Global Partners Reports Third-Quarter 2024 Financial Results

Global Partners LP (NYSE: GLP) (“Global” or the “Partnership”) today reported financial results for the third quarter ended September 30, 2024.

CEO Commentary

“Global’s solid financial and operational performance in the third quarter highlights the continued growth and diversification of our retail, terminal, and wholesale liquid energy portfolio,” said Eric Slifka, the Partnership’s President and Chief Executive Officer. “We delivered year-over-year gains across our key financial metrics, demonstrating the effectiveness of our strategy to acquire, invest in and optimize assets that drive operating returns.

“We continue to integrate the 29 new terminals acquired over the past 11 months, adding business and growing volumes,” Slifka said. “In our Gasoline Distribution and Station Operations segment, our retail assets are exceeding expectations. In our Wholesale and Commercial segments, supply market dynamics enabled us to capitalize on favorable conditions in the quarter. Our integrated business model provides the potential to enhance our market leadership and long-term growth.

“On November 1, we acquired the ExxonMobil terminal in East Providence, Rhode Island. This transaction complements our existing terminal network with the addition of 959,730 barrels of storage and deep-water dock access,” Slifka concluded.

Third-Quarter 2024 Financial Highlights

Net income was $45.9 million, or $1.17 per diluted common limited partner unit, for the third quarter of 2024, compared with net income of $26.8 million, or $0.60 per diluted common limited partner unit, in the same period of 2023.

Earnings before interest, taxes, depreciation and amortization (EBITDA) was $119.1 million in the third quarter of 2024 compared with $76.7 million in the same period of 2023.

Adjusted EBITDA was $114.0 million in the third quarter of 2024 versus $77.7 million in the same period of 2023.

Distributable cash flow (DCF) was $71.1 million in the third quarter of 2024 compared with $42.2 million in the same period of 2023.

Adjusted DCF was $71.6 million in the third quarter of 2024 compared with $43.3 million in the same period of 2023.

Gross profit was $286.0 million in the third quarter of 2024 compared with $228.5 million in the same period of 2023.

Combined product margin, which is gross profit adjusted for depreciation allocated to cost of sales, was $318.3 million in the third quarter of 2024 compared with $252.1 million in the same period of 2023.

Combined product margin, EBITDA, adjusted EBITDA, DCF and adjusted DCF are non-GAAP (Generally Accepted Accounting Principles) financial measures, which are explained in greater detail below under “Use of Non-GAAP Financial Measures.” Please refer to Financial Reconciliations included in this news release for reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures for the three months and nine months ended September 30, 2024, and 2023.

Gasoline Distribution and Station Operations (GDSO) segment product margin was $237.7 million in the third quarter of 2024 compared with $206.5 million in the same period of 2023. Product margin from gasoline distribution increased to $164.1 million from $132.0 million in the year-earlier period, primarily reflecting higher fuel margins (cents per gallon). Product margin from station operations decreased to $73.6 million in the third quarter of 2024 from $74.5 million in the third quarter of 2023.

Wholesale segment product margin was $71.1 million in the third quarter of 2024 compared with $37.2 million in the same period of 2023. Gasoline and gasoline blendstocks product margin increased to $43.0 million in the third quarter of 2024 from $20.4 million in the same period of 2023, driven primarily by the acquisition of liquid energy terminals from Motiva Enterprises LLC in December 2023 and by more favorable market conditions. Product margin from distillates and other oils was $28.1 million in the third quarter of 2024 compared with $16.8 million in the same period of 2023, primarily due to more favorable market conditions in residual oil and distillates.

Commercial segment product margin was $9.5 million in the third quarter of 2024 compared with $8.4 million in the same period of 2023 primarily due to more favorable market conditions in bunkering.

