(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At ~~April 30,~~July 31, 2020, the registrant had ~~45,197,331~~43,741,226 Common Units ~~outstanding.~~outstanding.

		March 31,			September 30,				June 30,			September 30,
		2020			2019				2020			2019
(in thousands)		(unaudited)							(unaudited)
ASSETS	ASSETS							ASSETS
Current assets
Cash and cash equivalents		$	10,301		$	4,899			$	66,718		$	4,899
Receivables, net of allowance of $9,017 and $8,378, respectively			187,091			120,245
Receivables, net of allowance of $8,757 and $8,378, respectively										111,915			120,245
Inventories			52,826			64,788				43,699			64,788
Prepaid expenses and other current assets			43,319			36,898				28,464			36,898
Total current assets			293,537			226,830				250,796			226,830
Property and equipment, net			95,204			98,239				94,826			98,239
Operating lease right-of-use assets			103,672			—				100,765			—
Goodwill			244,574			244,574				244,574			244,574
Intangibles, net			98,245			107,688				93,518			107,688
Restricted cash			250			250				250			250
Captive insurance collateral			65,776			58,490				69,607			58,490
Deferred charges and other assets, net			17,823			16,635				17,788			16,635
Total assets		$	919,081		$	752,706			$	872,124		$	752,706
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities
Accounts payable		$	23,898		$	33,973			$	25,081		$	33,973
Revolving credit facility borrowings			24,043			24,000				—			24,000
Fair liability value of derivative instruments			14,017			8,262				10,495			8,262
Current maturities of long-term debt			13,000			9,000				13,000			9,000
Current portion of operating lease liabilities			19,567			—				19,391			—
Accrued expenses and other current liabilities			158,989			120,839				153,591			120,839
Unearned service contract revenue			65,176			61,213				58,121			61,213
Customer credit balances			36,202			68,270				50,127			68,270
Total current liabilities			354,892			325,557				329,806			325,557
Long-term debt			116,188			120,447				112,975			120,447
Long-term operating lease liabilities			89,373			—				86,680			—
Deferred tax liabilities, net			20,229			20,116				19,153			20,116
Other long-term liabilities			22,444			25,746				22,235			25,746
Partners’ capital
Common unitholders			334,968			279,709				319,522			279,709
General partner			(1,792	)		(1,968	)			(2,041	)		(1,968	)
Accumulated other comprehensive loss, net of taxes			(17,221	)		(16,901	)			(16,206	)		(16,901	)
Total partners’ capital			315,955			260,840				301,275			260,840
Total liabilities and partners’ capital		$	919,081		$	752,706			$	872,124		$	752,706

	Three Months Ended March 31,						Six Months Ended March 31,						Three Months Ended June 30,						Nine Months Ended June 30,
(in thousands, except per unit data - unaudited)	2020			2019			2020			2019			2020			2019			2020			2019
Sales:
Product	$	481,275		$	637,400		$	913,963		$	1,096,107		$	165,182		$	210,657		$	1,079,145		$	1,306,764
Installations and services		61,788			62,182			138,045			138,502			66,973			72,719			205,018			211,221
Total sales		543,063			699,582			1,052,008			1,234,609			232,155			283,376			1,284,163			1,517,985
Cost and expenses:
Cost of product		285,350			415,639			573,023			721,865			93,264			155,055			666,287			876,920
Cost of installations and services		61,273			65,394			134,942			139,711			54,732			62,130			189,674			201,841
(Increase) decrease in the fair value of derivative instruments		11,670			(13,401	)		5,253			17,638			(3,279	)		1,630			1,974			19,268
Delivery and branch expenses		85,463			110,684			182,189			213,357			72,756			82,669			254,945			296,026
Depreciation and amortization expenses		9,089			7,858			18,139			15,603			8,447			8,225			26,586			23,828
General and administrative expenses		5,422			9,849			11,928			17,664			6,954			5,472			18,882			23,136
Finance charge income		(1,321	)		(1,443	)		(2,034	)		(2,294	)		(1,217	)		(1,872	)		(3,251	)		(4,166	)
Operating income		86,117			105,002			128,568			111,065
Operating income (loss)														498			(29,933	)		129,066			81,132
Interest expense, net		(2,756	)		(3,194	)		(5,435	)		(5,710	)		(2,308	)		(2,967	)		(7,743	)		(8,677	)
Amortization of debt issuance costs		(253	)		(244	)		(488	)		(503	)		(241	)		(253	)		(729	)		(756	)
Income before income taxes		83,108			101,564			122,645			104,852
Income tax expense		24,700			29,239			36,482			30,212
Net income	$	58,408		$	72,325		$	86,163		$	74,640
General Partner’s interest in net income		409			454			601			469
Limited Partners’ interest in net income	$	57,999		$	71,871		$	85,562		$	74,171
Income (loss) before income taxes														(2,051	)		(33,153	)		120,594			71,699
Income tax expense (benefit)														(2,005	)		(10,055	)		34,477			20,157
Net income (loss)													$	(46	)	$	(23,098	)	$	86,117		$	51,542
General Partner’s interest in net income (loss)														(1	)		(150	)		600			319
Limited Partners’ interest in net income (loss)													$	(45	)	$	(22,948	)	$	85,517		$	51,223

Basic and diluted income per Limited Partner Unit (1):	$	1.03		$	1.15		$	1.52		$	1.19
Basic and diluted income (loss) per Limited Partner Unit (1):													$	—		$	(0.46	)	$	1.55		$	0.86
Weighted average number of Limited Partner units outstanding:
Basic and Diluted		46,244			51,427			46,760			52,174			45,246			49,943			46,253			51,431

	Three Months Ended March 31,						Six Months Ended March 31,						Three Months Ended June 30,						Nine Months Ended June 30,
(in thousands - unaudited)	2020			2019			2020			2019			2020			2019			2020			2019
Net income	$	58,408		$	72,325		$	86,163		$	74,640
Other comprehensive income:
Net income (loss)													$	(46	)	$	(23,098	)	$	86,117		$	51,542
Other comprehensive income (loss):
Unrealized gain on pension plan obligation (1)		455			457			910			911			455			455			1,365			1,366
Tax effect of unrealized gain on pension plan obligation		(133	)		(125	)		(258	)		(249	)		(127	)		(124	)		(385	)		(373	)
Unrealized gain on captive insurance collateral		107			905			43			1,294			986			666			1,029			1,960
Tax effect of unrealized gain on captive insurance collateral		(15	)		(194	)		(7	)		(276	)		(207	)		(140	)		(214	)		(416	)
Unrealized loss on interest rate hedges		(1,716	)		(367	)		(1,382	)		(1,112	)		(126	)		(733	)		(1,508	)		(1,845	)
Tax effect of unrealized loss on interest rate hedges		460			95			374			292			34			196			408			488
Total other comprehensive income (loss)		(842	)		771			(320	)		860
Total comprehensive income	$	57,566		$	73,096		$	85,843		$	75,500
Total other comprehensive income														1,015			320			695			1,180
Total comprehensive income (loss)													$	969		$	(22,778	)	$	86,812		$	52,722

	Three Months Ended March 31, 2020																	Three Months Ended June 30, 2020
	Number of Units											Accum. Other			Total			Number of Units											Accum. Other			Total
(in thousands - unaudited)	Common			General Partner		Common			General Partner			Comprehensive Income (Loss)			Partners’ Capital			Common			General Partner		Common			General Partner			Comprehensive Income (Loss)			Partners’ Capital
Balance as of December 31, 2019		46,404			326	$	289,268		$	(1,991	)	$	(16,379	)	$	270,898
Net income		—			—		57,999			409			—			58,408
Balance as of March 31, 2020																			45,622			326	$	334,968		$	(1,792	)	$	(17,221	)	$	315,955
Net loss																			—			—		(45	)		(1	)		—			(46	)
Unrealized gain on pension plan obligation		—			—		—			—			455			455			—			—		—			—			455			455
Tax effect of unrealized gain on pension plan obligation		—			—		—			—			(133	)		(133	)		—			—		—			—			(127	)		(127	)
Unrealized gain on captive insurance collateral		—			—		—			—			107			107			—			—		—			—			986			986
Tax effect of unrealized gain on captive insurance collateral		—			—		—			—			(15	)		(15	)		—			—		—			—			(207	)		(207	)
Unrealized loss on interest rate hedges		—			—		—			—			(1,716	)		(1,716	)		—			—		—			—			(126	)		(126	)
Tax effect of unrealized loss on interest rate hedges		—			—		—			—			460			460			—			—		—			—			34			34
Distributions		—			—		(5,788	)		(210	)		—			(5,998	)		—			—		(5,988	)		(248	)		—			(6,236	)
Retirement of units (1)		(782	)		—		(6,511	)		—			—			(6,511	)		(1,155	)		—		(9,413	)		—			—			(9,413	)
Balance as of March 31, 2020 (unaudited)		45,622			326	$	334,968		$	(1,792	)	$	(17,221	)	$	315,955
Balance as of June 30, 2020 (unaudited)																			44,467			326	$	319,522		$	(2,041	)	$	(16,206	)	$	301,275


	Three Months Ended March 31, 2019																	Three Months Ended June 30, 2019
	Number of Units											Accum. Other			Total			Number of Units											Accum. Other			Total
(in thousands - unaudited)	Common			General Partner		Common			General Partner			Comprehensive Income (Loss)			Partners’ Capital			Common			General Partner		Common			General Partner			Comprehensive Income (Loss)			Partners’ Capital
Balance as of December 31, 2018		52,489			326	$	328,633		$	(1,416	)	$	(17,952	)	$	309,265
Net income		—			—		71,871			454			—			72,325
Balance as of March 31, 2019																			50,302			326	$	373,748		$	(1,146	)	$	(17,181	)	$	355,421
Net loss																			—			—		(22,948	)		(150	)		—			(23,098	)
Unrealized gain on pension plan obligation		—			—		—			—			457			457			—			—		—			—			455			455
Tax effect of unrealized gain on pension plan		—			—		—			—			(125	)		(125	)
Tax effect of unrealized gain on pension plan obligation																			—			—		—			—			(124	)		(124	)
Unrealized gain on captive insurance collateral		—			—		—			—			905			905			—			—		—			—			666			666
Tax effect of unrealized gain on captive insurance collateral		—			—		—			—			(194	)		(194	)		—			—		—			—			(140	)		(140	)
Unrealized loss on interest rate hedges		—			—		—			—			(367	)		(367	)		—			—		—			—			(733	)		(733	)
Tax effect of unrealized loss on interest rate hedges		—			—		—			—			95			95			—			—		—			—			196			196
Distributions		—			—		(6,120	)		(184	)		—			(6,304	)		—			—		(6,265	)		(226	)		—			(6,491	)
Retirement of units (1)		(2,187	)		—		(20,636	)		—			—			(20,636	)		(885	)		—		(8,577	)		—			—			(8,577	)
Balance as of March 31, 2019 (unaudited)		50,302			326	$	373,748		$	(1,146	)	$	(17,181	)	$	355,421
Balance as of June 30, 2019 (unaudited)																			49,417			326	$	335,958		$	(1,522	)	$	(16,861	)	$	317,575

