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GLOBAL PARTNERS LP 10-Q 2010

Documents found in this filing:

  1. 10-Q/A
  2. Ex-31.1
  3. Ex-31.2
  4. Ex-31.2

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 


 

FORM 10-Q/A

(Amendment No. 1)

 


 

(Mark One)

 

ý

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

 

 

 

 

For the quarterly period ended June 30, 2010

 

 

 

 

 

 

 

OR

 

 

 

 

 

o

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

 

 

 

 

For the transition period from              to              

 

 

Commission file number 001-32593

 

Global Partners LP

(Exact name of registrant as specified in its charter)

 

Delaware

 

74-3140887

(State or other jurisdiction of incorporation
or organization)

 

(I.R.S. Employer Identification No.)

 

P.O. Box 9161
800 South Street
Waltham, Massachusetts 02454-9161

(Address of principal executive offices, including zip code)

 

(781) 894-8800
(Registrant’s telephone number, including area code)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),

and (2) has been subject to such filing requirements for the past 90 days.

 

Yes ý No o

 

 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or

for such shorter period that the registrant was required to submit and post such files.

 

Yes o No o

 

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  o

 

Accelerated filer  x

 

Non-accelerated filer  o

 

Smaller reporting company  o

 

 

 

 

(Do not check if a smaller reporting company)

 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Yes o No ý

 

The issuer had 11,338,139 common units and 5,642,424 subordinated units outstanding as of August 3, 2010.

 

 



 

TABLE OF CONTENTS

 

EXPLANATORY NOTE

 

 

 

PART I. FINANCIAL INFORMATION

 

 

 

Item 1. Financial Statements

 

 

 

Consolidated Balance Sheets as of June 30, 2010 (restated) and December 31, 2009

 

 

 

Consolidated Statements of Income for the three and six months ended June 30, 2010 (restated) and 2009

 

 

 

Consolidated Statements of Cash Flows for the six months ended June 30, 2010 (restated) and 2009

 

 

 

Consolidated Statements of Partners’ Equity for the six months ended June 30, 2010 (restated)

 

 

 

Notes to Consolidated Financial Statements

 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

 

 

Item 4. Controls and Procedures

 

 

 

PART II. OTHER INFORMATION

 

 

 

Item 1. Legal Proceedings

 

 

 

Item 1A. Risk Factors

 

 

 

Item 6. Exhibits

 

 

 

SIGNATURES

 

 

 

INDEX TO EXHIBITS

 

 



 

EXPLANATORY NOTE

 

This Amendment No. 1 on Form 10-Q/A amends the Quarterly Report on Form 10-Q of Global Partners LP (the “Partnership”) for the fiscal quarter ended June 30, 2010, as filed with the Securities and Exchange Commission on August 6, 2010, and restates its unaudited financial statements as of and for the three and six months ended June 30, 2010, the notes thereto and related disclosures, to reflect the error described below.  As a result, the unaudited interim financial statements included in the originally filed Form 10-Q should not be relied upon.

 

Subsequent to the quarter ended June 30, 2010, following a change in the billing protocol for a certain type of sales transaction for a specific customer, management discovered that fuel tax credits associated with such sales transactions had not been properly recorded.  This coding error resulted in the Partnership’s sales and net income being understated and accrued tax liability being overstated as of and for the three and six months ended June 30, 2010.

 

The unaudited financial statements and the notes thereto included herein have been restated to reflect this adjustment, and disclosure of the adjustment has been made to the discussion under Managements Discussion and Analysis of Financial Condition and Results of Operations.

 

For the convenience of the reader, Amendment No. 1 restates the 10-Q in its entirety.  Except as stated above, no other information has been changed from the originally filed Form 10-Q.  The Partnership has included new certifications of its officers pursuant to Sections 302 and 906 of the Sarbanes Oxley Act with this Form 10-Q/A.

 

1



 

Item 1.    Financial Statements

 

GLOBAL PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

(Unaudited)

 

 

 

June 30,

 

December 31,

 

 

 

2010

 

2009

 

 

 

(Restated)

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

4,271

 

$

662

 

Accounts receivable, net

 

252,520

 

335,912

 

Accounts receivable—affiliates

 

3,239

 

1,565

 

Inventories

 

443,296

 

465,923

 

Brokerage margin deposits

 

19,826

 

18,059

 

Fair value of forward fixed price contracts

 

8,195

 

3,089

 

Prepaid expenses and other current assets

 

49,689

 

37,648

 

Total current assets

 

781,036

 

862,858

 

 

 

 

 

 

 

Property and equipment, net

 

197,852

 

159,292

 

Intangible assets, net

 

34,766

 

28,557

 

Other assets

 

15,238

 

1,996

 

Total assets

 

$

1,028,892

 

$

1,052,703

 

 

 

 

 

 

 

Liabilities and partners’ equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

202,603

 

$

243,449

 

Working capital revolving credit facility—current portion

 

101,328

 

221,711

 

Environmental liabilities—current portion

 

3,326

 

3,296

 

Accrued expenses and other current liabilities

 

81,858

 

77,604

 

Income taxes payable

 

 

461

 

Obligations on forward fixed price contracts and other derivatives

 

9,562

 

21,114

 

Total current liabilities

 

398,677

 

567,635

 

 

 

 

 

 

 

Working capital revolving credit facility—less current portion

 

269,272

 

240,889

 

Acquisition facility

 

97,800

 

71,200

 

Environmental liabilities—less current portion

 

