Segment Reporting | Note 13. SEGMENT REPORTING We conduct our business in two segments: 1) the Wholesale segment and 2) the Retail segment. The wholesale segment includes the wholesale distribution of motor fuel to lessee dealers, independent dealers, commission agents, DMS, CST and company operated retail sites. We have exclusive motor fuel distribution contracts with lessee dealers who lease the property from us. We also have exclusive distribution contracts with independent dealers to distribute motor fuel but do not collect rent from the independent dealers. Similar to lessee dealers, we have motor fuel distribution agreements with DMS and CST and collect rent from both. The Retail segment includes the sale of convenience merchandise items, the retail sale of motor fuel at company operated retail sites and the retail sale of motor fuel at retail sites operated by commission agents. A commission agent is a retail site where we retain title to the motor fuel inventory and sell it directly to our end user customers. At commission agent retail sites, we manage motor fuel inventory pricing and retain the gross profit on motor fuel sales, less a commission to the agent who operates the retail site. Similar to our Wholesale segment, we also generate revenues through leasing or subleasing real estate in our Retail segment. As part of our evaluation of the economic performance of our retail sites, we will from time to time convert company owned retail sites from our Retail segment to lessee dealers in our Wholesale segment. As a result, we no longer generate revenues from the retail sale of motor fuel or merchandise at these stores subsequent to the date of conversion and we no longer incur retail operating expenses related to these retail sites. However, we continue to supply these retail sites with motor fuel on a wholesale basis pursuant to the fuel supply contract with the lessee dealer. Further, we continue to own/lease the property and earn rental income under lease/sublease agreements with the lessee dealers under triple net leases. The lessee dealer owns all motor fuel and convenience merchandise and retains all gross profit on such operating activities. Unallocated items consist primarily of general and administrative expenses, depreciation, amortization and accretion expense, gains on sales of assets, net, and the elimination of the Retail segment’s intersegment cost of revenues from motor fuel sales against the Wholesale segment’s intersegment revenues from motor fuel sales. The profit in ending inventory generated by the intersegment motor fuel sales is also eliminated. Total assets by segment are not presented as management does not currently assess performance or allocate resources based on that data. The following table reflects activity related to our reportable segments (in thousands): Wholesale Retail Unallocated Consolidated Three Months Ended June 30, 2017 Revenues from fuel sales to external customers $ 383,519 $ 94,801 $ — $ 478,320 Intersegment revenues from fuel sales 69,027 — (69,027 ) — Revenues from food and merchandise sales — 27,691 — 27,691 Rent income 20,361 1,644 — 22,005 Other revenue 773 — — 773 Total revenues $ 473,680 $ 124,136 $ (69,027 ) $ 528,789 Income from CST Fuel Supply Equity $ 3,830 $ — $ — $ 3,830 Operating income (loss) $ 27,678 $ 1,538 $ (26,498 ) $ 2,718 Three Months Ended June 30, 2016 Revenues from fuel sales to external customers $ 366,838 $ 91,701 $ — $ 458,539 Intersegment revenues from fuel sales 67,209 — (67,209 ) — Revenues from food and merchandise sales — 33,297 — 33,297 Rent income 18,997 1,354 — 20,351 Other revenue 457 — — 457 Total revenues $ 453,501 $ 126,352 $ (67,209 ) $ 512,644 Income from CST Fuel Supply Equity $ 4,245 $ — $ — $ 4,245 Operating income (loss) $ 25,900 $ 2,728 $ (19,272 ) $ 9,356 Wholesale Retail Unallocated Consolidated Six Months Ended June 30, 2017 Revenues from fuel sales to external customers $ 722,607 $ 179,004 $ — $ 901,611 Intersegment revenues from fuel sales 130,643 — (130,643 ) — Revenues from food and merchandise sales — 51,711 — 51,711 Rent income 40,000 3,446 — 43,446 Other revenue 1,307 — — 1,307 Total revenues $ 894,557 $ 234,161 $ (130,643 ) $ 998,075 Income from CST Fuel Supply Equity $ 7,433 $ — $ — $ 7,433 Operating income (loss) $ 53,330 $ 1,683 $ (46,715 ) $ 8,298 Six Months Ended June 30, 2016 Revenues from fuel sales to external customers $ 610,241 $ 165,739 $ — $ 775,980 Intersegment revenues from fuel sales 115,646 — (115,646 ) — Revenues from food and merchandise sales — 63,746 — 63,746 Rent income 37,196 2,686 — 39,882 Other revenue 776 — — 776 Total revenues $ 763,859 $ 232,171 $ (115,646 ) $ 880,384 Income from CST Fuel Supply Equity $ 8,296 $ — $ — 8,296 Operating income (loss) $ 49,941 $ 4,398 $ (39,062 ) $ 15,277 |