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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, 2024

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

9.50% 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 6, 2024.

TABLE OF CONTENTS

PART I.     FINANCIAL INFORMATION

Item 1.     Financial Statements (unaudited)

3

Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023

3

Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023

4

Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2024 and 2023

5

Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023

6

Consolidated Statements of Partners’ Equity for the three months ended March 31, 2024 and 2023

7

Notes to Consolidated Financial Statements

8

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

32

Item 3.     Quantitative and Qualitative Disclosures About Market Risk

54

Item 4.     Controls and Procedures

56

PART II.     OTHER INFORMATION

57

Item 1.     Legal Proceedings

57

Item 1A.   Risk Factors

57

Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds

57

Item 5.      Other Information

57

Item 6.     Exhibits

57

SIGNATURES

59

Item 1.Financial Statements

GLOBAL PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

(Unaudited)

March 31,

December 31,

    

2024

    

2023

Assets

Current assets:

Cash and cash equivalents

$

72,822

$

19,642

Accounts receivable, net

561,934

551,764

Accounts receivable-affiliates

 

5,642

 

8,142

Inventories

 

403,955

 

397,314

Brokerage margin deposits

 

13,444

 

12,779

Derivative assets

 

9,108

 

17,656

Prepaid expenses and other current assets

 

88,012

 

90,531

Total current assets

 

1,154,917

 

1,097,828

Property and equipment, net

 

1,490,217

 

1,513,545

Right of use assets, net

247,465

252,849

Intangible assets, net

 

18,849

 

20,718

Goodwill

 

426,768

 

429,215

Equity method investments

88,128

94,354

Other assets

 

39,288

 

37,502

Total assets

$

3,465,632

$

3,446,011

Liabilities and partners’ equity

Current liabilities:

Accounts payable

$

475,452

$

648,717

Working capital revolving credit facility-current portion

 

226,000

 

16,800

Lease liability-current portion

55,546

59,944

Environmental liabilities-current portion

 

5,493

 

5,057

Trustee taxes payable

 

67,919

 

67,398

Accrued expenses and other current liabilities

 

148,029

 

179,887

Derivative liabilities

 

7,592

 

4,987

Total current liabilities

 

986,031

 

982,790

Working capital revolving credit facility-less current portion

 

 

Revolving credit facility

 

 

380,000

Senior notes

 

1,184,628

 

742,720

Lease liability-less current portion

198,848

200,195

Environmental liabilities-less current portion

 

68,800

 

71,092

Financing obligations

137,554

138,485

Deferred tax liabilities

68,300

68,909

Other long-term liabilities

 

57,467

 

61,160

Total liabilities

 

2,701,628

 

2,645,351

Partners’ equity

Series A preferred limited partners (2,760,000 units issued and outstanding at March 31, 2024 and December 31, 2023)

67,476

67,476

Series B preferred limited partners (3,000,000 units issued and outstanding at March 31, 2024 and December 31, 2023)

72,305

72,305

Common limited partners (33,995,563 units issued and 33,977,582 outstanding at March 31, 2024 and 33,995,563 units issued and 33,882,357 outstanding at December 31, 2023)

 

622,499

 

658,670

General partner interest (0.67% interest with 230,303 equivalent units outstanding at March 31, 2024 and December 31, 2023)

 

1,927

 

1,828

Accumulated other comprehensive (loss) income

 

(203)

 

381

Total partners’ equity

 

764,004

 

800,660

Total liabilities and partners’ equity

$

3,465,632

$

3,446,011

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

3

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per unit data)

(Unaudited)

Three Months Ended

 

March 31,

    

2024

      

2023

 

Sales

$

4,145,392

$

4,030,327

Cost of sales

 

3,930,257

 

3,808,263

Gross profit

 

215,135

 

222,064

Costs and operating expenses:

Selling, general and administrative expenses

 

69,781

 

62,256

Operating expenses

 

120,150

 

108,353

Amortization expense

 

1,869

 

2,084

Net gain on sale and disposition of assets

(2,501)

(2,128)

Total costs and operating expenses

 

