STAR GROUP LP

Previous wording

(a) On April 30, 2024, the NYMEX ultra low sulfur diesel contract closed at $2.51 per gallon or $0.27 per gallon lower than the average of $2.78 through the first six months of Fiscal 2024.

Current wording

(a) On July 30, 2024, the NYMEX ultra low sulfur diesel contract closed at $2.34 per gallon or $0.35 per gallon lower than the average of $2.69 through the first nine months of Fiscal 2024.

Previous wording

For fiscal 2025, the Company entered into weather hedge contracts with the similar hedge period described above. The maximum that the Company can receive is $15.0 million annually and we are additionally obligated to make an annual payment capped at $5.0 million if degree days exceed the Payment Threshold. If we had this same amount of coverage in place during fiscal 2024 we would have been paid an additional $7.5 million more than fiscal 2024.

Current wording

For fiscal 2025, the Company entered into weather hedge contracts with the similar hedge period described above. The maximum that the Company can receive is $15.0 million annually and we are additionally obligated to make an annual payment capped at $5.0 million if degree days exceed the Payment Threshold. If we had this same amount of coverage in place during fiscal 2024 we would have received $7.5 million more in April 2024.

Previous wording

For the six months ended March 31, 2024, the Company lost 5,800 accounts (net), or 1.5% of its home heating oil and propane customer base, compared to 1,800 accounts lost (net), or 0.4% of its home heating and oil propane customer base in the prior year comparable period. Gross customer gains were 9,400 less than the prior year's comparable period primarily due to market conditions with regard to physical supply in the first quarter of fiscal 2023 that did not repeat in the current fiscal year, warmer weather and less customer move-ins. Gross customer losses were 5,400 less due to a reduction in the number of customer relocations and other factors.

Current wording

For the nine months ended June 30, 2024, the Company lost 12,100 accounts (net), or 3.1% of its home heating oil and propane customer base, compared to 9,100 accounts lost (net), or 2.2% of its home heating and oil propane customer base in the prior year comparable period. Gross customer gains were 10,000 less than the prior year's comparable period primarily due to market conditions with regard to physical supply in the first quarter of fiscal 2023 that did not repeat in the current fiscal year and less customer move-ins. Gross customer losses were 7,000 less due to a reduction in the number of customer relocations and other factors.

Previous wording

During the six months ended March 31, 2024, we estimate that we lost 0.7% of our home heating oil and propane accounts to natural gas and electricity conversions versus 0.9% for the six months ended March 31, 2023 and 0.8% for the six months ended March 31, 2022. Losses to natural gas and electricity in our footprint for the heating oil and propane industry could be greater or less than the Company’s estimates.

Current wording

During the nine months ended June 30, 2024, we estimate that we lost 1.1% of our home heating oil and propane accounts to natural gas and electricity conversions versus 1.3% for the nine months ended June 30, 2023 and 1.3% for the nine months ended June 30, 2022. Losses to natural gas and electricity in our footprint for the heating oil and propane industry could be greater or less than the Company’s estimates.

Previous wording

The timing of acquisitions and the types of products sold by acquired companies impact year-over-year comparisons. During the six months ended March 31, 2024, the Company acquired one propane and three heating oil businesses for approximately $22.6 million. During fiscal 2023 the Company acquired one propane and two heating oil businesses for approximately $19.8 million. The following tables detail the Company’s acquisition activity and the associated volume sold during the 12-month period prior to the date of acquisition.

Current wording

The timing of acquisitions and the types of products sold by acquired companies impact year-over-year comparisons. During the nine months ended June 30, 2024, the Company acquired one propane and three heating oil businesses for approximately $22.6 million. During fiscal 2023 the Company acquired one propane and two heating oil businesses for approximately $19.8 million. The following tables detail the Company’s acquisition activity and the associated volume sold during the 12-month period prior to the date of acquisition.

Previous wording

Every ten years, the National Oceanic and Atmospheric Administration (“NOAA”) computes and publishes average meteorological quantities, including the average temperature for the last 30 years by geographical location, and the corresponding degree days. The latest and most widely used data covers the years from 1991 to 2020. Our calculations of “normal” weather are based on these published 30 year averages for heating degree days, weighted by volume for the locations where we have existing operations.

