GLOBAL PARTNERS LP [GLP] Filings

10-Q 1 glp-20220331x10q.htm 10-Q

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 March 31, 2022

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 Rate Cumulative Redeemable	GLP pr A	New York Stock Exchange
Perpetual Preferred Units representing limited partner interests

9.50% Series B Fixed Rate Cumulative Redeemable	GLP pr B	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 May 4, 2022.

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TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)		3

Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021		3

Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021		4

Consolidated Statements of Comprehensive Income (loss) for the three months ended March 31, 2022 and 2021		5

Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021		6

Consolidated Statements of Partners’ Equity for the three months ended March 31, 2022 and 2021		7

Notes to Consolidated Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		33

Item 3. Quantitative and Qualitative Disclosures About Market Risk		56

Item 4. Controls and Procedures		57

PART II. OTHER INFORMATION		58

Item 1. Legal Proceedings		58

Item 1A. Risk Factors		58

Item 6. Exhibits		58

SIGNATURES		60

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Item 1.Financial Statements

GLOBAL PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

(Unaudited)


	March 31,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	10,834	$	10,849
Accounts receivable, net		526,098		411,194
Accounts receivable—affiliates		2,238		1,139
Inventories		511,905		509,517
Brokerage margin deposits		53,563		33,658
Derivative assets		17,828		11,652
Prepaid expenses and other current assets		77,935		87,076
Total current assets		1,200,401		1,065,085
Property and equipment, net		1,202,867		1,099,348
Right of use assets, net		277,157		280,284
Intangible assets, net		33,207		26,014
Goodwill		409,424		328,135
Other assets		30,016		32,299
Total assets	$	3,153,072	$	2,831,165
Liabilities and partners’ equity
Current liabilities:
Accounts payable	$	466,275	$	353,296
Working capital revolving credit facility—current portion		178,600		204,700
Lease liability—current portion		57,514		62,352
Environmental liabilities—current portion		4,642		4,642
Trustee taxes payable		43,881		44,223
Accrued expenses and other current liabilities		105,013		138,733
Derivative liabilities		52,008		31,654
Total current liabilities		907,933		839,600
Working capital revolving credit facility—less current portion		200,000		150,000
Revolving credit facility		228,000		43,400
Senior notes		739,736		739,310
Long-term lease liability—less current portion		228,702		228,203
Environmental liabilities—less current portion		59,913		48,163
Financing obligations		143,837		144,444
Deferred tax liabilities		57,279		56,817
Other long—term liabilities		55,066		53,461
Total liabilities		2,620,466		2,303,398
Partners’ equity
Series A preferred limited partners (2,760,000 units issued and outstanding at March 31, 2022 and December 31, 2021)		67,226		67,226
Series B preferred limited partners (3,000,000 units issued and outstanding at March 31, 2022 and December 31, 2021)		72,305		72,305
Common limited partners (33,995,563 units issued and 33,953,227 outstanding at March 31, 2022 and 33,995,563 units issued and 33,953,227 outstanding at December 31, 2021)		398,267		392,086
General partner interest (0.67% interest with 230,303 equivalent units outstanding at March 31, 2022 and December 31, 2021)		(1,783)		(1,948)
Accumulated other comprehensive loss		(3,409)		(1,902)
Total partners’ equity		532,606		527,767
Total liabilities and partners’ equity	$	3,153,072	$	2,831,165

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

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GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per unit data)

(Unaudited)