189,299

 

170,565

Operating income

 

25,836

 

51,499

Other (loss) (expense):

Loss from equity method investments

(1,379)

Interest expense

 

(29,696)

 

(22,068)

(Loss) income before income tax expense

 

(5,239)

 

29,431

Income tax expense

 

(363)

 

(400)

Net (loss) income

 

(5,602)

 

29,031

Less: General partner’s interest in net (loss) income, including incentive distribution rights

 

3,136

 

1,782

Less: Preferred limited partner interest in net income

3,916

3,463

Net (loss) income attributable to common limited partners

$

(12,654)

$

23,786

Basic net (loss) income per common limited partner unit

$

(0.37)

$

0.70

Diluted net (loss) income per common limited partner unit

$

(0.37)

$

0.70

Basic weighted average common limited partner units outstanding

33,963

 

33,986

Diluted weighted average common limited partner units outstanding

 

33,963

 

34,001

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

4

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In thousands)

(Unaudited)

Three Months Ended

 

March 31,

2024

    

2023

 

Net (loss) income

$

(5,602)

$

29,031

Other comprehensive (loss) income:

Change in pension liability

 

(584)

 

452

Total other comprehensive (loss) income

 

(584)

 

452

Comprehensive (loss) income

$

(6,186)

$

29,483

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

5

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Three Months Ended

March 31,

    

2024

    

2023

    

Cash flows from operating activities

Net (loss) income

$

(5,602)

$

29,031

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Depreciation and amortization

32,486

26,648

Amortization of deferred financing fees

 

1,831

1,347

Bad debt expense

 

(172)

38

Unit-based compensation expense

 

2,596

1,094

Write-off of financing fees

1,440

Net gain on sale and disposition of assets

 

(2,501)

(2,128)

Loss from equity method investments

1,379

Dividends received on equity method investments

204

Changes in operating assets and liabilities:

Accounts receivable

 

(9,998)

40,579

Accounts receivable-affiliate

 

2,500

(1,655)

Inventories

 

(7,257)

180,867

Broker margin deposits

 

(665)

4,381

Prepaid expenses, all other current assets and other assets

 

1,555

(3,580)

Accounts payable

 

(173,265)

(245,723)

Trustee taxes payable

 

521

5,255

Change in derivatives

 

11,153

(8,002)

Accrued expenses, all other current liabilities and other long-term liabilities

 

(38,907)

(47,477)

Net cash used in operating activities

 

(182,702)

 

(19,325)

Cash flows from investing activities

Equity method investments

 

(9,659)

Capital expenditures

 

(16,614)

(15,180)

Seller note issuances

(3,471)

(3,880)

Dividends received of equity method investments

14,304

Proceeds from sale of property and equipment, net

 

13,933

6,991

Net cash used in investing activities

 

(1,507)

 

(12,069)

Cash flows from financing activities

Net borrowings from working capital revolving credit facility

209,200

93,900

Net payments on revolving credit facility

 

(380,000)

Proceeds from senior notes, net

441,301

LTIP units withheld for tax obligations

 

(1,818)

(469)

Distribution equivalent rights

(565)

(149)

Distributions to limited partners and general partner

 

(30,729)

(58,858)

Net cash provided by financing activities

 

237,389

 

34,424

Cash and cash equivalents

Increase in cash and cash equivalents

 

53,180

 

3,030

Cash and cash equivalents at beginning of period

 

19,642

 

4,040

Cash and cash equivalents at end of period

$

72,822

$

7,070

Supplemental information

Cash paid during the period for interest

 

$

29,578

 

$

29,259

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

6

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, 2024

    

Partners

Partners

Partners

    

Interest

    

Income (Loss)

    

Equity

 

Balance at December 31, 2023

$

67,476

$

72,305

$

658,670

$

1,828

$

381

$

800,660

Net income (loss)

 

2,135

 

1,781

 

(12,654)

 

3,136

 

 

(5,602)

Distributions to limited partners and general partner

(2,135)

(1,781)

 

(23,797)

 

(3,037)

 

