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Organization and Basis of Presentation

Organization and Basis of Presentation

1. Organization and Basis of Presentation

The accompanying Predecessor Entity’s unaudited special purpose condensed combined financial statements represent the financial statement combination of certain entities under common control (LGC, Energy Realty OP LP, EROP-Ohio Holdings, LLC, Lehigh-Kimber Petroleum Corporation, Lehigh-Kimber Realty, LLC, Kwik Pik-Ohio LLC and Kwik Pik Realty-Ohio LLC

LGC, a Delaware corporation, is one of the entities that comprise the Predecessor Entity and is the entity that has been in operation and under common control for the entirety of the periods presented in the unaudited special purpose condensed combined financial statements. Accordingly, LGC is deemed to be the acquirer of the other entities included in the Predecessor Entity who were acquired during the periods presented in the unaudited special purpose condensed combined financial statements and are included in the unaudited special purpose combined financial statements. During the periods covered by the unaudited special purpose condensed combined financial statements, acquisitions have occurred of certain Locations and contractual rights to distribute motor fuels (“wholesale fuel supply agreements”) to Independent Dealers who own or lease their retail Locations from unrelated third-parties.

On the Closing Date, the Predecessor Entity Contributed Assets and certain liabilities to the Partnership. The Partnership issued Common Units and Subordinated Units to the shareholders or their assigns of the Predecessor Entity in consideration of their transfer of the Contributed Assets to the Partnership. An entity ultimately controlled by the majority shareholder of the Predecessor Entity controls the General Partner that manages the Partnership’s business. Accordingly, the accompanying unaudited special purpose condensed combined financial statements are presented in accordance with SEC requirements for predecessor financial statements. The management of the Partnership has determined the presentation of the accompanying unaudited special purpose condensed combined financial statements includes the most significant and relevant historical financial information representing the past performance of the Contributed Assets forming the Partnership and is therefore relevant financial information for its investors.

The accompanying unaudited special purpose condensed combined financial statements exclude certain affiliate entities under common control during the periods presented, including LGO and other entities owned and/or operated by the equity-holders of the Predecessor Entity. These entities’ assets, liabilities, operations and/or equity interests were not contributed to the Partnership. Additionally, certain liabilities, and certain assets and operations of the Predecessor Entity were also not contributed (“Non-Contributed Assets”) to the Partnership as they did not fit the strategic and geographic plans of the Partnership. However, the Non-Contributed Assets, liabilities and operations are not significant, and are included in the accompanying unaudited special purpose condensed combined financial statements.

The Predecessor Entity is principally engaged in the business of: (i) distributing motor fuels (using third-party transportation services providers)—on a wholesale basis to Sub-wholesalers, Independent Dealers, Lessee Dealers, LGO and other related entities, and others, and (ii) ownership or lease of Locations and, in turn, generating rental-fee income revenue from Lessee Dealers. As a result of acquiring the Contributed Assets in connection with the Offering, the Partnership is engaged in substantially the same business and revenue generating activities as the Predecessor Entity.

The accompanying unaudited special purpose condensed combined financial statements include the accounts of the Predecessor Entity. All significant intercompany balances and transactions have been eliminated in combination. The historical cost-based accounts of the Predecessor Entity, including revenues for rental income and contra-expense amounts for management fees, have been charged to other affiliated entities outside of the Predecessor Entity. Management has determined that the method of expense allocation used is reasonable and that these charges are reasonable. However, because of certain related-party relationships and transactions (Note 13), these unaudited special purpose condensed combined financial statements may not necessarily be indicative of the conditions that could have existed or results of operations that could have occurred if the Predecessor Entity had entered into similar arrangements with non-affiliated entities.

Interim Financial Statements

The accompanying interim unaudited special purpose condensed combined financial statements and related disclosures are unaudited and have been prepared in accordance with GAAP on the same basis as the audited special purpose combined financial statements for the year ended December 31, 2011 and, in the opinion of management, include all adjustments of a normal recurring nature considered necessary to present fairly the Predecessor Entity’s financial position as of September 30, 2012, and the results of its operations, and cash flows for the periods presented. Operating results for the three and nine months ended September 30, 2012, are not necessarily indicative of the results that may be expected for the year ending December 31, 2012, or any other future periods. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted under the SEC’s rules and regulations for interim financial statements. These unaudited special purpose condensed combined financial statements should be read in conjunction with the audited special purpose combined financial statements and accompanying notes for the year ended December 31, 2011, included in the Registration Statement.

Significant Accounting Policies

The Predecessor Entity’s significant accounting policies are disclosed in the audited special purpose combined financial statements for the year ended December 31, 2011, included in the Registration Statement. Since the date of those financial statements, there have been no changes to the Predecessor Entity’s significant accounting policies.

Reclassification

Certain items in the December 31, 2011, Predecessor Entity’s unaudited special purpose condensed combined financial statements have been reclassified to conform to the September 30, 2012, presentation. Such reclassifications had no effect on previously reported 2011 net income or combined owners’ deficit at December 31, 2011.