	Six Months Ended March 31, 2020																	Nine Months Ended June 30, 2020
	Number of Units											Accum. Other			Total			Number of Units											Accum. Other			Total
(in thousands - unaudited)	Common			General Partner		Common			General Partner			Comprehensive Income (Loss)			Partners’ Capital			Common			General Partner		Common			General Partner			Comprehensive Income (Loss)			Partners’ Capital
Balance as of September 30, 2019		47,685			326	$	279,709		$	(1,968	)	$	(16,901	)	$	260,840			47,685			326	$	279,709		$	(1,968	)	$	(16,901	)	$	260,840
Net income		—			—		85,562			601			—			86,163			—			—		85,517			600			—			86,117
Unrealized gain on pension plan obligation		—			—		—			—			910			910			—			—		—			—			1,365			1,365
Tax effect of unrealized gain on pension plan obligation		—			—		—			—			(258	)		(258	)		—			—		—			—			(385	)		(385	)
Unrealized gain on captive insurance collateral		—			—		—			—			43			43			—			—		—			—			1,029			1,029
Tax effect of unrealized gain on captive insurance collateral		—			—		—			—			(7	)		(7	)		—			—		—			—			(214	)		(214	)
Unrealized loss on interest rate hedges		—			—		—			—			(1,382	)		(1,382	)		—			—		—			—			(1,508	)		(1,508	)
Tax effect of unrealized loss on interest rate hedges		—			—		—			—			374			374			—			—		—			—			408			408
Distributions		—			—		(11,728	)		(425	)		—			(12,153	)		—			—		(17,716	)		(673	)		—			(18,389	)
Retirement of units (1)		(2,063	)		—		(18,575	)		—			—			(18,575	)		(3,218	)		—		(27,988	)		—			—			(27,988	)
Balance as of March 31, 2020 (unaudited)		45,622			326	$	334,968		$	(1,792	)	$	(17,221	)	$	315,955
Balance as of June 30, 2020 (unaudited)																			44,467			326	$	319,522		$	(2,041	)	$	(16,206	)	$	301,275


	Six Months Ended March 31, 2019																	Nine Months Ended June 30, 2019
	Number of Units											Accum. Other			Total			Number of Units											Accum. Other			Total
(in thousands - unaudited)	Common			General Partner		Common			General Partner			Comprehensive Income (Loss)			Partners’ Capital			Common			General Partner		Common			General Partner			Comprehensive Income (Loss)			Partners’ Capital
Balance as of September 30, 2018		53,088			326	$	329,129		$	(1,303	)	$	(18,041	)	$	309,785			53,088			326	$	329,129		$	(1,303	)	$	(18,041	)	$	309,785
Impact of adoption of ASU No. 2014-09		—			—		9,164			60			—			9,224			—			—		9,164			60			—			9,224
Net income		—			—		74,171			469			—			74,640			—			—		51,223			319			—			51,542
Unrealized gain on pension plan obligation		—			—		—			—			911			911			—			—		—			—			1,366			1,366
Tax effect of unrealized gain on pension plan		—			—		—			—			(249	)		(249	)
Tax effect of unrealized gain on pension plan obligation																			—			—		—			—			(373	)		(373	)
Unrealized gain on captive insurance collateral		—			—		—			—			1,294			1,294			—			—		—			—			1,960			1,960
Tax effect of unrealized gain on captive insurance collateral		—			—		—			—			(276	)		(276	)		—			—		—			—			(416	)		(416	)
Unrealized loss on interest rate hedges		—			—		—			—			(1,112	)		(1,112	)		—			—		—			—			(1,845	)		(1,845	)
Tax effect of unrealized loss on interest rate hedges		—			—		—			—			292			292			—			—		—			—			488			488
Distributions		—			—		(12,345	)		(372	)		—			(12,717	)		—			—		(18,610	)		(598	)		—			(19,208	)
Retirement of units (1)		(2,786	)		—		(26,371	)		—			—			(26,371	)		(3,671	)		—		(34,948	)		—			—			(34,948	)
Balance as of March 31, 2019 (unaudited)		50,302			326	$	373,748		$	(1,146	)	$	(17,181	)	$	355,421
Balance as of June 30, 2019 (unaudited)																			49,417			326	$	335,958		$	(1,522	)	$	(16,861	)	$	317,575

	Six Months Ended March 31,						Nine Months Ended June 30,
(in thousands - unaudited)	2020			2019			2020			2019
Cash flows provided by (used in) operating activities:
Net income	$	86,163		$	74,640		$	86,117		$	51,542
Adjustment to reconcile net income to net cash provided by (used in) operating activities:
(Increase) decrease in fair value of derivative instruments		5,253			17,638			1,974			19,268
Depreciation and amortization		18,627			16,106			27,315			24,584
Provision for losses on accounts receivable		3,203			4,968			4,556			8,500
Change in deferred taxes		222			(9,335	)		(1,154	)		(11,206	)
Change in weather hedge contract receivable/payable		(10,053	)		2,110
Changes in operating assets and liabilities:
Increase in receivables		(69,562	)		(159,249	)
Decrease (increase) in inventories		12,008			(3,741	)
Decrease (increase) in receivables								4,745			(34,793	)
Decrease in inventories								21,135			1,958
Decrease in other assets		4,812			12,778			12,037			9,156
Decrease in accounts payable		(8,910	)		(2,364	)		(8,229	)		(7,570	)
Decrease in customer credit balances		(32,462	)		(38,476	)		(18,537	)		(26,177	)
Increase in other current and long-term liabilities		41,574			42,564			26,338			27,060
Net cash provided by (used in) operating activities		50,875			(42,361	)
Net cash provided by operating activities								156,297			62,322
Cash flows provided by (used in) investing activities:
Capital expenditures		(5,684	)		(6,814	)		(8,573	)		(8,235	)
Proceeds from sales of fixed assets		201			746			395			1,040
Purchase of investments		(7,218	)		(7,571	)		(10,044	)		(10,576	)
Acquisitions		(496	)		(13,671	)		(496	)		(62,807	)
Net cash used in investing activities		(13,197	)		(27,310	)		(18,718	)		(80,578	)
Cash flows provided by (used in) financing activities:
Revolving credit facility borrowings		90,202			139,331			90,202			139,331
Revolving credit facility repayments		(127,659	)		(25,831	)		(151,702	)		(70,331	)
Loan issuance		130,000			—			130,000			—
Term loan repayments		(92,500	)		(2,500	)		(95,750	)		(5,000	)
Distributions		(12,153	)		(12,717	)		(18,389	)		(19,208	)
Unit repurchases		(18,575	)		(26,371	)		(27,988	)		(34,948	)
Customer retainage payments		(300	)		(357	)		(514	)		(357	)
Payments of debt issue costs		(1,291	)		(43	)		(1,619	)		(45	)
Net cash (used in) provided by financing activities		(32,276	)		71,512			(75,760	)		9,442
Net increase in cash, cash equivalents, and restricted cash		5,402			1,841
Net increase (decrease) in cash, cash equivalents, and restricted cash								61,819			(8,814	)
Cash, cash equivalents, and restricted cash at beginning of period		5,149			14,781			5,149			14,781
Cash, cash equivalents, and restricted cash at end of period	$	10,551		$	16,622		$	66,968		$	5,967

Star Group, L.P. (“Star,” the “Company,” “we,” “us,” or “our”) is a full service provider specializing in the sale of home heating and air conditioning products and services to residential and commercial home heating oil and propane customers. The Company has 1 reportable segment for accounting purposes. We also sell diesel fuel, gasoline and home heating oil on a delivery only basis, and in certain of our marketing areas, we provide plumbing services primarily to our home heating oil and propane customer base. We believe we are the nation’s largest retail distributor of home heating oil based upon sales volume. Including our propane locations, we serve customers in the more northern and eastern states within the Northeast, Central and Southeast U.S. regions.

The Consolidated Financial Statements include the accounts of Star and its subsidiaries. All material intercompany items and transactions have been eliminated in consolidation.

The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair statement of financial condition and results for the interim periods. Due to the seasonal nature of the Company’s business, the results of operations and cash flows for the ~~six-month~~nine-month period ended ~~March 31,~~June 30, 2020 are not necessarily indicative of the results to be expected for the full year.

These interim financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and Rule 10-01 of Regulation S-X of the U.S. Securities and Exchange Commission (the “SEC”) and should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2019.

Comprehensive income (loss) is comprised of Net income (loss) and Other comprehensive income (loss). Other comprehensive income (loss) consists of the unrealized gain on amortization on the Company’s pension plan obligation for its two frozen defined benefit pension plans, unrealized gain on available-for-sale investments, unrealized loss on interest rate hedge and the corresponding tax effects.

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At ~~March 31,~~June 30, 2020, the ~~$10.6~~$67.0 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of ~~$10.3~~$66.7 million of cash and cash equivalents and $0.3 million of restricted cash. At September 30, 2019, the $5.1 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of $4.9 million of cash and cash equivalents and $0.3 million of restricted cash. Restricted cash represents deposits held by our captive insurance company that are required by state insurance regulations to remain in the captive insurance company as cash.

The captive insurance collateral is held by our captive insurance company in an irrevocable trust as collateral for certain workers’ compensation and automobile liability claims. The collateral is required by a third party insurance carrier that insures per claim amounts above a set deductible. If we did not deposit cash into the trust, the third party carrier would require that we issue an equal amount of letters of credit, which would reduce our availability under the fifth amended and restated credit agreement. Due to the expected timing of claim payments, the nature of the collateral agreement with the carrier, and our captive insurance company’s source of other operating cash, the collateral is not expected to be used to pay obligations within the next twelve months.

At ~~March 31,~~June 30, 2020, captive insurance collateral is comprised of ~~$60.2~~$68.8 million of Level 1 debt securities measured at fair value and ~~$5.6~~$0.8 million of mutual funds measured at net asset value. At September 30, 2019, the balance was comprised of $58.0 million of Level 1 debt securities measured at fair value and $0.5 million of mutual funds measured at net asset value. Unrealized gains and losses, net of related income taxes, are reported as accumulated other comprehensive gain (loss), except for losses from impairments which are determined to be other-than-temporary. Realized gains and losses, and declines in value judged to be other-than-temporary on available-for-sale securities are included in the determination of net income and are included in Interest expense, net, at which time the average cost basis of these securities are adjusted to fair value.

To partially mitigate the adverse effect of warm weather on cash flows, the Company has used weather hedge contracts for a number of years. Weather hedge contracts are recorded in accordance with the intrinsic value method defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815-45-15 Derivatives and Hedging, Weather Derivatives (EITF 99-2). The premium paid is included in the caption “Prepaid expenses and other current assets” in the accompanying balance sheets and amortized over the life of the contract, with the intrinsic value method applied at each interim period.

The Company entered into weather hedge contracts for fiscal years 2019, 2020 and 2021. Under these contracts, we are entitled to receive a payment if the total number of degree days within the hedge period is less than the prior ten year average. The “Payment Thresholds,” or strikes, are set at various levels. In addition, we will be obligated to make a payment capped at $5.0 million if degree days exceed the Payment Threshold which approximates the prior ten year average. The hedge period runs from November 1 through March 31, taken as a whole, for each respective fiscal year. For fiscal 2020 and 2021 the maximum that the Company can receive annually is $12.5 million and the maximum that the Company would be obligated to pay annually is $5.0 million. As of ~~March 31,~~June 30, 2020, the Company reduced delivery and branch expense ~~and recorded a receivable~~ under these contracts ofby $10.1 million and received the amount in full in April 2020. As of ~~March 31,~~June 30, 2019, the Company increased delivery and branch expense ~~and recorded a payable~~ under these contracts of ~~$2.1 million,~~$2.1million, and paid the amount in full in April 2019.

New England Teamsters and Trucking Industry Pension Fund (“the NETTI Fund”) Liability

As of ~~March 31,~~June 30, 2020, we had $0.2 million and $16.8 million balances included in the captions “Accrued expenses and other current liabilities” and “Other long-term liabilities,” respectively, on our Condensed Consolidated Balance Sheet representing the remaining balance of the NETTI Fund withdrawal liability. Based on the borrowing rates currently available to the Company for long-term financing of a similar maturity, the fair value of the NETTI Fund withdrawal liability as of ~~March 31,~~June 30, 2020 and September 30, 2019 was ~~$29.4~~$29.3 million and $21.1 million, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of this liability.

In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASC Topic 842”). The update requires all leases with a term greater than twelve months to be recognized on the balance sheet by recording (1) a lease liability that represents a lessee’s obligation to make lease payments arising from a lease, measured at the present value of the remaining lease payments; and (2) a right-of-use (“ROU”) asset that represents the lessee’s right to use a specified asset for the lease term, measured in an amount equal to the lease liability adjusted for accrued lease payments. The standard also requires the disclosure of key information pertaining to leasing arrangements.

