The following discussion and analysis of financial condition and results of operations of Global Partners LP should be read in conjunction with the historical consolidated financial statements of Global Partners LP and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q.





Forward-Looking Statements



Some of the information contained in this Quarterly Report on Form 10-Q may
contain forward-looking statements. Forward-looking statements include, without
limitation, any statement that may project, indicate or imply future results,
events, performance or achievements, and may contain the words "may," "believe,"
"should," "could," "expect," "anticipate," "plan," "intend," "estimate,"
"continue," "will likely result," or other similar expressions. In addition, any
statement made by our management concerning future financial performance
(including future revenues, earnings or growth rates), ongoing business
strategies or prospects, and possible actions by us are also forward-looking
statements. Forward-looking statements are not guarantees of performance.
Although we believe 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 our control,
which may cause future results to be materially different from the results
stated or implied in this document. These risks and uncertainties include,

among
other things:


We may not have sufficient cash from operations to enable us to pay ? distributions on our Series A Preferred Units or maintain distributions on our

common units at current levels following establishment of cash reserves and


  payment of fees and expenses, including payments to our general partner.

A significant decrease in price or demand for the products we sell or a ? significant decrease in the pricing of and demand for our logistics activities

could have an adverse effect on our financial condition, results of operations


  and cash available for distribution to our unitholders.



The outbreak of COVID-19 and certain developments in global oil markets have

had, and may continue to have, material adverse consequences for general ? economic, financial and business conditions, and could materially and adversely

affect our business, financial condition and results of operation and those of


  our customers, suppliers and other counterparties.




?We depend upon marine, pipeline, rail and truck transportation services for a
substantial portion of our logistics activities in transporting the products we
sell. Implementation of regulations and directives that adversely impact the
market for transporting these products by rail or otherwise could adversely
affect those activities. In addition, implementation of regulations and
directives related to these aforementioned services as well as a disruption in
any of these transportation services could have an adverse effect on our
financial condition, results of operations and cash available for distribution
to our unitholders.


?We have contractual obligations for certain transportation assets such as railcars, barges and pipelines. A decline in demand for (i) the products we sell or (ii) our logistics activities, which has resulted and could continue to result in a decrease in the utilization of our transportation assets, could negatively impact our financial condition, results of operations and cash available for distribution to our unitholders.

We may not be able to fully implement or capitalize upon planned growth

projects. Even if we consummate acquisitions or expend capital in pursuit of ? growth projects that we believe will be accretive, they may in fact result in


  no increase or even a decrease in cash available for distribution to our
  unitholders.



?Erosion of the value of major gasoline brands could adversely affect our gasoline sales and customer traffic.


?Our gasoline sales could be significantly reduced by a reduction in demand due
to higher prices and to new technologies and alternative fuel sources, such as
electric, hybrid, battery powered, hydrogen or other alternative fuel-powered
motor vehicles. Changing consumer preferences or driving habits could lead

to
new forms of

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fueling destinations or potentially fewer customer visits to our sites,
resulting in a decrease in gasoline sales and/or sales of food, sundries and
other on-site services. Any of these outcomes could negatively affect our
financial condition, results of operations and cash available for distribution
to our unitholders.


?Physical effects from climate change and impacts to areas prone to sea level rise or other extreme weather events could have the potential to adversely affect our assets and operations.





?Changes in government usage mandates and tax credits could adversely affect the
availability and pricing of ethanol and renewable fuels, which could negatively
impact our sales.



?Our petroleum and related products sales, logistics activities and results of
operations have been and could continue to be adversely affected by, among other
things, changes in the petroleum products market structure, product
differentials and volatility (or lack thereof), implementation of regulations
that adversely impact the market for transporting petroleum and related products
by rail and other modes of transportation, severe weather conditions,
significant changes in prices and interruptions in transportation services and
other necessary services and equipment, such as railcars, barges, trucks,
loading equipment and qualified drivers.



?Our risk management policies cannot eliminate all commodity risk, basis risk or
the impact of unfavorable market conditions, each of which can adversely affect
our financial condition, results of operations and cash available for
distribution to our unitholders. In addition, noncompliance with our risk
management policies could result in significant financial losses.



?Our results of operations are affected by the overall forward market for the products we sell, and pricing volatility may adversely impact our results.


?Our businesses could be affected by a range of issues, such as changes in
commodity prices, energy conservation, competition, the global economic climate,
movement of products between foreign locales and within the United States,
changes in refiner demand, weekly and monthly refinery output levels, changes in
local, domestic and worldwide inventory levels, changes in health, safety and
environmental regulations, including, without limitation, those related to
climate change, failure to obtain renewal permits on terms favorable to us,
seasonality, supply, weather and logistics disruptions and other factors and
uncertainties inherent in the transportation, storage, terminalling and
marketing of refined products, gasoline blendstocks, renewable fuels and crude
oil.



?Increases and/or decreases in the prices of the products we sell could
adversely impact the amount of availability for borrowing working capital under
our credit agreement, which credit agreement has borrowing base limitations

and
advance rates.



?Warmer weather conditions could adversely affect our home heating oil and
residual oil sales. Our sales of home heating oil and residual oil continue to
be reduced by conversions to natural gas and by utilization of propane and/or
natural gas (instead of heating oil) as primary fuel sources.



?We are exposed to trade credit risk and risk associated with our trade credit support in the ordinary course of our businesses.

? The condition of credit markets may adversely affect our liquidity.

Our credit agreement and the indentures governing our senior notes contain

operating and financial covenants, and our credit agreement contains borrowing ? base requirements. A failure to comply with the operating and financial

covenants in our credit agreement, the indentures and any future financing

agreements could impact our access to bank loans and other sources of financing


  as well as our ability to pursue our business activities.



A significant increase in interest rates could adversely affect our results of ? operations and cash available for distribution to our unitholders and our

ability to service our indebtedness.






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Our gasoline station and convenience store business, including with the onset ? of the COVID-19 pandemic, could expose us to an increase in consumer litigation

and result in an unfavorable outcome or settlement of one or more lawsuits


  where insurance proceeds are insufficient or otherwise unavailable.



Congress has given the Food and Drug Administration ("FDA") broad authority to

regulate tobacco and nicotine products, and the FDA and states have enacted and

are pursuing enaction of numerous regulations restricting the sale of such

products. These governmental actions, as well as national, state and municipal

campaigns to discourage smoking, tax increases, and imposition of regulations

restricting the sale of e-cigarettes and vapor products, have and could result ? in reduced consumption levels, higher costs which we may not be able to pass on

to our customers, and reduced overall customer traffic. Also, increasing

regulations related to and restricting the sale of vapor products and

e-cigarettes may offset some of the gains we have experienced from selling

these types of products. These factors could materially affect the sale of this

product mix which in turn could have an adverse effect on our financial

condition, results of operations and cash available for distribution to our


  unitholders.




?Our results can be adversely affected by unforeseen events, such as adverse
weather, natural disasters, terrorism, pandemics, or other catastrophic events
which could have an adverse effect on our financial condition, results of
operations and cash available for distributions to our unitholders.



Our businesses could expose us to litigation and result in an unfavorable ? outcome or settlement of one or more lawsuits where insurance proceeds are


  insufficient or otherwise unavailable.




?Adverse developments in the areas where we conduct our businesses could have a
material adverse effect on such businesses and could reduce our ability to make
distributions to our unitholders.



?A serious disruption to our information technology systems could significantly limit our ability to manage and operate our businesses efficiently.

?We are exposed to performance risk in our supply chain.





?Our businesses are subject to federal, state and municipal environmental and
non-environmental regulations which could have a material adverse effect on

such
businesses.



?Our general partner and its affiliates have conflicts of interest and limited
fiduciary duties, which could permit them to favor their own interests to the
detriment of our unitholders.



?Unitholders have limited voting rights and are not entitled to elect our general partner or its directors or remove our general partner without the consent of the holders of at least 66 2/3% of the outstanding common units (including common units held by our general partner and its affiliates), which could lower the trading price of our units.

?Our tax treatment depends on our status as a partnership for federal income tax purposes.

?Unitholders may be required to pay taxes on their share of our income even if they do not receive any cash distributions from us.





Additional information about risks and uncertainties that could cause actual
results to differ materially from forward-looking statements is contained in
Part I, Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year
ended December 31, 2019 and Part II, Item 1A, "Risk Factors," in this Quarterly
Report on Form 10-Q.



We expressly disclaim any obligation or undertaking to update these statements
to reflect any change in our expectations or beliefs or any change in events,
conditions or circumstances on which any forward-looking statement is based,
other than as required by federal and state securities laws. All forward-looking
statements included in this Quarterly Report on Form 10-Q and all subsequent
written or oral forward-looking statements attributable to us or persons acting
on our behalf are expressly qualified in their entirety by these cautionary

statements.

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Overview



General



We are a master limited partnership formed in March 2005. We own, control or
have access to one of the largest terminal networks of refined petroleum
products and renewable fuels in Massachusetts, Maine, Connecticut, Vermont, New
Hampshire, Rhode Island, New York, New Jersey and Pennsylvania (collectively,
the "Northeast"). We are one of the region's largest independent owners,
suppliers and operators of gasoline stations and convenience stores. As of
September 30, 2020, we had a portfolio of 1,542 owned, leased and/or supplied
gasoline stations, including 278 directly operated convenience stores, primarily
in the Northeast. We are also one of the largest distributors of gasoline,
distillates, residual oil and renewable fuels to wholesalers, retailers and
commercial customers in the New England states and New York. We engage in the
purchasing, selling, gathering, blending, storing and logistics of transporting
petroleum and related products, including gasoline and gasoline blendstocks
(such as ethanol), distillates (such as home heating oil, diesel and kerosene),
residual oil, renewable fuels, crude oil and propane and in the transportation
of petroleum products and renewable fuels by rail from the mid-continent region
of the United States and Canada.



Collectively, we sold approximately $1.9 billion and $5.8 billion of refined
petroleum products, gasoline blendstocks, renewable fuels, crude oil and propane
for the three and nine months ended September 30, 2020, respectively. In
addition, we had other revenues of approximately $0.1 billion and $0.3 billion
for the three and nine months ended September 30, 2020, respectively, from
convenience store sales at our directly operated stores, rental income from
dealer leased and commissioned agent leased gasoline stations and from
cobranding arrangements, and sundries.



We base our pricing on spot prices, fixed prices or indexed prices and routinely
use the New York Mercantile Exchange ("NYMEX"), Chicago Mercantile Exchange
("CME") and Intercontinental Exchange ("ICE") or other counterparties to hedge
the risk inherent in buying and selling commodities. Through the use of
regulated exchanges or derivatives, we seek to maintain a position that is
substantially balanced between purchased volumes and sales volumes or future
delivery obligations.


Our Perspective on Global and the COVID-19 Pandemic





Overview



The COVID-19 pandemic has continued to make its presence felt at home, in the
office workplace and at our retail sites and terminal locations. We have
successfully executed our business continuity plans and at this time we continue
to work remotely. We remain active in responding to the challenges posed by the
COVID-19 pandemic and continue to provide essential products and services while
prioritizing the safety of our employees, customers and vendors in the
communities where we operate.



