Global Partners LP Reports Third Quarter 2008 Financial Results

November 6, 2008

Recently Acquired Terminal Assets Drive Strong Performance of Transportation Fuels

WALTHAM, Mass.--(BUSINESS WIRE)--Nov. 6, 2008--Global Partners LP (NYSE:GLP) today reported financial results for the third quarter and nine months ended September 30, 2008.

Net income for the third quarter of 2008 was $1.0 million, or $0.08 per diluted limited partner unit, compared with net income of $2.5 million, or $0.19 per diluted limited partner unit, for the same period in 2007. The decrease in net income largely reflected higher depreciation in the third quarter of 2008 associated with the refined petroleum product terminals acquired late last year from ExxonMobil Oil Corp. The partnership had approximately 13.1 million weighted average limited partner units outstanding (basic and diluted) for the three months ended September 30, 2008 and 2007.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the three months ended September 30, 2008 was $10.1 million, compared with $9.9 million for the same period in 2007.

Distributable cash flow for the third quarter of 2008 was $4.2 million, compared with $4.5 million for the comparable quarter of 2007.

"We are pleased with our third-quarter results, which were highlighted by solid distributable cash flow and year-over-year increases in gross profit and EBITDA," said Global Partners President and Chief Executive Officer Eric Slifka. "Our performance underscores the success of the strategic initiatives we have implemented over the past 18 months to significantly expand our asset base and diversify our product mix.

"The refined petroleum product terminals we acquired from ExxonMobil Oil Corp. in 2007 are performing ahead of plan and have contributed positively to our third-quarter results," Slifka said. "Even with macroeconomic issues that have prompted consumers and businesses to focus more intently on conservation, on a year-over-year basis gasoline net product margin grew approximately $11 million to $13.6 million in the third quarter of 2008 on a 15% increase in volume. These assets, which enabled us to more than offset volume weakness in distillates and residual fuels in the third quarter, provide Global with a growing and significant base of year-round business."

Sales for the three months ended September 30, 2008 increased to $2.3 billion from $1.6 billion for the same period in 2007. This increase reflected higher refined petroleum product prices as well as the partnership's acquisition of two refined petroleum product terminals in Glenwood Landing and Inwood, New York in the fourth quarter of last year. Wholesale segment sales were $2.2 billion in the third quarter of 2008, compared with $1.5 billion for the third quarter of 2007. Commercial segment sales were $102.1 million for the third quarter of 2008, compared with $58.5 million in the third quarter of 2007. Combined gross profit for the three months ended September 30, 2008 was $25.9 million, compared with $23.9 million in the same period in 2007.

Financial Results for the Nine Months Ended September 30, 2008 and 2007

For the nine months ended September 30, 2008, net income was $8.4 million, or $0.62 per diluted limited partner unit, compared with $36.0 million, or $0.66 per diluted limited partner unit, in 2007. The partnership had approximately 13.1 million and 12.2 million weighted average limited partner units outstanding (basic and diluted) for the nine months ended September 30, 2008 and 2007, respectively.

EBITDA for the first nine months of 2008 was $35.3 million, compared with $53.5 million for the nine months ended September 30, 2007.

Net income and EBITDA for the first nine months of 2007 included one-time gains of $14.1 million from Global Partners' sale of its investment in NYMEX Holdings, Inc. and related NYMEX seats. Net income as adjusted for the NYMEX-related gains was $21.9 million, while adjusted EBITDA was $39.3 million.

Distributable cash flow for the nine-month period of 2008 was $18.2 million, compared with $25.4 million for the first nine months of 2007.

Sales through the first nine months of 2008 increased to $7.3 billion from $4.6 billion for the same period in 2007. Wholesale segment sales were $7.0 billion in the first nine months of 2008, compared with $4.3 billion in the same period in 2007. Commercial segment sales were $331.5 million in the first nine months of 2008, compared with $271.0 million in the comparable period of 2007. Combined gross profit for the nine months ended September 30, 2008 was $84.2 million, compared with $87.8 million for the same period in 2007.

EBITDA and distributable cash flow 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 and other non-GAAP financial measures to their most directly comparable GAAP financial measures for the three months and nine months ended September 30, 2008 and 2007.

The Board of Directors of Global Partners' general partner, Global GP LLC, declared a quarterly cash distribution of $0.4875 per unit ($1.95 per unit on an annualized basis) on all of its outstanding common and subordinated units for the period from July 1, 2008 through September 30, 2008. The distribution will be paid November 14, 2008 to unitholders of record as of the close of business November 5, 2008.

Business Outlook

"In today's challenging global economic environment, we believe that our healthy balance sheet and ample liquidity are important competitive advantages for Global Partners," Slifka said. "As of September 30, we had $212 million available under our $750 million credit agreement, which is committed through early 2011.

