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GLOBAL PARTNERS LP 10-Q 2015
glp_Current folio_10Q_Taxonomy2015

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 


 

FORM 10-Q

 


 

(Mark One)

 

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

 

 

 

For the quarterly period ended June 30, 2015

 

 

 

OR

 

 

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 No

 

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 No

 

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  

Accelerated filer  

Non-accelerated filer  

Smaller reporting company  

 

 

(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 No

 

The issuer had 33,995,563 common units outstanding as of August 4, 2015.

 

 

 

 

 


 

TABLE OF CONTENTS

 

PART I.     FINANCIAL INFORMATION

 

 

 

 

 

Item 1.     Financial Statements (unaudited) 

 

 

 

 

Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014 

 

 

 

 

Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014 

 

 

 

 

Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2015 and 2014 

 

 

 

 

Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014 

 

 

 

 

Consolidated Statement of Partners’ Equity for the six months ended June 30, 2015 

 

 

 

 

Notes to Consolidated Financial Statements 

 

 

 

 

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

 

60 

 

 

 

Item 3.      Quantitative and Qualitative Disclosures about Market Risk 

 

83 

 

 

 

Item 4.      Controls and Procedures 

 

85 

 

 

 

PART II.  OTHER INFORMATION 

 

87 

 

 

 

Item 1.      Legal Proceedings 

 

87 

 

 

 

Item 1A.  Risk Factors 

 

88 

 

 

 

Item 6.     Exhibits 

 

88 

 

 

 

SIGNATURES 

 

91 

 

 

 

INDEX TO EXHIBITS 

 

92 

 

 

 

 

 


 

Item 1.Financial Statements

 

GLOBAL PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

June 30, 

 

December 31, 

 

    

2015

    

2014

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

11,187

 

$

5,238

Accounts receivable, net

 

 

375,573

 

 

457,730

Accounts receivable—affiliates

 

 

5,275

 

 

3,903

Inventories

 

 

429,039

 

 

336,813

Brokerage margin deposits

 

 

18,990

 

 

17,198

Derivative assets

 

 

47,153

 

 

83,826

Prepaid expenses and other current assets

 

 

80,716

 

 

56,515

Total current assets

 

 

967,933

 

 

961,223

Property and equipment, net

 

 

1,240,539

 

 

825,051

Intangible assets, net

 

 

79,883

 

 

48,902

Goodwill

 

 

443,414

 

 

154,078

Other assets

 

 

49,941

 

 

50,723

Total assets

 

$

2,781,710

 

$

2,039,977

Liabilities and partners’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

332,412

 

$

456,619

Working capital revolving credit facility—current portion

 

 

118,200

 

 

 —

Line of credit

 

 

 —

 

 

700

Environmental liabilities—current portion

 

 

3,067

 

 

3,101

Trustee taxes payable

 

 

94,057

 

 

105,744

Accrued expenses and other current liabilities

 

 

60,709

 

 

82,820

Derivative liabilities

 

 

46,066

 

 

58,507

Total current liabilities

 

 

654,511

 

 

707,491

Working capital revolving credit facility—less current portion

 

 

150,000

 

 

100,000

Revolving credit facility

 

 

268,000

 

 

133,800

Senior notes

 

 

663,673

 

 

368,136

Environmental liabilities—less current portion

 

 

71,938

 

 

34,462

Financing obligation

 

 

89,613

 

 

 —

Other long-term liabilities

 

 

146,399

 

 

59,932

Total liabilities

 

 

2,044,134

 

 

1,403,821

Partners’ equity

 

 

 

 

 

 

Global Partners LP equity:

 

 

 

 

 

 

Common unitholders 33,995,563 units issued and 33,542,344 outstanding at June 30, 2015 and 30,995,563 units issued and 30,604,961 outstanding at December 31, 2014)

 

 

699,935

 

 

599,406

General partner interest (0.67% and 0.74% interest with 230,303 equivalent units outstanding at June 30, 2015 and December 31, 2014, respectively)

 

 

1,709

 

 

788

Accumulated other comprehensive loss

 

 

(11,952)

 

 

(13,252)

Total Global Partners LP equity

 

 

689,692

 

 

586,942

Noncontrolling interest

 

 

47,884

 

 

49,214

Total partners’ equity

 

 

737,576

 

 

636,156

Total liabilities and partners’ equity

 

$

2,781,710

 

$

2,039,977

 

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

3


 

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per unit data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

    

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

    

2015

      

2014

    

2015

   

2014

 

Sales

 

$

2,680,088

 

$

4,569,620

 

$

5,659,204

 

$

9,686,548

 

Cost of sales

 

 

2,535,900

 

 

4,481,935

 

 

5,346,458

 

 

9,439,839

 

Gross profit

 

 

144,188

 

 

87,685

 

 

312,746

 

 

246,709

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

45,391

 

 

31,673

 

 

94,177

 

 

68,971

 

Operating expenses

 

 

72,168

 

 

51,029

 

 

140,824

 

 

98,981

 

Amortization expense

 

 

3,070

 

 

4,524

 

 

8,411

 

 

9,052

 

Loss on asset sales

 

 

213

 

 

397

 

 

650

 

 

1,060

 

Total costs and operating expenses

 

 

120,842

 

 

87,623

 

 

244,062

 

 

178,064

 

Operating income

 

 

23,346

 

 

62

 

 

68,684

 

 

68,645

 

Interest expense

 

 

(16,451)

 

 

(12,246)