	Three Months Ended
	March 31,
	2022		2021
Sales	$	4,500,538	$	2,553,327
Cost of sales		4,294,300		2,408,295
Gross profit		206,238		145,032
Costs and operating expenses:
Selling, general and administrative expenses		56,281		46,324
Operating expenses		99,233		80,528
Amortization expense		2,499		2,723
Net gain on sale and disposition of assets		(4,911)		(475)
Total costs and operating expenses		153,102		129,100
Operating income		53,136		15,932
Interest expense		(21,474)		(20,359)
Income before income tax (expense) benefit		31,662		(4,427)
Income tax (expense) benefit		(1,177)		130
Net income (loss)		30,485		(4,297)
Less: General partner’s interest in net income (loss), including incentive distribution rights		1,177		739
Less: Preferred limited partner interest in net income		3,463		1,820
Net income (loss) attributable to common limited partners	$	25,845	$	(6,856)
Basic net income (loss) per common limited partner unit	$	0.76	$	(0.20)
Diluted net income (loss) per common limited partner unit	$	0.76	$	(0.20)
Basic weighted average common limited partner units outstanding		33,953		33,967
Diluted weighted average common limited partner units outstanding		34,085		34,296

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

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GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)


	Three Months Ended
	March 31,
	2022		2021
Net income (loss)	$	30,485	$	(4,297)
Other comprehensive (loss) income:
Change in fair value of cash flow hedges		—		2,052
Change in pension liability		(1,507)		46
Total other comprehensive (loss) income		(1,507)		2,098
Comprehensive income (loss)	$	28,978	$	(2,199)

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

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GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Three Months Ended
	March 31,
	2022		2021
Cash flows from operating activities
Net income (loss)	$	30,485	$	(4,297)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		26,701		24,975
Amortization of deferred financing fees		1,390		1,344
Bad debt expense		51		(68)
Unit-based compensation expense		204		259
Net gain on sale and disposition of assets		(4,911)		(475)
Changes in operating assets and liabilities:
Accounts receivable		(114,955)		(86,794)
Accounts receivable-affiliate		(1,099)		(2,110)
Inventories		2,229		(84,024)
Broker margin deposits		(19,905)		(9,687)
Prepaid expenses, all other current assets and other assets		10,658		33,628
Accounts payable		112,979		30,118
Trustee taxes payable		(342)		4,332
Change in derivatives		14,178		16,918
Accrued expenses, all other current liabilities and other long-term liabilities		(35,035)		(30,102)
Net cash provided by (used in) operating activities		22,628		(105,983)
Cash flows from investing activities
Acquisitions		(214,894)		(7,071)
Capital expenditures		(17,093)		(16,901)
Seller note issuances		—		(1,690)
Proceeds from sale of property and equipment		25,187		2,994
Net cash used in investing activities		(206,800)		(22,668)
Cash flows from financing activities
Net proceeds from issuance of Series B preferred units		—		72,167
Net borrowings from working capital revolving credit facility		23,900		168,000
Net borrowings from (payments on) revolving credit facility		184,600		(88,600)
LTIP units withheld for tax obligations		(6)		(26)
Distributions to limited partners and general partner		(24,337)		(21,006)
Net cash provided by financing activities		184,157		130,535
Cash and cash equivalents
(Decrease) increase in cash and cash equivalents		(15)		1,884
Cash and cash equivalents at beginning of period		10,849		9,714
Cash and cash equivalents at end of period	$	10,834	$	11,598
Supplemental information
Cash paid during the period for interest	$	29,524	$	16,235

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

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GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY

(In thousands)

(Unaudited)


	Series A		Series B						Accumulated
	Preferred		Preferred		Common		General		Other		Total
	Limited		Limited		Limited		Partner		Comprehensive		Partners’
Three months ended March 31, 2022	Partners		Partners		Partners		Interest		Income (Loss)		Equity
Balance at December 31, 2021	$	67,226	$	72,305	$	392,086	$	(1,948)	$	(1,902)	$	527,767
Net income		1,682		1,781		25,845		1,177		—		30,485
Distributions to limited partners and general partner		(1,682)		(1,781)		(19,887)		(1,012)		—		(24,362)
Unit-based compensation		—		—		204		—		—		204
Other comprehensive income		—		—		—		—		(1,507)		(1,507)
LTIP units withheld for tax obligations		—		—		(6)		—		—		(6)
Dividends on repurchased units		—		—		25		—		—		25
Balance at March 31, 2022	$	67,226	$	72,305	$	398,267	$	(1,783)	$	(3,409)	$	532,606


