Attached files

file filename
8-K - 8-K - GLOBAL PARTNERS LPa12-22893_28k.htm
EX-23.1 - EX-23.1 - GLOBAL PARTNERS LPa12-22893_2ex23d1.htm
EX-99.1 - EX-99.1 - GLOBAL PARTNERS LPa12-22893_2ex99d1.htm

Exhibit 99.2

 

Global Partners LP

Unaudited pro forma combined

financial statements

 

The following unaudited pro forma combined financial data is based upon the historical audited consolidated financial data of Global Partners LP and its subsidiaries (the “Partnership”) and AE Holdings Corp. and its subsidiaries (“AE Holdings”) and has been prepared to reflect the Partnership’s March 1, 2012 acquisition from AE Holdings of 100% of the outstanding membership interests in Alliance Energy LLC (“Alliance”). Prior to the closing of the acquisition, Alliance was wholly owned by AE Holdings, which is approximately 95% owned by members of the Slifka family.

 

The unaudited pro forma combined balance sheet combines the historical consolidated balance sheets of the Partnership and AE Holdings, giving effect to the acquisition as if it had been consummated on December 31, 2011, and the unaudited pro forma combined statements of income for the year ended December 31, 2011 and for the nine months ended September 30, 2012 combine the historical statements of income of the Partnership and AE Holdings, giving effect to the acquisition as if it had occurred on January 1, 2011. The historical consolidated financial information has been adjusted to give effect to pro forma events that are (1) directly attributable to the acquisition, (2) factually supportable, and (3) with respect to the statements of income, expected to have a continuing impact on the combined results of operations.

 

These unaudited pro forma combined financial statements should be read in conjunction with the Partnership’s historical audited consolidated financial statements and related notes previously filed with the Securities and Exchange Commission and AE Holdings’s audited consolidated financial statements and accompanying notes filed along with this data. The unaudited pro forma combined financial statements are not necessarily indicative of the operating results or financial position that would have occurred if the acquisition had been completed at the dates indicated. It may be necessary to further reclassify AE Holdings’s consolidated financial statements to conform to those classifications that are determined by the combined company to be most appropriate. While some reclassifications of prior periods have been included in the unaudited pro forma combined financial statements, further reclassifications may be necessary.

 

The unaudited pro forma combined financial statements were prepared using the purchase method of accounting with the Partnership treated as the acquiring entity. Accordingly, consideration paid by the Partnership to complete the acquisition of Alliance was preliminarily allocated to Alliance’s assets and liabilities based upon their estimated fair values as of March 1, 2012, the date of completion of the acquisition. The preliminary allocation is dependent upon certain valuations and other studies that have not progressed to a stage where there is sufficient information to make a definitive allocation. Additionally, a final determination of the fair value of Alliance’s assets and liabilities will be based on the actual net tangible and intangible assets of Alliance that exist as of the date of the acquisition. Accordingly, the pro forma purchase price adjustments are preliminary, subject to further adjustments as additional information becomes available and as additional analyses are performed, and have been made solely for the purpose of providing the unaudited pro forma combined financial information presented below. The Partnership, with the assistance of an independent appraisal firm, estimated on a preliminary basis the fair value of Alliance’s assets and liabilities based on discussions with the Partnership’s management, due diligence and information presented in public filings.

 



 

Global Partners LP

Unaudited pro forma combined balance sheet

December 31, 2011

 

 

 

Historical

 

Pro forma adjustments

 

 

 

In thousands

 

Global
Partners LP

 

AE Holdings
Corp.

 

Reclassifications

 

Other
adjustments

 

Pro forma
combined

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

4,328

 

$

1,547

 

$

 

$

(1,547

)(e)

$

4,328

 

Accounts receivable, net

 

621,670

 

26,522

 

2,419

(a)

(4,700

)(f)

645,911

 

Accounts receivable—affiliates

 

1,776

 

2,419

 

(2,419

)(a)

(943

)(g)

833

 

Inventories

 

664,144

 

11,545

 

 

 

675,689

 

Brokerage margin deposits

 

43,935

 

 

 

 

43,935

 

Fair value of forward fixed price contracts

 

15,450

 

 

 

 

15,450

 

Prepaid expenses and other current assets

 

61,561

 

4,544

 

 

 

66,105

 

Total current assets

 

1,412,864

 

46,577

 

 

(7,190

)

1,452,251

 

Property and equipment, net

 

408,850

 

204,351

 

 

