Global Partners LP Stock

Global Partners LP owns, controls, or has access to a terminal network 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’). Global GP LLC operates as the company’s general partner.

The company is one of the region’s largest independent owners, suppliers and operators of gasoline stations and convenience stores. As of December 31, 2022, the company had a portfolio of 1,673 owned, leased and/or supplied gasoline stations, including 353 directly operated convenience stores, primarily in the Northeast. The company is also one of the largest distributors of gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers in the New England states and New York. The company engages in the purchasing, selling, gathering, blending, storing and logistics of transporting petroleum and related products, including gasoline and gasoline blendstocks (such as ethanol), distillates (such as home heating oil, diesel and kerosene), residual oil, renewable fuels, crude oil and propane and in the transportation of petroleum products and renewable fuels by rail from the mid-continent region of the United States and Canada.

The company purchases refined petroleum products, gasoline blendstocks, renewable fuels and crude oil primarily from domestic and foreign refiners and ethanol producers, crude oil producers, major and independent oil companies and trading companies.

Segments

The company operates through three segments: Wholesale, Gasoline Distribution and Station Operations (GDSO) and Commercial.

Wholesale

In its Wholesale segment, the company engages in the logistics of selling, gathering, blending, storing and transporting refined petroleum products, gasoline blendstocks, renewable fuels, crude oil and propane. The company transports these products by railcars, barges, trucks and/or pipelines pursuant to spot or long-term contracts. From time to time, the company aggregates crude oil by truck or pipeline in the mid-continent region of the United States and Canada, transport it by rail and ship it by barge to refiners. The company sells home heating oil, branded and unbranded gasoline and gasoline blendstocks, diesel, kerosene and residual oil to home heating oil retailers and wholesale distributors. Generally, customers use their own vehicles or contract carriers to take delivery of the gasoline, distillates and propane at bulk terminals and inland storage facilities that the company owns or controls or at which it has throughput or exchange arrangements. Ethanol is shipped primarily by rail and by barge.

Gasoline Distribution and Station Operations

In its GDSO segment, gasoline distribution includes sales of branded and unbranded gasoline to gasoline station operators and sub-jobbers. Station operations include convenience store and prepared food sales; rental income from gasoline stations leased to dealers, from commissioned agents and from cobranding arrangements; and sundries (such as car wash sales and lottery and ATM commissions).

As of December 31, 2022, the company had a portfolio of owned, leased and/or supplied gasoline stations, primarily in the Northeast.

Commercial

In its Commercial segment, the company includes sales and deliveries to end user customers in the public sector and to large commercial and industrial end users of unbranded gasoline, home heating oil, diesel, kerosene, residual oil and bunker fuel. In the case of public sector commercial and industrial end user customers, the company sells products primarily either through a competitive bidding process or through contracts of various terms. The company responds to publicly issued requests for product proposals and quotes. The company generally arranges for the delivery of the product to the customer’s designated location. The company’s Commercial segment also includes sales of custom blended fuels delivered by barges or from a terminal dock to ships through bunkering activity.

Products

Gasoline: The company sells substantially all grades of branded and unbranded gasoline and it sells gasoline blendstocks, such as ethanol, that comply with seasonal and geographical requirements in the areas in which it markets.

Distillates: Distillates are primarily divided into home heating oil, diesel and kerosene. In 2022, sales of diesel, home heating oil and kerosene accounted for approximately 62%, 37% and 1%, respectively, of the company’s total volume of distillates sold. The distillates the company sells are used primarily for fuel for trucks and off-road construction equipment and for space heating of residential and commercial buildings.

The company sells generic home heating oil and Heating Oil Plus, its proprietary premium branded heating oil that is electronically blended at the delivery facility, to wholesale distributors and retailers. In addition, the company sells the additive used to create Heating Oil Plus to some wholesale distributors, make injection systems available to them and provide technical support to assist them with blending. The company also educates the sales force of its customers to better prepare them for marketing its products to their customers.