(30,750)

Unit-based compensation

 

2,596

 

 

2,596

Other comprehensive income

 

 

 

(584)

(584)

LTIP units withheld for tax obligations

 

(1,818)

 

 

(1,818)

Distribution equivalent rights

 

(519)

 

 

(519)

Dividends on repurchased units

 

21

 

 

21

Balance at March 31, 2024

$

67,476

$

72,305

$

622,499

$

1,927

$

(203)

$

764,004

Series A

Series B

Accumulated

Preferred

Preferred

Common

General

Other

Total

Limited

Limited

Limited

Partner

Comprehensive

Partners’

 

Three months ended March 31, 2023

    

Partners

Partners

Partners

    

Interest

    

Income (Loss)

    

Equity

 

Balance at December 31, 2022

$

67,226

$

72,305

$

648,956

$

406

$

(449)

$

788,444

Net income

 

1,682

 

1,781

 

23,786

 

1,782

 

 

29,031

Distributions to limited partners and general partner

(1,682)

(1,781)

 

(53,458)

 

(1,952)

 

(58,873)

Unit-based compensation

 

1,094

 

 

1,094

Other comprehensive income

 

 

 

452

452

LTIP units withheld for tax obligations

 

(469)

 

 

(469)

Distribution equivalent rights

 

(406)

 

 

(406)

Dividends on repurchased units

 

15

 

 

15

Balance at March 31, 2023

$

67,226

$

72,305

$

619,518

$

236

$

3

$

759,288

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

7

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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 a large terminal network of refined petroleum products and renewable fuels—with connectivity to strategic rail, pipeline and marine assets—spanning from Maine to Florida and into the U.S. Gulf States. The Partnership is one of the largest independent owners, suppliers and operators of gasoline stations and convenience stores, primarily in Massachusetts, Maine, Connecticut, Vermont, New Hampshire, Rhode Island, New York, New Jersey and Pennsylvania (collectively, the “Northeast”) and Maryland and Virginia. As of March 31, 2024, the Partnership had a portfolio of 1,601 owned, leased and/or supplied gasoline stations, including 333 directly operated convenience stores, primarily in the Northeast, as well as 64 gasoline stations located in Texas that are operated by the Partnership’s unconsolidated affiliate, Spring Partners Retail LLC (“SPR”). 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 and for substantially all of the employees who primarily or exclusively provide services to SPR, who are employed by SPR Operator LLC (“SPR Operator”), also 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, 2024, affiliates of the General Partner, including its directors and executive officers and their affiliates, owned 6,433,977 common units, representing a 18.9% limited partner interest.

2024 Events

Redemption of Series A Preferred Units—On April 15, 2024, the Partnership redeemed all of its outstanding Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (the “Series A Preferred Units”) at a redemption price of $25.00 per unit, plus a $0.514275 per unit cash distribution for the period from February 15, 2024 through April 14, 2024. Effective April 15, 2024, the Series A Preferred Units are no longer outstanding. See Note 12 for additional information.

Acquisition of Terminals from Gulf Oil—On April 9, 2024, the Partnership completed its acquisition of four refined-product terminals from Gulf Oil Limited Partnership which are located in Chelsea, MA, New Haven, CT, Linden, NJ and Woodbury, NJ, pursuant to a purchase agreement initially entered into on December 15, 2022 and subsequently amended and restated on February 23, 2024. The purchase price was approximately $212.3 million, excluding inventory acquired in the transaction. The Partnership financed the transaction with borrowings under its revolving credit facility.

Credit Agreement Facility Reallocation and Accordion Reduction—On February 5, 2024, the Partnership and the lenders under the Partnership’s credit agreement agreed, pursuant to the terms of our credit agreement, to (i) a reallocation of $300.0 million of the revolving credit facility to the working capital revolving credit facility and (ii) reduce the accordion feature from $200.0 million to $0. After giving effect to the reallocation and the accordion reduction, the working capital revolving credit facility is $950.0 million and the revolving credit facility is

8

Table of Contents

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

$600.0 million, for a total commitment of $1.55 billion, effective February 8, 2024. This reallocation and accordion reduction return the credit facilities to the terms in place prior to the reallocation and accordion exercise previously agreed to by the Partnership and the lenders on December 7, 2023. See Note 6 for additional information on the credit agreement.