Current wording

Every ten years, the National Oceanic and Atmospheric Administration (“NOAA”) computes and publishes average meteorological statistics, including the average temperature for the last 30 years by geographical location, and the corresponding degree days. The latest and most widely used data covers the years from 1991 to 2020. Our calculations of “normal” weather are based on these published 30 year averages for heating degree days, weighted by volume for the locations where we have existing operations.

Previous wording

For the three months ended March 31, 2024, retail volume of home heating oil and propane sold decreased by 4.0 million gallons, or 3.3%, to 117.1 million gallons, compared to 121.1 million gallons for the three months ended March 31, 2023. For those locations where we had existing operations during both periods, which we sometimes refer to as the “base business” (i.e., excluding acquisitions), temperatures (measured on a heating degree day basis) for the three months ended March 31, 2024 were 6.9% colder than the three months ended March 31, 2023 and 15.2% warmer than normal, as reported by NOAA. For the twelve months ended March 31, 2024, net customer attrition for the base business was 4.5%. The impact of fuel conservation, along with any period-to-period differences in delivery scheduling, the timing of accounts added or lost during the fiscal years, equipment efficiency, and other volume variances not otherwise described, are included in the chart below under the heading “Other.” An analysis of the change in the retail volume of home heating oil and propane, which is based on management’s estimates, sampling, and other mathematical calculations and certain assumptions, is found below:

Current wording

For the three months ended June 30, 2024, retail volume of home heating oil and propane sold increased by 7.6 million gallons, or 25.3%, to 37.7 million gallons, compared to 30.1 million gallons for the three months ended June 30, 2023. For those locations where we had existing operations during both periods, which we sometimes refer to as the “base business” (i.e., excluding acquisitions), temperatures (measured on a heating degree day basis) for the three months ended June 30, 2024 were 0.5% colder than the three months ended June 30, 2023 and 17.7% warmer than normal, as reported by NOAA. For the twelve months ended June 30, 2024, net customer attrition for the base business was 4.4%. The impact of fuel conservation, along with any period-to-period differences in delivery scheduling, the timing of accounts added or lost during the fiscal years, equipment efficiency, and other volume variances not otherwise described, are included in the chart below under the heading “Other.” An analysis of the change in the retail volume of home heating oil and propane, which is based on management’s estimates, sampling, and other mathematical calculations and certain assumptions, is found below:

Previous wording

Volume of motor fuel and other petroleum products sold decreased by 3.0 million gallons, or 9.1%, to 30.2 million gallons for the three months ended March 31, 2024, compared to 33.2 million gallons for the three months ended March 31, 2023.

Current wording

Volume of motor fuel and other petroleum products sold decreased by 3.0 million gallons, or 8.3%, to 32.9 million gallons for the three months ended June 30, 2024, compared to 35.9 million gallons for the three months ended June 30, 2023.

Previous wording

For the three months ended March 31, 2024, installation and service revenue increased by $2.3 million, or 3.4%, to $70.7 million, compared to $68.4 million for the three months ended March 31, 2023 driven by an increase in service revenue.

Current wording

For the three months ended June 30, 2024, installation and service revenue increased by $6.0 million, or 7.9%, to $82.6 million, compared to $76.6 million for the three months ended June 30, 2023 driven by an increase in service revenue.

Previous wording

The table below calculates our per gallon margins and reconciles product gross profit for home heating oil and propane and motor fuel and other petroleum products. We believe the change in home heating oil and propane margins should be evaluated before the effects of increases or decreases in the fair value of derivative instruments, as we believe that realized per gallon margins should not include the impact of non-cash changes in the market value of hedges before the settlement of the underlying transaction. On that basis, home heating oil and propane margins for the three months ended March 31, 2024 increased by $0.0839 per gallon, or 5.3%, to $1.6768 per gallon, from $1.5929 per gallon during the three months ended March 31, 2023. Going forward, we cannot assume that per gallon margins realized during the three months ended March 31, 2024 are sustainable especially with the volatility in heating oil and propane costs. Product sales and cost of product include home heating oil, propane, other petroleum products and liquidated damages billings.

