WALTHAM, Mass.--(BUSINESS WIRE)--Dec. 22, 2016--
Global Partners LP (NYSE: GLP) (“the Partnership”) today announced that
its wholly owned subsidiary, Global Companies LLC (“Global”), has signed
an agreement to terminate early a sublease for 1,610 railcars leased
from a third party. As part of this agreement, in the fourth quarter of
2016 Global will make a one-time discounted lease termination payment.
The payment represents a discount of approximately $10.2 million from
approximately $72 million in railcar lease payments that Global would
have been obligated to pay over the next three years. The termination of
the sublease eliminates future lease payments related to these railcars
of approximately $30 million, $29 million and $13 million in 2017, 2018
and 2019, respectively.
In the fourth quarter of 2016, the Partnership expects to incur a
one-time expense of approximately $81 million associated with the early
termination. In addition to the discounted lease termination payment,
the one-time expense includes costs for future railcar storage, freight,
cleaning and inspection services as well as certain non-cash accounting
adjustments associated with the early termination.
In connection with the sublease termination, the Partnership executed an
amendment to its credit agreement that permits the use of borrowings to
make the early termination payment. The amendment also accelerates the
step-down in the combined total leverage ratio from 5.50 times to 5.00
times effective with the fiscal quarter ending December 31, 2016.
Eric Slifka, President and CEO of Global Partners, said, “Terminating
the lease for these railcars – three years ahead of its scheduled
expiration in 2019 – saves the Partnership more than $10 million in cash
and puts some of the expenses associated with underutilized railcars
behind us.”
About Global Partners LP
Global Partners is a midstream logistics and marketing master limited
partnership that owns, controls or has access to one of the largest
terminal networks of petroleum products and renewable fuels in the
Northeast. Global also is one of the largest distributors of gasoline,
distillates, residual oil and renewable fuels to wholesalers, retailers
and commercial customers in New England and New York. With approximately
1,500 locations, primarily in the Northeast, Global is one of the
largest independent owners, suppliers and operators of gasoline stations
and convenience stores. The Partnership is also engaged in the
transportation of crude oil and other products by rail from the
mid-continental U.S. and Canada to the East and West Coasts for
distribution to refiners and others. Global is No. 276 in the Fortune
500 list of America’s largest corporations. 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 our current expectations and
beliefs concerning future developments and their potential effect on us.
While management believes that these forward-looking statements are
reasonable as and when made, there can be no assurance that future
developments affecting us will be those that we anticipate. All comments
concerning our expectations for future revenues and operating results
are based on our forecasts for our existing operations and do not
include the potential impact of any future acquisitions. Our
forward-looking statements involve significant risks and uncertainties
(some of which are beyond our control) and assumptions that could cause
actual results to differ materially from our historical experience and
our present expectations or projections.
For additional information regarding known material factors that could
cause our actual results to differ from our projected results, please
see our filings with the SEC, including our 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. We undertake 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161222005367/en/
Source: Global Partners LP
Global Partners LP
Daphne H. Foster, 781-894-8800
Chief
Financial Officer
or
Edward J. Faneuil, 781-894-8800
Executive
Vice President, General Counsel and Secretary