Revenue Recognition

Revenues from wholesale fuel sales are recognized when fuel is delivered to the customer. Rental income is recognized on a straight-line basis over the term of the lease. Retail merchandise sales are recognized net of applicable provisions for discounts and allowances upon delivery, generally at the point of sale.

The amounts recorded for bad debts are generally based upon a specific analysis of aged accounts while also factoring in any new business conditions that might impact the historical analysis, such as market conditions and bankruptcies of particular customers. Bad debt provisions are included in selling, general and administrative expenses. The following table presents the Predecessor Entity’s products as a percentage of total sales for the three and nine months ended September 30:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Gasoline	94.4	%	92.5	%	94.2	%	92.2	%
Diesel fuel	5.6	%	7.5	%	5.8	%	7.8	%
Total	100.0	%	100.0	%	100.0	%	100.0	%

Cost of Sales

The Predecessor Entity includes in cost of sales all costs incurred to acquire wholesale fuel, including the costs of purchasing and transporting inventory prior to delivery to our wholesale customers. Cost of sales does not include any depreciation of our property, plant and equipment. Depreciation is separately classified in the Predecessor Entity’s unaudited special purpose condensed combined statements of operations. Total cost of sales of suppliers who accounted for 10% or more of the Predecessor Entity’s total combined cost of sales during the three and nine months ended September 30:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
ExxonMobil	40.3	%	48.6	%	40.5	%	48.9	%
Motiva Enterprises	17.1	%	24.7	%	19.0	%	24.5	%
Valero	4.2	%	13.1	%	4.2	%	12.3	%
BP Products	28.6	%	5.1	%	26.5	%	5.1	%

Recent Accounting Pronouncements

In December 2011, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” (“ASU 2011-12”). In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (“ASU 2011-05”). Both ASU’s are effective for interim reporting periods beginning after December 15, 2011. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in equity. In addition, items of other comprehensive income that are reclassified to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive income. ASU 2011-12 defers the changes in ASU 2011-05 that pertain to how, when and where reclassification adjustments are presented. The Predecessor Entity adopted this guidance as of January 1, 2012, retrospectively for the all periods presented. The adoption of this ASU did not have a material impact on the unaudited special purpose condensed combined financial statements.

In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS” (“ASU 2011-04”). ASU 2011-04 provides a consistent definition of fair value to ensure that the fair value measurement and disclosure requirements are similar between GAAP and International Financial Reporting Standards (“IFRS”). This ASU changes certain fair value measurement principles and enhances the disclosure requirements and is effective for interim and annual periods beginning after December 15, 2011, and should be applied prospectively. The Predecessor Entity adopted this guidance as of January 1, 2012. The adoption of this ASU did not have a material impact on the unaudited special purpose condensed combined financial statements.

In July 2012, the FASB issued ASU 2012-02, “Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” (“ASU 2012-02”) on impairment testing for indefinite-lived intangible assets. ASU 2012-02 amends FASB Codification Topic 350, Intangibles-Goodwill and Other to allow, but not require, an entity, when performing its annual or more frequent indefinite-lived intangible asset impairment test, to first assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The Predecessor Entity is currently evaluating ASU 2012-02. The adoption of this ASU is not expected to have a significant impact on the Predecessor Entity’s unaudited special purpose condensed combined financial statements.

The entire disclosure for the organization, consolidation and basis of presentation of financial statements disclosure, and significant accounting policies of the reporting entity. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.

Acquisitions

9 Months Ended

Sep. 30, 2012

Acquisitions

Acquisitions

2. Acquisitions

In evaluating potential acquisition candidates, the Predecessor Entity considers a number of factors, including strategic fit, desirability of location, purchase price, and the Predecessor Entity’s ability to improve the productivity and profitability of a location and/or wholesale supply agreement through the implementation of the Predecessor Entity’s operating strategy. The ability to create accretive financial results and/or operational efficiencies due to the relative operational scale and/or geographic concentration, among other strategic factors, may result in a purchase price in excess of the fair value of identifiable assets acquired and liabilities assumed, resulting in the recognition of goodwill. The Predecessor Entity strives to make its acquisitions accretive to owners’ equity and provide a reasonable long-term return on investment. Goodwill recorded in connection with the acquisitions is primarily attributable to the assembled workforce of the acquired businesses and the synergies expected to arise after the Predecessor Entity’s acquisitions of those businesses.

The Predecessor Entity concluded that the historical balance sheet and operating information concerning the acquisitions discussed below, would not be meaningful to investors of the Partnership because, among other reasons, the Predecessor Entity changed fundamentally the nature of the revenue producing assets acquired from the manner in which they were used by their respective sellers. Thus, presenting historical financial information regarding the acquisitions would mislead investors in the Partnership. Moreover, the sellers were unwilling to provide complete financial information for the acquisitions for periods prior to the closing date of the acquisition and, accordingly, the preparation of historical financial information is impracticable.