The COVID-19 pandemic has resulted in an economic downturn and restricted travel
to, from and within the states in which we conduct our businesses. Federal,
state and municipal "stay at home" or similar-like directives have resulted in
decreases in the demand for gasoline and convenience store products. Social
distancing guidelines and directives limiting food operations at our convenience
stores have further contributed to a reduction in in-store traffic and sales.
The demand for diesel fuel has similarly (but not as drastically) been impacted.
We remain well positioned to pivot and address different (and, at times,
conflicting) directives from federal, state and municipal authorities designed
to mitigate the spread of the COVID-19 pandemic, permit the opening of
businesses and promote an economic recovery. From mid-March into April, we saw
reductions of more than 50% in gasoline volume and more than 20% in convenience
store sales but have since seen increases in both gasoline volume and
convenience store sales as some businesses reopened and directives from federal,
state and municipal authorities became less restrictive. That said,
uncertainties surrounding the duration of the COVID-19 pandemic and demand at
the pump, inside our stores and at our terminals remain.



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Given the uncertainty in the early part of 2020 surrounding the short-term and
long-term impacts of COVID-19, including the timing of an economic recovery,
early in the second quarter we took certain steps to increase liquidity and
create additional financial flexibility. Such steps included a 25% decrease to
our quarterly distribution on our common units to $0.39375 per unit for the
period from January 1, 2020 to March 31, 2020. In addition, we borrowed
$50.0 million under our revolving credit facility which was included in cash on
our balance sheet. We also reduced planned expenses and 2020 capital spending.
We amended our credit agreement to provide temporary adjustments to certain
covenants. Given the stronger-than-expected performance in the second quarter,
we paid down our revolving credit facility with the $50.0 million cash on hand
and increased our planned 2020 capital spending. In addition, we have increased
our quarterly distribution on our common units for each of the last two
quarters.



Moving Forward - Our Perspective


The extent to which the COVID-19 pandemic may affect our operating results
remains uncertain. The outbreak of the COVID-19 pandemic has had, and may
continue to have, material adverse consequences for general economic, financial
and business conditions, and could materially and adversely affect our business,
financial condition and results of operations and those of our customers,
suppliers and other counterparties.



Our inventory management is dependent on the use of hedging instruments which
are managed based on the structure of the forward pricing curve. Daily market
changes may impact periodic results due to the point-in-time valuation of these
positions. Volatility in the oil markets resulting from COVID-19 and
geopolitical events may impact our results.



Business operations today, as compared to how we conducted our business in early
March, reflect changes which may well remain for an indefinite period of time.
In these uncertain times and volatile markets, we believe that we are
operationally nimble and that our portfolio of assets may continue to provide us
with opportunities.



2020 Events



2029 Notes Offering and 2023 Notes Redemption-On October 7, 2020, we and GLP
Finance Corp. (the "Issuers") issued $350.0 million aggregate principal amount
of 6.875% senior notes due 2029 (the "2029 Notes") to several initial purchasers
(the "2029 Notes Initial Purchasers") in a private placement exempt from the
registration requirements under the Securities Act of 1933, as amended (the
"Securities Act"). We used the net proceeds from the offering to fund the
redemption of our 7.00% senior notes due 2023 (the "2023 Notes") and to repay a
portion of the borrowings outstanding under our credit agreement. Please read
"-Liquidity and Capital Resources-Senior Notes" for additional information

on
the 2029 Notes.



Amended Credit Agreement-On May 7, 2020, we and certain of our subsidiaries
entered into the fourth amendment to third amended and restated credit agreement
which, among other things, provides temporary adjustments to certain covenants
and reduces the total aggregate commitment by $130.0 million. See "-Liquidity
and Capital Resources-Credit Agreement."



Operating Segments



We purchase refined petroleum products, gasoline blendstocks, renewable fuels,
crude oil and propane primarily from domestic and foreign refiners and ethanol
producers, crude oil producers, major and independent oil companies and trading
companies. We operate our businesses under three segments: (i) Wholesale,
(ii) Gasoline Distribution and Station Operations ("GDSO") and (iii) Commercial.



Wholesale



In our Wholesale segment, we engage in the logistics of selling, gathering,
blending, storing and transporting refined petroleum products, gasoline
blendstocks, renewable fuels, crude oil and propane. We transport these products
by railcars, barges, trucks and/or pipelines pursuant to spot or long-term
contracts. From time to time, we aggregate crude oil by truck or pipeline in the
mid-continent region of the United States and Canada, transport it by rail

and
ship it

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by barge to refiners. We sell home heating oil, branded and unbranded gasoline
and gasoline blendstocks, diesel, kerosene, residual oil and propane to home
heating oil and propane retailers and wholesale distributors. Generally,
customers use their own vehicles or contract carriers to take delivery of the
gasoline, distillates and propane at bulk terminals and inland storage
facilities that we own or control or at which we have throughput or exchange
arrangements. Ethanol is shipped primarily by rail and by barge.



In our Wholesale segment, we obtain Renewable Identification Numbers ("RIN") in
connection with our purchase of ethanol which is used for bulk trading purposes
or for blending with gasoline through our terminal system. A RIN is a renewable
identification number associated with government-mandated renewable fuel
standards. To evidence that the required volume of renewable fuel is blended
with gasoline, obligated parties must retire sufficient RINs to cover their
Renewable Volume Obligation ("RVO"). Our U.S. Environmental Protection Agency
("EPA") obligations relative to renewable fuel reporting are comprised of
foreign gasoline and diesel that we may import and blending operations at
certain facilities.



Gasoline Distribution and Station Operations

In our GDSO segment, gasoline distribution includes sales of branded and unbranded gasoline to gasoline station operators and sub-jobbers. Station operations include (i) convenience stores, (ii) rental income from gasoline stations leased to dealers, from commissioned agents and from cobranding arrangements and (iii) sundries (such as car wash sales and lottery and ATM commissions).

As of September 30, 2020, we had a portfolio of owned, leased and/or supplied gasoline stations, primarily in the Northeast, that consisted of the following:






Company operated      278
Commissioned agents   272
Lessee dealers        209
Contract dealers      783
Total               1,542


At our company-operated stores, we operate the gasoline stations and convenience
stores with our employees, and we set the retail price of gasoline at the
station. At commissioned agent locations, we own the gasoline inventory, and we
set the retail price of gasoline at the station and pay the commissioned agent a
fee related to the gallons sold. We receive rental income from commissioned
agent leased gasoline stations for the leasing of the convenience store
premises, repair bays and other businesses that may be conducted by the
commissioned agent. At dealer-leased locations, the dealer purchases gasoline
from us, and the dealer sets the retail price of gasoline at the dealer's
station. We also receive rental income from (i) dealer-leased gasoline stations
and (ii) cobranding arrangements. We also supply gasoline to locations owned
and/or leased by independent contract dealers. Additionally, we have contractual
relationships with distributors in certain New England states pursuant to which
we source and supply these distributors' gasoline stations with
ExxonMobil-branded gasoline.



Commercial



In our Commercial segment, we include sales and deliveries to end user customers
in the public sector and to large commercial and industrial end users of
unbranded gasoline, home heating oil, diesel, kerosene, residual oil and bunker
fuel. In the case of public sector commercial and industrial end user customers,
we sell products primarily either through a competitive bidding process or
through contracts of various terms. We respond to publicly issued requests for
product proposals and quotes. We generally arrange for the delivery of the
product to the customer's designated location. Our Commercial segment also
includes sales of custom blended fuels delivered by barges or from a terminal
dock to ships through bunkering activity.



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Seasonality



Due to the nature of our businesses and our reliance, in part, on consumer
travel and spending patterns, we may experience more demand for gasoline during
the late spring and summer months than during the fall and winter. Travel and
recreational activities are typically higher in these months in the geographic
areas in which we operate, increasing the demand for gasoline. Therefore, our
volumes in gasoline are typically higher in the second and third quarters of the
calendar year. However, the COVID-19 pandemic has had a negative impact on
gasoline demand and the extent and duration of that impact is uncertain. As
demand for some of our refined petroleum products, specifically home heating oil
and residual oil for space heating purposes, is generally greater during the
winter months, heating oil and residual oil volumes are generally higher during
the first and fourth quarters of the calendar year. These factors may result in
fluctuations in our quarterly operating results.



Outlook



This section identifies certain risks and certain economic or industry-wide
factors, in addition to those described under "-Our Perspective on Global and
the COVID-19 Pandemic," that may affect our financial performance and results of
operations in the future, both in the short-term and in the long-term. Our
results of operations and financial condition depend, in part, upon the
following:



Our businesses are influenced by the overall markets for refined petroleum

products, gasoline blendstocks, renewable fuels, crude oil and propane and

increases and/or decreases in the prices of these products may adversely impact


  our financial condition, results of operations and cash available for
  distribution to our unitholders and the amount of borrowing available for
  working capital under our credit agreement. Results from our purchasing,
  storing, terminalling, transporting, selling and blending operations are

influenced by prices for refined petroleum products, gasoline blendstocks,

renewable fuels, crude oil and propane, price volatility and the market for

such products. Prices in the overall markets for these products may affect our

financial condition, results of operations and cash available for distribution

to our unitholders. Our margins can be significantly impacted by the forward

product pricing curve, often referred to as the futures market. We typically

hedge our exposure to petroleum product and renewable fuel price moves with

futures contracts and, to a lesser extent, swaps. In markets where future

prices are higher than current prices, referred to as contango, we may use our

storage capacity to improve our margins by storing products we have purchased

at lower prices in the current market for delivery to customers at higher

prices in the future. In markets where future prices are lower than current

prices, referred to as backwardation, inventories can depreciate in value and ? hedging costs are more expensive. For this reason, in these backward markets,

we attempt to reduce our inventories in order to minimize these effects. Our

inventory management is dependent on the use of hedging instruments which are

managed based on the structure of the forward pricing curve. Daily market

changes may impact periodic results due to the point-in-time valuation of these

positions. Volatility in oil markets may impact our results. When prices for

the products we sell rise, some of our customers may have insufficient credit

to purchase supply from us at their historical purchase volumes, and their

customers, in turn, may adopt conservation measures which reduce consumption,

thereby reducing demand for product. Furthermore, when prices increase rapidly

and dramatically, we may be unable to promptly pass our additional costs on to

our customers, resulting in lower margins which could adversely affect our

results of operations. Higher prices for the products we sell may (1) diminish

our access to trade credit support and/or cause it to become more expensive and

(2) decrease the amount of borrowings available for working capital under our

credit agreement as a result of total available commitments, borrowing base

limitations and advance rates thereunder. When prices for the products we sell

decline, our exposure to risk of loss in the event of nonperformance by our

customers of our forward contracts may be increased as they and/or their

customers may breach their contracts and purchase the products we sell at the


  then lower market price from a competitor.



We commit substantial resources to pursuing acquisitions and expending capital

for growth projects, although there is no certainty that we will successfully

complete any acquisitions or growth projects or receive the economic results we ? anticipate from completed acquisitions or growth projects. We are continuously

engaged in discussions with potential sellers and lessors of existing (or

suitable for development) terminalling, storage, logistics and/or marketing


  assets, including gasoline stations, convenience stores and related businesses.
  Our


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growth largely depends on our ability to make accretive acquisitions and/or

accretive development projects. We may be unable to execute such accretive

transactions for a number of reasons, including the following: (1) we are unable

to identify attractive transaction candidates or negotiate acceptable terms;

(2) we are unable to obtain financing for such transactions on economically

acceptable terms; or (3) we are outbid by competitors. In addition, we may

consummate transactions that at the time of consummation we believe will be

accretive but that ultimately may not be accretive. If any of these events were

to occur, our future growth and ability to increase or maintain distributions on

our common units could be limited. We can give no assurance that our transaction

efforts will be successful or that any such efforts will be completed on terms


 that are favorable to us.




