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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 September 30, 2017

 

 

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)

 

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post 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  ☐

(Do not check if a smaller reporting company)

 

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 6, 2017.

 

 

 

 


 

TABLE OF CONTENTS

 

PART I.     FINANCIAL INFORMATION

 

 

 

 

 

Item 1.     Financial Statements (unaudited) 

 

3

 

 

 

Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016 

 

3

 

 

 

Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016  

 

4

 

 

 

Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2017 and 2016 

 

5

 

 

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016 

 

6

 

 

 

Consolidated Statement of Partners’ Equity for the nine months ended September 30, 2017 

 

7

 

 

 

Notes to Consolidated Financial Statements 

 

8

 

 

 

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

 

50

 

 

 

Item 3.     Quantitative and Qualitative Disclosures About Market Risk 

 

76

 

 

 

Item 4.     Controls and Procedures 

 

77

 

 

 

PART II.     OTHER INFORMATION 

 

79

 

 

 

Item 1.     Legal Proceedings 

 

79

 

 

 

Item 1A.   Risk Factors 

 

81

 

 

 

Item 6.     Exhibits 

 

81

 

 

 

SIGNATURES 

 

82

 

 

 

 

 

 

 

 


 

Item 1.Financial Statements

 

GLOBAL PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

 

    

2017

    

2016

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

10,855

 

$

10,028

 

Accounts receivable, net

 

 

330,939

 

 

421,360

 

Accounts receivable—affiliates

 

 

5,647

 

 

3,143

 

Inventories

 

 

280,510

 

 

521,878

 

Brokerage margin deposits

 

 

12,454

 

 

27,653

 

Derivative assets

 

 

5,350

 

 

21,382

 

Prepaid expenses and other current assets

 

 

77,175

 

 

70,022

 

Total current assets

 

 

722,930

 

 

1,075,466

 

Property and equipment, net

 

 

1,038,231

 

 

1,099,899

 

Intangible assets, net

 

 

57,670

 

 

65,013

 

Goodwill

 

 

291,455

 

 

294,768

 

Other assets

 

 

37,892

 

 

28,874

 

Total assets

 

$

2,148,178

 

$

2,564,020

 

Liabilities and partners’ equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

241,724

 

$

320,262

 

Working capital revolving credit facility—current portion

 

 

39,200

 

 

274,600

 

Environmental liabilities—current portion

 

 

5,329

 

 

5,341

 

Trustee taxes payable

 

 

97,857

 

 

101,166

 

Accrued expenses and other current liabilities

 

 

81,383

 

 

70,443

 

Derivative liabilities

 

 

11,109

 

 

27,413

 

Total current liabilities

 

 

476,602

 

 

799,225

 

Working capital revolving credit facility—less current portion

 

 

100,000

 

 

150,000

 

Revolving credit facility

 

 

190,000

 

 

216,700

 

Senior notes

 

 

661,109

 

 

659,150

 

Environmental liabilities—less current portion

 

 

52,712

 

 

57,724

 

Financing obligations

 

 

152,463

 

 

152,444

 

Deferred tax liabilities

 

 

64,181

 

 

66,054

 

Other long-term liabilities

 

 

59,343

 

 

64,882

 

Total liabilities

 

 

1,756,410

 

 

2,166,179

 

Partners’ equity

 

 

 

 

 

 

 

Global Partners LP equity:

 

 

 

 

 

 

 

Common unitholders 33,995,563 units issued and 33,644,218 outstanding at September 30, 2017 and 33,995,563 units issued and 33,543,669 outstanding at December 31, 2016)

 

 

395,219

 

 

401,044

 

General partner interest (0.67% interest with 230,303 equivalent units outstanding at September 30, 2017 and December 31, 2016)

 

 

(2,996)

 

 

(2,948)

 

Accumulated other comprehensive loss

 

 

(4,213)

 

 

(5,441)

 

Total Global Partners LP equity

 

 

388,010

 

 

392,655

 

Noncontrolling interest

 

 

3,758

 

 

5,186

 

Total partners’ equity

 

 

391,768

 

 

397,841

 

Total liabilities and partners’ equity

 

$

2,148,178

 

$

2,564,020

 

 

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

    

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

    

2017

      

2016

    

2017

   

2016

 

Sales

 

$

2,159,746

 

$

2,030,198

 

$

6,520,060

 

$

5,927,209

 

Cost of sales

 