"It remains our intention to recommend to the Board of Directors of our general partner that we maintain our cash distribution at $0.4875 per unit for the fourth quarter of 2008," Slifka concluded. "We believe that our strong capital position, tight expense management and diversified product mix will enable us to remain financially flexible and well positioned for long-term growth."

Financial Results Conference Call

Management will review Global Partners' third-quarter 2008 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) 709-8155 (U.S. and Canada)
(201) 689-8881 (International)

The call also will be webcast live and archived on the Global Partners' website, www.globalp.com.

Use of Non-GAAP Financial Measures

Adjusted Net Income Per Diluted Limited Partner Unit

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 is defined as net income after adding back the theoretical amount allocated to the 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 Emerging Issues Task Force 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 its business. Accordingly, the distributions we 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 for the nine months ended September 30, 2007 was the result of accounting for the sale of Class B units. Although EITF 98-05 affected net income available to limited partners, it did not affect net income or distributable cash flow to limited partners, nor did it affect total partners' 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

EBITDA, adjusted EBITDA and net income as adjusted for one-time gains are used as supplemental financial measures by management and 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 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 nine months ended September 30, 2007. EBITDA, adjusted EBITDA and net income as adjusted for one-time gains should not be considered 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, 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 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 Global Partners' limited 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 the partnership has generated sufficient cash flow on a current or historic 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 reflects the exclusion of the $14.1 million gain on investment for the nine months ended September 30, 2007. 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 presented in accordance with GAAP. In addition, Global Partners' distributable cash flow may not be comparable to distributable cash flow or similarly titled measure 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.

Forward-looking Statements

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, 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 per unit data)
(Unaudited)

                            Three Months Ended     Nine Months Ended
                               September 30,         September 30,
                           --------------------- ---------------------
                              2008       2007       2008       2007
                           ---------- ---------- ---------- ----------

Sales                      $2,272,079 $1,598,461 $7,290,780 $4,555,727
Cost of sales               2,246,151  1,574,514  7,206,563  4,467,906
                            ---------  ---------  ---------  ---------
Gross profit                   25,928     23,947     84,217     87,821

Costs and operating
 expenses:
  Selling, general and
   administrative              10,457      9,476     31,712     34,340
  Operating expenses            8,429      6,939     26,225     19,139
  Amortization expenses           738        388      2,199      1,104
                            ---------  ---------  ---------  ---------
   Total costs and
    operating expenses         19,624     16,803     60,136     54,583
                            ---------  ---------  ---------  ---------

Operating income                6,304      7,144     24,081     33,238

Interest expense              (5,297)    (4,614)   (15,414)   (10,453)
Gain on sale of investment          -          -          -     14,118
                            ---------  ---------  ---------  ---------

Income before income tax
 expense                        1,007      2,530      8,667     36,903

Income tax expense                  -          -      (295)      (888)
                            ---------  ---------  ---------  ---------

Net income                      1,007      2,530      8,372     36,015

Less: General partner's
 interest in net income(1)       (17)       (44)      (144)      (712)
                            ---------  ---------  ---------  ---------

Limited partners' interest
 in net income             $      990 $    2,486 $    8,228 $   35,303
                            =========  =========  =========  =========

Net income per limited
 partner unit, basic and
 diluted(2)(3)(4)          $     0.08 $     0.19 $     0.62 $     0.66
                            =========  =========  =========  =========

Weighted average limited
 partners' units
 outstanding, basic and
 diluted                       13,071     13,071     13,071     12,233
                            =========  =========  =========  =========


(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 and nine months ended September 30, 2008 and
 for the three months ended September 30, 2007. For the nine months
 ended September 30, 2007, the general partner interest was 1.99%,
 based on a weighted average.

(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 nine months ended September 30, 2008 and
 2007 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. EITF 03-06
 does not impact the net income per limited partner unit calculation
 for the three months ended September 30, 2008 and 2007 because the
 Partnership's net income did not exceed its distribution 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 nine months ended September 30, 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 affected net income available to limited partners, it did
 not affect net income nor did it affect total partners' equity.

(4) Calculation includes the weighted average effect of the private
 placement of Class B units which were converted to common units for
 the nine months ended September 30, 2007. Per unit data is calculated
 on a quarterly basis; therefore, per unit data for the nine months
 ended September 30, 2008 and 2007 equals the sums of the respective
 first three quarters.
GLOBAL PARTNERS LP
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)


                                            September 30, December 31,
                                                2008          2007
                                            ------------- ------------
Assets
Current assets:
  Cash and cash equivalents                 $         605 $      2,110
  Accounts receivable, net                        349,432      439,165
  Accounts receivable - affiliates                  2,768        4,308
  Inventories                                     359,250      484,259
  Brokerage margin deposits                         5,397       12,545
  Fair value of forward fixed price
   contracts                                       48,221          742
  Prepaid expenses and other current assets        22,632       17,736
                                             ------------  -----------
    Total current assets                          788,305      960,865

Property and equipment, net                       161,631      161,734
Intangible assets, net                             32,072       34,168
Other assets                                        2,789        2,460
                                             ------------  -----------

