Good day, everyone, and welcome to the Global Partners Fourth Quarter 2012 Financial Results Conference Call. Today's call is being recorded. [Operator Instructions] With us today 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 make 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. Global Partners delivered record results across its key financial metrics in 2012, achieving new highs for EBITDA and distributable cash flow and the highest net income in the partnership's history adjusting for a one-time gain from the sale of NYMEX seats in 2007. This performance reflects in part the contribution of the March 2012 acquisition of Alliance Energy, a gasoline distributor and operator of retail gas stations and convenience stores, as well as our growing crude logistics activity. Let me touch on a few financial highlights. For the year, net income more than doubled to $46.7 million, EBITDA was up 58% to $135.8 million, and distributable cash flow increased 73% to $80.8 million. Thanks in part to robust margins in our Gasoline and Station Operations segment, we enjoyed a particularly strong fourth quarter. Net income and distributable cash flow approximately doubled to $22.7 million and $32.1 million, respectively. EBITDA increased 76% to $47.1 million. U.S. oil production grew at its fastest rate in history in 2012, and 2013 could be even stronger. For example, the Department of Energy has reported that domestic oil production for the week ended March 8 was 7.2 million barrels a day, the highest level in over 20 years. This surge requires significant infrastructure to move crude oil and associated products from wellhead to market. Our rail logistics expertise and unique origin to destination assets position us at the forefront of this opportunity. We have 2 additional significant advantages. Our system is capital-efficient and rapidly scalable. Also, there is a lack of infrastructure alternatives in the U.S. to the east and west coasts. The lack of pipeline infrastructure is only one reason that railroads are playing a key role in the transportation of energy products. Products can be delivered…

Thank you, Eric. Good morning, everyone. Let me begin by talking about the results from each of our segments. In our Wholesale segment, we had record volume for both the fourth quarter and the full year of 2012. The volume increases for the year were due to our expanding crude oil activity, and the fourth quarter also enjoyed higher distillet [ph] volume due to a comparatively colder year-over-year fourth quarter. For the year, the Wholesale net product margin was up $21 million or 17% to $145 million. In the case of our Gasoline Distribution and Station Operations segment, 2012 also enjoyed record volume of 954 million gallons and a record net product margin of 206 million, reflecting the 10-month impact of our acquisition of Alliance Energy. The fourth quarter results for this segment, as Eric mentioned, were unusually strong. As we have discussed previously, this segment generally produces consistent cash flows on an annual basis. The quarterly margins will move up or down depending on price movements. NYMEX gasoline prices dropped $0.53 during the fourth quarter, which caused margins to increase as street prices and prices throughout the gasoline distribution supply chain tended to lag. When prices increase, of course, the opposite happens. I should note that in the first 2 months of 2013, according to the AAA, the national average price of gasoline increased $0.49 per gallon, marking the sharpest price increase during that period on record. Commercial volumes for the year increased 4% from 338 million gallons to 352 million gallons, but the net product margin declined approximately $3 million, from $22 million to $19 million, due in part to a warm first quarter, which negatively impacted the sale of our heating-related products. Total operating expenses increased year-over-year by approximately $90 million, reflecting the costs associated with the…

Thank you, Tom. In summary, Global delivered record 2012 financial results. The strategic steps we have taken to strengthen and diversify our cash flows position us to better expand our rail logistics and marketing activities. As we have said in the past, rent from our gasoline station dealers and convenience store margins in our company-operated sites are relatively consistent and predictable. These flows combined with the increasing throughput fees expected from our 2 Basin transloading facilities as well as throughput fees at our Albany terminal and our new Oregon facility, together combine to produce fee-like cash flows. With that, Tom and I will be happy to take your questions. Operator?

[Operator Instructions] Our first question is from the line of Brian Zarahn of Barclays.

On the Oregon terminal, can you talk a little bit about the markets you're seeking to serve? Is it going to be more Washington or California? And then, can you talk a little bit about the potential for exporting Canadian crude?