90,543

(f)

703,744

 

Goodwill

 

 

8,960

 

 

14,592

(h)

23,552

 

Intangible assets, net

 

36,710

 

4,477

 

 

28,808

(i)

69,995

 

Other assets

 

10,427

 

6,420

 

 

 

16,847

 

Total non-current assets

 

455,987

 

224,208

 

 

133,943

 

814,138

 

Total assets

 

$

1,868,851

 

$

270,785

 

$

 

$

126,753

 

$

2,266,389

 

Liabilities and partners’ equity

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

575,776

 

$

36,947

 

$

 

$

 

$

612,723

 

Accounts payable—affiliate

 

 

943

 

 

(943

)(g)

 

Working capital revolving credit facility—current portion

 

62,805

 

 

 

22,800

(j)

85,605

 

Current portion of long-term debt

 

 

22,800

 

 

 

(22,800

)(e)

 

Environmental liabilities—current portion

 

2,936

 

 

500

(b)

 

3,436

 

Trustee taxes payable

 

76,523

 

 

11,468

(c)

 

87,991

 

Accrued expenses and other current liabilities

 

41,307

 

14,686

 

(11,968

)(b)(c)

 

44,025

 

Obligations on forward fixed price contracts and other derivatives

 

11,707

 

 

 

 

11,707

 

Total current liabilities

 

771,054

 

75,376

 

 

(943

)

845,487

 

Working capital revolving credit facility—less current portion

 

526,095

 

 

 

(32,902

)(j)

493,193

 

Revolving credit facility

 

205,000

 

 

 

192,000

(j)

397,000

 

Revolving line of credit—less current portion

 

 

89,175

 

 

 

(89,175

)(e)

 

Senior term debt—less current portion

 

 

56,250

 

 

 

(56,250

)(e)

 

Environmental liabilities—less current portion

 

27,303

 

 

2,114

(d)

19,386

(k)

48,803

 

Other long-term liabilities

 

24,110

 

12,192

 

(2,114

)(d)

1,916

(e)(f)

36,104

 

Total long-term liabilities

 

782,508

 

157,617

 

 

34,975

 

975,100

 

Total liabilities

 

1,553,562

 

232,993

 

 

34,032

 

1,820,587

 

Partners’ equity

 

 

 

 

 

 

 

 

 

 

 

Common unitholders

 

336,103

 

9

 

 

130,504

(l)

466,616

 

General partner interest

 

(319

)

 

 

 

(319

)

Retained earnings

 

 

42,292

 

 

(42,292

)(l)

 

Accumulated other comprehensive loss

 

(20,495

)

(4,509

)

 

4,509

(e)(l)

(20,495

)

Total partners’ equity

 

315,289

 

37,792

 

 

92,721

 

445,802

 

Total liabilities and partners’ equity

 

$

1,868,851

 

$

270,785

 

$

 

$

126,753

 

$

2,266,389

 

 

The accompanying notes are an integral part of these unaudited pro forma combined financial statements.

 



 

Global Partners LP

Unaudited pro forma combined statement of income

December 31, 2011

 

 

 

Historical

 

Pro forma adjustments

 

 

 

(In thousands, except per unit data)

 

Global
Partners LP

 

AE Holdings
Corp.

 

Reclassifications

 

Other
adjustments

 

Pro forma
combined

 

Sales

 

$

14,835,729

 

$

1,761,232

 

$

16,337

(a)

$

(189,887

)(e)(g)

$

16,423,411

 

Station rental revenues

 

 

16,337

 

(16,337

)(a)

 

 

Cost of sales

 

14,626,131

 

1,649,854

 

13,672

(b)

(188,172

)(e)(f)

16,101,485

 

Gross profit

 

209,598

 

127,715

 

(13,672

)

(1,715

)

321,926

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

78,605

 

83,685

 

(61,306

)(c)(d)

(2,662

)(g)

98,322

 

Operating expenses

 

73,534

 

 

61,069

(c)

 

134,603

 

Restructuring charges

 

2,030

 

 

 

 

2,030

 

Gain on sales and dispositions of property and equipment, net

 

 

(237

)

237

(d)

 

 

Amortization expense(1)

 

4,800

 

15,272

 

(13,672

)(b)

1,729

(h)

8,129

 

Total costs and operating expenses

 

158,969

 

98,720

 

(13,672

)

(933

)

243,084

 

Operating income

 

50,629

 

28,995

 

 

(782

)

78,842

 