The condition of credit markets may adversely affect our liquidity. In the

past, world financial markets experienced a severe reduction in the

availability of credit. Possible negative impacts in the future could include a ? decrease in the availability of borrowings under our credit agreement,

increased counterparty credit risk on our derivatives contracts and our

contractual counterparties requiring us to provide collateral. In addition, we


  could experience a tightening of trade credit from our suppliers.



We depend upon marine, pipeline, rail and truck transportation services for a

substantial portion of our logistics activities in transporting the products we

sell. Implementation of regulations and directives related to these

aforementioned services as well as disruption in any of these transportation

services could have an adverse effect on our financial condition, results of

operations and cash available for distribution to our unitholders. Hurricanes,

flooding and other severe weather conditions could cause a disruption in the

transportation services we depend upon and could affect the flow of service. In ? addition, accidents, labor disputes between providers and their employees and

labor renegotiations, including strikes, lockouts or a work stoppage, shortage

of railcars, trucks and barges, mechanical difficulties or bottlenecks and

disruptions in transportation logistics could also disrupt our business

operations. These events could result in service disruptions and increased

costs which could also adversely affect our financial condition, results of


  operations and cash available for distribution to our unitholders. Other
  disruptions, such as those due to an act of terrorism or war, could also
  adversely affect our businesses.




  We have contractual obligations for certain transportation assets such as

railcars, barges and pipelines. A decline in demand for (i) the products we ? sell or (ii) our logistics activities, could result in a decrease in the

utilization of our transportation assets, which could negatively impact our

financial condition, results of operations and cash available for distribution


  to our unitholders.



Our gasoline financial results, with particular impact to our GDSO segment, are

seasonal and can be lower in the first and fourth quarters of the calendar

year. Due to the nature of our businesses and our reliance, in part, on

consumer travel and spending patterns, we may experience more demand for

gasoline during the late spring and summer months than during the fall and ? winter. Travel and recreational activities are typically higher in these months

in the geographic areas in which we operate, increasing the demand for gasoline

that we sell. Therefore, our results of operations in gasoline can be lower in

the first and fourth quarters of the calendar year. The COVID-19 pandemic has

had a negative impact on gasoline demand and the extent and duration of that


  impact is uncertain.



Our heating oil and residual oil financial results are seasonal and can be

lower in the second and third quarters of the calendar year. Demand for some

refined petroleum products, specifically home heating oil and residual oil for ? space heating purposes, is generally higher during November through March than

during April through October. We obtain a significant portion of these sales

during the winter months. Therefore, our results of operations in heating oil

and residual oil for the first and fourth calendar quarters can be better than


  for the second and third quarters.



Warmer weather conditions could adversely affect our results of operations and

financial condition. Weather conditions generally have an impact on the demand ? for both home heating oil and residual oil. Because we supply distributors

whose customers depend on home heating oil and residual oil for space heating

purposes during the winter, warmer-than-normal temperatures during the first

and fourth calendar quarters can decrease the total




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volume we sell and the gross profit realized on those sales. Therefore, our

results of operations in heating oil and residual oil for the first and fourth

calendar quarters can be better than for the second and third quarters.

? Energy efficiency, higher prices, new technology and alternative fuels could

reduce demand for our products.




Higher prices and new technologies and alternative fuel sources, such as
electric, hybrid or battery powered motor vehicles, could reduce the demand for
transportation fuels and adversely impact our sales of transportation fuels. A
reduction in sales of transportation fuels could have an adverse effect on our
financial condition, results of operations and cash available for distribution
to our unitholders. In addition, increased conservation and technological
advances have adversely affected the demand for home heating oil and residual
oil. Consumption of residual oil has steadily declined over the last three
decades. We could face additional competition from alternative energy sources as
a result of future government-mandated controls or regulations further promoting
the use of cleaner fuels. End users who are dual-fuel users have the ability to
switch between residual oil and natural gas. Other end users may elect to
convert to natural gas. During a period of increasing residual oil prices
relative to the prices of natural gas, dual-fuel customers may switch and other
end users may convert to natural gas. During periods of increasing home heating
oil prices relative to the price of natural gas, residential users of home
heating oil may also convert to natural gas. As described above, such switching
or conversion could have an adverse effect on our financial condition, results
of operations and cash available for distribution to our unitholders.



Changes in government usage mandates and tax credits could adversely affect the

availability and pricing of ethanol and renewable fuels, which could negatively

impact our sales. The EPA has implemented a Renewable Fuels Standard ("RFS")

pursuant to the Energy Policy Act of 2005 and the Energy Independence and

Security Act of 2007. The RFS program seeks to promote the incorporation of

renewable fuels in the nation's fuel supply and, to that end, sets annual

quotas for the quantity of renewable fuels (such as ethanol) that must be

blended into transportation fuels consumed in the United States. A RIN is

assigned to each gallon of renewable fuel produced in or imported into the

United States. We are exposed to volatility in the market price of RINs. We

cannot predict the future prices of RINs. RIN prices are dependent upon a

variety of factors, including EPA regulations related to the amount of RINs

required and the total amounts that can be generated, the availability of RINs

for purchase, the price at which RINs can be purchased, and levels of ? transportation fuels produced, all of which can vary significantly from quarter

to quarter. If sufficient RINs are unavailable for purchase or if we have to

pay a significantly higher price for RINs, or if we are otherwise unable to

meet the EPA's RFS mandates, our results of operations and cash flows could be

adversely affected. Future demand for ethanol will be largely dependent upon

the economic incentives to blend based upon the relative value of gasoline and

ethanol, taking into consideration the EPA's regulations on the RFS program and

oxygenate blending requirements. A reduction or waiver of the RFS mandate or

oxygenate blending requirements could adversely affect the availability and

pricing of ethanol, which in turn could adversely affect our future gasoline

and ethanol sales. In addition, changes in blending requirements or broadening

the definition of what constitutes a renewable fuel could affect the price of

RINs which could impact the magnitude of the mark-to-market liability recorded

for the deficiency, if any, in our RIN position relative to our RVO at a point


  in time.




  We may not be able to fully implement or capitalize upon planned growth

projects. We could have a number of organic growth projects that may require

the expenditure of significant amounts of capital in the aggregate. Many of

these projects involve numerous regulatory, environmental, commercial and legal

uncertainties beyond our control. As these projects are undertaken, required

approvals, permits and licenses may not be obtained, may be delayed or may be ? obtained with conditions that materially alter the expected return associated

with the underlying projects. Moreover, revenues associated with these organic

growth projects may not increase immediately upon the expenditures of funds

with respect to a particular project and these projects may be completed behind

schedule or in excess of budgeted cost. We may pursue and complete projects in

anticipation of market demand that dissipates or market growth that never

materializes. As a result of these uncertainties, the anticipated benefits

associated with our capital projects may not be achieved.

Governmental action and campaigns to discourage smoking and use of other

products may have a material adverse effect on our revenues and gross ? profit. Congress has given the FDA broad authority to regulate tobacco and

nicotine products, and the FDA and states have enacted and are pursuing

enaction of numerous regulations




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restricting the sale of such products. These governmental actions, as well as

national, state and municipal campaigns to discourage smoking, tax increases,

and imposition of regulations restricting the sale of e-cigarettes and vapor

products, have and could result in reduced consumption levels, higher costs

which we may not be able to pass on to our customers, and reduced overall

customer traffic. Also, increasing regulations related to and restricting the

sale of vapor products and e-cigarettes may offset some of the gains we have

experienced from selling these types of products. These factors could materially

affect the sale of this product mix which in turn could have an adverse effect

on our financial condition, results of operations and cash available for

distribution to our unitholders.

New, stricter environmental laws and other industry-related regulations or

environmental litigation could significantly impact our operations and/or

increase our costs, which could adversely affect our results of operations and

financial condition. Our operations are subject to federal, state and municipal

laws and regulations regulating, among other matters, logistics activities,

product quality specifications and other environmental matters. The trend in

environmental regulation has been towards more restrictions and limitations on

activities that may affect the environment over time. Our businesses may be

adversely affected by increased costs and liabilities resulting from such

stricter laws and regulations. We try to anticipate future regulatory

requirements that might be imposed and plan accordingly to remain in compliance

with changing environmental laws and regulations and to minimize the costs of

such compliance. Risks related to our environmental permits, including the risk

of noncompliance, permit interpretation, permit modification, renewal of

permits on less favorable terms, judicial or administrative challenges to

permits by citizens groups or federal, state or municipal entities or permit

revocation are inherent in the operation of our businesses, as it is with other

companies engaged in similar businesses. We may not be able to renew the

permits necessary for our operations, or we may be forced to accept terms in ? future permits that limit our operations or result in additional compliance

costs. In recent years, the transport of crude oil and ethanol has become

subject to additional regulation. The establishment of more stringent design or

construction standards, or other requirements for railroad tank cars that are

used to transport crude oil and ethanol with too short of a timeframe for

compliance may lead to shortages of compliant railcars available to transport

crude oil and ethanol, which could adversely affect our businesses. Likewise,

in recent years, efforts have commenced to seek to use federal, state and

municipal laws to contest issuance of permits, contest renewal of permits and

restrict the types of railroad tanks cars that can be used to deliver products,

including, without limitation, crude oil and ethanol to bulk storage terminals.

Were such laws to come into effect and were they to survive appeals and

judicial review, they would potentially expose our operations to duplicative

and possibly inconsistent regulation. There can be no assurances as to the

timing and type of such changes in existing laws or the promulgation of new

laws or the amount of any required expenditures associated therewith. Climate

change continues to attract considerable public and scientific attention. In

recent years environmental interest groups have filed suit against companies in

the energy industry related to climate change. Should such suits succeed, we

could face additional compliance costs or litigation risks.




Results of Operations


Evaluating Our Results of Operations

Our management uses a variety of financial and operational measurements to analyze our performance. These measurements include: (1) product margin, (2) gross profit, (3) earnings before interest, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA, (4) distributable cash flow, (5) selling, general and administrative expenses ("SG&A"), (6) operating expenses and (7) degree days.





Product Margin



We view product margin as an important performance measure of the core
profitability of our operations. We review product margin monthly for
consistency and trend analysis. We define product margin as our product sales
minus product costs. Product sales primarily include sales of unbranded and
branded gasoline, distillates, residual oil, renewable fuels, crude oil and
propane, as well as convenience store sales, gasoline station rental income and
revenue generated from our logistics activities when we engage in the storage,
transloading and shipment of products owned by others. Product costs include the
cost of acquiring products and all associated costs including shipping and

handling

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costs to bring such products to the point of sale as well as product costs
related to convenience store items and costs associated with our logistics
activities. We also look 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 our consolidated financial statements to assess
our 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, our
product margin may not be comparable to product margin or a similarly titled
measure of other companies.



Gross Profit


We define gross profit as our product margin minus terminal and gasoline station related depreciation expense allocated to cost of sales.

