STAR GROUP LP

Previous wording

(a) On April 30, 2025, the NYMEX ultra low sulfur diesel contract closed at $2.04 per gallon.

Current wording

(a) On July 31, 2025, the NYMEX ultra low sulfur diesel contract closed at $2.40 per gallon.

Previous wording

The temperatures experienced during the hedge period through March 31, 2025 were colder than the strikes in the weather hedge contracts. As a result at March 31, 2025, we increased delivery and branch expense and recorded a payable under those weather hedge contracts of $3.1 million, and paid the amount in full in April 2025. By comparison, the temperatures experienced during the hedge period through March 31, 2024 were warmer than the strike in the weather hedge contract. As of March 31, 2024, we reduced delivery and branch expenses and recorded a receivable of $7.5 million under the weather hedge contract, and received the amount in full in April 2024.

Current wording

The temperatures experienced during the hedge period through March 31, 2025 were colder than the strikes in the weather hedge contracts. As a result as of March 31, 2025, we increased delivery and branch expense and recorded a payable under those weather hedge contracts of $3.1 million, and paid the amount in full in April 2025. By comparison, the temperatures experienced during the hedge period through March 31, 2024 were warmer than the strike in the weather hedge contract. As of March 31, 2024, we reduced delivery and branch expenses and recorded a receivable of $7.5 million under the weather hedge contract, and received the amount in full in April 2024.

Previous wording

For the six months ended March 31, 2025, the Company lost 6,000 accounts (net), or 1.5% of its home heating oil and propane customer base, compared to 5,800 accounts lost (net), or 1.5% of its home heating and oil propane customer base in the prior year comparable period. Gross customer gains were 1,200 accounts less than the prior year's comparable period and gross customer losses were 1,000 accounts less.

Current wording

For the nine months ended June 30, 2025, the Company lost 13,000 accounts (net), or 3.1% of its home heating oil and propane customer base, compared to 12,100 accounts lost (net), or 3.1% of its home heating and oil propane customer base in the prior year comparable period. Gross customer gains were 1,300 accounts less than the prior year's comparable period and gross customer losses were 400 accounts less.

Previous wording

During the six months ended March 31, 2025, we estimate that we lost 0.7% of our home heating oil and propane accounts to natural gas and electricity conversions, consistent with the 0.7% and 0.9% lost for the six months ended March 31, 2024 and 2023, respectively. 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, 2025, we estimate that we lost 1.0% of our home heating oil and propane accounts to natural gas and electricity conversions, consistent with the 1.1% and 1.3% lost for the nine months ended June 30, 2024 and 2023, respectively. 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, 2025, the Company acquired one heating oil and two propane businesses for approximately $79.6 million. During fiscal 2024, the Company acquired one propane and four heating oil businesses for approximately $49.4 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, 2025, the Company acquired one heating oil and three propane businesses for approximately $80.5 million. During fiscal 2024, the Company acquired one propane and four heating oil businesses for approximately $49.4 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

For the three months ended March 31, 2025, retail volume of home heating oil and propane sold increased by 26.8 million gallons, or 22.9%, to 143.9 million gallons, compared to 117.1 million gallons for the three months ended March 31, 2024. For those locations where we had existing operations during both periods, which we sometimes refer to as our “base business” (i.e., excluding acquisitions), temperatures (measured on a heating degree day basis) for the three months ended March 31, 2025 were 12.9% colder than the three months ended March 31, 2024 and 4.5% warmer than normal, as reported by NOAA. For the twelve months ended March 31, 2025, net customer attrition for the base business was 4.2%. 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, 2025, retail volume of home heating oil and propane sold decreased by 1.5 million gallons, or 3.8%, to 36.2 million gallons, compared to 37.7 million gallons for the three months ended June 30, 2024. For those locations where we had existing operations during both periods, which we sometimes refer to as our “base business” (i.e., excluding acquisitions), temperatures (measured on a heating degree day basis) for the three months ended June 30, 2025 were 2.0% warmer than the three months ended June 30, 2024 and 19.3% warmer than normal, as reported by NOAA. For the twelve months ended June 30, 2025, 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 1.3 million gallons, or 4.3%, to 28.9 million gallons for the three months ended March 31, 2025, compared to 30.2 million gallons for the three months ended March 31, 2024.

