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OFFON

GLOBAL PARTNERS LP

(GLP)
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GLOBAL PARTNERS LP : Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-K)

03/05/2021 | 02:21pm EDT

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 report.

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
December 31, 2020, we had a portfolio of 1,548 owned, leased and/or supplied
gasoline stations, including 277 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 $7.9 billion of refined petroleum products,
gasoline blendstocks, renewable fuels, crude oil and propane for the year ended
December 31, 2020. In addition, we had other revenues of approximately
$0.4 billion for the year ended December 31, 2020 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 our
in-office employees 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 of 2020,
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,

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notwithstanding the introduction of country-wide vaccination programs, uncertainties surrounding the duration of the COVID-19 pandemic and demand at the pump, inside our stores and at our terminals remain.

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 increased our
quarterly distribution on our common units for each of the second, third and
fourth quarters of 2020.

Moving Forward - Our Perspective

The extent to which the COVID-19 pandemic may affect our operating results
remains uncertain. 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 2020, 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

Purchase Agreement-On December 14, 2020, we announced the signing of an
agreement to purchase retail fuel and convenience store assets from
Connecticut-based Consumers Petroleum of Connecticut, Incorporated. The
acquisition includes 27 company-operated gasoline stations with "Wheels"-branded
convenience stores in Connecticut. The transaction also includes fuel supply
agreements for approximately 25 gasoline stations located in Connecticut and New
York. The stations market fuel under the Citgo and Sunoco brands. The purchase
is expected to close in the first half of 2021 subject to regulatory approvals
and other customary closing conditions.

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. The redemption
of the 2023 Notes occurred on October 23, 2020.

On February 1, 2021, we completed an exchange offer whereby holders of the 2029
Notes exchanged all of the 2029 Notes for an equivalent amount of senior notes
registered under the Securities Act. The exchange notes are substantially
identical to the 2029 Notes, except that the exchange notes are not subject to
the restrictions on transfers or to any increase in annual interest rates for
failure to comply with the 2029 Notes Registration Rights Agreement (defined
below). Please read "-Liquidity and Capital Resources-Senior Notes" for
additional information on the 2029 Notes.

2019 Event

2027 Notes Offering and 2022 Notes Tender Offer and Redemption- On July 31, 2019, the Issuers issued


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$400.0 million aggregate principal amount of 7.00% senior notes due 2027 (the
"2027 Notes") to several initial purchasers (the "2027 Notes Initial
Purchasers") in a private placement exempt from the registration requirements
under the Securities Act. The 2027 Notes were resold by the 2027 Notes Initial
Purchasers to qualified institutional buyers pursuant to Rule 144A under the
Securities Act and to persons outside the United States pursuant to Regulation S
under the Securities Act. We used the net proceeds from the offering to fund the
repurchase of our 6.25% senior notes due 2022 (the "2022 Notes") in a tender
offer and to repay a portion of the borrowings outstanding under our credit
agreement. The redemption of the 2022 Notes occurred on August 30, 2019.

On February 18, 2020, we completed an exchange offer whereby holders of the 2027
Notes exchanged all of the 2027 Notes for an equivalent amount of senior notes
registered under the Securities Act. Please read "-Liquidity and Capital
Resources-Senior Notes" for additional information on the 2027 Notes.

2018 Events


Series A Preferred Unit Offering-On August 7, 2018, we issued 2,760,000 9.75%
Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units
representing limited partner interests for $25.00 per Series A preferred unit in
an offering registered under the Securities Act of 1933. We used the proceeds,
net of underwriting discount and expenses, of $66.4 million to reduce
indebtedness under our credit agreement. See Note 18 of Notes to Consolidated
Financial Statements for additional information.

Acquisition from Cheshire Oil Company, LLC-On July 24, 2018, we acquired the
assets of ten company-operated gasoline stations and convenience stores from New
Hampshire-based Cheshire Oil Company, LLC ("Cheshire") for approximately
$33.4 million, including inventory. See Note 20 of Notes to Consolidated
Financial Statements for additional information.

Acquisition from Champlain Oil Company, Inc.-On July 17, 2018, we acquired
retail fuel and convenience store assets from Vermont-based Champlain Oil
Company, Inc. ("Champlain") for approximately $138.2 million, including
inventory. The acquisition included 37 company-operated gasoline stations with
Jiffy Mart-branded convenience stores in Vermont and New Hampshire and
approximately 24 fuel sites that are either owned or leased, including lessee
dealer and commission agent locations. The transaction also included fuel supply
agreements for approximately 65 gasoline stations, primarily in Vermont and New
Hampshire. See Note 20 of Notes to Consolidated Financial Statements for
additional information.

Volumetric Ethanol Excise Tax Credit-In the first quarter of 2018, we recognized
a one-time income item of approximately $52.6 million as a result of the
extinguishment of a contingent liability related to the Volumetric Ethanol
Excise Tax Credit, which tax credit program expired in 2011. Based upon the
significant passage of time from that 2011 expiration date, including underlying
statutes of limitation, as of January 31, 2018 we determined that the liability
was no longer required. The recognition of this one-time income item did not
impact cash flows from operations for the year ended December 31, 2018.

Operating Segments


We purchase refined petroleum products, gasoline blendstocks, renewable fuels
and crude oil 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.

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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 by barge to refiners. We sell home heating oil, branded and unbranded
gasoline and gasoline blendstocks, diesel, kerosene and residual oil to home
heating oil 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 store sales, (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 December 31, 2020, we had a portfolio of owned, leased and/or supplied
gasoline stations, primarily in the Northeast, that consisted of the following:




Company operated         277
Commissioned agents      273
Lessee dealers           208
Contract dealers         790
Total                  1,548


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.

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Our Commercial segment also includes sales of custom blended fuels delivered by barges or from a terminal dock to ships through bunkering activity.

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.


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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 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 could require 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 in our GDSO segment can be lower in the first

and fourth quarters of the calendar year due to seasonal fluctuations in

demand. 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 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 in-store traffic, and the extent and

duration of that impact is uncertain.

Our heating oil and residual oil financial results 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.


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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 volume we sell and the

gross profit realized on those sales.

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 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


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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 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. For example, President

Biden signed an executive order calling for new or more stringent emissions

standards for new, modified and existing oil and gas facilities. 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. 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.

Further regulation of the transport by rail of fuel products may adversely

affect our financial condition and results of operations. Over the last several

years, federal and state agencies have adopted various requirements governing

the transport of fuel products, such as crude oil and ethanol. Were these

bodies to establish more stringent design or construction standards for

railcars, or impose other requirements for such railroad tank cars that are

used to transport, by example, crude oil and ethanol, those requirements,

? individually or in the aggregate, may lead to shortages of compliant railcars,

or limitations on deliveries of these products, which in either case could

adversely affect our businesses. In recent years, non-governmental groups have

intensified their efforts to use federal, state and municipal laws to restrict

the transportation of fuels products, including, without limitation, crude oil

and ethanol by railroad tank cars. Additional regulations regarding the

movement and storage of fossil fuel products by transportation modalities could

   potentially expose our operations to duplicative and possibly inconsistent
   regulation.


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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) 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 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.


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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 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 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):




                                                       Year Ended December 31,
                                                2020             2019             2018
Net income attributable to Global
Partners LP                                  $   102,210$     35,867$    103,905
EBITDA (1)(2)                                $   285,529$    234,374$    304,312
Adjusted EBITDA (1)(2)                       $   287,731$    233,666$    310,606
Distributable cash flow (3)(4)               $   156,392$     95,713
  $    173,688
Wholesale Segment:
Volume (gallons)                               3,599,794        4,153,831        3,620,983
Sales
Gasoline and gasoline blendstocks            $ 3,008,490$  5,358,550$  4,732,028
Crude oil (5)                                     84,046           96,419  

109,719

Other oils and related products (6)            1,486,539        1,974,897  

2,049,043

Total                                        $ 4,579,075$  7,429,866$  6,890,790
Product margin
Gasoline and gasoline blendstocks            $   100,818$     83,982$     76,741
Crude oil (5)                                      (672)         (13,047)  

7,159

Other oils and related products (6)               82,999           51,584  

53,389

Total                                        $   183,145$    122,519$    137,289
Gasoline Distribution and Station Operations
Segment:
Volume (gallons)                               1,360,252        1,622,122        1,596,453
Sales
Gasoline                                     $ 2,545,616$  3,806,892$  4,081,498
Station operations (7)                           431,041          466,761          427,211
Total                                        $ 2,976,657$  4,273,653$  4,508,709
Product margin
Gasoline                                     $   398,016$    374,550$    373,303
Station operations (7)                           205,926          225,078          203,098
Total                                        $   603,942$    599,628$    576,401
Commercial Segment:
Volume (gallons)                                 568,230          743,545          645,393
Sales                                        $   765,867$  1,378,211$  1,273,103
Product margin                               $    15,195$     28,540$     23,611
Combined sales and product margin:
Sales                                        $ 8,321,599$ 13,081,730$ 12,672,602
Product margin (8)                           $   802,282$    750,687$    737,301
Depreciation allocated to cost of sales         (81,144)         (87,930)  

