Global Partners LP Stock

Good day, everyone, and welcome to the Global Partners Second Quarter 2026 Financial Results conference call. Today's call is being recorded. With us from Global Partners are President and Chief Executive Officer, Mr. Eric Slifka, Chief Financial Officer, Mr. Gregory Hanson. Chief Operating Officer, Mr. Mark Romain. and Chief Legal Officer, Ms. Kristen Seabrook. At this time, I would like to turn the call over to Ms. Seabrook for opening remarks. Please go ahead.

Good morning everyone and thank you for joining us. Today's call will include forward-looking statements within the meaning of federal security laws including projections and expectations concerning the future financial and operational performance of global partners. No assurances can be given that these projections will be attained or that these expectations will be met. Our assumptions and future performance are subject to a wide range of business risks, uncertainties, and factors, including supply and demand, which could cause actual results to differ materially, as described in our filings with the Securities and Exchange. Exchange Commission. Global Partners undertakes no obligation to revise or update any forward-looking statements. Now it's my pleasure to turn the call over to our president and chief executive officer, Eric Sliska. Eric?.

Thank you, Kristen, and good morning, everyone. We delivered a strong second quarter with each of our operating segments contributing meaningfully and our teams executing at a high level across business. These results underscore the strength of Global's integrated liquid energy platform and the advantage of operating across products, markets, and customers. That diversification is a competitive strength and allows us to capture value across changing market conditions and generate value. attractive returns. During the quarter, our gasoline distribution station operations segment benefited from improved fuel margins, while our wholesale and commercial segment also delivered positive year-over-year growth. These results reinforced the resiliency of our model and the value of maintaining a portfolio of assets that can perform across a variety of operating environments. The core of our business is predictable, delivering steady cash flow regardless of the market.

On top of that foundation is our ability to capture additional value when markets are dynamic, and we pursue that upside within a disciplined framework that manages our exposures condition shift. Against that backdrop, refined product markets remain volatile, with geopolitical developments contributing to elevated price swings, increased inventory risk, and tight inventory levels. Turning briefly to our distribution, last month our board approved a quarterly cash distribution of 78 cents per common unit, or $3.12 on an annualized basis. The distribution will be paid on August 14th to unit holders of record as of August 12th. Now let me turn the call over to Greg for the financial review. Greg.

Thank you, Eric, and good morning, everyone. As we review the numbers, unless otherwise noted, all comparisons will be with the second quarter of 2025. The net income in the second quarter of 26 was 71 million versus 25.2 million in the prior year period. EBITDA was $146 million in the second quarter versus $95.7 million in 25. And adjusted EBITDA was $148.2 million compared with $98.2 million. Distributable cash flow was 92.6 million in the second quarter of 26 compared with 52 million and adjusted DCF was 92.5 million versus 52.3 million. We continue to maintain healthy distribution coverage at quarter end 2.25 times or 2.19 times after including distributions to our preferred unit holders.

Moving to our segment details, GDSO segment product margin increased $37.3 million in the quarter to $245.2 million. Product margin from gasoline distribution increased $37.1 million to $175 million, primarily reflecting higher fuel margins year over year. On a cents per gallon basis, fuel margin increased by 14 cents to 50 cents in Q2 26 from 36 cents in Q2 25. Station operations product margin, which includes convenience store and prepared food sales, sundries and rental income, increased 0.2 million to 70.2 million in the second quarter of 26. At the quarter end, our GDSO portfolio of fueling stations and C-stores consists of 1,505 sites, exclusive of the 69 sites under our Spring Partners retail joint venture. Turning to our wholesale segment, second quarter product margin increased 14.8 million to 106.5 million. Product margin from gasoline and gasoline blend stocks increased 19.6 million to 78.4 million, primarily reflecting more favorable market conditions in gasoline.

Product margin from distillates and other oils decreased 4.8 million to 28.1 million, primarily due to less favorable market conditions than residual oil. In our commercial segment, product margin increased $4.4 million to $10.5 million, primarily reflecting more favorable market conditions in our bunkering group. As Eric mentioned, we are pleased with the results across our segments and our team's ability to capture value in a dynamic market environment. We continue to expect the current steep backwardation in the forward product pricing curve to increase the cost of carrying our hedged inventory in the future periods. And we remain focused on disciplined inventory management, driving growth across our segments, and efficient operations. operations. Operating expenses increased $1.1 million in the second quarter to $136.8 million, reflecting higher expenses associated with our GDSO operations, offset by lower expenses related to our terminal operations. SG&A increased $8.3 million to $83 million, primarily due to increase in discretionary incentive comp, wages and benefits, and other expenses, partially offset by a decrease in professional fees.

Interest expense decreased $1.4 million to $33.1 million, partly due to lower average balances on our credit facilities. CapEx in the second quarter was $35 million, consisting of maintenance CapEx of $15.9 million and expansion CapEx of $19.1 million, primarily related to investments in our gasoline station business. For the full year 2026, we continue to expect maintenance capex in the range of $60 million to $70 million, and expansion capex, excluding acquisitions, in the range of $75 to $85 million. Our current capex estimates depend in part on the timing of project completions, availability of equipment and labor, weather, and any unforeseen events or opportunities that are required. additional maintenance or investment. Our balance sheet remains strong. As of June 30th, leverage as defined in our credit agreement as funded debt to EBITDA stood at 2.85 times, and we had ample excess capacity in our credit facility. 174.6 million outstanding on our working capital revolving credit facility and 103.5 million outstanding on our revolving credit facility. I'd also like to highlight on July 30th, we redeemed all the outstanding Series B fixed rate preferred units. This accretive act transaction further simplifies our capital structure and enhances our financial flexibility going forward.