3,607

 

2,254

 

Accrued pension benefit cost

 

2,461

 

2,751

 

Deferred compensation

 

2,051

 

1,840

 

Other long-term liabilities

 

15,546

 

8,714

 

Total liabilities

 

789,414

 

895,283

 

 

 

 

 

 

 

Partners’ equity

 

 

 

 

 

Common unitholders (11,338,139 units issued and 11,291,312 outstanding at June 30, 2010 and 7,428,139 units issued and 7,380,996 outstanding at December 31, 2009)

 

252,141

 

165,129

 

Subordinated unitholders (5,642,424 units issued and outstanding at June 30, 2010 and December 31, 2009)

 

1,895

 

(713

)

General partner interest (230,303 equivalent units outstanding at June 30, 2010 and December 31, 2009)

 

78

 

(29

)

Accumulated other comprehensive loss

 

(14,636

)

(6,967

)

Total partners’ equity

 

239,478

 

157,420

 

Total liabilities and partners’ equity

 

$

1,028,892

 

$

1,052,703

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

2



 

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per unit data)

(Unaudited)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2010

 

2009

 

2010

 

2009

 

 

 

(Restated)

 

 

 

(Restated)

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

1,534,701

 

$

1,201,149

 

$

3,499,446

 

$

2,834,104

 

Cost of sales

 

1,502,740

 

1,173,360

 

3,419,717

 

2,755,601

 

Gross profit

 

31,961

 

27,789

 

79,729

 

78,503

 

 

 

 

 

 

 

 

 

 

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

13,891

 

13,299

 

30,469

 

31,374

 

Operating expenses

 

9,803

 

9,137

 

18,462

 

17,612

 

Amortization expenses

 

734

 

803

 

1,425

 

1,603

 

Total costs and operating expenses

 

24,428

 

23,239

 

50,356

 

50,589

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

7,533

 

4,550

 

29,373

 

27,914

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(4,374

)

(3,422

)

(8,438

)

(7,198

)

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

 

3,159

 

1,128

 

20,935

 

20,716

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

(150

)

(387

)

(875

)

 

 

 

 

 

 

 

 

 

 

Net income

 

3,159

 

978

 

20,548

 

19,841

 

 

 

 

 

 

 

 

 

 

 

Less:

General partner’s interest in net income, including incentive distribution rights

 

(107

)

(67

)

(446

)

(443

)

 

 

 

 

 

 

 

 

 

 

Limited partners’ interest in net income

 

$

3,052

 

$

911

 

$

20,102

 

$

19,398

 

 

 

 

 

 

 

 

 

 

 

Basic net income per limited partner unit

 

$

0.18

 

$

0.07

 

$

1.32

 

$

1.48

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per limited partner unit

 

$

0.18

 

$

0.07

 

$

1.30

 

$

1.46

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average limited partner units outstanding

 

16,917

 

13,059

 

15,260

 

13,065

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average limited partner units outstanding

 

17,155

 

13,356

 

15,496

 

13,273

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

3



 

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Six Months Ended
June 30,

 

 

 

2010

 

2009

 

 

 

(Restated)

 

 

 

Cash flows from operating activities

 

 

 

 

 

Net income

 

$

20,548

 

$

19,841

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

7,566

 

7,460

 

Amortization of deferred financing fees

 

1,008

 

578

 

Gain on disposition of property and equipment and other

 

(4

)

 

Bad debt expense

 

280

 

1,155

 

Stock-based compensation expense

 

(49

)

917

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

83,112

 

57,642

 

Accounts receivable — affiliate

 

(1,674

)

1,447

 

Inventories

 

22,627

 

(129,007

)

Broker margin deposits

 

(1,767

)

(16,872

)

Prepaid expenses, all other current assets and other assets

 

(25,653

)

(3,520

)

Accounts payable

 

(40,846

)

(87,559

)

Income taxes payable

 

(1,179

)

(578

)

Change in fair value of forward fixed price contracts

 

(16,658

)

159,535

 

Accrued expenses, all other current liabilities and other long-term liabilities

 

3,253

 

9,142

 

Net cash provided by operating activities

 

50,564

 

20,181

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Terminal acquisition

 

(46,046

)

 

Capital expenditures

 

(4,828

)

(6,303

)

Proceeds from sale of property and equipment

 

43

 

 

Net cash used in investing activities

 

(50,831

)

(6,303

)

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Proceeds from public offering, net

 

84,584

 

 

(Payments on) proceeds from credit facilities, net

 

(65,400

)

2,500

 

Repurchase of common units

 

 

(1,293

)

Repurchased units withheld for tax obligations

 

(404

)

 

Distributions to partners

 

(14,904

)

(13,068

)

Net cash provided by (used in) in financing activities

 

3,876

 

(11,861

)

 

 

 

 

 

 

Increase in cash and cash equivalents

 

3,609

 

2,017

 

Cash and cash equivalents at beginning of period

 

662

 

945

 

Cash and cash equivalents at end of period

 

$

4,271

 

$

2,962

 

 

 

 

 

 

 

Supplemental information

 

 

 

 

 

Cash paid during the period for interest

 

$

8,200

 

$

7,289

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

4



 

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY

(In thousands)

(Restated) (Unaudited)

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

General

 

Other

 

Total

 

 

 

Common

 

Subordinated

 

Partner

 

Comprehensive

 

Partners’

 

 

 

Unitholders

 

Unitholders

 

Interest

 

Loss

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2009

 