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 our consolidated financial statements, such as investors, commercial banks and research analysts, to assess:

? our compliance with certain financial covenants included in our debt


  agreements;



? our financial performance without regard to financing methods, capital

structure, income taxes or historical cost basis;

? our ability to generate cash sufficient to pay interest on our indebtedness and


  to make distributions to our partners;



our operating performance and return on invested capital as compared to those

of other companies in the wholesale, marketing, storing and distribution of ? refined petroleum products, gasoline blendstocks, renewable fuels, crude oil

and propane, and in the gasoline stations and convenience stores business,

without regard to financing methods and capital structure; and

? the viability of acquisitions and capital expenditure projects and the overall


  rates of return of alternative investment opportunities.




Adjusted EBITDA is EBITDA further adjusted for gains or losses on the sale and
disposition of assets and goodwill and long-lived asset impairment charges.
EBITDA and Adjusted EBITDA should not be considered as alternatives to net
income, operating income, cash flow from operating activities or any other
measure of financial performance or liquidity presented in accordance with GAAP.
EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net
income, and these measures may vary among other companies. Therefore, EBITDA and
Adjusted EBITDA may not be comparable to similarly titled measures of other

companies.



Distributable Cash Flow



Distributable cash flow is an important non-GAAP financial measure for 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 also determines our
ability to make cash distributions on our incentive distribution rights. The
investment community also uses a distributable cash flow metric similar to the
metric used in our partnership agreement with respect to publicly traded
partnerships to indicate whether or not such partnerships have generated
sufficient earnings on a current or historic level that can sustain
distributions on preferred or common units or support an increase in quarterly
cash distributions on common units. Our partnership

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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.

Selling, General and Administrative Expenses





Our SG&A expenses include, among other things, marketing costs, corporate
overhead, employee salaries and benefits, pension and 401(k) plan expenses,
discretionary bonuses, non-interest financing costs, professional fees and
information technology expenses. Employee-related expenses including employee
salaries, discretionary bonuses and related payroll taxes, benefits, and pension
and 401(k) plan expenses are paid by our general partner which, in turn, are
reimbursed for these expenses by us.



Operating Expenses



Operating expenses are costs associated with the operation of the terminals,
transload facilities and gasoline stations and convenience stores used in our
businesses. Lease payments, maintenance and repair, property taxes, utilities,
credit card fees, taxes, labor and labor-related expenses comprise the most
significant portion of our operating expenses. While the majority of these
expenses remains relatively stable, independent of the volumes through our
system, they can fluctuate slightly depending on the activities performed during
a specific period. In addition, they can be impacted by new directives issued by
federal, state and local governments.



Degree Days



A "degree day" is an industry measurement of temperature designed to evaluate
energy demand and consumption. Degree days are based on how far the average
temperature departs from a human comfort level of 65°F. Each degree of
temperature above 65°F is counted as one cooling degree day, and each degree of
temperature below 65°F is counted as one heating degree day. Degree days are
accumulated each day over the course of a year and can be compared to a monthly
or a long-term (multi-year) average, or normal, to see if a month or a year was
warmer or cooler than usual. Degree days are officially observed by the National
Weather Service and officially archived by the National Climatic Data Center.
For purposes of evaluating our results of operations, we use the normal heating
degree day amount as reported by the National Weather Service at its Logan
International Airport station in Boston, Massachusetts.



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Key Performance Indicators



The following table provides a summary of some of the key performance indicators
that may be used to assess our results of operations. These comparisons are not
necessarily indicative of future results (gallons and dollars in thousands):




                                               Three Months Ended           Nine Months Ended
                                                 September 30,                September 30,
                                              2020           2019          2020           2019
Net income attributable to Global
Partners LP                                $    18,230    $    15,080   $    97,768    $    36,695
EBITDA (1)(2)                              $    64,965    $    65,094   $   235,299    $   187,105
Adjusted EBITDA (1)(2)                     $    65,859    $    66,060   $   237,849    $   187,496

Distributable cash flow (3)(4)(5)          $    31,333    $    30,405   $  

149,134    $    86,281
Wholesale Segment:
Volume (gallons)                               837,768        995,638     2,631,430      3,057,823
Sales
Gasoline and gasoline blendstocks          $   767,538    $ 1,466,111   $ 2,182,321    $ 4,106,434
Crude oil (6)                                   57,518         13,646        73,010         56,174
Other oils and related products (7)            235,359        312,534     1,069,921      1,343,417
Total                                      $ 1,060,415    $ 1,792,291   $ 3,325,252    $ 5,506,025
Product margin
Gasoline and gasoline blendstocks          $    16,318    $    20,194   $    83,241    $    76,568
Crude oil (6)                                  (2,729)        (3,019)         2,004       (10,043)
Other oils and related products (7)             14,031         17,071        58,764         40,566
Total                                      $    27,620    $    34,246   $   144,009    $   107,091
Gasoline Distribution and Station
Operations Segment:
Volume (gallons)                               376,317        423,327     1,006,300      1,214,077
Sales
Gasoline                                   $   696,184    $ 1,010,655   $ 1,896,960    $ 2,866,496
Station operations (8)                         122,856        128,942       325,577        354,127
Total                                      $   819,040    $ 1,139,597   $ 2,222,537    $ 3,220,623
Product margin
Gasoline                                   $   101,405    $   107,620   $   305,405    $   282,919
Station operations (8)                          57,462         61,109       154,904        169,621
Total                                      $   158,867    $   168,729   $   460,309    $   452,540
Commercial Segment:
Volume (gallons)                               139,925        171,505       428,418        546,261
Sales                                      $   181,927    $   313,765   $   578,263    $ 1,006,171
Product margin                             $     2,855    $     7,213   $    11,773    $    18,217
Combined sales and product margin:
Sales                                      $ 2,061,382    $ 3,245,653   $ 6,126,052    $ 9,732,819
Product margin (9)                         $   189,342    $   210,188   $   616,091    $   577,848
Depreciation allocated to cost of sales       (20,101)       (22,419)      (61,165)       (66,092)
Combined gross profit                      $   169,241    $   187,769   $  

554,926 $ 511,756



GDSO portfolio as of September 30, 2020
and 2019:                                         2020           2019
Company operated                                   278            295
Commissioned agents                                272            253
Lessee dealers                                     209            221
Contract dealers                                   783            797
Total GDSO portfolio                             1,542          1,566




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                                              Three Months Ended        Nine Months Ended
                                                September 30,             September 30,
                                             2020           2019         2020         2019
Weather conditions:
Normal heating degree days                        96             96        3,750       3,750
Actual heating degree days                        72             28        3,320       3,405

Variance from normal heating degree days        (25) %         (71) %       (11) %       (9) %
Variance from prior period actual
heating degree days                              157 %          (3) %        (2) %       (4) %



EBITDA and Adjusted EBITDA are non-GAAP financial measures which are (1) discussed above under "-Evaluating Our Results of Operations." The table

below presents reconciliations of EBITDA and Adjusted EBITDA to the most

directly comparable GAAP financial measures.

EBITDA and Adjusted EBITDA for the three and nine months ended September 30, (2) 2019 include a $13.1 million loss on the early extinguishment of debt related

to our repurchase of our 6.25% senior notes due 2022.

Distributable cash flow is a non-GAAP financial measure which is discussed

above under "-Evaluating Our Results of Operations." As defined by our

partnership agreement, distributable cash flow is not adjusted for certain (3) non-cash items, such as net losses on the sale and disposition of assets and

goodwill and long-lived asset impairment charges. The table below presents

reconciliations of distributable cash flow to the most directly comparable

GAAP financial measures.

Distributable cash flow includes a net loss (gain) on sale and disposition of

assets and long-lived asset impairment of $0.9 million for each of the three

months ended September 30, 2020 and 2019, and $2.5 million and $0.3 million (4) for the nine months ended September 30, 2020 and 2019, respectively.

Excluding these charges, distributable cash flow would have been

$32.2 million and $31.3 million for the three months ended September 30, 2020

and 2019, respectively, and $151.6 million and $86.6 million for the nine

months ended September 30, 2020 and 2019, respectively.

Distributable cash flow for the three and nine months ended September 30, (5) 2019 includes a $13.1 million loss on the early extinguishment of debt

related to the repurchase of our 6.25% senior notes due 2022.

(6) Crude oil consists of our crude oil sales and revenue from our logistics

activities.

(7) Other oils and related products primarily consist of distillates, residual

oil and propane.

(8) Station operations consist of convenience stores sales, rental income and

sundries.

Product margin is a non-GAAP financial measure which is discussed above under (9) "-Evaluating Our Results of Operations." The table above includes a


    reconciliation of product margin on a combined basis to gross profit, a
    directly comparable GAAP measure.






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The following table presents reconciliations of EBITDA and Adjusted EBITDA to
the most directly comparable GAAP financial measures on a historical basis for
each period presented (in thousands):




                                                      Three Months Ended           Nine Months Ended
                                                         September 30,               September 30,
                                                      2020          2019           2020         2019
Reconciliation of net income to EBITDA and
Adjusted EBITDA:
Net income                                         $   18,192    $    14,893    $   97,240    $  36,058
Net loss attributable to noncontrolling interest           38            187           528          637
Net income attributable to Global Partners LP          18,230         15,080        97,768       36,695
Depreciation and amortization, excluding the
impact of noncontrolling interest                      24,745         27,110        75,192       81,022
Interest expense, excluding the impact of
noncontrolling interest                                19,854         22,091        62,544       68,113
Income tax expense (benefit)                            2,136            813         (205)        1,275
EBITDA (1)                                             64,965         65,094       235,299      187,105
Net loss (gain) on sale and disposition of
assets                                                    691            323           623        (252)
Long-lived asset impairment                               203            643         1,927          643
Adjusted EBITDA (1)                                $   65,859    $    

66,060 $ 237,849 $ 187,496



Reconciliation of net cash provided by operating
activities to EBITDA and Adjusted EBITDA:
Net cash provided by operating activities          $   88,286    $   143,017    $  250,289    $ 109,525
Net changes in operating assets and liabilities
and certain non-cash items                           (45,321)      (100,890)      (77,621)        8,077
Net cash from operating activities and changes
in operating assets and liabilities attributable
to noncontrolling interest                                 10             63           292          115
Interest expense, excluding the impact of
noncontrolling interest                                19,854         22,091        62,544       68,113
Income tax expense (benefit)                            2,136            813         (205)        1,275
EBITDA (1)                                             64,965         65,094       235,299      187,105
Net loss (gain) on sale and disposition of
assets                                                    691            323           623        (252)
Long-lived asset impairment                               203            643         1,927          643
Adjusted EBITDA (1)                                $   65,859    $    66,060    $  237,849    $ 187,496

EBITDA and Adjusted EBITDA for the three and nine months ended September 30, (1) 2019 include a $13.1 million loss on the early extinguishment of debt related


    to our repurchase of our 6.25% senior notes due 2022.