 

 

(30,414)

 

 

(23,353)

 

Income (loss) before income tax expense

 

 

6,895

 

 

(12,184)

 

 

38,270

 

 

45,292

 

Income tax benefit (expense)

 

 

719

 

 

(94)

 

 

(247)

 

 

(416)

 

Net income (loss)

 

 

7,614

 

 

(12,278)

 

 

38,023

 

 

44,876

 

Net income attributable to noncontrolling interest

 

 

(396)

 

 

(441)

 

 

(390)

 

 

(585)

 

Net income (loss) attributable to Global Partners LP

 

 

7,218

 

 

(12,719)

 

 

37,633

 

 

44,291

 

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

 

 

2,671

 

 

1,033

 

 

4,850

 

 

2,541

 

Limited partners’ interest in net income (loss)

 

$

4,547

 

$

(13,752)

 

$

32,783

 

$

41,750

 

Basic net income (loss) per limited partner unit

 

$

0.15

 

$

(0.50)

 

$

1.06

 

$

1.53

 

Diluted net income (loss) per limited partner unit

 

$

0.15

 

$

(0.50)

 

$

1.06

 

$

1.53

 

Basic weighted average limited partner units outstanding

 

 

31,037

 

 

27,244

 

 

30,819

 

 

27,252

 

Diluted weighted average limited partner units outstanding

 

 

31,214

 

 

27,244

 

 

30,978

 

 

27,313

 

 

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

4


 

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

 

2015

    

2014

    

2015

 

2014

 

Net income (loss)

 

$

7,614

 

$

(12,278)

 

$

38,023

 

$

44,876

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of cash flow hedges

 

 

1,295

 

 

212

 

 

1,478

 

 

871

 

Change in pension liability

 

 

(269)

 

 

343

 

 

(178)

 

 

(266)

 

Total other comprehensive income

 

 

1,026

 

 

555

 

 

1,300

 

 

605

 

Comprehensive income (loss)

 

 

8,640

 

 

(11,723)

 

 

39,323

 

 

45,481

 

Comprehensive income attributable to noncontrolling interest

 

 

(396)

 

 

(441)

 

 

(390)

 

 

(585)

 

Comprehensive income (loss) attributable to Global Partners LP

 

$

8,244

 

$

(12,164)

 

$

38,933

 

$

44,896

 

 

 

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

 

5


 

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

6

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

June 30, 

 

 

    

2015

    

2014

 

Cash flows from operating activities

 

 

 

 

 

 

 

Net income

 

$

38,023

 

$

44,876

 

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

55,240

 

 

41,175

 

Amortization of deferred financing fees

 

 

2,927

 

 

2,567

 

Amortization of leasehold interests

 

 

172

 

 

 —

 

Amortization of senior notes discount

 

 

411

 

 

210

 

Bad debt expense

 

 

288

 

 

356

 

Unit‑based compensation expense

 

 

2,072

 

 

1,701

 

Write-off of financing fees

 

 

 —

 

 

1,626

 

Loss on asset sales

 

 

650

 

 

1,060

 

Changes in operating assets and liabilities, excluding net assets acquired:

 

 

 

 

 

 

 

Accounts receivable

 

 

90,971

 

 

140,340

 

Accounts receivable—affiliate

 

 

(1,372)

 

 

(535)

 

Inventories

 

 

(72,788)

 

 

82,285

 

Broker margin deposits

 

 

(1,792)

 

 

1,617

 

Prepaid expenses, all other current assets and other assets

 

 

3,749

 

 

(17,876)

 

Accounts payable

 

 

(145,863)

 

 

(267,283)

 

Trustee taxes payable

 

 

(17,225)

 

 

14,942

 

Change in derivatives

 

 

24,232

 

 

15,094

 

Financing obligation

 

 

89,613

 

 

 —

 

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

 

 

(126,540)

 

 

(12,521)

 

Net cash (used in) provided by operating activities

 

 

(57,232)

 

 

49,634

 

Cash flows from investing activities

 

 

 

 

 

 

 

Acquisitions

 

 

(561,757)

 

 

 —

 

Capital expenditures

 

 

(33,163)

 

 

(44,260)

 

Proceeds from sale of property and equipment

 

 

1,251

 

 

3,405

 

Net cash used in investing activities

 

 

(593,669)

 

 

(40,855)

 

Cash flows from financing activities

 

 

 

 

 

 

 

Proceeds from issuance of common units, net

 

 

109,305

 

 

 —

 

Borrowings from (payments on) working capital revolving credit facility

 

 

168,200

 

 

(20,000)

 

Borrowings from (payments on) revolving credit facility

 

 

134,200

 

 

(162,100)

 

Proceeds from senior notes, net of discount

 

 

295,125

 

 

258,903

 

Payments on line of credit

 

 

(700)

 

 

 —

 

Repayment of senior notes

 

 

 —

 

 

(40,244)

 

Repurchase of common units

 

 

(2,442)

 

 

(1,824)

 

Noncontrolling interest capital contribution

 

 

1,880

 

 

4,200

 

Distribution to noncontrolling interest

 

 

(3,600)

 

 

(4,200)

 

Distributions to partners

 

 

(45,118)

 

 

(35,987)

 

Net cash provided by (used in) financing activities

 

 

656,850

 

 

(1,252)

 

Cash and cash equivalents

 

 

 

 

 

 

 

Increase in cash and cash equivalents

 

 

5,949

 

 

7,527

 