As of October 1, 2019, the Company adopted ASC Topic 842 using the modified retrospective transition approach as of the effective date as permitted by the amendments in ASU 2018-11. As a result, the Company was not required to adjust its comparative period financial information for effects of the standard or make the new required lease disclosures for periods before the date of adoption (i.e. October 1, 2019). The Company has elected to adopt the package of transition practical expedients and, therefore, has not reassessed (1) whether existing or expired contracts contain a lease, (2) lease classification for existing or expired leases or (3) the accounting for initial direct costs that were previously capitalized. We also elected a practical expedient to not separate non-lease components from the lease components and excluded short term leases from the calculation of right of use asset and operating lease liability. For certain leases relating to vehicles and equipment we elected to apply portfolio approach guidance and accounted for leases with similar characteristics as a single lease. The Company did not elect the practical expedient to use hindsight for leases existing at the adoption date.

The adoption of ASC Topic 842 had a material impact to the Company’s Condensed Consolidated Balance Sheet, but did not impact the Condensed Consolidated Statement of Operations or Condensed Consolidated Statement of Partners’ Capital. The most significant changes to the Condensed Consolidated Balance Sheet relate to the recognition of the following as of October 1, 2019: “Operating lease right-of-use assets” in the amount of $104.7 million, “Current portion of operating lease liabilities” in the amount of $20.1 million and “Long-term operating lease liabilities” in the amount of $89.9 million. The adoption of ASC Topic 842 also had no impact on operating, investing, or financing cash flows in the Condensed Consolidated Statement of Cash Flows. However, ASC Topic has significantly affected the Company’s disclosures about noncash investing activities. Additionally, the Company’s lease-related disclosures have significantly increased as of and for the ~~six~~nine months ended ~~March 31,~~June 30, 2020 as compared to prior years. See Note 13 – Leases for further details on the adoption of ASC Topic 842.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The Company adopted the ASU effective March 12, 2020. The update provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as interbank offered rates and LIBOR. The Company has ~~$66.5~~$65.3 million of interest rate swap agreements at ~~March 31,~~June 30, 2020 that are benchmarked against LIBOR, which the Company has designated as cash flow hedging derivatives. This guidance includes practical expedients for contract modifications due to reference rate reform. The Company has elected to adopt the practical expedient that the Company may change the contractual terms of the interest rate swap agreements that isare expected to be affected by reference rate reform and not be required to de-designate the hedging ~~relationship.~~relationships. The adoption did not have an impact on the Company’s consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses. The update broadens the information that an entity should consider in developing expected credit loss estimates, eliminates the probable initial recognition threshold, and allows for the immediate recognition of the full amount of expected credit losses. This new guidance is effective for our annual reporting period beginning in the first quarter of fiscal 2021. The Company is evaluating the effect that ASU No. 2016-13 will have on its consolidated financial statements and related disclosures.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 230): Simplifying the Test for Goodwill Impairment. The update simplifies how an entity is required to test goodwill for impairment. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but not exceed the total amount of goodwill allocated to the reporting unit. This new guidance is effective for our annual reporting period beginning in the first quarter of fiscal ~~2021, with early adoption permitted.~~2021. The Company ~~has not determined the timing of adoption, but~~ does not expect ASU 2017-04 towill have a material impact on its consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General: Changes to the Disclosure Requirements for Defined Benefit Plans, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing and adding certain disclosures for these plans. The new guidance is effective for our annual reporting period beginning in the first quarter of fiscal ~~2021, with early adoption permitted.~~2021. The Company is evaluating the effect that ASU No. 2018-14 will have on its consolidated financial statements and related ~~disclosures, and has not determined the timing of adoption.~~disclosures.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which will align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new guidance is effective for our annual reporting period beginning in the first quarter of fiscal ~~2022, with early adoption permitted.~~2021. The Company ~~is evaluating the effect that~~does not expect ASU No. 2018-15 will have a material impact on its consolidated financial statements and related ~~disclosures, and has not determined the timing of adoption.~~disclosures.

The following disaggregates our revenue by major sources for the three and ~~six~~nine months ended ~~March 31,~~June 30, 2020 and ~~March 31,~~June 30, 2019:

	Three Months Ended March 31,				Six Months Ended March 31,				Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2020		2019		2020		2019		2020		2019		2020		2019
Petroleum Products:
Home heating oil and propane	$	413,466	$	554,364	$	756,812	$	918,566	$	120,951	$	115,988	$	877,763	$	1,034,554
Other petroleum products		67,809		83,036		157,151		177,541		44,231		94,669		201,382		272,210
Total petroleum products		481,275		637,400		913,963		1,096,107		165,182		210,657		1,079,145		1,306,764
Installations and Services:
Equipment installations		20,158		20,384		50,723		50,367		21,548		24,344		72,271		74,711
Equipment maintenance service contracts		27,764		26,678		55,672		54,997		32,541		32,279		88,213		87,276
Billable call services		13,866		15,120		31,650		33,138		12,884		16,096		44,534		49,234
Total installations and services		61,788		62,182		138,045		138,502		66,973		72,719		205,018		211,221
Total Sales	$	543,063	$	699,582	$	1,052,008	$	1,234,609	$	232,155	$	283,376	$	1,284,163	$	1,517,985

We recognize an asset for incremental commission expenses paid to sales personnel in conjunction with obtaining new residential customer product and equipment maintenance service contracts. We defer these costs only when we have determined the commissions are, in fact, incremental and would not have been incurred absent the customer contract. Costs to obtain a contract are amortized and recorded ratably as delivery and branch expenses over the period representing the transfer of goods or services to which the assets relate. Costs to obtain new residential product and equipment maintenance service contracts are amortized as expense over the estimated customer relationship period of approximately five years. Deferred contract costs are classified as current or non-current within “Prepaid expenses and other current assets” and “Deferred charges and other assets, net,” respectively. At ~~March 31,~~June 30, 2020 the amount of deferred contract costs included in “Prepaid expenses and other current assets” and “Deferred charges and other assets, net” was ~~$3.5~~$3.4 million and $~~6.3~~$5.9 million, respectively. At September 30, 2019 the amount of deferred contract costs included in “Prepaid expenses and other current assets” and “Deferred charges and other assets, net” was ~~$3.4~~$3.4 million and $~~5.9~~$5.9 million, respectively. During the ~~six~~nine months ended ~~March 31,~~June 30, 2020 and 2019 we recognized expense of $~~1.9~~$3.0 million each period associated with the amortization of deferred contract costs within “Delivery and branch expenses” in the Condensed Consolidated Statement of Operations.

The Company has contract liabilities for advanced payments received from customers for future oil deliveries (primarily amounts received from customers on “smart pay” budget payment plans in advance of oil deliveries) and obligations to service customers with equipment maintenance service contracts. Contract liabilities are recognized straight-line over the service contract period, generally one year or less. As of ~~March 31,~~June 30, 2020 and September 30, 2019 the Company had contract liabilities of $~~97.2~~$105.5 million and $127.0 million, respectively. During the ~~six~~nine months ended ~~March 31,~~June 30, 2020 the Company recognized $~~95.7~~$110.0 million of revenue that was included in the September 30, 2019 contract liability balance. During the ~~six~~nine months ended ~~March 31,~~June 30, 2019 the Company recognized ~~$90.3~~$104.6 million of revenue that was included in the September 30, 2018 contract liability balance.

In July 2012, the Board adopted a plan to repurchase certain of the Company’s Common Units that was amended in fiscal 2018 (the “Repurchase Plan”). Through ~~the beginning of February~~April 2020, the Company had repurchased approximately ~~11.8~~12.8 million Common Units under the Repurchase Plan. In ~~February~~May 2020, the Board authorized an increase of the number of Common Units that remained available for the Company to repurchase from 0.1 million to a total of ~~1.1~~3.6 million, of which ~~1.0~~2.5 million were available for repurchase in open market transactions and ~~0.1~~1.1 million were available for repurchase in privately-negotiated transactions. During the ~~second~~third fiscal quarter of 2020, the Company repurchased approximately ~~0.8~~1.2 million Common Units in open market transactions under the Repurchase Plan and repurchased ~~0.4~~0.7 million Common Units in ~~April~~July 2020. There is no guarantee of the exact number of units that will be purchased under the Repurchase Plan and the Company may discontinue purchases at any time. The Repurchase Plan does not have a time limit. The Board may also approve additional purchases of units from time to time in private transactions. The Company’s repurchase activities take into account SEC safe harbor rules and guidance for issuer repurchases. All of the Common Units purchased inunder the Repurchase Plan will be retired.

Under the Company’s fifth amended and restated credit agreement dated December 4, 2019, in order to repurchase Common Units we must maintain Availability (as defined in the fifth amended and restated credit agreement) of $45 million, 15.0% of the facility size of $300 million (assuming the non-seasonal aggregate commitment is outstanding) on a historical pro forma and forward-looking basis, and a fixed charge coverage ratio of not less than 1.15 measured as of the date of repurchase. The Company was in compliance with this covenant as of ~~March 31,~~June 30, 2020.

(in thousands, except per unit amounts)
Period	Total Number of Units Purchased		Average Price Paid per Unit (a)		Total Number of Units Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Units that May Yet Be Purchased			Total Number of Units Purchased		Average Price Paid per Unit (a)		Total Number of Units Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Units that May Yet Be Purchased
Fiscal year 2012 to 2019 total		13,340	$	8.08		10,896		956			13,340	$	8.08		10,896		956

First quarter fiscal year 2020 total		1,281	$	9.42		650		306	(b)		1,281	$	9.42		650		306	(b)

January 2020		160	$	9.48		160		146
February 2020		122	$	9.15		122		1,024	(c)
March 2020		500	$	7.76		500		524
Second quarter fiscal year 2020 total		782	$	8.33		782		524			782	$	8.33		782		524	(c)

April 2020		424	$	7.71		424		100	(d)		424	$	7.71		424		100
May 2020											106	$	8.12		106		3,494	(d)
June 2020											625	$	8.45		625		2,869
Third quarter fiscal year 2020 total											1,155	$	8.15		1,155		2,869

July 2020											725	$	8.97		725		2,144	(e)

The Company considers all of its captive insurance collateral to be available-for-sale investments. Investments at ~~March 31,~~June 30, 2020 consist of the following (in thousands):

	Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)			Fair Value		Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)			Fair Value
Cash and Receivables	$	5,639	$	—	$	—		$	5,639	$	787	$	—	$	—		$	787
U.S. Government Sponsored Agencies		33,320		310		(1	)		33,629		42,056		274		(1	)		42,329
Corporate Debt Securities		22,735		724		—			23,459		21,704		1,697		—			23,401
Foreign Bonds and Notes		3,010		39		—			3,049		3,002		88		—			3,090
Total	$	64,704	$	1,073	$	(1	)	$	65,776	$	67,549	$	2,059	$	(1	)	$	69,607

Maturities of investments were as follows at ~~March 31,~~June 30, 2020 (in thousands):

	Net Carrying Amount		Net Carrying Amount
Due within one year	$	14,402	$	8,072
Due after one year through five years		42,552		52,198
Due after five years through ten years		8,822		9,337
Total	$	65,776	$	69,607

The Company uses derivative instruments such as futures, options and swap agreements in order to mitigate exposure to market risk associated with the purchase of home heating oil for price-protected customers, physical inventory on hand, inventory in transit, priced purchase commitments and internal fuel usage. FASB ASC 815-10-05 Derivatives and Hedging, established accounting and reporting standards requiring that derivative instruments be recorded at fair value and included in the consolidated balance sheet as assets or liabilities, along with qualitative disclosures regarding the derivative activity. The Company has elected not to designate its commodity derivative instruments as hedging derivatives, but rather as economic hedges whose change in fair value is recognized in its statement of operations in the caption “(Increase) decrease in the fair value of derivative instruments.” Depending on the risk being economically hedged, realized gains and losses are recorded in cost of product, cost of installations and services, or delivery and branch expenses.