$

165,129

 

$

(713

)

$

(29

)

$

(6,967

)

$

157,420

 

Proceeds from public offering, net

 

84,584

 

 

 

 

84,584

 

Stock-based compensation

 

(49

)

 

 

 

(49

)

Distributions to partners

 

(9,063

)

(5,502

)

(339

)

 

(14,904

)

Phantom unit dividends

 

(48

)

 

 

 

(48

)

Repurchased units withheld for tax obligations

 

(404

)

 

 

 

(404

)

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

Net income

 

11,992

 

8,110

 

446

 

 

20,548

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of interest rate collars and forward starting swap

 

 

 

 

(7,111

)

(7,111

)

Change in pension liability

 

 

 

 

(558

)

(558

)

Total comprehensive income

 

 

 

 

 

12,879

 

Balance at June 30, 2010

 

$

252,141

 

$

1,895

 

$

78

 

$

(14,636

)

$

239,478

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

5



 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 1.                      Organization and Basis of Presentation

 

Organization

 

Global Partners LP (the “Partnership”) is a publicly traded master limited partnership that engages in the wholesale and commercial distribution of refined petroleum products and small amounts of natural gas and provides ancillary services to companies.

 

The Partnership has five operating subsidiaries:  Global Companies LLC, its subsidiary, Glen Hes Corp., Global Montello Group Corp., Chelsea Sandwich LLC and Global Energy Marketing LLC (“Global Energy”) (the five operating subsidiaries, collectively, the “Companies”).  The Companies (other than Glen Hes Corp.) are wholly owned by Global Operating LLC, a wholly owned subsidiary of the Partnership.  Global Energy was formed to conduct the Partnership’s natural gas operations.  It commenced operations in January 2010 after obtaining the necessary licensure.  In addition, GLP Finance Corp. (“GLP Finance”) is a wholly owned subsidiary of the Partnership.  GLP Finance has no material assets or liabilities.  Its activities will be limited to co-issuing debt securities and engaging in other activities incidental thereto.

 

On March 19, 2010, the Partnership completed a public offering of 3,910,000 common units at a price of $22.75 per common unit.  Net proceeds were approximately $84.6 million, after deducting approximately $4.4 million in underwriting fees and offering expenses.  The Partnership used the net proceeds to reduce indebtedness under its senior secured credit agreement.  See Note 16 for additional information related to the public offering.

 

The Partnership’s 1.34% general partner interest (reduced from 1.73% following the Partnership’s public offering discussed above and in Note 16) is held by Global GP LLC, the Partnership’s general partner (the “General Partner”).  The General Partner, which is owned by affiliates of the Slifka family, manages the Partnership’s operations and activities and employs its officers and substantially all of its personnel.  Affiliates of the General Partner, including its directors and executive officers, own 241,141 common units and 5,642,424 subordinated units, representing a combined 34.2% limited partner interest.

 

Basis of Presentation

 

Interim Financial Statements

 

The accompanying consolidated financial statements as of June 30, 2010 and December 31, 2009 and for the three and six months ended June 30, 2010 and 2009 reflect the accounts of the Partnership.  All intercompany balances and transactions have been eliminated.

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial condition and operating results for the interim periods.  The interim financial information, which has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), should be read in conjunction with the consolidated financial statements for the year ended December 31, 2009 and notes thereto contained in the Partnership’s Annual Report on Form 10-K.  The significant accounting policies described in Note 2 “Summary of Significant Accounting Policies” of such Annual Report on Form 10-K are the same used in preparing the accompanying consolidated financial statements.

 

The results of operations for the three and six months ended June 30, 2010 are not necessarily indicative of the results of operations that will be realized for the entire year ending December 31, 2010.  The consolidated balance sheet at December 31, 2009 has been derived from the audited consolidated financial statements and footnotes thereto included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2009.

 

6



 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 1.                      Organization and Basis of Presentation (continued)

 

As demand for some of the Partnership’s refined petroleum products, specifically home heating oil and residual oil for space heating purposes, is generally greater during the winter months, sales are generally higher during the first and fourth quarters of the calendar year which may result in significant fluctuations in the Partnership’s quarterly operating results.

 

The following table presents the Partnership’s products as a percentage of total sales for the periods presented:

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2010

 

2009

 

2010

 

2009

 

Distillate sales: home heating oil, diesel and kerosene

 

30

%

 

35

%

 

41

%

 

51

%

 

Gasoline sales

 

65

%

 

60

%

 

54

%

 

43

%

 

Residual oil sales

 

5

%

 

5

%

 

5

%

 

6

%

 

 

 

100

%

 

100

%

 

100

%

 

100

%

 

 

The Partnership had one customer, ExxonMobil Oil Corporation (“ExxonMobil”), who accounted for approximately 23% and 25% of total sales for the three months ended June 30, 2010, and 2009, respectively and approximately 20% and 19% of total sales for the six months ended June 30, 2010 and 2009, respectively.

 

Note 2.                      Restatement

 

Subsequent to the quarter ended June 30, 2010, following a change in the billing protocol for a certain type of sales transaction for a specific customer, management discovered that fuel tax credits associated with such sales transactions had not been properly recorded.  This coding error resulted in the Partnership’s sales and net income being understated and accrued tax liability being overstated as of and for the three and six months ended June 30, 2010.  As a result, the Partnership has restated its unaudited financial statements for the correction of an error as of and for the three and six months ended June 30, 2010.  The error had no impact on the Partnership’s previously reported net cash provided by operating activities.

