Good day, everyone and welcome to the Global Partners Second Quarter 2020 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 Financial Officer, Ms. Daphne Foster; Chief Operating Officer, Mr. Mark Romaine; and Executive Vice President and General Counsel, Mr. Edward Faneuil. At this time, I would like to turn the call over to Mr. Faneuil for opening remarks. Please go ahead, sir.

Good morning, everyone. Thank you for joining us today. Before we begin, let me remind everyone that this morning 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, estimates concerning the future financial and operational performance of Global Partners. Forward-looking statements are based on assumptions regarding market conditions such as the crude oil market, business cycles, demand for petroleum products, including gasoline and gasoline blendstocks and renewable fuels, utilization of assets and facilities, weather, credit markets, the regulatory and permitting environment and the forward product pricing curve, which could influence quarterly financial results. These statements involve significant risks and uncertainties, some of which are beyond the Partnership’s control, including without limitation, the impact and duration of the COVID-19 pandemic, uncertainty around the timing of an economic recovery in the United States, which will impact the demand for the products we sell and the services we provide. Uncertainty around the impact of the COVID-19 pandemic to our counterparties and our customers and their corresponding ability to perform their obligations and/or utilize the products we sell and/or services we provide. Uncertainty around the impact and duration of federal state and municipal regulations and directors related to the COVID-19 pandemic and assumptions that could cause actual results to differ materially from the Partnership’s historical experience and present expectations or projections. We believe these assumptions are reasonable given currently available information and our assessment of historical trends. Because our assumptions and future performance are subject to a wide range of business risks and uncertainties, we can provide no assurance that actual performance will fall within any guidance ranges, if provided. In addition, such performance is subject to risk factors, including, but not limited to those described in our filings with the Securities and Exchange Commission. Global Partners undertakes no obligation to revise or publicly release the results of any revision to any forward-looking statements that maybe 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 news releases, publicly announced conference calls or other means that will constitute public disclosure for the purposes of Regulation FD. Now, please allow me to turn the call over to our President and Chief Executive Officer, Eric Slifka.

Thank you, Edward. Good morning, everyone and thank you for joining us. Let me begin this morning by recognizing our team for their outstanding work during the past quarter from our store associates and managers, to our terminal employees, to the staff in our Waltham and Branford offices, who have successfully transitioned to working remotely. While the economic environment remains challenging, I am exceptionally proud of the way we have adapted to this new way of doing business during the pandemic. Our team has eagerly embraced our COVID-19 related procedures and safety protocols ensuring the health and well-being of our guests, customers and one another, while keeping our retail locations and terminals fully operational to deliver fuel, food and other essential goods and services. Turning to our results, we delivered strong results in the second quarter, reflecting the extreme contango market structure. Our terminal network enabled us to take advantage of a dramatic shift in the forward product pricing curve, leading to a $73.5 million increase in wholesale product margin from the same period last year. It’s important to keep in mind that in Q1 of this year, our wholesale product margin declined by nearly $30 million year-over-year. Those Q1 results reflected a number of factors, including the steepening forward curve caused by the rapid decline in fuel prices. Through the first half of 2020, our wholesale product margin is up about $44 million versus the same period a year earlier. In our GDSO segment, the gasoline distribution portion of the business benefited from higher retail fuel margins that more than offset a decrease in volume. We sold about 132 million fewer gallons of gasoline in the second quarter of this year than the comparable period in 2019. That reduction is attributable in part to a significant drop in commuter…

Thank you, Eric. As Eric noted, the primary driver for our Q2 results was the significant recovery in the supply demand imbalance at the end of the first quarter. The forward product pricing curve was in extreme contango at the start of the quarter and then flattened providing an extraordinary benefit to our wholesale segment product margins. Second quarter 2020 net income was $76.3 million compared with $14.5 million for the same period of 2019. Adjusted EBITDA was $126.6 million in the second quarter of 2020 versus $62.8 million in the year earlier period. DCF was $95.8 million in this year’s second quarter compared with DCF of $28.1 million in the same period of 2019. Trailing 12-month distribution coverage at the end of the second quarter was 2.4x. After factoring in distributions to the preferred unit holders that coverage was 2.3x. Volume in the quarter declined 450 million gallons to 1.2 billion compared with the same period of 2019 with decreases across all segments. In the wholesale segment, volume declined 25% or 260 million gallons due to decreases in gasoline and gasoline blendstocks partially offset by an increase in distillates and residual oil in part due to cold weather, which was 42% colder than last year and 18% colder than normal. Volume in our GDSO segment declined 32% or 132 million gallons, reflecting the decline in automobile travel due to the impact of COVID-19 and volume in our commercial segment declined 32% or 58 million gallons due to declines in both gasoline and bunker fuel. Turning to our segment margins, GDSO product margin was essentially level at $145.6 million compared with $145.4 million in the second quarter of 2019, with higher fuel margins more than offsetting both the decline in fuel volume and the decline in traffic at the C-stores.…