As of ~~March 31,~~June 30, 2020, to hedge a substantial majority of the purchase price associated with heating oil gallons anticipated to be sold to its price-protected customers, the Company held the following derivative instruments that settle in future months to match anticipated sales: ~~8.9~~8.2 million gallons of swap contracts, ~~5.3~~6.3 million gallons of call options, ~~4.0~~3.5 million gallons of put options, and ~~52.8~~59.5 million net gallons of synthetic call options. To hedge the inter-month differentials for its price-protected customers, its physical inventory on hand and inventory in transit, the Company, as of ~~March 31,~~June 30, 2020, held ~~32.6~~19.4 million gallons of short swap contracts, 57.2 million gallons of long future contracts, and ~~52.1~~59.6 million gallons of short future contracts that settle in future months. To hedge its internal fuel usage and other activities for fiscal ~~2020,~~2021, the Company, as of ~~March 31,~~June 30, 2020, held ~~7.3~~7.9 million gallons of call options and ~~swap contracts and 0.2 million gallons of short~~ swap contracts that settle in future months.

As of ~~March 31,~~June 30, 2019, to hedge a substantial majority of the purchase price associated with heating oil gallons anticipated to be sold to its price-protected customers, the Company held the following derivative instruments that settle in future months to match anticipated sales: ~~7.2~~6.9 million gallons of swap contracts, ~~2.2~~3.6 million gallons of call options, ~~3.4~~3.1 million gallons of put options, and ~~54.9~~58.6 million net gallons of synthetic call options. To hedge the inter-month differentials for its price-protected customers, its physical inventory on hand and inventory in transit, the Company, as of ~~March 31,~~June 30, 2019, held ~~33.1~~1.3 million gallons of long swap contracts, 55.4 million gallons of long future contracts, and ~~50.8~~71.5 million gallons of short future contracts that settle in future months. To hedge its internal fuel usage and other ~~related~~ activities for fiscal 2019, the Company, as of ~~March 31,~~June 30, 2019, held ~~1.8~~7.8 million gallons of swap contracts and ~~0.8~~0.7 million gallons of short swap contracts that settle in future months.

As of ~~March 31,~~June 30, 2020, the Company has interest rate swap agreements in order to mitigate exposure to market risk associated with variable rate interest on ~~$66.5~~$65.3 million, or ~~51%~~51.5%, of its long term debt. The Company has designated its interest rate swap agreements as cash flow hedging derivatives. To the extent these derivative instruments are effective and the accounting standard’s documentation requirements have been met, changes in fair value are recognized in other comprehensive income until the underlying hedged item is recognized in earnings. As of ~~March 31,~~June 30, 2020 the fair value of the swap contracts was ~~$(3.3)~~$(3.5) million. As of September 30, 2019, the notional value of the swap contracts was $45.0 million and the fair value of the swap contracts was $(2.0) million. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of the swap contracts.

The Company’s derivative instruments are with the following counterparties: Bank of America, N.A., Bank of Montreal, Cargill, Inc., Citibank, N.A., JPMorgan Chase Bank, N.A., Key Bank, N.A., Toronto-Dominion Bank and Wells Fargo Bank, N.A. The Company assesses counterparty credit risk and considers it to be low. We maintain master netting arrangements that allow for the non-conditional offsetting of amounts receivable and payable with counterparties to help manage our risks and record derivative positions on a net basis. The Company generally does not receive cash collateral from its counterparties and does not restrict the use of cash collateral it maintains at counterparties. At ~~March 31,~~June 30, 2020, the aggregate cash posted as collateral in the normal course of business at counterparties was ~~$1.8~~$0.5 million and recorded in “Prepaid expense and other current assets.” Positions with counterparties who are also parties to our credit agreement are collateralized under that facility. As of ~~March 31,~~June 30, 2020, ~~$18.6~~$11.1 million of hedge positions and payable amounts were secured under the credit facility.

FASB ASC 820-10 Fair Value Measurements and Disclosures, established a three-tier fair value hierarchy, which classified the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company’s Level 1 derivative assets and liabilities represent the fair value of commodity contracts

used in its hedging activities that are identical and traded in active markets. The Company’s Level 2 derivative assets and liabilities represent the fair value of commodity and interest rate contracts used in its hedging activities that are valued using either directly or indirectly observable inputs, whose nature, risk and class are similar. No significant transfers of assets or liabilities have been made into and out of the Level 1 or Level 2 tiers. All derivative instruments were non-trading positions and were either a Level 1 or Level 2 instrument. The Company had no Level 3 derivative instruments. The fair market value of our Level 1 and Level 2 derivative assets and liabilities are calculated by our counter-parties and are independently validated by the Company. The Company’s calculations are, for Level 1 derivative assets and liabilities, based on the published New York Mercantile Exchange (“NYMEX”) market prices for the commodity contracts open at the end of the period. For Level 2 derivative assets and liabilities the calculations performed by the Company are based on a combination of the NYMEX published market prices and other inputs, including such factors as present value, volatility and duration.

The Company had no assets or liabilities that are measured at fair value on a nonrecurring basis subsequent to their initial recognition. The Company’s financial assets and liabilities measured at fair value on a recurring basis are listed on the following table.

(In thousands)						Fair Value Measurements at Reporting Date Using:										Fair Value Measurements at Reporting Date Using:
Derivatives Not Designated as Hedging Instruments						Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs								Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs
Under FASB ASC 815-10		Balance Sheet Location	Total			Level 1		Level 2				Balance Sheet Location	Total			Level 1		Level 2
Asset Derivatives at March 31, 2020
Asset Derivatives at June 30, 2020											Asset Derivatives at June 30, 2020
Commodity contracts		Fair liability value of derivative instruments	$	35,497		$	—	$	35,497			Fair liability value of derivative instruments	$	22,715		$	—	$	22,715
Commodity contracts		Long-term derivative liabilities included in the deferred charges and other assets, net and other long-term liabilities, net balances		1,673			—		1,673			Long-term derivative liabilities included in the deferred charges and other assets, net and other long-term liabilities, net balances		1,576			—		1,576
Commodity contract assets at March 31, 2020			$	37,170		$	—	$	37,170
Liability Derivatives at March 31, 2020
Commodity contract assets at June 30, 2020											Commodity contract assets at June 30, 2020		$	24,291		$	—	$	24,291
Liability Derivatives at June 30, 2020											Liability Derivatives at June 30, 2020
Commodity contracts		Fair liability value of derivative instruments	$	(49,514	)	$	—	$	(49,514	)		Fair liability value of derivative instruments	$	(33,210	)	$	—	$	(33,210	)
Commodity contracts		Long-term derivative liabilities included in the deferred charges and other assets, net and other long-term liabilities, net balances		(1,867	)		—		(1,867	)		Long-term derivative liabilities included in the deferred charges and other assets, net and other long-term liabilities, net balances		(1,214	)		—		(1,214	)
Commodity contract liabilities at March 31, 2020			$	(51,381	)	$	—	$	(51,381	)
Commodity contract liabilities at June 30, 2020											Commodity contract liabilities at June 30, 2020		$	(34,424	)	$	—	$	(34,424	)
Asset Derivatives at September 30, 2019	Asset Derivatives at September 30, 2019										Asset Derivatives at September 30, 2019
Commodity contracts		Fair liability value of derivative instruments	$	13,824		$	—	$	13,824			Fair liability value of derivative instruments	$	13,824		$	—	$	13,824
Commodity contracts		Long-term derivative assets included in the deferred charges and other assets, net balance and other long term liabilities, net		1,466			—		1,466			Long-term derivative assets included in the deferred charges and other assets, net balance and other long term liabilities, net		1,466			—		1,466
Commodity contract assets September 30, 2019	Commodity contract assets September 30, 2019		$	15,290		$	—	$	15,290		Commodity contract assets September 30, 2019		$	15,290		$	—	$	15,290
Liability Derivatives at September 30, 2019	Liability Derivatives at September 30, 2019										Liability Derivatives at September 30, 2019
Commodity contracts		Fair liability value of derivative instruments	$	(22,086	)	$	—	$	(22,086	)		Fair liability value of derivative instruments	$	(22,086	)	$	—	$	(22,086	)
Commodity contracts		Long-term derivative liabilities included in the deferred charges and other assets, net balance and other long term liabilities, net		(1,719	)		—		(1,719	)		Long-term derivative liabilities included in the deferred charges and other assets, net balance and other long term liabilities, net		(1,719	)		—		(1,719	)
Commodity contract liabilities September 30, 2019	Commodity contract liabilities September 30, 2019		$	(23,805	)	$	—	$	(23,805	)	Commodity contract liabilities September 30, 2019		$	(23,805	)	$	—	$	(23,805	)

The Company’s derivative assets (liabilities) offset by counterparty and subject to an enforceable master netting arrangement are listed on the following table.

(In thousands)									Gross Amounts Not Offset in the Statement of Financial Position															Gross Amounts Not Offset in the Statement of Financial Position
Offsetting of Financial Assets (Liabilities) and Derivative Assets (Liabilities)	Gross Assets Recognized		Gross Liabilities Offset in the Statement of Financial Position			Net Assets (Liabilities) Presented in the Statement of Financial Position			Financial Instruments		Cash Collateral Received		Net Amount			Gross Assets Recognized		Gross Liabilities Offset in the Statement of Financial Position			Net Assets (Liabilities) Presented in the Statement of Financial Position			Financial Instruments		Cash Collateral Received		Net Amount
Long-term derivative assets included in deferred charges and other assets, net	$	615	$	(559	)	$	56		$	—	$	—	$	56		$	1,576	$	(1,174	)	$	402		$	—	$	—	$	402
Fair liability value of derivative instruments		35,497		(49,514	)		(14,017	)		—		—		(14,017	)		22,715		(33,210	)		(10,495	)		—		—		(10,495	)
Long-term derivative liabilities included in other long-term liabilities, net		1,058		(1,308	)		(250	)		—		—		(250	)		—		(40	)		(40	)		—		—		(40	)
Total at March 31, 2020	$	37,170	$	(51,381	)	$	(14,211	)	$	—	$	—	$	(14,211	)
Total at June 30, 2020																$	24,291	$	(34,424	)	$	(10,133	)	$	—	$	—	$	(10,133	)
Long-term derivative assets included in other long-term assets, net	$	16	$	(16	)	$	—		$	—	$	—	$	—		$	16	$	(16	)	$	—		$	—	$	—	$	—
Fair liability value of derivative instruments		13,824		(22,086	)		(8,262	)		—		—		(8,262	)		13,824		(22,086	)		(8,262	)		—		—		(8,262	)
Long-term derivative liabilities included in other long-term liabilities, net		1,450		(1,703	)		(253	)		—		—		(253	)		1,450		(1,703	)		(253	)		—		—		(253	)
Total at September 30, 2019	$	15,290	$	(23,805	)	$	(8,515	)	$	—	$	—	$	(8,515	)	$	15,290	$	(23,805	)	$	(8,515	)	$	—	$	—	$	(8,515	)