Current wording

The table below calculates our per gallon margins and reconciles product gross profit for home heating oil and propane and motor fuel and other petroleum products. We believe the change in home heating oil and propane margins should be evaluated before the effects of increases or decreases in the fair value of derivative instruments, as we believe that realized per gallon margins should not include the impact of non-cash changes in the market value of hedges before the settlement of the underlying transaction. On that basis, home heating oil and propane margins for the three months ended June 30, 2024 increased by $0.2506 per gallon, or 17.3%, to $1.6960 per gallon, from $1.4454 per gallon during the three months ended June 30, 2023. Going forward, we cannot assume that per gallon margins realized during the three months ended June 30, 2024 are sustainable especially with the volatility in heating oil and propane costs. Product sales and cost of product include home heating oil, propane, other petroleum products and liquidated damages billings.

Previous wording

For the six months ended March 31, 2024, total product gross profit was $351.1 million, which was $2.7 million, or 0.8%, lower than the six months ended March 31, 2023, due to a decrease in home heating oil and propane volume sold ($20.6 million) and decrease in gross profit from other petroleum products ($2.6 million), that was partially offset by an increase in home heating oil and propane margins ($20.5 million).

Current wording

For the three months ended June 30, 2024, total product gross profit was $74.7 million, which was $20.2 million, or 37.2%, higher than the three months ended June 30, 2023, due to an increase in home heating oil and propane volume sold ($11.0 million) and an increase in home heating oil and propane margins ($9.5 million), partially offset by a decrease in gross profit from other petroleum products ($0.3 million).

Previous wording

Total installation costs for the three months ended March 31, 2024 increased by $0.3 million or 1.8%, to $21.7 million, compared to $21.4 million of installation costs for the three months ended March 31, 2023. This increase was largely due to higher installation sales. Installation costs as a percentage of installation sales were 82.9% for the three months ended March 31, 2024 and 84.8% for the three months ended March 31, 2023. Gross profit from installation increased by $0.7 million.

Current wording

Total installation costs for the three months ended June 30, 2024 increased by $1.9 million or 8.2%, to $24.8 million, compared to $22.9 million of installation costs for the three months ended June 30, 2023. This increase was largely due to higher installation sales. Installation costs as a percentage of installation sales were 82.2% for the three months ended June 30, 2024 and 83.4% for the three months ended June 30, 2023. Gross profit from installation increased by $0.8 million.

Previous wording

Service expense increased by $1.9 million, or 4.1%, to $48.8 million for the three months ended March 31, 2024, representing 109.7% of service sales, versus $46.9 million, or 108.6% of service sales, for the three months ended March 31, 2023. The colder temperatures drove an increase in service calls and related expenses. In addition, a large proportion of our service expenses are incurred under fixed-fee prepaid service contract arrangements, therefore trends in service expenses may not directly correlate to trends in the related revenues. Gross loss from service decreased by $0.6 million.

Current wording

Service expense increased by $0.6 million, or 1.4%, to $44.3 million for the three months ended June 30, 2024, representing 84.4% of service sales, versus $43.7 million, or 89.0% of service sales, for the three months ended June 30, 2023. A large proportion of our service expenses are incurred under fixed-fee prepaid service contract arrangements, therefore trends in service expenses may not directly correlate to trends in the related revenues. Gross profit from service increased by $2.7 million.

Previous wording

We realized a combined gross profit from service and installation of $0.1 million for the three months ended March 31, 2024 compared to a gross profit of $0.1 million for the three months ended March 31, 2023.

Current wording

We realized a combined gross profit from service and installation of $13.5 million for the three months ended June 30, 2024 compared to a gross profit of $10.0 million for the three months ended June 30, 2023.

Previous wording

During the three months ended March 31, 2023, the change in the fair value of derivative instruments resulted in a $3.0 million charge due to a decrease in the market value for unexpired hedges (an $11.5 million charge), partially offset by an $8.5 million credit due to the expiration of certain hedged positions.

Current wording

During the three months ended June 30, 2024, the change in the fair value of derivative instruments resulted in a $1.0 million charge due to a decrease in the market value for unexpired hedges (a $3.0 million charge) that was partially offset by a $2.0 million credit due to the expiration of certain hedged positions.

Previous wording

During the three months ended March 31, 2024, the change in the fair value of derivative instruments resulted in an $11.8 million credit due to an increase in the market value for unexpired hedges (a $0.7 million credit) and an $11.1 million credit due to the expiration of certain hedged positions.