(86,892)

Combined gross profit                        $   721,138$    662,757

$ 650,409


GDSO portfolio as of December 31, 2020, 2019
and 2018:
Company operated                                     277              289              297
Commissioned agents                                  273              258              259
Lessee dealers                                       208              216              237
Contract dealers                                     790              788              786
Total GDSO portfolio                               1,548            1,551            1,579




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                                                         Year Ended December 31,
                                                        2020        2019       2018
Weather conditions:
Normal heating degree days                                5,630      5,630      5,630
Actual heating degree days                                5,029      5,152      5,391
Variance from normal heating degree days                   (11) %      (8)

% (4) % Variance from prior period actual heating degree days (2) % (4) % 2 %

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 include a loss on early extinguishment of debt of

$7.2 million in 2020 related to the 2023 Notes and $13.1 million in 2019

related to the 2022 Notes (see Note 8 of Notes to Consolidated Financial (2) Statements). EBITDA and Adjusted EBITDA in 2018 include a one-time gain of

approximately $52.6 million as a result of the extinguishment of a contingent

liability related to a Volumetric Ethanol Excise Tax Credit and a lease exit

and termination gain of $3.5 million (see Note 2 of Notes to Consolidated

Financial Statements).

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 loss on early extinguishment of debt of

$7.2 million in 2020 related to the 2023 Notes and $13.1 million in 2019

related to the 2022 Notes (see Note 8 of Notes to Consolidated Financial (4) Statements). Distributable cash flow in 2018 includes a one-time gain of

approximately $52.6 million as a result of the extinguishment of a contingent

liability related to a Volumetric Ethanol Excise Tax Credit (see Note 2 of

Notes to Consolidated Financial Statements).

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

activities.

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

oil and propane.

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

sundries.

Product margin is a non-GAAP financial measure which is discussed above under (8) "-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
(in
thousands):




                                                              Year Ended December 31,
                                                           2020          2019         2018
Reconciliation of net income to EBITDA and Adjusted
EBITDA:
Net income                                              $   101,682$  35,178$ 102,403
Net loss attributable to noncontrolling interest                528          689        1,502
Net income attributable to Global Partners LP               102,210       

35,867 103,905 Depreciation and amortization, excluding the impact of noncontrolling interest

                                   99,899      107,557      105,639
Interest expense, excluding the impact of
noncontrolling interest                                      83,539       89,856       89,145
Income tax (benefit) expense                                  (119)        1,094        5,623
EBITDA (1)                                                  285,529      234,374      304,312
Net loss (gain) on sale and disposition of assets               275      (2,730)        5,880
Long-lived asset impairment                                   1,927        2,022          414
Adjusted EBITDA (1)                                     $   287,731$ 233,666$ 310,606

Reconciliation of net cash provided by operating
activities to EBITDA and Adjusted EBITDA:
Net cash provided by operating activities               $   312,526    $  

94,402 $ 168,856 Net changes in operating assets and liabilities and certain non-cash items

                                    (110,709)       48,968       40,385
Net cash from operating activities and changes in
operating assets and liabilities attributable to
noncontrolling interest                                         292           54          303
Interest expense, excluding the impact of
noncontrolling interest                                      83,539       89,856       89,145
Income tax (benefit) expense                                  (119)        1,094        5,623
EBITDA (1)                                                  285,529      234,374      304,312
Net loss (gain) on sale and disposition of assets               275      (2,730)        5,880
Long-lived asset impairment                                   1,927        2,022          414
Adjusted EBITDA (1)                                     $   287,731$ 233,666$ 310,606

EBITDA and Adjusted EBITDA include a loss on early extinguishment of debt of

$7.2 million in 2020 related to the 2023 Notes and $13.1 million in 2019

related to the 2022 Notes (see Note 8 of Notes to Consolidated Financial (1) Statements). EBITDA and Adjusted EBITDA in 2018 include a one-time gain of

approximately $52.6 million as a result of the extinguishment of a contingent

liability related to a Volumetric Ethanol Excise Tax Credit and a lease exit

    and termination gain of $3.5 million (see Note 2 of Notes to Consolidated
    Financial Statements.




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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 (in
thousands):






                                                              Year Ended December 31,
                                                          2020           2019          2018
Reconciliation of net income to distributable cash
flow:
Net income                                             $   101,682$   35,178$  102,403
Net loss attributable to noncontrolling interest               528           689         1,502
Net income attributable to Global Partners LP              102,210        

35,867 103,905 Depreciation and amortization, excluding the impact of noncontrolling interest

                                     99,899       

107,557 105,639 Amortization of deferred financing fees and senior notes discount

                                               5,241         5,940         6,873
Amortization of routine bank refinancing fees              (3,970)       

(3,754) (4,088) Maintenance capital expenditures, excluding the impact of noncontrolling interest

                                (46,988)      (49,897)      (38,641)
Distributable cash flow (1)(2)                             156,392        95,713       173,688
Distributions to Series A preferred unitholders (3)        (6,728)       (6,728)       (2,691)
Distributable cash flow after distributions to Series
A preferred unitholders                                $   149,664    $   

88,985 $ 170,997


Reconciliation of net cash provided by operating
activities to distributable cash flow:
Net cash provided by operating activities              $   312,526    $   

94,402 $ 168,856 Net changes in operating assets and liabilities and certain non-cash items

                                   (110,709)        48,968        40,385
Net cash from operating activities and changes in              292            54           303
operating assets and liabilities attributable to
noncontrolling interest
Amortization of deferred financing fees and senior
notes discount                                               5,241         5,940         6,873
Amortization of routine bank refinancing fees              (3,970)       

(3,754) (4,088) Maintenance capital expenditures, excluding the impact of noncontrolling interest

                                (46,988)      (49,897)      (38,641)
Distributable cash flow (1)(2)                             156,392        95,713       173,688
Distributions to Series A preferred unitholders (3)        (6,728)       (6,728)       (2,691)
Distributable cash flow after distributions to Series
A preferred unitholders                                $   149,664$   88,985$  170,997

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 loss on early extinguishment of debt of

$7.2 million in 2020 related to the 2023 Notes and $13.1 million in 2019

related to the 2022 Notes (see Note 8 of Notes to Consolidated Financial (2) Statements). Distributable cash flow in 2018 includes a one-time gain of

approximately $52.6 million as a result of the extinguishment of a contingent

    liability related to a Volumetric Ethanol Excise Tax Credit (see Note 2 of
    Notes to Consolidated Financial Statements).

Distributions to Series A preferred unitholders represent the distributions (3) 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 for Years 2020, 2019 and 2018

Consolidated Sales


Our total sales were $8.3 billion and $13.1 billion for 2020 and 2019,
respectively, a decrease of $4.8 billion, or 36%, due to decreases in prices and
volume sold. Our aggregate volume of product sold was 5.5 billion gallons and
6.5 billion gallons for 2020 and 2019, respectively, a decrease of 1.0 billion
gallons in part due to the impact of the COVID-19 pandemic. The decrease in
volume sold includes a decrease of 554 million gallons in our Wholesale segment
due to a decline in gasoline and gasoline blendstocks, partially offset by
increased volume in other oils and related products and crude oil, and decreases
of 262 million gallons in our GDSO segment and 175 million gallons in our
Commercial segment.

Our total sales were $13.1 billion and $12.7 billion for 2019 and 2018,
respectively, an increase of $0.4 billion, or 3%, due to an increase in volume
sold. Our aggregate volume of product sold was 6.5 billion gallons and
5.8 billion gallons for 2019 and 2018, respectively, an increase of 0.7 billion
gallons. The increase in volume sold includes increases of 533 million gallons
in our Wholesale segment, primarily in gasoline and gasoline blendstocks,
98 million gallons in our Commercial segment and 26 million gallons in our
GDSO
segment.

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Gross Profit

Our gross profit was $721.1 million and $662.7 million for 2020 and 2019,
respectively, an increase of $58.4 million, or 9%, primarily due to more
favorable market conditions in our Wholesale segment and higher fuel margins
(cents per gallon) in gasoline distribution in our GDSO segment which offset a
decrease in GDSO fuel volume and a decrease in our station operations product
margin. The increase in gross profit was offset by a decline in our Commercial
segment largely due to a decrease in bunkering activity.