 

The following is a summary of the adjustments to the Partnership’s previously issued unaudited consolidated balance sheet as of June 30, 2010 (in thousands):

 

 

 

Previously
Reported

 

Adjustments

 

Restated

 

Liabilities and partners’ equity

 

 

 

 

 

 

 

Accrued expenses and other current liabilities

 

$

88,469

 

$

(6,611

)

$

81,858

 

Total current liabilities

 

$

405,288

 

$

(6,611

)

$

398,677

 

Total liabilities

 

$

796,025

 

$

(6,611

)

$

789,414

 

 

 

 

 

 

 

 

 

Partners’ equity

 

 

 

 

 

 

 

Common unitholders

 

$

247,980

 

$

4,161

 

$

252,141

 

Subordinated unitholders

 

$

(458

)

$

2,353

 

$

1,895

 

General partner interest

 

$

(19

)

$

97

 

$

78

 

Total partners’ equity

 

$

232,867

 

$

6,611

 

$

239,478

 

 

7



 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 2.                      Restatement (continued)

 

The following is a summary of the adjustments to the Partnership’s previously issued unaudited consolidated statement of operations for the three months and six months ended June 30, 2010 (in thousands, except per unit data):

 

 

 

Three Months Ended June 30, 2010

 

 

 

Previously
Reported

 

Adjustments

 

Restated

 

Sales

 

$

1,530,451

 

$

4,250

 

$

1,534,701

 

Gross profit

 

$

27,711

 

$

4,250

 

$

31,961

 

Operating income

 

$

3,283

 

$

4,250

 

$

7,533

 

Loss (income) before income taxes

 

$

(1,091

)

$

4,250

 

$

3,159

 

Net (loss) income

 

$

(1,091

)

$

4,250

 

$

3,159

 

General partner’s interest in net (loss) income, including incentive distribution rights

 

$

(50

)

$

(57

)

$

(107

)

Limited partners’ interest in net (loss) income

 

$

(1,141

)

$

4,193

 

$

3,052

 

Basic net income per limited partner unit

 

$

(0.07

)

$

0.25

 

$

0.18

 

Diluted net income per limited partner unit

 

$

(0.07

)

$

0.25

 

$

0.18

 

 

 

 

Six Months Ended June 30, 2010

 

 

 

Previously
Reported

 

Adjustments

 

Restated

 

Sales

 

$

3,492,835

 

$

6,611

 

$

3,499,446

 

Gross profit

 

$

73,118

 

$

6,611

 

$

79,729

 

Operating income

 

$

22,762

 

$

6,611

 

$

29,373

 

Income before income taxes

 

$

14,324

 

$

6,611

 

$

20,935

 

Net income

 

$

13,937

 

$

6,611

 

$

20,548

 

General partner’s interest in net income, including incentive distribution rights

 

$

(349

)

$

(97

)

$

(446

)

Limited partners’ interest in net income

 

$

13,588

 

$

6,514

 

$

20,102

 

Basic net income per limited partner unit

 

$

0.89

 

$

0.43

 

$

1.32

 

Diluted net income per limited partner unit

 

$

0.88

 

$

0.42

 

$

1.30

 

 

The following is a summary of the adjustments to the Partnership’s previously issued unaudited consolidated statement of cash flows for the six months ended June 30, 2010 (in thousands).

 

 

 

Previously
Reported

 

Adjustments

 

Restated

 

Net income

 

$

13,937

 

$

6,611

 

$

20,548

 

Accrued expenses, all other current liabilities and other long-term liabilities

 

$

9,864

 

$

(6,611

)

$

3,253

 

 

Note 3.                      Net Income Per Limited Partner Unit

 

Under the Partnership’s partnership agreement, for any quarterly period, the incentive distribution rights (“IDRs”) participate in net income only to the extent of the amount of cash distributions actually declared, thereby excluding the IDRs from participating in the Partnership’s undistributed net income or losses.  Accordingly, the Partnership’s undistributed net income is assumed to be allocated to the common and subordinated unitholders, or limited partners’ interest, and to the General Partner’s interest.

 

8



 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 3.                      Net Income Per Limited Partner Unit (continued)

 

On April 21, 2010, the board of directors of the General Partner declared a quarterly cash distribution of $0.4875 per unit for the period from January 1, 2010 through March 31, 2010.  On July 21, 2010, the board declared a quarterly cash distribution of $0.4875 per unit for the period from April 1, 2010 through June 30, 2010.  These declared cash distributions resulted in incentive distributions to the General Partner, as the holder of the IDRs, and enabled the Partnership to reach its second target distribution with respect to such IDRs.  See Note 10, “Cash Distributions” for further information.