Cash and cash equivalents at beginning of period

 

 

5,238

 

 

9,217

 

Cash and cash equivalents at end of period

 

$

11,187

 

$

16,744

 

Supplemental information

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

25,117

 

$

22,130

 

Non-cash exchange of 6.25% senior notes due 2022

 

$

 —

 

$

110,000

 

 

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

6


 

GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

    

 

 

    

General

    

Other

    

 

 

    

Total

 

 

 

Common

 

Partner

 

Comprehensive

 

Noncontrolling

 

Partners’

 

 

 

Unitholders

 

Interest

 

Loss

 

Interest

 

Equity

 

Balance at December 31,  2014

 

$

599,406

 

$

788

 

$

(13,252)

 

$

49,214

 

$

636,156

 

Issuance of common units

 

 

109,305

 

 

 —

 

 

 —

 

 

 —

 

 

109,305

 

Net income

 

 

32,783

 

 

4,850

 

 

 —

 

 

390

 

 

38,023

 

Noncontrolling interest capital contribution

 

 

 —

 

 

 —

 

 

 —

 

 

1,880

 

 

1,880

 

Distribution to noncontrolling interest

 

 

 —

 

 

 —

 

 

 —

 

 

(3,600)

 

 

(3,600)

 

Other comprehensive income

 

 

 —

 

 

 —

 

 

1,300

 

 

 —

 

 

1,300

 

Unit-based compensation

 

 

2,072

 

 

 —

 

 

 —

 

 

 —

 

 

2,072

 

Distributions to partners

 

 

(41,688)

 

 

(3,929)

 

 

 —

 

 

 —

 

 

(45,617)

 

Repurchase of common units

 

 

(2,442)

 

 

 —

 

 

 —

 

 

 —

 

 

(2,442)

 

Dividends on repurchased units

 

 

499

 

 

 —

 

 

 —

 

 

 —

 

 

499

 

Balance at June 30,  2015

 

$

699,935

 

$

1,709

 

$

(11,952)

 

$

47,884

 

$

737,576

 

 

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

 

 

 

7


 

Table of Contents 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 1. Organization and Basis of Presentation

 

Organization

 

Global Partners LP (the “Partnership”) is a midstream logistics and marketing master limited partnership formed in March 2005 engaged in the purchasing, selling and logistics of transporting petroleum and related products, including domestic and Canadian crude oil, gasoline and gasoline blendstocks (such as ethanol and naphtha), distillates (such as home heating oil, diesel and kerosene), residual oil, renewable fuels, natural gas and propane.  The Partnership also receives revenue from convenience store sales and gasoline station rental income.  The Partnership owns, controls or has 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”).  The Partnership owns transload and storage terminals in North Dakota and Oregon that extend its origin-to-destination capabilities from the mid-continent region of the United States and Canada to the East and West Coasts.  The Partnership is 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.  As of June 30, 2015, the Partnership had a portfolio of 1,537 owned, leased and/or supplied gasoline stations, including 286 convenience stores, in the Northeast, Maryland and Virginia.

 

On January 7, 2015, the Partnership acquired, through one of its wholly owned subsidiaries, Global Montello Group Corp. (“GMG”), 100% of the equity interests in Warren Equities, Inc. (“Warren”) from The Warren Alpert Foundation.  On January 14, 2015, through the Partnership's wholly owned subsidiary, Global Companies LLC (Global Companies), the Partnership acquired the Revere terminal (the Revere Terminal) located in Boston Harbor in Revere, Massachusetts from Global Petroleum Corp. (GPC) and related entities.  On June 1, 2015, the Partnership acquired retail gasoline stations and dealer supply contracts from Capitol Petroleum Group (defined below) (“Capitol”).  See Note 2.

 

Global GP LLC, the Partnership’s general partner (the “General Partner”), manages the Partnership’s operations and activities and employs its officers and substantially all of its personnel, except for most of its gasoline station and convenience store employees and certain union personnel who are employed by GMG or Drake Petroleum Company, Inc. (“Drake Petroleum”), both of which are wholly owned subsidiaries of the Partnership.

 

The General Partner, which holds a 0.67% general partner interest in the Partnership (reduced from 0.74% following the Partnership’s public offering of common units discussed in Note 9), is owned by affiliates of the Slifka family.  As of June 30, 2015, affiliates of the General Partner, including its directors and executive officers and their affiliates, owned 8,262,582 common units, representing a 24.3% limited partner interest.

 

Ownership by affiliates of the General Partner decreased by approximately 3,477,715 common units (from 37.9% at December 31, 2014 to  24.3% at June 30, 2015) primarily as a result of the liquidation and dissolution of AE Holdings Corp.  (“AE Holdings”).  Immediately prior to such liquidation and dissolution, the directors and executive officers of the General Partner were deemed to beneficially own the entire 5,850,000 common units that were then owned by AE Holdings.  Upon the liquidation and dissolution of AE Holdings, the 5,850,000 common units were distributed to the stockholders of AE Holdings.  An aggregate 1,956,234 common units were sold by the stockholders of AE Holdings to cover their respective tax liabilities resulting from their receipt of the common units.  Approximately 2,306,960 common units of the original 5,850,000 common units are held by the directors and executive officers of the General Partner, and the remaining 1,586,806 common units are held by unaffiliated members of the Slifka family.

