WALTHAM, Mass.--(BUSINESS WIRE)--March 13, 2008--Global Partners
LP (NYSE: GLP) today reported financial results for the fourth quarter
and full year ended December 31, 2007.
Financial Highlights
Net income for the fourth quarter of 2007 was $11.0 million, or
$0.72 per diluted limited partner unit, compared with $11.1 million,
or $0.78 per diluted limited partner unit, for the fourth quarter of
2006. For the full year 2007, net income was $47.0 million, or $1.38
per diluted limited partner unit, compared with $33.5 million, or
$2.46 per diluted limited partner unit, for 2006. Net income for the
full year 2007 included a $14.1 million gain from the partnership's
sale of its investment in NYMEX Holdings, Inc. and related NYMEX
seats.
Adjusted net income per diluted limited partner unit was $0.83 for
the fourth quarter of 2007 compared with $0.97 for the fourth quarter
of 2006. For the 12 months ended December 31, 2007, adjusted net
income per diluted limited partner unit was $3.92 compared with $2.91
for the comparable period in 2006.
Weighted average diluted limited partner units outstanding were
13.1 million for the fourth quarter of 2007 compared with 11.3 million
for the fourth quarter of 2006. For the full year 2007, weighted
average diluted limited partner units outstanding were 12.4 million
compared with 11.3 million for the corresponding period of 2006.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) for the fourth quarter of 2007 increased 26% to $21.8 million
from $17.3 million for the fourth quarter of 2006. EBITDA for the full
year 2007, which included the $14.1 million gain, was $75.2 million
compared with $51.5 million for 2006. Adjusted EBITDA for the full
year 2007, which excluded the $14.1 million gain, was $61.1 million.
Distributable cash flow for the fourth quarter of 2007 increased
15% to $13.3 million from $11.5 million for the fourth quarter of
2006. For the full year 2007, distributable cash flow increased 7% to
$38.6 million compared with $36.0 million for 2006.
"We enjoyed a strong year in 2007, with growth in EBITDA and
distributable cash flow," said Global Partners President and Chief
Executive Officer Eric Slifka. "We concluded the year with a solid
quarter that reflects the success of our product marketing programs
and the significant expansion of our terminal network. During the year
we added more than 1.9 million barrels of storage capacity with the
acquisitions from ExxonMobil Oil Corporation of four refined petroleum
products terminals in New York and one in Vermont. These assets
underscore our strategy of increasing the percentage of product volume
generated from transportation fuels and other non-weather-related
products."
Sales for the fourth quarter of 2007 increased to $2.2 billion
from $1.1 billion for the fourth quarter of 2006, reflecting the
partnership's acquisitions of refined petroleum products terminals and
higher refined petroleum product prices. Wholesale segment sales were
$2.1 billion in the fourth quarter of 2007 compared with $996.1
million for the fourth quarter of 2006. Commercial segment sales were
$110.1 million for the fourth quarter of 2007 compared with $98.1
million in the fourth quarter of 2006. Sales for the full year 2007
increased to $6.8 billion compared with $4.5 billion for 2006.
Wholesale segment sales increased to $6.4 billion for 2007 from $4.1
billion for 2006, while Commercial segment sales decreased to $381.1
million for the full year 2007 compared with $400.8 million for 2006.
Combined gross profit increased to $39.2 million in the fourth
quarter of 2007 from $34.6 million for the fourth quarter of 2006. For
the full year 2007, combined gross profit increased to $127.0 million
compared with $113.2 million for the same period of 2006.
Net income as adjusted for one-time gains, adjusted net income per
diluted limited partner unit, EBITDA, adjusted EBITDA and
distributable cash flow are non-GAAP (Generally Accepted Accounting
Principles) financial measures 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,
2007 and 2006.
Recent Highlights
-- Global Partners announced a quarterly cash distribution of
$0.4875 per unit ($1.95 on an annualized basis) on all of its
outstanding limited partner units for the period from October
1, 2007 through December 31, 2007. The distribution
represented an increase of 7.1% over the quarterly
distribution of $0.4550 paid in February 2007 and an increase
of 1.6% over the November 2007 distribution of $0.4800. The
distribution was paid February 14, 2008 to unitholders of
record as of the close of business February 5, 2008.