Current wording

Volume of motor fuel and other petroleum products sold decreased by 0.9 million gallons, or 2.7%, to 32.0 million gallons for the three months ended June 30, 2025, compared to 32.9 million gallons for the three months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2025, installation and service revenue increased by $7.2 million, or 10.2%, to $77.9 million, compared to $70.7 million for the three months ended March 31, 2024 driven by $5.8 million of sales generated from recent acquisitions and the remainder was driven by a concerted effort to expand these offerings to our customers as well as annual price increases.

Current wording

For the three months ended June 30, 2025, installation and service revenue increased by $6.9 million, or 8.3%, to $89.5 million, compared to $82.6 million for the three months ended June 30, 2024 driven by $6.4 million of sales generated from recent acquisitions and the remainder was driven by a concerted effort to expand these offerings to our customers as well as annual price increases.

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 transactions. On that basis, home heating oil and propane margins for the three months ended March 31, 2025 increased by $0.0427 per gallon, or 2.5%, to $1.7195 per gallon, from $1.6768 per gallon during the three months ended March 31, 2024. In the base business, home heating and propane margins for the three months ended March 31, 2025 increased by $0.0738 per gallon, or 4.4% to $1.7506 per gallon. Going forward, we cannot assume that per gallon margins realized during the three months ended March 31, 2025 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 transactions. On that basis, home heating oil and propane margins for the three months ended June 30, 2025 decreased by $0.0413 per gallon, or 2.4%, to $1.6547 per gallon, from $1.6960 per gallon during the three months ended June 30, 2024. In the base business, home heating and propane margins for the three months ended June 30, 2025 decreased by $0.010 per gallon, or 0.6% to $1.6860 per gallon. Going forward, we cannot assume that per gallon margins realized during the three months ended June 30, 2025 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, 2025, total product gross profit was $258.2 million, which was $52.3 million, or 25.4%, higher than the three months ended March 31, 2024, due to an increase in home heating oil and propane volume sold ($45.0 million), increase in home heating oil and propane margins ($6.1 million) and an increase in gross profit from other petroleum products ($1.2 million).

Current wording

For the three months ended June 30, 2025, total product gross profit was $71.7 million, which was $3.0 million, or 4.1%, lower than the three months ended June 30, 2024, due to a decrease in home heating oil and propane volume sold ($2.4 million), decrease in home heating oil and propane margins ($1.5 million) and slightly offset by an increase in gross profit from other petroleum products ($0.9 million).

Previous wording

Total installation costs for the three months ended March 31, 2025 increased by $2.6 million or 11.8%, to $24.3 million, compared to $21.7 million of installation costs for the three months ended March 31, 2024. This increase was largely due to higher installation sales from recent acquisitions. Installation costs as a percentage of installation sales were 84.2% for the three months ended March 31, 2025 and 82.9% for the three months ended March 31, 2024. The gross profit from installation increased by $0.1 million.

Current wording

Total installation costs for the three months ended June 30, 2025 increased by $2.5 million or 10.2%, to $27.3 million, compared to $24.8 million of installation costs for the three months ended June 30, 2024. This increase was largely due to higher installation sales from recent acquisitions. Installation costs as a percentage of installation sales were 82.0% for the three months ended June 30, 2025 and 82.2% for the three months ended June 30, 2024. The gross profit from installation increased by $0.7 million.