So first of all, I think the natural movement is the movement that is the closest, right? But obviously, we'll look at the entire market, right? So first is the closest and because that's got cheapest movement to get to the refining facility. And then after that, you'll spend a little more in barging to get there, right? So that yields what I would say, is maybe a little bit of a lower netback. In terms of internationally, you're going to try and do what you can to sell those barrels at the highest value or to the highest priced customer, so...

For the Canadian barrels, would those be railed directly from Canada or would they be railed from the U.S.?

Well, they would have to be Canadian barrels so they'd have to be sourced out of Canada and separate and distinct and unique and tracked.

Okay. But it'd be probably railed directly from Canada, not piped into the U.S. and then railed?

I'd say, likely. Yes, I mean where we've sort of focused is really on the rail side of that.

Okay. And then on given the higher gasoline prices first quarter, are you seeing any impact on volumes or margins so far?

I think, Brian, we just want to factually point out that they've risen in the first couple of months. If history's a guide, that tends to squeeze margins a bit.

Okay. And then on, last question for me, maybe a little esoteric, but on the renewable fuel credits, we're seeing some refiners get hit by that. Is there any impact from your side of things in terms of also volumes or more on the margin side, I guess?

Yes. I mean, I think it's just a shift in the market and ends up getting essentially passed through. But it's a hot topic right at this moment.

Our next question is from the line of Paul Jacob with Raymond James.

So obviously, there's a lot of interest in creating positions on the Gulf Coast in terms of crude by rail. When you think about your positions on the East and West Coast for rail, can you talk about the opportunity to expand to the Gulf Coast? And any potential across fertilization benefits that you see if you were to create an incremental position there?

Yes. I mean, I think for us what we're trying to do is create a national network that provides logistic solutions for our customers throughout North America, right? So the goal for us is really put ourselves in a position where we can be the best provider of services to refiners and takers of crude products, right?

And along those lines, would you consider a possible joint venture opportunity, if that were to present itself? Are you guys looking at more of buying your own facility and kind of working from there like you did on the West Coast?

We're looking at all options, right? So I mean, at the end of the day, if somebody came to me and said, "Hey Eric, I've got a joint venture and I want to do this, that or the..." I'm going to look at it and we'll consider it. And we'll consider our alternatives and we'll go forward with what business we think provides us with the highest returns.

Okay. And then just to make sure that I heard you clearly earlier, is it -- so the EBITDA guidance that you outlined, that $175 million to $190 million range, nothing from the Oregon assets is factored in there?

Correct.

Is that correct?

Correct.

Okay. And then the ethanol plant at that Oregon facility, recognizing that that's not fully online right now, what's the timeline for bringing that back on?

I mean, it's really about an economic opportunity, right? So at the end of the day, we think there's going to be an opportunity to run that facility at some point in time, it's not just yet. And really, we're getting our arms around that entire facility. I mean, there's a lot to do there, and that's one of the items on our checklist, right? So -- but I think it's about pricing, and we're economic. So at the end of the day, if we can make money there, we're going to look to start up and run it.

Okay. And then last question for me. Can you talk about any investments that you plan on making given the recent OsComp deal? And what are the terms of that venture? And how does that leverage your position on the East Coast?

Essentially, I'm not going to give out the details of the OsComp deal. But we think it's a nice niche market. You're building out these facilities that service the market. Obviously, the consumers can't get alternative fuels in there, so they're buying higher-priced oil. And you're trying to figure out how to cut their energy bills, and this is one way to do it.

[Operator Instructions] Our next question is coming from the line of Robert Longhicker [ph] of Dovetree [ph].

Can you talk a little bit about how many gallons per day you guys go for your gas station business?

How many -- what's the total sales?

Take us a minute, do a calculation on it. Let's come back in a moment on that.

Okay. And does the Getty -- do the Getty stations, are they treated just like the other stations in terms of how they go through your P&L, it's gallons going through with the margin on the gallons?

