eric slifka, president and ceo q3 2014 investor presentation · q3 2014 investor presentation...
TRANSCRIPT
Q3 2014 Investor Presentation
Global Partners LP (NYSE: GLP)
Baird 2016 Global Industrial Conference
Eric Slifka, President and CEO
Daphne H. Foster, CFO
2
Forward-Looking Statements
Certain statements and information in this presentation 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 current expectations and beliefs
concerning future developments and their potential effect on Global Partners. While management believes that these forward-looking
statements are reasonable as and when made, there can be no assurance that future developments affecting Global Partners will be
those that it anticipates. All comments concerning Global Partners’ expectations for future revenues and operating results are based on
Global Partners’ forecasts for existing operations and do not include the potential impact of any future acquisitions. Global Partners’
forward-looking statements involve significant risks and uncertainties (some of which are beyond Global Partners’ control) and
assumptions that could cause actual results to differ materially from its historical experience and its present expectations or projections.
For additional information regarding known material factors that could cause Global Partners’ actual results to differ from its projected
results, please see Global Partners LP’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
Partners 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.
3
Use of Non-GAAP Financial Measures
This presentation contains non-GAAP financial measures relating to Global Partners. A reconciliation of these measures to the most directly comparable GAAP measures is available in the Appendix to this
presentation. For additional detail regarding selected items impacting comparability, please visit the Investor Relations sec tion of Global Partners’ website at www.globalp.com.
Product Margin
Global Partners views product margin as an important performance measure of the core profitability of its operations. The Par tnership 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 unbrand ed and branded gasoline, distillates, residual oil, renewable fuels, crude oil,
natural gas and propane, as well as convenience store sales, gasoline station rental income and revenue generated from the Pa rtnership’s logistics activities when it engages in the storage, transloading
and shipment of products owned by others. Product costs include the cost of acquiring the refined petroleum products, renewab le fuels, crude oil, natural gas and propane 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 conven ience store items and costs associated with the Partnership’s 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 Global
Partners’ consolidated financial statements to assess the Partnership’s 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, Global Partners’ product margin ma y 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, renewable fuels, crude
oil, natural gas and propane, 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 adjusted for the gain or loss on the sale and disposition of assets and 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 our limited partners since it serves as an indicator of our success in providing a cash return on their investment. Distributable cash flow as
defined by our 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 our 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
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 or support an increase in quarterly cash
distribution. 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, our distributable cash flow may not be comparable to distributable cash flow or similarly titled measures of other companies.
4
Global Partners at a Glance
• Master limited partnership engaged in midstream logistics and marketing
• Leading wholesale distributor of petroleum products
• One of the largest terminal networks of petroleum products and
renewable fuels in the Northeast
• One of the largest independent owners, suppliers and operators of
gasoline stations and convenience stores in the Northeast
• Engaged in the transportation of petroleum and related products by rail
5
Year to Date Highlights
Optimize Assets• Sale-leaseback of certain New England gas station sites
• Sale of non-strategic sites, including the Mirabito transaction
• Ongoing divestiture of non-strategic sites through NRC Realty
• Leverage storage capacity to capitalize on contango opportunities
• Ethanol transloading and dock expansion in Oregon
Growth Initiatives • Signed long-term lease for 22 stations and c-stores in Western Mass.
• Added leased sites as part of agreement with Getty Realty
• New-to-industry retail and raze-and rebuild projects (ongoing)
6
Global’s DNA
Sourcing and Logistics
Integrated Marketing
Retail Wholesale Distribution C-Store Operations
Origin and Transportation Delivery and Storage
7
Global by the Numbers
Refined Petroleum Bulk Product Terminals
Barrels of Storage Capacity
Barrels of Product Sold Daily
Gas Stations Owned, Leased or Supplied
25
12.2M
337K
1,500
*Included in the ~1,500 total gas stations
257* Company-operated Convenience Stores
8
How Large is Global’s Refined Fuels Network?