Previous wording

Service expense increased by $3.1 million, or 6.3%, to $51.9 million for the three months ended March 31, 2025, representing 105.8% of service sales, versus $48.8 million, or 109.7% of service sales, for the three months ended March 31, 2024. This increase was largely due to higher service sales from recent acquisitions. 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. The gross loss from service decreased by $1.5 million.

Current wording

Service expense increased by $3.6 million, or 8.1%, to $47.9 million for the three months ended June 30, 2025, representing 85.4% of service sales, versus $44.3 million, or 84.4% of service sales, for the three months ended June 30, 2024. This increase was largely due to higher service sales from recent acquisitions. 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. The gross profit from service did not change compared to the three months ended June 30, 2024.

Previous wording

We realized a combined gross profit from service and installation of $1.7 million for the three months ended March 31, 2025 compared to a gross profit of $0.1 million for the three months ended March 31, 2024, a $1.6 million increase.

Current wording

We realized a combined gross profit from service and installation of $14.2 million for the three months ended June 30, 2025 compared to a gross profit of $13.5 million for the three months ended June 30, 2024, a $0.7 million increase.

Previous wording

During the three months ended March 31, 2025, the change in the fair value of derivative instruments resulted in a $6.1 million credit as a decrease in the market value for unexpired hedges (a $2.1 million charge) was more than offset by an $8.2 million credit due to the expiration of certain hedged positions.

Current wording

During the three months ended June 30, 2025, the change in the fair value of derivative instruments resulted in a $0.6 million credit as a decrease in the market value for unexpired hedges (a $2.2 million charge) was more than offset by an $2.8 million credit due to the expiration of certain hedged positions.

Previous wording

For the three months ended March 31, 2025, depreciation and amortization expenses increased $1.2 million, or 15.0%, to $8.9 million, compared to $7.7 million for the three months ended March 31, 2024, primarily due to acquisitions and slightly offset by intangible assets that fully amortized in the prior fiscal year.

Current wording

For the three months ended June 30, 2025, depreciation and amortization expenses increased $2.0 million, or 27.0%, to $9.2 million, compared to $7.2 million for the three months ended June 30, 2024, primarily due to acquisitions and slightly offset by intangible assets that fully amortized in the prior fiscal year.

Previous wording

For the three months ended March 31, 2025, finance charge income was $1.4 million, essentially unchanged from the three months ended March 31, 2024.

Current wording

For the three months ended June 30, 2025, finance charge income was $1.8 million, essentially unchanged from the three months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2025, net interest expense increased by $0.7 million, or 16.3%, to $4.5 million compared to $3.8 million for the three months ended March 31, 2024. The year-over-year change was driven by an increase in average borrowings of $60.1 million from $200.8 million for the three months ended March 31, 2024 to $260.9 million for the three months ended March 31, 2025 that was partially offset by a decrease in the weighted average interest rate from 7.1% for the three months ended March 31, 2024 to 6.8% for the three months ended March 31, 2025. To hedge against rising interest rates, the Company utilizes interest rate swaps. At March 31, 2025, approximately 38% 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, 2025, net interest expense increased by $0.9 million, or 36.7%, to $3.6 million compared to $2.7 million for the three months ended June 30, 2024. The year-over-year change was driven by an increase in average borrowings of $60.3 million from $143.2 million for the three months ended June 30, 2024 to $203.5 million for the three months ended June 30, 2025 that was partially offset by a decrease in the weighted average interest rate from 7.2% for the three months ended June 30, 2024 to 7.0% for the three months ended June 30, 2025. The increase in average borrowings was attributable to financing acquisitions. To hedge against rising interest rates, the Company utilizes interest rate swaps. At June 30, 2025, 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.

Previous wording

For the three months ended March 31, 2025, amortization of debt issuance cost was $0.2 million, essentially unchanged from the three months ended March 31, 2024.

Current wording

For the three months ended June 30, 2025, amortization of debt issuance cost was $0.3 million, essentially unchanged from the three months ended June 30, 2024.

