Global Partners LP (GLP) Cash Flow Statement

The OCF/NI ratio of 4.89 in Q2 2026 appears inflated by a $194.8M working capital inflow, likely from seasonal inventory drawdowns and receivable collections. Excluding working capital changes, cash conversion would be closer to 1.8x, still healthy but less dramatic. This pattern is typical for fuel distributors, where timing of fuel purchases and sales drives quarterly swings, so investors should focus on trailing twelve-month conversion rather than any single quarter.

The FCF trajectory is highly erratic, with negative quarters in Q1 2024, Q1 2025, and Q1 2026, and a massive $261.9M capex in Q4 2024 that drove FCF to -$200.3M. This volatility appears tied to seasonal working capital needs and acquisition-related spending, as seen in the $217.6M acquisition outflow in Q4 2024. Despite the swings, cumulative FCF over the ten quarters is positive, but the pattern suggests that annual FCF is a more reliable metric than quarterly, and the recent Q2 2026 strength may not be sustainable.

Routine capex is modest, typically $15-40M per quarter, suggesting maintenance-level spending on terminals and retail stores. The Q4 2024 outlier of $261.9M likely represents an acquisition or major expansion, given the concurrent $217.6M acquisition outflow. This implies that organic capex is low, but the company periodically makes large strategic investments, which can temporarily depress FCF. Investors should monitor whether such investments generate sufficient returns to justify the elevated leverage.

The working capital swings are massive relative to net income, with Q1 quarters consistently showing large outflows (e.g., -$216.4M in Q1 2026) and Q2 quarters showing inflows (e.g., +$194.8M in Q2 2026). This pattern likely reflects seasonal inventory builds ahead of winter heating oil demand and subsequent drawdowns. The efficiency of collections and payables management appears stable, but the sheer size of these swings suggests that the company's cash flow is heavily dependent on commodity price movements and timing, which may complicate distribution coverage assessments.

The company consistently pays out around $31-33M in dividends each quarter, which is a fixed cost. In quarters with negative FCF (Q1 2025, Q1 2026), distributions were funded by debt or cash reserves, as evidenced by the negative FCF and high leverage. Buybacks are minimal, suggesting management prioritizes distributions and acquisitions over share repurchases. The sustainability of the distribution depends on annual FCF, which appears sufficient on a trailing basis, but the quarterly volatility warrants monitoring, especially given the rising debt-to-equity ratio.

The cumulative OCF exceeds net income by $211M, largely due to non-cash D&A and favorable working capital timing. This suggests that reported earnings understate the company's cash-generating ability, which is typical for asset-heavy businesses with significant depreciation. However, the gap is not uniform; in some quarters, OCF was negative while net income was positive, highlighting the importance of cash flow over earnings for this MLP. The positive cumulative divergence supports the distribution, but investors should be cautious about relying on this trend continuing, as working capital swings can reverse.