Supplemental Guarantor Condensed Consolidating Financial Statements | Note 23. Supplemental Guarantor Condensed Consolidating Financial Statements The Partnership’s wholly owned subsidiaries, other than GLP Finance, are guarantors of senior notes issued by the Partnership and GLP Finance. As such, the Partnership is subject to the requirements of Rule 3-10 of Regulation S-X of the SEC regarding financial statements of guarantors and issuers of registered guaranteed securities. The Partnership presents condensed consolidating financial information for its subsidiaries within the notes to consolidated financial statements in accordance with the criteria established for parent companies in the SEC’s Regulation S-X, Rule 3-10(d). The following condensed consolidating financial information presents the Condensed Consolidating Balance Sheets as of June 30, 2019 and December 31, 2018, the Condensed Consolidating Statements of Operations for the three and six months ended June 30, 2019 and 2018 and the Condensed Consolidating Statements of Cash Flows for the six months ended June 30, 2019 and 2018 of the Partnership’s 100% owned guarantor subsidiaries, the non-guarantor subsidiary and the eliminations necessary to arrive at the information for the Partnership on a consolidated basis. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Condensed Consolidating Balance Sheet June 30, 2019 (In thousands) (Issuer) Non- Guarantor Guarantor Subsidiaries Subsidiary Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 9,988 $ 458 $ — $ 10,446 Accounts receivable, net 373,574 267 64 373,905 Accounts receivable - affiliates 4,731 64 (64) 4,731 Inventories 426,029 — — 426,029 Brokerage margin deposits 19,954 — — 19,954 Derivative assets 9,071 — — 9,071 Prepaid expenses and other current assets 87,084 188 — 87,272 Total current assets 930,431 977 — 931,408 Property and equipment, net 1,103,304 2,810 — 1,106,114 Right of use assets, net 315,295 82 — 315,377 Intangible assets, net 52,243 — — 52,243 Goodwill 325,186 — — 325,186 Other assets 33,587 — — 33,587 Total assets $ 2,760,046 $ 3,869 $ — $ 2,763,915 Liabilities and partners’ equity Current liabilities: Accounts payable $ 283,094 $ 33 $ — $ 283,127 Accounts payable - affiliates (39) 39 — — Working capital revolving credit facility - current portion 206,100 — — 206,100 Lease liability—current portion 70,067 17 — 70,084 Environmental liabilities - current portion 6,092 — — 6,092 Trustee taxes payable 40,206 — — 40,206 Accrued expenses and other current liabilities 82,866 110 — 82,976 Derivative liabilities 12,583 — — 12,583 Total current liabilities 700,969 199 — 701,168 Working capital revolving credit facility - less current portion 150,000 — — 150,000 Revolving credit facility 212,000 — — 212,000 Senior notes 665,826 — — 665,826 Long-term lease liability—less current portion 255,357 61 — 255,418 Environmental liabilities - less current portion 55,455 — — 55,455 Financing obligations 149,710 — — 149,710 Deferred tax liabilities 42,772 — — 42,772 Other long-term liabilities 45,559 — — 45,559 Total liabilities 2,277,648 260 — 2,277,908 Partners' equity Global Partners LP equity 482,398 2,196 — 484,594 Noncontrolling interest — 1,413 — 1,413 Total partners' equity 482,398 3,609 — 486,007 Total liabilities and partners' equity $ 2,760,046 $ 3,869 $ — $ 2,763,915 Condensed Consolidating Balance Sheet December 31, 2018 (In thousands) (Issuer) Non- Guarantor Guarantor Subsidiaries Subsidiary Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 7,050 $ 1,071 $ — $ 8,121 Accounts receivable, net 334,689 52 36 334,777 Accounts receivable - affiliates 5,435 36 (36) 5,435 Inventories 386,442 — — 386,442 Brokerage margin deposits 14,766 — — 14,766 Derivative assets 26,390 — — 26,390 Prepaid expenses and other current assets 98,877 100 — 98,977 Total current assets 873,649 1,259 — 874,908 Property and equipment, net 1,128,826 3,806 — 1,132,632 Intangible assets, net 58,532 — — 58,532 Goodwill 327,406 — — 327,406 Other assets 30,813 — — 30,813 