	Series A		Series B						Accumulated
	Preferred		Preferred		Common		General		Other		Total
	Limited		Limited		Limited		Partner		Comprehensive		Partners’
Three months ended March 31, 2021	Partners		Partners		Partners		Interest		Income (Loss)		Equity
Balance at December 31, 2020	$	67,226	$	—	$	428,842	$	(2,169)	$	1,600	$	495,499
Issuance of Series B preferred units		—		72,167		—		—		—		72,167
Net income (loss)		1,682		138		(6,856)		739		—		(4,297)
Distributions to limited partners and general partner		(1,682)		—		(18,698)		(642)		—		(21,022)
Unit-based compensation		—		—		259		—		—		259
Other comprehensive income		—		—		—		—		2,098		2,098
LTIP units withheld for tax obligations		—		—		(26)		—		—		(26)
Dividends on repurchased units		—		—		16		—		—		16
Balance at March 31, 2021	$	67,226	$	72,305	$	403,537	$	(2,072)	$	3,698	$	544,694

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

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Organization and Basis of Presentation

Organization

Global Partners LP (the “Partnership”) is a master limited partnership formed in March 2005. The Partnership owns, controls or has access to one of the largest terminal networks of refined petroleum products and renewable fuels in Massachusetts, Maine, Connecticut, Vermont, New Hampshire, Rhode Island, New York, New Jersey and Pennsylvania (collectively, the “Northeast”). The Partnership is one of the region’s largest independent owners, suppliers and operators of gasoline stations and convenience stores. As of March 31, 2022, the Partnership had a portfolio of 1,689 owned, leased and/or supplied gasoline stations, including 342 directly operated convenience stores, primarily in the Northeast. The Partnership is also one of the largest distributors of gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers in the New England states and New York. The Partnership engages in the purchasing, selling, gathering, blending, storing and logistics of transporting petroleum and related products, including gasoline and gasoline blendstocks (such as ethanol), distillates (such as home heating oil, diesel and kerosene), residual oil, renewable fuels, crude oil and propane and in the transportation of petroleum products and renewable fuels by rail from the mid-continent region of the United States and Canada.

Global GP LLC, the Partnership’s general partner (the “General Partner”), manages the Partnership’s operations and activities and employs its officers and substantially all of its personnel, except for most of its gasoline station and convenience store employees who are employed by Global Montello Group Corp. (“GMG”), a wholly owned subsidiary of the Partnership.

The General Partner, which holds a 0.67% general partner interest in the Partnership, is owned by affiliates of the Slifka family. As of March 31, 2022, affiliates of the General Partner, including its directors and executive officers and their affiliates, owned 6,173,345 common units, representing a 18.2% limited partner interest.

COVID-19 Pandemic

The COVID-19 pandemic continues to make its presence felt at home, in the workplace, at the Partnership’s retail sites and terminal locations and in the global supply chain. The Partnership remains active in responding to the challenges posed by the COVID-19 pandemic and continues to provide essential products and services while prioritizing the safety of its employees, customers and vendors in the communities where the Partnership operates.

2022 Events

Amendments to the Credit Agreement—On March 9, 2022, the Partnership and certain of its subsidiaries entered into the sixth amendment to third amended and restated credit agreement which, among other things, increased the total aggregate commitment to $1.55 billion. On March 30, 2022, the Partnership and certain of its subsidiaries entered into the seventh amendment to third amended and restated credit agreement which, among other things, refreshed the accordion feature under the credit agreement. See Note 7 for additional information on these amendments.

Acquisitions—On February 1, 2022, the Partnership acquired substantially all of the retail motor fuel assets from Miller Oil Co., Inc. (“Miller Oil”). See Note 2.