 

2,009,652

 

 

1,897,587

 

 

6,094,577

 

 

5,535,197

 

Gross profit

 

 

150,094

 

 

132,611

 

 

425,483

 

 

392,012

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

40,134

 

 

36,705

 

 

111,600

 

 

108,329

 

Operating expenses

 

 

70,338

 

 

70,591

 

 

208,720

 

 

218,718

 

Amortization expense

 

 

2,260

 

 

2,260

 

 

6,781

 

 

7,128

 

Net loss (gain) on sale and disposition of assets

 

 

2,190

 

 

7,486

 

 

(7,291)

 

 

13,966

 

Goodwill and long-lived asset impairment

 

 

809

 

 

147,817

 

 

809

 

 

149,972

 

Total costs and operating expenses

 

 

115,731

 

 

264,859

 

 

320,619

 

 

498,113

 

Operating income (loss)

 

 

34,363

 

 

(132,248)

 

 

104,864

 

 

(106,101)

 

Interest expense

 

 

(20,626)

 

 

(21,197)

 

 

(65,836)

 

 

(65,192)

 

Income (loss) before income tax benefit (expense)

 

 

13,737

 

 

(153,445)

 

 

39,028

 

 

(171,293)

 

Income tax benefit (expense)

 

 

723

 

 

(3,138)

 

 

(72)

 

 

(1,668)

 

Net income (loss)

 

 

14,460

 

 

(156,583)

 

 

38,956

 

 

(172,961)

 

Net loss attributable to noncontrolling interest

 

 

418

 

 

37,032

 

 

1,242

 

 

39,076

 

Net income (loss) attributable to Global Partners LP

 

 

14,878

 

 

(119,551)

 

 

40,198

 

 

(133,885)

 

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

 

 

100

 

 

(801)

 

 

270

 

 

(897)

 

Limited partners’ interest in net income (loss)

 

$

14,778

 

$

(118,750)

 

$

39,928

 

$

(132,988)

 

Basic net income (loss) per limited partner unit

 

$

0.44

 

$

(3.54)

 

$

1.19

 

$

(3.97)

 

Diluted net income (loss) per limited partner unit

 

$

0.44

 

$

(3.54)

 

$

1.18

 

$

(3.97)

 

Basic weighted average limited partner units outstanding

 

 

33,644

 

 

33,531

 

 

33,570

 

 

33,522

 

Diluted weighted average limited partner units outstanding

 

 

33,945

 

 

33,531

 

 

33,839

 

 

33,522

 

 

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

4


 

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2017

    

2016

    

2017

 

2016

 

Net income (loss)

 

$

14,460

 

$

(156,583)

 

$

38,956

 

$

(172,961)

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of cash flow hedges

 

 

167

 

 

660

 

 

764

 

 

1,513

 

Change in pension liability

 

 

(105)

 

 

169

 

 

464

 

 

543

 

Total other comprehensive income

 

 

62

 

 

829

 

 

1,228

 

 

2,056

 

Comprehensive income (loss)

 

 

14,522

 

 

(155,754)

 

 

40,184

 

 

(170,905)

 

Comprehensive loss attributable to noncontrolling interest

 

 

418

 

 

37,032

 

 

1,242

 

 

39,076

 

Comprehensive income (loss) attributable to Global Partners LP

 

$

14,940

 

$

(118,722)

 

$

41,426

 

$

(131,829)

 

 

 

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

 

5


 

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

6

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

    

2017

    

2016

    

Cash flows from operating activities

 

 

 

 

 

 

 

Net income (loss)

 

$

38,956

 

$

(172,961)

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

79,423

 

 

86,474

 

Amortization of deferred financing fees

 

 

4,295

 

 

4,467

 

Amortization of leasehold interests

 

 

562

 

 

939

 

Amortization of senior notes discount

 

 

1,079

 

 

1,039

 

Bad debt expense

 

 

622

 

 

50

 

Unit-based compensation expense

 

 

1,415

 

 

3,094

 

Write-off of financing fees

 

 

573

 

 

1,828

 

Net (gain) loss on sale and disposition of assets

 

 

(7,291)

 

 

13,966

 

Goodwill and long-lived asset impairment

 

 

809

 

 

149,972

 

Changes in operating assets and liabilities, excluding net assets acquired:

 

 

 

 

 

 

 

Accounts receivable

 

 

89,799

 

 