Shell Retail Gas Stations and Wholesale Fuel Supply Agreement Acquisition

The Predecessor Entity acquired from Motiva Enterprises, LLC (“Motiva”), an unrelated third-party, a total of 26 Shell Oil Company (“Shell”) branded gas stations and convenience stores (“Shell Locations”) located in the State of New Jersey under the terms of an Asset Purchase and Sale Agreement (the “Motiva Asset Agreement”) and also acquired 56 wholesale fuel supply agreements under the terms of an Agreement to Assign Retailer Instruments with Reversionary Rights (the “Motiva Assignment Agreement”). Taken together, the Motiva Asset Agreement and the Motiva Assignment Agreement are collectively referred to herein as the “Motiva Transaction”. The Motiva Transaction was accounted for as a business combination, in accordance with the guidance under Accounting Standards Codification 805, Business Combinations, for accounting purposes.

The Motiva Transaction acquisition closing dates were in May 2011 with respect to the acquisition of 14 Shell Locations and the wholesale fuel sale supply agreements and in August 2011 for the remaining 12 Shell Locations. The Predecessor Entity acquired fee simple interest in 21 of the Shell Locations and leasehold interests in the other 5 of the Shell Locations, with all of the Shell Locations considered company owned and independent dealer operated on the acquisition closing dates. The Motiva Transaction is expected to enhance the Predecessor Entity’s presence in the New Jersey marketplace by increasing market share, expanding and enhancing the geographical distribution of operations, and further increasing the wholesale supply business.

The Motiva Transaction aggregate purchase price consideration was $30,414 of cash consideration, funded with proceeds of $20,337 of borrowings under a credit agreement and the remaining balance from available cash-on-hand.

The following table summarizes the fair values of the assets acquired and liabilities assumed:

Land	$	10,850
Buildings	7,830
Equipment	5,470
Wholesale fuel supply agreements	5,734
Lease agreements with above average market value	337
Total identifiable assets	$	30,221
Environmental liabilities	$	1,521
Total liabilities assumed	1,521
Net identifiable assets acquired	28,700
Goodwill	1,714
Net assets acquired	$	30,414

The fair value of land, buildings, and equipment was determined using a cost approach, with the fair value of an asset estimated by reference to the replacement cost to obtain a substitute asset of comparable features and functionality, and is the amount a willing market participant would pay for such an asset, taking into consideration the asset condition as well as any physical deterioration, functional obsolescence, and/or economic obsolescence. The buildings and equipment are being depreciated on a straight-line basis, with estimated useful life of 20 years for buildings and 3 to 10 years for equipment. Land is not depreciated.

The fair value of the wholesale fuel supply agreements was determined using an income approach, with the fair value estimated to be the present value of incremental after-tax cash flows attributable solely to the wholesale fuel supply agreements over their estimated remaining useful life, using probability- weighted cash flows, generally assumed to extend through the term of the wholesale fuel supply contracts, and using discount rates considered appropriate given the inherent risks associated with this type of agreement. The Predecessor Entity believes the level and timing of cash flows represent relevant market participant assumptions. The wholesale fuel supply agreements are being amortized on a proportional basis corresponding to the average attrition rate of the wholesale fuel supply agreements over an estimated weighted average useful life of approximately 10 years.

Under the terms of a separate brand fee agreement with Shell Oil Company, the Predecessor Entity is entitled to operate the Shell Locations’ acquired in the Motiva Transaction under the Shell-branded trade name and related trade logos.

Other

During 2011 and 2012, as part of the Predecessor Entity’s effort to increase market share, expand and enhance the geographical distributions and further increase the wholesale supply business, the Predecessor Entity acquired 4 and 1 location(s), respectively, which individually and in the aggregate represented immaterial acquisitions for the periods presented.

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

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-Name Emerging Issues Task Force (EITF)
-Number 88-16
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-Paragraph 67-73
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Discontinued Operations and Assets Held for Sale

9 Months Ended

Sep. 30, 2012

Discontinued Operations and Assets Held for Sale

Discontinued Operations and Assets Held for Sale

3. Discontinued Operations and Assets Held for Sale

Discontinued Operations

As part of certain sale transactions, the Predecessor Entity may continue to distribute motor fuels on a wholesale basis to a divested site. In addition, the Predecessor Entity has the right to monitor and, if necessary, impose conditions on the operations of a divested site to ensure that the purchaser is complying with the terms and conditions of the franchise agreement covering such site. Accordingly, the Predecessor Entity has the ability to exert significant influence over the divested site, and thus the Predecessor Entity has significant continuing involvement and the divested sites are not deemed to be discontinued operations. The Predecessor Entity classifies Locations as discontinued when operations and cash flows will be eliminated from the ongoing operations and the Predecessor Entity will not retain any significant continuing involvement in the operations after the respective sale transactions. For all periods presented, all of the operating results for these discontinued operations were removed from continuing operations and were presented separately as discontinued operations in the unaudited special purpose condensed combined statements of operations. The notes to the unaudited special purpose condensed combined financial statements were adjusted to exclude discontinued operations unless otherwise noted. The following operating results of the Locations are included in discontinued operations for the three and nine months ended September 30:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Revenues:
Revenues from fuel sales	$	1,217		$	1,372		$	3,775		$	4,326
Revenues from fuel sales to affiliates	1,605			1,701			4,726			4,670
Rental income	31			32			91			95
Rental income from affiliates	85			85			254			254
Total revenues	2,938			3,190			8,846			9,345
Costs and Expenses:
Cost of revenues from fuel sales	1,187			1,346			3,669			4,247
Cost of revenues from fuel sales to affiliates	1,590			1,686			4,692			4,631
Operating expenses	44			7			49			51
Depreciation and amortization	26			32			84			177
(Gain) loss on sale of assets	—			—			(237		)	540
Total costs and operating expenses	2,847			3,071			8,257			9,646
Operating income (loss)	91			119			589			(301		)
Interest expense, net	(13		)	(14		)	(40		)	(260		)
Income (loss) from discontinued operations	$	78		$	105		$	549		$	(561	)