Previous wording

For the six months ended March 31, 2025, the Company’s income tax expense increased by $14.8 million to $47.8 million, from $33.0 million for the six months ended March 31, 2024. The increase in the income tax expense was driven by a $52.2 million increase in income before income taxes.

Current wording

For the three months ended June 30, 2025, the Company’s income tax benefit increased by $2.3 million to $6.5 million, from $4.2 million for the three months ended June 30, 2024. The increase in the income tax benefit was driven by a $7.9 million increase in loss before income taxes.

Previous wording

For the three months ended March 31, 2025, Star’s net income increased $17.5 million, to $85.9 million, compared to the three months ended March 31, 2024, primarily due to a $31.9 million increase in Adjusted EBITDA that was partially offset by a $6.9 million increase in income tax expense, an unfavorable change in the fair value of derivative instruments of $5.7 million, a $1.2 million increase in depreciation and amortization expenses and a $0.7 million increase in net interest expense.

Current wording

For the three months ended June 30, 2025, Star’s net loss increased $5.6 million, to $16.6 million, compared to the three months ended June 30, 2024, primarily due to a $6.5 million increase in the Adjusted EBITDA loss, a $2.0 million increase in depreciation and amortization expenses and a $0.9 million increase in net interest expense that was partially offset by a $2.3 million increase in income tax benefit and a favorable change in the fair value of derivative instruments of $1.6 million.

Previous wording

For the three months ended March 31, 2025, Adjusted EBITDA increased $31.9 million, to $128.2 million, compared to the three months ended March 31, 2024, due to an increase in Adjusted EBITDA from recent acquisitions, an increase in home heating oil and propane per gallon margins in the base business, higher home heating oil and propane volume sold in the base business due to colder weather and an improvement in service and installation profitability.

Current wording

For the three months ended June 30, 2025, Adjusted EBITDA loss increased $6.5 million, to $10.6 million, compared to the three months ended June 30, 2024, as a decrease in home heating oil and propane per gallon margins in the base business and lower home heating oil and propane volume sold in the base business was reduced by lower base business operating expenses and positive Adjusted EBITDA generated from recent acquisitions during this loss historical period. The positive Adjusted EBITDA realized from acquisitions during this historical loss quarter was due to our recent propane acquisitions.

Previous wording

For the six months ended March 31, 2025, retail volume of home heating oil and propane sold increased by 29.0 million gallons, or 14.7%, to 226.3 million gallons, compared to 197.3 million gallons for the six months ended March 31, 2024. For those locations where we had existing operations during both periods, which we sometimes refer to as our “base business” (i.e., excluding acquisitions), temperatures (measured on a heating degree day basis) for the six months ended March 31, 2025 were 9.4% colder than the six months ended March 31, 2024 and 6.8% warmer than normal, as reported by NOAA. For the twelve months ended March 31, 2025, net customer attrition for the base business was 4.2%. 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, 2025, retail volume of home heating oil and propane sold increased by 27.7 million gallons, or 11.8%, to 262.6 million gallons, compared to 234.9 million gallons for the nine months ended June 30, 2024. For those locations where we had existing operations during both periods, which we sometimes refer to as our “base business” (i.e., excluding acquisitions), temperatures (measured on a heating degree day basis) for the nine months ended June 30, 2025 were 8.2% colder than the nine months ended June 30, 2024 but 8.3% warmer than normal, as reported by NOAA. For the twelve months ended June 30, 2025, 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, 2025, compared to the six months ended March 31, 2024:

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, 2025, compared to the nine months ended June 30, 2024:

Previous wording

Volume of motor fuel and other petroleum products sold decreased by 2.9 million gallons, or 4.8%, to 59.6 million gallons for the six months ended March 31, 2025, compared to 62.5 million gallons for the six months ended March 31, 2024.

Current wording

Volume of motor fuel and other petroleum products sold decreased by 3.8 million gallons, or 4.0%, to 91.6 million gallons for the nine months ended June 30, 2025, compared to 95.4 million gallons for the nine months ended June 30, 2024.