Current wording

During the three months ended June 30, 2023, the change in the fair value of derivative instruments resulted in a $1.0 million credit as a decrease in the market value for unexpired hedges (a $6.5 million charge) was more than offset by a $7.5 million credit due to the expiration of certain hedged positions.

Previous wording

For the three months ended March 31, 2024, delivery and branch expense increased $8.2 million, or 8.5%, to $104.1 million, compared to $95.9 million for the three months ended March 31, 2023. During the quarter ended March 31, 2024, the company recorded a benefit under the weather hedge of $6.5 million compared to a benefit of $12.9 million in the quarter ended March 31, 2023 that accounts for an increase in expense of $6.4 million. The increase was also driven by $1.8 million of acquisition related expenses. In the base business a $1.0 million increase in insurance expenses due to increasing premiums and expected claim costs and $0.7 million of other next expense increases was partially offset by a $1.7 million, or 4.6% reduction in delivery expenses due to the 3.3% decline in home heating oil and propane volume.

Current wording

For the three months ended June 30, 2024, delivery and branch expense increased $3.4 million, or 4.2%, to $86.5 million, compared to $83.1 million for the three months ended June 30, 2023. The increase was driven by $1.6 million of acquisition related expenses, a $1.6 million increase in insurance expenses due to increasing premiums and expected claim costs and $0.2 million of other net expense increases.

Previous wording

For the three months ended March 31, 2024, net interest expense decreased by $1.2 million, or 22.7%, to $3.8 million compared to $5.0 million for the three months ended March 31, 2023. The year-over-year change was driven by a decrease in average borrowings of $75.7 million from $276.5 million for the three months ended March 31, 2023 to $200.8 million for the three months ended March 31, 2024 that was partially offset by an increase in the weighted average interest rate from 6.3% for the three months ended March 31, 2023 to 7.1% for the three months ended March 31, 2024. To hedge against rising interest rates, the Company utilizes interest rate swaps. At March 31, 2024, approximately 39% of borrowings under Star's variable-rate long term debt were not subject to interest rate increases as a result of interest rate swaps.

Current wording

For the three months ended June 30, 2024, net interest expense decreased by $0.7 million, or 20.9%, to $2.7 million compared to $3.4 million for the three months ended June 30, 2023. The year-over-year change was driven by a decrease in average borrowings of $31.3 million from $174.5 million for the three months ended June 30, 2023 to $143.2 million for the three months ended June 30, 2024 that was partially offset by an increase in the weighted average interest rate from 6.7% for the three months ended June 30, 2023 to 7.2% for the three months ended June 30, 2024. To hedge against rising interest rates, the Company utilizes interest rate swaps. At June 30, 2024, approximately 40.0% of borrowings under Star's variable-rate long term debt were not subject to interest rate increases as a result of interest rate swaps.

Previous wording

For the six months ended March 31, 2024, amortization of debt issuance cost decreased to $0.5 million from $0.6 million for the six months ended March 31, 2023.

Current wording

For the three months ended June 30, 2024, amortization of debt issuance cost was $0.2 million, essentially unchanged from the three months ended June 30, 2023.

Previous wording

For the three months ended March 31, 2024, Star’s net income increased $6.3 million, to $68.4 million, compared to the three months ended March 31, 2023, primarily due to a favorable change in the fair value of derivative instruments of $14.8 million and a $1.2 million decrease in interest expense that was partially offset by a $5.8 million decrease in Adjusted EBITDA and a $3.6 million increase in income tax expense.

Current wording

For the three months ended June 30, 2024, Star’s net loss decreased $12.9 million, to $11.0 million, compared to the three months ended June 30, 2023, primarily due to an$18.9 million decrease in Adjusted EBITDA loss and a $0.7 million decrease in interest expense that was partially offset by a $5.1 million decrease in income tax benefit and an unfavorable change in the fair value of derivative instruments of $2.0 million.