Total sales were $4.4 billion in the third quarter of 2024 compared with $4.2 billion in the same period of 2023, primarily due to an increase in volume sold, partially offset by a decrease in prices. Wholesale segment sales were $2.7 billion in the third quarter of 2024 compared with $2.3 billion in the same period of 2023. GDSO segment sales were $1.4 billion in the third quarter of 2024 compared with $1.6 billion in the same period of 2023. Commercial segment sales were $277.1 million in the third quarter of 2024 compared with $273.8 million in the same period of 2023.

Total volume was 1.7 billion gallons in the third quarter of 2024 compared with 1.4 billion gallons in the same period of 2023. Wholesale segment volume was 1.2 billion gallons in the third quarter of 2024 compared with 829.7 million gallons in the same period of 2023. GDSO volume was 412.7 million gallons in the third quarter of 2024 compared with 426.8 million gallons in the same period of 2023. Commercial segment volume was 122.6 million gallons in the third quarter of 2024 compared with 108.4 million gallons in the same period of 2023.

Recent Developments

• Global acquired a 730-acre liquid energy terminal in East Providence, Rhode Island from the ExxonMobil Oil Corporation. The terminal features 10 product tanks with a total shell capacity of 959,730 barrels, serving as a strategic hub for storing a variety of products, including gasoline, additives, distillates, and renewable fuels.
• Global announced a cash distribution of $0.7300 per unit ($2.92 per unit on an annualized basis) on all of its outstanding common units from July 1, 2024 through September 30, 2024. The distribution will be paid on November 14, 2024 to unitholders of record as of the close of business on November 8, 2024.

Financial Results Conference Call

Management will review the Partnership’s third-quarter 2024 financial results in a teleconference call for analysts and investors today.

Time:

10:00 a.m. ET

Dial-in numbers:

[phone] (U.S. and Canada)

 

[phone] (International)

Please plan to dial in to the call at least 10 minutes prior to the start time. The call also will be webcast live and archived on Global Partners’ website, https://ir.globalp.com

About Global Partners LP

Building on a legacy that began more than 90 years ago, Global Partners has evolved into a Fortune 500 company and industry-leading integrated owner, supplier, and operator of liquid energy terminals, fueling locations, and guest-focused retail experiences. Global operates or maintains dedicated storage at 54 liquid energy terminals—with connectivity to strategic rail, pipeline, and marine assets—spanning from Maine to Florida and into the U.S. Gulf States. Through this extensive network, the company distributes gasoline, distillates, residual oil, and renewable fuels to wholesalers, retailers, and commercial customers. In addition, Global owns, operates and/or supplies more than 1,700 retail locations across the Northeast states, the Mid-Atlantic, and Texas, providing the fuels people need to keep them on the go at their unique guest-focused convenience destinations. Recognized as one of Fortune’s Most Admired Companies, Global Partners is embracing progress and diversifying to meet the needs of the energy transition.

Global, a master limited partnership, trades on the New York Stock Exchange under the ticker symbol “GLP.” For additional information, visit www.globalp.com.

Use of Non-GAAP Financial Measures

Product Margin

Global Partners views product margin as an important performance measure of the core profitability of its operations. The Partnership reviews product margin monthly for consistency and trend analysis. Global Partners defines product margin as product sales minus product costs. Product sales primarily include sales of unbranded and branded gasoline, distillates, residual oil, renewable fuels and crude oil, as well as convenience store and prepared food sales, gasoline station rental income and revenue generated from logistics activities when the Partnership engages in the storage, transloading and shipment of products owned by others. Product costs include the cost of acquiring products and all associated costs including shipping and handling costs to bring such products to the point of sale as well as product costs related to convenience store items and costs associated with logistics activities. The Partnership also looks at product margin on a per unit basis (product margin divided by volume). Product margin is a non-GAAP financial measure used by management and external users of the Partnership’s consolidated financial statements to assess its business. Product margin should not be considered an alternative to net income, operating income, cash flow from operations, or any other measure of financial performance presented in accordance with GAAP. In addition, product margin may not be comparable to product margin or a similarly titled measure of other companies.