Gasoline*
Diesel fuel
Heating oil
TTM as of 9/30/2016
*Total gasoline volume sold
699K
18K
37K
Automobile tanks filled/day
Diesel trucks filled/day
Homes heated/day in winter
9
Getty Realty
Agreement
Acquired
Alliance
Energy
Acquired
Mobil Stations
History of Growth
2007 2008 2009 2010 2011
Acquired three
terminals
from ExxonMobil
Acquired two
terminals
from ExxonMobil
Completed Port of
Providence
terminal project
Organic terminal
projects in
Albany, NY
Oyster Bay, NY
Philadelphia, PA
Launched offshore
bunkering
service
2012 2013
Albany Ethanol Expansion
Project with CP Railway
Acquired
Warex terminals
Contracted to supply
150M gallons to other
Mobil distributors
Receipt, storage and
distribution of Bakken crude
oil at Global Albany
Completed 100K bbl
storage tank in
Columbus, ND
Acquired
Basin Transload
Completed
Global Albany
rail expansion
Acquired
CPBR Facility
Opened NGL
facility in Albany
Signed pipeline connection agreements
with Tesoro and Meadowlark
~$1.7 Billion in Acquisitions and Investments
2014
Acquired
Warren Equities
Acquired Boston
Harbor Terminal
Completed 176K bbl storage
tank in Columbus, ND
2015 2016
Expanded retail portfolio
with the addition of 22 leased
sites in Western Mass.
Acquired NY/DC
retail portfolio from
Capitol Petroleum
Business Overview
11
Business Overview
• Bulk purchase, movement,
storage and sale of:
– Gasoline and gasoline blendstocks
– Crude oil
– Other oils and related products
• Customers
– Branded and unbranded gasoline
distributors
– Home heating oil retailers and
wholesale distributors
– Refiners
CommercialWholesale
• Sales and deliveries to end
user customers of:
– Unbranded gasoline
– Heating oil, kerosene, diesel
and residual fuel
– Natural gas
– Bunker fuel
• Customers
– Government agencies
– States, towns, municipalities
– Large commercial clients
– Shipping companies
Gasoline Distribution &
Station Operations• Retail gasoline sales
– Branded and unbranded
• Rental income from:
– Dealers
– Commission agents
– Co-branding arrangements
• Sales to retail customers of:
– Convenience store items
– Car wash services
– Fresh-made and prepared foods
• Alltown and Xtra Mart stores
• Customers
– Station operators
– Gasoline jobbers
– Retail customers
12
Vertical Integration
Truck
Pipeline
Barge
Tanker
Storage Facilities
RetailGas Station
Truck
CommercialBarge
Truck
Industrial
Rail
Wholesale Rack Refinery
Rail
Barge
Consumer
Wholesale Commercial Gasoline Distribution & Station Operations
Wholesale Segment
14
Global has 11.3 million bbls of terminal capacity in the Northeast
Estimated market share1
Wholesale Terminals – Northeast
1 Based on terminal capacity (bbls in 000s)
Source: OPIS/Stalsby Petroleum Terminal Encyclopedia, 2015 and Company data
Newburgh, NY: 429K bbls
Albany, NY: 1,402K bbls
Newburgh-Warex, NY: 956K bbls
Commander/Oyster Bay, NY: 134K bbls
Port of Providence, RI: 480K bbls
Sandwich, MA: 99K bbls
Chelsea, MA: 685K bbls
Revere, MA: 2,097K bbls
Portland, ME: 665K bbls
Burlington, VT: 419K bbls
Inwood, NY: 322K bbls
Glenwood Landing, NY: 98K bbls
Wethersfield, CT: 183K bbls
Bridgeport, CT: 110K bbls
Key to Terminal Type
Distillate
Ethanol
Gasoline/Distillate/Ethanol
Residual/Distillate
Residual/Distillate/Biofuel
Distillate/Biofuel
Gasoline/Distillate/Ethanol/Crude
Propane/Butane
Crude Macungie, PA: 170K bbls
Staten Island, NY: 287K bbls
Philadelphia, PA: 260K bbls
Bayonne, NJ: 371K bbls
Springfield, MA: 54K bbls
Location Est. market capacity GLP capacity GLP % of total
Newburgh, NY 2,847 1,385 49%
Western Long Island, NY 776 554 71%
Boston Harbor, MA 9,995 2,782 28%
Vermont 427 419 98%
Providence, RI 4,631 480 10%
Albany/Rensselaer, NY 9,387 1,402 15%
Riverhead, NY: 2,045K bbls
Albany, NY: 24K bbls
15
Albany Terminal Critical Link in North American Infrastructure
• Receipt, storage and delivery of
multiple petroleum products
–Gasoline
–Ethanol
–Heating oil
–Crude oil
• Significant intermodal flexibility
–Rail
–Barge
–Truck
16
Ethanol Transloading in Oregon
• Infrastructure projects
–Converted facility’s 200,000 bbls of storage
capacity from crude to ethanol
–Expansion of terminal dock to handle
Panamax-class vessels
–Began to receive, store and sell ethanol in
Q3 2016
Gasoline Distribution & Station
Operations Segment
18
One of the Largest Operators of Gasoline Stations and
Convenience Stores in the Northeast
• Large gasoline station and C-store portfolio –Supply ~1,500 locations in 11 states
• Own or control ~800 sites; approximately 50% owned
–Brands include Mobil, CITGO, Shell, Gulf and Sunoco
• New-to-industry and organic projects –Retail site development and expansion
–Merchandising and rebranding
–Co-branding initiatives
• Acquisitions of Warren Equities and Capitol Petroleum portfolio –Strengthen footprint on East Coast
–Expand presence to mid-Atlantic
–Deepen integration between midstream and downstream assets
19
GDSO Segment is Downstream Link in Vertically Integrated
