Business Wire | Mar 5, 2021 08:00AM EST

Global Partners Reports Fourth-Quarter and Full-Year 2020 Financial Results

Mar. 05, 2021

WALTHAM, Mass.--(BUSINESS WIRE)--Mar. 05, 2021--Global Partners LP (NYSE: GLP) today reported financial results for the fourth quarter and full year ended December 31, 2020.

"Global delivered extraordinary results in 2020, posting net income attributable to the Partnership of $102.2 million, Adjusted EBITDA of $287.7 million and distributable cash flow of $156.4 million - increases in each metric year-over-year," said Eric Slifka, Global's President and Chief Executive Officer.

"Global has always adapted and innovated to meet the most essential needs of the customers and the economic regions we serve. Our performance in the face of a global pandemic underscores the resilience of our business model and highlights our fundamental role as a critical infrastructure company. In that role, we provide energy products and goods and services through a portfolio of fully integrated terminal, supply and real estate assets.

"I also want to publicly acknowledge the outstanding work of our people, from the front-line associates at our gas stations, convenience stores and terminals to our office personnel at locations throughout the country," Slifka said. "In a year like no other, they kept our operations running smoothly, ensuring the safety of our guests and customers while helping us innovate and grow."

Fourth Quarter Financial Highlights

Net income attributable to the Partnership was $4.4 million, or $0.06 per diluted common limited partner unit, for the fourth quarter of 2020 compared with a net loss attributable to the Partnership of $0.8 million, or $0.08 per common limited partner unit, in the fourth quarter of 2019.

Net income attributable to the Partnership, EBITDA, Adjusted EBITDA and DCF for the three and 12 months ended December 31, 2020 included a $7.2 million loss on the early extinguishment of debt related to the Partnership's October 2020 redemption of its 7.00% senior notes due 2023.

Earnings before interest, taxes, depreciation and amortization (EBITDA) was $50.2 million in the fourth quarter of 2020 compared with $47.3 million in the fourth quarter of 2019.

Adjusted EBITDA was $49.9 million in the fourth quarter of 2020 compared with $46.2 million in the fourth quarter of 2019.

Distributable cash flow (DCF) was $7.3 million in the fourth quarter of 2020 compared with $9.4 million in the fourth quarter of 2019.

Gross profit in the fourth quarter of 2020 was $166.2 million compared with $151.0 million in the fourth quarter of 2019, reflecting higher Wholesale segment product margins partly offset by lower product margins in the Gasoline Distribution and Station Operations and Commercial segments.

Combined product margin, which is gross profit adjusted for depreciation allocated to cost of sales, was $186.2 million in the fourth quarter of 2020 compared with $172.8 million in the fourth quarter of 2019.

Combined product margin, EBITDA, Adjusted EBITDA, and 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 and 12 months ended December 31, 2020 and 2019.

GDSO segment product margin was $143.6 million in the fourth quarter of 2020 compared with $147.1 million in the fourth quarter of 2019. This result primarily reflected lower fuel volume and reduced convenience store activity due to COVID-19, partly offset by higher fuel margins.

Wholesale segment product margin was $39.1 million in the fourth quarter of 2020 compared with $15.4 million in the fourth quarter of 2019. This result primarily reflected more favorable market conditions in gasoline and gasoline blendstocks and other oils and related products.

Commercial segment product margin was $3.4 million in the fourth quarter of 2020 compared with $10.3 million in the fourth quarter of 2019, primarily reflecting a decrease in bunkering activity.

Total sales were $2.2 billion in the fourth quarter of 2020 compared with $3.3 billion in the fourth quarter of 2019, due to decreases in prices and volume. Wholesale segment sales were $1.3 billion in the fourth quarter of 2020 compared with $1.9 billion in the fourth quarter of 2019. GDSO segment sales were $0.7 billion in the fourth quarter of 2020 compared with $1.0 billion in the fourth quarter of 2019. Commercial segment sales were $0.2 billion in the fourth quarter of 2020 compared with $0.4 billion in the fourth quarter of 2019.

Volume in the fourth quarter of 2020 was 1.5 billion gallons compared with 1.7 billion gallons in the fourth quarter of 2019. Wholesale segment volume was 1.0 billion gallons in the fourth quarter of 2020 compared with 1.1 billion gallons in the fourth quarter of 2019. GDSO volume was 354.0 million gallons in the fourth quarter of 2020 compared with 408.0 million gallons in the fourth quarter of 2019. Commercial segment volume was 139.8 million gallons in the fourth quarter of 2020 compared with 197.3 million gallons in the fourth quarter of 2019.