Now let me turn the call back to Eric for closing comments. Eric? Thanks, Greg. Looking ahead, we remain focused on executing our strategy, investing thoughtfully in the business, and allocating capital to the highest return opportunities. We believe the quality of our asset base, the dedication of our team, and the strength of our balance sheet position Global well for the remainder of 20 We are committed to delivering attractive returns for our unit holders and building value that endures over time. With that, Greg, Mark, and I will be happy to take your questions. Operator, please open the line for Q&A.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question comes from the line of Greg Brody with Bank of America.

question. Good morning, guys. Good morning, Greg. Would you mind just talking a little bit about the consumer behavior? you're seeing out there are higher prices affecting purchases at all?.

Yes good morning Greg it's Mark- I think you know I think we're seeing a little bit of that we're seeing a little bit of impact from from you know inflation higher prices I think weeds with that shows up is- the you know the average size of the fill up is probably down a little bit I'm but I wouldn't say you know in a material fashion and that's trading you know that could be trading also trading down from I 93 octane to 87 octane from a store standpoint. Our store sales are pretty good. You know, transactions may be down a shade, but I wouldn't say anything material, we're not seeing anything material.

I don't see it in your numbers. It is interesting. And that's continued through this quarter, through the first month of this quarter, same.

same as QQ. You're talking about July? Customer behavior, yes. Yes, customer behavior. Yes, I don't think you're seeing anything that's real different here as we enter into, or as we sit in the middle of Q3, I don't think we see anything different than we've seen for the better part of the year.

Got it. Just a decision to pay down the prep is just a... Historically, you've paid it down and refinance it. But it sounds like you're that's a permanent decision. Is that just cost of capital or is there is there a change in the way you're viewing your credit profile?.

Yes, I mean, I guess it's a couple things. One, it's a very accretive. Obviously, it was at a fixed rate at 9.5%. You know, it's a nice piece of paper. We had it for, we used it for acquisitions, as an equity component on acquisitions in the previous, but like the Series A, you know, after five years, when you're callable, given where our cost of capital is right now And we also produced significant amount of excess cash flow year to date. And so it made a lot of sense to simplify our capital structure and take it out on a very accretive basis overall. Doesn't mean we wouldn't look to the prep equity or equity markets in the future for certain acquisitions. But given where we stand, we're going And today we've got a lot of excess capacity under our bank facilities and a very strong balance sheet.

So it made a lot of sense on an accretion basis to take it out.

And just the last question for me, can you just talk about the M&A environment today? what you're seeing out there, the opportunities that and the potential for you to be active.

Yes, I think it's been busy, and there's a lot that's out there, and as I've sort of always said, you know, we're going to look for the right assets. We should be the high bidder on assets that fit us and complement our existing asset base. in a position to try and execute on some deals. Great. That's the time, guys. I'll...

That's it for me. Thank you, Greg. Thank you, Jim. We have reached the end of the question and answer session.

Mr. Sliska, I'd like to turn the floor back over to you for closing comments. Thank you again for your time today and for your continued interest in global. We look forward to speaking with you next quarter and wish everyone a great weekend. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Good day, everyone, and welcome to the Global Partners First Quarter 2026 Financial Results Conference Call. Today's call is being recorded. With us from Global Partners are President and Chief Executive Officer, Mr. Eric Slifka; Chief Financial Officer, Mr. Gregory Hanson; Chief Operating Officer, Mr. Mark Romaine; and Chief Legal Officer, Ms. Kristin Seabrook. At this time, I would like to turn the call over to Ms. Seabrook for opening remarks. Please go ahead.

Good morning, everyone, and thank you for joining us. Today's call will include forward-looking statements within the meaning of federal securities laws, including projections and expectations concerning the future financial and operational performance of Global Partners. No assurances can be given that these projections will be attained or that these expectations will be met. Our assumptions and future performance are subject to a wide range of business risks, uncertainties and factors, including supply and demand, which could cause actual results to differ materially as described in our filings with the Securities and Exchange Commission. Global Partners undertakes no obligation to revise or update any forward-looking statements. Now it's my pleasure to turn the call over to our President and Chief Executive Officer, Eric Slifka. Eric?

Thank you, Kristin, and good morning, everyone, and thank you for joining us on today's earnings call. We started 2026 with a strong first quarter, driven by solid execution across our operating segments and supported by the continued strength of our integrated liquid energy platform in a dynamic commodity environment marked by heightened geopolitical tension and global supply disruptions. Our business is built to perform across a wide range of market conditions. And given the current volatility, we remain focused on managing risks and opportunities while continuing to optimize our asset base to enhance returns. Our results this quarter were driven by a colder-than-normal winter in the Northeast and more favorable market conditions in wholesale and commercial, along with improved fuel margins in our gasoline distribution and station operations segment. Importantly, these results reinforce the resiliency of our model. We do not rely on any single commodity, geography or market dynamic to generate cash flow. Instead, we manage a diversified portfolio of assets and adjust our operating approach to reflect the conditions in front of us. That flexibility remains a core strength of Global. Whether markets are volatile or more stable, our focus is the same: disciplined execution, prudent capital allocation and maintaining a strong balance sheet to support long-term value creation for our unitholders. Turning briefly to our distribution. Last month, our Board approved a quarterly cash distribution of $76.50 (sic) [ $0.7650 ] per common unit or $3.06 on an annualized basis. This marks our 18th consecutive quarterly increase, supported by healthy coverage and the cash-generating capacity of our business. The distribution will be paid on May 15 to unitholders of record as of May 11. Now let me turn the call over to Greg for the financial review. Greg?