Discontinued operations have not been segregated in the unaudited special purpose condensed combined statements of cash flows.

Assets of Operations Held for Sale

In addition to the discontinued operations disclosed above, the Predecessor Entity has classified 17 and two Locations as of September 30, 2012, and December 31, 2011, respectively, as held-for-sale. In connection with the classification as held-for-sale, the Predecessor Entity recognized a loss of $269 for the nine month period ended September 30, 2012, and this amount has been included in depreciation and amortization expense. The loss represents the impairment recognized to present value the held-for-sale Locations at the lower of cost or fair value, less costs to sell. The fair values, less costs to sell were determined based on negotiated amounts with unrelated third parties. No impairment was recognized to present the 2 Locations at the lower of cost or fair value at December 31, 2011. The Predecessor Entity expects to complete the sale of these Locations within the next twelve months. The losses, including the direct costs to transact a sale, for the held-for-sale Locations could differ from the ultimate sales price due to the fluidity of the negotiations, price volatility, changing interest rates, and future economic conditions.

	September 30, 2012			December 31, 2011
Assets held for sale:
Property and equipment, at cost:
Land	$	5,444		$	388
Buildings and improvements	3,098			376
Equipment and other	1,535			20
Total property and equipment, at cost	10,077			784
Less accumulated depreciation	(1,781		)	(41		)
Total assets held for sale	8,296			743
Liabilities related to assets held for sale:
Long-term debt	8,296			183
Total liabilities related to assets held for sale	8,296			183
Net assets held for sale	$	—		$	560

The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations).

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Debt

9 Months Ended

Sep. 30, 2012

Debt

Debt

7. Debt

	September 30, 2012		December 31, 2011
Revolving term loan, net of discount	$	165,005	$	164,264
Term loan, net of discount	—		6,077
Mortgage Notes	13,950		15,128
	178,955		185,469
Less liabilities of operations held for sale	8,296		183
Less current portion	9,715		7,757
Long-term portion	$	160,944	$	177,529

Revolving Term Loan

On December 30, 2010, the Predecessor Entity entered into a $175,000 revolving term loan credit facility with a syndicate of lenders. The term loan portion of $135,000 is payable in quarterly principal amounts of $1,600, which payments commenced on September 30, 2011. The revolving facility had a borrowing capacity of $40,000 of which $15,000 may be drawn upon for operating purposes, $5,000 may be used for short term advances and $20,000 may be used to issue letters of credit. The Predecessor Entity is subject to an initial fee of 25 basis points of the stated amount for any letters of credit issued. The Predecessor Entity had approximately $19,150 and $11,200 in outstanding letters of credit as of September 30, 2012 and December 31, 2011, respectively.

Both the term and revolving portions of the credit facility mature on December 30, 2015. Pursuant to the terms of the credit facility, the Predecessor Entity may increase its borrowing capacity by $75,000 for acquisition related purposes. During 2011, the Predecessor Entity increased the borrowing capacity under its term loan by $20,000 in connection with the Shell acquisition as discussed in Note 2.

In February 2012, the Predecessor Entity increased the borrowing capacity of the revolving facility by $8,000 in order to pay off the Term Loan (as defined herein) discussed below. The initial proceeds used under the revolving term facility were used to refinance several credit facilities held by the Predecessor Entity. After these amendments, the term loan portion of the facility is $155,000 and the borrowing capacity of the revolving credit facility is $48,000. In addition, the quarterly principal amounts increased to $2,600. Borrowings under the revolving term loan credit facility bear interest at a floating rate which, at the Predecessor Entity’s option, may be determined by reference to a LIBOR rate or a base rate plus an applicable margin ranging from 1.25% to 3.00%. Short term advances bear interest at a base rate plus an applicable margin. The Predecessor Entity’s applicable margin is determined by certain combined leverage ratios at the time of borrowing as set forth in the credit agreement. The Predecessor Entity is subject to a commitment fee of 50 basis points for any excess borrowing capacity over the outstanding principal borrowings under the revolver portion of the credit facility. As of September 30, 2012 and December 31, 2011, the credit facility had an interest rate of 3.3% and 3.4%, respectively. Interest incurred for the three months ended September 30, 2012 and 2011 was approximately $1,555 and $1,291, respectively. Interest incurred for the nine months ended September 30, 2012 and 2011 was approximately $4,562 and $3,801, respectively.