 

The following table provides a reconciliation of net income and the assumed allocation of net income to the limited partners’ interest for purposes of computing net income per limited partner unit for the three and six months ended June 30, 2010 and 2009 (in thousands, except per unit data):

 

 

 

Three Months Ended June 30, 2010

 

 

 

 

 

Limited

 

General

 

 

 

 

 

 

 

Partner

 

Partner

 

 

 

 

 

Total

 

Interest

 

Interest

 

IDRs

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income(1)

 

$

3,159

 

$

3,052

 

$

107

 

$

 

 

 

 

 

 

 

 

 

 

 

Declared distribution

 

$

8,455

 

$

8,278

 

$

112

 

$

65

 

Assumed allocation of undistributed net income

 

(5,296

)

(5,226

)

(70

)

 

Assumed allocation of net income

 

$

3,159

 

$

3,052

 

$

42

 

$

65

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

Basic weighted average limited partner units outstanding(2)

 

 

 

16,917

 

 

 

 

 

Dilutive effect of phantom units

 

 

 

238

 

 

 

 

 

Diluted weighted average limited partner units outstanding(2)

 

 

 

17,155

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per limited partner unit

 

 

 

$

0.18

 

 

 

 

 

Diluted net income per limited partner unit

 

 

 

$

0.18

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2009

 

 

 

 

 

Limited

 

General

 

 

 

 

 

 

 

Partner

 

Partner

 

 

 

 

 

Total

 

Interest

 

Interest

 

IDRs

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income(1)

 

$

978

 

$

911

 

$

67

 

$

 

 

 

 

 

 

 

 

 

 

 

Declared distribution

 

$

6,534

 

$

6,372

 

$

112

 

$

50

 

Assumed allocation of undistributed net income

 

(5,556

)

(5,461

)

(95

)

 

Assumed allocation of net income

 

$

978

 

$

911

 

$

17

 

$

50

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

Basic weighted average limited partner units outstanding

 

 

 

13,059

 

 

 

 

 

Dilutive effect of phantom units

 

 

 

297

 

 

 

 

 

Diluted weighted average limited partner units outstanding

 

 

 

13,356

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per limited partner unit

 

 

 

$

0.07

 

 

 

 

 

Diluted net income per limited partner unit

 

 

 

$

0.07

 

 

 

 

 

 

9



 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 3.                      Net Income Per Limited Partner Unit (continued)

 

 

 

Six Months Ended June 30, 2010

 

 

 

 

 

Limited

 

General

 

 

 

 

 

 

 

Partner

 

Partner

 

 

 

 

 

Total

 

Interest

 

Interest

 

IDRs

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income(1)

 

$

20,548

 

$

20,102

 

$

446

 

$

 

 

 

 

 

 

 

 

 

 

 

Declared distribution

 

$

16,910

 

$

16,556

 

$

224

 

$

130

 

Assumed allocation of undistributed net income

 

3,638

 

3,546

 

92

 

 

Assumed allocation of net income

 

$

20,548

 

$

20,102

 

$

316

 

$

130

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

Basic weighted average limited partner units outstanding(2)

 

 

 

15,260

 

 

 

 

 

Dilutive effect of phantom units

 

 

 

236

 

 

 

 

 

Diluted weighted average limited partner units outstanding(2)

 

 

 

15,496

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per limited partner unit

 

 

 

$

1.32

 

 

 

 

 

Diluted net income per limited partner unit

 

 

 

$

1.30

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2009

 

 

 

 

 

Limited

 

General

 

 

 

 

 

 

 

Partner

 

Partner

 

 

 

 

 

Total

 

Interest

 

Interest

 

IDRs

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income(1)

 

$

19,841

 

$

19,398

 

$

443

 

$

 

 

 

 

 

 

 

 

 

 

 

Declared distribution

 

$

13,068

 

$

12,744

 

$

224

 

$

100

 

Assumed allocation of undistributed net income

 

6,773

 

6,654

 

119

 

 

Assumed allocation of net income

 

$

19,841

 

$

19,398

 

$

343

 

$

100

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

Basic weighted average limited partner units outstanding

 

 

 

13,065

 

 

 

 

 

Dilutive effect of phantom units

 

 

 

208

 

 

 

 

 

Diluted weighted average limited partner units outstanding

 

 

 

13,273

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per limited partner unit

 

 

 

$

1.48

 

 

 

 

 

Diluted net income per limited partner unit

 

 

 

$

1.46

 

 

 

 

 

 


(1)             Calculation includes the effect of the public offering on March 19, 2010 (see Note 16) and, as a result, the general partner interest was reduced to 1.34% for the three months ended June 30, 2010 and, based on a weighted average, 1.61% for the six months ended June 30, 2010.  For the three and six months ended June 30, 2009, the general partner interest was 1.73%.

(2)             At June 30, 2010, limited partner units outstanding excluded common units held on behalf of the Partnership pursuant to its Repurchase Program and for future satisfaction of the General Partner’s Obligations (as defined in Note 14).  These units are not deemed outstanding for purposes of calculating net income per limited partner unit (basic and diluted).

 

10



 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 4.                      Comprehensive (Loss) Income

 

The components of comprehensive (loss) income consisted of the following (in thousands):

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2010

 

2009

 

2010

 

2009

 

Net income

 

$

3,159

 

$

978

 

$

20,548

 

$

19,841

 

Change in fair value of interest rate collars and forward starting swap

 

(4,879

)

2,263

 

(7,111

)

3,415

 

Change in pension liability

 

(679

)

593

 

(558

)

351

 

Total comprehensive (loss) income

 

$

(2,399

)

$

3,834

 

$

12,879

 

$

23,607

 

 

Note 5.                      Inventories

 

The Partnership hedges substantially all of its inventory purchases through futures contracts and swap agreements.  Hedges are executed when inventory is purchased and are identified with that specific inventory.  Changes in the fair value of these contracts, as well as the offsetting gain or loss on the hedged inventory item, are recognized in earnings as an increase or decrease in cost of sales.  All hedged inventory is valued using the lower of cost, as determined by specific identification, or market.  Prior to sale, hedges are removed from specific barrels of inventory, and the then unhedged inventory is sold and accounted for on a first-in, first-out basis.