Supply Chain
Legacy Global locations
Warren locations
Capitol Petroleum locations
• Annuity business: Rental income from
Dealer Leased and Commission Agents
• Vertical integration: Integration between
supply, terminaling and wholesale
businesses and gas station sites
• Scale: ~1,500 sites with volume of 1.5
billion gallons in 2015
• Preeminent locations: Portfolio of “best-in-
class” sites in Northeast and Mid-Atlantic
• Diversification: Flexible diversity of mode of
operation, site geography and site brand
Strategic Advantages
20
Organization of GDSO Segment
Company Operated Stores
Commission Agents
Lessee Dealers
Contract Dealers
257
285
260
670Data as of 9/30/2016
21
Track Record of Acquisitive Growth
• Completed in April 2016
• 22 gas stations and convenience stores in
Pittsfield and Springfield regions
• Added through long-term leases
• Shell and Mobil fuel brands
• Completed in January 2015
• 148 convenience stores, 33 commission
agent locations and approximately 330
dealers
• Strong footprint across 10 states in the
Northeast with the majority of its stores
primarily concentrated in MA, CT and NY
• Projected EBITDA:
‒ Second full year of operations:
$50 million to $60 million
• Meaningfully expands scale while
providing significant operational
synergies and strategic options
• Completed in June 2015
• Portfolio primarily of 97 Mobil- and Exxon-
branded owned or leased retail gas
stations and seven dealer supply contracts
in NYC and Prince George’s County, MD
• 51 retail locations and seven dealer supply
accounts in NYC and 46 retail sites in
Maryland/Washington, D.C. market
• Sites sold a total of ~125 million gallons
of fuel in 2014
• Expands Global’s presence in two
attractive markets
Warren Equities Capitol Petroleum GroupExpanded Portfolio in
Western Mass
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East OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast OrangeEast Orange
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HackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensackHackensack
IrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonIrvingtonJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey CityJersey City
LindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLindenLinden
NewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewarkNewark
Perth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth AmboyPerth Amboy
UnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnionUnion
West New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest New YorkWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest OrangeWest Orange
East MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast MeadowEast Meadow
FreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeportFreeport
HempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempsteadHempstead
HicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksvilleHicksville
Long BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong BeachLong Beach
OceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceansideOceanside
Valley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley StreamValley Stream
678
9580
278
95
478
278
398
66
97
498
270
22
GDSO Segment - Growth Through Organic and M&A Initiatives
Organic Projects:
• Raze and rebuilds
• New-to-industry sites
Real Estate Focus:
• Optimize real-estate portfolio through asset sales
• Convert mode of operation of certain stations to
maximize value
Merchandising Focus:
• Store mix
• Vendor relationships and related buying power
• Co-branding alliances
M&A:
• Transactions that provide strategic and operational
advantages
Commercial Segment
24
Commercial Segment Overview
• Delivered fuels business – commercial and industrial, as well as federal agencies, states,
towns and municipalities
– Through competitive bidding process or through contracts of various terms
• Bunkering – marine vessel fueling
– Custom blending and delivered by barge or from a terminal dock to ships
• Natural gas marketing
Financial Summary
26
Q3 2016 Financial Performance
Please refer to Appendix for reconciliation of non-GAAP items
($ in millions) Q3 2015 Q3 2016
Product margin $178.7 $157.2
Gross profit $152.3 $132.6
Net income (loss) attributable to GLP(2) $8.2 $(119.6)
EBITDA $59.3 $(67.8)
Adjusted EBITDA $60.0 $51.6
Maintenance capex $9.0 $8.7
DCF(1)(2) $29.6 $(100.2)
GDSO Wholesale Commercial
Q3’15 Q3’16 Q3’15 Q3’16 Q3’15 Q3’16
Q3 Product Margin by Segment($ in millions)
Q3 2016 vs. Q3 2015 Drivers
Strong GDSO segment
Non-cash goodwill
impairment related to
Wholesale segment
Expansion of leased
retail portfolio
Absence of logistics
nominations from one
customer
Favorable market
conditions in wholesale
gasoline
Tight crude oil differentials
Impact of crude-related
fixed costs
Favorable variance Unfavorable variance
(1) As defined by our 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.
