Star (SGU)

Risks

• The COVID-19 pandemic has caused disruptions to our operations and has impacted our business and may continue to impact our business and operations in numerous ways that remain unpredictable.
• Mandatory COVID-19 vaccination of employees could impact our workforce and have a material adverse effect on our business and results of operations.
• Our operating results will be adversely affected if we continue to experience significant net customer attrition in our home heating oil and propane customer base.
• Because of the highly competitive nature of our business, we may not be able to retain existing customers or acquire new customers, which would have an adverse impact on our business, operating results and financial condition.
• Our operating results will be adversely affected if we experience significant net customer attrition from natural gas conversions.
• If we do not make acquisitions on economically acceptable terms, our future growth will be limited.
• Since weather conditions may adversely affect the demand for home heating oil and propane, our business, operating results and financial condition are vulnerable to warm winters.
• Our operating results are subject to seasonal fluctuations.
• High product prices can lead to customer conservation and attrition, resulting in reduced demand for our products.
• Increases in wholesale product costs may have adverse effects on our business, financial condition, results of operations, or liquidity.
• Our hedging strategy may adversely affect our liquidity.
• Sudden and sharp oil price increases that cannot be passed on to customers may adversely affect our operating results.
• Significant declines in the wholesale price of home heating oil may cause price-protected customers to renegotiate or terminate their arrangements which may adversely impact our gross profit and operating results.
• A significant portion of our home heating oil volume is sold to price-protected customers (ceiling and fixed) and our gross margins could be adversely affected if we are not able to effectively hedge against fluctuations in the volume and cost of product sold to these customers.
• Our risk management policies cannot eliminate all commodity risk, basis risk, or the impact of adverse market conditions which can adversely affect our financial condition, results of operations and cash available for distribution to our unitholders. In addition, any noncompliance with our risk management policies could result in significant financial losses.
• Our obligation to fund multi-employer pension plans to which we contribute may have an adverse impact on us.
• We rely on the continued solvency of our derivatives, insurance and weather hedge counterparties.
• We are subject to operating and litigation risks that could adversely affect our operating results whether or not covered by insurance.
• Our captive insurance company may not bring the benefits we expect.
• Our results of operations and financial condition may be adversely affected by governmental regulation and associated environmental and regulatory costs.
• Our operations would be adversely affected if service at our third-party terminals or on the common carrier pipelines used is interrupted.
• We depend on the use of information technology systems that have been and may in the future be a target of cyber-attacks.
• Conflicts of interest have arisen and could arise in the future.
• Our inability to identify qualified individuals for our workforce could slow our growth and adversely impact our ability to operate our business
• A substantial portion of our workforce is unionized, and we may face labor actions that could disrupt our operations or lead to higher labor costs and adversely affect our business.
• Cash distributions (if any) are not guaranteed and may fluctuate with performance and reserve requirements.
• If we fail to maintain an effective system of internal controls, then we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential unitholders could lose confidence in our financial reporting, which would harm our business and the trading price of our common units.
• Our substantial debt and other financial obligations could impair our financial condition and our ability to obtain additional financing and have a material adverse effect on us if we fail to meet our financial and other obligations.
• We are not required to accumulate cash for the purpose of meeting our future obligations to our lenders, which may limit the cash available to service the final payment due on the term loan outstanding under our Credit Agreement.
• Under our Credit Agreement, the occurrence of a “change of control” is considered a default. We may be unable to repay borrowings under our Credit Agreement if the indebtedness outstanding thereunder is accelerated following a change of control.
• Disruptions in our supply chain and other factors affecting the delivery of our products and services could adversely impact our business.
• Continuing inflation may hurt our sales margins and profitability.
• Energy efficiency and new technology may reduce the demand for our products and adversely affect our operating results.
• Economic conditions could adversely affect our results of operations and financial condition.
• The risk of global terrorism and political unrest may adversely affect the economy and the price and availability of the products that we sell and have a material adverse effect on our business, financial condition and results of operations.