Our gross profit was $662.7 million and $650.4 million for 2019 and 2018,
respectively, an increase of $12.3 million, or 2%, primarily due to the
acquisitions of Champlain and Cheshire in July 2018 (collectively the "2018
Acquisitions") in our GDSO segment. The increase in gross profit was offset by a
decline in crude oil product margin in our Wholesale segment, primarily due to
$21.6 million in revenue recognized in 2018 related to a take-or-pay contract
with one particular customer which was not recognized in 2019 as that contract
expired in June 2018.

Results for Wholesale Segment

Gasoline and Gasoline Blendstocks. Sales from wholesale gasoline and gasoline
blendstocks were $3.0 billion and $5.3 billion for 2020 and 2019, respectively,
a decrease of $2.3 billion, or 44%, due to decreases in prices and volume sold.
Our gasoline and gasoline blendstocks product margin was $100.8 million and
$84.0 million for 2020 and 2019, respectively, an increase of $16.8 million, or
20%. 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. Our
product margin also benefitted due to more favorable market conditions in
gasoline in the fourth quarter of 2020 compared to the same period in 2019 which
was negatively impacted due to unfavorable market conditions. 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.

Sales from wholesale gasoline and gasoline blendstocks were $5.3 billion and
$4.7 billion for 2019 and 2018, respectively, an increase of $0.6 billion, or
13%, due to an increase in volume sold. Our gasoline and gasoline blendstocks
product margin was $84.0 million and $76.7 million for 2019 and 2018,
respectively, an increase of $7.3 million, or 9%, primarily due to more
favorable market conditions in gasoline, offset by less favorable market
conditions in gasoline blendstocks, primarily ethanol.

Crude Oil. Crude oil sales and logistics revenues were $84.0 million and
$96.4 million for 2020 and 2019, respectively, a decrease of $12.4 million, or
13%, primarily due to a decrease in prices, partially offset by an increase in
volume sold. Our crude oil product margin was ($0.7 million) and ($13.0 million)
for 2020 and 2019, respectively, an increase of $12.3 million, or 95%, primarily
due to more favorable market conditions largely in the second quarter including
the flattening of the forward product pricing curve.

Crude oil sales and logistics revenues were $96.4 million and $109.7 million for
2019 and 2018, respectively, a decrease of $13.3 million, or 12%, primarily due
to the $21.6 million decrease in take-or-pay contract revenue, partially offset
by an increase in volume sold. Our crude oil product margin was ($13.0 million)
and $7.2 million for 2019 and 2018, respectively, a decrease of $20.2 million,
or 282%, primarily due to the $21.6 million decrease in take-or-pay contract
revenue. Our product margin for 2019 was favorably impacted by lower railcar
related expenses.

Other Oils and Related Products. Sales from other oils and related products
(primarily distillates and residual oil) were $1.5 billion and $2.0 billion for
2020 and 2019, respectively, a decrease of $0.5 billion, or 25%, in part due to
a decline in prices, partially offset by an increase in volume sold. Our product
margin from other oils and related products was $83.0 million and $51.6 million
and for 2020 and 2019, respectively, an increase of $31.4 million, or 61%.
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. Our
product margin also benefitted from more favorable market conditions in the
fourth quarter of 2020 compared to the same period in 2019, largely in
distillates. 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

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product margins.

Sales from other oils and related products were $2.0 billion and $2.1 billion
for 2019 and 2018, respectively, a decrease of $0.1 billion, or 4%, in part due
to a decline in prices, partially offset by an increase in residual oil volume
sold. Our product margin from other oils and related products was $51.6 million
and $53.4 million for 2019 and 2018, respectively, a decrease of $1.8 million,
or 3%. Our product margin in distillates for 2019 was negatively impacted due to
less favorable market conditions, largely in the fourth quarter, and to weather
that was both warmer than normal and warmer than in 2018.

Results for Gasoline Distribution and Station Operations Segment


Gasoline Distribution. Sales from gasoline distribution were $2.5 billion and
$3.8 billion for 2020 and 2019, respectively, a decrease of $1.3 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
$398.0 million and $374.5 million for 2020 and 2019, respectively, an increase
of $23.5 million, or 6%, primarily due to higher fuel margins (cents per gallon)
which more than offset the decline in volume sold. Our product margin for 2020
benefitted from declining wholesale prices in the first quarter of 2020,
primarily in March due to the COVID-19 pandemic and geopolitical events.
Declining wholesale gasoline prices can improve our gasoline distribution
product margin, the extent of which depends on the magnitude and duration of the
decline.

Sales from gasoline distribution were $3.8 billion and $4.1 billion for 2019 and
2018, respectively, a decrease of $0.3 billion, or 7%, due to a decline in
prices, partially offset by an increase in volume sold. Our product margin from
gasoline distribution was $374.5 million and $373.3 million for 2019 and 2018,
respectively, an increase of $1.2 million, primarily due to the 2018
Acquisitions. Our product margin in 2019 was negatively impacted by lower fuel
margins (cents per gallon) in the fourth quarter compared to the fourth quarter
of 2018 when fuel margins were higher due to a decline in wholesale gasoline
prices.

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 $431.0 million and
$466.7 million for 2020 and 2019, respectively, a decrease of $35.7 million, or
8%. Our product margin from station operations was $205.9 million and
$225.1 million for 2020 and 2019, respectively, a decrease of $19.2 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.

Revenues from our station operations were $466.7 million and $427.2 million for
2019 and 2018, respectively, an increase of $39.5 million, or 9%. Our product
margin from station operations was $225.1 million and $203.1 million for 2019
and 2018, respectively, an increase of $22.0 million, or 11%, primarily due to
the 2018 Acquisitions.

Results for Commercial Segment

Our commercial sales were $0.8 billion and $1.4 billion for 2020 and 2019,
respectively, a decrease of $0.6 billion, or 43%, due to decreases in prices and
volume sold. Our commercial product margin was $15.2 million and $28.5 million
for 2020 and 2019, respectively, a decrease of $13.3 million, or 47%, largely
due to a decrease in bunkering activity.

Our commercial sales were $1.4 billion and $1.3 billion for 2019 and 2018,
respectively, an increase of $0.1 billion, or 8%, due to an increase in volume
sold. Our commercial product margin was $28.5 million and $23.6 million for 2019
and 2018, respectively, an increase of $4.9 million, or 21%, primarily due to
favorable market conditions in bunkering.

Selling, General and Administrative Expenses

SG&A expenses were $192.5 million and $170.9 million for 2020 and 2019, respectively, an increase of


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$21.6 million, or 13%, including increases of $16.6 million in accrued
discretionary incentive compensation, $1.6 million in wages and benefits,
$1.4 million in costs associated with the COVID-19 pandemic, $1.3 million in
advertising costs and $1.0 million in professional fees, offset by a decrease of
$0.3 million in various other SG&A expenses.

SG&A expenses were $170.9 million and $171.0 million for 2019 and 2018,
respectively, a decrease of $0.1 million, or less than 1%, including decreases
of $4.6 million in incentive compensation and $3.9 million in acquisition costs
recorded in 2018 that were not incurred in 2019, offset by increases of
$5.6 million in wages and $2.1 million in benefits in part to support our GDSO
business, including the 2018 Acquisitions, and $0.7 million in various SG&A
expenses.

Operating Expenses


Operating expenses were $323.3 million and $342.4 million for 2020 and 2019,
respectively, a decrease of $19.1 million, or 6%, due to a decrease of
$21.4 million associated with our GDSO operations, in part due to lower credit
card fees related to the reduction in volume and price, lower maintenance and
repair expenses and lower salary expense in part attributable to reduced store
hours, all of which were partly the result of the COVID-19 pandemic. The
decrease in operating expenses was offset by an increase of $2.3 million
associated with our terminal operations, primarily related to higher maintenance
and repair expenses.

Operating expenses were $342.4 million and $321.1 million for 2019 and 2018,
respectively, an increase of $21.3 million, or 7%, due to an increase of
$21.9 million associated with our GDSO operations, primarily due to the 2018
Acquisitions, partially offset by decreases in expenses associated with our
terminal operations and with the sale of sites.

Gain on Trustee Taxes

In 2018, we recognized a one-time gain of approximately $52.6 million as a
result of the extinguishment of a contingent liability related to the Volumetric
Ethanol Excise Tax Credit, which tax credit program expired in 2011. Based upon
the significant passage of time from that 2011 expiration date, including
underlying statutes of limitation, as of January 31, 2018 we determined that the
liability was no longer required.