Thank you, Eric, and good morning, everyone. As we review the numbers, unless otherwise noted, all comparisons will be with the first quarter of 2025. Net income in the first quarter of 2026 was $70.1 million versus $18.7 million. EBITDA was $142.1 million in the first quarter versus $91.9 million in '25, and adjusted EBITDA was $140.4 million in '26 compared with $91.3 million. Distributable cash flow was $96.4 million in the first quarter of '26 compared with $45.7 million and adjusted DCF was $96.8 million versus $46.5 million. We maintained healthy distribution coverage at the quarter end of 1.96x or 1.9x after including distributions to our preferred unitholders. Moving to our segment details. GDSO segment product margin increased $11.4 million in the quarter to $199.3 million. Product margin from gasoline distribution increased $10.9 million to $136.7 million, primarily reflecting higher fuel margins year-over-year. On a cents per gallon basis, fuel increased -- fuel margin increased by $0.06 to $0.41 in Q1 '26 from $0.35 in Q1 2025. Station operations product margin, which includes convenience store and prepared food sales, sundries and rental income, increased $0.5 million to $62.6 million in the first quarter of '26. At quarter end, our GDSO portfolio of fueling stations and C-stores consisted of 1,513 sites, exclusive of the 68 sites under our Spring Partners retail joint venture. Turning to our Wholesale segment. First quarter product margin increased $60.5 million to $154.1 million. Product margin from gasoline and gasoline blend stocks increased $44.1 million to $101.2 million, and product margin from distillates and other oils increased $16.4 million to $52.9 million. These increases in our Wholesale segment product margin are primarily due to more favorable market conditions in gasoline and residual oil. We are pleased with the performance of the Wholesale segment, which delivered strong results in the heightened commodity price volatility during the quarter. We do expect the current steep backwardation in the forward product pricing curve to increase the cost of carrying our hedged inventory in future periods, and we remain focused on disciplined inventory management. In our Commercial segment, product margin increased $4.6 million to $11.7 million, primarily due to more favorable market conditions. Operating expenses increased $2.5 million in the first quarter to $129.2 million, reflecting expenses associated with our GDSO and terminal operations. SG&A increased $25.6 million to $99.3 million, primarily reflecting higher performance-based incentive compensation expense. We expect SG&A expenses to normalize in the remaining quarter of 2026 -- quarters of 2026. Interest expense was $35.5 million compared with $36 million in the same period of 2025. CapEx in the first quarter was $31.9 million, consisting of maintenance CapEx of $10 million and expansion CapEx of $21.9 million, primarily related to investments in our gasoline station business. For full year 2026, we expect maintenance CapEx in the range of $60 million to $70 million and expansion CapEx, excluding acquisitions, in the range of $75 million to $85 million. Our current CapEx estimates depend in part on the timing of project completions, the availability of equipment and labor, weather and any unforeseen events or opportunities that require additional maintenance or investments. Our balance sheet remains strong at March 31, with leverage as defined in our credit agreement as funded debt to EBITDA at 3.1x and ample excess capacity in our credit facility. As of March 31, we had $408.3 million borrowings outstanding on our working capital revolver and $103.5 million outstanding on our revolving credit facility. On our IR calendar this month, we'll be participating in the 23rd Annual Energy Infrastructure CEO and Investor Conference. For those of you participating, we look forward to seeing you. Now let me turn the call back to Eric for his closing comments. Eric?

Thank you, Greg. We delivered an exceptional quarter, and the entire Global Partners team executed at a high level across all segments. We also recognize that a portion of these results reflect market conditions shaped by the ongoing conflict, which continues to drive volatility across global energy markets. We are managing the remainder of the year with the same discipline that drove this quarter while planning for a range of scenarios as the conflict evolves. With that, Greg, Mark and I will be happy to take your questions. Operator, please open the line for Q&A.

[Operator Instructions] Our first question comes from the line of Selman Akyol with Stifel.

First of all, congratulations on very nice results. That was very impressive. Let me ask you this. Are you seeing any changes in customer patterns, any signs of demand destruction at all given the higher fuel prices yet?

Yes. I mean nothing noticeable in the quarter in March. Obviously, one thing we track is average fill-ups and average gallons per fill-up, and we have seen some decline in that through March and April. But overall, I mean, the consumer continues to be pretty healthy. I do think, obviously, that higher gasoline prices will impact the share of wallet going forward. So it's something we continue to lean in on promotions and loyalty in our C-store to drive customers into our stores. But depending on how long this prolonged goes on, it could have a further impact on potential demand at the pump.

Got it. And then nice uptick year-over-year in your fuel gallon CPG. How is that going in given the volatility? And I'm really kind of thinking March, you had 1 month of the volatility, but you've seen certainly more of that in -- as we've gone into the second quarter. So I'm just kind of wondering how CPG is holding up.

