| Summary of Financial Information for Partnership's Reportable Segments |
Summarized financial information for the Partnership’s reportable segments for the years ended December 31 is presented in the table below: | | | | | | | | | | | | | | Years Ended December 31, | | 2015 | | 2014 | | 2013 | Net sales: | | | | | | Refined products | $ | 3,063,858 |
| | $ | 4,650,871 |
| | $ | 4,331,410 |
| Natural gas | 347,453 |
| | 359,984 |
| | 304,843 |
| Materials handling | 45,570 |
| | 37,776 |
| | 28,446 |
| Other operations | 25,033 |
| | 21,131 |
| | 18,650 |
| Net sales | $ | 3,481,914 |
| | $ | 5,069,762 |
| | $ | 4,683,349 |
| Adjusted gross margin (1): | | | | | | Refined products | $ | 170,448 |
| | $ | 146,021 |
| | $ | 114,744 |
| Natural gas | 51,004 |
| | 55,536 |
| | 40,373 |
| Materials handling | 45,564 |
| | 37,811 |
| | 28,430 |
| Other operations | 8,986 |
| | 5,599 |
| | 5,547 |
| Adjusted gross margin | 276,002 |
| | 244,967 |
| | 189,094 |
| Reconciliation to operating income (2): | | | | | | Add: unrealized (loss) gain on inventory (3) | (2,079 | ) | | 11,070 |
| | (4,188 | ) | Add: unrealized (loss) on prepaid forward contracts (4) | (2,628 | ) | | — |
| | — |
| Add: unrealized gain (loss) on natural gas transportation contracts (5) | 21,695 |
| | 58,694 |
| | (55,745 | ) | Operating costs and expenses not allocated to operating segments: | | | | | | Operating expenses | (71,468 | ) | | (62,993 | ) | | (53,273 | ) | Selling, general and administrative | (94,403 | ) | | (76,420 | ) | | (55,210 | ) | Depreciation and amortization | (20,342 | ) | | (17,625 | ) | | (16,515 | ) | Operating income | 106,777 |
| | 157,693 |
| | 4,163 |
| Other income (expense) | 298 |
| | (288 | ) | | 568 |
| Interest income | 456 |
| | 569 |
| | 604 |
| Interest expense | (27,367 | ) | | (29,651 | ) | | (30,914 | ) | Income tax provision | (1,816 | ) | | (5,509 | ) | | (4,259 | ) | Net income (loss) | $ | 78,348 |
| | $ | 122,814 |
| | $ | (29,838 | ) |
| | (1) | Adjusted gross margin is a non-GAAP financial measure used by management and external users of the Partnership’s consolidated financial statements to assess the Partnership’s economic results of operations and its market value reporting to lenders. The Partnership adjusts its segment results for the impact of unrealized hedging gains and losses with regard to refined products and natural gas inventory, prepaid forward contracts and natural gas transportation contracts relating to the underlying commodity derivative hedges, which are not marked to market for the purpose of recording unrealized gains or losses in net income (loss). These adjustments align the unrealized hedging gains and losses to the period in which the revenue from the sale of inventory, prepaid fixed forwards and the utilization of transportation contracts relating to those hedges is realized in net income (loss). |
| | (2) | Reconciliation of adjusted gross margin to operating income, the most directly comparable GAAP measure. |
| | (3) | Inventory is valued at the lower of cost or market. The fair value of the derivatives the Company uses to economically hedge its inventory declines or appreciates in value as the value of the underlying inventory appreciates or declines, which creates unrealized hedging losses (gains) with respect to the derivatives that are included in net income (loss). |
| | (4) | The unrealized hedging gain (loss) on prepaid forward contracts represents the Partnership’s estimate of the change in fair value of the prepaid forward contracts which are not recorded in net income (loss) until the forward contract is settled in the future (i.e., when the commodity is delivered to the customer). As these contracts are prepaid, they do not qualify as derivatives. The fair value of the derivatives the Partnership uses to economically hedge its prepaid forward contracts declines or appreciates in value as the value of the underlying forward contract appreciates or declines, which creates unrealized hedging gains (losses) with respect to the derivatives that are included in net income (loss). |
| | (5) | The unrealized hedging gain (loss) on natural gas transportation contracts represents the Partnership’s estimate of the change in fair value of the natural gas transportation contracts which are not recorded in net income (loss) until the transportation is utilized in the future (i.e., when natural gas is delivered to the customer), as these contracts do not qualify as derivatives. As the fair value of the natural gas transportation contracts decline or appreciate, the offsetting physical or financial derivative will also appreciate or decline creating unmatched unrealized hedging (losses) gains in net income (loss) as of each period end. |
|
| Summary of Changes in Carrying Amount of Goodwill by Segment |
Changes in the carrying amount of goodwill by segment were as follows: | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2013 | | Activity (1) | | As of December 31, 2014 | | Activity | | As of December 31, 2015 | Refined products | $ | 36,550 |
| | $ | — |
| | $ | 36,550 |
| | $ | — |
| | $ | 36,550 |
| Natural gas | 4,383 |
| | 14,243 |
| | 18,626 |
| | — |
| | 18,626 |
| Materials handling | 6,896 |
| | — |
| | 6,896 |
| | — |
| | 6,896 |
| Other | 1,216 |
| | — |
| | 1,216 |
| | — |
| | 1,216 |
| Total | $ | 49,045 |
| | $ | 14,243 |
| | $ | 63,288 |
| | $ | — |
| | $ | 63,288 |
|
| | (1) | Reflects goodwill attributable to the Metromedia Energy acquisition. |
|