Other (expense) income

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(31,209

)

(11,620

)

 

4,344

(i)

(38,485

)

Change in fair value of warrant liability

 

 

(2,214

)

 

2,214

(j)

 

Gain on derivative contracts, net

 

 

296

 

 

(296

)(k)

 

Total other (expense) income

 

(31,209

)

(13,538

)

 

6,262

 

(38,485

)

Income before income tax expense

 

19,420

 

15,457

 

 

(5,480

)

40,357

 

Income tax expense

 

(68

)

(100

)

 

 

(168

)

Net income

 

19,352

 

15,357

 

 

5,480

 

40,189

 

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

 

(684

)

 

 

(270

)(l)

(954

)

Limited partners’ interest in net income

 

$

18,668

 

$

15,357

 

$

 

$

5,210

 

$

39,235

 

Basic net income per limited partner unit

 

$

0.88

 

 

 

 

 

 

 

$

1.45

 

Diluted net income per limited partner unit

 

$

0.87

 

 

 

 

 

 

 

$

1.44

 

Basic weighted average limited partner units outstanding

 

21,280

 

 

 

 

 

5,850

(m)

27,130

 

Diluted weighted average limited partner units outstanding

 

21,474

 

 

 

 

 

5,850

(m)

27,324

 

 


(1)                                 Includes depreciation and amortization expense for AE Holdings Corp. on a historical basis.

 

The accompanying notes are an integral part of these unaudited pro forma combined financial statements.

 



 

Global Partners LP

Unaudited pro forma combined statement of income

for the nine months ended September 30, 2012

 

 

 

Historical

 

Pro forma adjustments

 

 

 

(In thousands, except per unit data)

 

Global
Partners LP

 

AE Holdings
Corp.

 

Reclassifications

 

Other
adjustments

 

Pro forma
combined

 

Sales

 

$

12,508,738

 

$

271,995

 

$

2,808

(n)

$

(40,579

)(r)(t)

$

12,742,962

 

Station rental revenues

 

 

2,808

 

(2,808

)(n)

 

 

Cost of sales

 

12,280,124

 

258,881

 

2,632

(o)

(40,666

)(r)(s)

12,500,971

 

Gross profit

 

228,614

 

15,922

 

(2,632

)

87

 

241,991

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

70,608

 

17,494

 

(10,460

)(p)(q)

(443

)(t)

77,199

 

Operating expenses

 

100,692

 

 

10,484

(p)

 

111,176

 

Loss on sales and dispositions of property and equipment, net

 

 

24

 

(24

)(q)

 

 

Amortization expense(1)

 

5,373

 

2,910

 

(2,632

)(o)

555

(u)

6,206

 

Total costs and operating expenses

 

176,673

 

20,428

 

(2,632

)

112

 

194,581

 

Operating income (loss)

 

51,941

 

(4,506

)

 

(25

)

47,410

 

Other (expense) income

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(27,705

)

(1,159

)

 

(54

)(v)

(28,918

)

Loss on derivative contracts, net

 

 

(2,051

)

 

2,051

(w)

 

Total other (expense) income

 

(27,705

)

(3,210

)

 

1,997

 

(28,918

)

Income before income tax expense

 

24,236

 

(7,716

)

 

1,972

 

18,492

 

Income tax expense

 

(228

)

 

 

 

(228

)

Net income (loss)

 

24,008

 

(7,716

)

 

1,972

 

18,264

 

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

 

(733

)

 

 

12

(x)

(721

)

Limited partners’ interest in net income

 

$

23,275

 

$

(7,716

)

$

 

$

1,984

 

$

17,543

 

Basic net income per limited partner unit

 

$

0.89

 

 

 

 

 

 

 

$

0.64

 

Diluted net income per limited partner unit

 

$

0.89

 

 

 

 

 

 

 

$

0.64

 

Basic weighted average limited partner units outstanding

 

26,085

 

 

 

 

 

1,281

(y)

27,366

 

Diluted weighted average limited partner units outstanding

 

26,258

 

 

 

 

 

1,281

(y)

27,539

 

 


(1)                                 Includes depreciation and amortization expense for AE Holdings Corp. on a historical basis.

 

The accompanying notes are an integral part of these unaudited pro forma combined financial statements.

 



 

Global Partners LP

Notes to unaudited pro forma combined financial statements

 

Note 1.         Basis of presentation

 

On March 1, 2012, Global Partners LP (the “Partnership”) acquired from AE Holdings Corp. (“AE Holdings”) 100% of the outstanding membership interests in Alliance Energy LLC (“Alliance”).