Yes. Selman, it's Eric. Margins continue to show the same historic resiliency that they have. And if there is a decline in volume, margins historically have expanded, right? So I think that, that is going to hold true. And I think that, that's what we're seeing now. But generally, too, there's a lot of price volatility in the market. And so you're waking up certain days and the product prices are moving $0.15, $0.20, $0.30 -- to me, that volatility represents an opportunity. The amount of price changes that we're making -- somebody quoted me internally here, we've made the same amount of price changes already that we typically make in a year. That's in the tens of thousands. That's in the tens of thousands.

Wow, that's quite a stat. So in this environment, how do you think about acquisitions? Are they easier? Is it you'd rather pause and see how things shake out? Is there anything...

I mean we -- yes. No, we continue to look at everything that's out there. I would say the landscape is as competitive as it's ever been, but we're trying to be involved in every process that is out there. And it will be interesting to sort of see, if anything, or what gets done or what gets sold.

Got you. But are you seeing sellers' expectations come in at all?

It's interesting. It's based more on cash flow and multiples, right? But like multiples are still strong, right? So it's competitive.

Got you. You guys referenced sort of the higher carrying cost for inventories at wholesale, I guess, just in general. But is there any thoughts of carrying lower inventories given the carrying costs? Or is that just cost of doing business and we're not having problem getting any product, so we'll keep inventories robust?

Hi, Selman, good morning, it's Mark. Yes, that's actually something that we've done historically. It's part of our playbook, and it does kind of highlight the benefit or the value of the storage capacity that we have, and we can tailor our inventory levels based on market conditions. As you might expect, when markets get extremely backwards, we're able to reduce inventories down significantly during that run-up. -- capture additional margin and then mitigate some of the risk associated with holding inventory. So we're at a point now where we're -- we've drawn down inventories in this environment. We'll continue to manage them tightly. On the flip side, if the markets contango, obviously, we're building inventory. So that is a key risk mitigation lever that we're able to pull and really kind of tailor to the market conditions of the current environment.

Got it. Let me just ask you one macro question, and I don't know if it's unanswerable or not, but -- so we're getting ready to go into the driving season, the summer driving season, sort of peak demand. The U.S. has been selling down. Our exports are pretty robust. Do you think there's supply tightness out there as we get into the summer at all? Do you have any thoughts on kind of what that's going to look like the summer just in general with everything going on?

Yes. It's Mark again, Selman. I think if you look at inventories, and we just had this conversation yesterday, they're pretty low. We've got a lot of exports leaving the Gulf, maybe some leaving New York. Imports for gasoline into the PADD 1 have been very light. And we've been drawing -- the U.S. has been drawing inventories pretty aggressively over the last, call it, 6 weeks, maybe 8 weeks. So we're at a pretty low level heading into a key driving season. Some of this -- some of it will depend on how long the current situation goes on. But even if the conflict is resolved tomorrow, there's been a lot of damage done to worldwide production and inventories are at a pretty low level across the board. So it will be interesting to see how that plays out. I don't think an end to the war is going to solve the problem immediately. The system is going to take time. When I say system, I mean worldwide, but we're obviously specifically focused on PADD 1 and to a lesser degree, PADD 3. But I think you're going to have some lasting impact to that, and we'll see how it plays out. But there is some underlying fundamental strength in the market that I think we're going to see play out for, I might say, at least through the end of the year.

Selman, it's Eric. I just want to -- I want to add one other thing. It will be interesting to see how countries position themselves [Foreign Language] inventory and storage for moments like this. And if a lot of other countries look at storing crude or products in caverns or throughout the country and make sure that they have product on hand and how that plays out into price...

Yes. pricing [indiscernible]

Yes. That's a big macro point, right? Because even if everything came back, it's just -- it's not going to be the same as it was before, right? So it will be different. And if countries go and decide they want to build secure inventory that they can use in a market like this, that's going to put pressure on supply because it's going to show up as increased demand.

Yes, we've seen -- we've already seen comments coming out of Australia for that. All right, guys. Again, very nice quarter, and I will leave it there.

I will now turn the call back to Mr. Slifka for closing comments.

Thank you for joining us this morning. We look forward to keeping you updated on our progress. Thanks, everyone.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

Good day, everyone, and welcome to the Global Partners Fourth Quarter and Full Year 2025 Financial Results Conference Call. Today's call is being recorded. With us from Global Partners are President and Chief Executive Officer, Mr. Eric Slifka; Chief Financial Officer, Mr. Gregory Hanson; Chief Operating Officer, Mr. Mark Romaine; and Chief Legal Officer, Ms. Kristin Seabrook. At this time, I would like to turn the call over to Ms. Seabrook for opening remarks. Please go ahead.

Good morning, everyone. Thank you for joining us. Today's call will include forward-looking statements within the meaning of federal securities law including projections and expectations concerning the future financial and operational performance of Global Partners. No assurances can be given that these projections will be attained or that these expectations will be met.

Our assumptions and future performance are subject to a wide range of business risks, uncertainties and factors, which could cause actual results to differ materially are described in our filings with the Securities and Exchange Commission. Global Partners undertakes no obligation to revise or update any forward-looking statements. Now it's my pleasure to turn the call over to our President and Chief Executive Officer, Eric Slifka.

Thank you, Kris, and good morning, everyone. Before I begin, I want to welcome Kristin to our first earnings call as our Chief Legal Officer. Kristin brings valuable business and legal experience, including her leadership roles at Pilot, and she has already made a strong impact. Her judgment and perspective will be important as we continue to execute our strategy and position Global for the future. We are very pleased to have her on our team. Our full year performance in 2025 reflects disciplined execution of a strategy we have built and refined over many years. Higher volumes across our terminal and wholesale network along with a double-digit increase in Wholesale segment product margin demonstrates the benefits of investments that expand capabilities and enhance the performance of our integrated network.