EBITDA and Adjusted EBITDA

EBITDA and adjusted EBITDA are non-GAAP financial measures used as supplemental financial measures by management and may be used by external users of Global Partners’ consolidated financial statements, such as investors, commercial banks and research analysts, to assess the Partnership’s:

• compliance with certain financial covenants included in its debt agreements;
• financial performance without regard to financing methods, capital structure, income taxes or historical cost basis;
• ability to generate cash sufficient to pay interest on its indebtedness and to make distributions to its partners;
• operating performance and return on invested capital as compared to those of other companies in the wholesale, marketing, storing and distribution of refined petroleum products, gasoline blendstocks, renewable fuels, crude oil and propane, and in the gasoline stations and convenience stores business, without regard to financing methods and capital structure; and
• viability of acquisitions and capital expenditure projects and the overall rates of return of alternative investment opportunities.

Adjusted EBITDA is EBITDA further adjusted for gains or losses on the sale and disposition of assets, goodwill and long-lived asset impairment charges and Global’s proportionate share of EBITDA related to its joint ventures, which are accounted for using the equity method. EBITDA and adjusted EBITDA should not be considered as alternatives to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and adjusted EBITDA exclude some, but not all, items that affect net income, and these measures may vary among other companies. Therefore, EBITDA and adjusted EBITDA may not be comparable to similarly titled measures of other companies.

Distributable Cash Flow and Adjusted Distributable Cash Flow

Distributable cash flow is an important non-GAAP financial measure for the Partnership’s limited partners since it serves as an indicator of Global’s success in providing a cash return on their investment. Distributable cash flow as defined by the Partnership’s partnership agreement (the “partnership agreement”) is net income plus depreciation and amortization minus maintenance capital expenditures, as well as adjustments to eliminate items approved by the audit committee of the board of directors of the Partnership’s general partner that are extraordinary or non-recurring in nature and that would otherwise increase distributable cash flow.

Distributable cash flow as used in the partnership agreement also determines Global’s ability to make cash distributions on its incentive distribution rights. The investment community also uses a distributable cash flow metric similar to the metric used in the partnership agreement with respect to publicly traded partnerships to indicate whether or not such partnerships have generated sufficient earnings on a current or historical level that can sustain distributions on preferred or common units or support an increase in quarterly cash distributions on common units. The partnership agreement does not permit adjustments for certain non-cash items, such as net losses on the sale and disposition of assets and goodwill and long-lived asset impairment charges.

Adjusted distributable cash flow is a non-GAAP financial measure intended to provide management and investors with an enhanced perspective of the Partnership’s financial performance. Adjusted distributable cash flow is distributable cash flow (as defined in the partnership agreement) further adjusted for Global’s proportionate share of distributable cash flow related to its joint ventures, which are accounted for using the equity method. Adjusted distributable cash flow is not used in the partnership agreement to determine the Partnership’s ability to make cash distributions and may be higher or lower than distributable cash flow as calculated under the partnership agreement.

Distributable cash flow and adjusted distributable cash flow should not be considered as alternatives to net income, operating income, cash flow from operations, or any other measure of financial performance presented in accordance with GAAP. In addition, the Partnership’s distributable cash flow and adjusted distributable cash flow may not be comparable to distributable cash flow or similarly titled measures of other companies.

Forward-looking Statements

Certain statements and information in this press release may constitute “forward-looking statements.” The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on Global’s current expectations and beliefs concerning future developments and their potential effect on the Partnership. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting the Partnership will be those that it anticipates. Forward-looking statements involve significant risks and uncertainties (some of which are beyond the Partnership’s control) including, without limitation, uncertainty around the timing of an economic recovery in the United States which will impact the demand for the products we sell and the services that we provide, and assumptions that could cause actual results to differ materially from the Partnership’s historical experience and present expectations or projections. We believe these assumptions are reasonable given currently available information. Our assumptions and future performance are subject to a wide range of business risks, uncertainties and factors, which are described in our filings with the Securities and Exchange Commission (SEC).

