Good day, everyone, and welcome to the Global Partners Third Quarter 2012 Financial Results Conference Call. Today's call is being recorded. There will be an opportunity for questions at the end of the call. With us from Global Partners are President and Chief Executive Officer, Mr. Eric Slifka; Chief Operating Officer and Chief Financial Officer, Mr. Tom Hollister; Executive Vice President, Chief Accounting Officer and Co-Director of Mergers and Acquisitions, Mr. Charles Rudinsky; and Executive Vice President and General Counsel, Mr. Edward Faneuil. At this time, I'd like to turn the call over to Mr. Faneuil for opening remarks. Please go ahead, sir.

Good morning, everyone. Thank you for joining us. Let me remind everyone that during today’s call, we will be making forward-looking statements within the meaning of federal securities laws. These statements may include, but are not limited to, projections, beliefs, goals and estimates concerning the future financial and operational performance of Global Partners. Estimates for Global Partners' future EBITDA are based on a number of assumptions regarding market conditions, including demand for petroleum and renewable fuels, weather, the level of market competition and the forward product pricing curve. Therefore, Global Partners can give no assurance that our future EBITDA will be as estimated. The actual performance for Global Partners may differ materially from those expressed or implied by any such forward-looking statements. In addition, such performance is subject to risk factors including, but not limited to, those described in Global Partners' filings with the Securities and Exchange Commission. Global Partners undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statement that may be made during today’s conference call. With Regulation FD in effect, it is our policy that any material comments concerning future results of operations will be communicated through press releases, publicly announced conference calls or other means that will constitute public disclosure for purposes of Regulation FD. Now please let me turn the call over to our President and Chief Executive Officer, Mr. Eric Slifka.

Thank you, Edward, and good morning, everyone. Before commenting on our results, let me express, on behalf of everyone at Global, our deep concern for our employees and the other residents of New York, New Jersey and Connecticut who were affected by Hurricane Sandy. As the cleanup work continues and the rebuilding of homes and businesses begins, we are helping to ensure that the fuel needs of first responders, other emergency personnel and the entire region are met as efficiently as possible. While the storm was devastating for many of our employees, friends and neighbors in the region, fortunately for Global, our facilities sustained no significant infrastructure damage and the facilities are operational, although the availability of supply to New York is tight. Our New England gas station sites are running on a business-as-usual basis. The cooperative spirit demonstrated by state, federal and industry officials remains critical as the area continues its recovery. Turning now to our Q3 estimates. On a year-over-year basis, our third quarter performance was very strong. We sold more petroleum products in Q3, nearly 1.6 billion gallons, than any previous quarter in our history driven primarily by our Alliance acquisition, our growing crude oil business and our fuel supply and services agreement with Getty Realty. By segment, our Wholesale business accounted for 1.2 billion gallons complemented by $282 million gallons of volume in our Gasoline Distribution and Station Operations segment. From a financial perspective, net income, EBITDA and distributable cash flow all posted new third quarter highs for Global Partners. Net income improved from $1.9 million in Q3 of last year to $6.9 million, EBITDA increased from $18.7 million to $29.5 million and distributable cash flow grew from $8.6 million to $15 million. As we discussed on our August earnings call, our third quarter results did…

Thank you, Eric. As Eric mentioned, our year-over-year results were strong with records for third quarter net income, distributable cash flow and EBITDA. Given the acquisition of Alliance Energy in the first quarter and the overall expansion of our business lines, rather than comparing our performance year-over-year, I will primarily make financial comparisons to this year's second quarter. Let me begin by describing the margin results in our reporting segments. As Eric noted, sharp increases in gasoline prices contributed to a decline of $10 million, or 23%, for the second quarter in the gasoline portion of our Gasoline Distribution and Station Operations segment. This segment consists primarily of the operations from our Mobil and Alliance acquisitions. Within the same segment, the margin associated with rental income from our dealers and commission agents, as well as sales at our company-operated convenience stores was $18.6 million in the third quarter, level with the second quarter results. The results from these activities, as we have previously explained, should be relatively consistent from quarter-to-quarter. In our Wholesale segment, the net product margin was $34.9 million, essentially flat from the second quarter's $34.7 million. Within the segment, however, improvements in crude oil margin results were offset by margin reductions in other products caused in part by continued backwardation in the gasoline forward market as well as lower ethanol margins. In our Commercial segment, the net product margin increased 50% to -- 50%, $4.8 million from $3.2 million, in the second quarter despite declines in residual fuel volume and margins. The $1.6 million increase was driven by improved margins in our bunkering activities and regional and national expansions of our delivered transportation fuel business. Compared with the second quarter of this year, expenses were up approximately $3.1 million primarily due to increases in operating expenses associated…

[Operator Instructions] Our first question comes from Paul Jacob with Raymond James.

So quick question at the Beulah site. Could you talk a little bit about the downstream ability there? Has anything changed in terms of the opportunities on either the West or the Gulf Coast for terminaling? And if not, if you don't find anything that would present an attractive acquisition opportunity, do you see anything for JVs?

I'm sorry, what's the last part of the question?

If you don't see any straight-on acquisition opportunities, would you be looking at anything in terms of a joint venture?

I think the facility, I think, stands on its own. There are customers going through that facility currently. So we think it's a good site even if we weren't to expand with our own, what I'd say, a destination point. Our preference is we'd like to build out a system that has both origination and destination. But ultimately, what that looks like and how long that takes, we're just -- we're working towards it. But we've got to find the right transactions in order to get that. If it doesn't happen, that's fine because that site stands on its own.

Okay. So the volumes at that site already have a place to go?