Our GDSO segment delivered solid results. Strong fuel margins helped partially offset a decline in volumes and lower station operations contribution due in part to a reduced site count related to site optimization efforts. As we have said before, different parts of our business will experience different conditions at different times. What defines Global's performance over time is the strength of our supply terminals, wholesale distribution, bunkering and retail operations, providing multiple sources of earnings that help balance performance across cycles. This is important just how these segments work together.

Our ability to source product, move it efficiently through our terminals, supply our customers and ultimately serve guests through our owned and operated retail sites allows us to capture value across the system and deliver consistent durable results. Our strategy remains focused on acquiring strategic assets, investing in our existing network and continuously optimizing our portfolio. On the acquisition front, the East Providence terminal marked its first full year as part of our network in 2025 and has already exceeded our expectations. This asset expanded our storage, marine and truck rack capabilities and strengthened our service footprint across key Northeastern markets, enhancing connectivity and flexibility across our system. We also expanded our bunkering business into the Houston market through a lease at the Texas City terminal, providing access to one of the largest refining and fuel hubs in the world and establishing a strong platform for future growth.

We continue to invest in strengthening our existing portfolio. Our Wholesale segment benefited from the continued growth of our terminal network, where we expanded capabilities and grew third-party volumes. We also strengthened our data and analytics infrastructure, improving operational visibility and enhancing -- and enabling more informed and timely decision-making across the business. At the same time, we remain focused on optimizing our portfolio. During the year, we divested nonstrategic retail locations and converted sites to higher value formats. These actions improve overall portfolio quality and position the business for more consistent performance over time.

As an owner, supplier and operator of critical energy infrastructure, we manage Global with a clear understanding how each part of the system contributes to overall performance. This perspective allows us to allocate capital with discipline, strengthen our platform and focus on long-term cash flow generation and returns.

Looking ahead, our priorities remain clear. We will continue to execute with discipline, invest in capabilities that enhance our platform and build on the strong foundation we have established. Supported by a strong balance sheet, consistent cash flow generation and a network built thoughtfully over time, we believe Global is well positioned to deliver sustainable value for our unitholders.

Turning to our distribution. Last month, the Board approved a quarterly cash distribution of $0.76 per common unit, our 17th consecutive increase. The distribution was paid on February 13 to unitholders of record as of the close of business on February 9. With that, I'll turn the call over to Greg for the financial review. Greg?

Thank you, Eric, and good morning, everyone. As we review the numbers, please note that unless otherwise noted, all comparisons will be with the fourth quarter of 2024. Adjusted EBITDA for the fourth quarter of '25 was $94.8 million compared with $97.8 million. Net income for the fourth quarter was $25.1 million versus $23.9 million. Distributable cash flow was $38.4 million for the fourth quarter compared with $45.7 million and adjusted DCF was $38.8 million versus $46.1 million.

The variance between the fourth quarter of 2025 versus 2024 primarily reflects less favorable market conditions in our Wholesale and Commercial segments, partially offset by a stronger fuel margin environment in our GDSO segment. We continue to maintain a solid distribution coverage of 1.56x as of December 31 or 1.5x after including distributions to our preferred unitholders.

Turning to our segment details. GDSO product margin increased $17.7 million in the quarter to $231.3 million. Product margin from gasoline distribution increased $19.9 million to $165.6 million, primarily reflecting higher fuel margins year-over-year. On a cents per gallon basis, fuel margins increased by $0.09 to $0.45 in Q4 '25 from $0.36 in '24. As volatility in RBOB prices during the quarter provided a favorable fuel margin environment. Station operations product margin, which includes convenience stores and prepared food sales, sundries and rental income, decreased by $2.2 million to $65.7 million in the fourth quarter, due in part to a lower company-operated site count as a result of the sale and conversion of certain company-operated sites.

At year-end, our GDSO portfolio of fueling stations and C-Stores totaled 1,524 sites. In addition, we operate or supplied 67 sites under our Spring Partners Retail joint venture. Turning to our Wholesale segment. Fourth quarter product margin decreased $21.5 million to $58.3 million. Product margin from gasoline and gasoline blendstocks decreased $10.5 million to $28.1 million. primarily reflecting less favorable market conditions in gasoline. Product margin from distillates and other oils decreased $11 million to $30.2 million, driven by less favorable market conditions.

In our Commercial segment, product margin decreased $2.6 million to $6 million, primarily due to less favorable market conditions in bunkering. Operating expenses decreased $3.5 million in the fourth quarter to $124.6 million, while SG&A increased $1.5 million to $80.9 million. Interest expense was $33.3 million in the fourth quarter compared with $34.4 million in the same period in '24. CapEx in the fourth quarter was $38.8 million, consisting of maintenance CapEx of $22.6 million and expansion CapEx of $16.2 million, primarily related to investments in our terminal and gas station business.

Full year 2025, we had $54 million in maintenance CapEx and $37.5 million in expansion CapEx. For the full year 2026, we expect maintenance CapEx in the range of $60 million to $70 million and expansion CapEx, excluding acquisitions, in the range of $75 million to $85 million. Our current CapEx estimates depend in part on the timing of project completions, the availability of equipment and labor, weather and any unforeseen events or opportunities that require additional maintenance or investment.