In connection with obtaining the revolving term loan credit facility, the Predecessor Entity paid $4,226 in fees to the lenders and to third parties. In connection with the February 2012 amendment to the revolving portion of the facility, the Predecessor Entity paid $117 in lender fees.

Financing fees of $2,580 and $1,763 were recorded as discount to the carrying value of the debt and deferred financing fees, respectively. The debt discount and deferred financing fees are being amortized into interest expense over the terms of the related debt. Amortization of the debt discount and deferred financing fees were $323 and $212 for the three months ended September 30, 2012 and 2011, respectively and $1,057 and $725 for the nine months ended September 30, 2012 and 2011, respectively.

The revolving term loan credit facility is secured by liens and security interests with first priority security interest in the Predecessor Entity’s assets, including its properties. All borrowers are jointly and severally liability for obligations under the facility. LGO, a related party, is a borrower under the revolving term loan facility. The revolving term loan facility contains covenants that, subject to specified exceptions, restrict the Predecessor Entity’s ability to, among other things, incur additional indebtedness, incur liens, liquidate or dissolve, sell, transfer, lease or dispose of assets, or make loans, investments or guarantees. The revolving term loan facility includes a number of affirmative and negative covenants, which could restrict the Predecessor Entity’s operations. If the Predecessor Entity were to be in default the lenders could accelerate the Predecessor Entity’s obligation to pay all outstanding amounts. The Predecessor Entity is subject to various financial covenant restrictions under the revolving term loan facility. In September 2012, the Predecessor Entity entered into an amendment to change certain financial covenants as of June 30, 2012 and through December 31, 2015 and each fiscal quarter thereafter.

As of the Closing Date, the Predecessor had $165 million outstanding under its Revolving Term Loan Credit Facility (the “Original Facility”) with a scheduled December 2015 maturity date. On the Closing Date, the Partnership entered into the $249 million New Credit Agreement, which superseded and replaced the Original Facility. Upon closing of the New Credit Agreement, $165 million was drawn and subsequently applied on that date to the repayment, in full, of the indebtedness then outstanding under the Original Facility.

In addition, a portion of the Offering proceeds were applied to the repayment of approximately $57.8 million of indebtedness outstanding under the New Credit Agreement. Accordingly, as of the Closing Date, the outstanding balance of the New Credit Agreement was $111.8 million. The $57.8 million pay-down was done at the discretion of the Partnership and was not contractually required under the terms and conditions of the New Credit Agreement.

The Original Facility included a number of affirmative and negative financial covenants. Had the Original Facility not been paid off in connection with the Offering, and not been replaced with the New Credit Agreement, the Predecessor Entity would have needed to determine its compliance with such financial covenants as of September 30, 2012. The Predecessor Entity would not have been in compliance with certain of these financial covenants. In the event of this non-compliance, the lenders would have had the right to potentially demand repayment of the entire outstanding balance under the Original Facility. However, the Original Facility lenders waived this right in connection with the execution of the New Credit Agreement.

As a result of the Original Facility lender’s waiver, the execution of the New Credit Agreement, and the expected probable compliance with new covenant compliance requirements contained in the New Credit Agreement, the Predecessor Entity has classified the Original Facility’s outstanding balance as long term in the accompanying unaudited special purpose condensed combined balance sheet as of September 30, 2012.

Term Loan

On December 30, 2009 in connection with the acquisition of Uni-Mart, the Predecessor Entity issued a promissory note. The Predecessor Entity made monthly installment payments of $53, which included components of principal and interest up to the December 30, 2014 maturity date of the term loan. Borrowings under the term loan facility bore interest at a floating rate, which were determined by reference to a base rate plus an applicable margin of 2.0%. As of December 31, 2011, the term loan had an interest rate of 5.25%. In February 2012, this term loan was paid in its entirety. Interest incurred for the three months ended September 30, 2012 and 2011 was $-0- and $87, respectively. Interest incurred for the nine months ended September 30, 2012 and 2011 was $44 and $268, respectively.

In connection with obtaining the term loan, the Predecessor Entity paid $101 in lender fees and recorded as discount to the carrying value of the debt. The debt discount was being amortized into interest expense over the term of the related debt. Upon paying the term loan in its entirety in February 2012, the unamortized portion of the discount was immediately expensed. Amortization of the debt discount was $0 and $6 for the three months ended September 30, 2012 and 2011, respectively and $52 and $17 for the nine months ended September 30, 2012 and 2011, respectively.