 

Inventories consisted of the following (in thousands):

 

 

 

June 30,
2010

 

December 31,
2009

 

Distillates: home heating oil, diesel and kerosene

 

$

283,033

 

$

339,737

 

Residual oil

 

44,330

 

39,787

 

Gasoline

 

88,827

 

64,645

 

Blend stock

 

27,106

 

21,754

 

Total

 

$

443,296

 

$

465,923

 

 

In addition to its own inventory, the Partnership has exchange agreements with unrelated third-party suppliers, whereby it may draw inventory from these other suppliers and suppliers may draw inventory from the Partnership.  Positive exchange balances are accounted for as accounts receivable and amounted to $34.7 million and $22.9 million at June 30, 2010 and December 31, 2009, respectively.  Negative exchange balances are accounted for as accounts payable and amounted to $30.9 million and $10.2 million at June 30, 2010 and December 31, 2009, respectively.  Exchange transactions are valued using current quoted market prices.

 

Note 6.                      Derivative Financial Instruments

 

Accounting and reporting guidance for derivative instruments and hedging activities requires that an entity recognize derivatives as either assets or liabilities on the balance sheet and measure the instruments at fair value.  Changes in the fair value of the derivative are to be recognized currently in earnings, unless specific hedge accounting criteria are met.

 

11



 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 6.                      Derivative Financial Instruments (continued)

 

The following table presents the volume of activity related to the Partnership’s derivative financial instruments at June 30, 2010:

 

 

 

Units(1)

 

Unit of Measure

 

Oil Contracts

 

 

 

 

 

Long

 

10,192

 

Thousands of barrels

 

Short

 

(14,373

)

Thousands of barrels

 

 

 

 

 

 

 

Natural Gas Contracts

 

 

 

 

 

Long

 

20,487

 

Thousands of decatherms

 

Short

 

(20,487

)

Thousands of decatherms

 

 

 

 

 

 

 

Interest Rate Collars

 

$

200

 

Millions of dollars

 

 

 

 

 

 

 

Forward Starting Swap

 

$

100

 

Millions of dollars

 

 

(1)             Number of open positions and gross notional amounts do not quantify risk or represent assets or liabilities of the Partnership, but are used in the calculation of cash settlements under the contracts.

 

Fair Value Hedges

 

The fair value of the Partnership’s derivatives is determined through the use of independent markets and is based upon the prevailing market prices of such instruments at the date of valuation.  The Partnership enters into futures contracts for the receipt or delivery of refined petroleum products in future periods.  The contracts are entered into in the normal course of business to reduce risk of loss of inventory on hand, which could result through fluctuations in market prices.  Changes in the fair value of these contracts, as well as the offsetting gain or loss on the hedged inventory item, are recognized in earnings as an increase or decrease in cost of sales.  Ineffectiveness related to these hedging activities was immaterial for the three and six months ended June 30, 2010 and 2009.

 

The Partnership also uses futures contracts and swap agreements to hedge exposure under forward purchase and sale commitments.  These agreements are intended to hedge the cost component of virtually all of the Partnership’s forward purchase and sale commitments.  Changes in the fair value of these contracts, as well as offsetting gains or losses on the forward fixed price purchase and sale commitments, are recognized in earnings as an increase or decrease in cost of sales.  Gains and losses on net product margin from forward fixed price purchase and sale contracts are reflected in earnings as an increase or decrease in cost of sales as these contracts mature.  Ineffectiveness related to these hedging activities was immaterial for the three and six months ended June 30, 2010 and 2009.

 

12



 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 6.                      Derivative Financial Instruments (continued)

 

The following table presents the gross fair values of the Partnership’s derivative instruments and firm commitments and their location in the Partnership’s consolidated balance sheets at June 30, 2010 and December 31, 2009 (in thousands):

 

 

 

 

 

June 30,

 

December 31,

 

 

 

Balance Sheet

 

2010

 

2009

 

Asset Derivatives

 

Location (Net)

 

Fair Value

 

Fair Value

 

 

 

 

 

 

 

 

 

Derivatives designated as hedging instruments and
firm commitments

 

 

 

 

 

 

 

Oil product contracts(1)

 

(2)

 

$

5,919

 

$

4,085

 

 

 

 

 

 

 

 

 

Derivatives not designated as hedging instruments

 

 

 

 

 

 

 

Oil product and natural gas contracts

 

(2)

 

9,798

 

11,067

 

 

 

 

 

 

 

 

 

Total asset derivatives

 

 

 

$

15,717

 

$

15,152

 

 

 

 

 

 

 

 

 

Liability Derivatives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives designated as hedging instruments and
firm commitments

 

 

 

 

 

 

 

Oil product contracts(1)

 

(3)

 

$

4,636

 

$

23,030

 

 

 

 

 

 

 

 

 

Derivatives not designated as hedging instruments

 

 

 

 

 

 

 

Oil product and natural gas contracts

 

(4)

 

9,602

 

10,805

 

 

 

 

 

 

 

 

 

Total liability derivatives

 

 

 

$

14,238

 

$

33,835

 

 

(1)      Includes forward fixed price purchase and sale contracts as recognized in the Partnership’s consolidated balance sheets at June 30, 2010 and December 31, 2009.