30,296

 

Accounts receivable-affiliate

 

 

(2,504)

 

 

243

 

Inventories

 

 

240,462

 

 

(51,773)

 

Broker margin deposits

 

 

15,199

 

 

12,646

 

Prepaid expenses, all other current assets and other assets

 

 

(19,400)

 

 

(6,226)

 

Accounts payable

 

 

(78,538)

 

 

(71,611)

 

Trustee taxes payable

 

 

(3,309)

 

 

(11,381)

 

Change in derivatives

 

 

(1,764)

 

 

34,116

 

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

 

 

2,053

 

 

(11,018)

 

Net cash provided by operating activities

 

 

362,441

 

 

14,160

 

Cash flows from investing activities

 

 

 

 

 

 

 

Capital expenditures

 

 

(31,646)

 

 

(54,738)

 

Proceeds from sale of property and equipment

 

 

29,804

 

 

58,917

 

Net cash (used in) provided by investing activities

 

 

(1,842)

 

 

4,179

 

Cash flows from financing activities

 

 

 

 

 

 

 

Net (payments on) borrowings from working capital revolving credit facility

 

 

(285,400)

 

 

69,900

 

Net payments on revolving credit facility

 

 

(26,700)

 

 

(88,200)

 

Proceeds from sale-leaseback, net

 

 

 —

 

 

62,476

 

Repurchased units withheld for tax obligations

 

 

(516)

 

 

 —

 

Noncontrolling interest capital contribution

 

 

279

 

 

 —

 

Distribution to noncontrolling interest

 

 

(465)

 

 

(1,798)

 

Distributions to partners

 

 

(46,970)

 

 

(46,890)

 

Net cash used in financing activities

 

 

(359,772)

 

 

(4,512)

 

Cash and cash equivalents

 

 

 

 

 

 

 

Increase in cash and cash equivalents

 

 

827

 

 

13,827

 

Cash and cash equivalents at beginning of period

 

 

10,028

 

 

1,116

 

Cash and cash equivalents at end of period

 

$

10,855

 

$

14,943

 

Supplemental information

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

36,892

 

$

49,548

 

 

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

6


 

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

    

 

 

    

General

    

Other

    

 

 

    

Total

 

 

 

Common

 

Partner

 

Comprehensive

 

Noncontrolling

 

Partners’

 

 

 

Unitholders

 

Interest

 

Loss

 

Interest

 

Equity

 

Balance at December 31, 2016

 

$

401,044

 

$

(2,948)

 

$

(5,441)

 

$

5,186

 

$

397,841

 

Net income (loss)

 

 

39,928

 

 

270

 

 

 —

 

 

(1,242)

 

 

38,956

 

Noncontrolling interest capital contribution

 

 

 —

 

 

 —

 

 

 —

 

 

279

 

 

279

 

Distribution to noncontrolling interest

 

 

 —

 

 

 —

 

 

 —

 

 

(465)

 

 

(465)

 

Other comprehensive income

 

 

 —

 

 

 —

 

 

1,228

 

 

 —

 

 

1,228

 

Unit-based compensation

 

 

1,415

 

 

 —

 

 

 —

 

 

 —

 

 

1,415

 

Distributions to partners

 

 

(47,169)

 

 

(318)

 

 

 —

 

 

 —

 

 

(47,487)

 

Repurchased units held for tax obligations

 

 

(516)

 

 

 —

 

 

 —

 

 

 —

 

 

(516)

 

Dividends on repurchased units

 

 

517

 

 

 —

 

 

 —

 

 

 —

 

 

517

 

Balance at September 30, 2017

 

$

395,219

 

$

(2,996)

 

$

(4,213)

 

$

3,758

 

$

391,768

 

 

 

 

 

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

 

 

 

7


 

Table of Contents 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 1.    Organization and Basis of Presentation

 

Organization

 

Global Partners LP (the “Partnership”) is a midstream logistics and marketing master limited partnership formed in March 2005 engaged in the purchasing, selling, 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.  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 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 is also one of the largest independent owners, suppliers and operators of gasoline stations and convenience stores with locations throughout the New England states and New York.  As of September 30, 2017, the Partnership had a portfolio of 1,435 owned, leased and/or supplied gasoline stations, including 234 directly operated convenience stores, in the Northeast, Maryland and Virginia.  The Partnership also receives revenue from convenience store sales, rental income and sundries.  In addition, the Partnership owns transload and storage terminals in North Dakota and Oregon that extend its origin-to-destination capabilities 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 September 30, 2017, affiliates of the General Partner, including its directors and executive officers and their affiliates, owned 7,403,798 common units, representing a 21.8% limited partner interest.