-- The partnership opened a new distillate and biofuels terminal
in Providence, Rhode Island. The terminal, which has the
capacity to store 244,000 barrels of refined petroleum
products, is part of Global Partners' new deepwater marine
terminal project being developed at the Port of Providence.
This project also includes 230,000 barrels of residual fuels
storage capacity that is scheduled to open for business later
this year.
-- Global Partners completed its previously announced acquisition
of two refined petroleum products terminals on Long Island,
New York from ExxonMobil Oil Corp. The terminals have a
combined storage capacity of 430,000 barrels. ExxonMobil has
entered into long-term throughput contracts with the
partnership to use each of the terminals.
Business Outlook
"A number of industry factors are adversely affecting our outlook
as we begin 2008," Slifka said. "Unfavorable forward pricing in the
bulk refined petroleum products supply market has led to higher supply
costs. Volume is being significantly affected by warmer temperatures
year-to-date compared with the first quarter of 2007 and the normal
average. Volume also is being affected by higher heating oil and
residual fuel prices. This higher price environment is prompting
meaningful energy conservation and reducing the number of fixed-price
sales. The price differential between oil and natural gas is
encouraging conversion to natural gas. We expect that these factors
will have a significant negative impact on our results of operation in
the first quarter of 2008 compared with the same period of 2007."
"During the past few years we have shifted the strategic emphasis
of our company by increasing the terminaling, storage and marketing of
gasoline, diesel and other refined fuels," Slifka said. "In the year
ahead, our focus on diversity by product, market and geography will
continue. The acquisitions of terminals with a majority of volume from
transportation fuels, such as those we purchased in 2007, provide us
with important opportunities for further diversification and long-term
growth. Going forward we will continue to identify and evaluate
similar strategic buying opportunities."
Financial Results Conference Call
Management will review Global Partners' fourth-quarter and
full-year 2007 financial results in a teleconference call for analysts
and investors at 10:00 a.m. ET today.
Time: 10:00 a.m. ET
Dial-in numbers: (877) 407-5790 (U.S. and Canada)
(201) 689-8328 (International)
Five-day replay: (877) 660-6853 (U.S. and Canada)
(201) 612-7415 (International)
Account number: 247 (Required for replay only)
Conference ID: 276972 (Required for replay only)
The call also will be webcast live and archived on the Global
Partners' website, www.globalp.com.
Use of Non-GAAP Financial Measures
Global Partners uses adjusted net income per diluted limited
partner unit to measure its financial performance on a per unit basis.
Adjusted net income per diluted limited partner unit, as presented in
the table below, is defined as net income after adding back the
theoretical amount allocated to Global Partners'general partner's
interest as provided under Emerging Issues Task Force 03-06,
"Participating Securities and the Two-Class Method under FASB
Statement 128" ("EITF 03-06") and a non-cash reduction in net income
available to limited partners under EITF 98-05, "Accounting for
Convertible Securities with Beneficial Conversion Features or
Contingently Adjustable Conversion Ratios" ("EITF 98-05"), divided by
the weighted average number of outstanding diluted common and
subordinated units, or limited partner units, during the period.
Net income per diluted limited partner unit as dictated by EITF
03-06 is theoretical and pro forma in nature and does not reflect the
economic probabilities of whether earnings for an accounting period
would or could be distributed to unitholders. The partnership
agreement does not provide for the quarterly distribution of net
income; rather, it provides for the distribution of available cash,
which is a contractually defined term that generally means all cash on
hand at the end of each quarter after establishment of sufficient cash
reserves required to operate the business. Accordingly, the
distributions the partnership historically paid and will pay in future
periods are not impacted by net income per diluted limited partner
unit as dictated by EITF 03-06.
The non-cash reduction under EITF 98-05 is the result of
accounting for the sale of Class B units. Although EITF 98-05 affects
net income available to limited partners, it does not affect net
income or distributable cash flow to limited partners, nor does it
affect total unitholders equity.
Adjusted net income per diluted limited partner unit is a non-GAAP
financial measure and should not be considered as an alternative to
net income per diluted limited partner unit or any other measure of
financial performance presented in accordance with GAAP. In addition,
Global Partners' adjusted net income per diluted limited partner unit
may not be comparable to the adjusted net income per diluted limited
partner unit or similarly titled measure of other companies.