See Note 2 of Notes to Consolidated Financial Statements, "Summary of Significant Accounting Policies-Trustee Taxes" for additional information.

Lease Exit and Termination Gain


In December 2016, we voluntarily terminated early a sublease with a counterparty
for 1,610 railcars that were underutilized due to unfavorable market conditions
in the crude oil by rail market. Separately, we entered into a fleet management
services agreement (effective January 1, 2017) (the "Services Agreement") with
the counterparty, pursuant to which we would provide railcar storage, freight,
insurance and other services on behalf of the counterparty. During each of 2019
and 2018, we were released from certain of our obligations under the Services
Agreement, which resulted in a reduction of the remaining accrued incremental
costs of $0.5 million and $3.5 million for the years ended December 31, 2019 and
2018, respectively, which benefit is included in lease exit and termination gain
in the accompanying statements of operations.

Amortization Expense

Amortization expense related to our intangible assets was $10.8 million, $11.4 million and $11.0 million for 2020, 2019 and 2018, respectively.

Net (Loss) Gain on Sale and Disposition of Assets

Net (loss) gain on sale and disposition of assets was ($0.3 million), $2.7 million and ($5.9 million) for 2020,


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2019 and 2018, respectively, primarily due to the sale of GDSO sites. Included in the net (loss) gain on sale and disposition of assets is approximately $0.9 million, $2.9 million and $3.9 million for 2020, 2019 and 2018, respectively, of goodwill derecognized as part of the site divestitures.

Long-Lived Asset Impairment

We recognized an impairment charge relating to certain right-of-use assets in
the amount of $1.9 million for 2020, of which $1.7 million was allocated to the
Wholesale segment and $0.2 million was allocated to the GDSO segment. We had no
impairment charges relating to right-of-use assets for 2019 and 2018.

We recognized an impairment charge relating to long-lived assets used at certain gasoline stations and convenience stores in the amount of $0.3 million, $2.0 million and $0.4 million for 2020, 2019 and 2018, respectively, These assets are allocated to the GDSO segment.

Interest Expense


Interest expense was $83.5 million and $89.9 million for 2020 and 2019,
respectively, a decrease of $6.4 million, or 7%, due to 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.

Interest expense was $89.9 million and $89.1 million for 2019 and 2018, respectively, an increase of $0.7 million, or less than 1%, primarily due to higher interest rates for 2019 compared to 2018, partially offset by lower average balances on our credit facilities.

Loss on Early Extinguishment of Debt

In 2020 as a result of the redemption of the 2023 Notes, we recorded a $7.2 million loss from early extinguishment of debt, consisting of a $5.3 million cash call premium and a $1.9 million non-cash write-off of remaining unamortized deferred financing fees.

In 2019 as a result of the repurchase of the 2022 Notes, we recorded a $13.1 million loss from early extinguishment of debt, 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.

Please read "-Liquidity and Capital Resources-Senior Notes" for additional information.

Income Tax Benefit (Expense)


Income tax benefit (expense) was $0.1 million, ($1.1 million) and ($5.6 million)
for 2020, 2019 and 2018, respectively, which reflects the income tax (benefit)
expense from the operating results of GMG, which is a taxable entity for federal
and state income tax purposes. For 2020, the income tax benefit consists of an
income tax benefit of $6.3 million (discussed below) offset by an income tax
expense of ($6.2 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
for 2020. On January 15, 2021, we received cash refunds totaling $15.8 million
associated with the carryback of losses generated in 2018 with respect to the
2016 and 2017 tax years.

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Net Loss Attributable to Noncontrolling Interest

In February 2013, we acquired a 60% membership interest in Basin Transload. The
net loss attributable to noncontrolling interest was $0.5 million, $0.7 million
and $1.5 million for 2020, 2019 and 2018, respectively, which represents the 40%
noncontrolling ownership of the net loss reported. In connection with the terms
of an agreement between the minority members of Basin Transload and us, on
September 29, 2020, we acquired the minority members' collective 40% interest in
Basin Transload (see Note 23 of Notes to Consolidated Financial Statements 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, third and fourth
quarters of 2020. 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 $283.9 million and $250.6 million at December 31, 2020 and
2019, respectively, an increase of $33.3 million. Changes in current assets and
current liabilities increasing our working capital include decreases of
$165.5 million in accounts payable and $114.5 million in the current portion of
our working capital revolving credit facility, primarily due to lower prices,
for a total increase in working capital of $280.0 million. The increase in
working capital was offset by decreases of $185.9 million in accounts receivable
and $66.1 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
November 13, 2020                $ 17.3 million      Third quarter 2020


In addition, on January 26, 2021, the board of directors of our general partner
declared a quarterly cash distribution of $0.55 per unit ($2.20 per unit on an
annualized basis) on all of our outstanding common units for the period from
October 1, 2020 through December 31, 2020 to our common unitholders of record as
of the close of business February 8, 2020. This distribution resulted in our
reaching our third target level distribution for the quarter ended December 31,
2020. On February 12, 2021, we paid the total cash distribution of approximately
$19.3 million.

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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
November 16, 2020                $ 1.7 million    August 15, 2020 - November 14, 2020


In addition, on January 19, 2021, 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
November 15, 2020 through February 14, 2021 to our preferred unitholders of
record as of the opening of business on February 1, 2021. On February 21, 2021,
we paid the total cash distribution of approximately $1.7 million.

Contractual Obligations


We have contractual obligations that are required to be settled in cash. The
amounts of our contractual obligations at December 31, 2020 were as follows
(in
thousands):




                                                    Payments Due by Period
                                                                            2025 and
Contractual Obligations      2021        2022        2023        2024      Thereafter       Total
Credit facility
obligations (1)            $  43,433$ 274,673   $       -   $       -   $         -   $   318,106
Senior notes obligations
(2)                           40,031      52,063      52,063      52,063       942,282     1,138,502
Operating lease
obligations (3)               94,460      66,371      52,923      41,392       128,925       384,071
Other long-term
liabilities (4)               28,916      22,078      13,222      13,123        41,417       118,756
Financing obligations
(5)                           15,024      15,268      15,518      15,774        82,158       143,742
Total                      $ 221,864$ 430,453$ 133,726$ 122,352

$ 1,194,782$ 2,103,177

Includes principal and interest on our working capital revolving credit

facility and our revolving credit facility at December 31, 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 (2) are required prior to maturity. See "-Liquidity and Capital Resources-Senior

Notes" for additional information on our senior notes.

Includes operating lease obligations related to leases for office space and (3) computer equipment, land, gasoline stations, railcars and barges. See Note 3

of Notes to Consolidated Financial Statements for additional information.

Includes amounts related to our 15-year brand fee agreement entered into in

2010 with ExxonMobil and amounts related to our pipeline connection (4) agreements, natural gas transportation and reservation agreements and access

right agreements (see Note 11 of Notes to Consolidated Financial Statements

for additional information on these 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.



See Note 3 of Notes to Consolidated Financial Statements with respect to sublease information related to certain lease agreements and Note 11 of Notes to Consolidated Financial Statements with respect to purchase commitments.

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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 $47.0 million, $49.9 million and
$38.6 million in maintenance capital expenditures for the years ended
December 31, 2020, 2019 and 2018, respectively, which are included in capital
expenditures in the accompanying consolidated statements of cash flows, of which
approximately $37.3 million, $45.0 million and $33.6 million for 2020, 2019 and
2018, 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 $29.3 million, $33.0 million and $175.7 million in
expansion capital expenditures, including acquisitions, for the years ended
December 31, 2020, 2019 and 2018, respectively, primarily related to investments
in our gasoline station business.

In 2020, the $29.3 million in expansion capital expenditures included
approximately $23.7 million in raze and rebuilds, expansion and improvements at
retail gasoline stations and new-to-industry sites and $5.6 million in other
expansion capital expenditures, primarily related to investments at our
terminals and information technology projects.

In 2019, the $33.0 million in expansion capital expenditures included
approximately $31.1 million in raze and rebuilds, expansion and improvements at
retail gasoline stations and new-to-industry sites and $1.9 million in other
expansion capital expenditures, primarily related to investments at our
terminals and information technology projects.

In 2018, the $175.7 million in expansion capital expenditures included
approximately $145.1 million in property and equipment associated with the
acquisitions of Cheshire and Champlain. In addition, we had $30.6 million in
expansion capital expenditures primarily related to investments in our gasoline
stations, including, in part, raze and rebuilds and new-to-industry sites.

We currently expect maintenance capital expenditures of approximately
$45.0 million to $55.0 million and expansion capital expenditures, excluding
acquisitions, of approximately $40.0 million to $50.0 million in 2021, 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.