 

Recent Transactions

 

Amended and Restated Credit Agreement— On April 25, 2017, the Partnership and certain of its subsidiaries entered into a third amended and restated credit agreement with aggregate commitments of $1.3 billion and a maturity date of April 30, 2020.  See Note 7 for additional information.

 

Sale of Natural Gas and Electricity Brokerage BusinessesOn February 1, 2017, the Partnership completed the sale of its natural gas marketing and electricity brokerage businesses for a purchase price of approximately $17.3 million, subject to customary closing adjustments.  Proceeds from the sale amounted to approximately $16.3 million, and the Partnership realized a gain on the sale of $14.2 million.  The sale of the natural gas marketing and electricity brokerage businesses reflects the Partnership’s ongoing program to monetize non-strategic assets not fundamental to its growth strategy.  Prior to the sale, the results of natural gas marketing and electricity brokerage businesses were included in the Commercial segment.  See Note 6.

 

Basis of Presentation

 

The accompanying consolidated financial statements as of September 30, 2017 and December 31, 2016 and for the three and nine months ended September 30, 2017 and 2016 reflect the accounts of the Partnership.  Upon consolidation, all intercompany balances and transactions have been eliminated.

 

8


 

Table of Contents 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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, 2016 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 and nine months ended September 30, 2017 are not necessarily indicative of the results of operations that will be realized for the entire year ending December 31, 2017.  The consolidated balance sheet at December 31, 2016 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, 2016.

 

Noncontrolling Interest

 

The Partnership acquired a 60% interest in Basin Transload, LLC (“Basin Transload”) on February 1, 2013.  After evaluating Accounting Standards Codification (“ASC”) Topic 810, “Consolidations,” the Partnership concluded it is appropriate to consolidate the balance sheet and statements of operations of Basin Transload based on an evaluation of the outstanding voting interests.  Amounts pertaining to the noncontrolling ownership interest held by third parties in the financial position and operating results of the Partnership are reported as a noncontrolling interest in the accompanying consolidated balance sheets and statements of operations.

 

Concentration of Risk

 

Due to the nature of the Partnership’s business 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.  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.

 

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

 

Nine Months Ended

 

 

 

 

September 30,

 

September 30,

 

 

 

    

2017

    

2016

    

2017

 

2016

 

 

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

 

71

%  

71

%  

65

%  

66

%  

 

Crude oil sales and crude oil logistics revenue

 

 5

%  

 6

%  

 6

%  

 7

%  

 

Distillates (home heating oil, diesel and kerosene), residual oil, natural gas and propane sales

 

20

%  

18

%  

25

%  

22

%  

 

Convenience store sales, rental income and sundries

 

 4

%  

 5

%  

 4

%  

 5

%  

 

Total

 

100

%  

100

%  

100

%  

100

%  

 

 

9


 

Table of Contents 

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

 

Nine Months Ended

 

 

 

 

September 30,

 

September 30,

 

 

 

    

2017

    

2016

    

2017

 

2016

 

 

Wholesale segment

 

21

%  

10

%

24

%  

19

%  

 

Gasoline Distribution and Station Operations segment

 

76

%  

87

%

73

%  

77

%  

 

Commercial segment

 

 3

%  

 3

%

 3

%  

 4

%  

 

Total

 

100

%  

100

%

100

%  

100

%  

 

 

See Note 15, “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 and nine months ended September 30, 2017 and 2016.

 

 

 

 

 

Note 2.    Net Income (Loss) Per Limited Partner Unit

 

Under the Partnership’s partnership agreement, for any quarterly period, the incentive distribution rights (“IDRs”) participate in net income only to the extent of the amount of cash distributions actually declared, thereby excluding the IDRs from participating in the Partnership’s undistributed net income or losses.  Accordingly, the Partnership’s undistributed net income or losses is assumed to be allocated to the common unitholders, or limited partners’ interest, and to the General Partner’s general partner interest.