The company has a fixed price sales program that it markets primarily to wholesale distributors and retailers which uses the New York Mercantile Exchange (NYMEX) heating oil contract as the pricing benchmark and as the vehicle to manage the commodity risk.

The company sells generic diesel and Diesel One, its proprietary premium diesel fuel product. The company offers marketing and technical support for those customers who purchase Diesel One.

Residual Oil: The company sells residual oil to industrial, commercial and marine customers. The company specially blends product for users in accordance with their individual power specifications and for marine transport.

Crude Oil: The company engages in the purchasing, selling, storing and logistics of transporting domestic and Canadian crude oil and other products via pipeline, rail and barge from the mid-continent region of the United States and Canada for distribution to refiners and other customers.

Convenience Store Items and Sundries: The company sells a broad selection of food, beverages, snacks, grocery and non-food merchandise at its convenience store locations and generate sundry sales, such as car wash sales and lottery and ATM commissions, at its convenience store locations.

Assets

Terminals

As of December 31, 2022, the company owned, leased or maintained dedicated storage facilities at 24 bulk terminals, each with the capacity of more than 50,000 barrels, with a collective storage capacity of approximately 10.0 million barrels. Twenty-one of these bulk terminals are located throughout the Northeast. Some of the company’s storage tankage is versatile, allowing it to switch tankage from one product to another.

In addition to refined products, the company owns or operates rail facilities in New York, Vermont and Oregon capable of handling ethanol, renewable diesel (only in Oregon) and other products and two rail facilities in North Dakota that are permitted to receive, store or distribute crude oil. At select locations, the company has capacity to store renewable fuels, and in Albany, New York, it also has an additional rail-fed storage terminal capable of handling propane.

The bulk terminals and inland storage facilities from which the company distributes product are supplied by ship, barge, truck, pipeline and/or rail. The inland storage facilities, which the company uses primarily to store distillates, are supplied with product delivered by truck and/or pipeline from bulk terminals. The company’s customers receive product from its network of bulk terminals and inland storage facilities primarily via truck, pipeline and/or rail.

In connection with its businesses, the company may lease or otherwise secure the right to use certain third-party assets (such as railcars, pipelines and barges). As of December 31, 2022, the company supported its rail activity with a fleet of approximately 65 leased railcars. The makeup of this fleet is split between general-purpose cars and pressurized tank cars. The company leases railcars from third parties through various lease arrangements with various expiration dates, and it also leases barges from third parties through various time charter lease arrangements also with various expiration dates.

The company uses throughput arrangements for storage of product at terminals owned by others. The company or its customers can load product at these terminals, and it pays the owners of these terminals fees for services rendered in connection with the receipt, storage and handling of such product. Compensation to the terminal owners may be fixed or based upon the volume of its product that is delivered and sold at the terminal. The company’s throughput agreements may require it to throughput a minimum volume over an agreed-upon period and may include make-up rights if the minimum volume is not met.

The company has exchange agreements with customers and suppliers. An exchange is a contractual agreement where the parties exchange product at their respective terminals or facilities. For example, the company (or its customers) receive product that is owned by its exchange partner from such party’s facility or terminal, and it delivers the same volume of its product to such party (or to such party’s customers) out of one of the terminals in its terminal network.

Gasoline Stations

As of December 31, 2022, the company had a portfolio of 1,673 owned, leased and/or supplied gasoline stations, including 353 directly operated convenience stores, primarily in the Northeast.

The company receives rental income from commissioned agent leased gasoline stations for the leasing of the convenience store premises, repair bays and/or other businesses that may be conducted by the commissioned agent. At dealer-leased locations, the dealer purchases gasoline from the company, and the dealer sets the retail price of gasoline at the dealer’s station. The company also receives rental income from dealer-leased gasoline stations and cobranding arrangements. The company also supplies gasoline to locations owned and/or leased by independent contract dealers. Additionally, the company has contractual relationships with distributors in certain New England states pursuant to which it sources and supplies these distributors’ gasoline stations with ExxonMobil-branded gasoline.