For additional information regarding known material factors that could cause actual results to differ from the Partnership’s projected results, please see Global’s filings with the SEC, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Global undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per unit data)

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2024

2023

2024

2023

Sales

$

4,422,238

 

$

4,221,045

 

$

12,977,328

 

$

12,083,062

 

Cost of sales

4,136,189

 

3,992,525

 

12,188,260

 

11,389,819

 

Gross profit

286,049

 

228,520

 

789,068

 

693,243

 

 


Costs and operating expenses:














Selling, general and administrative expenses

70,495

 

63,479

 

212,646

 

192,431

 

Operating expenses

137,126

 

115,944

 

387,235

 

334,676

 

Amortization expense

2,288

 

2,017

 

6,146

 

6,119

 

Net gain on sale and disposition of assets

(7,805

)

(897

)

(10,609

)

(2,141

)

Long-lived asset impairment

492

 

-

 

492

 

-

 

Total costs and operating expenses

202,596

 

180,543

 

595,910

 

531,085

 

 


Operating income

83,453

 

47,977

 

193,158

 

162,158

 

 


Other (loss) income and (expense):














(Loss) income from equity method investments

(147

)

1,180

 

(1,872

)

2,384

 

Interest expense

(35,129

)

(21,089

)

(100,356

)

(64,963

)

 


Income before income tax expense

48,177

 

28,068

 

90,930

 

99,579

 

 


Income tax expense

(2,255

)

(1,260

)

(4,461

)

(2,351

)

 


Net income

45,922

 

26,808

 

86,469

 

97,228

 

 


Less: General partner's interest in net income, including














incentive distribution rights

4,118

 

2,560

 

11,056

 

6,681

 

Less: Preferred limited partner interest in net income

1,781

 

3,712

 

7,794

 

10,638

 

Less: Redemption of Series A preferred limited partner units

-

 

-

 

2,634

 

-

 

 


Net income attributable to common limited partners

$

40,023

 

$

20,536

 

$

64,985

 

$

79,909

 

 


Basic net income per common limited partner unit (1)

$

1.18

 

$

0.60

 

$

1.92

 

$

2.35

 

 


Diluted net income per common limited partner unit (1)

$

1.17

 

$

0.60

 

$

1.90

 

$

2.35

 

 


Basic weighted average common limited partner units outstanding

33,781

 

33,983

 

33,884

 

33,985

 

 


Diluted weighted average common limited partner units outstanding

34,193

 

34,063

 

34,255

 

34,026

 

(1) 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 and to the General Partner's general partner interest. Net income attributable to common limited partners is divided by the weighted average common units outstanding in computing the net income per limited partner unit.

GLOBAL PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

September 30,

December 31,

2024

2023

Assets

Current assets:








Cash and cash equivalents

$

20,567

$

19,642

Accounts receivable, net

471,898

551,764

Accounts receivable - affiliates

6,107

8,142

Inventories

499,472

397,314

Brokerage margin deposits

18,482

12,779

Derivative assets

25,364

17,656

Prepaid expenses and other current assets

83,027

90,531

Total current assets

1,124,917

1,097,828

 


Property and equipment, net

1,661,397

1,513,545

Right of use assets, net

306,191

252,849

Intangible assets, net

19,372

20,718

Goodwill

422,342

429,215

Equity method investments

89,283

94,354

Other assets

41,613

37,502

 


Total assets

$

3,665,115

$

3,446,011

Liabilities and partners' equity

Current liabilities:








Accounts payable

$

454,478

$

648,717

Working capital revolving credit facility - current portion

219,200

16,800

Lease liability - current portion

49,704

59,944

Environmental liabilities - current portion

5,493

5,057

Trustee taxes payable

69,522

67,398

Accrued expenses and other current liabilities

182,486

179,887

Derivative liabilities

2,392

4,987

Total current liabilities

983,275

982,790

 


