Global Partners Earnings 2020-09-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-32593

Global Partners LP

(Exact name of registrant as specified in its charter)

Delaware		74-3140887
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

P.O. Box 9161
800 South Street
Waltham, Massachusetts 02454-9161
(Address of principal executive offices, including zip code)

(781) 894-8800
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Units representing limited partner interests	GLP	New York Stock Exchange

9.75% Series A Fixed-to-Floating Cumulative Redeemable	GLP pr A	New York Stock Exchange
Perpetual Preferred Units representing limited partner interests

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐			Accelerated filer ☒
Non-accelerated filer ☐			Smaller reporting company ☐
			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The issuer had 33,995,563 common units outstanding as of November 2, 2020.

Table of Contents

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)		3

Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019		3

Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019		4

Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2020 and 2019		5

Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019		6

Consolidated Statements of Partners’ Equity for the three and nine months ended September 30, 2020 and 2019		7

Notes to Consolidated Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		52

Item 3. Quantitative and Qualitative Disclosures About Market Risk		80

Item 4. Controls and Procedures		81

PART II. OTHER INFORMATION		83

Item 1. Legal Proceedings		83

Item 1A. Risk Factors		83

Item 6. Exhibits		84

SIGNATURES		85

Table of Contents

Item 1.Financial Statements

GLOBAL PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

(Unaudited)


	September 30,		December 31,
	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	4,861	$	12,042
Accounts receivable, net		239,396		413,195
Accounts receivable—affiliates		5,282		7,823
Inventories		328,706		450,482
Brokerage margin deposits		23,455		34,466
Derivative assets		43,159		4,564
Prepaid expenses and other current assets		92,295		81,940
Total current assets		737,154		1,004,512
Property and equipment, net		1,070,251		1,104,863
Right of use assets, net		287,787		296,746
Intangible assets, net		38,627		46,765
Goodwill		323,889		324,474
Other assets		28,596		31,067
Total assets	$	2,486,304	$	2,808,427
Liabilities and partners’ equity
Current liabilities:
Accounts payable	$	186,794	$	373,386
Working capital revolving credit facility—current portion		10,100		148,900
Lease liability—current portion		70,965		68,160
Environmental liabilities—current portion		5,009		5,009
Trustee taxes payable		30,077		42,932
Accrued expenses and other current liabilities		99,898		102,802
Derivative liabilities		6,589		12,698
Total current liabilities		409,432		753,887
Working capital revolving credit facility—less current portion		150,000		175,000
Revolving credit facility		188,000		192,700
Senior notes		691,765		690,533
Long-term lease liability—less current portion		229,307		239,349
Environmental liabilities—less current portion		50,416		54,262
Financing obligations		146,994		148,127
Deferred tax liabilities		56,399		42,879
Other long—term liabilities		54,926		52,451
Total liabilities		1,977,239		2,349,188
Partners’ equity
Global Partners LP equity:
Series A preferred limited partners (2,760,000 units issued and outstanding at September 30, 2020 and December 31, 2019, respectively)		67,226		67,226
Common limited partners (33,995,563 units issued and 33,965,589 outstanding at September 30, 2020 and 33,995,563 units issued and 33,867,393 outstanding at December 31, 2019)		443,345		398,535
General partner interest (0.67% interest with 230,303 equivalent units outstanding at September 30, 2020 and December 31, 2019)		(2,403)		(2,620)
Accumulated other comprehensive income (loss)		897		(5,076)
Total Global Partners LP equity		509,065		458,065
Noncontrolling interest		—		1,174
Total partners’ equity		509,065		459,239
Total liabilities and partners’ equity	$	2,486,304	$	2,808,427