Yes, that's a supply business. As you may have read, we converted a temporary arrangement in the case of 90 sites to permanent leases. So we are the, in effect, we work with dealers on those sites and supply them gasoline. Very similar to the rest of the Distribution business.

Got you, okay. And then how many cars per unit train did you guys do in the quarter?

Let's -- for this quarter, hold one 1 second, let's get that detail. I know we have that somewhere here.

Number of total cars in Albany?

For the quarter, just total. Yes, total -- I get -- you want cars or unit trains?

So I think you said you guys figured you got 87 unit trains. So I'm just trying -- wondering what kind of -- what the average car per train was?

It is about right, 87.

About 87. The cars are around 30,000 gallons each, right? And the unit train size is probably an average of about 100. So I'd say that's a good estimate to use.

Got you. And you're still trying to -- that's still going to go up over time? I think at some point you guys said you are going to -- you should...

Yes, the goal is to be able to run it at capacity. And I'd say, we're not quite there yet. We're probably today around 110,000 barrels a day, and we want to try and get it to its maximum capacity. So we'll keep pushing. It takes time and work, but we're getting there.

And the max is 160, is that right?

Correct. So regarding it, that's, so Chuck, what do you have there?

The run rate for 2012 was 2.7 million gallons a day at the stations. You have to remember that we had Alliance for only 10 months, so you would expect the current run rate to be a little higher.

A little bit higher. Okay, thanks.

Okay. And then -- so you don't have it on a like an average per station, anything like that? Just because obviously the number of stations changed so much over the -- throughout the year?

Right, we don't have that for you.

Okay. And then in the quarter, how many barrels or unit trains did you guys do at Phillips just in the quarter?

We don't break that out. I think the key is, is for you, look at the total number, that's really the important number. And that's what's getting throughput through the facility.

Our next question is from the line of Kate Morris with Bank of America.

A quick question on gasoline margins. Was there any positive impact from Sandy? Or was the robust margin much all driven by Alliance and the lower commodity prices during the quarter?

If you're looking at our Wholesale business line, the strength year-over-year had to do with expanding sites. We're in 25, 30 new locations around the country, wholesale in gasoline. And we also, by the way, as we have discussed, restructured our -- how we supply our gasoline business to be much more effective in backward markets. But I think your question had more to do with the Gasoline Distribution business. And obviously, that results was way up year-over-year due to Alliance, as well as we mentioned, the strong margins in the fourth quarter.

Looking at a per-unit margin, is that a good run rate per quarter?

I think we would suggest that annualizing the Gas Station Distribution and Station Operations margin is the right way to look at the business. You'll see quarterly ups and downs. The fourth quarter, as we mentioned, was very robust from a margin standpoint.

Our next question is from the line of Lin Shen [ph] of High Tench [ph].

First, I just want to clarify, for your Albany crude terminal, did you just mention like 110 is like the current completion [ph] level?

Yes.

So there's how many trains a day, it's like 1, like...

That's probably -- see, if we can make that calculations for you. It's more than what, Tom?

Train a day.

It's more than a train a day, right? Yes, I mean, okay, so if you said a train is -- carries between depending on the size of the train, 75,000 to 80,000 barrels, I mean and you're doing 110,000 a day, that's the breakout, right?

Okay, okay. And also, Hess has announced that they're going to sell their retail gas station in United States. So have you guys think about this -- any potential opportunity for Global?

We would look at any transaction that's out there, right, so...

So do you think there's like synergy for Global's current business?

Yes. I mean, there could be. There could be. Clearly, they're in the retail business and they're in the marketplace. So I mean, and they're our competitors, so sure.

And also given your current leverage level, do you guys think that you need to go to the public equity market this year?

Lin, [ph] at this time, we have no need to do so. We obviously continuously consider the right capital structure for the partnership, but we have no need, so no.

There are no further questions at this time. I would like to turn the floor back over to Mr. Slifka for his closing comments.

Everyone, thank you for joining us today. We look forward to keeping you updated on our progress. Thank you very much.

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