Previous wording

For the six months ended March 31, 2024, retail volume of home heating oil and propane sold decreased by 13.0 million gallons, or 6.2%, to 197.3 million gallons, compared to 210.3 million gallons for the six months ended March 31, 2023. For those locations where we had existing operations during both periods, which we sometimes refer to as the “base business” (i.e., excluding acquisitions), temperatures (measured on a heating degree day basis) for the six months ended March 31, 2024 were 0.2% warmer than the six months ended March 31, 2023 and 14.7% warmer than normal, as reported by NOAA. For the twelve months ended March 31, 2024, net customer attrition for the base business was 4.5%. The impact of fuel conservation, along with any period-to-period differences in delivery scheduling, the timing of accounts added or lost during the fiscal years, equipment efficiency, and other volume variances not otherwise described, are included in the chart below under the heading “Other.” An analysis of the change in the retail volume of home heating oil and propane, which is based on management’s estimates, sampling, and other mathematical calculations and certain assumptions, is found below:

Current wording

For the nine months ended June 30, 2024, retail volume of home heating oil and propane sold decreased by 5.5 million gallons, or 2.3%, to 234.9 million gallons, compared to 240.4 million gallons for the nine months ended June 30, 2023. For those locations where we had existing operations during both periods, which we sometimes refer to as the “base business” (i.e., excluding acquisitions), temperatures (measured on a heating degree day basis) for the nine months ended June 30, 2024 were less than 0.1% warmer than the nine months ended June 30, 2023 and 15.1% warmer than normal, as reported by NOAA. For the twelve months ended June 30, 2024, net customer attrition for the base business was 4.4%. The impact of fuel conservation, along with any period-to-period differences in delivery scheduling, the timing of accounts added or lost during the fiscal years, equipment efficiency, and other volume variances not otherwise described, are included in the chart below under the heading “Other.” An analysis of the change in the retail volume of home heating oil and propane, which is based on management’s estimates, sampling, and other mathematical calculations and certain assumptions, is found below:

Previous wording

The following chart sets forth the percentage by volume of total home heating oil sold to residential variable-price customers, residential price-protected customers and commercial/industrial/other customers for the six months ended March 31, 2024, compared to the six months ended March 31, 2023:

Current wording

The following chart sets forth the percentage by volume of total home heating oil sold to residential variable-price customers, residential price-protected customers and commercial/industrial/other customers for the nine months ended June 30, 2024, compared to the nine months ended June 30, 2023:

Previous wording

Volume of motor fuel and other petroleum products sold decreased by 6.3 million gallons, or 9.2%, to 62.5 million gallons for the six months ended March 31, 2024, compared to 68.8 million gallons for the six months ended March 31, 2023.

Current wording

Volume of motor fuel and other petroleum products sold decreased by 9.3 million gallons, or 8.9%, to 95.4 million gallons for the nine months ended June 30, 2024, compared to 104.7 million gallons for the nine months ended June 30, 2023.

Previous wording

For the six months ended March 31, 2024, product sales decreased by $0.2 billion, or 15.8%, to $1.0 billion, compared to $1.2 billion for the six months ended March 31, 2023, due to a decrease in average selling prices and a decrease in total volume sold of 6.9%. Selling prices decreased largely due to a decrease in wholesale product cost of $0.5048 per gallon, or 15.9%, compared to the six months ended March 31, 2023. Product volumes and wholesale product cost include heating oil, propane, motor fuels and other petroleum products.

Current wording

For the nine months ended June 30, 2024, product sales decreased by $0.2 billion, or 11.6%, to $1.3 billion, compared to $1.5 billion for the nine months ended June 30, 2023, due to a decrease in average selling prices and a decrease in total volume sold of 4.3%. Selling prices decreased largely due to a decrease in wholesale product cost of $0.4308 per gallon, or 14.1%, compared to the nine months ended June 30, 2023. Product volumes and wholesale product cost include heating oil, propane, motor fuels and other petroleum products.

Previous wording

For the six months ended March 31, 2024, installation and service revenue increased by $3.6 million, or 2.5%, to $150.3 million, compared to $146.7 million for the six months ended March 31, 2023 driven by an increase in installation sales.

Current wording

For the nine months ended June 30, 2024, installation and service revenue increased by $9.7 million, or 4.3%, to $232.9 million, compared to $223.2 million for the nine months ended June 30, 2023 driven by an increase in installation sales.