(2) Includes a non-cash net goodwill and long-lived asset impairment of $0 and $112.0 million
($147.8 million attributed to us offset by $35.8 million attributed to the noncontrolling interest).
Also includes a net loss on sale and disposition of assets of $0.7 million and $7.5 million for the
three months ended September 30, 2015 and 2016, respectively. Excluding these items,
distributable cash flow would have been $30.3 million and $19.3 million for the three months
ended September 30, 2015 and 2016, respectively.
27
Financial Profile
Product Margin EBITDA
($ in millions) ($ in millions)
DCF
($ in millions)
(3) DCF
(4) DCF excluding net impairment charges of $114.1
million and losses on the sale of assets of $14.7 million.
(1) EBITDA
(2) Adjusted EBITDA excludes net impairment charges of $114.1
million and losses on the sale of assets of $14.7 million.
Please refer to Appendix for reconciliation of
non-GAAP items.
28
Product Margin by Business Segment
Wholesale
Crude
23%
Total Q3 2016 Product Margin
Commercial 2%
Please refer to Appendix for reconciliation of non-GAAP items
Wholesale 19%
GDSO 79%
Wholesale
Distillates
& Residual
7% Wholesale
Gasoline 12%
Gasoline
Distribution
51%
C-Store &
Third-party Rent
28%
Totals may not add due to rounding
GDSO Product Margin ($M)
Wholesale Product Margin ($M)
Commercial Product Margin ($M)
$157.2M
29
Volume and Margin
• Consistency/Repeatability– Driving cars & trucks
– Heating buildings and homes
– Term contracts
– Rental income and C-Store sales
• Variability– Market and economic conditions
– Weather
– Seasonality
* Retail excludes C-store margin and rent
Product Margin (cents per gallon)Station Operations Margin ($M)
30
Balance Sheet at September 30, 2016
• Tangible and liquid with receivables and inventory comprising 30% of total
assets at 9/30/16
• Receivables diversified over a large customer base and turn within 10 to 20
days; write-offs have averaged 0.01% of sales per year over the past five
years
• Inventory represents about 10 to 20 days of sales
• Remaining assets are comprised primarily of $1.1B of conservatively valued
fixed assets (strategically located, non-replicable terminals and gas stations)
• $318M (27%) of total debt at 9/30/16 related to inventory financing
– Borrowed under working capital facility
• $839M (73%) is debt related to:
– Terminal operating infrastructure
– Acquisitions and capital expenditures
• Total committed facility of $1.475B*:
– $900M working capital revolver
– $575M acquisition/general corporate purpose revolver
– Credit agreement matures 4/30/2018
• Issued $375M 6.25% senior notes due 2022 and $300M 7.00% senior notes due 2023
Balance sheet figures(In thousands)
Assets
Current assets:
Cash and cash equivalents $ 14,943
Accounts receivable, net 281,008
Accounts receivable - affiliates 2,335
Inventories 438,254
Brokerage margin deposits 18,681
Derivative assets 24,563
Prepaid expenses and other current assets 73,665
Total current assets 853,449
Property and equipment, net 1,128,765
Intangible assets, net 67,586
Goodwill 299,057
Other assets 35,663
Total assets $ 2,384,520
Liabilities and partners' equity
Current liabilities:
Accounts payable $ 231,241
Working capital revolving credit facility - current portion 168,000
Environmental liabilities - current portion 5,329
Trustee taxes payable 83,883
Accrued expenses and other current liabilities 63,107
Derivative liabilities 24,491
Total current liabilities 576,051
Working capital revolving credit facility - less current portion 150,000
Revolving credit facility 180,800
Senior notes 658,497
Environmental liabilities - less current portion 60,552
Financing obligations 152,378
Deferred tax liabilities 72,907
Other long-term liabilities 55,850
Total liabilities 1,907,035
Partners' equity
Global Partners LP equity 472,164
Noncontrolling interest 5,321
Total partners' equity 477,485
Total liabilities and partners' equity $ 2,384,520