(In thousands)
The Effect of Derivative Instruments on the Statement of Operations	The Effect of Derivative Instruments on the Statement of Operations												The Effect of Derivative Instruments on the Statement of Operations
			Amount of (Gain) or Loss Recognized						Amount of (Gain) or Loss Recognized						Amount of (Gain) or Loss Recognized					Amount of (Gain) or Loss Recognized
Derivatives Not Designated as Hedging Instruments Under FASB ASC 815-10		Location of (Gain) or Loss Recognized in Income on Derivative	Three Months Ended March 31, 2020			Three Months Ended March 31, 2019			Six Months Ended March 31, 2020		Six Months Ended March 31, 2019			Location of (Gain) or Loss Recognized in Income on Derivative	Three Months Ended June 30, 2020			Three Months Ended June 30, 2019		Nine Months Ended June 30, 2020		Nine Months Ended June 30, 2019
Commodity contracts		Cost of product (a)	$	(3,700	)	$	14,345		$	2,349	$	8,193		Cost of product (a)	$	4,681		$	558	$	7,030	$	8,751
Commodity contracts		Cost of installations and service (a)	$	233		$	403		$	224	$	650		Cost of installations and service (a)	$	282		$	79	$	506	$	729
Commodity contracts		Delivery and branch expenses (a)	$	626		$	271		$	597	$	437		Delivery and branch expenses (a)	$	664		$	75	$	1,261	$	512
Commodity contracts		(Increase) / decrease in the fair value of derivative instruments (b)	$	11,670		$	(13,401	)	$	5,253	$	17,638		(Increase) / decrease in the fair value of derivative instruments (b)	$	(3,279	)	$	1,630	$	1,974	$	19,268

The Company’s product inventories are stated at the lower of cost and net realizable value computed on the weighted average cost method. All other inventories, representing parts and equipment are stated at the lower of cost and net realizable value using the FIFO method. The components of inventory were as follows (in thousands):

	March 31, 2020		September 30, 2019		June 30, 2020		September 30, 2019
Product	$	31,823	$	43,536	$	23,070	$	43,536
Parts and equipment		21,003		21,252		20,629		21,252
Total inventory	$	52,826	$	64,788	$	43,699	$	64,788

Property and equipment are stated at cost. Depreciation is computed over the estimated useful lives of the depreciable assets using the straight-line method (in thousands):

	March 31, 2020		September 30, 2019		June 30, 2020		September 30, 2019
Property and equipment	$	234,014	$	230,690	$	235,942	$	230,690
Less: accumulated depreciation		138,810		132,451		141,116		132,451
Property and equipment, net	$	95,204	$	98,239	$	94,826	$	98,239

During fiscal year 2020, the Company acquired the customer list and the assets of a heating oil dealer for an aggregate purchase price of approximately $0.5 million.

The gross carrying amount and accumulated amortization of intangible assets subject to amortization are as follows (in thousands):

	March 31, 2020						September 30, 2019						June 30, 2020						September 30, 2019
	Gross						Gross						Gross						Gross
	Carrying		Accum.				Carrying		Accum.				Carrying		Accum.				Carrying		Accum.
	Amount		Amortization		Net		Amount		Amortization		Net		Amount		Amortization		Net		Amount		Amortization		Net
Customer lists	$	383,388	$	306,657	$	76,731	$	382,373	$	297,221	$	85,152	$	383,388	$	310,816	$	72,572	$	382,373	$	297,221	$	85,152
Trade names and other intangibles		37,853		16,339		21,514		37,739		15,203		22,536		37,853		16,907		20,946		37,739		15,203		22,536
Total	$	421,241	$	322,996	$	98,245	$	420,112	$	312,424	$	107,688	$	421,241	$	327,723	$	93,518	$	420,112	$	312,424	$	107,688

Amortization expense for intangible assets was ~~$10.6~~$15.3 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2020, compared to ~~$9.3~~$14.1 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2019.

	March 31,				September 30,				June 30,				September 30,
	2020				2019				2020				2019
	Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)
Revolving Credit Facility Borrowings	$	24,043	$	24,043	$	61,500	$	61,500	$	—	$	—	$	61,500	$	61,500
Senior Secured Term Loan (b)		129,188		130,000		91,947		92,500		125,975		126,750		91,947		92,500
Total debt	$	153,231	$	154,043	$	153,447	$	154,000	$	125,975	$	126,750	$	153,447	$	154,000
Total short-term portion of debt	$	37,043	$	37,043	$	33,000	$	33,000	$	13,000	$	13,000	$	33,000	$	33,000
Total long-term portion of debt	$	116,188	$	117,000	$	120,447	$	121,000	$	112,975	$	113,750	$	120,447	$	121,000

On December 4, 2019, the Company refinanced its five-year term loan and the revolving credit facility with the execution of the fifth amended and restated revolving credit facility agreement with a bank syndicate ~~currently~~ comprised of eleven participants, which enables the Company to borrow up to $300 million ($450 million during the heating season of December through April of each year) on a revolving credit facility for working capital purposes (subject to certain borrowing base limitations and coverage ratios), provides for a $130 million five-year senior secured term loan (the “Term Loan”), allows for the issuance of up to $25 million in letters of credit, and has a maturity date of December 4, 2024.

The Company can increase the revolving credit facility size by $200 million without the consent of the bank group. However, the bank group is not obligated to fund the $200 million increase. If the bank group elects not to fund the increase, the Company can add additional lenders to the group, with the consent of the Agent (as defined in the credit agreement), which shall not be unreasonably withheld. Obligations under the fifth amended and restated credit facility are guaranteed by the Company and its subsidiaries and are secured by liens on substantially all of the Company’s assets, including accounts receivable, inventory, general intangibles, real property, fixtures and equipment.

All amounts outstanding under the fifth amended and restated revolving credit facility become due and payable on the facility termination date of December 4, 2024. The Term Loan is repayable in quarterly payments of $3.25 million, the first of which was made on April 1, 2020, plus an annual payment equal to 25% of the annual Excess Cash Flow as defined in the credit agreement (an amount not to exceed $12 million annually), less certain voluntary prepayments made during the year, with final payment at maturity.

The interest rate on the fifth amended and restated revolving credit facility and the Term Loan is based on a margin over LIBOR or a base rate. At ~~March 31,~~June 30, 2020, the effective interest rate on the Term Loan was approximately ~~5.5%~~5.4% and the effective interest rate on revolving credit facility borrowings was approximately ~~4.0%~~4.0%. At September 30, 2019, the effective interest rate on the term loan and revolving credit facility borrowings was approximately 5.9% and 4.6%, respectively.

The commitment fee on the unused portion of the revolving credit facility is 0.30% from December through April, and 0.20% from May through November.

The fifth amended and restated credit agreement requires the Company to meet certain financial covenants, including a Fixed Charge Coverage Ratio (as defined in the credit agreement) of not less than 1.1 as long as the Term Loan is outstanding or revolving credit facility availability is less than 12.5% of the facility size. In addition, as long as the Term Loan is outstanding, a senior secured leverage ratio cannot be more than 3.0 as calculated as of the quarters ending June or September, and no more than 4.5 as calculated as of the quarters ending December or March.

Certain restrictions are also imposed by the credit agreement, including restrictions on the Company’s ability to incur additional indebtedness, to pay distributions to unitholders, to pay certain inter-company dividends or distributions, repurchase units, make investments, grant liens, sell assets, make acquisitions and engage in certain other activities.

At ~~March 31,~~June 30, 2020, ~~$130.0~~$126.8 million of the Term Loan was outstanding, ~~$24.0 million~~0 amount was outstanding under the revolving credit facility, ~~$18.6~~$11.1 million of hedge positions were secured under the credit agreement, and ~~$4.4~~$4.4 million of letters of credit were issued and outstanding. At September 30, 2019, $92.5 million of the Term Loan was outstanding, $61.5 million was outstanding under the revolving credit facility, $7.7 million of hedge positions were secured under the credit agreement, and $4.6 million of letters of credit were issued and outstanding.

At ~~March 31,~~June 30, 2020, availability was ~~$210.4~~$226.4 million, and the Company was in compliance with the fixed charge coverage ratio and the senior secured leverage ratio. At September 30, 2019, availability was $126.1 million, and the Company was in compliance with the fixed charge coverage ratio and the senior secured leverage ratio.

The accompanying financial statements are reported on a fiscal year, however, the Company and its corporate subsidiaries file Federal and State income tax returns on a calendar year.

The current and deferred income tax expense (benefit) for the three and ~~six~~nine months ended ~~March 31,~~June 30, 2020, and ~~March 31,~~June 30, 2019 are as follows:

Our continuing practice is to recognize interest and penalties related to income tax matters as a component of income tax expense. We file U.S. Federal income tax returns and various state and local returns. A number of years may elapse before an uncertain tax position is audited and finally resolved. For our Federal income tax returns we have four tax years subject to examination. In our major state tax jurisdictions of New York, Connecticut and Pennsylvania, we have four years that are subject to examination. In the state tax jurisdiction of New Jersey we have five tax years that are subject to examination. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, based on our assessment of many factors, including past experience and interpretation of tax law, we believe that our provision for income taxes reflect the most probable outcome. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events.

The Company has entered into certain operating leases for office space, vehicles and other equipment with lease terms between one to twenty years, expiring between 2020 and 2039. Some of the Company’s real estate property lease agreements have options to extend the leases for up to five years.

The Company determines if an arrangement is a lease at inception. Lease liabilities are measured at the lease commencement date in an amount equal to the present value of the minimum lease payments over the lease term. Right-of-use (“ROU”) assets are recognized based on the amount of the lease liability adjusted for any lease payments made to the lessor at or before the commencement date, minus any lease incentives received, plus any initial direct costs incurred. Renewal options are included in the calculation of the ROU asset and lease liability when it is determined that they are reasonably certain of exercise.

Certain of our lease arrangements contain non-lease components such as common area maintenance. We have elected to account for the lease component and its associated non-lease components as a single lease component. Leases with an initial term of 12 months or less are not recognized on our balance sheet. The Company has leases that have variable payments, including lease payments where lease payment increases are based on the percentage change in the Consumer Price Index. For such leases, payment at the lease commencement date is used to measure the ROU assets and operating lease liabilities. Changes in the index and other variable payments are expensed as incurred. The interest rate used to determine the present value of the future lease payments is our incremental borrowing rate, because the interest rate implicit in our operating leases is not readily determinable. The basis for an incremental borrowing rate was our Term Loan, market-based yield curves and comparable debt securities.

A summary of total lease costs and other information for the three and ~~six~~nine months ended ~~March 31,~~June 30, 2020 is as follows:

	Three Months Ended		Six Months Ended		Three Months Ended		Nine Months Ended
	March 31,		March 31,		June 30,		June 30,
(in thousands)	2020		2020		2020		2020
Lease cost:
Operating lease cost	$	6,333	$	12,932	$	6,547	$	19,479
Short-term lease cost		240		432		205		637
Variable lease cost		1,129		2,139		1,423		3,562
Total lease cost	$	7,702	$	15,503	$	8,175	$	23,678

Other information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	6,244	$	12,625	$	6,420	$	19,045
Right-of-use assets obtained in exchange for new operating lease liabilities	$	5,426	$	9,436	$	2,507	$	11,943

As of ~~March 31,~~June 30, 2020, our operating leases had a weighted average remaining lease term of ~~7.4~~7.3 years and a weighted average discount rate of 4.9%. Maturities of operating lease liabilities as of ~~March 31,~~June 30, 2020 are as follows:

	March 31,			June 30,
(in thousands)	2020			2020
Remaining six months of fiscal year 2020	$	12,589
Remaining three months of fiscal year 2020				$	6,256
2021		22,733			23,359
2022		18,669			19,062
2023		15,347			15,798
2024		13,194			13,655
Thereafter		49,172			49,944
Total undiscounted lease payments		131,704			128,074
Less imputed interest		(22,764	)		(22,003	)
Total lease liabilities	$	108,940		$	106,071

Maturities of operating lease liabilities presented undiscounted under ASC Topic 840 as prescribed by ASC Topic 842 as of September 30, 2019 are as follows:

	Six Months Ended				Nine Months Ended
Cash paid during the period for:	March 31,				June 30,
(in thousands)	2020		2019		2020			2019
Income taxes, net	$	9,992	$	3,748	$	9,988	(a)	$	3,046
Interest	$	6,543	$	5,770	$	9,272		$	9,709

(a) In July 2020, the Company made $8.5 million in tax payments that were deferred from April and June.