Thanks, Daphne. In summary, the impact of COVID-19 continues to cloud the outlook for markets making it difficult to forecast demand. While we believe that our integrated business model, diversified product portfolio and versatile asset base provide us with the operating and financial flexibility, our performance in the quarters ahead will be affected by the extent and duration of the pandemic. Now, Daphne and I will be happy to take your questions. Operator?

Thank you. [Operator Instructions] Our first question comes from the line of Ned Baramov with Wells Fargo. You may proceed with your question.

Hi, good morning. Thanks for taking the questions. Could you maybe talk about the Board’s decision to increase the distribution given the uncertain environment we are in? And also maybe could you provide your thoughts on de-levering the business further to potentially be better prepared from a total leverage perspective for periods of lower demand and/or volatile results?

Sure. Good morning, Ned. Obviously, the Board looks at the distribution every quarter and considers a number of factors. Remember, we did cut the distribution 25% last quarter due to the uncertainty. And while there is still uncertainty, I think we have – they have a better understanding, we had a remarkable second quarter with trailing 12-month coverage of 2.3x and so looked at our performance year-to-date backed it in various future scenarios, consider our leverage of 3.1x and where it might land in the future and looking at our CapEx needs and felt that it was appropriate to give back 50% of what we took away last quarter. In terms of leverage, I think 3.1x for us from a funded debt to EBITDA standpoint obviously, it doesn’t include the working capital, which as you know expands and contracts just based on commodity price more than anything else. I think we are well positioned from a leverage standpoint at this point.

Got it. And then my second question is on the West Coast renewable diesel contract, could you talk about volumes, EBITDA contributions or any potential capital investments needed?

I think at this point we are just going to be, stay a little quiet on it. We are just – have just signed it up and not giving any direction in terms of the magnitude of that contract.

Yes, if I could – this is Mark if I could just add to that, because I think Ned you asked about CapEx requirements and the terminal is set to handle the product now so with no further investment. Although I will say there is the ability to handle renewable diesel does give us, which is in addition to the recent addition to the firm, it does us give us opportunity to expand our pursuit of more of that type of business and certainly the terminal has the ability – we have the ability to expand the terminal. So, if we are able to generate more interest in that the opportunity exists, but the contract that we recently signed does not require any CapEx.

Let me add one other thing there, it’s Eric Slifka sorry, but when you did have to – we did have to clean the existing tanks out to carry the different products, so there was an expense that was associated with that. What I would say is it is not a material increase or change in the company’s earnings or cash flow from that facility, right. It’s a good deal, because it’s a term deal, so it’s secure and there is term with it that it has got some lens through out it. And so from a sort of conservative safety standpoint, it’s a good transaction for us.

Thank you very much. That’s all I had today.

Our next question comes from the line of Will Hardy with RBC. You may proceed with your question.

Good morning, all. I hope all are safe. Thank you for a great quarter and the dividend increase. Question I have is given the Speedway transaction with Marathon recently, what’s the market like you all out there buyers or sellers or convenience stores?

Yes. What we have always said is that the – what’s interesting about that market is it’s made up of many, many, many, many operators, many individual operators, small companies, family run businesses. And there is almost always a transaction going on somewhere across the country. That particular transaction happens to be one of the biggies. And so it’s unique from that standpoint. And obviously, it went at a big dollar number and – but in terms of the M&A market, the M&A market continues to be busy and there are companies that are always talking about doing one thing or another and obviously, we continue to look for potential acquisitions to grow the business.

I want to tell you all congratulations again. Every time there is an arbitrage opportunity that has appeared in the last 5 or 6 years, you all seem to do an incredibly good job on it. So thank you again.

Thank you very much for those kind words and stay healthy and safe.

Ladies and gentlemen, this concludes today’s question-and-answer session I would like to turn the call over to Mr. Slifka for closing remarks.

Thank you for joining us this morning. We look forward to keeping you updated on our progress. Stay safe and enjoy the rest of your summer everyone. Thank you so much for following us.

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation. Have a great day.