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The following table presents reconciliations of distributable cash flow to the
most directly comparable GAAP financial measures on a historical basis for each
period presented (in thousands):




                                                      Three Months Ended           Nine Months Ended
                                                         September 30,               September 30,
                                                      2020          2019           2020          2019
Reconciliation of net income to distributable
cash flow:
Net income                                         $   18,192    $    14,893    $   97,240    $   36,058
Net loss attributable to noncontrolling interest           38            187           528           637
Net income attributable to Global Partners LP          18,230         15,080        97,768        36,695
Depreciation and amortization, excluding the
impact of noncontrolling interest                      24,745         27,110        75,192        81,022
Amortization of deferred financing fees and
senior notes discount                                   1,329          1,352         3,896         4,679
Amortization of routine bank refinancing fees         (1,008)          (902)       (2,933)       (2,814)
Maintenance capital expenditures, excluding the
impact of noncontrolling interest                    (11,963)       (12,235)      (24,789)      (33,301)
Distributable cash flow (1)(2)                         31,333         30,405       149,134        86,281
Distributions to Series A preferred unitholders
(3)                                                   (1,682)        (1,682)       (5,046)       (5,046)
Distributable cash flow after distributions to
Series A preferred unitholders                     $   29,651    $    

28,723 $ 144,088 $ 81,235



Reconciliation of net cash provided by operating
activities to distributable cash flow:
Net cash provided by operating activities          $   88,286    $   143,017    $  250,289    $  109,525
Net changes in operating assets and liabilities
and certain non-cash items                           (45,321)      (100,890)      (77,621)         8,077
Net cash from operating activities and changes             10             63           292           115
in operating assets and liabilities attributable
to noncontrolling interest
Amortization of deferred financing fees and
senior notes discount                                   1,329          1,352         3,896         4,679
Amortization of routine bank refinancing fees         (1,008)          (902)       (2,933)       (2,814)
Maintenance capital expenditures, excluding the
impact of noncontrolling interest                    (11,963)       (12,235)      (24,789)      (33,301)
Distributable cash flow (1)(2)                         31,333         30,405       149,134        86,281
Distributions to Series A preferred unitholders
(3)                                                   (1,682)        (1,682)       (5,046)       (5,046)
Distributable cash flow after distributions to
Series A preferred unitholders                     $   29,651    $    

28,723 $ 144,088 $ 81,235

Distributable cash flow is a non-GAAP financial measure which is discussed

above under "-Evaluating Our Results of Operations." As defined by our (1) 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.

Distributable cash flow includes a net loss (gain) on sale and disposition of

assets and long-lived asset impairment of $0.9 million for each of the three

months ended September 30, 2020 and 2019, and $2.5 million and $0.3 million (2) for the nine months ended September 30, 2020 and 2019, respectively.

Excluding these charges, distributable cash flow would have been

$32.2 million and $31.3 million for the three months ended September 30, 2020

and 2019, respectively, and $151.6 million and $86.6 million for the nine

months ended September 30, 2020 and 2019, respectively.

Distributable cash flow for the three and nine months ended September 30, (3) 2019 includes a $13.1 million loss on the early extinguishment of debt

related to the repurchase of our 6.25% senior notes due 2022.

Distributions to Series A preferred unitholders represent the distributions (4) payable to the preferred unitholders during the period. Distributions on the

Series A Preferred Units are cumulative and payable quarterly in arrears on

February 15, May 15, August 15 and November 15 of each year.




Results of Operations



Consolidated Sales



Our total sales were $2.0 billion and $3.2 billion for the three months ended
September 30, 2020 and 2019, respectively, a decrease of $1.2 billion, or 37%,
due to decreases in prices and volume sold. Our aggregate volume of product sold
was 1.4 billion gallons and 1.6 billion gallons for the three months ended
September 30, 2020 and 2019, respectively, declining 236 million gallons
including decreases of 158 million gallons in our Wholesale segment due to a
decline in gasoline and gasoline blendstocks, partially offset by increased
volume in crude oil and other oils and related products, 47 million gallons in
our GDSO segment and 31 million gallons in our Commercial segment.



Our total sales were $6.1 billion and $9.7 billion for the nine months ended
September 30, 2020 and 2019, respectively, a decrease of $3.6 billion, or 37%,
due to decreases in prices and volume sold. Our aggregate volume of

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product sold was 4.1 billion gallons and 4.8 billion gallons for the nine months
ended September 30, 2020 and 2019, respectively, declining 752 million gallons
including decreases of 426 million gallons in our Wholesale segment due to a
decline in gasoline and gasoline blendstocks partially offset by increased
volume in crude oil and other oils and related products, 208 million gallons in
our GDSO segment and 118 million gallons in our Commercial segment.



Gross Profit


Our gross profit was $169.2 million and $187.8 million for the three months ended September 30, 2020 and 2019, respectively, a decrease of $18.6 million, or 10%, due to lower product margins in all three segments.


Our gross profit was $554.9 million and $511.8 million for the nine months ended
September 30, 2020 and 2019, respectively, an increase of $43.1 million, or 8%,
primarily due to more favorable market conditions in our Wholesale segment,
largely in the second quarter. During the second quarter of 2020, there was a
significant recovery in the supply/demand imbalance at the end of the first
quarter. The forward product pricing curve flattened which positively impacted
our Wholesale segment in the second quarter. Our gross profit also benefitted
from higher fuel margins (cents per gallon) in gasoline distribution in our GDSO
segment which offset a decrease in fuel volume and a decrease in our station
operations product margin.



Results for Wholesale Segment



Gasoline and Gasoline Blendstocks. Sales from wholesale gasoline and gasoline
blendstocks were $0.8 billion and $1.5 billion for the three months ended
September 30, 2020 and 2019, respectively, a decrease of $0.7 billion, or 47%,
due to decreases in prices and volume sold. Our gasoline and gasoline
blendstocks product margin was $16.3 million and $20.2 million for the three
months ended September 30, 2020 and 2019, respectively, a decrease of
$3.9 million, or 19%, primarily due to less favorable market conditions in
gasoline compared to the same period in 2019.



Sales from wholesale gasoline and gasoline blendstocks were $2.2 billion and
$4.1 billion for the nine months ended September 30, 2020 and 2019,
respectively, a decrease of $1.9 billion, or 46%, due to decreases in prices and
volume sold. Our gasoline and gasoline blendstocks product margin was
$83.2 million and $76.5 million for the nine months ended September 30, 2020 and
2019, respectively, an increase of $6.7 million, or 9%, primarily due to more
favorable market conditions, largely in the second quarter. During the second
quarter of 2020, there was a significant recovery in the supply/demand imbalance
at the end of the first quarter. The forward product pricing curve flattened
which positively impacted our product margins. In the first quarter of 2020, the
COVID-19 pandemic and the price war between Saudi Arabia and Russia caused a
rapid decline in prices, steepening the forward product pricing curve which
negatively impacted our product margin in gasoline for the first three months of
2020.


Crude Oil. Crude oil sales and logistics revenues were $57.5 million and $13.6 million for the three months ended September 30, 2020 and 2019, respectively, an increase of $43.9 million, or 322%, due to an increase in volume sold. Our crude oil product margin was ($2.7 million) and ($3.0 million) for the three months ended September 30, 2020 and 2019, respectively, an increase of $0.3 million.


Crude oil sales and logistics revenues were $73.0 million and $56.1 million for
the nine months ended September 30, 2020 and 2019, respectively, an increase of
$16.9 million, or 30%, due to an increase in volume sold. Our crude oil product
margin was $2.0 million and ($10.0 million) for the nine months ended
September 30, 2020 and 2019, respectively, an increase of $12.0 million, or
120%, primarily due to more favorable market conditions largely in the second
quarter including the flattening of the forward product pricing curve.



Other Oils and Related Products. Sales from other oils and related products
(primarily distillates and residual oil) were $235.3 million and $312.5 million
for the three months ended September 30, 2020 and 2019, respectively, a decrease
of $77.2 million, or 25%, due to a decrease in prices, partially offset by an
increase in volume sold. Our product margin from other oils and related products
was $14.0 million and $17.1 million for the three months ended September 30,
2020 and 2019, respectively, a decrease of $3.1 million, or 18%, due to less
favorable market conditions largely in residual oil compared to the same period
in 2019.



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Sales from other oils and related products were $1.0 billion and $1.3 billion
for the nine months ended September 30, 2020 and 2019, respectively, decreasing
$273.5 million, or 20%, due to a decrease in prices, partially offset by an
increase in volume sold. Our product margin from other oils and related products
was $58.8 million and $40.6 million for the nine months ended September 30, 2020
and 2019, respectively, an increase of $18.2 million, or 45%, primarily due to
more favorable market conditions in distillates, largely in the second quarter.
During the second quarter of 2020, there was a significant recovery in the
supply/demand imbalance at the end of the first quarter. The forward product
pricing curve flattened which positively impacted our product margins. In the
first quarter of 2020, the COVID-19 pandemic and the price war between Saudi
Arabia and Russia caused a rapid decline in prices, steepening the forward
product pricing curve, which negatively impacted our product margins for the
first three months of 2020.


Results for Gasoline Distribution and Station Operations Segment





Gasoline Distribution. Sales from gasoline distribution were $0.7 billion and
$1.0 billion for the three months ended September 30, 2020 and 2019,
respectively, a decrease of $0.3 billion, or 31%, due to decreases in prices and
volume sold largely due to the impact of the COVID-19 pandemic. Our product
margin from gasoline distribution was $101.4 million and $107.6 million for the
three months ended September 30, 2020 and 2019, respectively, a decrease of
$6.2 million, or 6%. While in the third quarter of 2020 our fuel margins (cents
per gallon) were higher than the same period in 2019, in the third quarter of
2019 wholesale gasoline prices declined which favorably impacted our fuel
margins (cents per gallon).



Sales from gasoline distribution were $1.9 billion and $2.9 billion for the nine
months ended September 30, 2020 and 2019, respectively, a decrease of
$1.0 billion, or 34%, due to decreases in prices and volume sold largely due to
the impact of the COVID-19 pandemic. Our product margin from gasoline
distribution was $305.4 million and $282.9 million for the nine months ended
September 30, 2020 and 2019, respectively, an increase of $22.5 million, or 8%,
due to higher fuel margins (cents per gallon) which more than offset the decline
in volume sold. Our product margin for the first nine months of 2020 benefitted
from declining wholesale prices in the first quarter of 2020, primarily in March
due to the COVID-19 pandemic and geopolitical events and to higher fuel margins
(cents per gallon) in both the second and third quarters compared to the same
periods in 2019. Declining wholesale gasoline prices can improve our gasoline
product margin, the extent of which depends on the magnitude and duration of the
decline.



Station Operations. Our station operations, which include (i) convenience stores
sales at our directly operated stores, (ii) rental income from gasoline stations
leased to dealers or from commissioned agents and from cobranding arrangements
and (iii) sale of sundries, such as car wash sales and lottery and ATM
commissions, collectively generated revenues of $122.8 million and
$128.9 million for the three months ended September 30, 2020 and 2019,
respectively, a decrease of $6.1 million, or 5%. Our product margin from station
operations was $57.5 million and $61.1 million for the three months ended
September 30, 2020 and 2019, respectively, a decrease of $3.6 million, or 6%.
The decreases in sales and product margin are primarily due to less activity at
our convenience stores, primarily due to the impact of the COVID-19 pandemic.



Sales from our station operations were $325.6 million and $354.1 million for the
nine months ended September 30, 2020 and 2019, respectively, a decrease of
$28.5 million, or 8%. Our product margin from station operations was
$154.9 million and $169.6 million for the nine months ended September 30, 2020
and 2019, respectively, a decrease of $14.7 million, or 9%. The decreases in
sales and product margin are primarily due to less activity at our convenience
stores, primarily due to the impact of the COVID-19 pandemic.