 

8


 

Table of Contents 

GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Basis of Presentation

 

The financial results of Capitol for the one month ended June 30, 2015 are included in the accompanying statements of operations for the three and six months ended June 30, 2015.  The financial results of Warren and the Revere Terminal for the three and six months ended June 30, 2015 are included in the accompanying statements of operations for the three and six months ended June 30, 2015.  The accompanying consolidated financial statements as of June 30, 2015 and December 31, 2014 and for the three and six months ended June 30, 2015 and 2014 reflect the accounts of the Partnership.  Upon consolidation, 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, 2014 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, 2015 are not necessarily indicative of the results of operations that will be realized for the entire year ending December 31, 2015.  The consolidated balance sheet at December 31, 2014 has been derived from the audited consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2014.

 

Due to the nature of the Partnership’s business and its reliance, in part, on consumer travel and spending patterns, the Partnership may experience more demand for gasoline and gasoline blendstocks 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 the Partnership operates, increasing the demand for gasoline and gasoline blendstocks that the Partnership distributes.  Therefore, the Partnership’s volumes in gasoline and gasoline blendstocks are typically higher in the second and third quarters of the calendar year.  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, 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 the Partnership’s quarterly operating results.

 

Reclassification

 

Certain prior year amounts in the consolidated financial statements have been reclassified to conform to the current year presentation.

 

Noncontrolling Interest

 

These financial statements reflect the application of ASC 810, “Consolidations” (“ASC 810”) which establishes accounting and reporting standards that require: (i) the ownership interest in subsidiaries held by parties other than the parent to be clearly identified and presented in the consolidated balance sheet within shareholder’s equity, but separate from the parent’s equity; (ii) the amount of consolidated net income attributable to the parent and the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of operations and (iii) changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary to be accounted for consistently.

 

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The Partnership acquired a 60% interest in Basin Transload, LLC (“Basin Transload”) on February 1, 2013.  After evaluating ASC 810, the Partnership concluded it is appropriate to consolidate the balance sheet and statement of operations of Basin Transload based on an evaluation of the outstanding voting interests.  Amounts pertaining to the noncontrolling ownership interest held by third parties in the financial position and operating results of the Partnership are reported as a noncontrolling interest in the accompanying consolidated balance sheets and statements of operations.

 

Concentration of Risk

 

The following table presents the Partnership’s sales, logistics revenue and rental income as a percentage of the consolidated sales for the periods presented:

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

    

2015

    

2014

    

2015

 

2014

 

Gasoline sales: gasoline and gasoline blendstocks such as ethanol and naphtha

 

62

%  

67

%  

56

%  

60

%  

Crude oil sales and logistics revenue

 

13

%  

14

%  

11

%  

13

%  

Distillates (home heating oil, diesel and kerosene), residual oil, natural gas and propane sales

 

21

%  

18

%  

30

%  

26

%  

Convenience store sales, rental income and sundry sales

 

4

%  

1

%  

3

%  

1

%  

Total

 

100

%  

100

%  

100

%  

100

%  

 

None of the Partnership’s customers accounted for greater than 10% of total sales for the three and six months ended June 30, 2015.   The Partnership had one customer, ExxonMobil Corporation (“ExxonMobil”) that accounted for approximately 17% and 16%, respectively, of total sales for the three and six months ended June 30, 2014, respectively. 

 

Note 2. Business Combinations

 

Acquisition of Warren Equities, Inc.

 

On January 7, 2015, the Partnership acquired, through GMG, 100% of the equity interests in Warren, one of the largest independent marketers of petroleum products in the Northeast, from The Warren Alpert Foundation.  The acquisition included 147 company-owned Xtra Mart convenience stores and related fuel operations, 53 commission agent locations and fuel supply rights for approximately 320 dealers.  The acquired properties are located in the Northeast, Maryland and Virginia.  The purchase price, inclusive of post-closing adjustments, was approximately $381.8 million, including working capital.  The acquisition was funded with borrowings under the Partnership's credit facility and with proceeds from its December 2014 public offering of 3,565,000 common units.

 

The acquisition was accounted for using the purchase method of accounting in accordance with the Financial Accounting Standards Board’s (“FASB”) guidance regarding business combinations.  The Partnership’s financial statements include the results of operations of Warren subsequent to the acquisition date.

 

The purchase price allocation is considered preliminary, and additional adjustments may be recorded during the allocation period in accordance with the FASB’s guidance regarding business combinations.  The purchase price allocation will be finalized as the Partnership receives additional information relevant to the acquisition, including a final valuation of the assets purchased, including tangible and intangible assets, and liabilities assumed.

 

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The following table presents the preliminary allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands):

 

 

 

 

 

 

Assets purchased:

   

 

 

Accounts receivable

 

$

9,101

Inventory

 

 

19,199

Prepaid expenses and other current assets

 

 

13,281

Property and equipment

 

 

253,097

Intangibles

 

 

36,560

Other non-current assets

 

 

16,605

Total identifiable assets purchased

 

 

347,843

Liabilities assumed:

 

 

 

Accounts payable

 

 

(21,620)

Assumption of environmental liabilities

 

 

(36,088)

Taxes payable

 

 

(5,538)

Accrued expenses

 

 

(13,890)

Long-term deferred taxes

 

 

(74,154)

Other non-current liabilities

 

 

(9,739)

Total liabilities assumed

 

 

(161,029)

Net identifiable assets acquired

 

 

186,814

Goodwill

 

 

195,015

Net assets acquired

 

$

381,829

 

During the quarter ended June 30, 2015, the Partnership recorded certain changes to the preliminary purchase accounting, specifically related to the values assigned to property and equipment, long-term deferred taxes and certain working capital assets and liabilities.  The impact of these changes increased goodwill from $147.9 million at March 31, 2015 to $195.0 million at June 30, 2015.