Previous wording

The table below calculates our per gallon margins and reconciles product gross profit for home heating oil and propane and motor fuel and other petroleum products. We believe the change in home heating oil and propane margins should be evaluated before the effects of increases or decreases in the fair value of derivative instruments, as we believe that realized per gallon margins should not include the impact of non-cash changes in the market value of hedges before the settlement of the underlying transaction. On that basis, home heating oil and propane margins for the six months ended March 31, 2024 increased by $0.1037 per gallon, or 6.6%, to $1.6764 per gallon, from $1.5727 per gallon during the six months ended March 31, 2023. Going forward, we cannot assume that per gallon margins realized during the six months ended March 31, 2024 are sustainable especially with the volatility in heating oil and propane costs. Product sales and cost of product include home heating oil, propane, other petroleum products and liquidated damages billings.

Current wording

The table below calculates our per gallon margins and reconciles product gross profit for home heating oil and propane and motor fuel and other petroleum products. We believe the change in home heating oil and propane margins should be evaluated before the effects of increases or decreases in the fair value of derivative instruments, as we believe that realized per gallon margins should not include the impact of non-cash changes in the market value of hedges before the settlement of the underlying transaction. On that basis, home heating oil and propane margins for the nine months ended June 30, 2024 increased by $0.1229 per gallon, or 7.9%, to $1.6796 per gallon, from $1.5567 per gallon during the nine months ended June 30, 2023. Going forward, we cannot assume that per gallon margins realized during the nine months ended June 30, 2024 are sustainable especially with the volatility in heating oil and propane costs. Product sales and cost of product include home heating oil, propane, other petroleum products and liquidated damages billings.

Previous wording

For the three months ended March 31, 2024, total product gross profit was $205.9 million, which was $3.0 million, or 1.5%, higher than the three months ended March 31, 2023, due to an increase in home heating oil and propane margins ($9.8 million) that was partially offset by a decrease in home heating oil and propane volume sold ($6.4 million) and decrease in gross profit from other petroleum products ($0.4 million).

Current wording

For the nine months ended June 30, 2024, total product gross profit was $425.8 million, which was $17.6 million, or 4.3%, higher than the nine months ended June 30, 2023, due to an increase in home heating oil and propane margins ($28.8 million) that was partially offset by a decrease in home heating oil and propane volume sold ($8.5 million) and decrease in gross profit from other petroleum products ($2.7 million).

Previous wording

Total installation costs for the six months ended March 31, 2024 increased by $1.1 million or 2.3%, to $49.2 million, compared to $48.1 million of installation costs for the six months ended March 31, 2023. This increase was largely due to higher installation sales. Installation costs as a percentage of installation sales were 81.3% for the six months ended March 31, 2024 and 83.0% for the six months ended March 31, 2023. Gross profit from installation increased by $1.4 million.

Current wording

Total installation costs for the nine months ended June 30, 2024 increased by $3.0 million or 4.2%, to $74.0 million, compared to $71.0 million of installation costs for the nine months ended June 30, 2023. This increase was largely due to higher installation sales. Installation costs as a percentage of installation sales were 81.6% for the nine months ended June 30, 2024 and 83.1% for the nine months ended June 30, 2023. Gross profit from installation increased by $2.2 million.

Previous wording

Service expense decreased by $0.2 million, or 0.3%, to $96.5 million for the six months ended March 31, 2024, representing 107.5% of service sales, versus $96.7 million, or 109.1% of service sales, for the six months ended March 31, 2023. The warmer temperatures drove a decrease in service calls and related expenses. In addition, a large proportion of our service expenses are incurred under fixed-fee prepaid service contract arrangements, therefore trends in service expenses may not directly correlate to trends in the related revenues. Gross loss from service decreased by $1.4 million.

Current wording

Service expense increased by $0.4 million, or 0.3%, to $140.8 million for the nine months ended June 30, 2024, representing 99.0% of service sales, versus $140.4 million, or 101.9% of service sales, for the nine months ended June 30, 2023. A large proportion of our service expenses are incurred under fixed-fee prepaid service contract arrangements, therefore trends in service expenses may not directly correlate to trends in the related revenues. Gross profit from service increased by $4.1 million.

Previous wording

We realized a combined gross profit from service and installation of $4.6 million for the six months ended March 31, 2024 compared to a gross profit of $1.8 million for the six months ended March 31, 2023, a $2.8 million increase.

Current wording

We realized a combined gross profit from service and installation of $18.1 million for the nine months ended June 30, 2024 compared to a gross profit of $11.8 million for the nine months ended June 30, 2023, a $6.3 million increase.