(2)      Fair value of forward fixed price contracts and prepaid expenses and other current assets

(3)      Obligations on forward fixed price contracts and other derivatives and accrued expenses and other current liabilities

(4)      Obligations on forward fixed price contracts and other derivatives and accrued expenses and other current liabilities

 

13



 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 6.                      Derivative Financial Instruments (continued)

 

The following table presents the amount of gains and losses from derivatives involved in fair value hedging relationships recognized in the Partnership’s consolidated statements of income for the three and six months ended June 30, 2010 and 2009 (in thousands):

 

 

 

 

 

Amount of Gain (Loss) Recognized in

 

 

 

 

 

Income on Derivatives

 

 

 

Location of Gain (Loss)

 

Three Months Ended

 

Six Months Ended

 

Derivatives in Fair Value

 

Recognized in

 

June 30,

 

June 30,

 

Hedging Relationships

 

Income on Derivative

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil product contracts

 

Cost of sales

 

$

42,230

 

$

(99,378

)

$

42,203

 

$

(199,602

)

 

 

 

 

 

Amount of Gain (Loss) Recognized in

 

 

 

 

 

Income on Hedged Items

 

 

 

Location of Gain (Loss)

 

Three Months Ended

 

Six Months Ended

 

Hedged Items in Fair Value

 

Recognized in

 

June 30,

 

June 30,

 

Hedged Relationships

 

Income on Hedged Items

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventories and forward fixed price contracts

 

Cost of sales

 

$

(42,332

)

$

99,699

 

$

(42,305

)

$

200,247

 

 

The Partnership’s derivative financial instruments do not contain credit risk-related or other contingent features that could cause accelerated payments when these financial instruments are in net liability positions.

 

The table below presents the composition and fair value of forward fixed price purchase and sale contracts on the Partnership’s consolidated balance sheet being hedged by the following derivative instruments (in thousands):

 

 

 

June 30,
2010

 

December 31,
2009

 

Futures contracts

 

$

(865

)

$

(14,605

)

Swaps and other, net

 

(502

)

(3,420

)

Total

 

$

(1,367

)

$

(18,025

)

 

The total balances of $(1.4) million and $(18.0) million reflect the fair value of the forward fixed price contract liability net of the corresponding asset on the accompanying consolidated balance sheets at June 30, 2010 and December 31, 2009, respectively.

 

The Partnership also markets and sells natural gas.  The Partnership generally conducts business by entering into forward purchase commitments for natural gas only when it simultaneously enters into arrangements for the sale of product for physical delivery to third-party users.  The Partnership generally takes delivery under its purchase commitments at the same location as it delivers to third-party users.  Through these transactions, which establish an immediate margin, the Partnership seeks to maintain a position that is substantially balanced between firm forward purchase and sales commitments.  Natural gas is generally purchased and sold at fixed prices and quantities.  Current price quotes from actively traded markets are used in all cases to determine the contracts’ fair value.  Changes in the fair value of these contracts are recognized in earnings as an increase or decrease in cost of sales.

 

The Partnership formally documents all relationships between hedging instruments and hedged items after its risk management objectives and strategy for undertaking the hedge are determined.  The Partnership calculates hedge effectiveness on a quarterly basis.  This process includes specific identification of the hedging instrument and the hedged transaction, the nature of the risk being hedged and how the hedging instrument’s effectiveness will be assessed.  Both at the inception of the hedge and on an ongoing basis, the Partnership assesses whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair value of hedged items.  The derivative instruments that qualify for hedge accounting are fair value hedges.

 

14



 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 6.                      Derivative Financial Instruments (continued)

 

The Partnership has a daily margin requirement with its broker based on the prior day’s market results on open futures contracts.  The brokerage margin balance was $19.8 million and $18.1 million at June 30, 2010 and December 31, 2009, respectively.

 

The Partnership is exposed to credit loss in the event of nonperformance by counterparties of forward purchase and sale commitments, futures contracts, options and swap agreements, but the Partnership has no current reason to expect any material nonperformance by any of these counterparties.  Futures contracts, the primary derivative instrument utilized by the Partnership, are traded on regulated exchanges, greatly reducing potential credit risks.  The Partnership utilizes primarily one clearing broker, a major financial institution, for all New York Mercantile Exchange (“NYMEX”) derivative transactions and the right of offset exists.  Accordingly, the fair value of all derivative instruments is presented on a net basis on the consolidated balance sheets.  Exposure on forward purchase and sale commitments, swap and certain option agreements is limited to the amount of the recorded fair value as of the balance sheet dates.

 

The Partnership generally enters into master netting arrangements to mitigate counterparty credit risk with respect to its derivatives.  Master netting arrangements are standardized contracts that govern all specified transactions with the same counterparty and allow the Partnership to terminate all contracts upon occurrence of certain events, such as a counterparty’s default or bankruptcy.  Because these arrangements provide the right of offset, and the Partnership’s intent and practice is to offset amounts in the case of contract terminations, the Partnership records fair value of derivative positions on a net basis.

 

Cash Flow Hedges

 

The Partnership links all hedges that are designated as cash flow hedges to forecasted transactions.  To the extent such hedges are effective, the changes in the fair value of the derivative instrument are reported as a component of other comprehensive income and reclassified into interest expense in the same period during which the hedged transaction affects earnings.