Total assets $ 2,419,226 $ 5,065 $ — $ 2,424,291 Liabilities and partners' equity Current liabilities: Accounts payable $ 308,941 $ 38 $ — $ 308,979 Accounts payable - affiliates (169) 169 — — Working capital revolving credit facility - current portion 103,300 — — 103,300 Environmental liabilities - current portion 6,092 — — 6,092 Trustee taxes payable 42,613 — — 42,613 Accrued expenses and other current liabilities 117,149 125 — 117,274 Derivative liabilities 4,494 — — 4,494 Total current liabilities 582,420 332 — 582,752 Working capital revolving credit facility - less current portion 150,000 — — 150,000 Revolving credit facility 220,000 — — 220,000 Senior notes 664,455 — — 664,455 Environmental liabilities - less current portion 57,132 — — 57,132 Financing obligations 149,997 — — 149,997 Deferred tax liabilities 42,856 — — 42,856 Other long-term liabilities 57,905 — — 57,905 Total liabilities 1,924,765 332 — 1,925,097 Partners' equity Global Partners LP equity 494,461 2,870 — 497,331 Noncontrolling interest — 1,863 — 1,863 Total partners' equity 494,461 4,733 — 499,194 Total liabilities and partners' equity $ 2,419,226 $ 5,065 $ — $ 2,424,291 Condensed Consolidating Statement of Operations Three Months Ended June 30, 2019 (In thousands) (Issuer) Non- Guarantor Guarantor Subsidiaries Subsidiary Eliminations Consolidated Sales $ 3,507,137 $ 526 $ (123) $ 3,507,540 Cost of sales 3,340,184 336 (123) 3,340,397 Gross profit 166,953 190 — 167,143 Costs and operating expenses: Selling, general and administrative expenses 40,867 101 — 40,968 Operating expenses 86,068 383 — 86,451 Amortization expense 2,977 — — 2,977 Net gain on sale and disposition of assets (1,128) — — (1,128) Total costs and operating expenses 128,784 484 — 129,268 Operating income (loss) 38,169 (294) — 37,875 Interest expense (23,066) — — (23,066) Income (loss) before income tax expense 15,103 (294) — 14,809 Income tax expense (438) — — (438) Net income (loss) 14,665 (294) — 14,371 Net loss attributable to noncontrolling interest — 118 — 118 Net income (loss) attributable to Global Partners LP 14,665 (176) — 14,489 Less: General partners' interest in net income, including incentive distribution rights 366 — — 366 Less: Series A preferred limited partner interest in net income 1,682 — — 1,682 Net income (loss) attributable to common limited partners $ 12,617 $ (176) $ — $ 12,441 Condensed Consolidating Statement of Operations Three Months Ended June 30, 2018 (In thousands) (Issuer) Non- Guarantor Guarantor Subsidiaries Subsidiary Eliminations Consolidated Sales $ 3,126,450 $ 215 $ (90) $ 3,126,575 Cost of sales 2,976,692 712 (90) 2,977,314 Gross profit 149,758 (497) — 149,261 Costs and operating expenses: Selling, general and administrative expenses 39,854 100 — 39,954 Operating expenses 75,837 381 — 76,218 Amortization expense 2,437 — — 2,437 Net loss on sale and disposition of assets 3,033 — — 3,033 Total costs and operating expenses 121,161 481 — 121,642 Operating income (loss) 28,597 (978) — 27,619 Interest expense (21,613) — — (21,613) Income (loss) before income tax benefit 6,984 (978) — 6,006 Income tax benefit 16 — — 16 Net income (loss) 7,000 (978) — 6,022 Net loss attributable to noncontrolling interest — 391 — 391 Net income (loss) attributable to Global Partners LP 7,000 (587) — 6,413 Less: General partners' interest in net income, including incentive distribution rights 110 — — 110 Net income (loss) attributable to common limited partners $ 6,890 $ (587) $ — $ 6,303 Condensed Consolidating Statement of Operations Six Months Ended June 30, 2019 (In thousands) (Issuer) Non- Guarantor Guarantor Subsidiaries Subsidiary Eliminations Consolidated Sales $ 6,486,499 $ 885 $ (218) $ 6,487,166 Cost of sales 6,162,384 1,013 (218) 6,163,179 Gross profit (loss) 324,115 (128) — 323,987 Costs and operating expenses: Selling, general and administrative expenses 81,859 199 — 82,058 Operating expenses 168,597 798 — 169,395 Lease exit and termination gain (493) — — (493) Amortization expense 5,953 — — 