Business Context and Reporting Period
Company: Global Partners LP (Delaware limited partnership)
Filing Type: Form 8-K (Current Report)
Date of Report: July 31, 2018
Reporting Period: Three months ended June 30, 2018 (Second Quarter 2018)
Context: The filing discloses preliminary, unaudited financial estimates included in a preliminary prospectus supplement for a Registration Statement on Form S-3. Management emphasizes that actual results may differ materially from these estimates as financial closing procedures were not yet complete.
Key Financial Metrics (Preliminary Estimates)
The following figures represent management's estimates for the three months ended June 30, 2018, presented as ranges in thousands of dollars:
| Financial Metric | Low Estimate | High Estimate |
|---|---|---|
| Net Income | $3,800 | $6,800 |
| Net Income Attributable to Global Partners LP | $4,200 | $7,200 |
| EBITDA | $50,600 | $53,600 |
| Adjusted EBITDA | $53,600 | $56,600 |
| Distributable Cash Flow | $18,800 | $21,800 |
Additional Components:
- Depreciation and Amortization: $25,100 (fixed estimate)
- Interest Expense: $21,600 (fixed estimate)
- Maintenance Capital Expenditures: $11,200 (fixed estimate)
- Net Loss on Sale of Assets: $3,000 (included in Adjusted EBITDA reconciliation)
Material Changes and Unusual Items
Unusual Items: The filing identifies a net loss on the sale and disposition of assets of $3.0 million for the quarter. This item is excluded from Adjusted EBITDA but included in the calculation of Distributable Cash Flow as defined by the partnership agreement.
Comparison to Prior Period: The filing text does not provide specific financial results for the prior comparable period (Q2 2017) or Q1 2018, preventing a direct quantitative comparison of material changes.
Guidance, Outlook, and Risks
Management Commentary: Management utilizes EBITDA and Adjusted EBITDA to assess compliance with debt covenants, operating performance, and the ability to generate cash for distributions. Distributable Cash Flow is highlighted as a key indicator for sustaining distributions to partners.
Forward-Looking Statements: The document contains forward-looking statements subject to risks and uncertainties. Actual results may differ due to factors discussed in the company's Form 10-K (2017) and Form 10-Q (Q1 2018).
Risks and Contingencies:
- Estimation Risk: Results are preliminary and subject to material adjustment upon completion of financial closing procedures.
- Non-GAAP Measures: EBITDA and Distributable Cash Flow are not GAAP measures and may not be comparable to similarly titled measures of other companies.
Investor Verification Checklist
- Final Audit Status: Verify the final audited financial statements for Q2 2018 to confirm if actual results align with the preliminary ranges provided.
- Asset Sale Details: Review the specific nature and accounting treatment of the $3.0 million loss on the sale and disposition of assets.
- Debt Covenant Compliance: Confirm that the final Adjusted EBITDA figures satisfy all financial covenants in the company's debt agreements.
- Distribution Coverage: Assess whether the final Distributable Cash Flow supports the company's quarterly distribution obligations.
- Capital Expenditures: Verify the final classification of capital expenditures between maintenance and growth categories.