 

The accompanying unaudited pro forma combined financial statements present the pro forma consolidated financial position and results of operations of the combined company based upon the historical financial statements of the Partnership and AE Holdings, after giving effect to the acquisition and adjustments described in these notes, and are intended to reflect the impact of the acquisition on the Partnership. The accompanying unaudited pro forma combined financial statements are presented for illustrative purposes only and do not give effect to any cost savings, revenue synergies or restructuring costs which may result from the integration of the Partnership’s and Alliance’s operations.

 

The unaudited pro forma combined balance sheet reflects the acquisition as if it was completed on December 31, 2011 and includes pro forma adjustments for the Partnership’s preliminary valuations of certain tangible and intangible assets acquired and environmental liabilities assumed. These adjustments are subject to further adjustment as additional information becomes available and additional analyses are completed. The unaudited pro forma combined statements of income reflect the acquisition as if it had been completed on January 1, 2011.

 

The unaudited pro forma combined balance sheet has been adjusted to reflect the preliminary allocation of the purchase price to identifiable net assets acquired and the excess of the purchase price over the net assets acquired which represents goodwill. The purchase price allocation included within these unaudited pro forma combined financial statements is based upon a purchase price of approximately $312.4 million. See Note 2.

 

Note 2.         Preliminary allocation of acquisition consideration

 

The purchase price for the acquisition of approximately $312.4 million includes a cash payment of $181.9 million which was funded by the Partnership through additional borrowings under its revolving credit facility. The consideration also includes the issuance of 5,850,000 common units representing limited partner interests in the Partnership which had a fair value of $22.31 per unit on March 1, 2012, resulting in equity consideration of $130.5 million.

 

The following is a summary of the purchase price as of the date of acquisition (in thousands, except units):

 

Number of common units issued

 

5,850,000

 

 

 

Price per common unit on March 1, 2012, date of acquisition

 

$

22.31

 

 

 

Total fair value of common units issued

 

 

 

$

130,513

 

Cash consideration

 

 

 

181,898

 

Total purchase price

 

 

 

$

312,411

 

 

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

 

$

18,801

 

Inventory

 

11,421

 

Prepaid expenses

 

3,235

 

Property and equipment

 

294,894

 

Intangibles

 

33,285

 

Other non-current assets

 

4,861

 

Total identifiable assets purchased

 

366,497

 

Liabilities assumed:

 

 

 

Accounts payable

 

(36,975

)

Assumption of environmental liabilities

 

(22,000

)

Trustee taxes payable

 

(9,969

)

Accrued expenses

 

(2,211

)

Long-term deferred taxes

 

(6,425

)

Other non-current liabilities

 

(5,629

)

Total liabilities assumed

 

(83,209

)

Net identifiable assets acquired

 

283,288

 

Goodwill

 

29,123

 

Net assets acquired

 

$

312,411

 

 



 

Global Partners LP

Notes to unaudited pro forma combined financial statements

 

Note 3.        Pro forma adjustments

 

The unaudited pro forma combined financial data includes the following adjustments (i) to reclassify certain amounts to conform Alliance’s historical financial statements to the Partnership’s balance sheet and statements of income and (ii) to give effect to the acquisition based on preliminary estimates which may change as additional information is obtained:

 

Balance sheet at December 31, 2011

 

(a)                                 To reclassify $2.4 million out of accounts receivable—affiliate to accounts receivable, net in order to conform to the Partnership’s presentation.

 

(b)                                 To reclassify $0.5 million out of accrued expenses and other current liabilities to environmental liabilities—current portion in order to conform to the Partnership’s presentation.

 

(c)                                  To reclassify $11.5 million out of accrued expenses and other current liabilities to trustee taxes payable in order to conform to the Partnership’s presentation.

 

(d)                                 To reclassify $2.1 million out of other long-term liabilities to environmental liabilities—less current portion in order to conform to the Partnership’s presentation.

 

(e)                                  To eliminate assets, liabilities and debt not assumed by the Partnership in the acquisition of Alliance.

 

(f)                                   To record the estimated fair value adjustment representing the difference in the book value and the estimated fair value of assets and liabilities assumed in the acquisition of Alliance.

 

(g)                                  To eliminate AE Holdings’s accounts receivableaffiliate from and accounts payable to the Partnership.