Our balance sheet remains strong at year-end, with leverage as defined in our credit agreement as funded debt to EBITDA at 3.59x, and ample excess capacity on our credit facilities. As of December 31, we had $226.1 million borrowings outstanding on our working capital revolver and $103.5 million outstanding on our $500 million revolving credit facility.

On our IR calendar, next week, we'll be hosting one-on-one meetings at the JPMorgan Leveraged Finance Conference. For those of you participating, we look forward to seeing you in Miami. Now let me turn the call back to Eric for his closing comments.

Thanks, Greg. As we look ahead, the message is simple, Global is built for durability. Our integrated footprint, scale across the liquid energy value chain and disciplined approach to capital allow us to manage through uneven markets, adjusting its conditions evolve and leaning in when opportunities emerge.

Early year cold weather conditions in the Northeast have supported solid wholesale fuel demand, and our footprint is well positioned to meet that demand and serve customers reliably. With strong fundamentals, a proven operating model and a clear strategic framework, we remain focused on disciplined execution and on enhancing value over time for our unitholders. We start 2026 -- As we start 2026, we've never felt more confident about the ability of our complementary assets to drive growth. With that, Greg, Mark and I will be happy to take your questions. Operator, please open the line for Q&A.

[Operator Instructions] Our first question comes from the line of Selman Akyol with Stifel.

I'd like to start on the site optimization you guys referenced several times. Should we think of that as being completed? I know you're always doing some fine-tuning, but for the most part, is that done?

Selman, it's Eric Slifka. Look, we continue to optimize. We continue to look at what is -- what we believe is the most efficient way to run all of our locations. So that is a continual process. The goal here is really to be as efficient as we possibly can throughout the entire organization. So I would say that is a never-ending process.

Okay. And then pivoting over just to your CapEx, and you guys called out it's going to be in terminals and GDSO. Is there any way to break that out between the 2? And maybe just thoughts on where you want to be investing or how much?

Yes. I think -- hey Selman, it's Greg. I mean I think on the maintenance side, you'll see a little bit uptick year-over-year versus last year. That was primarily related to the terminals and the terminals we acquired over the last couple of years. So that's up a little bit overall. But I think our goal is hopefully to be conservative in that maintenance CapEx range we gave for guidance, I think we have a lot of efforts to drive down our capital spend through procurement on the maintenance side. And then on the expansion side, we've got 3 raise and rebuilds that we're working on, on the GDSO side. It's a decent part of that.

Then the major potential spend, I think, is more on the terminalling side. We're having -- we're looking at some projects for expanding the capabilities of our terminals, expanding the throughput, expanding the logistics of them. Some of that is going to be uncertain due to timing on permitting and contracts. But we're seeing a real opportunity, especially around some of the terminals we've acquired in the last 3 years to really expand the capabilities down there, either through logistics efforts or just expanding the actual capacity of the terminals.

That's great to hear. In -- Eric, in your comments, you talked about sort of the -- looking for growth in the Houston bunkering market. Can you expand on that? And does that tie into potentially some of your comments in terms of the capital?

In terms of Houston, what we think is we found a little bit of a niche location, and that's specific to what we're trying to do there. Obviously, we're in that business throughout the Northeast. So this is an expansion and we have tankage and we have barges and whatnot. So we think we're in a good position to deliver to the needs of that market in the specific location that we're at.

Yes. The only thing I would add to that, Selman, is on the CapEx side related to that, it's pretty CapEx light. It's lease barges and lease terminals. Where there's CapEx opportunities in Texas is around our other 7 terminals that we have in the Texas market that we acquired through the Motiva acquisition.

Got it. And then you also referenced data analytics, and I presume that results more in cost savings than it does in revenue gains. But is there anything to expand on that?

Selman, it's Mark. I think it's both. Actually, I think it's a few things. First of all, we -- I know I'm stating the obvious, but we generate a tremendous amount of data from our business, whether it be through our stores, whether it be through our terminals and so part of this is just building the infrastructure to organize that data better and make it accessible to the people running the business.

Our expectation on the benefit of that is twofold: one, it should, and is already providing efficiencies for the business and also enhancing decision-making. And then the second part of that is around the analytics side is using that data to drive better business decisions and perhaps even embedding some AI capabilities into some modeling to help us with some of the decisions we have to make on a day in, day out basis.

Yes. The only thing I would add to that is I think there's -- we're very excited about the future potential there. I will say, as it relates to '25, some of the SG&A increase you see year-over-year in SG&A is related to salaries and labor related to that effort and also an uptick in licensing subscription fees for software related to that, too. So that's somewhere where we've invested some of our SG&A dollars to, I think, hopefully, get to significant cost savings in the future and potential hopefully helping our margins too.

Got it. And then last one for me. It sounded like weather was favorable for you in Q1 in the Wholesale segment. And get there's a lot of volatility and always sort of difficult to know. But any way to sort of maybe frame up what 1Q looks like and how we should be thinking about it?

Yes. I don't think we're going to -- it's hard to frame up from a guidance perspective, anything. I think we just really want to recognize that the latter half of January into February was extremely cold in the Northeast which led to a lot of heating degree days, which is, as you know, historically, is very helpful for our rack Wholesale business in general and should give us a decent tailwind to start the year.

Eric Slifka, I'd like to turn the floor back over to you for closing comments.

