Segment Reporting The Partnership has four reportable segments that comprise the structure used by the chief operating decision makers (CEO and CFO) to make key operating decisions and assess performance. When establishing a reporting segment, the Partnership aggregates individual operating units that are in the same line of business and have similar economic characteristics. These reportable segments are refined products, natural gas, materials handling and other activities. The Partnership's refined products segment purchases a variety of refined products, such as heating oil, diesel fuel, residual fuel oil, kerosene, jet fuel and gasoline (primarily from refining companies, trading organizations and producers), and sells them to its customers. The Partnership has wholesale customers who resell the refined products they purchase from the Partnership and commercial customers who consume the refined products they purchase. The Partnerships wholesale customers consist of home heating oil retailers and diesel fuel and gasoline resellers. The Partnerships commercial customers include federal and state agencies, municipalities, regional transit authorities, drill sites, large industrial companies, real estate management companies, hospitals and educational institutions. The refined products reportable segment consists of three operating segments. The Partnership's natural gas segment purchases natural gas from natural gas producers and trading companies and sells and distributes natural gas to commercial and industrial customers primarily in the Northeast and Mid-Atlantic United States. The natural gas reportable segment consists of one operating segment. The Partnership's materials handling segment offloads, stores, and/or prepares for delivery a variety of customer-owned products, including asphalt, clay slurry, salt, gypsum, crude oil, residual fuel oil, coal, petroleum coke, caustic soda, tallow, pulp and heavy equipment. These services are generally provided under multi-year agreements as either fee-based activities or as leasing arrangements when the right to use an identified asset (such as storage tanks or storage locations) has been conveyed in the agreement. The materials handling reportable segment consists of two operating segments. The Partnership's other segment primarily consists of the purchase, sale and distribution of coal, and commercial trucking activities unrelated to its refined products segment. Other activities are not reported separately as they represent less than 10% of consolidated net sales and adjusted gross margin. The other activities reporting segment consists of two operating segments. The Partnership evaluates segment performance based on adjusted gross margin, a non-GAAP measure, which is net sales less cost of products sold (exclusive of depreciation and amortization) increased by unrealized hedging losses and decreased by unrealized hedging gains, in each case with respect to refined products and natural gas inventory, prepaid forward contracts and natural gas transportation contracts. Based on the way the business is managed, it is not reasonably possible for the Partnership to allocate the components of operating costs and expenses among the operating segments. There were no significant intersegment sales for any of the years presented below. The Partnership had no single customer that accounted for more than 10% of total net sales for the three months ended March 31, 2019 and 2018 , respectively. The Partnerships foreign sales, primarily sales of refined products and natural gas to its customers in Canada, were $55.6 million and $65.6 million for the three months ended March 31, 2019 and 2018 , respectively. Summarized financial information for the Partnership's reportable segments is presented in the table below: Three Months Ended March 31, 2019 2018 Net sales: Refined products $ 1,120,123 $ 1,180,860 Natural gas 114,167 129,927 Materials handling 16,481 13,148 Other operations 7,537 7,213 Net sales $ 1,258,308 $ 1,331,148 Adjusted gross margin (1): Refined products $ 44,739 $ 56,335 Natural gas 32,322 37,948 Materials handling 16,451 13,148 Other operations 1,932 2,106 Adjusted gross margin 95,444 109,537 Reconciliation to operating income (2): Add/(deduct): Change in unrealized gain on inventory (3) (4,236 ) 23,561 Change in unrealized value on natural gas transportation contracts (4) 7,988 14,068 Operating costs and expenses not allocated to operating segments: Operating expenses (23,789 ) (23,209 ) Selling, general and administrative (20,913 ) (27,864 ) Depreciation and amortization (8,388 ) (8,425 ) Operating income 46,106 87,668 Interest income 187 112 Interest expense (11,959 ) (9,884 ) Income tax provision (413 ) (2,975 ) Net income $ 33,921 $ 74,921 (1) The Partnership trades, purchases, stores and sells energy commodities that experience market value fluctuations. To manage the Partnerships underlying performance, including its physical and derivative positions, management utilizes adjusted gross margin, which is a non-GAAP financial measure. Adjusted gross margin is also used by external users of the Partnerships consolidated financial statements to assess the Partnerships economic results of operations and its commodity market value reporting to lenders. In determining adjusted gross margin, the Partnership adjusts its segment results for the impact of unrealized gains and losses with regard to refined products and natural gas inventory, prepaid forward contracts and natural gas transportation contracts, which are not marked to market for the purpose of recording unrealized gains or losses in net income. 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. Adjusted gross margin has no impact on reported volumes or net sales. (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 net realizable value. The adjustment related to unrealized gain on inventory which is not included in net income, represents the estimated difference between inventory valued at the lower of cost or net realizable value as compared to market values. The fair value of the derivatives the Partnership 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. (4) Represents the Partnerships estimate of the change in fair value of the natural gas transportation contracts which are not recorded in net income until the transportation is utilized in the future (i.e., when natural gas is delivered to the customer), as these contracts are executory contracts that 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 gains (losses). Segment Assets Due to the commingled nature and uses of the Partnerships fixed assets, the Partnership does not track its fixed assets between its refined products and materials handling operating segments or its other activities. There are no significant fixed assets attributable to the natural gas reportable segment. As of March 31, 2019 , goodwill recorded for the refined products , natural gas , materials handling and other operations segments amounted to $71.4 million , $35.5 million , $6.9 million and $1.2 million , respectively.