On April 18, 2017, a civil action was filed in the United States District Court for the Eastern District of New York, entitled M. Norman Donnenfeld v. Petro, Inc., Civil Action Number 2:17-cv-2310-JFB-SIL, against Petro, Inc. By amended complaint filed on August 15, 2017, the Plaintiff alleged he did not receive expected contractual benefits under his protected price plan contract when oil prices fell and asserted various claims for relief including breach of contract, violation of the New York General Business Law and fraudulent inducement. The Plaintiff also sought to have a class certified of similarly situated Petro customers who entered into protected price plan contracts and were denied the same contractual benefits. The Plaintiff sought compensatory, punitive and other damages in unspecified amounts. On September 15, 2017, Petro filed a motion to dismiss the amended complaint as time-barred and for failure to state a cause of action. On September 12, 2018, the district court granted in part and denied in part Petro's motion to dismiss. The district court dismissed the Plaintiff's claims for breach of the covenant of good faith and fair dealing and fraudulent inducement, but declined to dismiss the Plaintiff's remaining claims. The district court granted the Plaintiff leave to amend to attempt to replead his fraudulent inducement claim. On October 10, 2018, the Plaintiff filed a second amended complaint. The second amended complaint attempted to replead a fraudulent inducement claim and was otherwise substantially similar or identical to the prior complaint. On November 13, 2018, Petro moved to dismiss the fraudulent inducement and unjust enrichment claims in the second amended complaint. On January 31, 2019, the court granted the motion and dismissed the fraudulent inducement and unjust enrichment claims with prejudice. On February 22, 2019, counsel for Petro and the Plaintiff participated in a mediation which, after arms-length negotiations, resulted in a memorandum of understanding to settle the litigation, subject to the completion of confirmatory discovery, negotiation of a final settlement agreement and court approval. In an order dated March 27, 2019, the district court stayed all discovery deadlines in light of the pending settlement. On October 4, 2019, upon consent of all parties, Judge Roslynn R. Mauskopf assigned the action to Magistrate Judge Steve I. Locke for final disposition. On March 26, 2020, the court granted final approval of the class action settlement, certified the class for settlement purposes only and dismissed the action with prejudice. On March 26, 2020, the court also granted Plaintiff’s unopposed motion for fees, expenses and named plaintiff service award. The settlement is not an admission of liability or breach to any customers by Petro and, the Company continues to believe the allegations lack merit. ~~If the settlement is not completed for any reason, the Company will continue to vigorously defend the action; in that case, we cannot assess the potential outcome or materiality of this matter.~~

The Company’s operations are subject to the operating hazards and risks normally incidental to handling, storing and transporting and otherwise providing for use by consumers hazardous liquids such as home heating oil and propane. In the ordinary course of business, the Company is a defendant in various legal proceedings and litigation. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. We do not believe these matters, when considered individually or in the aggregate, could reasonably be expected to have a material adverse effect on the Company’s results of operations, financial position or liquidity.

The Company maintains insurance policies with insurers in amounts and with coverages and deductibles we believe are reasonable and prudent. However, the Company cannot assure that this insurance will be adequate to protect it from all material expenses related to current and potential future claims, legal proceedings and litigation, including the above mentioned action, as certain types of claims may be excluded from our insurance coverage. If we incur substantial liability and the damages are not covered by insurance, or are in excess of policy limits, or if we incur liability at a time when we are not able to obtain liability insurance, then our business, results of operations and financial condition could be materially adversely affected.

Income per limited partner unit is computed in accordance with FASB ASC 260-10-05 Earnings Per Share, Master Limited Partnerships (EITF 03-06), by dividing the limited partners’ interest in net income by the weighted average number of limited partner units outstanding. The pro forma nature of the allocation required by this standard provides that in any accounting period where the Company’s aggregate net income exceeds its aggregate distribution for such period, the Company is required to present net income per limited partner unit as if all of the earnings for the periods were distributed, regardless of whether those earnings would actually be distributed during a particular period from an economic or practical perspective. This allocation does not impact the Company’s overall net income or other financial results. However, for periods in which the Company’s aggregate net income exceeds its aggregate distributions for such period, it will have the impact of reducing the earnings per limited partner unit, as the calculation according to this standard result in a theoretical increased allocation of undistributed earnings to the General Partner. In accounting periods where aggregate net income does not exceed aggregate distributions for such period, this standard does not have any impact on the Company’s net income per limited partner unit calculation. A separate and independent calculation for each quarter and year-to-date period is performed, in which the Company’s contractual participation rights are taken into account.

The following presents the net income allocation and per unit data using this method for the periods presented:

Three Months Ended

Six Months Ended

Basic and Diluted Earnings Per Limited Partner:

March 31,

March 31,

(in thousands, except per unit data)

2020

2019

2020

2019

Net income

$
58,408

$
72,325

$
86,163

$
74,640

Less General Partner’s interest in net income

409

454

601

469

Net income available to limited partners

57,999

71,871

85,562

74,171

Less dilutive impact of theoretical distribution of earnings
   under FASB ASC 260-10-45-60

10,283

12,934

14,631

12,294

Limited Partner’s interest in net income under FASB ASC 260-10-45-60

$
47,716

$
58,937

$
70,931

$
61,877

Per unit data:

Basic and diluted net income available to limited partners

$
1.25

$
1.40

$
1.83

$
1.42

Less dilutive impact of theoretical distribution of earnings
   under FASB ASC 260-10-45-60

0.22

0.25

0.31

$
0.23

Limited Partner’s interest in net income under FASB ASC
   260-10-45-60

$
1.03

$
1.15

$
1.52

$
1.19

Weighted average number of Limited Partner units outstanding

46,244

51,427

46,760

52,174

	Three Months Ended						Nine Months Ended
Basic and Diluted Earnings Per Limited Partner:	June 30,						June 30,
(in thousands, except per unit data)	2020			2019			2020		2019
Net income (loss)	$	(46	)	$	(23,098	)	$	86,117	$	51,542
Less General Partner’s interest in net income (loss)		(1	)		(150	)		600		319
Net income (loss) available to limited partners		(45	)		(22,948	)		85,517		51,223
Less dilutive impact of theoretical distribution of earnings under FASB ASC 260-10-45-60		—			—			13,616		6,740
Limited Partner’s interest in net income (loss) under FASB ASC 260-10-45-60	$	(45	)	$	(22,948	)	$	71,901	$	44,483
Per unit data:
Basic and diluted net income (loss) available to limited partners	$	—		$	(0.46	)	$	1.85	$	1.00
Less dilutive impact of theoretical distribution of earnings under FASB ASC 260-10-45-60		—			—			0.30		0.14
Limited Partner’s interest in net income (loss) under FASB ASC 260-10-45-60	$	—		$	(0.46	)	$	1.55	$	0.86
Weighted average number of Limited Partner units outstanding		45,246			49,943			46,253		51,431

In July 2020, the Company purchased the customer list and assets of a heating oil dealer for an aggregate amount of approximately $2.3 million. The purchase price was allocated $1.9 million to intangible assets, $0.5 million to fixed assets and reduced by $0.1 million for working capital credits.

In ~~April~~July 2020, we declared a quarterly distribution of $0.1325 per unit, or $0.53 per unit on an annualized basis, on all Common Units with respect to the ~~second~~third quarter of fiscal 2020, payable on ~~May 12,~~August 4, 2020, to holders of record on ~~May 4,~~July 27, 2020. The amount of distributions in excess of the minimum quarterly distribution of $0.0675 are distributed in accordance with our Partnership Agreement, subject to the management incentive compensation plan. As a result, ~~$6.0~~$5.8 million will be paid to the Common Unit holders, $0.2 million to the General Partner unit holders (including $0.2 million of incentive distribution as provided in our Partnership Agreement) and $0.2 million to management pursuant to the management incentive compensation plan which provides for certain members of management to receive incentive distributions that would otherwise be payable to the General Partner.

In ~~April~~July 2020, in accordance with the Repurchase Plan, the Company repurchased and retired ~~0.4~~0.7 million Common Units at an average price paid of $~~7.71~~$8.97 per unit.

We have seen a reduction in certain sales activity in the month of April 2020 when compared to that in April 2019, primarily due to the decrease in economic activity and travel resulting from the current pandemic of the novel coronavirus, or COVID-19.

The volume of Motor Fuel and Other Petroleum Products for April 2020 (which is primarily motor fuels used for both on and off road purposes) is down approximately 35% compared to the volume sold in April 2019. Service revenues are down approximately 10% in April 2020 when compared to April 2019, as in some locations the company has restricted its service to only emergency services, or customers are electing to defer non-emergency services until a later date. Installation revenues are also down approximately 40% in April 2020 when compared to April 2019 as, again, many customers are deferring non-emergency installations.

The extent of the impact of the COVID-19 outbreak on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, its impact on our customers and suppliers and the range of governmental and community reactions to the pandemic, which are uncertain and cannot be fully predicted at this time.

This Quarterly Report on Form 10-Q (this “Report”) includes “forward-looking statements” which represent our expectations or beliefs concerning future events that involve risks and uncertainties, including those associated with the severity and duration of the novel coronavirus, or COVID-19, pandemic, the pandemic’s impact on the U.S. and global economies, the timing, scope and effectiveness of federal, state and local governmental responses to the pandemic, the effect of weather conditions on our financial performance, the price and supply of the products that we sell, the consumption patterns of our customers, our ability to obtain satisfactory gross profit margins, our ability to obtain new customers and retain existing customers, our ability to make strategic acquisitions, the impact of litigation, our ability to contract for our current and future supply needs, natural gas conversions, future union relations and the outcome of current and future union negotiations, the impact of current and future governmental regulations, including climate change, environmental, health, and safety regulations, the ability to attract and retain employees, customer credit worthiness, counterparty credit worthiness, marketing plans, potential cyber-attacks, general economic conditions and new technology. All statements other than statements of historical facts included in this Report including, without limitation, the statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere herein, are forward-looking statements. Without limiting the foregoing, the words “believe,” “anticipate,” “plan,” “expect,” “seek,” “estimate,” and similar expressions are intended to identify forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct, and actual results may differ materially from those projected as a result of certain risks and uncertainties. These risks and uncertainties include, but are not limited to, those set forth in this Report under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our Fiscal 2019 Form 10-K under Part I Item 1A “Risk Factors.” Important factors that could cause actual results to differ materially from our expectations (“Cautionary Statements”) are disclosed in this Report and in our Fiscal 2019 Form ~~10-K.~~10-K and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. Currently, one of the most significant factors, however, is the potential adverse effect of the current pandemic of the novel coronavirus, or COVID-19, on the financial condition, results of operations, cash flows and performance of the Company, ~~and~~ its customers and counterparties, and the global economy and financial markets. The extent to which COVID-19 impacts us and our customers will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, ~~and~~ the direct and indirect economic effects of the pandemic and containment measures, among others. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements. Unless otherwise required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this Report.

In December 2019, there was an outbreak of a new strain of coronavirus (“COVID-19”). On March 11, 2020, the World Health Organization characterized the outbreak of COVID-19 as a global pandemic and recommended containment and mitigation measures. The United States has declared a national emergency concerning the outbreak, which has adversely impacted global activity and contributed to significant declines and volatility in financial markets. There have been extraordinary and wide-ranging actions taken by international, federal, state and local public health and governmental authorities to contain and combat the outbreak and spread of COVID-19 in regions across the United States and the world, including quarantines, and ~~“stay-at-home”~~ orders and similar mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations. Our business is concentrated in the Northeast and Mid-Atlantic sections of the United States. These areas have been significantly impacted by the virus.

~~To date we~~We have been designated by state and local governmental officials in the markets we serve as providing essential services during the COVID-19 pandemic. Therefore, we have continued to make fuel deliveries and provide emergency services to all areas in which we operate. We are closely monitoring all official pronouncements and executive orders concerning our status as an essential business. To date, we have not experienced any ~~significant~~ supply chain issues impacting our ability to deliver petroleum products ~~and provide services~~ to our customers. However, we are experiencing delays in the procurement of certain HVAC equipment. We believe the various initiatives we have implemented in response to the COVID-19 pandemic, such as certain staff working remotely, have not significantly impacted our ability to serve our customers. ~~We are still making fuel deliveries and providing emergency services to all areas in which we operate.~~ The 2019-2020 peak heating season coincides with our first and second fiscal quarters, which historically represent approximately 80% of our annual volume of home heating oil and propane sold.