 

The following represents the change in goodwill from the period ended March 31, 2015 to June 30, 2015 (in thousands):

 

 

 

 

 

Goodwill – March 31, 2015

 

$

147,909

Decrease in fair value of property and equipment

 

 

78,194

Decrease in long-term deferred taxes

 

 

(31,701)

Increase in working capital assets and liabilities

 

 

613

Goodwill – June 30, 2015

 

$

195,015

 

Management is currently in the process of evaluating the purchase price accounting.  The Partnership engaged a third-party valuation firm to assist in the valuation of Warren’s property and equipment, intangible assets consisting of supply contracts and favorable leasehold interests, and unfavorable leasehold interests.  This valuation continues to be in progress and, at June 30, 2015, the estimated fair values of property and equipment of $253.1 million, intangibles assets of $36.6 million ($35.8 million of supply contracts and $0.8 million of favorable leasehold interests), and unfavorable leasehold interests of $2.5 million, which are included in other non-current liabilities, were developed by management based on their estimates, assumptions and acquisition history including preliminary reports from the third-party valuation firm.  The estimated fair values of the property and equipment, intangible assets and unfavorable leasehold interests will be supported by the valuations performed by the third-party valuation firm.

 

The fair value of $36.1 million assigned to the assumption of environmental liabilities was developed by management based on their estimates, assumptions and acquisition history, including preliminary reports from third-

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party environmental engineers (see Note 12).  The fair value of the environmental liabilities will be supported by the assessment performed by the third-party environmental engineers.

 

The long-term deferred tax liabilities of $74.2 million and short-term deferred tax assets of $2.1 million included in other current assets are primarily related to temporary differences associated with the fair value allocations of property and equipment and intangible assets, which are not deductible for tax purposes, net of acquired environmental liabilities and other deductible accrued liabilities.

 

The fair value of loan receivables purchased of $25.0 million was estimated by management based on the receivable’s payment terms,  assumptions of current interest rates and collectability and is included in other current assets and other non-current assets. The gross contractual amount for these loan receivables is $29.1 million, of which the Partnership estimates $2.4 million is not collectible. 

 

The fair values of the remaining Warren assets and liabilities noted above approximate their carrying values at January 7, 2015.  It is possible that once the Partnership receives the completed valuations on the property and equipment and intangible assets, the final purchase price accounting may be different than what is presented above.

 

The preliminary purchase price for the acquisition was allocated to assets acquired and liabilities assumed based on their estimated fair values.  The Partnership then allocated the purchase price in excess of net tangible assets acquired to identifiable intangible assets, based upon on its estimates and assumptions.  Any excess purchase price over the fair value of the net tangible and intangible assets acquired was allocated to goodwill.

 

The Partnership utilized accounting guidance related to intangible assets which lists the pertinent factors to be considered when estimating the useful life of an intangible asset.  These factors include, in part, a review of the expected use by the Partnership of the assets acquired, the expected useful life of another asset (or group of assets) related to the acquired assets and legal, regulatory or other contractual provisions that may limit the useful life of an acquired asset.  The Partnership amortizes these intangible assets over their estimated useful lives which is consistent with the estimated undiscounted future cash flows of these assets.

 

As part of the purchase price allocation, identifiable intangible assets include supply contracts and favorable leasehold interests that are being amortized over seven to ten years and five years, respectivelyThe weighted average life over which these acquired intangibles are being amortized is approximately ten and five years, respectively.  The supply contracts are subject to renewals, and assumptions related to the renewals have been included in the determination of the value of the supply contracts at the date of acquisition.  The Partnership determines the renewal assumptions used based on management’s assumptions of future events, including customer demand, customer attrition rates, contract renewal length and market overall conditions.  The supply contracts had a weighted average term of approximately five years prior to their next renewal.  As the purchase price accounting is preliminary, the final assumptions related to the likelihood of renewals remains in process.  Amortization expense related to the supply contracts amounted to $1.1 million and $1.9 million for the three and six months ended June 30, 2015, respectively. 

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The estimated remaining amortization expense for the supply contracts acquired in connection with the acquisition for each of the five succeeding years and thereafter is as follows (in thousands):

 

 

 

 

 

 

 

2015 (7/1/2015-12/31/2015)

 

$

1,873

 

2016

 

 

3,745

 

2017

 

 

3,745

 

2018

 

 

3,745

 

2019

 

 

3,745

 

Thereafter

 

 

17,075

 

Total

 

$

33,928

 

 

Amortization related to the favorable leasehold interests was immaterial for the three and six months ended June 30, 2015.  The estimated remaining amortization for favorable leasehold interests acquired in connection with the acquisition for each of the five succeeding years is as follows (in thousands):

 

 

 

 

 

 

2015 (7/1/2015-12/31/2015)

 

$

76

 

2016

 

 

152

 

2017

 

 

152

 

2018

 

 

152

 

2019

 

 

152

 

Total

 

$

684

 

 

The $195.0 million of goodwill was assigned to the Gasoline Distribution and Station Operations (“GDSO”) reporting unit.  The goodwill recognized is attributable primarily to expected synergies and growth opportunities for the Partnership.  For federal income tax purposes, the acquisition of Warren was deemed to be a stock purchase and, therefore, any recorded goodwill is not expected to be tax deductible.  In accordance with the stock purchase agreement between the Partnership and Warren, the Partnership is ultimately not responsible for federal income tax obligations for the interim period, June 1, 2014 to January 6, 2015 (Warren’s fiscal year end was May 31).  Any tax obligations will be funded by the selling shareholders.  Any tax refund will be remitted to the selling shareholders. 