Thank you for joining us this morning. We look forward to keeping you updated on our progress. Thanks so much.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

Good day, everyone, and welcome to the Global Partners Third Quarter 2025 Financial Results Conference Call. Today's call is being recorded.

[Operator Instructions]

With us from Global Partners are President and Chief Executive Officer, Mr. Eric Slifka; Chief Financial Officer, Mr. Gregory Hanson; Chief Operating Officer, Mr. Mark Romaine; and Chief Legal Officer and Secretary, Mr. Sean Geary.

At this time, I'd like to turn the floor over to Mr. Geary for opening remarks. Please go ahead, sir.

Good morning, everyone, and thank you for joining us. Today's call will include forward-looking statements within the meanings of federal securities laws, including projections or expectations concerning the future financial and operational performance of Global Partners. No assurances can be given that these projections will be attained or that these expectations will be met. Our assumptions and future performance are subject to a wide range of business risks, uncertainties and factors, which could cause actual results to differ materially as described in our filings with the Securities and Exchange Commission. Global Partners undertakes no obligation to revise or update any forward-looking statements.

Now it's my pleasure to turn the call over to our President and Chief Executive Officer, Eric Slifka.

Thank you, Sean. Good morning, everyone, and thank you for joining us. We performed well in the third quarter, consistent with our expectations, reflecting operational strength and disciplined execution across the organization. We experienced a strong performance in our Wholesale segment in Q3, driven by favorable market conditions in gasoline and the continued optimization of our liquid energy terminal network. Over the past 2 years, we have significantly scaled our terminal assets, meaningfully enhancing our product distribution network and positioning Global Partners for long-term growth. This effort reflects our strategy of efficiently connecting liquid energy products with downstream markets, leveraging the integration of terminals acquired from Motiva, Gulf and ExxonMobil.

These assets continue to perform well, strengthening our supply chain flexibility, contributing to throughput growth and enhancing our network. We are pleased that fuel margins have remained historically strong even with the year-over-year decline. Our retail network is a critical part of our strategy as we invest in, optimize and upgrade our portfolio. Recently, we expanded our marine fuel supply operations into the port of Houston. As a reminder, today, our bunkering business is centered in the Northeast, and now we have extended this business into the Gulf Coast.

On the retail side, we're continuing to redefine the convenience store experience through our all-time Fresh and newly reimagined Honey Farms Market brands. These brands embody our 4 pillars: community, hospitality, local and fresh, while introducing chef-driven menus, clean label offerings and hyperlocal engagement. Through our new loyalty platform, these benefits, we are creating a seamless personalized experience designed to drive repeat business, build long-term loyalty and strengthen the connection between our guests and our brands.

Turning to our distribution. In October, the Board declared a quarterly cash distribution of $75.50 per common unit or $3.02 on an annualized basis. This marked our 16th consecutive quarterly distribution increase. The distribution will be paid on November 14 to unitholders of record as of the close of business on November 10.

With that overview, I'll turn it over to Greg for the financial review. Greg?

Thank you, Eric, and good morning, everyone. As I review the numbers, please note that all comparisons will be with the third quarter of 2024, unless otherwise noted. Net income for the third quarter was $29 million versus $45.9 million last year. I would note that last year's quarter had a $7.8 million onetime gain on asset sales that affected that number. EBITDA was $97.1 million for the third quarter compared with $119.1 million and adjusted EBITDA was $98.8 million versus $114 million. Distributable cash flow was $53 million compared to $71.1 million, while adjusted distributable cash flow was $53.3 million versus $71.6 million. Trailing 12-month distribution coverage remained strong as of September 30, with 1.64x coverage or 1.5x after factoring in distributions to our preferred unitholders.

Turning to our segment details. GDSO product margin decreased $18.8 million to $218.9 million. Product margin from gasoline distribution decreased $19.3 million to $144.8 million, primarily due to lower fuel margins compared with the same period in 2024. On a cents per gallon basis, fuel margins of $0.37 were down 7% from the previous year. In the third quarter of 2024, we experienced strong fuel margins, in part due to Wholesale gasoline prices declining by $0.57 during the quarter. In comparison, in this year's third quarter, Wholesale gasoline prices declined only $0.11.

Station operations product margin, which includes convenience store and prepared food sales, sundries and rental income, increased $0.5 million to $74.1 million, in part due to an increase in sundries. At quarter end, we had a portfolio of 1,540 sites, 49 fewer than the same period last year. The site count does not include the 67 locations we operate or supply under our Spring Partners Retail joint venture.

Looking at the Wholesale segment, third quarter product margin increased $6.9 million to $78 million. Product margin from gasoline and gasoline blend stocks increased $18.5 million to $61.5 million, primarily due to more favorable market conditions in gasoline and the expansion of our terminal network. Product margin from distillates and other oils decreased $11.6 million to $16.5 million, primarily due to less favorable market conditions in residual oil. Commercial segment product margin decreased $2.5 million to $7 million, in part due to less favorable market conditions in bunkering.

Turning to expenses. Operating expenses decreased $4.6 million to $132.5 million in the third primarily related to lower maintenance and repair expenses at our terminal operations. SG&A expense increased $5.8 million to $76.3 million, reflecting in part increases in wages and benefits and various other SG&A expenses. Interest expense was $33.3 million in the third quarter of '25, down $1.8 million from last year, in part due to lower average balances on our credit facilities.

