Supplemental Guarantor Condensed Consolidating Financial Statements

6 Months Ended

Jun. 30, 2020

Supplemental Guarantor Condensed Consolidating Financial Statements

Supplemental Guarantor Condensed Consolidating Financial Statements

Note 21.    Supplemental Guarantor Condensed Consolidating Financial Statements

The Partnership’s wholly owned subsidiaries, other than GLP Finance, are guarantors of senior notes issued by the Partnership and GLP Finance. As such, the Partnership is subject to the requirements of Rule 3-10 of Regulation S-X of the SEC regarding financial statements of guarantors and issuers of registered guaranteed securities. The Partnership presents condensed consolidating financial information for its subsidiaries within the notes to consolidated financial statements in accordance with the criteria established for parent companies in the SEC’s Regulation S-X, Rule 3-10(d).

The following condensed consolidating financial information presents the Condensed Consolidating Balance Sheets as of June 30, 2020 and December 31, 2019, the Condensed Consolidating Statements of Operations for the three and six months ended June 30, 2020 and 2019 and the Condensed Consolidating Statements of Cash Flows for the six months ended June 30, 2020 and 2019 of the Partnership’s 100% owned guarantor subsidiaries, the non-guarantor subsidiary and the eliminations necessary to arrive at the information for the Partnership on a consolidated basis. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

Condensed Consolidating Balance Sheet

June 30, 2020

(In thousands)

	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	9,027	$	1,331	$	—	$	10,358
Accounts receivable, net		232,594		171		67		232,832
Accounts receivable—affiliates		7,496		67		(67)		7,496
Inventories		344,026		—		—		344,026
Brokerage margin deposits		32,296		—		—		32,296
Derivative assets		48,571		—		—		48,571
Prepaid expenses and other current assets		93,146		251		—		93,397
Total current assets		767,156		1,820		—		768,976
Property and equipment, net		1,073,386		1,698		—		1,075,084
Right of use assets, net		281,960		65		—		282,025
Intangible assets, net		41,340		—		—		41,340
Goodwill		323,889		—		—		323,889
Other assets		30,964		—		—		30,964
Total assets	$	2,518,695	$	3,583	$	—	$	2,522,278
Liabilities and partners’ equity
Current liabilities:
Accounts payable	$	162,822	$	529	$	—	$	163,351
Accounts payable—affiliates		(26)		26		—		—
Working capital revolving credit facility—current portion		41,700		—		—		41,700
Lease liability—current portion		70,604		18		—		70,622
Environmental liabilities—current portion		5,009		—		—		5,009
Trustee taxes payable		43,739		—		—		43,739
Accrued expenses and other current liabilities		94,403		183		—		94,586
Derivative liabilities		8,089		—		—		8,089
Total current liabilities		426,340		756		—		427,096
Working capital revolving credit facility—less current portion		175,000		—		—		175,000
Revolving credit facility		188,000		—		—		188,000
Senior notes		691,355		—		—		691,355
Long-term lease liability—less current portion		223,504		43		—		223,547
Environmental liabilities—less current portion		51,290		—		—		51,290
Financing obligations		147,400		—		—		147,400
Deferred tax liabilities		54,999		—		—		54,999
Other long—term liabilities		55,085		—		—		55,085
Total liabilities		2,012,973		799		—		2,013,772
Partners' equity
Global Partners LP equity		505,722		1,700		—		507,422
Noncontrolling interest		—		1,084		—		1,084
Total partners' equity		505,722		2,784		—		508,506
Total liabilities and partners' equity	$	2,518,695	$	3,583	$	—	$	2,522,278

Condensed Consolidating Balance Sheet

December 31, 2019

(In thousands)