Mortgage Notes

In June and December of 2008, the Predecessor Entity entered into several mortgage notes with two lenders for an aggregate initial borrowing amount of $23,586. Pursuant to the terms of the mortgage notes, the Predecessor Entity makes monthly installment payments that are comprised of principal and interest through maturity dates of June 23, 2023 and December 23, 2023. Since the initial borrowing the Predecessor Entity has made additional principal payments. The balance outstanding at September 30, 2012 and December 31, 2011 is $13,950 and $15,128, respectively. The mortgage notes bear interest at a floating rate which may be determined by reference to an index rate plus an applicable margin not to exceed 5.0%. As of September 30, 2012 and December 31, 2011, the weighted average interest rate was 4.0% for both periods. Interest expense for the three months ended September 30, 2012 and 2011 was approximately $147 and $148, respectively. Interest expense for the nine months ended September 30, 2012 and 2011 was approximately $445 and $481, respectively. The mortgage notes are secured by a first priority security interest in certain properties of the Predecessor Entity. The mortgage notes contain a number of affirmative and negative covenants. The Predecessor Entity is also required to comply with certain financial covenants. In May 2012, the Predecessor Entity obtained a waiver to cure its violation of certain financial covenants as of December 31, 2011. In connection with obtaining the mortgage notes, the Predecessor Entity incurred $245 in related expenses that were recorded as deferred financing fees. The deferred financing fees are being amortized into interest expense over the terms of the related debt. Amortization of deferred financing for each of the three months ended September 30, 2012 and 2011 was $4 and $3, respectively. Amortization of deferred financing for the nine months ended September 30, 2012 and 2011 was $12 and $38, respectively.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Measurements

Fair Value Measurements

9. Fair Value Measurements

The Predecessor Entity measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). GAAP specifies a three-level hierarchy that is used when measuring and disclosing fair value. The fair value hierarchy gives the highest priority to quoted prices available in active markets (i.e., observable inputs) and the lowest priority to data lacking transparency (i.e., unobservable inputs). An instrument’s categorization within the fair value hierarchy is based on the lowest level of significant input to its valuation. The following is a description of the three hierarchy levels.

Level 1	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Active markets are considered to be those in which transactions for the assets or liabilities. Active markets are considered to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2	Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in inactive markets.
Level 3	Unobservable inputs that are not corroborated by market data. This category is comprised of financial and non-financial assets and liabilities whose fair value is estimated based on internally developed models or methodologies using significant inputs that are generally less readily observable from objective sources.

Transfers into or out of any hierarchy level are recognized at the end of the reporting period in which the transfer occurred. There were no significant transfers between any levels during the nine months ended September 30, 2012 or 2011.

Following are descriptions of the valuation methodologies used to measure material assets and liabilities at fair value and details of the valuation models, key inputs to those models and significant assumptions utilized.

Derivative instruments—The Predecessor Entity may enter into derivative contracts, such as interest rate swaps, as part of their overall risk management strategies. The majority of the Predecessor Entity’s derivatives outstanding are reported at fair value based upon market quotes that are deemed to be observable inputs in an active market for similar assets and liabilities and are considered Level 2 inputs for purposes of fair value disclosures. The Predecessor Entity has not changed its valuation techniques or inputs during the nine months ended September 30, 2012. At September 30, 2012 and December 31, 2011 the fair value of these derivative instruments was approximately $146 and $498, respectively, which were included in other liabilities in the unaudited special purpose condensed combined balance sheet.

For assets and liabilities measured on a non-recurring basis during the year, accounting guidance requires quantitative disclosures about the fair value measurements separately for each major category. See Note 2. Acquisitions for acquired assets and liabilities measured on a non-recurring basis for the nine months ended September 30, 2012. There were no other remeasured assets or liabilities at fair value on a non-recurring basis during the nine months ended September 30, 2012.

Financial Instruments

The fair value of the Predecessor Entity’s financial instruments consisting of accounts receivable, accounts payable and debt approximated their carrying value as of September 30, 2012 and December 31, 2011.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Section 50
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
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Environmental Liabilities

9 Months Ended

Sep. 30, 2012

Environmental Liabilities

Environmental Liabilities

10. Environmental Liabilities

The Predecessor Entity currently owns or leases properties where refined petroleum products are being or have been handled. These properties and the refined petroleum products handled thereon may be subject to federal and state environmental laws and regulations. Under such laws and regulations, the Predecessor Entity could be required to remove or remediate containerized hazardous liquids or associated generated wastes (including wastes disposed of or abandoned by prior owners or operators), to clean up contaminated property arising from the release of liquids or wastes into the environment, including contaminated groundwater, or to implement best management practices to prevent future contamination.

The Predecessor Entity maintains insurance of various types with varying levels of coverage that it considers adequate under the circumstances to cover its operations and properties. The insurance policies are subject to deductibles that the Predecessor Entity considers reasonable and not excessive. In addition, the Predecessor Entity has entered into indemnification and escrow agreements with various sellers in conjunction with several of its acquisitions. Allocation of environmental liability is an issue negotiated in connection with each of the Predecessor Entity’s acquisition transactions. In each case, the Predecessor Entity makes an assessment of potential environmental liability exposure based on available information. Based on that assessment and relevant economic and risk factors, the Predecessor Entity determines whether to, and the extent to which it will, assume liability for existing environmental conditions.