Seasonality

Due to the nature of its businesses and the company’s reliance, in part, on consumer travel and spending patterns. Travel and recreational activities are typically higher in these months in the geographic areas in which the company operates, increasing the demand for gasoline. Therefore, the company’s volumes in gasoline are typically higher in the second and third quarters of the calendar year. As demand for some of the company’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 (year ended December 31, 2022).

Trademarks

The name GLOBAL, the company’s Global logos and the name Global Petroleum Corp. are its trademarks. In addition, the company has trademarks for its premium fuels and additives: Heating Oil Plus and the Heating Oil Plus logo, SubZero and the SubZero logo, Diesel One and the Diesel One logo, Diesel 1, the Diesel 1 logo and the tagline Legacy.Technology.Performance. The company’s Global online customer portal for buying, bidding and contract management is operated under the name GlobalCONNECT.

The company also owns registrations and use the following trademarks, among others, for its convenience store business: Alltown, Alltown Fresh & logo, Fresh with Benefits, Alltown Insiders, Alltown Neighborhood Perks, Centre St. Kitchen, Fast Freddie’s, Mr. Mike’s, Deli Joe’s, Diamond Fuels, Xtra Mart & logo, HF Honey Farms & logo, Wheels & logo. The company also owns the trademark Jiffy Mart & logo. The company also has rights to use O’Connell’s Convenience Plus, T-Bird, Miller’s Mart and related marks.

Acquisitions

On September 20, 2022, the company acquired substantially all of the assets of Tidewater Convenience, Inc. The acquisition includes 14 company-operated Tidewater convenience stores and 1 fuel site, all located in Virginia.

On February 1, 2022, the company acquired substantially all of the retail motor fuel assets of Miller Oil Co., Inc. The acquisition includes 21 company-operated Miller’s Neighborhood Market convenience stores and 2 fuel sites that are either owned or leased, including lessee dealer and commissioned agent locations, all located in Virginia, and 34 fuel supply only sites, primarily in Virginia.

On January 25, 2022, the company acquired substantially all of the assets of Consumers Petroleum of Connecticut, Incorporated. The acquisition includes 26 company-owned Wheels convenience stores and related fuel operations located in Connecticut and 22 fuel-supply only sites located in Connecticut and New York.

Sale of the Revere Terminal

On June 28, 2022, the company completed the sale of its terminal located on Boston Harbor in Revere, Massachusetts (the Revere Terminal).

Environmental

The company’s operations generate a variety of wastes, including some hazardous wastes that are subject to the federal Resource Conservation and Recovery Act, as amended (RCRA) and comparable state laws. Its operations also generate solid wastes, which are regulated under state law or the less stringent solid waste requirements of the federal Solid Waste Disposal Act. The company’s operations are in substantial compliance with the existing requirements of RCRA, the Solid Waste Disposal Act, and similar state and municipal laws.

The company is in substantial compliance with regulations pursuant to the Oil Pollution Act of 1990, the federal Clean Water Act and similar state laws. Some of its facilities and operations are also subject to the U.S. Environmental Protection Agency’s Mandatory Reporting of Greenhouse Gases rule, and any further regulation may increase its operational costs.

The company is subject to regulations promulgated under the Hazardous Materials Transportation Act (and subsequent amendments) and administered by the U.S. Department of Transportation under the Federal Highway Administration, the Federal Railroad Administration, the United States Coast Guard and the Pipeline and Hazardous Materials Safety Administration.

The company is subject to the requirements of the Occupational Safety and Health Act and comparable state statutes that regulate the protection of the health and safety of workers.

History

Global Partners LP was founded in 2005. The company was incorporated under Delaware law in 2005.