 

(h)                                 Pro forma adjustments to goodwill consist of the following (in thousands):

 

Elimination of pre-existing AE Holdings goodwill

 

$

(8,960

)

Recording of estimated goodwill

 

23,552

 

Total

 

$

14,592

 

 

The estimated goodwill represents the excess of the preliminary purchase price paid on March 1, 2012 for the acquisition over the amounts assigned to assets acquired and liabilities assumed based on their estimated fair values as of December 31, 2011 and any acquired identifiable intangible assets. The goodwill recognized is attributed to the enhancement of the Partnership’s year-round income stream and building on the vertical integration between the Partnership’s supply, teminaling and wholesale business and its portfolio of gas station locations across the Northeast. The difference between the goodwill above of $23.6 million and the goodwill reported in Note 2 of $29.1 million is due to changes in working capital from December 31, 2011 to March 1, 2012.

 

(i)                                     Pro forma adjustments to intangible assets consist of the following (in thousands):

 

Elimination of pre-existing AE Holdings intangible assets, net

 

$

(4,477

)

Record the fair value of estimated intangible assets at acquisition date

 

33,285

 

Total

 

$

28,808

 

 

(j)                                    To recognize the effect of the cash consideration paid to acquire Alliance which was financed through proceeds from the Partnership’s revolving credit facility.

 

(k)                                 To record a $19.4 million adjustment to environmental liabilities. The liability for environmental matters, which were recorded on an undiscounted basis, has been estimated by the Partnership with the assistance from a third party consultant. Based on a preliminary analysis received to date, the estimated provision for environmental matters

 



 

Global Partners LP

Notes to unaudited pro forma combined financial statements

 

related to Alliance is $22.0 million ($0.5 million current and $21.5 million non-current). This provision represents the estimated contingency related to such environmental matters. Upon completion of this analysis, including a review of the legal and environmental requirements related to the remediation costs associated with future removal or replacement of underground gas storage tanks at the Alliance gas station locations, changes may result to the estimated provision for environmental matters.

 

(l)                                     Adjustments to equity represent the elimination of AE Holdings’s historical equity and the recording of the issuance of 5,850,000 common units of the Partnership.

 

Elimination of pre-existing AE Holdings common stock

 

$

(9

)

Record the issuance of 5,850,000 common units of the Partnership

 

130,513

 

Total

 

$

130,504

 

 

Income statement for the year ended December 31, 2011

 

(a)                                 To reclassify $16.3 million out of station rental revenues to sales in order to conform to the Partnership’s presentation.

 

(b)                                 To reclassify $13.7 million out of depreciation and amortization to cost of sales in order to conform to the Partnership’s presentation.

 

(c)                                  To reclassify $61.1 million out of selling, general and administrative expenses to operating expenses in order to conform to the Partnership’s presentation.

 

(d)                                 To reclassify $0.2 million out of gain on sales and dispositions of property and equipment, net to selling, general and administrative expenses.

 

(e)                                  To eliminate $187.1 million and $187.1 million in intercompany sales and cost of sales, respectively.

 

(f)                                   Pro forma adjustments to depreciation expense for purchased property and equipment (in thousands):

 

Elimination of pre-existing AE Holdings depreciation

 

$

(13,672

)

Record depreciation for acquired property and equipment

 

12,600

 

Total

 

$

(1,072

)

 

(g)                                  Pro forma adjustments to selling, general and administrative expenses consist of the following (in thousands):

 

Elimination of management fee(1)

 

$

(2,600

)

Elimination of shared services(2)

 

(187

)

Annual increase in compensation in connection with the acquisition

 

125

 

Total

 

$

(2,662

)

 


(1)                                 To eliminate $2.6 million in management fees. Prior to the acquisition, Global Companies LLC, a wholly-owned subsidiary of the Partnership, entered into management agreements with Alliance in connection with the Partnership’s September 2010 acquisition of retail gas stations from ExxonMobil. The management fee was $2.6 million for the year ended December 31, 2011. In connection with the acquisition of Alliance, the management agreements were terminated without penalty.

 

(2)                                 To eliminate $0.2 million in income and selling, general and expenses related to a shared service agreement. Prior to the acquisition of Alliance, the Partnership was a party to an Amended and Restated Services Agreement with Alliance. Pursuant to the agreement, the Partnership provided certain administrative, accounting and information processing services, and the use of certain facilities, to Alliance. These fees were recorded as an offset to selling, general and administrative expenses. On March 9, 2012, in connection with the acquisition of Alliance, the agreement was terminated without penalty. There were no settlement gains or losses recognized as a result of the termination of this agreement.

