Global Partners LP Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Global Partners LP filed its Q1 2024 10-Q, detailing financial performance across its business segments and asset composition.</b>

AI Summary

GLOBAL PARTNERS LP (GLP-PB) filed a Quarterly Report (10-Q) with the SEC on May 8, 2024. Global Partners LP reported financial results for the quarter ended March 31, 2024. The filing includes details on revenues, cost of sales, and selling, general, and administrative expenses. Specific segments like Wholesale, Gasoline Distribution and Station Operations, Commercial, and Station Operations are detailed. The company's assets include Land, Construction in Progress, Building and Building Improvements, Idle Plant Assets, Fixtures and Equipment, and Capitalized Internal Use Software as of March 31, 2024. The filing references various financial instruments including derivative assets and liabilities, and accrued environmental loss contingencies.

Why It Matters

For investors and stakeholders tracking GLOBAL PARTNERS LP, this filing contains several important signals. This 10-Q provides a quarterly update on Global Partners LP's financial health and operational performance, crucial for investors assessing short-term trends and strategic execution. The detailed segment reporting allows stakeholders to understand the revenue drivers and cost structures within each of Global Partners LP's distinct business units.

Risk Assessment

Risk Level: medium — GLOBAL PARTNERS LP shows moderate risk based on this filing. The company operates in the wholesale petroleum and gasoline distribution sectors, which are subject to volatile commodity prices and regulatory changes, as indicated by the detailed segment reporting and references to environmental contingencies.

Analyst Insight

Investors should analyze the revenue and cost trends across the different segments to identify areas of growth or concern for Global Partners LP.

Revenue Breakdown

Key Numbers

• 2024-03-31 — Conformed Period of Report (10-Q Filing)
• 2024-05-08 — Filed As Of Date (10-Q Filing)
• 2760000 — Revenues (2024 Q1)
• 3000000 — Revenues (2023 Q1)

Key Players & Entities

• GLOBAL PARTNERS LP (company) — Filer
• 0001323468 (company) — Central Index Key
• 5171 (company) — Standard Industrial Classification
• 743140887 (company) — IRS Number
• WALTHAM (company) — Business Address City
• MA (company) — Business Address State
• 02454 (company) — Business Address Zip
• 2024-03-31 (date) — Conformed Period of Report

FAQ

Risk Factors

• Derivative Assets and Liabilities [medium — financial]: The company holds derivative assets and liabilities, which can introduce volatility to financial results.
• Accrued Environmental Loss Contingencies [medium — regulatory]: Accrued environmental loss contingencies indicate potential future costs related to environmental compliance or remediation.

Filing Documents

• glp-20240331x10q.htm (10-Q) — 2498KB
• glp-20240331xex2d1.htm (EX-2.1) — 744KB
• glp-20240331xex31d1.htm (EX-31.1) — 19KB
• glp-20240331xex31d2.htm (EX-31.2) — 19KB
• glp-20240331xex32d1.htm (EX-32.1) — 10KB
• glp-20240331xex32d2.htm (EX-32.2) — 10KB
• 0001558370-24-007310.txt (&nbsp;) — 11996KB
• glp-20240331.xsd (EX-101.SCH) — 59KB
• glp-20240331_cal.xml (EX-101.CAL) — 64KB
• glp-20240331_def.xml (EX-101.DEF) — 374KB
• glp-20240331_lab.xml (EX-101.LAB) — 518KB
• glp-20240331_pre.xml (EX-101.PRE) — 446KB
• glp-20240331x10q_htm.xml (XML) — 2440KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements (unaudited)

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

Notes to Consolidated Financial Statements 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 32

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 54

Controls and Procedures

Item 4. Controls and Procedures 56

OTHER INFORMATION

PART II. OTHER INFORMATION 57

Legal Proceedings

Item 1. Legal Proceedings 57

Risk Factors

Item 1A. Risk Factors 57

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 57

Other Information

Item 5. Other Information 57

Exhibits

Item 6. Exhibits 57

SIGNATURES

SIGNATURES 59 Table of Contents

Financial Statements

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 ga

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 d

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 contin

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