	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	11,591	$	451	$	—	$	12,042
Accounts receivable, net		412,853		339		3		413,195
Accounts receivable—affiliates		7,823		3		(3)		7,823
Inventories		450,482		—		—		450,482
Brokerage margin deposits		34,466		—		—		34,466
Derivative assets		4,564		—		—		4,564
Prepaid expenses and other current assets		81,845		95		—		81,940
Total current assets		1,003,624		888		—		1,004,512
Property and equipment, net		1,102,644		2,219		—		1,104,863
Right of use assets, net		296,672		74		—		296,746
Intangible assets, net		46,765		—		—		46,765
Goodwill		324,474		—		—		324,474
Other assets		31,067		—		—		31,067
Total assets	$	2,805,246	$	3,181	$	—	$	2,808,427
Liabilities and partners' equity
Current liabilities:
Accounts payable	$	373,355	$	31	$	—	$	373,386
Accounts payable—affiliates		(17)		17		—		—
Working capital revolving credit facility—current portion		148,900		—		—		148,900
Lease liability—current portion		68,143		17		—		68,160
Environmental liabilities—current portion		5,009		—		—		5,009
Trustee taxes payable		42,932		—		—		42,932
Accrued expenses and other current liabilities		102,737		65		—		102,802
Derivative liabilities		12,698		—		—		12,698
Total current liabilities		753,757		130		—		753,887
Working capital revolving credit facility—less current portion		175,000		—		—		175,000
Revolving credit facility		192,700		—		—		192,700
Senior notes		690,533		—		—		690,533
Long-term lease liability—less current portion		239,308		41		—		239,349
Environmental liabilities—less current portion		54,262		—		—		54,262
Financing obligations		148,127		—		—		148,127
Deferred tax liabilities		42,879		—		—		42,879
Other long—term liabilities		52,451		—		—		52,451
Total liabilities		2,349,017		171		—		2,349,188
Partners' equity
Global Partners LP equity		456,229		1,836		—		458,065
Noncontrolling interest		—		1,174		—		1,174
Total partners' equity		456,229		3,010		—		459,239
Total liabilities and partners' equity	$	2,805,246	$	3,181	$	—	$	2,808,427

Condensed Consolidating Statement of Operations

Three Months Ended June 30, 2020

(In thousands)

	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Eliminations		Consolidated
Sales	$	1,469,017	$	780	$	(220)	$	1,469,577
Cost of sales		1,229,572		278		(220)		1,229,630
Gross profit		239,445		502		—		239,947
Costs and operating expenses:
Selling, general and administrative expenses		58,182		835		—		59,017
Operating expenses		76,323		391		—		76,714
Amortization expense		2,713		—		—		2,713
Net gain on sale and disposition of assets		(811)		—		—		(811)
Long-lived asset impairment		1,724		—		—		1,724
Total costs and operating expenses		138,131		1,226		—		139,357
Operating income (loss)		101,314		(724)		—		100,590
Interest expense		(21,089)		—		—		(21,089)
Income (loss) before income tax expense		80,225		(724)		—		79,501
Income tax expense		(3,528)		—		—		(3,528)
Net income		76,697		(724)		—		75,973
Net loss attributable to noncontrolling interest		—		289		—		289
Net income attributable to Global Partners LP		76,697		(435)		—		76,262
Less: General partners' interest in net income, including incentive distribution rights		511		—		—		511
Less: Series A preferred limited partner interest in net income		1,682		—		—		1,682
Net income attributable to common limited partners	$	74,504	$	(435)	$	—	$	74,069

Condensed Consolidating Statement of Operations

Three Months Ended June 30, 2019

(In thousands)

	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Eliminations		Consolidated
Sales	$	3,507,137	$	526	$	(123)	$	3,507,540
Cost of sales		3,340,184		336		(123)		3,340,397
Gross profit		166,953		190		—		167,143
Costs and operating expenses:
Selling, general and administrative expenses		40,867		101		—		40,968
Operating expenses		86,068		383		—		86,451
Amortization expense		2,977		—		—		2,977
Net gain on sale and disposition of assets		(1,128)		—		—		(1,128)
Total costs and operating expenses		128,784		484		—		129,268
Operating income		38,169		(294)		—		37,875
Interest expense		(23,066)		—		—		(23,066)
Income before income tax expense		15,103		(294)		—		14,809
Income tax expense		(438)		—		—		(438)
Net income		14,665		(294)		—		14,371
Net loss attributable to noncontrolling interest		—		118		—		118
Net income attributable to Global Partners LP		14,665		(176)		—		14,489
Less: General partners' interest in net income, including incentive distribution rights		366		—		—		366
Less: Series A preferred limited partner interest in net income		1,682		—		—		1,682
Net income attributable to common limited partners	$	12,617	$	(176)	$	—	$	12,441

Condensed Consolidating Statement of Operations

Six Months Ended June 30, 2020

(In thousands)