 



 

Global Partners LP

Notes to unaudited pro forma combined financial statements

 

(h)                                 To record the following adjustments to amortization expense of purchased intangible assets (in thousands):

 

Elimination of pre-existing AE Holdings amortization

 

$

(1,600

)

Record amortization for the estimated value of acquired intangible assets

 

3,329

 

Total adjustment for amortization of intangible assets

 

$

1,729

 

 

(i)                                     To record the following adjustments to interest expense on debt (in thousands):

 

Elimination of pre-existing AE Holdings interest expense

 

$

11,620

 

Record interest expense on the incremental debt incurred as a result of the acquisition(1)

 

(7,276

)

Total adjustment for interest expense

 

$

(4,344

)

 


(1)                                 The Partnership funded the acquisition in part through additional borrowing from its revolving credit facility. As a result, the Partnership has assumed an additional $181.9 million of incremental debt outstanding at an average interest rate of 4%, which represents the incremental borrowing rate as of the acquisition date.

 

(j)                                    To eliminate $2.2 million the change in fair value of warrant liability, due to the fact this warrant was settled in connection with the acquisition and was, therefore, not part of the liabilities assumed. As such, the financial statement impact has been eliminated.

 

(k)                                 To eliminate $0.3 million gain on derivative contracts that was not included in the assets and liabilities assumed. Such amounts were settled in connection with the acquisition. As such, the financial statement impact has been eliminated.

 

(l)                                     To record the pro forma impact of the general partner interest in net income.

 

(m)                             To record the issuance of the 5,850,000 common units issued to fund the Alliance acquisition, as if they were issued and outstanding on January 1, 2011.

 

Income statement for the nine months ended September 30, 2012

 

(n)                                 To reclassify $2.8 million out of station rental revenues to sales in order to conform to the Partnership’s presentation.

 

(o)                                 To reclassify $2.6 million out of depreciation and amortization to cost of sales in order to conform to the Partnership’s presentation.

 

(p)                                 To reclassify $10.5 million out of selling, general and administrative expenses to operating expenses in order to conform to the Partnership’s presentation.

 

(q)                                 To reclassify $24,000 out of loss on sales and dispositions of property and equipment, net to selling, general and administrative expenses.

 

(r)                                    To eliminate $40.1 million and $40.1 million in intercompany sales and cost of sales, respectively.

 

(s)                                   Pro forma adjustments to depreciation expense of purchased property and equipment (in thousands):

 

Elimination of pre-existing AE Holdings depreciation

 

$

(2,632

)

Record pro forma depreciation for acquired property and equipment

 

2,100

 

Total

 

$

(532

)

 

(t)                                    Pro forma adjustments to selling, general and administrative expenses consist of the following (in thousands):

 

Elimination of the pro forma amount of the annual management fee

 

$

(433

)

Elimination of shared services

 

(31

)

Pro forma increase in compensation in connection with the acquisition

 

21

 

Total

 

$

(443

)

 

(u)                                 To record the following adjustments to amortization expense of purchased intangible assets (in thousands):

 

Elimination of pre-existing AE Holdings amortization

 

$

(278

)

Record amortization for the estimated value of acquired intangible assets

 

833

 

Total adjustment for amortization of intangible assets

 

$

555

 

 



 

Global Partners LP

Notes to unaudited pro forma combined financial statements

 

(v)                                 To record the following adjustments to interest expense on debt (in thousands):

 

Elimination of pre-existing AE Holdings interest expense

 

$

(1,159

)

Record pro forma interest expense on the incremental debt incurred as a result of the acquisition(1)

 

1,213

 

Total adjustment for interest expense

 

$

54

 

 


(1)                                 The Partnership funded the acquisition in part through additional borrowing from its revolving credit facility. As a result, the Partnership has assumed an additional $181.9 million of incremental debt outstanding at an average interest rate of 4%, which represents the incremental borrowing rate as of the acquisition date.

 

(w)                               To eliminate $2.0 million loss on derivative contracts that was not included in the assets and liabilities assumed. Such amounts were settled prior to the acquisition date. As such, the financial statement impact has been eliminated.

 

(x)                                 To record the pro forma impact of the general partner interest in net income.

 

(y)                                 To record the issuance of the 5,850,000 common units issued to fund the Alliance acquisition, as if they were issued and outstanding on January 1, 2011.