 

In connection with the acquisition of Warren, the Partnership incurred acquisition costs totaling approximately $7.1 million, of which $1.0 million and $5.4 million were recorded for the three and six months ended June 30, 2015, respectively, and included in selling, general and administrative expenses in the accompanying consolidated statements of operations.  The remaining acquisition costs were incurred in 2014.  Additionally, in January 2015 and subsequent to the acquisition date, the Partnership recorded a restructuring charge of approximately $2.3 million, which is included in selling, general and administrative expenses in the accompanying consolidated statement of operations for the six months ended June 30, 2015.  This charge, which is principally for redundant and/or eliminated positions as a result of the acquisition, was not part of the purchase price allocation.  Approximately $0 and $0.5 million of the restructuring charge was paid during the three and six months ended June 30, 2015, respectively, and the remaining balance of $1.8 million is expected to be paid in full by December 31, 2015.

 

The acquisition of Warren complements the Partnership’s existing retail presence in the Northeast and expands its footprint into the adjacent Mid-Atlantic region.  The Warren operations have been integrated into the Partnership’s GDSO reporting segment.

 

Acquisition of Revere Terminal

 

On January 14, 2015, through the Partnership’s wholly owned subsidiary, Global Companies, the Partnership acquired the Revere Terminal located in Boston Harbor in Revere, Massachusetts from GPC, a privately held affiliate of

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(Unaudited)

the Partnership, and related entities for a purchase price of $23.7 million.  The acquisition includes contingent consideration which would be payable under specific circumstances involving a subsequent sale of the property, and the purchase price may be adjusted in connection with any value assigned to the contingent consideration as the purchase price accounting is finalized.  The Partnership financed the transaction with available capacity under its revolving credit facility.  In connection with the Revere Terminal transaction, the pre-existing terminal storage rental and throughput agreement between the Partnership and GPC has terminated.

 

The acquisition was accounted for using the purchase method of accounting in accordance with the FASB’s guidance regarding business combinations.  As the acquisition transitioned the Revere Terminal from a formerly leased facility to an owned facility, the transaction did not have a material impact on the Partnership’s consolidated financial statements.

 

The purchase price allocation is considered preliminary, and additional adjustments may be recorded during the allocation period in accordance with the FASB’s guidance regarding business combinations.  The purchase price allocation will be finalized as the Partnership receives additional information relevant to the acquisition, including a final valuation of the assets acquired, including tangible assets, and liabilities assumed, including liability for contingent consideration.

 

The following table presents the preliminary allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands):

 

 

 

 

 

Assets purchased:

   

 

 

Property and equipment

 

$

28,481

Total identifiable assets purchased

 

 

28,481

Liabilities assumed:

 

 

 

Assumption of environmental liabilities

 

 

(3,074)

Other non-current liabilities

 

 

(1,757)

Total liabilities assumed

 

 

(4,831)

Net assets acquired

 

$

23,650

 

During the quarter ended June 30, 2015, the Partnership recorded certain changes to the preliminary purchase accounting, primarily related to the values assigned to property and equipment and the assumption of environmental liabilities.  The impact of these changes in the period did not change the net identifiable assets acquired. 

 

Management is currently in the process of evaluating the purchase price accounting.  The Partnership engaged a third-party valuation firm to assist in the valuation of the Revere Terminal’s property and equipment.  This valuation continues to be in progress and, during the quarter ended June 30, 2015, the Partnership received preliminary fair values of these assets which are shown in the table above.  The estimated fair value of property and equipment of $28.5 million was developed by management based on their estimates, assumptions and acquisition history including preliminary reports from the third-party valuation firm.  The estimated fair value of the property and equipment will be supported by valuations performed by the third-party valuation firmIt is possible that once the Partnership receives the completed valuations on the property and equipment, the final purchase price accounting may be different than what is presented above. 

 

The fair value of $3.1 million assigned to the assumption of environmental liabilities was estimated by management based on their estimates, assumptions and acquisition history, including preliminary reports from third-party environmental engineers (see Note 12). 

 

The Partnership is continuing its review of the estimated fair value of the assets acquired and liabilities assumed.  Accordingly, the purchase price allocation, including any value attributable to contingent consideration, will be finalized

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(Unaudited)

as the Partnership receives additional information relevant to the acquisition and the assets acquired and liabilities assumed. 

 

The fair values of the remaining Revere Terminal liabilities noted above approximate their carrying values at January 14, 2015. 

 

Acquisition of Capitol Petroleum Group

 

On June 1, 2015, the Partnership acquired 97 primarily Mobil and Exxon branded owned or leased retail gasoline stations and seven dealer supply contracts in New York City and Prince George’s County, Maryland, along with certain related supply and franchise agreements, and third-party leases and other assets associated with the operations from Liberty Petroleum Realty, LLC, East River Petroleum Realty, LLC, Big Apple Petroleum Realty, LLC, White Oak Petroleum, LLC, Anacostia Realty, LLC, Mount Vernon Petroleum Realty, LLC and DAG Realty, LLC (collectively, “Capitol Petroleum Group”).  The purchase price was approximately $156.3 million.  The acquisition was financed with borrowings under the Partnership’s revolving credit facility.