Results for Commercial Segment





Our commercial sales were $181.9 million and $313.8 million for the three months
ended September 30, 2020 and 2019, respectively, a decrease of $131.9 million,
or 42%, due to decreases in prices and volume sold. Our commercial product
margin was $2.8 million and $7.2 million for the three months ended
September 30, 2020 and 2019, respectively, a decrease of $4.4 million, or 61%,
primarily due to a decrease in bunkering activity.



Our commercial sales were $0.6 billion and $1.0 billion for the nine months ended September 30, 2020 and 2019, respectively, decreasing $427.9 million, or 42%, due to decreases in prices and volume sold. Our commercial product



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margin was $11.8 million and $18.2 million for the nine months ended September 30, 2020 and 2019, respectively, a decrease of $6.4 million, or 35%, primarily due to a decrease in bunkering activity.

Selling, General and Administrative Expenses





SG&A expenses were $43.2 million and $45.3 million for the three months ended
September 30, 2020 and 2019, respectively, a decrease of $2.1 million, or 5%,
including decreases of $3.6 million in accrued discretionary incentive
compensation and $0.6 million in various other SG&A expenses, offset by
increases of $1.2 million in professional fees, $0.7 million in wages and
benefits and $0.2 million in costs associated with the COVID-19 pandemic.



SG&A expenses were $143.2 million and 127.4 million for the nine months ended
September 30, 2020 and 2019, respectively, an increase of $15.8 million, or 12%,
including increases of $8.6 million in accrued discretionary incentive
compensation, $2.8 million in wages and benefits, $2.0 million in professional
fees, $1.2 million in costs associated with the COVID-19 pandemic, $1.0 million
in advertising costs and $0.2 million in various other SG&A expenses.



Operating Expenses



Operating expenses were $82.2 million and $87.8 million for the three months
ended September 30, 2020 and 2019, respectively, a decrease of $5.6 million, or
6%, including a decrease of $6.4 million associated with our GDSO operations, in
part due to lower credit card fees due to the reduction in volume and price,
lower salary expense primarily due to reduced store hours and lower maintenance
and repair expenses, offset by an increase in expenses of $0.8 million
associated with our terminal operations.



Operating expenses were $241.5 million and $257.2 million for the nine months
ended September 30, 2020 and 2019, respectively, a decrease of $15.7 million, or
6%, including a decrease of $14.7 million associated with our GDSO operations,
in part due to lower credit card fees due to the reduction in volume and price,
lower salary expense in part due to reduced store hours, lower maintenance and
repair expenses and lower expenses due to the sale of sites. In addition,
operating expenses at our terminals decreased $1.0 million, primarily due to
lower maintenance and repair expenses.



Lease Exit and Termination Gain





During the nine months ended September 30, 2019, we were released from certain
of our remaining obligations to provide future railcar storage, freight,
insurance and other services for railcars under a fleet management services
agreement associated with our 2016 voluntary termination of a railcar sublease.
The release of certain obligations resulted in a $0.5 million reduction of the
remaining accrued incremental costs, which benefit is included in lease exit and
termination gain in the accompanying statement of operations for the nine months
ended September 30, 2019.



Amortization Expense


Amortization expense related to intangible assets was $2.7 million and $2.8 million for the three months ended September 30, 2020 and 2019, respectively, and $8.1 million and $8.7 million for the nine months ended September 30, 2020 and 2019, respectively.

Net (Loss) Gain on Sale and Disposition of Assets

Net (loss) gain on sale and disposition of assets was ($0.7 million) and ($0.3 million) for the three months ended September 30, 2020 and 2019, respectively, and ($0.6 million) and $0.3 million for the nine months ended September 30, 2020 and 2019, respectively, primarily due to the sale of GDSO sites.





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Long-Lived Asset Impairment



We recognized an impairment charge relating to certain right of use assets allocated to the GDSO segment in the amount of $0.2 million for each of the three and nine months ended September 30, 2020 and to the Wholesale segment in the amount of $0 and $1.7 million for the three and nine months ended September 30, 2020, respectively.





We recognized an impairment charge relating to long-lived assets used at certain
gasoline stations and convenience stores in the amount of $0.6 million for each
of the three and nine months ended September 30, 2019. These assets are
allocated to the GDSO segment.



Interest Expense



Interest expense was $19.9 million and $22.1 million for the three months ended
September 30, 2020 and 2019, respectively, a decrease of $2.2 million, or 10%,
due to lower average balances on our credit facilities and lower interest rates.



Interest expense was $62.5 million and $68.1 million for the nine months ended
September 30, 2020 and 2019, respectively, a decrease of $5.6 million, or 8%,
due to lower average balances on our credit facilities and lower interest rates,
which more than offset the $0.7 million write-off of deferred financing fees
associated with the amendment to our credit agreement in May 2020.



Loss on Early Extinguishment of Debt





As a result of the repurchase of our 6.25% senior notes due 2022 on July 31,
2019, we recorded a $13.1 million loss from early extinguishment of debt for
each of the three and nine months ended September 30, 2019, consisting of a
$6.9 million cash call premium and a $6.2 million non-cash write-off of
remaining unamortized original issue discount and deferred financing fees.

Income Tax (Expense) Benefit


Income tax (expense) benefit was ($2.1 million) and ($0.8 million) for the three
months ended September 30, 2020 and 2019, respectively, and $0.2 million and
($1.3 million) for the nine months ended September 30, 2020 and 2019,
respectively, which reflects the income tax (expense) benefit from the operating
results of GMG, which is a taxable entity for federal and state income tax
purposes. For the nine months ended September 30, 2020, the income tax benefit
consists of an income tax benefit of $6.3 million (discussed below) offset by an
income tax expense of ($6.1 million).



On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the
"CARES Act") was enacted and signed into law. The CARES Act is an emergency
economic stimulus package that includes spending and tax breaks to strengthen
the United States economy and fund a nationwide effort to curtail the effect of
COVID-19. The CARES Act provides certain tax changes in response to the COVID-19
pandemic, including the temporary removal of certain limitations on the
utilization of net operating losses, permitting the carryback of net operating
losses generated in 2018, 2019 or 2020 to the five preceding taxable years,
increasing the ability to deduct interest expense, deferring the employer share
of social security tax payments, as well as amending certain provisions of the
previously enacted Tax Cuts and Jobs Act. As a result, we recognized a benefit
of $6.3 million related to the CARES Act net operating loss carryback provisions
which is included in income tax benefit in the accompanying statement of
operations for the nine months ended September 30, 2020. We expect to receive
cash refunds totaling $15.8 million associated with the carryback of losses
generated in 2018 to the 2016 and 2017 tax years, and this income tax receivable
is included in prepaid expenses and other current assets in the accompanying
consolidated balance sheet as of September 30, 2020.



Net Loss Attributable to Noncontrolling Interest

In February 2013, we acquired a 60% membership interest in Basin Transload. The net loss attributable to the noncontrolling interest was immaterial for the three months ended September 30, 2020 and $0.2 million for the three



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months ended September 30, 2019. The loss attributable to the noncontrolling
interest was $0.5 million and $0.6 million for the nine months ended
September 30, 2020 and 2019, respectively. The net loss represents the 40%
noncontrolling ownership of the net loss reported. In connection with the terms
of an agreement between us and the minority members of Basin Transload, on
September 29, 2020, we acquired the minority members' collective 40% interest in
Basin Transload (see Note 18, "Legal Proceedings" for additional information).



Liquidity and Capital Resources





Liquidity


Our primary liquidity needs are to fund our working capital requirements, capital expenditures and distributions and to service our indebtedness. Our primary sources of liquidity are cash generated from operations, amounts available under our working capital revolving credit facility and equity and debt offerings. Please read "-Credit Agreement" for more information on our working capital revolving credit facility.





Given the uncertainty surrounding the short-term and long-term impacts of
COVID-19, including the timing of an economic recovery, early in the second
quarter we took certain steps to increase liquidity and create additional
financial flexibility. Such steps included a 25% decrease to our quarterly
distribution on our common units for the period from January 1, 2020 to
March 31, 2020. In addition, we borrowed $50.0 million under our revolving
credit facility which was included in cash on our balance sheet. We also reduced
planned expenses and 2020 capital spending. We amended our credit agreement to
provide temporary adjustments to certain covenants. Given the
stronger-than-expected performance in the second quarter, we paid down our
revolving credit facility with the $50.0 million cash on hand and increased our
planned 2020 capital spending. In addition, we increased our quarterly
distribution on our common units for each of the second and third quarters. We
believe that our current level of cash and borrowing capacity under our credit
agreement will be sufficient to meet our liquidity needs.



Working capital was $327.7 million and $250.6 million at September 30, 2020 and
December 31, 2019, respectively, an increase of $77.1 million. Changes in
current assets and current liabilities increasing working capital include
(i) decreases of $186.6 million in accounts payable and $138.8 million in the
current portion of our working capital revolving credit facility, primarily due
to lower prices, and (ii) an increase of $44.7 million in derivatives, for a
total increase in working capital of $370.1 million. The increase in working
capital was offset by decreases of $173.8 million in accounts receivable and
$121.8 million in inventories, also primarily due to lower prices.



Cash Distributions



Common Units



During 2020, we paid the following cash distributions to our common unitholders
and our general partner:




                                                  Distribution Paid for the
Cash Distribution Payment Date     Total Paid      Quarterly Period Ended
February 14, 2020                $ 18.3 million      Fourth quarter 2019
May 15, 2020                     $ 13.5 million      First quarter 2020
August 14, 2020                  $ 15.7 million      Second quarter 2020


In addition, on October 26, 2020, the board of directors of our general partner
declared a quarterly cash distribution of $0.50 per unit ($2.00 per unit on an
annualized basis) on all of our outstanding common units for the period from
July 1, 2020 through September 30, 2020 to our common unitholders of record as
of the close of business on November 9, 2020. We expect to pay the total cash
distribution of approximately $17.3 million on November 13, 2020.



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Preferred Units



During 2020, we paid the following cash distributions to holders of the Series A
Preferred Units:




                                                       Distribution Paid for the
Cash Distribution Payment Date    Total Paid           Quarterly Period Covering
February 18, 2020                $ 1.7 million   November 15, 2019 - February 14, 2020
May 15, 2020                     $ 1.7 million     February 15, 2020 - May 14, 2020
August 17, 2020                  $ 1.7 million      May 15, 2020 - August 14, 2020


In addition, on October 19, 2020, 2020, the board of directors of our general
partner declared a quarterly cash distribution of $0.609375 per unit ($2.4375
per unit on an annualized basis) on our Series A Preferred Units for the period
from August 15, 2020 through November 14, 2020 to our preferred unitholders of
record as of the opening of business on November 2, 2020. We expect to pay the
total cash distribution of approximately $1.7 million on November 16, 2020.




