Note 2.Business Combinations

Acquisition of Warren Equities, Inc.

On January 7, 2015, the Partnership acquired, through GMG, 100% of the equity interests in Warren, one of the largest independent marketers of petroleum products in the Northeast, from The Warren Alpert Foundation. The acquisition included 147 company-owned Xtra Mart convenience stores and related fuel operations, 53 commission agent locations and fuel supply rights for approximately 320 dealers. The acquired properties are located in the Northeast, Maryland and Virginia. The purchase price, inclusive of post-closing adjustments, was approximately $381.8 million, including working capital. The acquisition was funded with borrowings under the Partnership’s credit facility and with proceeds from its December 2014 public offering of 3,565,000 common units.

The acquisition was accounted for using the purchase method of accounting in accordance with the Financial Accounting Standards Board’s (“FASB”) guidance regarding business combinations. The Partnership’s financial statements include the results of operations of Warren subsequent to the acquisition date.

The purchase price allocation is considered preliminary, and additional adjustments may be recorded during the allocation period in accordance with the FASB’s guidance regarding business combinations. The purchase price allocation will be finalized as the Partnership receives additional information relevant to the acquisition, including a final valuation of the assets purchased, including tangible and intangible assets, and liabilities assumed.

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

Assets purchased:
Accounts receivable	$	5,372
Inventory	19,199
Prepaid expenses	12,552
Property and equipment	331,291
Intangibles	36,490
Other non-current assets	20,586
Total identifiable assets purchased	425,490
Liabilities assumed:
Accounts payable	(21,511		)
Assumption of environmental liabilities	(36,080		)
Taxes payable	(5,538		)
Accrued expenses	(11,595		)
Long-term deferred taxes	(105,855		)
Other non-current liabilities	(10,992		)
Total liabilities assumed	(191,571		)
Net identifiable assets acquired	233,919
Goodwill	147,909
Net assets acquired	$	381,828

Management is currently in the process of evaluating the purchase price accounting. The Partnership has engaged a third-party valuation firm to assist in the valuation of Warren’s property and equipment, intangibles and leasehold interests. This valuation continues to be in progress and, during the quarter ended March 31, 2015, the Partnership received preliminary fair values of these assets. The estimated fair values of property and equipment of $331.3 million and intangibles assets, primarily supply contracts, of $36.5 million were developed by management based on their estimates, assumptions and acquisition history including preliminary reports from a third-party valuation firm. The estimated fair values of the property and equipment, intangibles and leasehold interests will be supported by valuations performed by a third party.

The fair value of $36.1 million assigned to the assumption of environmental liabilities was estimated by management based on their estimates, assumptions and acquisition history, including preliminary reports from third-party environmental engineers (see Note 11). The fair value of this liability will be supported by a third-party environmental specialist.

The long-term deferred taxes of $105.9 million are primarily related to temporary differences associated with the fair value allocations of property and equipment and intangible assets, which are not deductible for tax purposes, net of acquired environmental liabilities and other deductible accrued liabilities.

The fair values of the remaining Warren assets and liabilities noted above approximate their carrying values at January 7, 2015. It is possible that once the Partnership receives the completed valuations on the property and equipment and intangible assets, the final purchase price accounting may be different than what is presented above.

The preliminary purchase price for the acquisition was allocated to assets acquired and liabilities assumed based on their estimated fair values. The Partnership then allocated the purchase price in excess of net tangible assets acquired to identifiable intangible assets, based upon on their estimates and assumptions. Any excess purchase price over the fair value of the net tangible and intangible assets acquired was allocated to goodwill.

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

As part of the purchase price allocation, identifiable intangible assets include supply contracts that are being amortized over ten years. The supply contracts are subject to renewals, and assumptions related to the renewals have been included in the determination of the value of the supply contracts at the date of acquisition. The supply contracts had a weighted average term of approximately 5 years prior to their next renewal. As the purchase price accounting is preliminary, the final assumptions related to the likelihood of renewals remains in process. For the three months ended March 31, 2015, amortization expense amounted to $0.8 million. The estimated remaining amortization expense for intangible assets acquired in connection with the acquisition for each of the five succeeding years and thereafter is as follows (in thousands):

2015 (1/7/15 – 12/31/15)	$	2,685
2016	3,580
2017	3,580
2018	3,580
2019	3,580
Thereafter	17,960
Total	$	34,965

The $147.9 million of goodwill was assigned to the Gasoline Distribution and Station Operations (“GDSO”) reporting unit. The goodwill recognized is attributable primarily to expected synergies and growth opportunities for the Partnership. The goodwill is not deductible for income tax purposes. The Partnership is responsible for federal tax obligations for the interim period, June 1, 2014 to January 6, 2015 (Warren’s fiscal year end was May 31). Any tax obligations will be funded by the selling shareholders. Any tax refund will be remitted to the selling shareholders.