Previous wording

For the six months ended March 31, 2025, product sales increased by $20.8 million, or 2.0%, to $1,064.6 million, compared to $1,043.8 million for the six months ended March 31, 2024, due to an increase in total volume sold of 10.0% and slightly offset by a decrease in average selling prices. Selling prices decreased largely due to a decrease in wholesale product cost of $0.3730 per gallon, or 14.0%, compared to the six months ended March 31, 2024. 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, 2025, product sales decreased by $12.1 million, or 0.9%, to $1,280.7 million, compared to $1,292.8 million for the nine months ended June 30, 2024, due to a decrease in average selling prices and slightly offset by an increase in total volume sold of 7.2%. Selling prices decreased largely due to a decrease in wholesale product cost of $0.3650 per gallon, or 13.9%, compared to the nine months ended June 30, 2024. 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, 2025, installation and service revenue increased by $16.2 million, or 10.8%, to $166.5 million, compared to $150.3 million for the six months ended March 31, 2024 driven by $12.0 million of sales generated from recent acquisitions and the remainder was driven by a concerted effort to expand these offerings to our customers as well as annual price increases.

Current wording

For the nine months ended June 30, 2025, installation and service revenue increased by $23.1 million, or 9.9%, to $256.0 million, compared to $232.9 million for the nine months ended June 30, 2024 driven by $18.4 million of sales generated from recent acquisitions and the remainder was driven by a concerted effort to expand these offerings to our customers as well as annual price increases.

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 transactions. On that basis, home heating oil and propane margins for the six months ended March 31, 2025 increased by $0.0374 per gallon, or 2.2%, to $1.7138 per gallon, from $1.6764 per gallon during the six months ended March 31, 2024. In the base business, home heating and propane margins for the six months ended March 31, 2025 increased by $0.0679 per gallon, or 4.0% to $1.7443 per gallon. Going forward, we cannot assume that per gallon margins realized during the six months ended March 31, 2025 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 transactions. On that basis, home heating oil and propane margins for the nine months ended June 30, 2025 increased by $0.0260 per gallon, or 1.6%, to $1.7056 per gallon, from $1.6796 per gallon during the nine months ended June 30, 2024. In the base business, home heating and propane margins for the nine months ended June 30, 2025 increased by $0.0568 per gallon, or 3.4% to $1.7364 per gallon. Going forward, we cannot assume that per gallon margins realized during the nine months ended June 30, 2025 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, 2025, total product gross profit was $408.9 million, which was $57.8 million, or 16.5%, higher than the six months ended March 31, 2024, due to an increase in home heating oil and propane volume sold ($48.7 million), an increase in home heating oil and propane margins ($8.5 million) and an increase in gross profit from other petroleum products ($0.6 million).

Current wording

For the nine months ended June 30, 2025, total product gross profit was $480.5 million, which was $54.7 million, or 12.8%, higher than the nine months ended June 30, 2024, due to an increase in home heating oil and propane volume sold ($46.5 million), an increase in home heating oil and propane margins ($6.9 million) and an increase in gross profit from other petroleum products ($1.3 million).

Previous wording

Total installation costs for the six months ended March 31, 2025 increased by $5.4 million or 10.8%, to $54.6 million, compared to $49.2 million of installation costs for the six months ended March 31, 2024. This increase was largely due to higher installation sales from recent acquisitions. Installation costs as a percentage of installation sales were 81.7% for the six months ended March 31, 2025 and 81.3% for the six months ended March 31, 2024. The gross profit from installation increased by $0.9 million.

Current wording

Total installation costs for the nine months ended June 30, 2025 increased by $7.9 million or 10.6%, to $81.9 million, compared to $74.0 million of installation costs for the nine months ended June 30, 2024. This increase was largely due to higher installation sales from recent acquisitions. Installation costs as a percentage of installation sales were 81.8% for the nine months ended June 30, 2025 and 81.6% for the nine months ended June 30, 2024. The gross profit from installation increased by $1.6 million.