Recent Developments

* Global announced a quarterly cash distribution of $0.55 per unit, or $2.20 per unit on an annualized basis, on all of its outstanding common units for the period from October 1 to December 31, 2020. The distribution was paid February 12, 2021 to unitholders of record as of the close of business on February 8, 2021. * Global signed an agreement to purchase the retail fuel and convenience store assets of Connecticut-based Consumers Petroleum of Connecticut, Incorporated. Subject to regulatory approvals and other customary closing conditions, the transaction is expected to close in the second quarter of 2021.

Business Outlook

"As we continue to embrace changes in consumer behavior and the demand for greener energy, Global's commitment to providing the essential goods and services that make life better remains the same. Our ability to provide reliability while adapting to changes in product demand continues to serve us well," Slifka said.

Any COVID-19 related events or conditions, or other unforeseen consequences of COVID-19 could significantly adversely affect our business and financial condition and the business and financial condition of our customers, suppliers and counterparties. The ultimate extent of the impact of COVID-19 on our business, financial condition and results of operations depends in large part on future developments which are uncertain and cannot be predicted at this time. That uncertainty includes the duration (including its potential return) of the COVID-19 pandemic, the geographic regions so impacted, the extent of said impact within specific boundaries of those areas and, lastly, the impact to the local, state and national economies.

Financial Results Conference Call

Management will review the Partnership's fourth-quarter and full-year 2020 financial results in a teleconference call for analysts and investors today.

Time: 10:00 a.m. ET

Dial-in numbers: (877) 709-8155 (U.S. and Canada)

(201) 689-8881 (International)

Due to the expected high demand on our conference call provider, please plan to dial in to the call at least 20 minutes prior to the start time.

The call also will be webcast live and archived on Global's website, https://ir.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, crude oil and propane, as well as convenience store 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 and goodwill and long-lived asset impairment charges. 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

Distributable cash flow is an important non-GAAP financial measure for the Partnership's limited partners since it serves as an indicator of success in providing a cash return on their investment. Distributable cash flow as defined by the Partnership's 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 our partnership agreement also determines our ability to make cash distributions on our incentive distribution rights. The investment community also uses a distributable cash flow metric similar to the metric used in our partnership agreement with respect to publicly traded partnerships to indicate whether or not such partnerships have generated sufficient earnings on a current or historic level that can sustain distributions on preferred or common units or support an increase in quarterly cash distributions on common units. Our 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.

Distributable cash flow should not be considered as 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, distributable cash flow may not be comparable to distributable cash flow or similarly titled measures of other companies.

About Global Partners LP

With approximately 1,550 locations primarily in the Northeast, Global Partners is one of the region's largest independent owners, suppliers and operators of gasoline stations and convenience stores. Global Partners also owns, controls or has access to one of the largest terminal networks in New England and New York, through which it distributes gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers. In addition, Global Partners engages in the transportation of petroleum products and renewable fuels by rail from the mid-continental U.S. and Canada. Global Partners LP, a master limited partnership, trades on the New York Stock Exchange under the ticker symbol "GLP." For additional information, visit www.globalp.com.

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. These forward-looking statements are based on Global Partners' 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. All comments concerning the Partnership's expectations for future revenues and operating results and otherwise are based on forecasts for its existing operations and do not include the potential impact of any future acquisitions. Forward-looking statements involve significant risks and uncertainties (some of which are beyond the Partnership's control) including, without limitation, the impact and duration of the COVID-19 pandemic, 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 we provide, uncertainty around the impact of the COVID-19 pandemic to our counterparties and our customers and their corresponding ability to perform their obligations and/or utilize the products we sell and/or services we provide, uncertainty around the impact and duration of federal, state and municipal regulations related to the COVID-19 pandemic, and assumptions that could cause actual results to differ materially from the Partnership's historical experience and present expectations or projections. For additional information regarding known material factors that could cause actual results to differ from the Partnership's projected results, please see Global Partners' 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 thereof. The Partnership 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 PARTNERSLPCONSOLIDATEDSTATEMENTS OFOPERATIONS(In thousands,except per unitdata)(Unaudited) Three Months Ended Twelve Months Ended

