Supplemental Guarantor Condensed Consolidating Financial Statements | Note 21. 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, 2020 and December 31, 2019, the Condensed Consolidating Statements of Operations for the three and six months ended June 30, 2020 and 2019 and the Condensed Consolidating Statements of Cash Flows for the six months ended June 30, 2020 and 2019 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, 2020 (In thousands) (Issuer) Non- Guarantor Guarantor Subsidiaries Subsidiary Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 9,027 $ 1,331 $ — $ 10,358 Accounts receivable, net 232,594 171 67 232,832 Accounts receivable—affiliates 7,496 67 (67) 7,496 Inventories 344,026 — — 344,026 Brokerage margin deposits 32,296 — — 32,296 Derivative assets 48,571 — — 48,571 Prepaid expenses and other current assets 93,146 251 — 93,397 Total current assets 767,156 1,820 — 768,976 Property and equipment, net 1,073,386 1,698 — 1,075,084 Right of use assets, net 281,960 65 — 282,025 Intangible assets, net 41,340 — — 41,340 Goodwill 323,889 — — 323,889 Other assets 30,964 — — 30,964 Total assets $ 2,518,695 $ 3,583 $ — $ 2,522,278 Liabilities and partners’ equity Current liabilities: Accounts payable $ 162,822 $ 529 $ — $ 163,351 Accounts payable—affiliates (26) 26 — — Working capital revolving credit facility—current portion 41,700 — — 41,700 Lease liability—current portion 70,604 18 — 70,622 Environmental liabilities—current portion 5,009 — — 5,009 Trustee taxes payable 43,739 — — 43,739 Accrued expenses and other current liabilities 94,403 183 — 94,586 Derivative liabilities 8,089 — — 8,089 Total current liabilities 426,340 756 — 427,096 Working capital revolving credit facility—less current portion 175,000 — — 175,000 Revolving credit facility 188,000 — — 188,000 Senior notes 691,355 — — 691,355 Long-term lease liability—less current portion 223,504 43 — 223,547 Environmental liabilities—less current portion 51,290 — — 51,290 Financing obligations 147,400 — — 147,400 Deferred tax liabilities 54,999 — — 54,999 Other long—term liabilities 55,085 — — 55,085 Total liabilities 2,012,973 799 — 2,013,772 Partners' equity Global Partners LP equity 505,722 1,700 — 507,422 Noncontrolling interest — 1,084 — 1,084 Total partners' equity 505,722 2,784 — 508,506 Total liabilities and partners' equity $ 2,518,695 $ 3,583 $ — $ 2,522,278 Condensed Consolidating Balance Sheet December 31, 2019 (In thousands) (Issuer) Non- Guarantor Guarantor Subsidiaries Subsidiary Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 11,591 $ 451 $ — $ 12,042 Accounts receivable, net 412,853 339 3 413,195 Accounts receivable—affiliates 7,823 3 (3) 7,823 Inventories 450,482 — — 450,482 Brokerage margin deposits 34,466 — — 34,466 Derivative assets 4,564 — — 4,564 Prepaid expenses and other current assets 81,845 95 — 81,940 Total current assets 1,003,624 888 — 1,004,512 Property and equipment, net 1,102,644 2,219 — 1,104,863 Right of use assets, net 296,672 74 — 296,746 Intangible assets, net 46,765 — — 46,765 Goodwill 324,474 — — 324,474 Other assets 31,067 — — 31,067 Total assets $ 2,805,246 $ 3,181 $ — $ 2,808,427 Liabilities and partners' equity Current liabilities: Accounts payable $ 373,355 $ 31 $ — $ 373,386 Accounts payable—affiliates (17) 17 — — Working capital revolving credit facility—current portion 148,900 — — 148,900 Lease liability—current portion 68,143 17 — 68,160 Environmental liabilities—current portion 5,009 — — 5,009 Trustee taxes payable 42,932 — — 42,932 Accrued expenses and other current liabilities 102,737 65 — 102,802 Derivative liabilities 12,698 — — 12,698 Total current liabilities 753,757 130 — 753,887 Working capital revolving credit facility—less current portion 175,000 — — 175,000 Revolving credit facility 192,700 — — 192,700 Senior notes 690,533 — — 690,533 Long-term lease liability—less current portion 239,308 41 — 239,349 Environmental liabilities—less current portion 54,262 — — 54,262 Financing obligations 148,127 — — 148,127 Deferred tax liabilities 42,879 — — 42,879 Other long—term liabilities 52,451 — — 52,451 Total liabilities 2,349,017 171 — 2,349,188 Partners' equity Global Partners LP equity 456,229 1,836 — 458,065 Noncontrolling interest — 1,174 — 1,174 Total partners' equity 456,229 3,010 — 459,239 Total liabilities and partners' equity $ 2,805,246 $ 3,181 $ — $ 2,808,427 Condensed Consolidating Statement of Operations Three Months Ended June 30, 2020 (In thousands) (Issuer) Non- Guarantor Guarantor Subsidiaries