5,953 Net gain on sale and disposition of assets (575) — — (575) Total costs and operating expenses 255,341 997 — 256,338 Operating income (loss) 68,774 (1,125) — 67,649 Interest expense (46,022) — — (46,022) Income (loss) before income tax expense 22,752 (1,125) — 21,627 Income tax expense (462) — — (462) Net income (loss) 22,290 (1,125) — 21,165 Net loss attributable to noncontrolling interest — 450 — 450 Net income (loss) attributable to Global Partners LP 22,290 (675) — 21,615 Less: General partners' interest in net income, including incentive distribution rights 670 — — 670 Less: Series A preferred limited partner interest in net income 3,364 — — 3,364 Net income (loss) attributable to common limited partners $ 18,256 $ (675) $ — $ 17,581 Condensed Consolidating Statement of Operations Six Months Ended June 30, 2018 (In thousands) (Issuer) Non- Guarantor Guarantor Subsidiaries Subsidiary Eliminations Consolidated Sales $ 5,928,948 $ 693 $ (175) $ 5,929,466 Cost of sales 5,634,416 1,634 (175) 5,635,875 Gross profit (loss) 294,532 (941) — 293,591 Costs and operating expenses: Selling, general and administrative expenses 79,129 191 — 79,320 Operating expenses 149,504 763 — 150,267 Gain on trustee taxes (52,627) — — (52,627) Amortization expense 4,905 — — 4,905 Net loss on sale and disposition of assets 4,900 — — 4,900 Total costs and operating expenses 185,811 954 — 186,765 Operating income (loss) 108,721 (1,895) — 106,826 Interest expense (43,058) — — (43,058) Income (loss) before income tax benefit 65,663 (1,895) — 63,768 Income tax benefit 929 — — 929 Net income (loss) 66,592 (1,895) — 64,697 Net loss attributable to noncontrolling interest — 758 — 758 Net income (loss) attributable to Global Partners LP 66,592 (1,137) — 65,455 Less: General partners' interest in net income, including incentive distribution rights 506 — — 506 Net income (loss) attributable to common limited partners $ 66,086 $ (1,137) $ — $ 64,949 Condensed Consolidating Statement Cash Flows Six Months Ended June 30, 2019 (In thousands) (Issuer) Non- Guarantor Guarantor Subsidiaries Subsidiary Consolidated Cash flows from operating activities Net cash used in operating activities $ (32,879) $ (613) $ (33,492) Cash flows from investing activities Capital expenditures (29,974) — (29,974) Seller note issuances (640) — (640) Proceeds from sale of property and equipment 10,053 — 10,053 Net cash used in investing activities (20,561) — (20,561) Cash flows from financing activities Net borrowings from working capital revolving credit facility 102,800 — 102,800 Net payments on revolving credit facility (8,000) — (8,000) LTIP units withheld for tax obligations (32) — (32) Distributions to limited partners and general partner (38,390) — (38,390) Net cash provided by financing activities 56,378 — 56,378 Cash and cash equivalents Increase (decrease) in cash and cash equivalents 2,938 (613) 2,325 Cash and cash equivalents at beginning of period 7,050 1,071 8,121 Cash and cash equivalents at end of period $ 9,988 $ 458 $ 10,446 Condensed Consolidating Statement Cash Flows Six Months Ended June 30, 2018 (In thousands) (Issuer) Non- Guarantor Guarantor Subsidiaries Subsidiary Consolidated Cash flows from operating activities Net cash used in operating activities $ (15,806) $ (420) $ (16,226) Cash flows from investing activities Capital expenditures (27,168) — (27,168) Proceeds from sale of property and equipment 7,241 — 7,241 Net cash used in investing activities (19,927) — (19,927) Cash flows from financing activities Net borrowings from working capital revolving credit facility 71,300 — 71,300 Net payments on revolving credit facility (11,000) — (11,000) Distributions to limited partners and general partner (31,523) — (31,523) Net cash provided by financing activities 28,777 — 28,777 Cash and cash equivalents Decrease in cash and cash equivalents (6,956) (420) (7,376) Cash and cash equivalents at beginning of period 13,035 1,823 14,858 Cash and cash equivalents at end of period $ 6,079 $ 1,403 $ 7,482 |