Appendix
32
Financial Reconciliations: Product Margin
(In thousands)
(Unaudited)
Reconciliation of gross profit to product margin
Wholesale segment:
Gasoline and gasoline blendstocks (1) $ 54,065 $ 56,224 $ 54,639 $ 43,147 $ 71,713 $ 66,031 $ 7,157 $ 21,529 $ 75,840
Crude oil - 12,301 35,538 92,807 141,965 74,182 15,719 (16,818) (22,461)
Other oils and related products 90,346 55,308 55,252 66,916 79,376 67,709 12,389 11,435 66,396
Total (1) 144,411 123,833 145,429 202,870 293,054 207,922 35,265 16,146 119,775
Gasoline Distribution and Station Operations segment:
Gasoline distribution 14,017 56,690 139,706 150,147 189,439 276,848 88,297 88,111 294,140
Station operations 8,885 31,713 67,011 78,833 93,939 178,487 49,047 48,729 188,572
Total 22,902 88,403 206,717 228,980 283,378 455,335 137,344 136,840 482,712
Commercial segment 15,033 21,975 18,652 28,359 29,716 29,201 6,088 4,176 21,098
Combined product margin (1) 182,346 234,211 370,798 460,209 606,148 692,458 178,697 157,162 623,585
Depreciation allocated to cost of sales (15,628) (24,391) (36,683) (55,653) (61,361) (94,789) (26,398) (24,551) (98,949)
Gross profit (1) $ 166,718 $ 209,820 $ 334,115 $ 404,556 $ 544,787 $ 597,669 $ 152,299 $ 132,611 $ 524,636
(1) Results for the year ended December 31, 2013 include a non-cash adjustment of ($19.3 million) related to the Partnership's RIN RVO and loss on fixed forward commitments.
Year Ended December 31,
Trailing
Twelve
Months Ended
September 30,
2015 2016 2016
Three Months Ended
September 30,
201520132010 2011 2012 2014
33
Financial Reconciliations: EBITDA and Adjusted EBITDA
(In thousands)
(Unaudited)
2011
Reconciliation of net income (loss) to EBITDA
Net income (loss) (1) $ 19,352 $ 46,743 $ 41,053 $ 116,980 $ 43,264 $ 8,146 $ (156,583) $ (175,866)
Net loss (income) attributable to noncontrolling interest - - 1,562 (2,271) 299 66 37,032 39,699
Net income (loss) attributable to Global Partners LP (1) 19,352 46,743 42,615 114,709 43,563 8,212 (119,551) (136,167)
Depreciation and amortization, excluding the impact of noncontrolling interest 30,359 45,458 70,423 78,888 110,670 29,744 27,391 111,740
Interest expense, excluding the impact of noncontrolling interest 35,932 42,021 43,537 47,719 73,329 20,643 21,197 87,466
Income tax expense (benefit) 68 1,577 819 963 (1,873) 722 3,138 (1,174)
EBITDA (1) $ 85,711 $ 135,799 $ 157,394 $ 242,279 $ 225,689 59,321 (67,825) 61,865
Loss on sale and disposition of assets 680 7,486 14,733
Goodwill and long-lived asset impairment - 147,817 149,972
Goodwill and long-lived asset impairment attributable to noncontrolling interest - (35,834) (35,834)
Adjusted EBITDA $ 60,001 $ 51,644 $ 190,736
Reconciliation of net cash (used in) provided by operating activities to EBITDA
Net cash (used in) provided by operating activities (1) $ (17,357) $ 232,452 $ 255,147 $ 344,902 $ 70,506 $ 51,840 $ 74,143 $ 82,058
Net changes in operating assets and liabilities and certain non-cash items 67,068 (140,251) (136,960) (141,558) 88,609 (12,885) (202,201) (141,648)
Net cash from operating activities and changes in operating
assets and liabilities attributable to noncontrolling interest - - (5,149) (9,747) (4,882) (999) 35,898 35,163
Interest expense, excluding the impact of noncontrolling interest 35,932 42,021 43,537 47,719 73,329 20,643 21,197 87,466
Income tax expense (benefit) 68 1,577 819 963 (1,873) 722 3,138 (1,174)
EBITDA (1) $ 85,711 $ 135,799 $ 157,394 $ 242,279 $ 225,689 59,321 (67,825) 61,865
Loss on sale and disposition of assets 680 7,486 14,733
Goodwill and long-lived asset impairment - 147,817 149,972
Goodwill and long-lived asset impairment attributable to noncontrolling interest - (35,834) (35,834)
Adjusted EBITDA $ 60,001 $ 51,644 $ 190,736
(1) Results for the year ended December 31, 2013 include a non-cash adjustment of ($19.3 million) related to the Partnership's RIN RVO and loss on fixed forward commitments.