Previous wording

Service expense increased by $6.8 million, or 7.1%, to $103.3 million for the six months ended March 31, 2025, representing 103.5% of service sales, versus $96.5 million, or 107.5% of service sales, for the six months ended March 31, 2024. This increase was largely due to higher service sales from recent acquisitions. 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. The gross loss from service decreased by $3.2 million.

Current wording

Service expense increased by $10.4 million, or 7.4%, to $151.2 million for the nine months ended June 30, 2025, representing 97.0% of service sales, versus $140.8 million, or 99.0% of service sales, for the nine months ended June 30, 2024. This increase was largely due to higher service sales from recent acquisitions. 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. The gross profit from service increased by $3.2 million.

Previous wording

We realized a combined gross profit from service and installation of $8.7 million for the six months ended March 31, 2025 compared to a gross profit of $4.6 million for the six months ended March 31, 2024, a $4.1 million increase.

Current wording

We realized a combined gross profit from service and installation of $22.9 million for the nine months ended June 30, 2025 compared to a gross profit of $18.1 million for the nine months ended June 30, 2024, a $4.8 million increase, of which $2.7 million is attributable to acquisitions and $2.1 million is due to operating initiatives in the base business.

Previous wording

During the six months ended March 31, 2025, the change in the fair value of derivative instruments resulted in an $11.4 million credit as a decrease in the market value for unexpired hedges (a $2.0 million charge) was more than offset by a $13.4 million credit due to the expiration of certain hedged positions.

Current wording

During the nine months ended June 30, 2025, the change in the fair value of derivative instruments resulted in a $12.0 million credit as a decrease in the market value for unexpired hedges (a $2.3 million charge) was more than offset by a $14.3 million credit due to the expiration of certain hedged positions.

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

For the six months ended March 31, 2025, delivery and branch expense increased $25.9 million, or 13.0%, to $224.3 million, compared to $198.4 million for the six months ended March 31, 2024. During the six months ended March 31, 2025, the Company's weather hedge contracts accounted for a $10.6 million increase in expense. The temperatures experienced during the second quarter of fiscal 2025 were colder than the strike prices and, therefore, the Company recorded an expense under those weather hedge contracts of $3.1 million. This compares to the prior-year period which, due to warmer weather, the Company recorded a credit of $7.5 million under its weather hedge contract. The increase was also driven by $13.0 million of expenses from recent acquisitions and a $2.3 million increase in net base business expenses. The increase in the base business expenses was driven by a $2.1 million, or 3.2%, increase in delivery expenses due to a 9.4 million gallon, or 4.8%, increase in home heating oil and propane volume sold in the base business compared to the prior year and $2.3 million of other net expense increases that were partially offset by a $2.1 million decrease in insurance related costs.

Current wording

For the nine months ended June 30, 2025, delivery and branch expense increased $29.9 million, or 10.5%, to $314.9 million, compared to $285.0 million for the nine months ended June 30, 2024. During the nine months ended June 30, 2025, the Company's weather hedge contracts accounted for a $10.6 million increase in expense. The temperatures experienced from November 2024 through March 2025 (the weather hedge period) were colder than the strike prices and, therefore, the Company recorded an expense under those weather hedge contracts of $3.1 million. This compares to the prior-year period which, due to warmer weather, the Company recorded a credit of $7.5 million under its weather hedge contract. The increase was also driven by $18.9 million of expenses from recent acquisitions and a $0.4 million increase in net base business expenses. The increase in the base business expenses was driven by a $1.4 million, or 1.6%, increase in delivery expenses due to a 4.2 million gallon, or 1.8%, increase in home heating oil and propane volume sold in the base business compared to the prior year and $1.9 million of other net expense increases that were partially offset by a $2.9 million decrease in insurance related costs.