As a result of the COVID-19 pandemic, and in order to protect the safety and health of our workforce and our customers, we have expanded certain employee benefit programs and will incur additional operating costs such as sanitizing our facilities and providing IT infrastructure to allow many office, clerical, sales and customer service employees to work from home. At this time, we ~~cannot estimate~~do not expect the cost of these ~~undertakings.~~ undertakings to be significant.

In certain ~~areas,~~markets more heavily impacted by the pandemic, we ~~have~~ ceased making non-emergency service calls that would have been performed in the third quarter of fiscal ~~2020.~~2020 under normal conditions. These service calls may be deferred to subsequent periods

and may increase our future service costs. ~~In addition,~~At this time, we do not expect that the increased costs associated with non-emergency service calls will be material to our annual service costs.

We believe that some of our customers ~~are deferring~~have deferred non-emergency services, including the installation of new equipment, which has caused a ~~significant~~ decline ~~in April 2020~~ in equipment installation sales. In the third quarter of fiscal 2020, we experienced a decline in installation sales ~~and reactive service~~

~~calls and may continue to reduce future service and installation income.~~of $2.8 million, or 11.5%, versus the prior-year period. We ~~are experiencing~~have also experienced a ~~significant~~ decline in motor fuel sales volume of 10.1 million gallons, or 23.7% versus the prior year’s period due to a significant reduction in economic activity and travel in the states in which we operate. During fiscal 2019 Motor Fuel and Other Petroleum Products represented 32.6% of our Total Product Volume, 25.0% of our Total Product Sales and 9.1%, of our Total Product Gross Profit, and historically we sell more volumes of motor fuels than heating oil and propane in the second half of the fiscal year. Accordingly,activity. If these trends continue, our financial results may suffer ~~accordingly if these trends continue.~~accordingly. However, in July 2020, we are experiencing a modest increase in installation activity and motor fuels sales volume as certain states have modified their “stay-at-home” orders.

As of ~~March 31,~~June 30, 2020, we had accounts receivable of ~~$187.1~~$111.9 million, of which ~~$149.4~~$85.3 million iswas due from residential customers and ~~$37.7~~$26.6 million is due from commercial customers. Our ability to borrow from our bank group is based in part on the aging of these accounts receivable. If ~~such~~ past due balances that do not meet the eligibility tests as found in our fifth amended and restated credit agreement increase from historic levels, our future ability to borrow would be reduced.

The Company ~~intends to take~~has taken advantage of certain tax and legislative actions which ~~will permit~~permitted the Company to defer its April 2020 and June 2020 Federal and State income tax ~~payment~~payments to July 2020 and to defer certain payroll tax withholdings relating to calendar 2020 to calendar 2021 and 2022. ~~We are also looking into loans available under various Federal stimulus packages, but at the present time our eligibility and need for such loans is uncertain.~~

We believe COVID-19’s impact on our business, operating results, cash flows (including the collection of current and future accounts receivable) and/or financial condition primarily will be driven by the severity and duration of the pandemic, the pandemic’s impact on the U.S. and global economies, the price of petroleum products, and the timing, scope and effectiveness of federal, state and local governmental responses to the pandemic. ~~Those~~We continue to monitor the effects of the pandemic on our business; however, the primary drivers are beyond our knowledge and control and, as a result, at this time we cannot reasonably estimate the ultimate adverse impact COVID-19 will have on our business, operating results, cash flows and/or financial condition going forward.

Our liquidity is adversely impacted in times of increasing wholesale product costs, as we must use more cash to fund our hedging requirements as well as the increased levels of accounts receivable and inventory. This may result in higher interest expense as a result of increased working capital borrowing to finance higher receivables and/or inventory balances. We may also incur higher bad debt expense and credit card processing costs as a result of higher selling prices as well as higher vehicle fuel costs due to the increase in energy costs. In addition, our liquidity can be adversely impacted by sudden and sharp decreases in wholesale product costs, due to the increased margin requirements for futures contracts and collateral requirements for options and swaps that we use to manage market risks.

Volatility, which is reflected in the wholesale price of liquid products, including home heating oil, propane and motor fuels, has a larger impact on our business when prices rise. Consumers are price sensitive to heating cost increases, which can lead to increased gross customer losses. As a commodity, the price of home heating oil is generally impacted by many factors, including economic and geopolitical forces, and, most recently, the COVID-19 pandemic, and is closely linked to the price of diesel fuel. The volatility in the wholesale cost of diesel fuel as measured by the New York Mercantile Exchange (“NYMEX”), for the fiscal years ending September 30, 2016, through 2020, on a quarterly basis, is illustrated in the following chart (price per gallon):

	Fiscal 2020 (a)				Fiscal 2019				Fiscal 2018				Fiscal 2017				Fiscal 2016				Fiscal 2020 (a)				Fiscal 2019				Fiscal 2018				Fiscal 2017				Fiscal 2016
Quarter Ended	Low		High		Low		High		Low		High		Low		High		Low		High		Low		High		Low		High		Low		High		Low		High		Low		High
December 31	$	1.86	$	2.05	$	1.66	$	2.44	$	1.74	$	2.08	$	1.39	$	1.70	$	1.08	$	1.61	$	1.86	$	2.05	$	1.66	$	2.44	$	1.74	$	2.08	$	1.39	$	1.70	$	1.08	$	1.61
March 31		0.95		2.06		1.70		2.04		1.84		2.14		1.49		1.70		0.87		1.26		0.95		2.06		1.70		2.04		1.84		2.14		1.49		1.70		0.87		1.26
June 30		—		—		1.78		2.12		1.96		2.29		1.37		1.65		1.08		1.57		0.61		1.22		1.78		2.12		1.96		2.29		1.37		1.65		1.08		1.57
September 30		—		—		1.75		2.08		2.05		2.35		1.45		1.86		1.26		1.53		—		—		1.75		2.08		2.05		2.35		1.45		1.86		1.26		1.53

On December 4, 2019, the Company refinanced its credit facility and entered into the fifth amended and restated revolving credit facility agreement with a bank syndicate of eleven participants, which enables the Company to borrow up to $300 million ($450 million during the heating season of December through April of each year) on a revolving line of credit for working capital purposes (subject to certain borrowing base limitations and coverage ratios), provides for a $130 million five-year senior secured term loan, allows for the issuance of up to $25 million in letters of credit, and extends the maturity date of the previous agreement to

December 4, 2024. Proceeds from the new term loan were used to repay the $90.0 million outstanding balance of the term loan and $40.0 million of the revolving credit facility borrowings under the old credit facility. Availability as a result of the new credit agreement increased $40.0 million.

Consistent with the fourth amended and restated revolving credit facility, under the Company’s fifth amended and restated credit agreement, in order to repurchase Common Units we must maintain availability of $45 million, equivalent to 15.0% of the facility size of $300 million (assuming the non-seasonal aggregate commitment is outstanding) on a historical pro forma and forward-looking basis, and a fixed charge coverage ratio of not less than 1.15 measured as of the date of repurchase.

The amount of cash flow generated in any given year depends upon a variety of factors including the amount of cash income taxes required, which will increase as depreciation and amortization decreases. The amount of depreciation and amortization that we deduct for book (i.e., financial reporting) purposes will differ from the amount that the Company can deduct for Federal tax purposes. The table below compares the estimated depreciation and amortization for book purposes to the amount that we expect to deduct for Federal tax purposes, based on currently owned assets. While we file our tax returns based on a calendar year, the amounts below are based on our September 30 fiscal year, and the tax amounts include any 100% bonus depreciation available for fixed assets purchased. However, this table does not include any forecast of future annual capital purchases.

(In thousands) Fiscal Year	Book		Tax		Book		Tax
2020	$	32,045	$	28,628	$	35,344	$	30,734
2021		26,651		21,644		29,966		22,292
2022		23,064		19,598		24,913		19,602
2023		19,778		17,812		21,548		17,821
2024		15,944		16,771		17,103		16,777
2025		13,047		16,279		13,821		16,280

Weather conditions have a significant impact on the demand for home heating oil and propane because certain customers depend on these products principally for space heating purposes. Actual weather conditions may vary substantially from year to year, significantly affecting the Company’s financial performance. To partially mitigate the adverse effect of warm weather on cash flow, we have used weather hedging contracts for a number of years with several providers.

Under these contracts, we are entitled to a payment if the total number of degree days within the hedge period is less than the ten-year average. The “Payment Thresholds,” or strikes, are set at various levels. Conversely, we are obligated to make a payment, capped at $5.0 million, if degree days exceed the ten-year average. The hedge period runs from November 1 through March 31, taken as a whole, for each respective fiscal year. For the ~~six~~nine months ended ~~March 31,~~June 30, 2020 we recorded a $10.1 million benefit and, for the ~~six~~nine months ended ~~March 31,~~June 30, 2019, we recorded a charge of $2.1 million.

We believe home heating oil and propane margins should be evaluated on a cents per gallon basis (before the effects of increases or decreases in the fair value of derivative instruments), as we believe that such per gallon margins are best at showing profit trends in the underlying business, without the impact of non-cash changes in the market value of hedges before the settlement of the underlying transaction.

A significant portion of our home heating oil volume is sold to individual customers under an arrangement pre-establishing a ceiling price or fixed price for home heating oil over a set period of time, generally twelve to twenty-four months (“price-protected” customers). When these price-protected customers agree to purchase home heating oil from us for the next heating season, we purchase option contracts, swaps and futures contracts for a substantial majority of the heating oil that we expect to sell to these customers. The amount of home heating oil volume that we hedge per price-protected customer is based upon the estimated fuel consumption per average customer per month. In the event that the actual usage exceeds the amount of the hedged volume on a monthly basis, we may be required to obtain additional volume at unfavorable costs. In addition, should actual usage in any month be less than the hedged volume, our hedging costs and losses could be greater, thus reducing expected margins.

FASB ASC 815-10-05 Derivatives and Hedging requires that derivative instruments be recorded at fair value and included in the consolidated balance sheet as assets or liabilities. To the extent our interest rate derivative instruments designated as cash flow hedges are effective, as defined under this guidance, changes in fair value are recognized in other comprehensive income until the forecasted hedged item is recognized in earnings. We have elected not to designate our commodity derivative instruments as hedging instruments under this guidance and, as a result, the changes in fair value of the derivative instruments are recognized in our statement

of operations. Therefore, we experience volatility in earnings as outstanding derivative instruments are marked to market and non-cash gains and losses are recorded prior to the sale of the commodity to the customer. The volatility in any given period related to unrealized non-cash gains or losses on derivative instruments can be significant to our overall results. However, we ultimately expect those gains and losses to be offset by the cost of product when purchased.

We measure net customer attrition on an ongoing basis for our full service residential and commercial home heating oil and propane customers. Net customer attrition is the difference between gross customer losses and customers added through marketing efforts. Customers added through acquisitions are not included in the calculation of gross customer gains. However, additional customers that are obtained through marketing efforts or lost at newly acquired businesses are included in these calculations. Customer attrition percentage calculations include customers added through acquisitions in the denominators of the calculations on a weighted average basis. Gross customer losses are the result of a number of factors, including price competition, move-outs, credit losses, conversions to natural gas and service disruptions. When a customer moves out of an existing home, we count the “move out” as a loss, and if we are successful in signing up the new homeowner, the “move in” is treated as a gain. The economic impact of COVID-19 could increase future attrition due to higher losses from credit related issues.