Subsidiary Eliminations Consolidated Sales $ 1,469,017 $ 780 $ (220) $ 1,469,577 Cost of sales 1,229,572 278 (220) 1,229,630 Gross profit 239,445 502 — 239,947 Costs and operating expenses: Selling, general and administrative expenses 58,182 835 — 59,017 Operating expenses 76,323 391 — 76,714 Amortization expense 2,713 — — 2,713 Net gain on sale and disposition of assets (811) — — (811) Long-lived asset impairment 1,724 — — 1,724 Total costs and operating expenses 138,131 1,226 — 139,357 Operating income (loss) 101,314 (724) — 100,590 Interest expense (21,089) — — (21,089) Income (loss) before income tax expense 80,225 (724) — 79,501 Income tax expense (3,528) — — (3,528) Net income 76,697 (724) — 75,973 Net loss attributable to noncontrolling interest — 289 — 289 Net income attributable to Global Partners LP 76,697 (435) — 76,262 Less: General partners' interest in net income, including incentive distribution rights 511 — — 511 Less: Series A preferred limited partner interest in net income 1,682 — — 1,682 Net income attributable to common limited partners $ 74,504 $ (435) $ — $ 74,069 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 38,169 (294) — 37,875 Interest expense (23,066) — — (23,066) Income before income tax expense 15,103 (294) — 14,809 Income tax expense (438) — — (438) Net income 14,665 (294) — 14,371 Net loss attributable to noncontrolling interest — 118 — 118 Net income 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 attributable to common limited partners $ 12,617 $ (176) $ — $ 12,441 Condensed Consolidating Statement of Operations Six Months Ended June 30, 2020 (In thousands) (Issuer) Non- Guarantor Guarantor Subsidiaries Subsidiary Eliminations Consolidated Sales $ 4,063,825 $ 1,111 $ (266) $ 4,064,670 Cost of sales 3,678,689 562 (266) 3,678,985 Gross profit 385,136 549 — 385,685 Costs and operating expenses: Selling, general and administrative expenses 99,006 934 — 99,940 Operating expenses 158,426 841 — 159,267 Amortization expense 5,425 — — 5,425 Net gain on sale and disposition of assets (68) — — (68) Long-lived asset impairment 1,724 — — 1,724 Total costs and operating expenses 264,513 1,775 — 266,288 Operating income 120,623 (1,226) — 119,397 Interest expense (42,690) — — (42,690) Income before income tax benefit 77,933 (1,226) — 76,707 Income tax benefit 2,341 — — 2,341 Net income 80,274 (1,226) — 79,048 Net loss attributable to noncontrolling interest — 490 — 490 Net income attributable to Global Partners LP 80,274 (736) — 79,538 Less: General partners' interest in net income, including incentive distribution rights 533 — — 533 Less: Series A preferred limited partner interest in net income 3,364 — — 3,364 Net income attributable to common limited partners $ 76,377 $ (736) $ — $ 75,641 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 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 68,774 (1,125) — 67,649 Interest expense (46,022) — — (46,022) Income before income tax expense 22,752 (1,125) — 21,627 Income tax expense (462) — — (462) Net income 22,290 (1,125) — 21,165 Net loss attributable to noncontrolling interest — 450 — 450 Net income 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 attributable to common limited partners $ 18,256 $ (675) $ — $ 17,581 Condensed Consolidating Statement Cash Flows Six Months Ended June 30, 2020 (In thousands) (Issuer) Non- Guarantor Guarantor Subsidiaries Subsidiary Consolidated Cash flows from operating activities Net cash provided by operating activities $ 162,123 $ (120) $ 162,003 Cash flows from investing activities Capital expenditures (21,746) — (21,746) Seller note issuances (1,188) — (1,188) Proceeds from sale of property and equipment 6,082 — 6,082 Net cash used in investing activities (16,852) — (16,852) Cash flows from financing activities Net payments on working capital revolving credit facility (107,200) — (107,200) Net payments on revolving credit facility (4,700) — (4,700) Repurchase of common units (291) — (291) LTIP units withheld for tax obligations (30) — (30) Noncontrolling interest capital contribution (600) 1,000 400 Distributions to limited partners and general partner (35,014) — (35,014) Net cash used in financing activities (147,835) 1,000 (146,835) Cash and cash equivalents Decrease in cash and cash equivalents (2,564) 880 (1,684) Cash and cash equivalents at beginning of period 11,591 451 12,042 Cash and cash equivalents at end of period $ 9,027 $ 1,331 $ 10,358 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 |