Previous wording

For the six months ended March 31, 2025, depreciation and amortization expenses increased $0.7 million, or 4.2%, to $16.8 million, compared to $16.1 million for the six months ended March 31, 2024, primarily due acquisitions and slightly offset by intangible assets that fully amortized in the prior fiscal year.

Current wording

For the nine months ended June 30, 2025, depreciation and amortization expenses increased $2.6 million, or 11.3%, to $26.0 million, compared to $23.4 million for the nine months ended June 30, 2024, primarily due acquisitions and slightly offset by intangible assets that fully amortized in the prior fiscal year.

Previous wording

For the six months ended March 31, 2025, general and administrative expenses increased by $1.5 million or 10.5%, to $15.4 million, from $13.9 million for the six months ended March 31, 2024, due to a $1.3 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.

Current wording

For the nine months ended June 30, 2025, general and administrative expenses increased by $1.6 million, or 7.5%, to $22.9 million, from $21.3 million for the nine months ended June 30, 2024, due to a $1.4 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 six months ended March 31, 2025, net interest expense increased by $0.4 million, or 5.9%, to $7.5 million compared to $7.1 million for the six months ended March 31, 2024. The year-over-year change was driven by an increase in average borrowings of $56.9 million from $178.6 million for the six months ended March 31, 2024 to $235.5 million for the six months ended March 31, 2025 that was partially offset by a decrease in the weighted average interest rate from 7.2% for the six months ended March 31, 2024 to 7.0% for the six months ended March 31, 2025. To hedge against rising interest rates, the Company utilizes interest rate swaps. At March 31, 2025, approximately 38% 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, 2025, net interest expense increased by $1.4 million, or 14.4%, to $11.1 million compared to $9.7 million for the nine months ended June 30, 2024. The year-over-year change was driven by an increase in average borrowings of $59.3 million from $165.5 million for the nine months ended June 30, 2024 to $224.8 million for the nine months ended June 30, 2025 that was partially offset by a decrease in the weighted average interest rate from 7.3% for the nine months ended June 30, 2024 to 7.0% for the nine months ended June 30, 2025. The increase in average borrowings was attributable to financing acquisitions. To hedge against rising interest rates, the Company utilizes interest rate swaps. At June 30, 2025, 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.

Previous wording

For the six months ended March 31, 2025, amortization of debt issuance cost was $0.5 million, essentially unchanged from the six months ended March 31, 2024.

Current wording

For the nine months ended June 30, 2025, amortization of debt issuance cost was $0.8 million, essentially unchanged from the nine months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2025, the Company’s income tax expense increased by $6.9 million to $34.8 million, from $27.9 million for the three months ended March 31, 2024. The increase in the income tax expense was driven by a $24.4 million increase in income before income taxes.

Current wording

For the nine months ended June 30, 2025, the Company’s income tax expense increased by $12.4 million to $41.3 million, from $28.9 million for the nine months ended June 30, 2024. The increase in the income tax expense was driven by a $44.3 million increase in income before income taxes.

Previous wording

For the six months ended March 31, 2025, Star’s net income increased $37.4 million, to $118.8 million, compared to the six months ended March 31, 2024, primarily due to a $34.7 million increase in Adjusted EBITDA and a favorable change in the fair value of derivative instruments of $18.6 million that was partially offset by a $14.8 million increase in income tax expense, a $0.7 million increase in depreciation and amortization expenses and a $0.4 million increase in net interest expense.

Current wording

For the nine months ended June 30, 2025, Star’s net income increased $31.9 million, to $102.2 million, compared to the nine months ended June 30, 2024, primarily due to a $28.2 million increase in Adjusted EBITDA and a favorable change in the fair value of derivative instruments of $20.2 million that was partially offset by a $12.4 million increase in income tax expense, a $2.6 million increase in depreciation and amortization expenses and a $1.4 million increase in net interest expense.