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per unit data)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Sales	$	2,061,382	$	3,245,653	$	6,126,052	$	9,732,819
Cost of sales		1,892,141		3,057,884		5,571,126		9,221,063
Gross profit		169,241		187,769		554,926		511,756
Costs and operating expenses:
Selling, general and administrative expenses		43,218		45,333		143,158		127,391
Operating expenses		82,235		87,827		241,502		257,222
Lease exit and termination gain		—		—		—		(493)
Amortization expense		2,712		2,766		8,137		8,719
Net loss (gain) on sale and disposition of assets		691		323		623		(252)
Long-lived asset impairment		203		643		1,927		643
Total costs and operating expenses		129,059		136,892		395,347		393,230
Operating income		40,182		50,877		159,579		118,526
Interest expense		(19,854)		(22,091)		(62,544)		(68,113)
Loss on early extinguishment of debt		—		(13,080)		—		(13,080)
Income before income tax (expense) benefit		20,328		15,706		97,035		37,333
Income tax (expense) benefit		(2,136)		(813)		205		(1,275)
Net income		18,192		14,893		97,240		36,058
Net loss attributable to noncontrolling interest		38		187		528		637
Net income attributable to Global Partners LP		18,230		15,080		97,768		36,695
Less: General partner’s interest in net income, including incentive distribution rights		324		395		857		1,065
Less: Series A preferred limited partner interest in net income		1,682		1,682		5,046		5,046
Net income attributable to common limited partners	$	16,224	$	13,003	$	91,865	$	30,584
Basic net income per common limited partner unit	$	0.48	$	0.38	$	2.71	$	0.91
Diluted net income per common limited partner unit	$	0.47	$	0.38	$	2.68	$	0.89
Basic weighted average common limited partner units outstanding		33,924		33,865		33,887		33,791
Diluted weighted average common limited partner units outstanding		34,209		34,266		34,241		34,255

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Net income	$	18,192	$	14,893	$	97,240	$	36,058
Other comprehensive income:
Change in fair value of cash flow hedges		528		—		5,715		—
Change in pension liability		878		391		258		2,871
Total other comprehensive income		1,406		391		5,973		2,871
Comprehensive income		19,598		15,284		103,213		38,929
Comprehensive loss attributable to noncontrolling interest		38		187		528		637
Comprehensive income attributable to Global Partners LP	$	19,636	$	15,471	$	103,741	$	39,566

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended
	September 30,
	2020		2019
Cash flows from operating activities
Net income	$	97,240	$	36,058
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		75,428		81,544
Amortization of deferred financing fees		3,896		3,777
Amortization of senior notes discount		—		902
Bad debt expense		375		517
Unit-based compensation expense		811		1,666
Write-off of financing fees		667		188
Net loss (gain) on sale and disposition of assets		623		(252)
Long-lived asset impairment		1,927		643
Loss on early extinguishment of debt		—		13,080
Changes in operating assets and liabilities
Accounts receivable		173,424		(1,492)
Accounts receivable-affiliate		2,541		(1,997)
Inventories		121,462		(7,724)
Broker margin deposits		11,011		(9,950)
Prepaid expenses, all other current assets and other assets		(9,978)		620
Accounts payable		(186,592)		1,389
Trustee taxes payable		(12,855)		(6,976)
Change in derivatives		(44,704)		20,606
Accrued expenses, all other current liabilities and other long-term liabilities		15,013		(23,074)
Net cash provided by operating activities		250,289		109,525
Cash flows from investing activities
Capital expenditures		(39,644)		(52,494)
Seller note issuances		(1,188)		(640)
Proceeds from sale of property and equipment		6,060		11,994
Net cash used in investing activities		(34,772)		(41,140)
Cash flows from financing activities
Net payments on working capital revolving credit facility		(163,800)		(400)
Net payments on revolving credit facility		(4,700)		(23,000)
Proceeds from senior notes, net		—		392,602
Repayment of senior notes		—		(381,886)
Repurchase of common units		(291)		—
LTIP units withheld for tax obligations		(273)		(646)
Noncontrolling interest capital contribution		400		—
Acquisition of noncontrolling interest		(1,650)		—
Distributions to limited partners and general partner		(52,384)		(57,396)
Net cash used in financing activities		(222,698)		(70,726)
Cash and cash equivalents
Decrease in cash and cash equivalents		(7,181)		(2,341)
Cash and cash equivalents at beginning of period		12,042		8,121
Cash and cash equivalents at end of period	$	4,861	$	5,780
Supplemental information
Cash paid during the period for interest	$	49,018	$	51,527

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY

(In thousands)

(Unaudited)