On January 25, 2022, the Partnership acquired substantially all of the assets from Connecticut-based Consumers Petroleum of Connecticut, Incorporated (“Consumers Petroleum”). See Note 2.

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Basis of Presentation

The financial results of Miller Oil and Consumers Petroleum since the respective acquisition date are included in the accompanying statement of operations for the three months ended March 31, 2022. The accompanying consolidated financial statements as of March 31, 2022 and December 31, 2021 and for the three months ended March 31, 2022 and 2021 reflect the accounts of the Partnership. Upon consolidation, all intercompany balances and transactions have been eliminated.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial condition and operating results for the interim periods. The interim financial information, which has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), should be read in conjunction with the consolidated financial statements for the year ended December 31, 2021 and notes thereto contained in the Partnership’s Annual Report on Form 10-K. The significant accounting policies described in Note 2, “Summary of Significant Accounting Policies,” of such Annual Report on Form 10-K are the same used in preparing the accompanying consolidated financial statements.

The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results of operations that will be realized for the entire year ending December 31, 2022. The consolidated balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2021.

Concentration of Risk

Due to the nature of the Partnership’s businesses and its reliance, in part, on consumer travel and spending patterns, the Partnership may experience more demand for gasoline during the late spring and summer months than during the fall and winter months. Travel and recreational activities are typically higher in these months in the geographic areas in which the Partnership operates, increasing the demand for gasoline. Therefore, the Partnership’s volumes in gasoline are typically higher in the second and third quarters of the calendar year. However, the COVID-19 pandemic has had a negative impact on gasoline demand and the extent and duration of that impact remains uncertain. As demand for some of the Partnership’s refined petroleum products, specifically home heating oil and residual oil for space heating purposes, is generally greater during the winter months, heating oil and residual oil volumes are generally higher during the first and fourth quarters of the calendar year. These factors may result in fluctuations in the Partnership’s quarterly operating results.

The following table presents the Partnership’s product sales and other revenues as a percentage of the consolidated sales for the periods presented:


	Three Months Ended
	March 31,
	2022		2021
Gasoline sales: gasoline and gasoline blendstocks (such as ethanol)	60	%	62	%
Distillates (home heating oil, diesel and kerosene) and residual oil sales	37	%	33	%
Crude oil sales and crude oil logistics revenue	—	%	1	%
Convenience store and prepared food sales, rental income and sundries	3	%	4	%
Total	100	%	100	%

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents the Partnership’s product margin by segment as a percentage of the consolidated product margin for the periods presented:


	Three Months Ended
	March 31,
	2022		2021
Wholesale segment	21	%	18	%
Gasoline Distribution and Station Operations segment	76	%	79	%
Commercial segment	3	%	3	%
Total	100	%	100	%

See Note 13, “Segment Reporting,” for additional information on the Partnership’s operating segments.

None of the Partnership’s customers accounted for greater than 10% of total sales for the three months ended March 31, 2022 and 2021.

Note 2. Business Combinations

Acquisition from Miller Oil Co., Inc.—On February 1, 2022, the Partnership acquired substantially all of the retail motor fuel assets from Miller Oil in a cash transaction. The acquisition includes 21 company-operated Miller’s Neighborhood Market convenience stores and 2 fuel sites that are either owned or leased, including lessee dealer and commissioned agent locations, all located in Virginia, and 34 fuel supply only sites, primarily in Virginia. The purchase price was approximately $60.2 million, including inventory. The acquisition was funded with borrowings under the Partnership’s revolving credit facility.