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Cash Flow

The following table summarizes cash flow activity for the years ended
December 31 (in thousands):




                                                2020           2019          2018

Net cash provided by operating activities $ 312,526$ 94,402 $

168,856

Net cash used in investing activities $ (69,728)$ (67,214)$ (225,720) Net cash used in financing activities $ (245,126)$ (23,267) $

   50,127


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.

Net cash provided by operating activities was $312.5 million, $94.4 million and
$168.9 million for 2020, 2019 and 2018, respectively, for a year-over-year
increase in cash flow from operating activities of $218.1 million in 2020 and a
decrease of $74.5 million in 2019. For 2018, cash flow from operating activities
was not impacted by the non-cash gain of $52.6 million as a result of the
extinguishment of a contingent liability related to the Volumetric Ethanol
Excise Tax Credit. This gain was included in net income and offset by the
corresponding decrease in the liability which had historically been included in
trustee taxes (see Note 2 of Notes to Consolidated Financial Statements).

Except for net income, the primary drivers of the changes in operating activities include the following for the years ended December 31 (in thousands):



                                       2020           2019         Change          2019          2018         Change
Decrease (increase) in accounts
receivable                          $   185,168$ (78,978)$   264,146$ (78,978)$   81,898$ (160,876)
Decrease (increase) in
inventories                         $    65,588$ (64,790)$   130,378$ (64,790)$ (29,778)$  (35,012)
(Decrease) increase in accounts
payable                             $ (165,513)$   64,407$ (229,920)$   64,407$  (4,433)$    68,840
(Increase) decrease in
derivatives                         $  (12,635)$   30,030$  (42,665)$   30,030      (31,764)    $    61,794


In 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 $42.7 million due to
market direction.

In 2019, the increases in accounts receivable, inventories and accounts payable
were primarily due to higher prices. The decrease in operating cash flow was
also impacted by the year-over-year change in derivatives of $61.8 million due
to market direction.

In 2018, the decrease in accounts receivable was due largely to the take-or-pay
receivable with one particular crude oil contract customer at December 31, 2017
that was not recognized at December 31, 2018. The increase in inventories was
due to higher inventory volume.

Investing Activities


Net cash used in investing activities was $69.7 million for 2020 and included
$47.0 million in maintenance capital expenditures, $29.3 million in expansion
capital expenditures and $1.6 million in seller note issuances, offset by
$8.2 million in proceeds from the sale of property and equipment. The seller
note issuances represent notes we, the seller, received from buyers in
connection with the sale of certain of our gasoline stations.

Net cash used in investing activities was $67.2 million for 2019 and included
$49.9 million in maintenance capital expenditures, $33.0 million in expansion
capital expenditures and $1.4 million in seller note issuances, offset by
$17.1 million in proceeds from the sale of property and equipment.

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Net cash used in investing activities was $225.7 million for 2018 and included
$138.2 million and $33.4 million in cash used to fund the acquisitions of
Champlain and Cheshire, respectively, including inventory, $38.6 million in
maintenance capital expenditures, $30.6 million in expansion capital
expenditures and $3.3 million in seller note issuances, offset by $18.4 million
in proceeds from the sale of property and equipment.

Please read "-Capital Expenditures" for a discussion of our expansion capital expenditures for the years ended December 31, 2020, 2019 and 2018.

Financing Activities


Net cash used in financing activities was $245.1 million for 2020 and included
$306.5 million in payments in connection with the redemption of the 2023 Notes
and the issuance of the 2029 Notes, $139.5 million in net payments on our
working capital revolving credit facility primarily due to lower prices and an
increase in net income, $71.3 million in cash distributions to our limited
partners (preferred and common unitholders) and our general partner,
$70.7 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 $344.7 million in proceeds in
connection with the issuance of the 2029 Notes and $0.4 million in capital
contributions from our noncontrolling interest at Basin Transload.

Net cash used in financing activities was $23.3 million for 2019 and included
$381.9 million in payments in connection with the repurchase of the 2022 Notes
and the issuance of the 2027 Notes, $76.6 million in cash distributions to our
limited partners (preferred and common unitholders) and our general partner,
$27.3 million in net payments on our revolving credit facility and $0.7 million
in LTIP units withheld for tax obligations related to awards that vested in
2019. Net cash used in financing activities was offset by $392.6 million in
proceeds in connection with the issuance of the 2027 Notes and $70.6 million in
net borrowings from our working capital revolving credit facility in part due to
higher prices.

Net cash provided by financing activities was $50.1 million for 2018 and
included $66.4 million in net proceeds from the issuance of the Series A
preferred units, $26.6 million in net borrowings from our revolving credit
facility and $24.0 million in borrowings from our working capital revolving
credit facility, offset by $66.0 million in cash distributions to our limited
partners (preferred and common unitholders) and our general partner and
$0.8 million in LTIP units withheld for tax obligations related to awards that
vested in 2018.

See Note 8 of Notes to Consolidated Financial Statement for supplemental cash
flow information related to our working capital revolving credit facility and
revolving credit facility for 2020, 2019 and 2018.

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. 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.

In addition, the credit agreement has an accordion feature whereby we may request on the same terms and


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conditions then applicable to the credit agreement, provided no Event of Default
(as defined in the credit agreement) then exists, an increase to the working
capital revolving credit facility, the revolving credit facility, or both, by up
to another $300.0 million, in the aggregate, for a total credit facility of up
to $1.47 billion. Any such request for an increase must be in a minimum amount
of $25.0 million. We cannot provide assurance, however, that our lending group
will agree to fund any request by us for additional amounts in excess of the
total available commitments of $1.17 billion.

In addition, the credit agreement includes a swing line pursuant to which Bank
of America, N.A., as the swing line lender, may make swing line loans in U.S.
dollars in an aggregate amount equal to the lesser of (a) $75.0 million and
(b) the Aggregate WC Commitments (as defined in the credit agreement). Swing
line loans will bear interest at the Base Rate (as defined in the credit
agreement). The swing line is a sub-portion of the working capital revolving
credit facility and is not an addition to the total available commitments of
$1.17 billion.

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. Under the credit agreement, borrowings
under the working capital revolving credit facility cannot exceed the then
current borrowing base. 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. These and other events could require us to seek
waivers or amendments of covenants or alternative sources of financing or to
reduce expenditures. We can provide no assurance that such waivers, amendments
or alternative financing could be obtained or, if obtained, would be on terms
acceptable to us.

Borrowings under the working capital revolving credit facility bear interest at
(1) the Eurocurrency rate subject to a floor of 0.75% plus 2.125% to 2.625%,
(2) the cost of funds rate subject to a floor of 0.50% plus 2.125% to 2.625%, or
(3) the base rate plus 1.125% to 1.625%, each depending on the Utilization
Amount (as defined in the credit agreement). Borrowings under the revolving
credit facility bear interest at (1) the Eurocurrency rate subject to a floor of
0.75% plus 1.75% to 3.25%, (2) the cost of funds rate subject to a floor of
0.50% plus 1.75% to 3.25%, or (3) the base rate plus 0.75% to 2.25%, each
depending on the Combined Total Leverage Ratio (as defined in the credit
agreement).

The average interest rates for the credit agreement were 2.9%, 4.3% and 4.0% for the years ended December 31, 2020, 2019 and 2018, respectively.


On July 27, 2017, the U.K. Financial Conduct Authority announced that it intends
to stop persuading or compelling banks to submit LIBOR rates after 2021. Under
our credit agreement, if a comparable or successor rate to LIBOR is approved by
Bank of America, N.A., in its capacity as administrative agent under our credit
agreement, the approved rate will be applied in a manner consistent with market
practice. To the extent market practice is not administratively feasible for the
administrative agent, the approved rate will be applied in a manner otherwise
reasonably determined by the administrative agent. We currently do not expect
the transition from LIBOR to have a material impact on us. However, if clear
market standards and replacement methodologies have not developed as of the time
LIBOR becomes unavailable, we may have difficulty reaching agreement on
acceptable replacement rates under our credit agreement. In the event that we do
not reach agreement on an acceptable replacement rate for LIBOR, outstanding
borrowings under the credit agreement denominated in U.S. dollars would revert
to a floating rate equal to the base rate (which is equal to the greatest of the
administrative agent's prime rate, the Federal Funds effective rate plus 0.50%,
or 1-month LIBOR plus 1.00%) plus the applicable margin applicable to the
alternative base rate which is currently equal to between 0.75% and 1.75%. If we
are unable to negotiate replacement rates on favorable terms, it could have a
material adverse effect on our financial condition, results of operations and
cash distributions to unitholders.