December 31, December 31,

2020 2019 2020 2019

Sales $ 2,195,547 $ 3,348,911 $ 8,321,599 $ 13,081,730

Cost of sales 2,029,335 3,197,910 7,600,461 12,418,973

Gross profit 166,212 151,001 721,138 662,757

Costs andoperatingexpenses:Selling,general and 49,375 43,546 192,533 170,937 administrativeexpensesOperating 81,796 85,160 323,298 342,382 expensesLease exit and - - - (493 )terminationgainAmortization 2,702 2,712 10,839 11,431 expenseNet (gain) losson sale and (348 ) (2,478 ) 275 (2,730 )disposition ofassetsLong-lived - 1,379 1,927 2,022 assetimpairmentTotal costs and 133,525 130,319 528,872 523,549 operatingexpenses Operating 32,687 20,682 192,266 139,208 income Interest (20,995 ) (21,743 ) (83,539 ) (89,856 )expenseLoss on early (7,164 ) - (7,164 ) (13,080 )extinguishmentof debt Income beforeincome tax 4,528 (1,061 ) 101,563 36,272 (expense)benefit Income tax (86 ) 181 119 (1,094 )(expense)benefit Net income 4,442 (880 ) 101,682 35,178 (loss) Net lossattributable to - 52 528 689 noncontrollinginterest Net income(loss) 4,442 (828 ) 102,210 35,867 attributable toGlobal PartnersLP Less: Generalpartner'sinterest in netincome (loss), 542 314 1,399 1,379 includingincentivedistributionrightsLess: Series Apreferred 1,682 1,682 6,728 6,728 limited partnerinterest in netincome Net income(loss) 2,218 (2,824 ) 94,083 27,760 attributable to $ $ $ $common limitedpartners Basic netincome (loss) 0.06 (0.08 ) 2.77 0.82 per common $ $ $ $limited partnerunit (1) Diluted netincome (loss) 0.06 (0.08 ) 2.74 0.81 per common $ $ $ $limited partnerunit (1) Basic weightedaverage common 33,966 33,866 33,907 33,810 limited partnerunitsoutstanding Dilutedweighted 34,260 34,287 34,308 34,339 average limitedpartner unitsoutstanding(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.(1) Under the Partnership's partnership agreement, for any quarterly period,the incentive distribution rights ("IDRs") participate in net income only tothe extent of the amount of cash distributions actually declared, therebyexcluding the IDRs from participating in the Partnership's undistributed netincome or losses. Accordingly, the Partnership's undistributed net income orlosses is assumed to be allocated to the common unitholders and to the GeneralPartner's general partner interest. Net income attributable to common limitedpartners is divided by the weighted average common units outstanding incomputing the net income per limited partner unit.GLOBAL PARTNERS LPCONSOLIDATED BALANCE SHEETS(In thousands)(Unaudited) December December 31, 31,

2020 2019

AssetsCurrent assets:Cash and cash equivalents $ 9,714 $ 12,042

Accounts receivable, net 227,317 413,195

Accounts receivable - affiliates 2,410 7,823

Inventories 384,432 450,482

Brokerage margin deposits 21,661 34,466

Derivative assets 16,556 4,564

Prepaid expenses and other current assets 119,340 81,940

Total current assets 781,430 1,004,512

Property and equipment, net 1,082,486 1,104,863

Right of use assets, net 290,506 296,746

Intangible assets, net 35,925 46,765

Goodwill 323,565 324,474

Other assets 26,588 31,067

Total assets $ 2,540,500 $ 2,808,427

Liabilities and partners' equityCurrent liabilities:Accounts payable $ 207,873 $ 373,386

Working capital revolving credit facility - current 34,400 148,900portionLease liability - current portion 75,376 68,160

Environmental liabilities - current portion 4,455 5,009

Trustee taxes payable 36,598 42,932

Accrued expenses and other current liabilities 126,774 102,802

Derivative liabilities 12,055 12,698

Total current liabilities 497,531 753,887

Working capital revolving credit facility - less 150,000 175,000current portionRevolving credit facility 122,000 192,700

Senior notes 737,605 690,533

Long-term lease liability - less current portion 226,648 239,349

Environmental liabilities - less current portion 49,166 54,262

Financing obligations 146,535 148,127

Deferred tax liabilities 56,218 42,879

Other long-term liabilities 59,298 52,451

Total liabilities 2,045,001 2,349,188

Partners' equityGlobal Partners LP equity 495,499 458,065

Noncontrolling interest - 1,174

Total partners' equity 495,499 459,239

Total liabilities and partners' equity $ 2,540,500 $ 2,808,427

GLOBAL PARTNERS LP FINANCIAL RECONCILIATIONS(In thousands) (Unaudited) Three Months Ended Twelve Months Ended

December 31, December 31,

2020 2019 2020 2019

Reconciliation ofgross profit to product marginWholesale segment: Gasoline and gasoline $ 17,577 $ 7,414 $ 100,818 $ 83,982 blendstocksCrude oil (2,676 ) (3,004 ) (672 ) (13,047 )

Other oils and related 24,235 11,018 82,999 51,584 productsTotal 39,136 15,428 183,145 122,519

Gasoline Distributionand Station Operations segment:Gasoline distribution 92,611 91,631 398,016 374,550

Station operations 51,022 55,457 205,926 225,078

Total 143,633 147,088 603,942 599,628

Commercial segment 3,422 10,323 15,195 28,540

Combined product 186,191 172,839 802,282 750,687 marginDepreciation allocated (19,979 ) (21,838 ) (81,144 ) (87,930 )to cost of salesGross profit $ 166,212 $ 151,001 $ 721,138 $ 662,757