 

Common units outstanding as reported in the accompanying consolidated financial statements at September 30, 2017 and December 31, 2016 excluded 351,345 and 451,894 common units, respectively, held on behalf of the Partnership pursuant to its repurchase program (see Note 12).  The decrease in common units outstanding from December 31, 2016 is primarily due to a long-term incentive plan award that vested during the nine months ended September 30, 2017.  These units are not deemed outstanding for purposes of calculating net income (loss) per limited partner unit (basic and diluted).

 

10


 

Table of Contents 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table provides a reconciliation of net income (loss) and the assumed allocation of net income (loss) to the limited partners’ interest for purposes of computing net income (loss) per limited partner unit for the periods presented (in thousands, except per unit data):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2017

 

 

Three Months Ended September 30, 2016

 

 

 

 

 

  

Limited

  

General

  

 

 

 

 

 

 

  

Limited

  

General

  

 

 

 

 

 

 

 

 

Partner

 

Partner

 

 

 

 

 

 

 

 

Partner

 

Partner

 

 

 

 

Numerator:

 

Total

 

Interest

 

Interest

 

IDRs

 

 

Total

 

Interest

 

Interest

 

IDRs

 

Net income (loss) attributable to Global Partners LP

 

$

14,878

 

$

14,778

 

$

100

 

$

 —

 

 

$

(119,551)

 

$

(118,750)

 

$

(801)

 

$

 —

 

Declared distribution

 

$

15,829

 

$

15,723

 

$

106

 

$

 —

 

 

$

15,829

 

$

15,723

 

$

106

 

$

 —

 

Assumed allocation of undistributed net income (loss)

 

 

(951)

 

 

(945)

 

 

(6)

 

 

 —

 

 

 

(135,380)

 

 

(134,473)

 

 

(907)

 

 

 —

 

Assumed allocation of net income (loss)

 

$

14,878

 

$

14,778

 

$

100

 

$

 —

 

 

$

(119,551)

 

$

(118,750)

 

$

(801)

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average limited partner units outstanding

 

 

 

 

 

33,644

 

 

 

 

 

 

 

 

 

 

 

 

33,531

 

 

 

 

 

 

 

Dilutive effect of phantom units

 

 

 

 

 

301

 

 

 

 

 

 

 

 

 

 

 

 

 —

 

 

 

 

 

 

 

Diluted weighted average limited partner units outstanding

 

 

 

 

 

33,945

 

 

 

 

 

 

 

 

 

 

 

 

33,531

 

 

 

 

 

 

 

Basic net income (loss) per limited partner unit

 

 

 

 

$

0.44

 

 

 

 

 

 

 

 

 

 

 

$

(3.54)

 

 

 

 

 

 

 

Diluted net income (loss) per limited partner unit (1)

 

 

 

 

$

0.44

 

 

 

 

 

 

 

 

 

 

 

$

(3.54)

 

 

 

 

 

 

 

 


(1)

Basic limited partner units were used to calculate diluted net loss per limited partner unit for the three months ended September 30, 2016, as using the effects of phantom units would have an anti-dilutive effect on net loss per limited partner unit.

 

11


 

Table of Contents 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2017

 

 

Nine Months Ended September 30, 2016

 

 

 

 

 

  

Limited

  

General

  

 

 

 

 

 

 

  

Limited

  

General

  

 

 

 

 

 

 

 

 

Partner

 

Partner

 

 

 

 

 

 

 

 

Partner

 

Partner

 

 

 

 

Numerator:

 

Total

 

Interest

 

Interest

 

IDRs

 

 

Total

 

Interest

 

Interest

 

IDRs

 

Net income (loss) attributable to Global Partners LP

 

$

40,198

 

$

39,928

 

$

270

 

$

 —

 

 

$

(133,885)

 

$

(132,988)

 

$

(897)

 

$

 —

 

Declared distribution

 

$

47,487

 

$

47,169

 

$

318

 

$

 —

 

 

$

47,487

 

$

47,169

 

$

318

 

$

 —

 

Assumed allocation of undistributed net income (loss)

 

 

(7,289)

 

 

(7,241)

 

 

(48)

 

 

 —

 

 

 

(181,372)

 

 

(180,157)

 

 

(1,215)

 

 

 —

 

Assumed allocation of net income (loss)

 

$

40,198

 

$

39,928

 

$

270

 

$

 —

 

 

$

(133,885)

 

$

(132,988)

 

$

(897)

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average limited partner units outstanding

 

 

 

 

 

33,570

 

 

 

 

 

 

 

 

 

 

 

 

33,522