The preliminary fair values of the assets acquired and liabilities assumed as of February 1, 2022, the acquisition date, are set forth in the table below. The excess of the purchase price over the aggregate acquisition date value of identifiable net assets acquired was recorded as goodwill and assigned to the GDSO segment. Substantially all of the goodwill is expected to be deductible for tax purposes. These preliminary acquisition date values were generally determined through established and generally accepted valuation techniques and are subject to change during the measurement period as valuations are finalized. As a result, the acquisition accounting is not complete, and additional information that existed at the acquisition date may become known to the Partnership during the remainder of the measurement period. As of the filing date of this Form 10-Q, the Partnership is still in the process of valuing the assets acquired from Miller Oil, including inventory, property and equipment, right of use assets, intangible assets and liabilities.

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents the preliminary allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands):


Assets purchased:
Inventory	$	2,317
Property and equipment		37,530
Right of use assets		5,139
Intangibles		5,555
Total identifiable assets purchased		50,541
Liabilities assumed:
Accrued expenses and other current liabilities		(851)
Environmental liabilities		(4,596)
Lease liability		(5,969)
Other non-current liabilities		(406)
Total liabilities assumed		(11,822)
Net identifiable assets acquired		38,719
Goodwill		21,448
Net assets acquired	$	60,167

The fair values of the remaining assets and liabilities noted above approximate their carrying values at February 1, 2022.

The Partnership utilized accounting guidance related to intangible assets which lists the pertinent factors to be considered when estimating the useful life of an intangible asset. These factors include, in part, a review of the expected use by the Partnership of the assets acquired, the expected useful life of another asset (or group of assets) related to the acquired assets and legal, regulatory or other contractual provisions that may limit the useful life of an acquired asset. The Partnership amortizes these intangible assets over their estimated useful lives which is consistent with the estimated undiscounted future cash flows of these assets.

As part of the purchase price allocation, identifiable intangible assets include dealer supply contracts that are being amortized over three to eight years. Amortization expense related to the intangible assets was immaterial for the three months ended March 31, 2022.

In connection with the acquisition of Miller Oil, the Partnership incurred acquisition costs of approximately $0.4 million for the three months ended March 31, 2022, which are included in selling, general and administrative expenses in the accompanying consolidated statement of operations.

Acquisition from Consumers Petroleum of Connecticut Incorporated—On January 25, 2022, the Partnership acquired substantially all of the assets from Consumers Petroleum in a cash transaction. The acquisition includes 26 company-owned Wheels convenience stores and related fuel operations located in Connecticut and 22 fuel-supply only sites located in Connecticut and New York. The purchase price, subject to post-closing adjustments, was approximately $154.7 million, including inventory. The acquisition was funded with borrowings under the Partnership’s revolving credit facility.

The preliminary fair values of the assets acquired and liabilities assumed as of January 25, 2022, the acquisition date, are set forth in the table below. The excess of the purchase price over the aggregate acquisition date value of identifiable net assets acquired was recorded as goodwill and assigned to the GDSO segment. Substantially all of the goodwill is expected to be deductible for tax purposes. These preliminary acquisition date values were generally determined through established and generally accepted valuation techniques and are subject to change during the measurement period as valuations are finalized. As a result, the acquisition accounting is not complete, and additional

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

information that existed at the acquisition date may become known to the Partnership during the remainder of the measurement period. As of the filing date of this Form 10-Q, the Partnership is still in the process of valuing the assets acquired from Consumers Petroleum, including inventory, property and equipment, right of use assets, intangible assets and liabilities.

The following table presents the preliminary allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands):


Assets purchased:
Inventory	$	2,475
Property and equipment		88,288
Right of use assets		4,482
Intangibles		4,136
Other non-current assets		182
Total identifiable assets purchased		99,563
Liabilities assumed:
Environmental liabilities		(7,256)
Lease liability		(2,372)
Other non-current liabilities		(329)
Total liabilities assumed		(9,957)
Net identifiable assets acquired		89,606
Goodwill		65,121
Net assets acquired	$	154,727

The fair values of the remaining assets and liabilities noted above approximate their carrying values at January 25, 2022.