EBITDA, adjusted EBITDA and net income as adjusted for one-time
gains are used as supplemental financial measures by management and
external users of the partnership's financial statements, such as
investors, commercial banks and research analysts, to assess:
-- its 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 and distribution of refined petroleum products
business, without regard to financing methods and capital
structure; and
-- the viability of acquisitions and capital expenditure projects
and the overall rates of return of alternative investment
opportunities.
Adjusted EBITDA and net income as adjusted for one-time gains
reflect the exclusion of the $14.1 million gain on investment for the
year ended December 31, 2007. EBITDA, adjusted EBITDA and net income
as adjusted for one-time gains should not be considered an alternative
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, adjusted EBITDA and net income as
adjusted for one-time gains exclude some, but not all, items that
affect net income, and these measures may vary among other companies.
Therefore, EBITDA, adjusted EBITDA and net income as adjusted for
one-time gains as presented below may not be comparable to similarly
titled measures of other companies.
Distributable cash flow also is an important non-GAAP financial
measure for limited partners of Global Partners since it serves as an
indicator of the partnership's success in providing a cash return on
their investment. Specifically, this financial measure indicates to
investors whether or not Global Partners is generating cash flow at a
level that can sustain or support an increase in its quarterly cash
distribution. Distributable cash flow is a quantitative standard used
by the investment community with respect to publicly traded
partnerships. Distributable cash flow for the twelve months ended
December 31, 2007 reflects the exclusion of the $14.1 million gain on
investment. Distributable cash flow is a non-GAAP financial measure
and should not be considered as an alternative to net income, cash
flow from operations or any other measure of financial performance or
liquidity presented in accordance with GAAP. In addition, the
distributable cash flow of Global Partners may not be comparable to
similarly titled measures of other companies.
About Global Partners LP
Global Partners LP, a publicly traded master limited partnership
based in Waltham, Massachusetts, owns, controls and has access to one
of the largest terminal networks of refined petroleum products in the
Northeast. The partnership is one of the largest wholesale
distributors of gasoline, distillates (such as home heating oil,
diesel and kerosene) and residual oil to wholesalers, retailers and
commercial customers in the region. Global Partners LP, a FORTUNE
500(R) company, trades on the New York Stock Exchange under the ticker
symbol "GLP." For additional information, please visit
www.globalp.com.
Safe Harbor Statement
This news release contains certain "forward-looking statements"
within the meaning of the federal securities laws. These
forward-looking statements are identified as any statements that do
not relate strictly to historical or current facts and can generally
be identified by the use of forward-looking terminology including
"will," "may," "believe," "expect," "anticipate," "estimate,"
"continue" or other similar words. Such statements may discuss
business prospects, goals, new developments and future expectations or
contain projections of results of operations, financial condition and
Global Partners LP's ability to make distributions to unitholders.
These statements are not guarantees of performance. Although Global
Partners LP believes these forward-looking statements are based on
reasonable assumptions, statements made regarding future results are
subject to a number of assumptions, uncertainties and risks, many of
which are beyond the control of Global Partners LP, which may cause
actual results to be materially different from the forward-looking
statements contained in this news release. For specific risks and
uncertainties that could cause actual results to differ materially
from forward-looking statements, please refer to Global Partners LP's
Annual Report on Form 10-K for the year ended December 31, 2006 and
Quarterly Report on Form 10-Q for the three months ended September 30,
2007 and subsequent filings the partnership makes with the Securities
and Exchange Commission. All forward-looking statements included in
this news release and all subsequent written or oral forward-looking
statements attributable to Global Partners LP or persons acting on its
behalf are expressly qualified in their entirety by these cautionary
statements. The forward-looking statements speak only as of the date
made, and Global Partners LP undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.
The financial statements and financial information presented below
reflect the operations of Global Partners LP.