 

The Partnership executed two zero premium interest rate collars with major financial institutions.  Each collar is designated and accounted for as a cash flow hedge.  The first collar, which became effective on May 14, 2007 and expires on May 14, 2011, is used to hedge the variability in interest payments due to changes in the three-month LIBOR rate with respect to $100.0 million of three-month LIBOR-based borrowings.  Under the first collar, the Partnership capped its exposure at a maximum three-month LIBOR rate of 5.75% and established a minimum floor rate of 3.75%.  As of June 30, 2010, the three-month LIBOR rate of 0.43% was lower than the floor rate.  As a result, in August 2010, the Partnership will remit to the respective financial institution the difference between the floor rate and the current rate which amounted to approximately $442,600 and, at June 30, 2010, such amount was recorded in accrued expenses and other current liabilities in the accompanying consolidated balance sheets.  The fair values of the first collar, excluding accrued interest, were liabilities of approximately $2.7 million and $3.9 million as of June 30, 2010 and December 31, 2009, respectively, and were recorded in both other long-term liabilities and accumulated other comprehensive income.  Hedge effectiveness was assessed at inception and is assessed quarterly, prospectively and retrospectively.  The changes in the fair value of the first collar are expected to be highly effective in offsetting the changes in interest rate payments attributable to fluctuations in the three-month LIBOR rate above and below the first collar’s strike rates.

 

15



 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 6.                      Derivative Financial Instruments (continued)

 

On September 29, 2008, the Partnership executed its second zero premium interest rate collar.  The second collar, which became effective on October 2, 2008 and expires on October 2, 2013, is used to hedge the variability in cash flows in monthly interest payments made on the Partnership’s $100.0 million one-month LIBOR-based borrowings (and subsequent refinancings thereof) due to changes in the one-month LIBOR rate.  Under the second collar, the Partnership capped its exposure at a maximum one-month LIBOR rate of 5.50% and established a minimum floor rate of 2.70%.  As of June 30, 2010, the one-month LIBOR rate of 0.35% was lower than the floor rate.  As a result, in July 2010, the Partnership remitted to the respective financial institution the difference between the floor rate and the current rate which amounted to approximately $189,200 and, at June 30, 2010, such amount was recorded in accrued expenses and other current liabilities in the accompanying consolidated balance sheet.  The fair values of the second collar, excluding accrued interest, were liabilities of approximately $4.9 million and $3.2 million as of June 30, 2010 and December 31, 2009, respectively, and were recorded in both other long-term liabilities and accumulated other comprehensive income in the accompanying consolidated balance sheets.  Hedge effectiveness was assessed at inception and is assessed quarterly, prospectively and retrospectively, using the regression analysis.  The changes in the fair value of the second collar are expected to be highly effective in offsetting the changes in interest rate payments attributable to fluctuations in the one-month LIBOR rate above and below the second collar’s strike rates.

 

In addition, in October 2009, the Partnership executed a forward starting swap with a major financial institution.  The swap, which will become effective on May 16, 2011 and expire on May 16, 2016, will be used to hedge the variability in interest payments due to changes in the one-month LIBOR swap curve with respect to $100.0 million of one-month LIBOR-based borrowings at a fixed rate of 3.93%.  The fair value of the swap was a liability of approximately $6.5 million as of June 30, 2010 and was recorded in other long-term liabilities in the accompanying consolidated balance sheets.  The fair value of the swap was an asset of approximately $80,000 as of December 31, 2009 and was recorded in other long-term assets in the accompanying consolidated balance sheets.  Hedge effectiveness was assessed at inception and will be assessed quarterly, prospectively and retrospectively, using regression analysis.  The changes in the fair value of the swap are expected to be highly effective in offsetting the changes in interest rate payments attributable to fluctuations in the one-month LIBOR swap curve.

 

The following table presents the fair value of the Partnership’s derivative instruments and their location in the Partnership’s consolidated balance sheets at June 30, 2010 and December 31, 2009 (in thousands):

 

 

 

 

 

June 30,

 

December 31,

 

Derivatives Designated as

 

Balance Sheet

 

2010

 

2009

 

Hedging Instruments

 

Location

 

Fair Value

 

Fair Value

 

 

 

 

 

 

 

 

 

Asset derivatives

 

 

 

 

 

 

 

Forward starting swap

 

Other assets

 

$

 

$

80

 

 

 

 

 

 

 

 

 

Liability derivatives

 

 

 

 

 

 

 

Interest rate collars

 

Other long-term liabilities

 

$

7,577

 

$

7,047

 

Forward starting swap

 

Other long-term liabilities

 

6,501

 

 

Total liability derivatives

 

 

 

$

14,078

 

$

7,047

 

 

16



 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 6.                      Derivative Financial Instruments (continued)

 

The following table presents the amount of gains and losses from derivatives involved in cash flow hedging relationships recognized in the Partnership’s consolidated statements of income and partners’ equity for the three and six months ended June 30, 2010 and 2009 (in thousands):

 

 

 

 

 

 

 

Recognized in Income

 

 

 

 

 

Recognized in Income

 

 

 

 

 

 

 

on Derivatives

 

 

 

 

 

on Derivatives

 

 

 

Amount of Gain (Loss)

 

(Ineffectiveness Portion

 

Amount of Gain (Loss)

 

(Ineffectiveness Portion

 

 

 

Recognized in Other

 

and Amount Excluded

 

Recognized in Other

 

and Amount Excluded

 

 

 

Comprehensive Income

 

from Effectiveness

 

Comprehensive Income

 

from Effectiveness

 

 

 

on Derivatives

 

Testing)

 

on Derivatives

 

Testing)

 

Derivatives in

 

Three Months Ended

 

Three Months Ended

 

Six Months Ended

 

Six Months Ended

 

Cash Flow

 

June 30,