Reconciliation of netincome (loss) to EBITDA and AdjustedEBITDANet income (loss) $ 4,442 $ (880 ) $ 101,682 $ 35,178

Net loss attributable - 52 528 689 to noncontrolling interestNet income (loss) 4,442 (828 ) 102,210 35,867 attributable to Global Partners LPDepreciation andamortization, 24,707 26,535 99,899 107,557 excluding the impact of noncontrollinginterestInterest expense,excluding the impact 20,995 21,743 83,539 89,856 of noncontrollinginterestIncome tax expense 86 (181 ) (119 ) 1,094 (benefit)EBITDA (1) 50,230 47,269 285,529 234,374

Net (gain) loss on (348 ) (2,478 ) 275 (2,730 )sale and disposition of assetsLong-lived asset - 1,379 1,927 2,022 impairmentAdjusted EBITDA (1) $ 49,882 $ 46,170 $ 287,731 $ 233,666

Reconciliation of netcash provided by (usedin) operating activities to EBITDAand Adjusted EBITDANet cash provided by 62,237 (15,123 ) 312,526 94,402 (used in) operating $ $ $ $activitiesNet changes inoperating assets and (33,088 ) 40,891 (110,709 ) 48,968 liabilities andcertain non-cash itemsNet cash fromoperating activitiesand changes inoperating assets and - (61 ) 292 54 liabilitiesattributable tononcontrollinginterestInterest expense,excluding the impact 20,995 21,743 83,539 89,856 of noncontrollinginterestIncome tax expense 86 (181 ) (119 ) 1,094 (benefit)EBITDA (1) 50,230 47,269 285,529 234,374

Net (gain) loss on (348 ) (2,478 ) 275 (2,730 )sale and disposition of assetsLong-lived asset - 1,379 1,927 2,022 impairmentAdjusted EBITDA (1) $ 49,882 $ 46,170 $ 287,731 $ 233,666

Reconciliation of netincome (loss) to distributable cashflowNet income (loss) $ 4,442 $ (880 ) $ 101,682 $ 35,178

Net loss attributable - 52 528 689 to noncontrolling interestNet income (loss) 4,442 (828 ) 102,210 35,867 attributable to Global Partners LPDepreciation andamortization, 24,707 26,535 99,899 107,557 excluding the impact of noncontrollinginterestAmortization ofdeferred financing 1,345 1,261 5,241 5,940 fees and senior notesdiscountAmortization of (1,037 ) (940 ) (3,970 ) (3,754 )routine bank refinancing feesMaintenance capitalexpenditures, (22,199 ) (16,596 ) (46,988 ) (49,897 )excluding the impact of noncontrollinginterestDistributable cash 7,258 9,432 156,392 95,713 flow (1)(2)Distributions to (1,682 ) (1,682 ) (6,728 ) (6,728 )Series A preferred unitholders (3)Distributable cashflow after 5,576 7,750 149,664 88,985 distributions to $ $ $ $Series A preferredunitholders Reconciliation of netcash provided by (usedin) operating activities todistributable cashflowNet cash provided by 62,237 (15,123 ) 312,526 94,402 (used in) operating $ $ $ $activitiesNet changes inoperating assets and (33,088 ) 40,891 (110,709 ) 48,968 liabilities andcertain non-cash itemsNet cash fromoperating activitiesand changes inoperating assets and - (61 ) 292 54 liabilitiesattributable tononcontrollinginterestAmortization ofdeferred financing 1,345 1,261 5,241 5,940 fees and senior notesdiscountAmortization of (1,037 ) (940 ) (3,970 ) (3,754 )routine bank refinancing feesMaintenance capitalexpenditures, (22,199 ) (16,596 ) (46,988 ) (49,897 )excluding the impact of noncontrollinginterestDistributable cash 7,258 9,432 156,392 95,713 flow (1)(2)Distributions to (1,682 ) (1,682 ) (6,728 ) (6,728 )Series A preferred unitholders (3)Distributable cashflow after 5,576 7,750 149,664 88,985 distributions to $ $ $ $Series A preferredunitholders(1)EBITDA, Adjusted EBITDA and distributable cash flow include a loss on early extinguishment of debt of $7.2 million for the three and twelve months ended December 31, 2020 related to the redemption of the 7.00% senior notes due 2023 and $13.1 million for the twelve months ended December 31, 2019 related to the repurchase of the 6.25% senior notes due 2022.(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)

Distributions to Series A preferred unitholders represent the distributions payable to the preferred unitholders during the period. Distributions on the Series A preferred units are cumulative and payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year. View source version on businesswire.com: https://www.businesswire.com/news/home/20210305005086/en/

CONTACT: Daphne H. Foster Chief Financial Officer Global Partners LP (781) 894-8800

CONTACT: Edward J. Faneuil Executive Vice President, General Counsel and Secretary Global Partners LP (781) 894-8800