CapEx in the third quarter was $19.7 million, consisting of $11.9 million of maintenance CapEx and $7.8 million of expansion CapEx, primarily related to investments in our gasoline stations and terminals. For the full year, we now anticipate maintenance capital expenditures of approximately $45 million to $55 million, while expansion capital expenditures, excluding acquisitions, are anticipated to be approximately $40 million to $50 relating primarily to investments in our gas station and terminal business. Our current CapEx estimates depend in part on the timing of completion of projects, availability of equipment and workforce, weather and unanticipated events or opportunities requiring additional maintenance or investments.

Turning to our balance sheet. As of September 30, leverage as defined in our credit agreement as funded debt to EBITDA was 3.6x. We had $240.6 million outstanding on the working capital revolving credit facility and $124.8 million outstanding on the revolving credit facility. Looking ahead to our Investor Relations calendar, next month, we'll be participating in 2 events, the BofA Securities 2025 Leveraged Finance Conference and the Wells Fargo 24th Annual Energy and Power Symposium. Please contact our Investor Relations team if you'd like to schedule a meeting during the conference.

Now let me turn the call back to Eric for closing comments. Eric?

Thanks, Greg. We remain focused on capital discipline and operational efficiency, continuously seeking opportunities to drive sustainable returns and long-term value creation for our unitholders. Our scale, integrated operations and talented team give us the flexibility to respond to market shifts and pursue growth opportunities that create lasting value for all of our stakeholders.

Now Greg, Mark and I would be happy to take your questions. Operator, please open the line for the Q&A.

[Operator Instructions]

Our first question comes from the line of Selman Akyol with Stifel.

Can you talk a little bit more about entering the bunkering market in Houston?

Yes. I mean we're already obviously in the business. We felt that there was an opportunity, and we feel like the assets that we've entered into there are differentiated versus our competition. And so we're already, like I said, in that business, we already have the customer list. We already have the know-how and the knowledge, and we think it's a good fit for the company.

Got it. And when you say sort of differentiated offering, can you just explain that a little bit?

Yes, primarily just the location of the facilities and how we're going to go to market to supply that very busy corridor that is not always so easy to deliver fuel in.

So you're on the Houston Ship Channel?

We're outside of it, yes.

Just outside Okay. Can you talk a little bit about the acquisition environment? And you noted that store counts were lower relative to where you were third quarter last year. And so I'm just curious to more to go there? Or do you think you can add stores from here? How should we be thinking about that?

Yes. Stifel, it's Greg Hanson. I can talk a little bit about the sites. I mean, I think we went through a pretty big optimization program on our sites last year. So year-over-year, we've -- in the last 12 months, we've sold 7 sites. We've converted 15 sites, and then we terminated some of our dealer relationships that were low margin. So we continue to optimize. I think that said, there's probably not that big a runway right now on sort of site divestitures for us. I think we're pretty happy with our portfolio in general. It still looks a little obviously down year-over-year because last year was a big optimization period for us. But we'll continue to, I think, move around the edges on that portfolio, but we're pretty happy where it is now.

And then on the M&A side, I think overall, it was pretty quiet going into the fourth quarter on the retail M&A. I think we're seeing some signs of life and more deals that are out there on the fourth quarter on the retail side. And then the terminalling side, we continue to look at opportunities as we go through the year. But I think that we have seen a pickup on the retail side.

Got it. So Parkland, which is north of the border, was recently acquired, but they have stores in the U.S. Do you face much competition from them?

We do not. No. We don't -- we're not in -- none of our retail, the GDSO segment operates in their footprint as of today.

Got it. And then there's been reports of sort of the lower end consumer being under pressure. And I'm wondering if you're seeing that and if you have any thoughts going forward on that?

Yes. I mean we've -- I think not unlike a lot of other retailers out there, we've definitely seen it this year. There's definitely pressure on lower income. You see consumers trading down from more premium brands to more sub-generic brands. We continue to try and leverage our loyalty program that Eric mentioned earlier to grow promotions. But I think it's -- yes, they've definitely been under pressure overall. That said, we look at the quarter, we were pretty happy with this summer, how the C-stores did. We were actually up year-over-year, and that's not even adjusting for same site. That's just pure, and we were down 16 company-operated sites year-over-year.

So to be above on the GDSO station operations is pretty good in our book. It was a decent strong summer. And where we're located in the Northeast, I think, continues to be trend towards a higher income consumer. So overall, we're pretty happy with how the summer went on the C-store. But yes, I would agree. I mean, I think it's pretty well recognized that the lower-end consumer continues to face pressure, but the higher-end consumer has been continuing to spend, which is good.

Got it. And then the last one for me. Just how is labor going for you guys? Is it getting any easier?

It's the -- I would say the wage inflation has calmed down a little bit. But operating in a retail environment, you continue to face a lot of high turnover. But compared with the '22 and '23 time frame, I think we're still -- we're in a better place. I think what we're working on is trying to optimize around our labor hours and make sure we have the right associates in the right stores to optimize sales, and we'll continue to work on that.

Got it. I guess what I was thinking about is, is it easier to get people now? Are you seeing more resumes, more people? I mean resume is too strong of a word, but are you seeing more applicants, that kind of thing?

Yes. I think we are overall versus the last couple of years, definitely.

We have reached the end of the question-and-answer session. Mr. Slifka, I'd like to turn the floor back over to you for closing comments.

Thanks for joining us this morning. We look forward to keeping you updated on our progress. Everyone, have a great Thanksgiving.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.