Working capital revolving credit facility - less current portion

-

-

Revolving credit facility

177,000

380,000

Senior notes

1,186,025

742,720

Lease liability - less current portion

262,754

200,195

Environmental liabilities - less current portion

72,510

71,092

Financing obligations

135,569

138,485

Deferred tax liabilities

64,156

68,909

Other long-term liabilities

60,504

61,160

Total liabilities

2,941,793

2,645,351

 


Partners' equity

723,322

800,660

 


Total liabilities and partners' equity

$

3,665,115

$

3,446,011

GLOBAL PARTNERS LP

FINANCIAL RECONCILIATIONS

(In thousands)

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2024

2023

2024

2023

Reconciliation of gross profit to product margin:

Wholesale segment:














Gasoline and gasoline blendstocks

$

43,024

 

$

20,390

 

$

143,197

 

$

79,799

 

Distillates and other oils

28,118

 

16,780

 

69,230

 

70,226

 

Total

71,142

 

37,170

 

212,427

 

150,025

 

Gasoline Distribution and Station Operations segment:














Gasoline distribution

164,122

 

132,000

 

433,065

 

380,699

 

Station operations

73,590

 

74,530

 

213,831

 

208,456

 

Total

237,712

 

206,530

 

646,896

 

589,155

 

Commercial segment

9,509

 

8,426

 

22,699

 

23,310

 

Combined product margin

318,363

 

252,126

 

882,022

 

762,490

 

Depreciation allocated to cost of sales

(32,314

)

(23,606

)

(92,954

)

(69,247

)

Gross profit

$

286,049

 

$

228,520

 

$

789,068

 

$

693,243

 

Reconciliation of net income to EBITDA and adjusted EBITDA:

Net income

$

45,922

 

$

26,808

 

$

86,469

 

$

97,228

 

Depreciation and amortization

35,753

 

27,507

 

103,505

 

80,952

 

Interest expense

35,129

 

21,089

 

100,356

 

64,963

 

Income tax expense

2,255

 

1,260

 

4,461

 

2,351

 

EBITDA

119,059

 

76,664

 

294,791

 

245,494

 

Net gain on sale and disposition of assets

(7,805

)

(897

)

(10,609

)

(2,141

)

Long-lived asset impairment

492

 

-

 

492

 

-

 

Loss (income) from equity method investments (1)

147

 

(1,180

)

1,872

 

(2,384

)

EBITDA related to equity method investments (1)

2,063

 

3,145

 

4,532

 

3,160

 

Adjusted EBITDA

$

113,956

 

$

77,732

 

$

291,078

 

$

244,129

 

Reconciliation of net cash provided by (used in) operating activities to EBITDA and adjusted EBITDA:

Net cash provided by (used in) operating activities

$

122,709

 

$

97,088

 

$

(35,647

)

$

343,025

 

Net changes in operating assets and liabilities and certain non-cash items

(41,034

)

(42,773

)

225,621

 

(164,845

)

Interest expense

35,129

 

21,089

 

100,356

 

64,963

 

Income tax expense

2,255

 

1,260

 

4,461

 

2,351

 

EBITDA

119,059

 

76,664

 

294,791

 

245,494

 

Net gain on sale and disposition of assets

(7,805

)

(897

)

(10,609

)

(2,141

)

Long-lived asset impairment

492

 

-

 

492

 

-

 

Loss (income) from equity method investments (1)

147

 

(1,180

)

1,872

 

(2,384

)

EBITDA related to equity method investments (1)

2,063

 

3,145

 

4,532

 

3,160

 

Adjusted EBITDA

$

113,956

 

$

77,732

 

$

291,078

 

$

244,129

 