GLOBAL PARTNERS LP
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per unit data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------ ------------------------
2007 2006 2007 2006
----------- ----------- ----------- ------------
Sales $2,202,107 $1,094,208 $6,757,834 $4,472,418
Cost of sales 2,162,944 1,059,564 6,630,850 4,359,192
---------- ---------- ---------- ----------
Gross profit 39,163 34,644 126,984 113,226
Costs and operating
expenses:
Selling, general and
administrative 11,197 12,391 45,537 43,027
Operating expenses 8,564 6,005 27,703 22,158
Amortization
expenses 1,146 358 2,250 1,528
---------- ---------- ---------- ----------
Total costs and
operating expenses 20,907 18,754 75,490 66,713
---------- ---------- ---------- ----------
Operating income 18,256 15,890 51,494 46,513
Interest expense (6,955) (4,381) (17,408) (11,901)
Other income - 151 - 515
Gain on sale of
investment - - 14,118 -
---------- ---------- ---------- ----------
Income before income
tax expense 11,301 11,660 48,204 35,127
Income tax expense (303) (601) (1,191) (1,666)
---------- ---------- ---------- ----------
Net income $ 10,998 $ 11,059 $ 47,013 $ 33,461
========== ========== ========== ==========
Less:
General partner's
interest in net
income(1) (191) (220) (903) (669)
---------- ---------- ---------- ----------
Limited partners'
interest in net
income $ 10,807 $ 10,839 $ 46,110 $ 32,792
========== ========== ========== ==========
Net income per
limited partner
unit, basic and
diluted(2)(3)(4) $ 0.72 $ 0.78 $ 1.38 $ 2.46
========== ========== ========== ==========
Weighted average
limited partners'
units outstanding,
basic and diluted 13,071 11,285 12,444 11,285
========== ========== ========== ==========
(1) Calculation includes the effect of the private placement of Class
B units on May 9, 2007 and, as a result, the general partner interest
was 1.73% for the three months ended December 31, 2007 and, based on
a weighted average, 1.92% for the twelve months ended December 31,
2007. For the three and twelve months ended December 31, 2006, the
general partner interest was 2%.
(2) Under the provisions of EITF 03-06, "Participating Securities and
the Two-Class Method under FASB Statement No. 128," net income per
limited partner unit for the three and twelve months ended December
31, 2007 and 2006 assumes a theoretical distribution of earnings.
Although this theoretical calculation provided by EITF 03-06 does not
impact the Partnership's overall net income, it does reduce the
Partnership's net income per limited partner unit for these periods.
(3) In connection with the private placement of Class B units, the
Partnership was required to take into account the effect of EITF 98-
05, "Accounting for Convertible Securities with Beneficial Conversion
Features or Contingently Adjustable Conversion Ratios." As a result,
a non-cash reduction in net income available to limited partners was
recorded for the twelve months ended December 31, 2007 because the
fair value of the Partnership's common units on May 9, 2007 (the date
on which the Class B units were issued) was greater than the purchase
price of the Class B units which was established at the time of the
execution of the Unit Purchase Agreement on March 14, 2007. Although
EITF 98-05 affects net income available to limited partners, it does
not affect net income nor does it affect total unitholders' equity.
(4) Calculation includes the weighted average effect of the private
placement of Class B units which were converted to common units for
the twelve months ended December 31, 2007. Per unit data is
calculated on a quarterly basis pursuant to EITF 03-06; therefore,
per unit data for the twelve months ended December 31, 2007 and 2006
equals the sum of the respective four quarters.