Correct, and there is already slowly moving towards its third-party volume, third-party throughput contract, that kind of stuff.

Okay, perfect. And then could give us a little bit of color relating to that propane facility in Albany? How do you plan to use that to extend your distribution footprint in that region? And do you see any opportunities there to extend your presence in gas transportation?

Yes, I think in terms of propane, many of the retail home heating oil companies that we currently sell heating oil, too, are also in that propane business. So we look at that customer base as being very similar. We also think that it's an advantaged supply location. So we think we have very good sourcing capabilities to get product into that facility at a low price. And so we think we'll supply many other companies as well there.

Okay. And then on the 6 stations that you just acquired, could you give us a little bit of color? I mean, I know that you probably, for competitive reasons, don't want to outline the acquisition price, if that's even negotiated at this point. But is this going to be in line with what you've spent historically on a site-by-site basis? And what type of margins are you looking at there is it on a DBW [ph] basis and so forth?

Paul, I don't want to quite -- it's Tom Hollister. I don't want to quite use the routine -- the word routine. But Alliance certainly was built over the years through acquisitions of this kind, and there are plenty of distributors and gasoline operators who from time to time are interested in selling. This is sort of a normal type of return opportunity. And the nice part of it is because we have the infrastructure in place, it can be tucked in quite naturally. We think these are attractive sites with upside.

Okay, perfect. And then the rental income, is that going to count in terms of the MLP structure?

Paul, we've been through this over the past -- most of it does. The real property rent is qualified. The personal property rent, which is a smaller portion, does not. So ballpark, most of it is qualified.

Okay. And then last question for me. Do you see any impact from Hurricane Sandy showing up in the fourth quarter that you think will be material to your earnings?

I mean, for us our facilities really sustained no significant damage. They've been operational. I think you'll see some movement maybe from different parts of our business. But on the whole, we don't see it happening, a large effect on the company.

[Operator Instructions] Our next question comes from Jerren Holder with Barclays Capital.

Just to follow up on the Hurricane Sandy questions. I know you mentioned that there isn't a material impact on your facilities. But what about your customers' facilities and their ability to sort of receive supplies? I know there were a lot of power outages and whatnot, and you could see on the news that there was just like a lot of stations not being able to supply to their customers. Can you comment on that a bit?

Yes, I mean, I think every -- each facility has its own unique story, and some have been affected more than others. And so the best way to think about supply is it's a little bit of a balloon. It just takes time to get from one place to the other place. So I'll give you one specific example. In Inwood, there are 3 other facilities in that marketplace.

Explain where Inwood is.

It's over on Long Island.

Right.

And at that facility, there's 2 other facilities in the area. One has sustained some damage. It's closed. Rumors are 1 month, 3 months, 4 months, we don't really know, but that -- but what happens is that volume gets displaced and someone else then has to pick it up and throughput the volume. So for -- in our case, hopefully, we'll get some of that volume and we'll be able to throughput and supply the customers. But the reason you're really seeing the system not work perfectly is because supply has to move around and be handled in a slightly different manner. I think what's fortunate for us is our facilities came through this in a really, really good fashion, and we're positioned well to, as the market smooths itself out, to supply the market. I think our -- my team here, in terms of supply and logistics and terminal operations, has done an incredible job of managing the system and working 24/7 and getting any assets that might have been down for power reasons were up very quickly. So I'm thrilled with the response that we've been able to provide to the marketplace.

[Operator Instructions] Our next question comes from Lynn Chen [ph] with HITE.

It's actually James Jampel from HITE. You mentioned that you had -- at the Analyst Day that there were going to be approximately 24 unit trains in September. Is that what actually came through?

It's a pretty good number, That's a pretty good number, James. I can't remember exactly. That's a pretty good number.

And what are we running today? What are you expecting for November?

I think -- yes, I mean -- James. So I think it's -- what we'd like to say is we continue to push more and more product through the asset as the efficiencies and as the system gets used to increasing volumes. We're going to push to maximize that facility as quickly as we can. But the other thing not to forget about is, we've gone from 80 car unit trains to 120. That also represent more volume as well, right? So it's not necessarily a 1:1 comparison, too.

But you could get it to 2 120 car unit trains a day?

The goal is to do 2 a day, correct.

And what's a realistic time frame for that?

As soon as possible. I mean, there's a lot of moving parts that are associated with that. So -- but we are increasing it as quickly as we can.

I see. And I noticed the omission of a -- no comment or reference to the 130 to 150 in normal markets estimate EBITDA from the Analyst Day for next year. And should we read anything into that?

No.

So I assume you would update us if there were an update to that?

Yes.

And how many unit trains a day are in that normal markets estimate?

Yes, we're not breaking that stuff out, James. But I think just suffice it to say we're as interested in -- you are -- as you are in moving as many unit trains through that facility as is possible. I think the great news is, is the facility's positioned to do well. It's -- we think it's a low-cost provider to the marketplace. It's a lot of cars that will be going through that facility as it ramps up. And we're very excited about the prospects of that asset over time and growing its volume.

Now I guess looking at the wholesale gasoline market, it doesn't look to be backwardated today anyway. Would -- is that a normal -- you would consider a normalized condition?

Those markets come and go, right? So in contango or into backwardation, and -- I think if you could just take a look at the historicals on the products and figure out when they're in contango, when they're in backwardation, and I think that will give you the exact answer to your question.

[Operator Instructions] There are no further questions in queue at this time. I would like to turn the floor back over to Mr. Slifka for closing comments.

This concludes today's call. We look forward to updating you on our progress. Thanks, everybody, for joining us this morning, and have a good day.

This concludes today's teleconference. You may disconnect your lines at this time, and thank you for participation.