 

The acquisition was accounted for using the purchase method of accounting in accordance with the FASB’s guidance regarding business combinations.  The Partnership’s financial statements include the results of operations of Capitol subsequent to the acquisition date.

 

The purchase price allocation is considered preliminary, and additional adjustments may be recorded during the allocation period in accordance with the FASB’s guidance regarding business combinations.  The purchase price allocation will be finalized as the Partnership receives additional information relevant to the acquisition, including a final valuation of the assets purchased, including tangible and intangible assets, and liabilities assumed.

 

The following table presents the preliminary allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands):

 

 

 

 

 

Assets purchased:

   

 

 

Inventory

 

$

238

Property and equipment

 

 

149,479

Intangibles

 

 

3,000

Other non-current assets

 

 

57

Total identifiable assets purchased

 

 

152,774

Liabilities assumed:

 

 

 

Financing obligation

 

 

(89,613)

Assumption of environmental liabilities

 

 

(225)

Other non-current liabilities

 

 

(979)

Total liabilities assumed

 

 

(90,817)

Net identifiable assets acquired

 

 

61,957

Goodwill

 

 

94,321

Net assets acquired

 

$

156,278

 

Management is currently in the process of evaluating the purchase price accounting.  The Partnership engaged a third-party valuation firm to assist in the valuation of Capitol’s property and equipment,  intangible assets consisting of supply contracts and favorable leasehold interests, and unfavorable leasehold interests.  This valuation continues to be in process and, during the quarter ended June 30, 2015, the Partnership received preliminary fair values of these assets.  The estimated fair value of property and equipment of $149.5 million, including $59.9 million of owned property and equipment and $89.6 million of property and equipment for certain properties previously sold by Capitol within two sale-leaseback transactions that did not meet the criteria for sale accounting, and intangibles assets of $3.0 million

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(Unaudited)

($2.2 million of favorable leasehold interests and $0.8 million of supply contracts) were developed by management based on their estimates, assumptions and acquisition history including preliminary reports from the third-party valuation firm.  The estimated fair value of unfavorable leasehold interests was immaterial.  The estimated fair values of the property and equipment, intangible assets and unfavorable leasehold interests will be supported by the valuations performed by the third-party valuation firm.  It is possible that once the Partnership receives the completed valuations on the property and equipment and intangible assets, the final purchase price accounting may be different than what is presented above.

 

The estimated fair value of property and equipment of $149.5 million includes $59.9 million of owned property and equipment and $89.6 million of certain properties previously sold by Capitol within two sale-leaseback transactions that did not meet the criteria for sale accounting.  As a result of not meeting the criteria for sale accounting, the property and equipment sold and leased back by Capitol has not been derecognized and, in purchase accounting, the estimated fair value of property and equipment associated with these sites of $89.6 million has been recognized within property and equipment.  Depreciation expense associated with these sale-leaseback properties amounted to $0.3 million for the three and six months ended June 30, 2015. 

 

The financing obligation of $89.6 million recognized is attributable to the two sale-leaseback transactions discussed above that did not meet the criteria for sale accounting and, as a result, were accounted for as financing arrangements.  These lease agreements mature on varying dates through 2029,  and the fair value of $89.6 million assigned to the financing obligation was estimated by management based on the remaining payments attributable to the lease agreements over their terms and is equal to the estimated fair value of property and equipment associated with these sites.  Over the course of the lease agreements, the lease rental payments will be classified as interest expense on the financing obligation and the pay-down of the financing obligation as opposed to operating expense.  Interest expense associated with the financing obligation as for these sale-leaseback properties amounted to $0.8 million for the three and six months ended June 30, 2015.  The financing obligation balance outstanding at June 30, 2015 was $89.6 million. The Partnership is in the process of completing its review over the valuation of the financing obligation recognized. 

 

The fair value of $0.2 million assigned to the assumption of environmental liabilities was developed by management based on their estimates, assumptions and acquisition history (see Note 12). 

 

The fair values of the remaining Capitol assets and liabilities noted above approximate their carrying values at June 1, 2015.    

 

The preliminary purchase price for the acquisition was allocated to assets acquired and liabilities assumed based on their estimated fair values.  The Partnership then allocated the purchase price in excess of net tangible assets acquired to identifiable intangible assets, based upon on their estimates and assumptions.  Any excess purchase price over the fair value of the net tangible and intangible assets acquired was allocated to goodwill.

 

The Partnership utilized accounting guidance related to intangible assets which lists the pertinent factors to be considered when estimating the useful life of an intangible asset.  These factors include, in part, a review of the expected use by the Partnership of the assets acquired, the expected useful life of another asset (or group of assets) related to the acquired assets and legal, regulatory or other contractual provisions that may limit the useful life of an acquired asset.  The Partnership amortizes these intangible assets over their estimated useful lives which is consistent with the estimated undiscounted future cash flows of these assets.

 

As part of the purchase price allocation, identifiable intangible assets include supply contracts and favorable leasehold interests that are being amortized over seven and two years, respectivelyThe weighted average life over which these acquired intangibles are being amortized is approximately seven and two years, respectively.  The supply contracts are subject to renewals, and assumptions related to the renewals have been included in the determination of the value of the supply contracts at the date of acquisition.  The Partnership determines the renewal assumptions used based

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(Unaudited)

on management’s assumptions of future events, including customer demand, customer attrition rates, contract renewal length and market overall conditions.  The supply contracts had a weighted average term of approximately one year prior to their next renewal.  As the purchase price accounting is preliminary, the final assumptions related to the likelihood of renewals remains in process.  Amortization expense related to the supply contracts was immaterial  for the three and six months ended June 30, 2015. 