Reconciliation of net income to distributable cash flow and adjusted distributable cash flow:

Net income

$

45,922

 

$

26,808

 

$

86,469

 

$

97,228

 

Depreciation and amortization

35,753

 

27,507

 

103,505

 

80,952

 

Amortization of deferred financing fees

1,872

 

1,423

 

5,576

 

4,134

 

Amortization of routine bank refinancing fees

(1,193

)

(1,214

)

(3,580

)

(3,507

)

Maintenance capital expenditures

(11,221

)

(12,295

)

(31,904

)

(35,450

)

Distributable cash flow (2)(3)

71,133

 

42,229

 

160,066

 

143,357

 

Loss (income) from equity method investments (1)

147

 

(1,180

)

1,872

 

(2,384

)

Distributable cash flow from equity method investments (1)

359

 

2,213

 

(111

)

1,941

 

Adjusted distributable cash flow

71,639

 

43,262

 

161,827

 

142,914

 

Distributions to preferred unitholders (4)

(1,781

)

(3,712

)

(7,794

)

(10,638

)

Adjusted distributable cash flow after distributions to preferred unitholders

$

69,858

 

$

39,550

 

$

154,033

 

$

132,276

 

Reconciliation of net cash provided by (used in) operating activities to distributable cash flow and

adjusted distributable cash flow:

Net cash provided by (used in) operating activities

$

122,709

 

$

97,088

 

$

(35,647

)

$

343,025

 

Net changes in operating assets and liabilities and certain non-cash items

(41,034

)

(42,773

)

225,621

 

(164,845

)

Amortization of deferred financing fees

1,872

 

1,423

 

5,576

 

4,134

 

Amortization of routine bank refinancing fees

(1,193

)

(1,214

)

(3,580

)

(3,507

)

Maintenance capital expenditures

(11,221

)

(12,295

)

(31,904

)

(35,450

)

Distributable cash flow (2)(3)

71,133

 

42,229

 

160,066

 

143,357

 

Loss (income) from equity method investments (1)

147

 

(1,180

)

1,872

 

(2,384

)

Distributable cash flow from equity method investments (1)

359

 

2,213

 

(111

)

1,941

 

Adjusted distributable cash flow

71,639

 

43,262

 

161,827

 

142,914

 

Distributions to preferred unitholders (4)

(1,781

)

(3,712

)

(7,794

)

(10,638

)

Adjusted distributable cash flow after distributions to preferred unitholders

$

69,858

 

$

39,550

 

$

154,033

 

$

132,276

 

(1) Represents the Partnership's proportionate share of (loss) income, EBITDA and distributable cash flow, as applicable, related to the Partnership's interests in its equity method investments.


(2) As defined by the Partnership's partnership agreement, distributable cash flow is not adjusted for certain non-cash items, such as net losses on the sale and disposition of assets and goodwill and long-lived asset impairment charges.


(3) Distributable cash flow includes a net gain on sale and disposition of assets and long-lived asset impairment of $7.3 million and $0.9 million for the three months ended September 30, 2024 and 2023, respectively, and $10.1 million and $2.1 million for the nine months ended September 30, 2024 and 2023, respectively. Distributable cash flow also includes (loss) income from equity method investments of ($0.1 million) and $1.2 million for the three months ended September 30, 2024 and 2023, respectively, and ($1.9 million) and $2.4 million for the nine months ended September 30, 2024 and 2023, respectively.


(4) Distributions to preferred unitholders represent the distributions payable to the Series A preferred unitholders and the Series B preferred unitholders earned during the period. Distributions on the Series A preferred units and the Series B preferred units are cumulative and payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year. On April 15, 2024, all of the Partnership's Series A preferred units were redeemed and are no longer outstanding.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241107804866/en/

Gregory B. Hanson Chief Financial Officer Global Partners LP [phone]

Sean T. Geary Chief Legal Officer and Secretary Global Partners LP [phone]