Contractual Obligations



We have contractual obligations that are required to be settled in cash. The
amounts of our contractual obligations at September 30, 2020 were as follows (in
thousands):




                                                                       Payments Due by Period
                                   Remainder of                                          2024 and
Contractual Obligations                2020          2021        2022        2023       Thereafter       Total

Credit facility obligations (1)   $        5,171   $ 162,940   $ 195,100   $       -   $          -   $   363,211
Senior notes obligations (2)              10,500      49,000      49,000     338,500        512,000       959,000
Operating lease obligations (3)           20,988      89,385      59,696      45,598        137,081       352,748
Other long-term liabilities (4)            8,722      26,901      22,091      13,259         50,808       121,781
Financing obligations (5)                  3,707      15,023      15,268   

  15,518         97,932       147,448
Total                             $       49,088   $ 343,249   $ 341,155   $ 412,875   $    797,821   $ 1,944,188

Includes principal and interest on our working capital revolving credit

facility and our revolving credit facility at September 30, 2020 and assumes

a ratable payment through the expiration date. Our credit agreement has a

contractual maturity of April 29, 2022 and no principal payments are required

prior to that date. However, we repay amounts outstanding and reborrow funds (1) based on our working capital requirements. Therefore, the current portion of

the working capital revolving credit facility included in the accompanying

consolidated balance sheets is the amount we expect to pay down during the

course of the year, and the long-term portion of the working capital

revolving credit facility is the amount we expect to be outstanding during

the entire year. Please read "-Credit Agreement" for more information on our

working capital revolving credit facility.

Includes principal and interest on our senior notes. No principal payments

are required prior to maturity. See Note 8 of Notes to Consolidated Financial

Statements in our Annual Report on Form 10-K for the year ended December 31, (2) 2019 for additional information on our senior notes. On October 7, 2020, we

issued $350.0 million aggregate principal amount of 2029 Notes and used a

portion of the proceeds from the offering to fund the redemption of the 2023

Notes. See "-Senior Notes" for additional information.

(3) Includes operating lease obligations related to leases for office space and

computer equipment, land, gasoline stations, railcars and barges.

Includes amounts related to our 15-year brand fee agreement entered into in (4) 2010 with ExxonMobil and amounts related to our pipeline connection

agreements, natural gas transportation and reservation agreements, access

right agreements and our pension and deferred compensation obligations.

Includes lease rental payments in connection with (i) the acquisition of

Capitol related to properties previously sold by Capitol within two

sale-leaseback transactions; and (ii) the sale of real property assets at 30 (5) gasoline stations and convenience stores. These transactions did not meet the

criteria for sale accounting and the lease rental payments are classified as

interest expense on the respective financing obligation and the pay-down of


    the related financing obligation. See Note 8 of Notes to Consolidated
    Financial Statement for additional information.




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Capital Expenditures



Our operations require investments to maintain, expand, upgrade and enhance
existing operations and to meet environmental and operational regulations. We
categorize our capital requirements as either maintenance capital expenditures
or expansion capital expenditures. Maintenance capital expenditures represent
capital expenditures to repair or replace partially or fully depreciated assets
to maintain the operating capacity of, or revenues generated by, existing assets
and extend their useful lives. Maintenance capital expenditures also include
expenditures required to maintain equipment reliability, tank and pipeline
integrity and safety and to address certain environmental regulations. We
anticipate that maintenance capital expenditures will be funded with cash
generated by operations. We had approximately $24.8 million and $33.3 million in
maintenance capital expenditures for the nine months ended September 30, 2020
and 2019, respectively, which are included in capital expenditures in the
accompanying consolidated statements of cash flows, of which approximately
$20.0 million and $30.8 million for the nine months ended September 30, 2020 and
2019, respectively, are related to our investments in our gasoline station
business. Repair and maintenance expenses associated with existing assets that
are minor in nature and do not extend the useful life of existing assets are
charged to operating expenses as incurred.



Expansion capital expenditures include expenditures to acquire assets to grow
our businesses or expand our existing facilities, such as projects that increase
our operating capacity or revenues by, for example, increasing dock capacity and
tankage, diversifying product availability, investing in raze and rebuilds and
new-to-industry gasoline stations and convenience stores, increasing storage
flexibility at various terminals and by adding terminals to our storage network.
We have the ability to fund our expansion capital expenditures through cash from
operations or our credit agreement or by issuing debt securities or additional
equity. We had approximately $14.8 million and $19.2 million in expansion
capital expenditures for the nine months ended September 30, 2020 and 2019,
respectively, primarily related to investments in our gasoline station business.



We currently expect maintenance capital expenditures of approximately
$45.0 million to $55.0 million and expansion capital expenditures, excluding
acquisitions, of approximately $30.0 million to $40.0 million in 2020, relating
primarily to investments in our gasoline station business. These current
estimates depend, in part, on the timing of completion of projects, availability
of equipment and workforce, weather, the scope and duration of the COVID-19
pandemic and unanticipated events or opportunities requiring additional
maintenance or investments.



We believe that we will have sufficient cash flow from operations, borrowing
capacity under our credit agreement and the ability to issue additional equity
and/or debt securities to meet our financial commitments, debt service
obligations, contingencies and anticipated capital expenditures. However, we are
subject to business and operational risks, including uncertainties related to
the extent and duration of the COVID-19 pandemic and geopolitical events, each
of which could adversely affect our cash flow. A material decrease in our cash
flows would likely have an adverse effect on our borrowing capacity as well as
our ability to issue additional equity and/or debt securities.



Cash Flow


The following table summarizes cash flow activity (in thousands):






                                                Nine Months Ended
                                                  September 30,
                                               2020           2019

Net cash provided by operating activities $ 250,289 $ 109,525 Net cash used in investing activities $ (34,772) $ (41,140) Net cash used in financing activities $ (222,698) $ (70,726)




Operating Activities



Cash flow from operating activities generally reflects our net income, balance
sheet changes arising from inventory purchasing patterns, the timing of
collections on our accounts receivable, the seasonality of parts of our
businesses, fluctuations in product prices, working capital requirements and
general market conditions.



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Net cash provided by operating activities was $250.3 million and $109.5 million for the nine months ended September 30, 2020 and 2019, respectively, for a period-over-period increase in cash flow from operating activities of $140.8 million.

Except for net income, the primary drivers of the changes in operating activities include the following (in thousands):






                                                    Nine Months Ended        Period over
                                                      September 30,             Period
                                                   2020           2019          Change

Decrease (increase) in accounts receivable $ 173,424 $ (1,492)

  $    174,916
Decrease (increase) in inventories              $   121,462    $  (7,724)    $    129,186
(Decrease) increase in accounts payable         $ (186,592)    $    1,389    $  (187,981)
(Increase) decrease in change in derivatives    $  (44,704)    $   20,606
 $   (65,310)




For the nine months ended September 30, 2020, the decreases in accounts
receivable, inventories and accounts payable are largely due to the decrease in
prices, primarily caused by the COVID-19 pandemic and geopolitical events. The
increase in operating cash flow was also impacted by the year-over-year change
in derivatives of $65.3 million in part due to the decrease in prices and an
increase in the volume of physical forward contracts.



For the nine months ended September 30, 2019, the increases in accounts receivable and inventories were primarily due to an increase in prices.





Investing Activities



Net cash used in investing activities was $34.8 million for the nine months
ended September 30, 2020 and included $24.8 million in maintenance capital
expenditures, $14.8 million in expansion capital expenditures and $1.2 million
in seller note issuances, offset by $6.0 million in proceeds from the sale of
property and equipment. The seller note issuances represent notes we received
from buyers in connection with the sale of certain of our gasoline stations.



Net cash used in investing activities was $41.1 million for the nine months
ended September 30, 2019 and included $33.3 million in maintenance capital
expenditures, $19.2 million in expansion capital expenditures and $0.6 million
in seller note issuances, offset by $12.0 million in proceeds from the sale

of
property and equipment.


Please read "-Capital Expenditures" for a discussion of our capital expenditures for the nine months ended September 30, 2020 and 2019.





Financing Activities



Net cash used in financing activities was $222.7 million for the nine months
ended September 30, 2020 and included $163.8 million in net payments on our
working capital revolving credit facility due to lower prices and an increase in
net income, $52.4 million in cash distributions to our limited partners
(preferred and common unitholders) and our general partner, $4.7 million in net
payments on our revolving credit facility, $1.6 million related to the
acquisition of our noncontrolling interest at Basin Transload, $0.3 million in
the repurchase of common units pursuant to our repurchase program for future
satisfaction of our LTIP obligations, and $0.3 million in LTIP units withheld
for tax obligations related to awards that vested in 2020. Net cash used in
financing activities was offset by $0.4 million in capital contributions from
our noncontrolling interest at Basin Transload.



Net cash used in financing activities was $70.7 million for the nine months
ended September 30, 2019 and included $381.9 million in payments in connection
with the repurchase of the 6.25% senior notes due 2022 and the issuance of the
7.00% senior notes due 2027, $57.4 million in cash distributions to our limited
partners (preferred and common unitholders) and our general partner,
$23.0 million in net payments on our revolving credit facility, $0.6 million in
LTIP units withheld for tax obligations related to awards that vested in 2019
and $0.4 million in net payments on our

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working capital revolving credit facility. Net cash used in financing activities
was offset by $392.6 million in proceeds in connection with the issuance of

the
7.00% senior notes due 2027.



See Note 8 of Notes to Consolidated Financial Statements for supplemental cash
flow information related to our working capital revolving credit facility and
revolving credit facility.



Credit Agreement



Certain subsidiaries of ours, as borrowers, and we and certain of our
subsidiaries, as guarantors, have a $1.17 billion senior secured credit facility
which was amended on May 7, 2020 to, among other things, provide temporary
adjustments to certain covenants and reduce the total aggregate commitment by
$130.0 million from $1.3 billion (see "-Fourth Amendment to the Credit
Agreement" below).



We repay amounts outstanding and reborrow funds based on our working capital
requirements and, therefore, classify as a current liability the portion of the
working capital revolving credit facility we expect to pay down during the
course of the year. The long-term portion of the working capital revolving
credit facility is the amount we expect to be outstanding during the entire
year. The credit agreement matures on April 29, 2022.



There are two facilities under the credit agreement:

a working capital revolving credit facility to be used for working capital

? purposes and letters of credit in the principal amount equal to the lesser of

our borrowing base and $770.0 million; and

? a $400.0 million revolving credit facility to be used for general corporate


   purposes.




Availability under the working capital revolving credit facility is subject to a
borrowing base which is redetermined from time to time and based on specific
advance rates on eligible current assets. Availability under the borrowing base
may be affected by events beyond our control, such as changes in petroleum
product prices, collection cycles, counterparty performance, advance rates and
limits and general economic conditions.



The average interest rates for the credit agreement were 2.8% and 4.3% for the
three months ended September 30, 2020 and 2019, respectively, and 3.0% and 4.5%
for the nine months ended September 30, 2020 and 2019, respectively.



As of September 30, 2020, we had total borrowings outstanding under the credit
agreement of $348.1 million, including $188.0 million outstanding on the
revolving credit facility. In addition, we had outstanding letters of credit of
$48.5 million. Subject to borrowing base limitations, the total remaining
availability for borrowings and letters of credit was $773.4 million and
$660.2 million at September 30, 2020 and December 31, 2019, respectively.



The credit agreement imposes financial covenants that require us to maintain
certain minimum working capital amounts, a minimum combined interest coverage
ratio, a maximum senior secured leverage ratio and a maximum total leverage
ratio. We were in compliance with the foregoing covenants at September 30, 2020.
The credit agreement also contains a representation whereby there can be no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect (as defined in
the credit agreement). In addition, the credit agreement limits distributions by
us to our unitholders to the amount of Available Cash (as defined in the
partnership agreement).