GLOBAL PARTNERS LP
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December December
31, 31,
2007 2006
---------- --------
Assets
Current assets:
Cash and cash equivalents $ 2,110 $ 3,861
Accounts receivable, net 439,165 202,580
Accounts receivable - affiliates 4,308 1,988
Inventories 484,259 288,067
Available for sale securities - 13,913
Brokerage margin deposits 12,545 625
Fair value of forward fixed price contracts 742 66,115
Prepaid expenses and other current assets 17,736 18,924
--------- -------
Total current assets 960,865 596,073
Property and equipment, net 161,734 31,657
Intangible assets, net 34,168 9,076
Other assets 2,460 2,081
--------- -------
Total assets $1,159,227 $638,887
========= =======
Liabilities and partners' equity
Current liabilities:
Accounts payable $ 371,341 $222,034
Revolving line of credit - current portion 304,800 188,700
Notes payable, other - current portion 1,239 319
Environmental liabilities - current portion 876 -
Accrued expenses and other current liabilities 69,762 35,573
Income taxes payable - 1,164
Obligations on forward fixed price contracts and
other derivatives 41,892 -
--------- -------
Total current liabilities 789,910 447,790
Revolving line of credit - less current portion 190,200 82,000
Notes payable, other - less current portion - 1,239
Environmental liabilities - less current portion 8,340 -
Accrued pension benefit cost 5,236 3,170
Deferred compensation 1,481 1,429
Other long-term liabilities 3,709 20
--------- -------
Total liabilities 998,876 535,648
Partners' equity 160,351 103,239
--------- -------
Total liabilities and partners' equity $1,159,227 $638,887
========= =======
GLOBAL PARTNERS LP
Financial Reconciliations
(In thousands, except per unit data)
(Unaudited)
Three Months Twelve Months Ended
Ended
December 31, December 31,
------------------ --------------------
2007 2006 2007 2006
--------- -------- ---------- ---------
Table 1 - Reconciliation of net
income to net income as
adjusted for one-time gains
-------------------------------
Net income $ 10,998 $11,059 $ 47,013 $ 33,461
Gain on sale of investment - - (14,118) -
-------- ------- --------- --------
Net income as adjusted for one-
time gains $ 10,998 $11,059 $ 32,895 $ 33,461
======== ======= ========= ========
Table 2 - Reconciliation of net
income per diluted limited
partner unit to
adjusted net income per diluted
limited partner unit
-------------------------------
Net income per diluted limited
partner unit under EITF 03-06
and EITF 98-05 $ 0.72 $ 0.78 $ 1.38 $ 2.46
Dilutive impact of theoretical
distribution of earnings under
EITF 03-06 0.11 0.19 1.21 0.45
Dilutive impact of non-cash
reduction under EITF 98-05 - - 1.33 -
-------- ------- --------- --------
Adjusted net income per diluted
limited partner unit $ 0.83 $ 0.97 $ 3.92 $ 2.91
======== ======= ========= ========
Table 3 - Reconciliation of net
income to EBITDA and Adjusted
EBITDA
-------------------------------
Net income $ 10,998 $11,059 $ 47,013 $ 33,461
Depreciation and amortization 3,506 1,226 9,613 4,513
Interest expense 6,955 4,381 17,408 11,901
Income tax expense 303 601 1,191 1,666
-------- ------- --------- --------
EBITDA 21,762 17,267 75,225 51,541
Gain on sale of investment - - (14,118) -
-------- ------- --------- --------
Adjusted EBITDA $ 21,762 $17,267 $ 61,107 $ 51,541
======== ======= ========= ========
Table 4 - Reconciliation of
cash flow from operating
activities to
EBITDA and Adjusted EBITDA
-------------------------------
Cash flow from operating
activities $(95,406) $(2,597) $(115,045) $(54,479)
Net change in operating assets
and liabilities 109,910 14,882 171,671 92,453
Interest expense 6,955 4,381 17,408 11,901
Income tax expense 303 601 1,191 1,666
-------- ------- --------- --------
EBITDA 21,762 17,267 75,225 51,541
Gain on sale of investment - - (14,118) -
-------- ------- --------- --------
Adjusted EBITDA $ 21,762 $17,267 $ 61,107 $ 51,541
======== ======= ========= ========
Table 5 - Reconciliation of net
income to distributable cash
flow
-------------------------------
Net income $ 10,998 $11,059 $ 47,013 $ 33,461
Depreciation and amortization 3,506 1,226 9,613 4,513
Gain on sale of investment - - (14,118) -
Maintenance capital
expenditures (1,247) (764) (3,870) (1,971)
-------- ------- --------- --------
Distributable cash flow $ 13,257 $11,521 $ 38,638 $ 36,003
======== ======= ========= ========
Table 6 - Reconciliation of
cash flow from operating
activities to
distributable cash flow
-------------------------------
Cash flow from operating
activities $(95,406) $(2,597) $(115,045) $(54,479)
Net change in operating assets
and liabilities 109,910 14,882 171,671 92,453
Gain on sale of investment - - (14,118) -
Maintenance capital
expenditures (1,247) (764) (3,870) (1,971)
-------- ------- --------- --------
Distributable cash flow $ 13,257 $11,521 $ 38,638 $ 36,003
======== ======= ========= ========
CONTACT: Global Partners LP
Thomas J. Hollister, 781-894-8800
Chief Operating Officer and
Chief Financial Officer
or
Edward J. Faneuil, 781-894-8800
Executive Vice President,
General Counsel and Secretary
SOURCE: Global Partners LP