Previous wording

During the six months ended March 31, 2024, the change in the fair value of derivative instruments resulted in a $7.3 million charge due to a decrease in the market value for unexpired hedges (a $3.5 million charge) and a $3.8 million charge due to the expiration of certain hedged positions.

Current wording

During the nine months ended June 30, 2024, the change in the fair value of derivative instruments resulted in a $8.3 million charge due to a decrease in the market value for unexpired hedges (a $4.0 million charge) and a $4.3 million charge due to the expiration of certain hedged positions.

Previous wording

During the six months ended March 31, 2023, the change in the fair value of derivative instruments resulted in a $20.7 million charge due to a decrease in the market value for unexpired hedges (a $13.5 million charge) and a $7.2 million charge due to the expiration of certain hedged positions.

Current wording

During the nine months ended June 30, 2023, the change in the fair value of derivative instruments resulted in a $19.6 million charge due to a decrease in the market value for unexpired hedges (a $13.5 million charge) and a $6.1 million charge due to the expiration of certain hedged positions.

Previous wording

For the six months ended March 31, 2024, delivery and branch expense increased $4.5 million, or 2.4%, to $198.4 million, compared to $193.9 million for the six months ended March 31, 2023. During the six months ended March 31, 2024, the company recorded a benefit under the weather hedge of $7.5 million compared to a benefit of $12.5 million during the six months ended March 31, 2023 that accounts for a $5.0 million increase in expense. The increase was also driven by $2.7 million of acquisition related expenses and was partially offset by a $3.2 million, or 1.6% reduction in base business expenses. The decrease in the base business was driven by a $4.9 million, or 7.1% reduction in delivery expenses due to the 6.2% decline in home heating oil and propane volume, and other expense reductions of $1.2 million These decreases in the base business were partially offset by an increase in insurance expenses of $2.9 million due to increasing premiums and expected claim costs.

Current wording

For the nine months ended June 30, 2024, delivery and branch expense increased $8.0 million, or 2.9%, to $285.0 million, compared to $277.0 million for the nine months ended June 30, 2023. During the nine months ended June 30, 2024, the company recorded a benefit under the weather hedge of $7.5 million compared to a benefit of $12.5 million during the nine months ended June 30, 2023 that accounts for a $5.0 million increase in expense. The increase was also driven by $4.3 million of acquisition related expenses and was partially offset by a $1.3 million, or 0.4% reduction in base business expenses. The decrease in the base business was driven by a $5.1 million, or 5.6% reduction in delivery expenses driven by the 2.3% decline in home heating oil and propane volume, and other expense reductions of $0.7 million. These decreases in the base business were partially offset by an increase in insurance expenses of $4.5 million due to increasing premiums and expected claim costs.

Previous wording

For the three months ended March 31, 2024, depreciation and amortization expenses increased $0.1 million, or 1.6%, to $7.7 million, compared to $7.6 million for the three months ended March 31, 2023, primarily due to acquisitions.

Current wording

For the nine months ended June 30, 2024, depreciation and amortization expenses increased $0.3 million, or 1.1%, to $23.4 million, compared to $23.1 million for the nine months ended June 30, 2023, primarily due to acquisitions.

Previous wording

For the six months ended March 31, 2024, general and administrative expenses increased by $0.3 million or 2.6%, to $13.9 million, from $13.6 million for the six months ended March 31, 2023, due to a $0.4 million reduction in the gain on the sale of fixed assets and a $0.4 million increase in salaries and benefits expenses that were partially offset by a $0.4 million decrease in profit sharing expense and $0.1 million of other net expense decreases. The Company accrues approximately 6.0% of Adjusted EBITDA as defined in its profit sharing plan for distribution to its employees. This amount is payable when the Company achieves Adjusted EBITDA of at least 70% of the amount budgeted. The dollar amount of the profit sharing pool adjusts accordingly based on Adjusted EBITDA levels achieved.

Current wording

For the nine months ended June 30, 2024, general and administrative expenses increased by $1.7 million or 8.7%, to $21.3 million, from $19.6 million for the nine months ended June 30, 2023, due to a $0.6 million reduction in the gain on the sale of fixed assets, a $0.5 million increase in salaries and benefits expenses, a $0.4 million increase in profit sharing expense and $0.2 million of other net expense increases. The Company accrues approximately 6.0% of Adjusted EBITDA as defined in its profit sharing plan for distribution to its employees. This amount is payable when the Company achieves Adjusted EBITDA of at least 70% of the amount budgeted. The dollar amount of the profit sharing pool adjusts accordingly based on Adjusted EBITDA levels achieved.