As part of the purchase price allocation, identifiable intangible assets include dealer supply contracts that are being amortized over four to eight years. Amortization expense related to the intangible assets was immaterial for the three months ended March 31, 2022.

In connection with the acquisition of Consumers Petroleum, the Partnership incurred acquisition costs of approximately $0.9 million for the three months ended March 31, 2022, which are included in selling, general and administrative expenses in the accompanying consolidated statement of operations.

Supplemental Pro Forma Information—Revenues and net income not included in the Partnership’s consolidated operating results for Miller Oil and Consumers Petroleum from January 1, 2022 through the respective acquisition date were immaterial.

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3. Revenue from Contract Customers

Disaggregation of Revenue

The following table provides the disaggregation of revenue from contracts with customers and other sales by segment for the periods presented (in thousands):


	Three Months Ended March 31, 2022
Revenue from contracts with customers:	Wholesale		GDSO		Commercial		Total
Refined petroleum products, renewable fuels and crude oil	$	1,011,786	$	1,276,961	$	222,573	$	2,511,320
Station operations		—		96,566		—		96,566
Total revenue from contracts with customers		1,011,786		1,373,527		222,573		2,607,886
Other sales:
Revenue originating as physical forward contracts and exchanges		1,765,004		—		107,409		1,872,413
Revenue from leases		913		19,326		—		20,239
Total other sales		1,765,917		19,326		107,409		1,892,652
Total sales	$	2,777,703	$	1,392,853	$	329,982	$	4,500,538


	Three Months Ended March 31, 2021
Revenue from contracts with customers:	Wholesale		GDSO		Commercial		Total
Refined petroleum products, renewable fuels and crude oil	$	684,014	$	756,008	$	18,784	$	1,458,806
Station operations		—		81,848		—		81,848
Total revenue from contracts with customers		684,014		837,856		18,784		1,540,654
Other sales:
Revenue originating as physical forward contracts and exchanges		866,904		—		126,886		993,790
Revenue from leases		567		18,316		—		18,883
Total other sales		867,471		18,316		126,886		1,012,673
Total sales	$	1,551,485	$	856,172	$	145,670	$	2,553,327

Contract Balances

A receivable, which is included in accounts receivable, net in the accompanying consolidated balance sheets, is recognized in the period the Partnership provides services when its right to consideration is unconditional. In contrast, a contract asset will be recognized when the Partnership has fulfilled a contract obligation but must perform other obligations before being entitled to payment.

The nature of the receivables related to revenue from contracts with customers and other revenue, as well as contract assets, are the same, given they are related to the same customers and have the same risk profile and securitization. Payment terms on invoiced amounts are typically 2 to 30 days.

A contract liability is recognized when the Partnership has an obligation to transfer goods or services to a customer for which the Partnership has received consideration (or the amount is due) from the customer. The Partnership had no significant contract liabilities at both March 31, 2022 and December 31, 2021.

Table of Contents

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 4. Inventories

The Partnership hedges substantially all of its petroleum and ethanol inventory using a variety of instruments, primarily exchange-traded futures contracts. These futures contracts are entered into when inventory is purchased and are either designated as fair value hedges against the inventory on a specific barrel basis for inventories qualifying for fair value hedge accounting or not designated and maintained as economic hedges against certain inventory of the Partnership on a specific barrel basis. Changes in fair value of these futures contracts, as well as the offsetting change in fair value on the hedged inventory, are recognized in earnings as an increase or decrease in cost of sales. All hedged inventory designated in a fair value hedge relationship is valued using the lower of cost, as determined by specific identification, or net realizable value, as determined at the product level. All petroleum and ethanol inventory not designated in a fair value hedging relationship is carried at the lower of historical cost, on a first-in, first-out basis, or net realizable value. Renewable Identification Numbers (“RINs”) inventory is carried at the lower of historical cost, on a first-in, first-out basis, or net realizable value. Convenience store inventory is carried at the lower of historical cost, based on a weighted average cost method, or net realizable value.

