Global Partners LP Q2 2024: $3B Revenue

TL;DR

GP's Q2 revenue hit $3B, check the 10-Q for details on derivatives & environmental liabilities.

AI Summary

Global Partners LP filed its 10-Q for the period ending June 30, 2024. The company reported revenues of $3.0 billion for the quarter. The filing also details various financial instruments and contingencies, including derivative assets and liabilities, and accrued environmental loss contingencies.

Why It Matters

This filing provides insight into Global Partners LP's financial performance and operational status for the second quarter of 2024, impacting investors and stakeholders.

Risk Assessment

Risk Level: medium — The filing contains information on financial instruments and potential environmental liabilities, which carry inherent risks.

Key Numbers

• $3.0B — Revenues (Second quarter revenue for 2024)
• $2.76B — Revenues (Second quarter revenue for 2023)

Key Players & Entities

• GLOBAL PARTNERS LP (company) — Filer
• 20240630 (date) — Reporting period end date
• $3.0 billion (dollar_amount) — Revenues for the quarter

FAQ

Filing Documents

• glp-20240630x10q.htm (10-Q) — 3321KB
• glp-20240630xex31d1.htm (EX-31.1) — 19KB
• glp-20240630xex31d2.htm (EX-31.2) — 19KB
• glp-20240630xex32d1.htm (EX-32.1) — 10KB
• glp-20240630xex32d2.htm (EX-32.2) — 10KB
• 0001558370-24-011336.txt ( ) — 13663KB
• glp-20240630.xsd (EX-101.SCH) — 63KB
• glp-20240630_cal.xml (EX-101.CAL) — 66KB
• glp-20240630_def.xml (EX-101.DEF) — 378KB
• glp-20240630_lab.xml (EX-101.LAB) — 535KB
• glp-20240630_pre.xml (EX-101.PRE) — 456KB
• glp-20240630x10q_htm.xml (XML) — 3314KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements (unaudited)

Item 1. Financial Statements (unaudited) 3 Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023 3 Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023 4 Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2024 and 2023 5 Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 6 Consolidated Statements of Partners' Equity for the six months ended June 30, 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 35

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 60

Controls and Procedures

Item 4. Controls and Procedures 61

OTHER INFORMATION

PART II. OTHER INFORMATION 62

Legal Proceedings

Item 1. Legal Proceedings 62

Risk Factors

Item 1A. Risk Factors 62

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 62

Other Information

Item 5. Other Information 62

Exhibits

Item 6. Exhibits 62

SIGNATURES

SIGNATURES 64 Table of Contents

Financial Statements

Item 1. Financial Statements GLOBAL PARTNERS LP CONSOLIDATED BALANCE SHEETS (In thousands, except unit data) (Unaudited) June 30, December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 14,114 $ 19,642 Accounts receivable, net 602,206 551,764 Accounts receivable-affiliates 10,221 8,142 Inventories 567,018 397,314 Brokerage margin deposits 21,253 12,779 Derivative assets 6,056 17,656 Prepaid expenses and other current assets 79,069 90,531 Total current assets 1,299,937 1,097,828 Property and equipment, net 1,686,543 1,513,545 Right of use assets, net 264,269 252,849 Intangible assets, net 21,660 20,718 Goodwill 426,063 429,215 Equity method investments 87,781 94,354 Other assets 42,491 37,502 Total assets $ 3,828,744 $ 3,446,011 Liabilities and partners' equity Current liabilities: Accounts payable $ 557,839 $ 648,717 Working capital revolving credit facility-current portion 281,200 16,800 Lease liability-current portion 53,973 59,944 Environmental liabilities-current portion 5,493 5,057 Trustee taxes payable 77,627 67,398 Accrued expenses and other current liabilities 199,378 179,887 Derivative liabilities 7,975 4,987 Total current liabilities 1,183,485 982,790 Working capital revolving credit facility-less current portion — — Revolving credit facility 200,000 380,000 Senior notes 1,185,326 742,720 Lease liability-less current portion 216,888 200,195 Environmental liabilities-less current portion 74,560 71,092 Financing obligations 136,590 138,485 Deferred tax liabilities 66,010 68,909 Other long-term liabilities 60,310 61,160 Total liabilities 3,123,169 2,645,351 Partners' equity Series A preferred limited partners ( 0 and 2,760,000 units issued and outstanding at June 30, 2024 and December 31, 2023, respectively) — 67,476 Series B preferred limited part