    Total assets                            $     984,797 $  1,159,227
                                             ============  ===========


Liabilities and partners' equity
Current liabilities:
  Accounts payable                          $     292,870 $    371,341
  Working capital revolving credit facility
   - current portion                              250,579      304,800
  Environmental liabilities - current
   portion                                            876          876
  Note payable, other                                   -        1,239
  Accrued expenses and other current
   liabilities                                     51,543       69,762
  Obligations on forward fixed price
   contracts and other derivatives                  2,803       41,892
                                             ------------  -----------
    Total current liabilities                     598,671      789,910

Working capital revolving credit facility -
 less current portion                             146,721      119,000
Acquisition facility                               71,200       71,200
Environmental liabilities - less current
 portion                                            7,912        8,340
Accrued pension benefit cost                        7,061        5,236
Deferred compensation                               1,618        1,481
Other long-term liabilities                         3,842        3,709
                                             ------------  -----------
    Total liabilities                             837,025      998,876

Partners' equity                                  147,772      160,351
                                             ------------  -----------

    Total liabilities and partners' equity  $     984,797 $  1,159,227
                                             ============  ===========
GLOBAL PARTNERS LP
FINANCIAL RECONCILIATIONS
(In thousands, except per unit data)
(Unaudited)


                               Three Months Ended   Nine Months Ended
                                 September 30,        September 30,
                              -------------------- -------------------
                                2008       2007      2008      2007
                              --------- ---------- --------- ---------
Table 1 - Reconciliation of
 net income to net income as
 adjusted for one-time gains
  Net income                  $   1,007 $    2,530 $   8,372 $  36,015
  Gain on sale of investment          -          -         -  (14,118)
                               --------  ---------  --------  --------
  Net income as adjusted for
   one-time gains             $   1,007 $    2,530 $   8,372 $  21,897
                               ========  =========  ========  ========

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  $    0.08 $     0.19 $    0.62 $    0.66
  Dilutive impact of
   theoretical distribution of
   earnings under EITF 03-06          -          -      0.02      1.10
  Dilutive impact of non-cash
   reduction under EITF 98-05         -          -         -      1.33
                               --------  ---------  --------  --------
  Adjusted net income per
   diluted limited partner
   unit                       $    0.08 $     0.19 $    0.64 $    3.09
                               ========  =========  ========  ========

Table 3 - Reconciliation of
 net income to EBITDA and
 Adjusted EBITDA
  Net income                  $   1,007 $    2,530 $   8,372 $  36,015
  Depreciation and
   amortization                   3,749      2,771    11,241     6,107
  Interest expense                5,297      4,614    15,414    10,453
  Income tax expense                  -          -       295       888
                               --------  ---------  --------  --------
  EBITDA                         10,053      9,915    35,322    53,463
  Gain on sale of investment          -          -         -  (14,118)
                               --------  ---------  --------  --------
  Adjusted EBITDA             $  10,053 $    9,915 $  35,322 $  39,345
                               ========  =========  ========  ========

Table 4 - Reconciliation of
 cash flow provided by (used
 in) operating activities to
 EBITDA and Adjusted EBITDA
  Cash flow provided by (used
   in) operating activities   $  60,097 $(120,936) $  54,124 $(19,639)
  Net change in operating
   assets and liabilities      (55,341)    126,237  (34,511)    61,761
  Interest expense                5,297      4,614    15,414    10,453
  Income tax expense                  -          -       295       888
                               --------  ---------  --------  --------
  EBITDA                         10,053      9,915    35,322    53,463
  Gain on sale of investment          -          -         -  (14,118)
                               --------  ---------  --------  --------
  Adjusted EBITDA             $  10,053 $    9,915 $  35,322 $  39,345
                               ========  =========  ========  ========

Table 5 - Reconciliation of
 net income to distributable
 cash flow
  Net income                  $   1,007 $    2,530 $   8,372 $  36,015
  Depreciation and
   amortization                   3,749      2,771    11,241     6,107
  Gain on sale of investment          -          -         -  (14,118)
  Maintenance capital
   expenditures                   (605)      (756)   (1,405)   (2,623)
                               --------  ---------  --------  --------
  Distributable cash flow     $   4,151 $    4,545 $  18,208 $  25,381
                               ========  =========  ========  ========

Table 6 - Reconciliation of
 cash flow provided by (used
 in) operating activities to
 distributable cash flow
  Cash flow provided by (used
   in) operating activities   $  60,097 $(120,936) $  54,124 $(19,639)
  Net change in operating
   assets and liabilities      (55,341)    126,237  (34,511)    61,761
  Gain on sale of investment          -          -         -  (14,118)
  Maintenance capital
   expenditures                   (605)      (756)   (1,405)   (2,623)
                               --------  ---------  --------  --------
  Distributable cash flow     $   4,151 $    4,545 $  18,208 $  25,381
                               ========  =========  ========  ========

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