	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Eliminations		Consolidated
Sales	$	4,063,825	$	1,111	$	(266)	$	4,064,670
Cost of sales		3,678,689		562		(266)		3,678,985
Gross profit		385,136		549		—		385,685
Costs and operating expenses:
Selling, general and administrative expenses		99,006		934		—		99,940
Operating expenses		158,426		841		—		159,267
Amortization expense		5,425		—		—		5,425
Net gain on sale and disposition of assets		(68)		—		—		(68)
Long-lived asset impairment		1,724		—		—		1,724
Total costs and operating expenses		264,513		1,775		—		266,288
Operating income		120,623		(1,226)		—		119,397
Interest expense		(42,690)		—		—		(42,690)
Income before income tax benefit		77,933		(1,226)		—		76,707
Income tax benefit		2,341		—		—		2,341
Net income		80,274		(1,226)		—		79,048
Net loss attributable to noncontrolling interest		—		490		—		490
Net income attributable to Global Partners LP		80,274		(736)		—		79,538
Less: General partners' interest in net income, including incentive distribution rights		533		—		—		533
Less: Series A preferred limited partner interest in net income		3,364		—		—		3,364
Net income attributable to common limited partners	$	76,377	$	(736)	$	—	$	75,641

Condensed Consolidating Statement of Operations

Six Months Ended June 30, 2019

(In thousands)

	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Eliminations		Consolidated
Sales	$	6,486,499	$	885	$	(218)	$	6,487,166
Cost of sales		6,162,384		1,013		(218)		6,163,179
Gross profit		324,115		(128)		—		323,987
Costs and operating expenses:
Selling, general and administrative expenses		81,859		199		—		82,058
Operating expenses		168,597		798		—		169,395
Lease exit and termination gain		(493)		—		—		(493)
Amortization expense		5,953		—		—		5,953
Net gain on sale and disposition of assets		(575)		—		—		(575)
Total costs and operating expenses		255,341		997		—		256,338
Operating income		68,774		(1,125)		—		67,649
Interest expense		(46,022)		—		—		(46,022)
Income before income tax expense		22,752		(1,125)		—		21,627
Income tax expense		(462)		—		—		(462)
Net income		22,290		(1,125)		—		21,165
Net loss attributable to noncontrolling interest		—		450		—		450
Net income attributable to Global Partners LP		22,290		(675)		—		21,615
Less: General partners' interest in net income, including incentive distribution rights		670		—		—		670
Less: Series A preferred limited partner interest in net income		3,364		—		—		3,364
Net income attributable to common limited partners	$	18,256	$	(675)	$	—	$	17,581

Condensed Consolidating Statement Cash Flows

Six Months Ended June 30, 2020

(In thousands)

	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Consolidated
Cash flows from operating activities
Net cash provided by operating activities	$	162,123	$	(120)	$	162,003
Cash flows from investing activities
Capital expenditures		(21,746)		—		(21,746)
Seller note issuances		(1,188)		—		(1,188)
Proceeds from sale of property and equipment		6,082		—		6,082
Net cash used in investing activities		(16,852)		—		(16,852)
Cash flows from financing activities
Net payments on working capital revolving credit facility		(107,200)		—		(107,200)
Net payments on revolving credit facility		(4,700)		—		(4,700)
Repurchase of common units		(291)		—		(291)
LTIP units withheld for tax obligations		(30)		—		(30)
Noncontrolling interest capital contribution		(600)		1,000		400
Distributions to limited partners and general partner		(35,014)		—		(35,014)
Net cash used in financing activities		(147,835)		1,000		(146,835)
Cash and cash equivalents
Decrease in cash and cash equivalents		(2,564)		880		(1,684)
Cash and cash equivalents at beginning of period		11,591		451		12,042
Cash and cash equivalents at end of period	$	9,027	$	1,331	$	10,358

Condensed Consolidating Statement Cash Flows

Six Months Ended June 30, 2019

(In thousands)

	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Consolidated
Cash flows from operating activities
Net cash used in operating activities	$	(32,879)	$	(613)	$	(33,492)
Cash flows from investing activities
Capital expenditures		(29,974)		—		(29,974)
Seller note issuances		(640)		—		(640)
Proceeds from sale of property and equipment		10,053		—		10,053
Net cash used in investing activities		(20,561)		—		(20,561)
Cash flows from financing activities
Net borrowings from working capital revolving credit facility		102,800		—		102,800
Net payments on revolving credit facility		(8,000)		—		(8,000)
LTIP units withheld for tax obligations		(32)		—		(32)
Distributions to limited partners and general partner		(38,390)		—		(38,390)
Net cash provided by financing activities		56,378		—		56,378
Cash and cash equivalents
Increase (decrease) in cash and cash equivalents		2,938		(613)		2,325
Cash and cash equivalents at beginning of period		7,050		1,071		8,121
Cash and cash equivalents at end of period	$	9,988	$	458	$	10,446