Please read Part II, Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations-Credit Agreement" in our Annual Report on
Form 10-K for the year ended December 31, 2019 for additional information on the
credit agreement.



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Fourth Amendment to the Credit Agreement


On May 7, 2020, we and certain of our subsidiaries entered into the Fourth
Amendment to Third Amended and Restated Credit Agreement (the "Fourth
Amendment"), which further amends the credit agreement. Capitalized terms used
but not defined herein shall have the meanings ascribed to such terms in the
credit agreement.


The Fourth Amendment amends certain terms, provisions and covenants of the credit agreement, including, without limitation:

increases by 0.125% the applicable rate under the working capital facility

(i) for borrowings of base rate loans, Eurocurrency rate loans and cost of funds


     rate loans and for issuances of letters of credit;



adds two pricing levels under the revolving credit facility for borrowings

(ii) of base rate loans, Eurocurrency rate loans and cost of funds rate loans and


      for issuances of letters of credit;



(iii) adds a Eurocurrency rate floor of 0.75% and a cost of funds rate floor of


       0.50%;



for the four (4) quarters commencing with the quarter ended June 30, 2020,

(iv) (a) increases to Combined Total Leverage Ratio covenant levels and (b) a

reduction to the Combined Interest Coverage Ratio covenant levels; and

reduces the aggregate commitments under the facilities by 10%, with the

(v) commitments under the working capital facility reduced to $770.0 million from

$850.0 million and the commitments under the revolving credit facility
     reduced to $400.0 million from $450.0 million.




All other material terms of the credit agreement remain substantially the same
as disclosed in Part II, Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations-Credit Agreement" in our Annual
Report on Form 10-K for the year ended December 31, 2019.



Senior Notes



We had 7.00% senior notes due 2027 and 7.00% senior notes due 2023 outstanding
at September 30, 2020. Please read Part II, Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations-Liquidity and Capital
Resources-Senior Notes" in our Annual Report on Form 10-K for the year ended
December 31, 2019 for additional information on these senior notes. On
October 7, 2020, the Issuers issued $350.0 million aggregate principal amount of
6.875% senior notes due 2029 to the 2029 Notes Initial Purchasers in a private
placement exempt from the registration requirements under the Securities Act. We
used the net proceeds from the offering to fund the redemption of our 2023 Notes
and to repay a portion of the borrowings outstanding under our credit agreement.



2029 Notes Indenture



In connection with the private placement of the 2029 Notes on October 7, 2020,
the Issuers and the subsidiary guarantors and Regions Bank, as trustee, entered
into an indenture (the "2029 Notes Indenture").



The 2029 Notes mature on January 15, 2029 with interest accruing at a rate of
6.875% per annum. Interest is payable beginning July 15, 2021 and thereafter
semi-annually in arrears on January 15 and July 15 of each year. The 2029 Notes
are guaranteed on a joint and several senior unsecured basis by each of the
Issuers and the subsidiary guarantors to the extent set forth in the 2029 Notes
Indenture. Upon a continuing event of default, the trustee or the holders of at
least 25% in principal amount of the 2029 Notes may declare the 2029 Notes
immediately due and payable, except that an event of default resulting from
entry into a bankruptcy, insolvency or reorganization with respect to the
Issuers, any restricted subsidiary of ours that is a significant subsidiary or
any group of our restricted subsidiaries that, taken together, would constitute
a significant subsidiary of ours, will automatically cause the 2029 Notes to
become due and payable.



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The Issuers have the option to redeem up to 35% of the 2029 Notes prior to
October 15, 2023 at a redemption price (expressed as a percentage of principal
amount) of 106.875% plus accrued and unpaid interest, if any. The Issuers have
the option to redeem the 2029 Notes, in whole or in part, at any time on or
after January 15, 2024, at the redemption prices of 103.438% for the
twelve-month period beginning on January 15, 2024, 102.292% for the twelve-month
period beginning January 15, 2025, 101.146% for the twelve-month period
beginning January 15, 2026, and 100% beginning on January 15, 2027 and at any
time thereafter, together with any accrued and unpaid interest to the date of
redemption. In addition, before January 15, 2024, the Issuers may redeem all or
any part of the 2029 Notes at a redemption price equal to the sum of the
principal amount thereof, plus a make whole premium, plus accrued and unpaid
interest, if any, to the redemption date. The holders of the 2029 Notes may
require the Issuers to repurchase the 2029 Notes following certain asset sales
or a Change of Control Triggering Event (as defined in the 2029 Notes Indenture)
at the prices and on the terms specified in the 2029 Notes Indenture.



The 2029 Notes Indenture contains covenants that limit our ability to, among
other things, incur additional indebtedness and issue preferred securities, make
certain dividends and distributions, make certain investments and other
restricted payments, restrict distributions by our subsidiaries, create liens,
sell assets or merge with other entities. Events of default under the 2029 Notes
Indenture include (i) a default in payment of principal of, or interest or
premium, if any, on, the 2029 Notes, (ii) breach of our covenants under the 2029
Notes Indenture, (iii) certain events of bankruptcy and insolvency, (iv) any
payment default or acceleration of indebtedness of ours or certain subsidiaries
if the total amount of such indebtedness unpaid or accelerated exceeds
$50.0 million and (v) failure to pay within 60 days uninsured final judgments
exceeding $50.0 million.


2029 Notes Registration Rights Agreement


On October 7, 2020, the Issuers and the subsidiary guarantors entered into a
registration rights agreement (the "2029 Notes Registration Rights Agreement")
with the 2029 Notes Initial Purchasers in connection with the Issuers' private
placement of the 2029 Notes. Under the 2029 Notes Registration Rights Agreement,
the Issuers and the subsidiary guarantors have agreed to file and use
commercially reasonable efforts to cause to become effective a registration
statement relating to an offer to exchange the 2029 Notes for an issue of notes
with terms identical to the 2029 Notes (except that the exchange notes will not
be subject to restrictions on transfer or to any increase in annual interest
rate for failure to comply with the 2029 Notes Registration Rights Agreement)
that are registered under the Securities Act so as to permit the exchange offer
to be consummated by December 1, 2021. If the exchange offer is not completed on
or before December 1, 2021, the annual interest rate borne by the 2029 Notes
will increase by 1.0% per annum until the exchange offer is completed or a shelf
registration statement relating to the resales of the 2029 Notes is declared
effective.



Financing Obligations



Capitol Acquisition



On June 1, 2015, we acquired retail gasoline stations and dealer supply
contracts from Capitol Petroleum Group ("Capitol"). In connection with the
acquisition, we assumed a financing obligation of $89.6 million associated with
two sale-leaseback transactions by Capitol for 53 leased sites that did not meet
the criteria for sale accounting. During the terms of these leases, which expire
in May 2028 and September 2029, in lieu of recognizing lease expense for the
lease rental payments, we incur interest expense associated with the financing
obligation. Interest expense of approximately $2.3 million was recorded for each
of the three months ended September 30, 2020 and 2019, and $7.0 million was
recorded for each of the nine months ended September 30, 2020 and 2019, which is
included in interest expense in the accompanying consolidated statements of
operations. The financing obligation will amortize through expiration of the
leases based upon the lease rental payments which were $2.5 million for each of
the three months ended September 30, 2020 and 2019, and $7.6 million and
$7.4 million for the nine months ended September 30, 2020 and 2019,
respectively. The financing obligation balance outstanding at September 30, 2020
was $86.4 million associated with the Capitol acquisition.



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Sale-Leaseback Transaction



On June 29, 2016, we sold to a premier institutional real estate investor (the
"Buyer") real property assets, including the buildings, improvements and
appurtenances thereto, at 30 gasoline stations and convenience stores located in
Connecticut, Maine, Massachusetts, New Hampshire and Rhode Island (the
"Sale-Leaseback Sites") for a purchase price of approximately $63.5 million. In
connection with the sale, we entered into a Master Unitary Lease Agreement with
the Buyer to lease back the real property assets sold with respect to the
Sale-Leaseback Sites (such Master Lease Agreement, together with the
Sale-Leaseback Sites, the "Sale-Leaseback Transaction").



As a result of not meeting the criteria for sale accounting for these sites, the
Sale-Leaseback Transaction is accounted for as a financing arrangement. As such,
the property and equipment sold and leased back by us has not been derecognized
and continues to be depreciated. We recognized a corresponding financing
obligation of $62.5 million equal to the $63.5 million cash proceeds received
for the sale of these sites, net of $1.0 million financing fees. During the term
of the lease, which expires in June 2031, in lieu of recognizing lease expense
for the lease rental payments, we incur interest expense associated with the
financing obligation. Lease rental payments are recognized as both interest
expense and a reduction of the principal balance associated with the financing
obligation. Lease rental payments are recognized as both interest expense and a
reduction of the principal balance associated with the financing obligation.
Interest expense was $1.1 million for each of the three months ended
September 30, 2020 and 2019 and $3.3 million for each of the nine months ended
September 30, 2020 and 2019. Lease rental payments were $1.2 million for each of
the three months ended September 30, 2020 and 2019, and $3.5 million for each of
the nine months ended September 30, 2020 and 2019. The financing obligation
balance outstanding at September 30, 2020 was $62.1 million associated with

the
Sale-Leaseback Transaction.


Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies and Estimates


Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses our consolidated financial statements, which have been
prepared in accordance with GAAP. The preparation of these consolidated
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the
reporting period. The outbreak of COVID-19 across the United States and the
responses of governmental bodies (federal, state and municipal), companies and
individuals, including mandated and/or voluntary restrictions to mitigate the
spread of the virus, have caused a significant economic downturn. The
uncertainty surrounding the short and long-term impact of COVID-19, including
the inability to project the timing of an economic recovery, may have an impact
on our use of estimates. Actual results may differ from these estimates under
different assumptions or conditions.



These estimates are based on our knowledge and understanding of current
conditions and actions that we may take in the future. Changes in these
estimates will occur as a result of the passage of time and the occurrence of
future events. Subsequent changes in these estimates may have a significant
impact on our financial condition and results of operations and are recorded in
the period in which they become known. We have identified the following
estimates that, in our opinion, are subjective in nature, require the exercise
of judgment, and involve complex analysis: inventory, leases, revenue
recognition, trustee taxes, derivative financial instruments, goodwill,
evaluation of long-lived asset impairment and environmental and other
liabilities.



The significant accounting policies and estimates that we have adopted and
followed in the preparation of our consolidated financial statements are
detailed in Note 2 of Notes to Consolidated Financial Statements, "Summary of
Significant Accounting Policies" included in our Annual Report on Form 10-K for
the year ended December 31, 2019. There have been no subsequent changes in these
policies and estimates that had a significant impact on our financial condition
and results of operations for the periods covered in this report, except as
described in Note 19 of Notes to Consolidated Financial Statements herein for
the adoption of ASU 2016-13, "Measurement of Credit Losses on

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Financial Instruments," including modifications to that standard thereafter, and now codified as ASC 326 which we adopted on January 1, 2020.

Recent Accounting Pronouncements

A description and related impact expected from the adoption of certain new accounting pronouncements is provided in Note 19 of Notes to Consolidated Financial Statements included elsewhere in this report.

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