Previous wording

For the three months ended March 31, 2024, finance charge income decreased by $0.5 million or 28.9% to $1.3 million, from $1.8 million for the three months ended March 31, 2023, due to less late customer payment charges received on aged receivables that was partially driven by the reduction in sales.

Current wording

For the nine months ended June 30, 2024, finance charge income decreased by $1.2 million or 24.3% to $3.7 million, from $4.9 million for the nine months ended June 30, 2023, due to less late customer payment charges received on aged receivables that was partially driven by the reduction in sales.

Previous wording

For the six months ended March 31, 2024, net interest expense decreased by $2.1 million, or 23.6%, to $7.1 million compared to $9.2 million for the six months ended March 31, 2023. The year-over-year change was driven by a decrease in average borrowings of $81.6 million from $260.2 million for the six months ended March 31, 2023 to $178.6 million for the six months ended March 31, 2024 that was partially offset by an increase in the weighted average interest rate from 6.2% for the six months ended March 31, 2023 to 7.2% for the six months ended March 31, 2024. To hedge against rising interest rates, the Company utilizes interest rate swaps. At March 31, 2024, approximately 39% of borrowings under Star's variable-rate long term debt were not subject to interest rate increases as a result of interest rate swaps.

Current wording

For the nine months ended June 30, 2024, net interest expense decreased by $2.9 million, or 22.9%, to $9.7 million compared to $12.6 million for the nine months ended June 30, 2023. The year-over-year change was driven by a decrease in average borrowings of $66.1 million from $231.6 million for the nine months ended June 30, 2023 to $165.5 million for the nine months ended June 30, 2024 that was partially offset by an increase in the weighted average interest rate from 6.3% for the nine months ended June 30, 2023 to 7.3% for the nine months ended June 30, 2024. To hedge against rising interest rates, the Company utilizes interest rate swaps. At June 30, 2024, approximately 40.0% of borrowings under Star's variable-rate long term debt were not subject to interest rate increases as a result of interest rate swaps.

Previous wording

For the three months ended March 31, 2024, amortization of debt issuance cost decreased to $0.2 million from $0.3 million for the three months ended March 31, 2023.

Current wording

For the nine months ended June 30, 2024, amortization of debt issuance cost decreased to $0.7 million from $0.8 million for the nine months ended June 30, 2023.

Previous wording

For the three months ended March 31, 2024, the Company’s income tax expense increased by $3.6 million to $27.9 million, from $24.3 million for the three months ended March 31, 2023. The increase in the income tax expense was driven by a $10.0 million increase in income before income taxes and increase in the effective income tax rate from 28.1% for the three months ended March 31, 2023 to 29.0% for the three months ended March 31, 2024 due primarily to an increase in state income taxes.

Current wording

For the nine months ended June 30, 2024, the Company’s income tax expense increased by $8.5 million to $28.9 million, from $20.4 million for the nine months ended June 30, 2023. The increase in the income tax expense was driven by a $27.1 million increase in income before income taxes and increase in the effective income tax rate from 28.3% for the nine months ended June 30, 2023 to 29.1% for the nine months ended June 30, 2024 due primarily to an increase in state income taxes.

Previous wording

For the six months ended March 31, 2024, Star’s net income increased $5.8 million, to $81.4 million, compared to the six months ended March 31, 2023, primarily due to a favorable change in the fair value of derivative instruments of $13.4 million and a $2.1 million decrease in interest expense that was partially offset by a $5.9 million reduction in Adjusted EBITDA, a $3.3 million increase in income tax expense and a $0.7 million increase in depreciation and amortization expenses.

Current wording

For the nine months ended June 30, 2024, Star’s net income increased $18.6 million, to $70.3 million, compared to the nine months ended June 30, 2023, primarily due to a $13.0 million increase in Adjusted EBITDA, a favorable change in the fair value of derivative instruments of $11.4 million and a $2.9 million decrease in interest expense that was partially offset by an $8.5 million increase in income tax expense and a $0.3 million increase in depreciation and amortization expenses.