 

The estimated remaining amortization expense for the supply contracts acquired in connection with the acquisition for each of the five succeeding years and thereafter is as follows (in thousands):

 

 

 

 

 

 

2015 (7/1/15-12/31/15)

 

$

57

 

2016

 

 

114

 

2017

 

 

114

 

2018

 

 

114

 

2019

 

 

114

 

Thereafter

 

 

277

 

Total

 

$

790

 

 

Amortization of favorable leasehold interests was immaterial for the three and six months ended June 30, 2015.  The estimated remaining amortization for favorable leasehold interests acquired in connection with the acquisition for each of the five succeeding years and thereafter is as follows (in thousands):

 

 

 

 

 

 

2015 (7/1/15-12/31/15)

 

$

550

 

2016

 

 

1,100

 

2017

 

 

458

 

Total

 

$

2,108

 

 

The $94.3 million of goodwill was assigned to the GDSO reporting unit.  The goodwill recognized is attributable primarily to the expansion of the Partnership’s presence in active markets in the East Coast in which the Partnership can leverage its existing operations and dealer relationships without significant incremental expense to grow the business.  The transaction also positions the Partnership to expand through tuck-in acquisitions as well as new-to-industry sites.  The goodwill is expected to be tax deductible.  The operations of Capitol have been integrated into the Partnership’s GDSO reporting segment.

 

In connection with the acquisition of Capitol, the Partnership incurred acquisition costs of approximately $3.1 million which was recorded for the three and six months ended June 30, 2015 and included in selling, general and administrative expenses in the accompanying consolidated statements of operations.

 

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(Unaudited)

Goodwill

 

The following table presents the changes in goodwill (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill Allocated to

 

 

 

 

 

 

Wholesale

 

GDSO

 

 

 

 

 

 

Reporting

 

Reporting

 

 

 

 

 

     

Unit

     

Unit

    

 

Total

 

Balance at December 31, 2014

 

$

121,752

 

$

32,326

 

$

154,078

 

Acquisition of Warren

 

 

 —

 

 

195,015

 

 

195,015

 

Acquisition of Capitol

 

 

 —

 

 

94,321

 

 

94,321

 

Balance at June 30, 2015

 

$

121,752

 

$

321,662

 

$

443,414

 

 

Supplemental Pro Forma Information

 

Revenues and net income not included in the Partnership’s consolidated operating results for Warren from January 1, 2015 through January 7, 2015, the acquisition date, were immaterial.  Accordingly, the supplemental pro forma information for the six months ended June 30, 2015 is consistent with the amounts reported in the accompanying statement of operations for the six months ended June 30, 2015.  As the acquisition transitioned the Revere Terminal from a formerly leased facility to an owned facility, the transaction did not have a material impact on the Partnership’s consolidated financial statements.

 

The following unaudited pro forma information for 2015 presents the consolidated results of operations of the Partnership as if the acquisition of Capitol occurred at the beginning of the periods presented, with pro forma adjustments to give effect to certain adjustmentsThe following unaudited pro forma information for 2014 presents the consolidated results of operations of the Partnership as if the acquisitions of Warren and Capitol occurred at the beginning of the periods presented, with pro forma adjustments to give effect to intercompany sales and certain other adjustments (in thousands, except per unit data):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

2015

 

2014

 

 

 

2015

 

2014

Sales

$

2,797,134

 

$

5,117,271

 

 

$

5,911,504

 

$

10,753,875

 

Net income (loss) attributable to Global Partners LP

$

6,611

 

$

(14,826)

 

 

$

39,422

 

$

37,097

 

Net income (loss) per limited partner unit, basic

$

0.13

 

$

(0.58)

 

 

$

1.12

 

$

1.27

 

Net income (loss) per limited partner unit, diluted

$

0.13

 

$

(0.58)

 

 

$

1.12

 

$

1.27

 

 

Pro forma information for Capitol for the three and six months ended June 30, 2014 is estimated based on annual revenues and net income.  Warren’s revenues and net income included in the Partnership’s consolidated operating results from January 7, 2015, the acquisition date, through the period ended June 30, 2015 were $0.6 billion and $4.4 million, respectively.  Capitol’s revenues and net loss included in the Partnership’s consolidated operating results from June 1, 2015, the acquisition date, through the period ended June 30, 2015 were $25.6 million and ($2.2 million), respectively.

 

 

 

 

Note 3. Net Income (Loss) 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 unitholders, or limited partners’ interest, and to the General Partner’s general partner interest.

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(Unaudited)

 

Common units outstanding as reported in the accompanying consolidated financial statements at June 30, 2015 and December 31, 2014 excluded 453,219 and 390,602 common units, respectively, held on behalf of the Partnership pursuant to its repurchase program (see Note 13).  These units are not deemed outstanding for purposes of calculating net income per limited partner unit (basic and diluted).

 

The following table provides a reconciliation of net income (loss) and the assumed allocation of net income (loss) to the limited partners’ interest for purposes of computing net income per limited partner unit for the three and six months ended June 30, 2015 and 2014 (in thousands, except per unit data):