The credit agreement provides for a letter of credit fee equal to the then
applicable working capital rate or then applicable revolver rate (each such rate
as defined in the credit agreement) per annum for each letter of credit issued.
In addition, we incur a commitment fee on the unused portion of each facility
under the credit agreement, ranging from 0.35% to 0.50% per annum.

As of December 31, 2020, we had total borrowings outstanding under the credit agreement of $306.4 million, including $122.0 million outstanding on the revolving credit facility. In addition, we had outstanding letters of credit of


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$85.1 million. Subject to borrowing base limitations, the total remaining availability for borrowings and letters of credit was $778.5 million and $660.2 million at December 31, 2020 and 2019, respectively.

The credit agreement is secured by substantially all of our assets and the
assets of our wholly owned subsidiaries and is guaranteed by us and our
subsidiaries, Bursaw Oil LLC, Global Partners Energy Canada ULC, Warex Terminals
Corporation, Drake Petroleum Company, Inc., Puritan Oil Company, Inc., Maryland
Oil Company, Inc. and Basin Transload, LLC.

The credit agreement also includes certain baskets, including (i) a
$25.0 million general secured indebtedness basket, (ii)  a $25.0 million general
investment basket, (iii) a $75.0 million secured indebtedness basket to permit
the borrowers to enter into a Contango Facility (as defined in the credit
agreement), (iv) a Sale/Leaseback Transaction (as defined in the credit
agreement) basket of $100.0 million, and (v) a basket of $50.0 million in an
aggregate amount for the purchase of our common units, provided that no Event of
Default exists or would occur immediately following such purchase(s).

In addition, the credit agreement provides the ability for the borrowers to
repay certain junior indebtedness, subject to a $100.0 million cap, so long as
no Event of Default has occurred or will exist immediately after making such
repayment.

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 December 31, 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).

Senior Notes

6.875% Senior Notes Due 2029

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 the
2023 Notes and to repay a portion of the borrowings outstanding under our credit
agreement. The redemption of the 2023 Notes occurred on October 23, 2020.

As a result of the redemption of the 2023 Notes, we recorded a $7.2 million loss from the early extinguishment of debt for the year ended December 31, 2020, consisting of a $5.3 million cash call premium and a $1.9 million non-cash write-off of remaining unamortized deferred financing fees.

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 as supplemented by the First Supplemental Indenture dated
October 28, 2020 (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

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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.

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, prior to 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 its 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. Pursuant to the 2029 Notes Registration Rights
Agreement, the Issuers and the subsidiary guarantors completed an exchange of
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 on February 1, 2021. All of the 2029 Notes were exchanged for SEC-registered
notes.

7.00% Senior Notes Due 2027


On July 31, 2019, the Issuers issued $400.0 million aggregate principal amount
of 7.00% senior notes due 2027 to the 2027 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 repurchase of the 2022 Notes
in a tender offer and to repay a portion of the borrowings outstanding under our
credit agreement. The redemption of the 2022 Notes occurred on August 30, 2019.

As a result of the repurchase of the 2022 Notes, we recorded a $13.1 million
loss from early extinguishment of debt for the year ended December 31, 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.

2027 Notes Indenture


In connection with the private placement of the 2027 Notes on July 31, 2019, the
Issuers and the subsidiary guarantors and Regions Bank (as successor trustee to
Deutsche Bank Trust Company Americas), as trustee, entered into

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an indenture as supplemented by the First Supplemental Indenture dated October 28, 2020 (the "2027 Notes Indenture").


The 2027 Notes will mature on August 1, 2027 with interest accruing at a rate of
7.00% per annum and payable semi-annually in arrears on February 1 and August 1
of each year, commencing February 1, 2020. The 2027 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 2027 Notes Indenture. Upon
a continuing event of default, the trustee or the holders of at least 25% in
principal amount of the 2027 Notes may declare the 2027 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 2027 Notes to become due and
payable.

Prior to August 1, 2022, the Issuers have the option to redeem up to 35% of the
2027 Notes in an amount not greater than the net cash proceeds of certain equity
offerings at a redemption price (expressed as a percentage of principal amount)
of 107% plus accrued and unpaid interest, if any. The Issuers have the option to
redeem the 2027 Notes, in whole or in part, at any time on or after August 1,
2022, at the redemption prices of 103.500% for the twelve-month period beginning
on August 1, 2022, 102.333% for the twelve-month period beginning August 1,
2023, 101.167% for the twelve-month period beginning August 1, 2024, and 100%
beginning on August 1, 2025 and at any time thereafter, together with any
accrued and unpaid interest to the date of redemption. In addition, prior to
August 1, 2022, the Issuers may redeem all or any part of the 2027 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 2027 Notes may require the Issuers to repurchase the 2027
Notes following certain asset sales or a Change of Control Triggering Event (as
defined in the 2027 Notes Indenture) at the prices and on the terms specified in
the 2027 Notes Indenture.

The 2027 Notes Indenture contains covenants that will 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 2027 Notes Indenture include (i) a default in payment of principal of, or
interest or premium, if any, on, the 2027 Notes, (ii) breach of our covenants
under the 2027 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.

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 $9.3 million, $9.3 million and
$9.4 million was recorded for the years ended December 31, 2020, 2019 and 2018,
respectively, and 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
$10.1 million, $9.9 million and $9.7 million for the years ended December 31,
2020, 2019 and 2018, respectively. The financing obligation balance outstanding
at December 31, 2020 was $86.1 million associated with the Capitol acquisition.

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


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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"). The Master Unitary
Lease Agreement provides for an initial term of fifteen years that expires in
2031. We have one successive option to renew the lease for a ten-year period
followed by two successive options to renew the lease for five-year periods on
the same terms, covenants, conditions and rental as the primary non-revocable
lease term. We do not have any residual interest nor the option to repurchase
any of the sites at the end of the lease term. The proceeds from the
Sale-Leaseback Transaction were used to reduce indebtedness outstanding under
our revolving credit facility.

The sale did not meet the criteria for sale accounting as of December 31, 2020
due to prohibited continuing involvement. Specifically, the sale is considered a
partial-sale transaction, which is a form of continuing involvement as we did
not transfer to the Buyer the storage tank systems which are considered integral
equipment of the Sale-Leaseback Sites. Additionally, a portion of the sold sites
have material sub-lease arrangements, which is also a form of continuing
involvement. As the sale of the Sale-Leaseback Sites did not meet the criteria
for sale accounting, we did not recognize a gain or loss on the sale of the
Sale-Leaseback Sites for the year ended December 31, 2020.

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. Interest expense was $4.3 million, $4.4 million and $4.4 million for
the years ended December 31, 2020, 2019 and 2018, respectively, and lease rental
payments were $4.7 million, $4.6 million and $4.5 million for the years ended
December 31, 2020, 2019 and 2018, respectively. The financing obligation balance
outstanding at December 31, 2020 was $62.0 million associated with the
Sale-Leaseback Transaction.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Impact of Inflation


Inflation has been relatively low in recent years and did not have a material
impact on our results of operations for the years ended December 31, 2020,
2019
and 2018.

Environmental Matters

Our businesses of purchasing, storing, supplying and distributing refined
petroleum products, gasoline blendstocks, renewable fuels, crude oil and propane
and other business activities, involves a number of activities that are subject
to extensive and stringent environmental laws. For a complete discussion of the
environmental laws and regulations affecting our businesses, please read Items 1
and 2, "Business and Properties-Environmental." For additional information
regarding our environmental liabilities, see Note 14 of Notes to Consolidated
Financial Statements included elsewhere in this report.

Critical Accounting Policies and Estimates


A summary of the significant accounting policies that we have adopted and
followed in the preparation of our consolidated financial statements is detailed
in Note 2 of Notes to Consolidated Financial Statements. Certain of these
accounting policies require the use of estimates. 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

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impact on our financial condition and results of operations and are recorded in
the period in which they become known. The COVID-19 pandemic 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. We have identified the following estimates
that, in our opinion, are subjective in nature, require the exercise of judgment
and involve complex analysis:

Inventory


We hedge substantially all of our petroleum and ethanol inventory using a
variety of instruments, primarily exchange-traded futures contracts. These
futures contracts are entered into when inventory is purchased and are either
designated as fair value hedges against the inventory on a specific barrel basis
for inventories qualifying for fair value hedge accounting or not designated and
maintained as economic hedges against certain inventory of ours on a specific
barrel basis. Changes in fair value of these futures contracts, as well as the
offsetting change in fair value on the hedged inventory, are recognized in
earnings as an increase or decrease in cost of sales. All hedged inventory
designated in a fair value hedge relationship is valued using the lower of cost,
as determined by specific identification, or net realizable value, as determined
at the product level. All petroleum and ethanol inventory not designated in a
fair value hedging relationship is carried at the lower of historical cost, on a
first-in, first-out basis, or net realizable value. RIN inventory is carried at
the lower of historical cost, on a first-in, first-out basis, or net realizable
value. Convenience store inventory is carried at the lower of historical cost,
based on a weighted average cost method, or net realizable value.