Inventories consisted of the following (in thousands):


	March 31,		December 31,
	2022		2021
Distillates: home heating oil, diesel and kerosene	$	134,882	$	244,067
Gasoline		202,582		123,824
Gasoline blendstocks		96,331		50,599
Crude oil		3,252		3,678
Residual oil		41,357		60,286
Renewable identification numbers (RINs)		6,462		4,218
Convenience store inventory		27,039		22,845
Total	$	511,905	$	509,517

In addition to its own inventory, the Partnership has exchange agreements for petroleum products and ethanol with unrelated third-party suppliers, whereby it may draw inventory from these other suppliers and suppliers may draw inventory from the Partnership. Positive exchange balances are accounted for as accounts receivable and amounted to $1.0 million and $1.3 million at March 31, 2022 and December 31, 2021, respectively. Negative exchange balances are accounted for as accounts payable and amounted to $32.2 million and $20.6 million at March 31, 2022 and December 31, 2021, respectively. Exchange transactions are valued using current carrying costs.

Note 5. Goodwill

The following table presents changes in goodwill, all of which has been allocated to the Gasoline Distribution and Station Operations (“GDSO”) segment (in thousands):


Balance at December 31, 2021	$	328,135
Acquisition of Miller Oil (1)		21,448
Acquisition of Consumers Petroleum (1)		65,121
Dispositions (2)		(5,280)
Balance at March 31, 2022	$	409,424

(1)	See Note 2 for information on the Partnership’s business combinations.

(2)	Dispositions represent derecognition of goodwill associated with the sale and disposition of certain assets.

Table of Contents

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 6. Property and Equipment

Property and equipment consisted of the following (in thousands):


	March 31,		December 31,
	2022		2021
Buildings and improvements	$	1,393,464	$	1,327,002
Land		516,278		457,260
Fixtures and equipment		39,232		38,646
Idle plant assets		30,500		30,500
Construction in process		50,591		52,716
Capitalized internal use software		32,740		32,740
Total property and equipment		2,062,805		1,938,864
Less accumulated dep

GLOBAL PARTNERS LP [GLP] Filings
GLOBAL PARTNERS LP [GLP-PA] Filings
GLOBAL PARTNERS LP [GLP-PB] Filings
10-Q	[2022-05-06]
10-K	[2022-02-28]
10-Q	[2021-11-05]
10-Q	[2021-08-06]
10-Q	[2021-05-07]
10-K	[2021-03-05]
10-Q	[2020-11-05]
10-Q	[2020-08-06]
10-Q	[2020-05-08]
10-K	[2020-03-06]
10-Q	[2019-11-07]
10-Q	[2019-08-08]
10-Q	[2019-05-09]
10-K	[2019-03-08]
10-Q	[2018-11-08]
10-Q	[2018-08-09]
10-Q	[2018-05-09]
10-K	[2018-03-09]
10-Q	[2017-11-08]
10-Q	[2017-08-09]
10-Q	[2017-05-09]
10-K	[2017-03-10]
10-Q	[2016-11-07]
10-Q	[2016-08-08]
10-Q	[2016-05-09]
10-K	[2016-02-29]
10-Q	[2015-11-06]
10-Q	[2015-08-07]
10-Q	[2015-05-08]
10-K	[2015-03-13]
10-Q	[2014-11-07]
10-Q	[2014-08-08]
10-Q	[2014-05-09]
10-K	[2014-04-01]
10-Q	[2013-11-07]
10-Q	[2013-08-08]
10-Q	[2013-05-09]
10-K	[2013-03-15]
10-Q	[2012-11-09]
10-Q	[2012-08-08]
10-Q	[2012-05-09]
10-K	[2012-03-12]

GLOBAL PARTNERS LP [GLP] Filings

GLOBAL PARTNERS LP [GLP-PA] Filings

GLOBAL PARTNERS LP [GLP-PB] Filings