2032 Notes Offering—On January 18, 2024, the Partnership and GLP Finance Corp. issued $450.0 million aggregate principal amount of 8.250% senior notes due 2032 (the “2032 Notes”) that are guaranteed by certain of the Partnership’s subsidiaries in a private placement exempt from the registration requirements under the Securities Act of 1933, as amended. The Partnership used the net proceeds from the offering to repay a portion of the borrowings outstanding under its credit agreement and for general corporate purposes. See Note 6 for additional information on the credit agreement.

Basis of Presentation

The accompanying consolidated financial statements as of March 31, 2024 and December 31, 2023 and for the three months ended March 31, 2024 and 2023 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, 2023 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, 2024 are not necessarily indicative of the results of operations that will be realized for the entire year ending December 31, 2024. The consolidated balance sheet at December 31, 2023 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, 2023.

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. 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.

9

Table of Contents

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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,

    

2024

    

2023

    

Gasoline sales: gasoline and gasoline blendstocks (such as ethanol)

 

60

%  

59

%  

Distillates (home heating oil, diesel and kerosene), residual oil and crude oil sales

 

37

%  

38

%  

Convenience store and prepared food sales, rental income and sundries

3

%  

3

%  

Total

 

100

%  

100

%  

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,

    

2024

    

2023

    

Wholesale segment

 

20

%  

22

%

Gasoline Distribution and Station Operations segment

 

77

%  

75

%

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, 2024 and 2023.

Note 2.     Revenue from Contracts with 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, 2024

 

Revenue from contracts with customers:

    

Wholesale

    

GDSO

    

Commercial

    

Total

 

Petroleum and related product sales

$

813,419

$

1,097,277

$

182,120

$

2,092,816

Station operations

 

 

109,832

 

 

109,832

Total revenue from contracts with customers

813,419

1,207,109

182,120

2,202,648

Other sales:

Revenue originating as physical forward contracts and exchanges

1,825,184

96,479

1,921,663

Revenue from leases

 

745

 

20,336

 

 

21,081

Total other sales

1,825,929

20,336

96,479

1,942,744

Total sales

$

2,639,348

$

1,227,445

$

278,599

$

4,145,392

10

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Three Months Ended March 31, 2023

 

Revenue from contracts with customers:

    

Wholesale

    

GDSO

    

Commercial

    

Total

 

Petroleum and related product sales

$

857,757

$

1,185,866

$

171,807

$

2,215,430

Station operations

 

 

107,279

 

 

107,279

Total revenue from contracts with customers

857,757

1,293,145

171,807

2,322,709

Other sales:

Revenue originating as physical forward contracts and exchanges

1,601,151

86,065

1,687,216

Revenue from leases

 

515

 

19,887

 

 

20,402

Total other sales

1,601,666

19,887

86,065

1,707,618

Total sales

$

2,459,423

$

1,313,032

$

257,872

$

4,030,327

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, 2024 and December 31, 2023.

Note 3.    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.

11

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Inventories consisted of the following (in thousands):

March 31,

December 31,

    

2024

    

2023

Distillates: home heating oil, diesel and kerosene

$

121,723

$

154,890

Gasoline

 

150,662

 

134,749

Gasoline blendstocks

 

64,582

 

31,146

Residual oil

 

35,158

 

45,774

Renewable identification numbers (RINs)

 

3,170

 

1,684

Convenience store inventory

 

28,660

 

29,071

Total

$

403,955

$

397,314

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 $4.0 million and $0.5 million at March 31, 2024 and December 31, 2023, respectively. Negative exchange balances are accounted for as accounts payable and amounted to $17.5 million and $29.8 million at March 31, 2024 and December 31, 2023, respectively. Exchange transactions are valued using current carrying costs.