2014
Twelve
Months Ended
September 30,
20132012 2015
Year Ended December 31,
Trailing
2015 2016
September 30,
Three Months Ended
2016
34
Financial Reconciliations: DCF
(In thousands)
(Unaudited)
Reconciliation of net income (loss) to distributable cash flow
Net income (loss) (1) $ 19,352 $ 46,743 $ 41,053 $ 116,980 $ 43,264 $ 8,146 $ (156,583) $ (175,866)
Net loss (income) attributable to noncontrolling interest - - 1,562 (2,271) 299 66 37,032 39,699
Net income (loss) attributable to Global Partners LP (1) 19,352 46,743 42,615 114,709 43,563 8,212 (119,551) (136,167)
Depreciation and amortization, excluding the impact of noncontrolling interest 30,359 45,458 70,423 78,888 110,670 29,744 27,391 111,740
Amortization of deferred financing fees and senior notes discount 4,723 5,753 7,265 6,186 6,988 1,824 1,868 7,332
Amortization of routine bank refinancing fees (3,467) (4,073) (4,072) (4,444) (4,516) (1,134) (1,168) (4,548)
Maintenance capital expenditures, excluding the impact of noncontrolling interest (4,226) (13,112) (10,977) (34,115) (29,850) (9,009) (8,742) (30,594)
Distributable cash flow (2) $ 46,741 $ 80,769 $ 105,254 $ 161,224 $ 126,855 $ 29,637 $ (100,202) $ (52,237)
Reconciliation of net cash (used in) provided by operating activities to
distributable cash flow
Net cash (used in) provided by operating activities (1) $ (17,357) $ 232,452 $ 255,147 $ 344,902 $ 70,506 $ 51,840 $ 74,143 $ 82,058
Net changes in operating assets and liabilities and certain non-cash items 67,068 (140,251) (136,960) (141,558) 88,609 (12,885) (202,201) (141,648)
Net cash from operating activities and changes in operating
assets and liabilities attributable to noncontrolling interest - - (5,149) (9,747) (4,882) (999) 35,898 35,163
Amortization of deferred financing fees and senior notes discount 4,723 5,753 7,265 6,186 6,988 1,824 1,868 7,332
Amortization of routine bank refinancing fees (3,467) (4,073) (4,072) (4,444) (4,516) (1,134) (1,168) (4,548)
Maintenance capital expenditures, excluding the impact of noncontrolling interest (4,226) (13,112) (10,977) (34,115) (29,850) (9,009) (8,742) (30,594)
Distributable cash flow (2) $ 46,741 $ 80,769 $ 105,254 $ 161,224 $ 126,855 $ 29,637 $ (100,202) $ (52,237)
(1) Results for the year ended December 31, 2013 include a non-cash adjustment of ($19.3 million) related to the Partnership's RIN RVO and loss on fixed forward commitments.
(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 loss on sale and disposition of assets of $0.7 million and $7.5 million for the three months ended September 30, 2015 and 2016, respectively, and $14.7 million for the trailing twelve months ended September
30, 2016. Distributable cash flow also includes a net goodwill and long-lived asset impairment of $0 and $112.0 million ($147.8 million attributed to the Partnership offset by $35.8 million attributed to the noncontrolling interest) for the three months
ended September 30, 2015 and 2016, respectively, and $114.1 million ($150.0 million attributed to the Partnership offset by $35.8 million attributed to the noncontrolling interest) for the trailing twelve months ended September 30, 2016. Excluding the
net loss on sale and disposition of assets and the net goodwill and long-lived asset impairment, distributable cash flow would have been $30.3 million and $19.3 million for the three months ended September 30, 2015 and 2016, respectively, and $76.6
million for the trailing twelve months ended September 30, 2016.
Year Ended December 31,
2011 2012 2016 (3)
Months Ended
September 30, September 30,
Three Months Ended
2013 20152014
Trailing
Twelve
2016 (3)2015 (3)