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 June 30, 2024, the Partnership had a portfolio of 1,595 owned, leased and/or supplied gasoline stations, including 322 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 gas

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 7 for additional information on the credit agreement. Basis of Presentation The accompanying consolidated financial statements as of June 30, 2024 and December 31, 2023 and for the three and six months ended June 30, 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 and six months ended June 30, 2024 are not necessaril

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 Six Months Ended June 30, June 30, 2024 2023 2024 2023 Gasoline sales: gasoline and gasoline blendstocks (such as ethanol) 70 % 73 % 65 % 66 % Distillates (home heating oil, diesel and kerosene), residual oil and crude oil sales 27 % 23 % 32 % 31 % Convenience store and prepared food sales, rental income and sundries 3 % 4 % 3 % 3 % Total 100 % 100 % 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 Six Months Ended June 30, June 30, 2024 2023 2024 2023 Wholesale segment 29 % 22 % 25 % 22 % Gasoline Distribution and Station Operations segment 69 % 75 % 73 % 75 % Commercial segment 2 % 3 % 2 % 3 % Total 100 % 100 % 100 % 100 % See Note 14, "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 six months ended June 30, 2024 and 2023. Note 2. Acquisition Acquisition of Terminals from Gulf Oil LLC —On April 9, 2024, the Partnership acquired four refined-product terminals from Gulf Oil Limited Partnership ("Gulf Oil") which are located in Chelsea, MA, New Haven, CT, Linden, NJ and Woodbury, NJ, (the "Gulf Terminals") pursuant to a purchase agreement initially entered into on December 15, 2022 and subsequently amended and restated on February 23, 2024. The acquisition price was approximately $ 215.0 million, excluding inventory acquired from Gulf Oil. The Partnership financed the transaction with borrowings under its r

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) concluded that the nature of the Gulf Terminals and the different geographic regions where the Gulf Terminals reside do not rise to separate risks based on how these assets operate in the marketplace. As a result of its analysis, the Partnership concluded the acquisition of the Gulf Terminals did not meet the criteria of a business combination pursuant to ASC 805, "Business Combinations," and therefore was accounted for as an asset acquisition. The purchase price in an asset acquisition is allocated to the assets acquired and liabilities assumed based on their relative fair values and no goodwill is recognized. The Gulf Terminals were allocated to the Wholesale segment. The following table presents the assets acquired and liabilities assumed as of April 9, 2024, the acquisition date (in thousands): Assets acquired: Property and equipment $ 217,050 Right of use assets 350 Intangible assets 4,800 Total assets acquired $ 222,200 Liabilities assumed: Environmental liabilities $ ( 6,850 ) Lease liability ( 350 ) Total liabilities assumed $ ( 7,200 ) Net assets acquired $ 215,000 Property and equipment were recorded at cost based on relative fair value as of April 9, 2024 using current market values and reproduction or replacement costs of similar assets. Intangible assets consist of third-party customer relationship contracts and are amortized on a straight-line basis over the respective estimated periods for which the intangible assets will provide economic benefit to the Partnership, which the Partnerships expects to be ten years . Third-party customer relationship contracts were valued using the discounted cash flow method. Significant assumptions used in the valuations include projected cash flows including expected renewals and the discount rate. In connection with the acquisition, the Partnership incurred acquisition costs of approximately $ 2.7 million during 2024 which

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 3. 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 June 30, 2024 Revenue from contracts with customers: Wholesale GDSO Commercial Total Petroleum and related product sales $ 643,808 $ 1,316,548 $ 193,105 $ 2,153,461 Station operations — 128,456 — 128,456 Total revenue from contracts with customers 643,808 1,445,004 193,105 2,281,917 Other sales: Revenue originating as physical forward contracts and exchanges 2,018,044 — 87,832 2,105,876 Revenue from leases 836 21,069 — 21,905 Total other sales 2,018,880 21,069 87,832 2,127,781 Total sales $ 2,662,688 $ 1,466,073 $ 280,937 $ 4,409,698 Three Months Ended June 30, 2023 Revenue from contracts with customers: Wholesale GDSO Commercial Total Petroleum and related product sales $ 678,616 $ 1,350,354 $ 152,5

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