In addition to our own inventory, we have exchange agreements for petroleum
products and ethanol with unrelated third-party suppliers, whereby we may draw
inventory from these other suppliers and suppliers may draw inventory from us.
Positive exchange balances are accounted for as accounts receivable. Negative
exchange balances are accounted for as accounts payable. Exchange transactions
are valued using current carrying costs.

Leases


We have gasoline station and convenience store leases, primarily of land and
buildings. We have terminal and dedicated storage facility lease arrangements
with various petroleum terminals and third parties, of which certain
arrangements have minimum usage requirements. We lease barges through various
time charter lease arrangements and railcars through various lease arrangements.
We also have leases for office space, computer and convenience store equipment
and automobiles. Our lease arrangements have various expiration dates with
options to extend.

We are also the lessor party to various lease arrangements with various expiration dates, including the leasing of gasoline stations and certain equipment to third-party station operators and cobranding lease agreements for certain space within our gasoline stations and convenience stores.


In addition, we are party to three master unitary lease agreements in connection
with (i) the June 2015 acquisition of retail gasoline stations from Capitol
related to properties previously sold by Capitol within two sale-leaseback
transactions; and (ii) the June 2016 sale of real property assets at 30 gasoline
stations and convenience stores that did not meet the criteria for sale
accounting. These transactions continue to be accounted for as financing
obligations upon transition to ASC 842, "Leases," which we adopted on January 1,
2019.

Accounting and reporting guidance for leases requires that leases be evaluated
and classified as either operating or finance leases by the lessee and as either
operating, sales-type or direct financing leases by the lessor. Our operating
leases are included in right-of-use ("ROU") assets, lease liability-current
portion and long-term lease liability-less current portion in the accompanying
consolidated balance sheets.

ROU assets represent our right to use an underlying asset for the lease term,
and lease liabilities represent the obligation to make lease payments arising
from the lease. ROU assets and liabilities are recognized at the lease
commencement date based on the present value of lease payments over the lease
term. Our variable lease payments

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consist of payments that depend on an index or rate (such as the Consumer Price
Index) as well as those payments that depend on our performance or use of the
underlying asset related to the lease. Variable lease payments are excluded from
the ROU assets and lease liabilities and are recognized in the period in which
the obligation for those payments is incurred. As most of our leases do not
provide an implicit rate in determining the net present value of lease payments,
we use our incremental borrowing rate based on the information available at the
lease commencement date. ROU assets also include any lease payments made and
exclude lease incentives. Many of our lessee agreements include options to
extend the lease, which are not included in the minimum lease terms unless they
are reasonably certain to be exercised. Rental expense for lease payments
related to operating leases is recognized on a straight-line basis over the
lease term.

Rental income for lease payments received related to operating leases is recognized on a straight-line basis over the lease term.


We have elected the package of practical expedients permitted under the
transition guidance within the new standard which, among other things, allows us
to carry forward the historical accounting relating to lease identification and
classification for existing leases upon adoption. Leases with an initial term of
12 months or less are not recorded on the balance sheet as we recognize lease
expense for these leases on a straight-line basis over the lease term.

Our leases have contracted terms as follows:

Gasoline station and convenience store leases                              1-20 years
Terminal lease arrangements                                                 1-5 years
Dedicated storage facility leases                                           1-5 years
Barge and railcar equipment leases                                         1-10 years
Office space leases                                                       

1-12 years Computer equipment, convenience store equipment and automobile leases 1-5 years



The above table excludes our West Coast facility land lease arrangement which
contract term is subject to expiration through July 2066. Some of the above
leases include options to extend the leases for up to an additional 30 years. We
do not include renewal options in our lease terms for calculating the lease
liability unless we are reasonably certain the renewal options are to be
exercised. The depreciable life of assets and leasehold improvements are limited
by the expected lease term, unless there is a transfer of title or purchase
option reasonably certain of exercise.

Revenue Recognition


Our sales relate primarily to the sale of refined petroleum products, gasoline
blendstocks, renewable fuels and crude oil are recognized along with the related
receivable upon delivery, net of applicable provisions for discounts and
allowances. We may also provide for shipping costs at the time of sale, which
are included in cost of sales.

Contracts with customers typically contain pricing provisions that are tied to a
market index, with certain adjustments based on quality and freight due to
location differences and prevailing supply and demand conditions, as well as
other factors. As a result, the price of the products fluctuates to remain
competitive with other available product supplies. The revenue associated with
such arrangements is recognized upon delivery.

In addition, we generate revenue from our logistics activities when we store,
transload and ship products owned by others. Revenue from logistics services is
recognized as services are provided.

Logistics agreements may require counterparties to throughput a minimum volume
over an agreed-upon period and may include make-up rights if the minimum volume
is not met. We recognize revenue associated with make-up rights at the earlier
of when the make-up volume is shipped, the make-up right expires or when it is
determined that the likelihood that the shipper will utilize the make-up right
is remote.

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We also recognize convenience store sales of gasoline, grocery and other merchandise and sundries at the time of the sale to the customer. Gasoline station rental income is recognized on a straight-line basis over the term of the lease.

Product revenue is not recognized on exchange agreements, which are entered into
primarily to acquire various refined petroleum products, gasoline blendstocks,
renewable fuels and crude oil of a desired quality or to reduce transportation
costs by taking delivery of products closer to our end markets. We recognize net
exchange differentials due from exchange partners in sales upon delivery of
product to an exchange partner. We recognize net exchange differentials due to
exchange partners in cost of sales upon receipt of product from an exchange
partner.

The amounts recorded for bad debts are generally based upon a specific analysis
of aged accounts while also factoring in any new business conditions that might
impact the historical analysis, such as market conditions and bankruptcies of
particular customers. Bad debt provisions are included in selling, general
and
administrative expenses.

Trustee Taxes

We collect trustee taxes, which consist of various pass through taxes collected
on behalf of taxing authorities, and remit such taxes directly to those taxing
authorities. Examples of trustee taxes include, among other things, motor fuel
excise tax and sales and use tax. As such, it is our policy to exclude trustee
taxes from revenues and cost of sales and account for them as current
liabilities. We may be subject to audits of our state and federal tax returns
prepared for trustee taxes.

Derivative Financial Instruments


We principally use derivative instruments, which include regulated
exchange-traded futures and options contracts (collectively, "exchange-traded
derivatives") and physical and financial forwards and over-the counter ("OTC")
swaps (collectively, "OTC derivatives"), to reduce our exposure to unfavorable
changes in commodity market prices. We use these exchange-traded and OTC
derivatives to hedge commodity price risk associated with our inventory, fuel
purchases and undelivered forward commodity purchases and sales ("physical
forward contracts"). We account for derivative transactions in accordance with
ASC Topic 815, "Derivatives and Hedging," and recognize derivatives instruments
as either assets or liabilities in the consolidated balance sheet and measure
those instruments at fair value. The changes in fair value of the derivative
transactions are presented currently in earnings, unless specific hedge
accounting criteria are met.

The fair value of exchange-traded derivative transactions reflects amounts that
would be received from or paid to our brokers upon liquidation of these
contracts. The fair value of these exchange-traded derivative transactions is
presented on a net basis, offset by the cash balances on deposit with our
brokers, presented as brokerage margin deposits in the consolidated balance
sheets. The fair value of OTC derivative transactions reflects amounts that
would be received from or paid to a third party upon liquidation of these
contracts under current market conditions. The fair value of these OTC
derivative transactions is presented on a gross basis as derivative assets or
derivative liabilities in the consolidated balance sheets, unless a legal right
of offset exists. The presentation of the change in fair value of our
exchange-traded derivatives and OTC derivative transactions depends on the
intended use of the derivative and the resulting designation.

Derivatives Accounted for as Hedges-We utilize fair value hedges and cash flow hedges to hedge commodity price risk.

Fair Value Hedges

Derivatives designated as fair value hedges are used to hedge price risk in
commodity inventories and principally include exchange-traded futures contracts
that are entered into in the ordinary course of business. For a derivative
instrument designated as a fair value hedge, the gain or loss is recognized in
earnings in the period of change together with the offsetting change in fair
value on the hedged item of the risk being hedged. Gains and losses related
to

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fair value hedges are recognized in the consolidated statements of operations
through cost of sales. These futures contracts are settled on a daily basis by
us through brokerage margin accounts.