In connection with the acquisition of Warren, the Partnership incurred acquisition costs totaling approximately $6.1 million, of which $4.4 million was recorded for the three months ended March 31, 2015 and included in selling, general and administrative expenses in the accompanying consolidated statement of income. The remaining acquisition costs were incurred in 2014. Additionally, subsequent to the acquisition date, the Partnership recorded a restructuring charge of approximately $2.3 million, which is included in selling, general and administrative expenses in the accompanying consolidated statement of income for the three months ended March 31, 2015. This charge, which is principally for redundant and/or eliminated positions as a result of the acquisition, was not part of the purchase price allocation. Approximately $0.5 million of the restructuring charge was paid during the three months ended March 31, 2015, and the remaining balance of $1.8 million is expected to be paid in full by December 31, 2015.

The acquisition of Warren complements the Partnership’s existing retail presence in the Northeast and expands its footprint into the adjacent Mid-Atlantic region. The acquisition added approximately 500 million gallons of fuel sold annually through the Partnership’s network and increased the number of its total gasoline stations that it owns, leases or supplies to more than 1,500 as of the acquisition closing date. The Warren operations have been integrated into the Partnership’s GDSO reporting segment.

Acquisition of Revere Terminal

On January 14, 2015, through the Partnership’s wholly owned subsidiary, Global Companies, the Partnership acquired the Revere Terminal located in Boston Harbor in Revere, Massachusetts from GPC, a privately held affiliate of the Partnership, for a purchase price of $23.65 million. The acquisition includes contingent consideration which would be payable under specific circumstances involving a subsequent sale of the property, and the purchase price may be adjusted in connection with any value assigned to the contingent consideration as the purchase price accounting is finalized. The Partnership financed the transaction with available capacity under its revolving credit facility. In connection with the Revere Terminal transaction, the pre-existing terminal storage rental and throughput agreement between the Partnership and GPC has terminated.

The acquisition was accounted for using the purchase method of accounting in accordance with the FASB’s guidance regarding business combinations. As the acquisition transitioned the Revere Terminal from a formerly leased facility to an owned facility, the transaction did not have a material impact on the Partnership’s consolidated financial statements.

At March 31, 2015, the Partnership’s preliminary purchase accounting includes estimated fair values of $28.3 million associated with the property and equipment acquired and $4.6 million of assumed liabilities. The purchase price allocation will be finalized as the Partnership receives additional information relevant to the acquisition.

Goodwill

The following table presents the changes in goodwill (in thousands):

	Goodwill Allocated to
	Wholesale		GDSO
	Reporting		Reporting
	Unit		Unit		Total
Balance at December 31, 2014	$	121,752	$	32,326	$	154,078
Acquisition of Warren	—		147,909		147,909
Balance at March 31, 2015	$	121,752	$	180,235	$	301,987

Supplemental Pro Forma Information

Revenues and net income included in the Partnership’s consolidated operating results for Warren from January 1, 2015 through January 7, 2015, the acquisition date, were immaterial. Accordingly, the supplemental pro forma information for the three months ended March 31, 2015 is consistent with the amounts reported in the accompanying statement of income for the three months ended March 31, 2015.

The following unaudited pro forma information for 2014 presents the consolidated results of operations of the Partnership as if the acquisition of Warren occurred at the beginning of the period presented, with pro forma adjustments to give effect to intercompany sales and certain other adjustments (in thousands, except per unit data):

	Three Months
	Ended
	March 31, 2014
Sales	$	5,496,851
Net income attributable to Global Partners LP	$	51,637
Net income per limited partner unit, basic and diluted	$	1.84

Warren’s revenues and net loss included in the Partnership’s consolidated operating results from January 7, 2015, the acquisition date, through the period ended March 31, 2015 were $247.7 million and $(1.0 million), respectively.