The following table presents a summary roll forward of the Predecessor Entity’s environmental liabilities, on an undiscounted basis, at September 30, 2012:

Environmental Liability Related to:	Balance at December 31, 2011		Additions 2012		Payments in 2012		Balance at September 30, 2012
Total Environmental Liabilities	$	25,819	$	804	$	4,351	$	22,272
Current portion	6,418						7,733
Long-term portion	19,401						14,539
Total environmental liabilities	$	25,819					$	22,272

The Predecessor Entity’s estimates used in these reserves are based on all known facts at the time and its assessment of the ultimate remedial action outcomes. The Predecessor Entity will adjust loss accruals as further information becomes available or circumstances change. Among the many uncertainties that impact the Predecessor Entity’s estimates are the necessary regulatory approvals for, and potential modification of, its remediation plans, the amount of data available upon initial assessment of the impact of soil or water contamination, changes in costs associated with environmental remediation services and equipment and the possibility of existing legal claims giving rise to additional claims. Therefore, although the Predecessor Entity believes that these reserves are adequate, no assurances can be made that any costs incurred in excess of these reserves or outside of indemnifications or not otherwise covered by insurance would not have a material adverse effect on the Predecessor Entity’s financial condition, results of operations or cash flows. The Predecessor Entity utilizes the services of an environmental remediation firm and advances of $3,500 and $3,105 at September 30, 2012 and December 31, 2011, respectively, were included in other current assets in the unaudited special purpose condensed combined balance sheets.

A significant portion of the environmental reserves above has a corresponding indemnification asset recorded in the accompanying unaudited special purpose condensed combined balance sheets. These indemnification assets consist primarily of third-party escrowed funds, state funds and insurance coverage. The breakdown of the indemnification assets is as follows at September 30, 2012 and December 31, 2011:

	Balance at September 30, 2012		Balance at December 31, 2011
Third-Party Escrows	$	8,325	$	10,041
State Funds	4,501		5,619
Insurance Coverage	6,203		6,821
Total indemnification assets	$	19,029	$	22,481
Current portion	7,425		6,418
Long-term portion	11,604		16,063
Total indemnification assets	$	19,029	$	22,481

State funds represent probable state reimbursement amounts that would be payable to the Predecessor Entity under state funds. Reimbursement will depend upon the continued maintenance and solvency of the state. Insurance coverage represents amounts deemed probable of reimbursement under insurance policies.

The entire disclosure for environmental loss contingencies, such as presence of hazardous waste, relevant information from reports issued by regulators, and estimated costs to achieve compliance with regulatory requirements. This element may be used for all of an entity's disclosures about environmental loss contingencies.

Related-Party Transactions

9 Months Ended

Sep. 30, 2012

Related-Party Transactions

Related-Party Transactions

13. Related-Party Transactions

The related party transactions with the Predecessor Entity, and other affiliated entities, under common control not part of the Predecessor Entity (“Affiliates”) are as follows:

Property and Equipment

In March of 2012, the Predecessor Entity purchased property and equipment from one of its owners for approximately $1,450. The purchase was recorded as an addition to property and equipment at its historical carrying value of $500. The excess purchase price over the historical carrying value of $950 was recorded as a distribution to the owner in the Predecessor Entity’s unaudited special purpose condensed combined statements of owners’ deficit and statements of cash flows.

Advances to Affiliates

The Predecessor Entity serves as a lender and borrower of funds and a clearinghouse for the settlement of receivables and payables for its Affiliates. Amounts advanced to its Affiliates for these types of transactional activities are disclosed in the accompanying unaudited special purpose condensed combined statements of cash flows.

Revenues from Fuel Sales to Affiliates

The Predecessor Entity sells refined petroleum products to its Affiliates at prevailing market prices at the time of delivery. Revenues and cost of revenues from fuel sales to affiliates are disclosed in the accompanying unaudited special purpose condensed combined statements of operations.

Mandatorily Redeemable Preferred Equity

In December 2008, the Predecessor Entity issued non-voting mandatorily redeemable preferred equity of $12,000 to certain related individuals. The holders receive semi-annual payments at an increasing coupon rate, not to exceed 18.0%. The initial coupon rate of 9.0% increases 3.0% every nine months and is capped at 18.0%. In the event of a default, the interest rate may increase to 24.0%. As of September 30, 2012 and December 31, 2011, the interest rate was 12.0%.

At any time following the initial issuance, the Predecessor Entity retains the right to repurchase the mandatorily redeemable preferred equity at a price equal to the initial issuance plus any payments accrued and unpaid. The mandatorily redeemable preferred equity are to be redeemed by the Predecessor Entity on or before December 22, 2015. At the time of redemption, the Predecessor Entity will pay the holders an amount equal to their unreturned capital and any unpaid payments accruing up to the point of repurchase.