Our fair value hedges include exchange-traded futures contracts and OTC
derivative contracts that are hedges against inventory with specific futures
contracts matched to specific barrels. The change in fair value of these futures
contracts and the change in fair value of the underlying inventory generally
provide an offset to each other in the consolidated statement of operations.

Cash Flow Hedges

Our sales and cost of sales fluctuate with changes in commodity prices. In
addition to our commodity price risk associated with our inventory and
undelivered forward commodity purchases and sales, our gross profit may
fluctuate in periods where commodity prices are rising or declining depending on
the magnitude and duration of the commodity price change. In our GDSO segment,
we have observed trends where margins may improve in periods where wholesale
gasoline prices are declining and margins may compress during periods where
wholesale gasoline prices are rising. Additionally, we have certain operating
costs that are indirectly impacted by fluctuations in commodity prices such that
our operating costs may increase during periods where margins compress and,
conversely, operating costs may decrease during periods where margins improve.
To hedge our cash flow risk as a result of this observed trend in the GDSO
segment, we entered into exchange-traded commodity swap contracts and designated
them as a cash flow hedge of our fuel purchases designed to reduce our cost of
fuel if market prices rise through 2021 or increase our cost of fuel if market
prices decrease through 2021. For a derivative instrument being designated as a
cash flow hedge, the effective portion of the derivative gain or loss is
initially reported as a component of other comprehensive income (loss) and
subsequently reclassified into the consolidated statement of income through cost
of goods sold in the same period that the hedged exposure affects earnings.

Derivatives Not Accounted for as Hedges-We utilize petroleum and ethanol commodity contracts to hedge price and currency risk in certain commodity inventories and physical forward contracts.

Petroleum and Ethanol Commodity Contracts

We use exchange-traded derivative contracts to hedge price risk in certain
commodity inventories which do not qualify for fair value hedge accounting or
are not designated by us as fair value hedges. Additionally, we use
exchange-traded derivative contracts, and occasionally financial forward and OTC
swap agreements, to hedge commodity price exposure associated with our physical
forward contracts which are not designated by us as cash flow hedges. These
physical forward contracts, to the extent they meet the definition of a
derivative, are considered OTC physical forwards and are reflected as derivative
assets or derivative liabilities in the consolidated balance sheet. The related
exchange-traded derivative contracts (and financial forward and OTC swaps, if
applicable) are also reflected as brokerage margin deposits (and derivative
assets or derivative liabilities, if applicable) in the consolidated balance
sheet, thereby creating an economic hedge. Changes in fair value of these
derivative instruments are recognized in the consolidated statement of
operations through cost of sales. These exchange traded derivatives are settled
on a daily basis by us through brokerage margin accounts.

While we seek to maintain a position that is substantially balanced within our
commodity product purchase and sale activities, we may experience net unbalanced
positions for short periods of time as a result of variances in daily purchases
and sales and transportation and delivery schedules as well as other logistical
issues inherent in our businesses, such as weather conditions. In connection
with managing these positions, we are aided by maintaining a constant presence
in the marketplace. We also engage in a controlled trading program for up to an
aggregate of 250,000 barrels of commodity products at any one point in time.
Changes in fair value of these derivative instruments are recognized in the
consolidated statements of operations through cost of sales.

Margin Deposits

All of our exchange-traded derivative contracts (designated and not designated) are transacted through clearing brokers. We deposit initial margin with the clearing brokers, along with variation margin, which is paid or received on a


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daily basis, based upon the changes in fair value of open futures contracts and
settlement of closed futures contracts. Cash balances on deposit with clearing
brokers and open equity are presented on a net basis within brokerage margin
deposits in the consolidated balance sheets.

Goodwill


Goodwill represents the future economic benefits arising from assets acquired in
a business combination that are not individually identified and separately
recognized. We have concluded that our operating segments are also our reporting
units. Goodwill is tested for impairment annually as of October 1 or when events
or changes in circumstances indicate that the carrying amount of goodwill may
not be recoverable. Derecognized goodwill associated with our disposition
activities of GDSO sites is included in the carrying value of assets sold in
determining the gain or loss on disposal, to the extent the disposition of
assets qualifies as a disposition of a business under ASC 805. The GDSO
reporting unit's goodwill that was derecognized related to the disposition of
sites that met the definition of a business was $0.9 million, $2.9 million and
$3.9 million for the years ended December 31, 2020, 2019 and 2018, respectively
(see Note 7 of Notes to Consolidated Financial Statements).

All of our goodwill is allocated to the GDSO segment. During 2020, 2019 and
2018, we completed a quantitative assessment for the GDSO reporting unit.
Factors included in the assessment included both macro-economic conditions and
industry specific conditions, and the fair value of the GDSO reporting unit was
estimated using a weighted average of a discounted cash flow approach and a
market comparables approach. Based on our assessment, no impairment was
identified.

Evaluation of Long-Lived Asset Impairment


Accounting and reporting guidance for long-lived assets requires that a
long-lived asset (group) be reviewed for impairment when events or changes in
circumstances indicate that the carrying amount might not be recoverable.
Accordingly, we evaluate long-lived assets for impairment whenever indicators of
impairment are identified. If indicators of impairment are present, we assess
impairment by comparing the undiscounted projected future cash flows from the
long-lived assets to their carrying value. If the undiscounted cash flows are
less than the carrying value, the long-lived assets will be reduced to their
fair value.

Environmental and Other Liabilities


We record accrued liabilities for all direct costs associated with the estimated
resolution of contingencies at the earliest date at which it is deemed probable
that a liability has been incurred and the amount of such liability can be
reasonably estimated. Costs accrued are estimated based upon an analysis of
potential results, assuming a combination of litigation and settlement
strategies and outcomes.

Estimated losses from environmental remediation obligations generally are
recognized no later than completion of the remedial feasibility study. Loss
accruals are adjusted as further information becomes available or circumstances
change. Costs of future expenditures for environmental remediation obligations
are not discounted to their present value. Recoveries of environmental
remediation costs from other parties are recognized when related contingencies
are resolved, generally upon cash receipt.

We are subject to other contingencies, including legal proceedings and claims
arising out of our businesses that cover a wide range of matters, including,
environmental matters and contract and employment claims. Environmental and
other legal proceedings may also include matters with respect to businesses
previously owned. Further, due to the lack of adequate information and the
potential impact of present regulations and any future regulations, there are
certain circumstances in which no range of potential exposure may be reasonably
estimated.

Recent Accounting Pronouncements

A description and related impact expected from the adoption of certain new accounting pronouncements is provided in Note 2 of Notes to Consolidated Financial Statements included elsewhere in this report.


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All news about GLOBAL PARTNERS LP
03/29GLOBAL PARTNERS LP  : S&P Revises Global Partners Outlook To Stable From Negativ..
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03/24GLOBAL PARTNERS LP  : Material Modification to Rights of Security Holders, Amend..
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03/18GLOBAL PARTNERS LP  : Entry into a Material Definitive Agreement, Financial Stat..
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03/17GLOBAL PARTNERS LP  : Prices Public Offering of Series B Preferred Units
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03/17GLOBAL PARTNERS LP  : Announces Public Offering of Series B Preferred Units
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03/09GLOBAL PARTNERS LP  : to Appoint Gregory Hanson as Chief Financial Offer Followi..
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03/09GLOBAL PARTNERS LP  : Change in Directors or Principal Officers, Regulation FD D..
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03/09GLOBAL PARTNERS LP  : Announces Chief Financial Officer Succession
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03/05GLOBAL PARTNERS LP  : Files 2020 Annual Report on Form 10-K
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03/05SECTOR UPDATE : Energy Stocks Rising as Global Oil Prices Near $70 Per Barrel
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Financials (USD)
Sales 2021 15 774 M - -
Net income 2021 48,5 M - -
Net Debt 2021 - - -
P/E ratio 2021 20,2x
Yield 2021 9,94%
Capitalization 752 M 752 M -
Capi. / Sales 2021 0,05x
Capi. / Sales 2022 0,04x
Nbr of Employees 2 958
Free-Float 78,2%
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Technical analysis trends GLOBAL PARTNERS LP
Short TermMid-TermLong Term
TrendsBearishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus UNDERPERFORM
Number of Analysts 4
Average target price 20,33 $
Last Close Price 22,14 $
Spread / Highest target -0,63%
Spread / Average Target -8,16%
Spread / Lowest Target -14,2%
EPS Revisions
Managers and Directors
NameTitle
Eric S. Slifka President, Chief Executive Officer & Vice Chairman
Daphne H. Foster Chief Financial Officer & Director
Richard B. Slifka Chairman
Mark Romaine Chief Operating Officer
Robert J. McCool Independent Director
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