Price	1.00	EPS	-89,225,000
Shares	-0	P/E	-0
MCap	-0	P/FCF	-0
Net Debt	-6	EBIT	90
TEV	-6	TEV/EBIT	-0
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-09-30	Filed 2020-11-05
10-Q	2020-06-30	Filed 2020-08-06
10-Q	2020-03-31	Filed 2020-05-08
10-K	2019-12-31	Filed 2020-03-06
10-Q	2019-09-30	Filed 2019-11-07
10-Q	2019-06-30	Filed 2019-08-08
10-Q	2019-03-31	Filed 2019-05-09
10-K	2018-12-31	Filed 2019-03-08
10-Q	2018-09-30	Filed 2018-11-08
10-Q	2018-06-30	Filed 2018-08-09
10-Q	2018-03-31	Filed 2018-05-09
10-K	2017-12-31	Filed 2018-03-09
10-Q	2017-09-30	Filed 2017-11-08
10-Q	2017-06-30	Filed 2017-08-09
10-Q	2017-03-31	Filed 2017-05-09
10-K	2016-12-31	Filed 2017-03-10
10-Q	2016-09-30	Filed 2016-11-07
10-Q	2016-06-30	Filed 2016-08-08
10-Q	2016-03-31	Filed 2016-05-09
10-K	2015-12-31	Filed 2016-02-29
10-Q	2015-09-30	Filed 2015-11-06
10-Q	2015-06-30	Filed 2015-08-07
10-Q	2015-03-31	Filed 2015-05-08
10-K	2014-12-31	Filed 2015-03-13
10-Q	2014-09-30	Filed 2014-11-07
10-Q	2014-06-30	Filed 2014-08-08
10-Q	2014-03-31	Filed 2014-05-09
10-K	2013-12-31	Filed 2014-04-01
10-Q	2013-09-30	Filed 2013-11-07
10-Q	2013-06-30	Filed 2013-08-08
10-Q	2013-03-31	Filed 2013-05-09
10-K	2012-12-31	Filed 2013-03-15
10-Q	2012-09-30	Filed 2012-11-09
10-Q	2012-06-30	Filed 2012-08-08
10-Q	2012-03-31	Filed 2012-05-09
10-Q	2011-09-30	Filed 2011-11-04
10-Q	2011-06-30	Filed 2011-08-05
10-Q	2011-03-31	Filed 2011-05-06
10-K	2010-12-31	Filed 2011-03-11
10-Q	2010-09-30	Filed 2010-11-05
10-Q	2010-06-30	Filed 2010-08-06
10-Q	2010-03-31	Filed 2010-05-07
10-K	2009-12-31	Filed 2010-03-12

8-K	2021-01-26	Regulation FD, Exhibits
8-K	2021-01-19	Regulation FD, Exhibits
8-K	2020-11-10
8-K	2020-11-05
8-K	2020-10-26
8-K	2020-10-19
8-K	2020-10-07
8-K	2020-09-30
8-K	2020-09-23
8-K	2020-08-06
8-K	2020-07-31
8-K	2020-07-20
8-K	2020-07-20
8-K	2020-07-20
8-K	2020-05-08
8-K	2020-05-07
8-K	2020-04-27
8-K	2020-04-16
8-K	2020-03-06
8-K	2020-01-27
8-K	2020-01-21
8-K	2019-11-07
8-K	2019-10-25
8-K	2019-10-22
8-K	2019-08-08
8-K	2019-07-31
8-K	2019-07-26
8-K	2019-07-24
8-K	2019-07-22
8-K	2019-07-22
8-K	2019-05-09
8-K	2019-04-29
8-K	2019-04-19
8-K	2019-04-19
8-K	2019-03-07
8-K	2019-02-04
8-K	2019-01-28
8-K	2019-01-22
8-K	2018-11-08
8-K	2018-10-26
8-K	2018-10-23
8-K	2018-10-08
8-K	2018-08-09
8-K	2018-08-07
8-K	2018-07-31
8-K	2018-07-31
8-K	2018-07-27
8-K	2018-06-30
8-K	2018-05-09
8-K	2018-04-27
8-K	2018-04-23
8-K	2018-04-09
8-K	2018-03-08
8-K	2018-01-29

EX-10.2	glp-20200930xex10d2.htm
EX-31.1	glp-20200930xex31d1.htm
EX-31.2	glp-20200930xex31d2.htm
EX-32.1	glp-20200930xex32d1.htm
EX-32.2	glp-20200930xex32d2.htm

GLP 10Q Quarterly Report

Global Partners Earnings 2020-09-30