Note 4.    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, 2023

$

429,215

Dispositions (1)

(2,447)

Balance at March 31, 2024

$

426,768

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

Note 5.    Property and Equipment

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

March 31, 

December 31,

    

2024

    

2023

 

Buildings and improvements

$

1,742,692

$

1,738,122

Land

 

611,306

 

614,548

Fixtures and equipment

 

48,671

 

47,589

Idle plant assets

30,500

30,500

Construction in process

 

52,309

 

54,281

Capitalized internal use software

 

33,808

 

33,808

Total property and equipment

 

2,519,286

 

2,518,848

Less accumulated depreciation

 

1,029,069

 

1,005,303

Total

$

1,490,217

$

1,513,545

Property and equipment includes retail gasoline station assets held for sale of $15.2 million and $20.3 million at March 31, 2024 and December 31, 2023, respectively.

12

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

At March 31, 2024, the Partnership had a $38.8 million remaining net book value of long-lived assets at its West Coast facility, including $30.5 million related to the Partnership’s ethanol plant acquired in 2013. The Partnership would need to take certain measures to prepare the facility for ethanol production in order to place the plant into service and commence depreciation. Therefore, the $30.5 million related to the ethanol plant was included in property and equipment and classified as idle plant assets at both March 31, 2024 and December 31, 2023.

If the Partnership is unable to generate cash flows to support the recoverability of the plant and facility assets, this may become an indicator of potential impairment of the West Coast facility. The Partnership believes these assets are recoverable but continues to monitor the market for ethanol, the continued business development of this facility for ethanol or other product transloading, and the related impact this may have on the facility’s operating cash flows and whether this would constitute an impairment indicator.

Note 6.    Debt and Financing Obligations

Credit Agreement

Certain subsidiaries of the Partnership, as borrowers, and the Partnership and certain of its subsidiaries, as guarantors, have a $1.55 billion senior secured credit facility (the “Credit Agreement”). The Credit Agreement matures on May 2, 2026.

On February 5, 2024, the Partnership and the lenders under the Credit Agreement agreed, pursuant to the terms of the Credit Agreement, to (i) a reallocation of $300.0 million of the revolving credit facility to the working capital revolving credit facility and (ii) reduce the accordion feature from $200.0 million to $0, effective February 8, 2024. This reallocation and accordion reduction return the credit facilities to the terms in place prior to the reallocation and accordion exercise previously agreed to by the Partnership and the lenders on December 7, 2023.

As of March 31, 2024, there were are two facilities under the Credit Agreement:

a working capital revolving credit facility to be used for working capital purposes and letters of credit in the principal amount equal to the lesser of the Partnership’s borrowing base and $950.0 million; and

a $600.0 million revolving credit facility to be used for general corporate purposes.

Availability under the working capital revolving credit facility is subject to a borrowing base which is redetermined from time to time and based on specific advance rates on eligible current assets. Availability under the borrowing base may be affected by events beyond the Partnership’s control, such as changes in petroleum product prices, collection cycles, counterparty performance, advance rates and limits and general economic conditions.

The average interest rates for the Credit Agreement were 7.4% and 6.5% for the three months ended March 31, 2024 and 2023, respectively.

The Partnership classifies a portion of its working capital revolving credit facility as a current liability and a portion as a long-term liability. The portion classified as a long-term liability represents the amounts expected to be outstanding throughout the next twelve months based on an analysis of historical daily borrowings under the working capital revolving credit facility, the seasonality of borrowings, forecasted future working capital requirements and forward product curves, and because the Partnership has a multi-year, long-term commitment from its bank group. Accordingly, at March 31, 2024, the Partnership estimated working capital revolving credit facility borrowings will equal or exceed $0 over the next twelve months.

13

Table of Contents

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The table below presents the total borrowings and availability under the Credit Agreement (in thousands):

March 31, 

December 31,

    

2024

    

2023

 

Total available commitments

$

1,550,000

$

1,750,000

Working capital revolving credit facility-current portion

226,000

16,800

Working capital revolving credit facility-less current portion

Revolving credit facility

380,000

Total borrowings outstanding