In February 2011, the Predecessor Entity amended the terms under the mandatorily redeemable preferred equity agreement. Pursuant to the amendment, the holders receive semi-annual payments at a rate of 12.0% with a default rate of 18.0%. In addition, the holder has the option to request payment of all principal and payments due any time after October 1, 2013. Pursuant to an amendment in May 2012, the interest rate will increase to 15% for the period from September 1, 2012 through August 31, 2013. The Predecessor Entity recorded the issuance of mandatorily redeemable preferred equity as a component of its long term liabilities with payments recorded as interest expense. The Predecessor Entity recognized interest expense of $390 and $360 for the three months ended September 30, 2012 and 2011, respectively, and $1,110 and $1,080 for the nine months ended September 30, 2012 and 2011, respectively.

In September 2012, the Predecessor Entity and the holders entered into an agreement for an aggregate $13.0 million payment to cancel the mandatorily redeemable preferred equity (the cancellation payment), along with payments accrued and unpaid at the applicable rate discussed above. The aggregate cancellation payment includes $12.0 million for the face value of the mandatorily redeemable equity and an additional $1.0 million in consideration for a contractual modification to provide for the cancellation of the mandatorily redeemable preferred equity. As the cancellation payment will be simultaneous with the Offering, the mandatorily redeemable preferred equity carrying value adjustment will be accounted for on the Predecessor Entity historical combined financial statements in the accounting period corresponding to the closing of the Offering.

On the Closing Date, and in conjunction with the closing of the Offering, all payments were made in accordance with this agreement.

Management Fees

The Predecessor Entity charges management fees to its Affiliates and these amounts are included as contra-expense amounts in selling, general and administrative expenses in the accompanying unaudited special purpose condensed combined statements of operations. The amounts recorded for these management fees was approximately $1,345 and $442 for the three months ended September 30, 2012 and 2011, respectively, and approximately $3,296 and $1,477 for the nine months ended September 30, 2012 and 2011, respectively. These management fees reflect the allocation of certain overhead expenses of the Predecessor Entity and include costs of centralized corporate functions, such as legal, accounting, information technology, insurance and other corporate services. The allocation methods for these costs include: estimates of the costs and level of support attributable to its Affiliates for legal, accounting, usage and headcount for information technology.

Note Receivable

In May 2009, the Predecessor Entity received a secured promissory note for $240 from a related party. Pursuant to the terms of the note, the Predecessor Entity is entitled to receive monthly installment payments of principal and interest payments May 2029 and shall bear interest at a fixed rate of 7% per annum. The Predecessor Entity received interest income of $3 and $4 for the three months ended September 30, 2012 and 2011, respectively, and $10 and $11 for the nine months ended September 30, 2012 and 2011, respectively. At September 30, 2012 and December 31, 2011 the unpaid principal balance of the note of approximately $197 and $204, respectively, were included in deferred financing fees and other assets in the accompanying unaudited special purpose condensed combined balance sheet.

Operating Leases of Gasoline Stations as Lessor

The Predecessor Entity leases certain gas stations to its Affiliates under cancelable operating leases. The rental income under these agreements totaled $2,005 and $1,959 for the three months ended September 30, 2012 and 2011, respectively, and $4,734 and $5,380 for the nine months ended September 30, 2012 and 2011, respectively.

Operating Leases of Gasoline Stations as Lessee

The Predecessor Entity leases certain gas stations from its Affiliates under cancelable operating leases. Total expenses incurred under these agreements totaled $138 for each of the three months ended September 30, 2012 and 2011 and $415 for each of the nine months ended September 30, 2012 and 2011.

Operating Lease of Office Space

The Predecessor Entity leases its principal offices from an entity which is owned and operated by a related party. Total rent expense recognized under this lease was $45 for each of the three months ended September 30, 2012 and 2011 and $135 for each of the nine months ended September 30, 2012 and 2011. The office lease has a 10-year term that commenced on February 1, 2010. The Predecessor Entity has the option to renew the lease for up to 3 additional 5-year periods at the then rate as defined under the terms of the agreement.

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph b
-Article 3A

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph k
-Article 4

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 1-4
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Organization and Basis of Presentation

Organization and Basis of Presentation (Policies) - Predecessor

9 Months Ended

Sep. 30, 2012

Revenue Recognition

Revenue Recognition

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Gasoline	94.4	%	92.5	%	94.2	%	92.2	%
Diesel fuel	5.6	%	7.5	%	5.8	%	7.8	%
Total	100.0	%	100.0	%	100.0	%	100.0	%

Cost of Sales

Cost of Sales

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
ExxonMobil	40.3	%	48.6	%	40.5	%	48.9	%
Motiva Enterprises	17.1	%	24.7	%	19.0	%	24.5	%
Valero	4.2	%	13.1	%	4.2	%	12.3	%
BP Products	28.6	%	5.1	%	26.5	%	5.1	%

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Disclosure of accounting policy for revenue recognition. If the entity has different policies for different types of revenue transactions, the policy for each material type of transaction is generally disclosed. If a sales transaction has multiple element arrangements (for example, delivery of multiple products, services or the rights to use assets) the disclosure may indicate the accounting policy for each unit of accounting as well as how units of accounting are determined and valued. The disclosure may encompass important judgment as to appropriateness of principles related to recognition of revenue. The disclosure also may indicate the entity's treatment of any unearned or deferred revenue that arises from the transaction.