	Fiscal Year Ended																					Fiscal Year Ended
	2020							2019							2018							2020							2019							2018
					Net							Net							Net							Net							Net							Net
	Gross Customer				Gains /			Gross Customer				Gains /			Gross Customer				Gains /			Gross Customer				Gains /			Gross Customer				Gains /			Gross Customer				Gains /
	Gains		Losses		(Attrition)			Gains		Losses		(Attrition)			Gains		Losses		(Attrition)			Gains		Losses		(Attrition)			Gains		Losses		(Attrition)			Gains		Losses		(Attrition)
First Quarter		23,900		23,100		800			26,200		25,400		800			24,700		19,900		4,800			23,900		23,100		800			26,200		25,400		800			24,700		19,900		4,800
Second Quarter		12,600		18,200		(5,600	)		12,600		22,300		(9,700	)		14,100		18,900		(4,800	)		12,600		18,200		(5,600	)		12,600		22,300		(9,700	)		14,100		18,900		(4,800	)
Third Quarter		—		—		—			7,100		15,900		(8,800	)		7,900		16,200		(8,300	)		8,000		13,600		(5,600	)		7,100		15,900		(8,800	)		7,900		16,200		(8,300	)
Fourth Quarter		—		—		—			13,200		20,600		(7,400	)		13,100		19,400		(6,300	)		—		—		—			13,200		20,600		(7,400	)		13,100		19,400		(6,300	)
Total		36,500		41,300		(4,800	)		59,100		84,200		(25,100	)		59,800		74,400		(14,600	)		44,500		54,900		(10,400	)		59,100		84,200		(25,100	)		59,800		74,400		(14,600	)

Customer gains (attrition) as a percentage of home heating oil and propane customer base

	Fiscal Year Ended																											Fiscal Year Ended
	2020									2019									2018									2020									2019									2018
							Net									Net									Net									Net									Net									Net
	Gross Customer						Gains /			Gross Customer						Gains /			Gross Customer						Gains /			Gross Customer						Gains /			Gross Customer						Gains /			Gross Customer						Gains /
	Gains			Losses			(Attrition)			Gains			Losses			(Attrition)			Gains			Losses			(Attrition)			Gains			Losses			(Attrition)			Gains			Losses			(Attrition)			Gains			Losses			(Attrition)
First Quarter		5.3	%		5.1	%		0.2	%		5.8	%		5.6	%		0.2	%		5.4	%		4.3	%		1.1	%		5.3	%		5.1	%		0.2	%		5.8	%		5.6	%		0.2	%		5.4	%		4.3	%		1.1	%
Second Quarter		2.8	%		4.0	%		(1.2	%)		2.8	%		5.0	%		(2.2	%)		3.0	%		4.1	%		(1.1	%)		2.8	%		4.0	%		(1.2	%)		2.8	%		5.0	%		(2.2	%)		3.0	%		4.1	%		(1.1	%)
Third Quarter		—			—			—			1.6	%		3.5	%		(1.9	%)		1.7	%		3.5	%		(1.8	%)		1.8	%		3.0	%		(1.2	%)		1.6	%		3.5	%		(1.9	%)		1.7	%		3.5	%		(1.8	%)
Fourth Quarter		—			—			—			2.7	%		4.2	%		(1.5	%)		2.9	%		4.3	%		(1.4	%)		—			—			—			2.7	%		4.2	%		(1.5	%)		2.9	%		4.3	%		(1.4	%)
Total		8.1	%		9.1	%		(1.0	%)		12.9	%		18.3	%		(5.4	%)		13.0	%		16.2	%		(3.2	%)		9.9	%		12.1	%		(2.2	%)		12.9	%		18.3	%		(5.4	%)		13.0	%		16.2	%		(3.2	%)

For the ~~six~~nine months ended ~~March 31,~~June 30, 2020, the Company lost ~~4,800~~10,400 accounts (net), or ~~1.0%~~2.2% of its home heating oil and propane customer base, compared to ~~8,900~~17,700 accounts lost (net), or ~~2.0%~~3.9% of its home heating oil and propane customer base, during the ~~six~~nine months ended ~~March 31,~~June 30, 2019. Gross customer gains were ~~2,300~~1,400 less than the prior year’s comparable period, and gross customer losses were ~~6,400~~8,700 accounts less.

During the ~~six~~nine months ended ~~March 31,~~June 30, 2020, we estimate that we lost ~~0.7%~~0.9% of our home heating oil and propane accounts to natural gas conversions versus ~~0.8%~~1.1% for the ~~six~~nine months ended ~~March 31,~~June 30, 2019 and ~~0.6% six~~1.0% nine months ended ~~March 31,~~June 30, 2018. Losses to natural gas in our footprint for the heating oil and propane industry could be greater or less than the Company’s estimates.

The timing of acquisitions and the types of products sold by acquired companies impact year-over-year comparisons. During the ~~six~~nine months ended ~~March 31,~~June 30, 2020, the Company acquired one heating oil dealer. The Company also acquired the customer list and assets of a heating oil ~~dealer.~~dealer in July 2020. During fiscal 2019 the Company completed three acquisitions. 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.

(in thousands of gallons)
Fiscal 2020 Acquisitions	Fiscal 2020 Acquisitions								Fiscal 2020 Acquisitions
Acquisition Number		Month of Acquisition	Home Heating Oil and Propane		Other Petroleum Products		Total			Month of Acquisition	Home Heating Oil and Propane		Other Petroleum Products		Total
1		October		1,085		—		1,085		October		1,085		—		1,085
2										July		2,400		—		2,400
				1,085		—		1,085				3,485		—		3,485

The Company’s fiscal year ends on September 30. All references to quarters and years, respectively, in this document are to the fiscal quarters and fiscal years unless otherwise noted. The seasonal nature of our business has resulted, on average, during the last five years, in the sale of approximately 30% of the volume of home heating oil and propane in the first fiscal quarter and 50% of the volume in the second fiscal quarter, the peak heating season. Approximately 25% of the volume of motor fuel and other petroleum products is sold in each of the four fiscal quarters. We generally realize net income during the quarters ending December and March and net losses during the quarters ending June and September. In addition, sales volume typically fluctuates from year to year in response to variations in weather, wholesale energy prices and other factors.

A “degree day” is an industry measurement of temperature designed to evaluate energy demand and consumption. Degree days are based on how far the average daily temperature departs from 65°F. Each degree of temperature above 65°F is counted as one cooling degree day, and each degree of temperature below 65°F is counted as one heating degree day. Degree days are accumulated each day over the course of a year and can be compared to a monthly or a long-term (multi-year) average to see if a month or a year was warmer or cooler than usual. Degree days are officially observed by the National Weather Service.

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 1981 to 2010. 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.

The following is a discussion of the consolidated results of operations of the Company and its subsidiaries and should be read in conjunction with the historical financial and operating data and Notes thereto included elsewhere in this Quarterly Report.

For the three months ended ~~March 31,~~June 30, 2020, retail volume of home heating oil and propane sold ~~decreased~~increased by ~~37.1~~14.3 million gallons, or ~~21.4%~~38.8%, to ~~136.2~~51.2 million gallons, compared to ~~173.3~~36.9 million gallons for the three months ended ~~March 31,~~June 30, 2019. 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,~~June 30, 2020 were ~~18.2~~46.4% ~~warmer~~colder than the three months ended ~~March 31,~~June 30, 2019. Temperatures during the three months ended ~~March 31,~~June 30, 2020 were ~~21.2~~17.9% ~~warmer~~colder than normal, as reported by NOAA. For the twelve months ended ~~March 31,~~June 30, 2020, net customer attrition for the base business was ~~4.6~~4.0%. 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:

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 three months ended ~~March 31,~~June 30, 2020, compared to the three months ended ~~March 31,~~June 30, 2019:

	Three Months Ended						Three Months Ended
Customers	March 31, 2020			March 31, 2019			June 30, 2020			June 30, 2019
Residential Variable		42.0	%		41.1	%		39.4	%		38.0	%
Residential Price-Protected (Ceiling and Fixed Price)		45.5	%		46.7	%		48.3	%		48.4	%
Commercial/Industrial		12.5	%		12.2	%		12.3	%		13.6	%
Total		100.0	%		100.0	%		100.0	%		100.0	%

Volume of other petroleum products sold decreased by ~~2.4~~8.1 million gallons, or ~~6.1%~~19.0%, to ~~36.6~~34.2 million gallons for the three months ended ~~March 31,~~June 30, 2020, compared to ~~39.0~~42.3 million gallons for the three months ended ~~March 31,~~June 30, 2019, ~~attributable to lower wholesale revenue due to~~as the ~~18.2% warmer weather and lower~~additional volume provided by acquisitions of 2.0 million gallons was more than offset by a decline in motor fuel sales of 10.1 million gallons, or 23.7%, resulting in part from COVID-19’s impact on economic activity as well as the loss of certain accounts. We believe that the decline in motor ~~fuels.~~fuel sales may continue in the near term.

For the three months ended ~~March 31,~~June 30, 2020, product sales decreased by ~~$156.1~~$45.5 million, or ~~24.5%~~21.6%, to ~~$481.3~~$165.2 million, compared to ~~$637.4~~$210.7 million for the three months ended ~~March 31,~~June 30, 2019 ~~due to~~as the impact of ~~lower~~the additional volume sold ~~and reduced~~was more than offset by a decline in selling prices. The decline in selling prices was largely attributable to a decrease in product ~~cost.~~cost of $0.8669 per gallon or 44.3%.

For the three months ended ~~March 31,~~June 30, 2020, installation and service revenue decreased by ~~$0.4~~$5.7 million, or ~~0.6%~~7.9%, to ~~$61.8~~$67.0 million, compared to ~~$62.2~~$72.7 million for the three months ended ~~March 31,~~June 30, 2019 as the additional revenue provided from acquisitions of ~~$2.9~~$1.8 million was reduced by lower ~~revenues~~revenue in the base business of ~~$3.3~~$7.5 million. As a result of COVID-19, we ceased making non-emergency service calls that would have been performed under normal conditions during the third quarter of fiscal 2020. These service calls may be deferred to subsequent periods and may increase our future service costs. In ~~the base business, service sales and installation sales declined due to net customer attrition and the impact~~addition, we believe that some of ~~18.2% warmer weather which negatively impacted billable service revenue and reduced the need for~~

our customers have deferred non-emergency services, including the installation of new ~~equipment.~~equipment, which has caused a decline in equipment installation sales and reactive service calls and may continue to reduce future service and installation income.

For the three months ended ~~March 31,~~June 30, 2020, cost of product decreased ~~$130.3~~$61.8 million, or ~~31.4%~~39.9%, to ~~$285.4~~$93.3 million, compared to ~~$415.6~~$155.1 million for the three months ended ~~March 31,~~June 30, 2019, ~~largely due to a decrease~~as the impact of an increase in total volume sold of ~~18.6%, and~~8.0% was more than offset by a ~~$0.3067~~$0.8669 per gallon, or ~~15.7%~~44.3%, decrease in wholesale product cost.

The table below calculates our per gallon margins and reconciles product gross profit for home heating oil and propane 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,~~June 30, 2020 increased by ~~$0.1406~~$0.0003 per gallon, ~~or 11.5%,~~ to ~~$1.3619~~$1.2174 per gallon, from ~~$1.2213~~$1.2171 per gallon during the three months ended ~~March 31,~~June 30, 2019. The market conditions experienced during the three months ended March 31, 2020, which resulted in lower product costs, created an opportunity for margin expansion and contributed to an increase in home heating oil and propane margins versus the prior year’s comparable quarter. In addition, the Company utilizes weighted average costing for computing cost of goods sold, which ~~contributed to an increase~~can delay the timing in which the effects of market changes in product ~~gross profit~~costs are reflected in costs of goods because price changes are weighted into the average costing calculation rather than immediately realized. As reported in our Quarterly Report on Form 10-Q for the three months ended March 31, 2020, ~~of $6.9 million. It is~~we anticipated that product gross profit ~~will~~would be reduced ~~by a similar amount over~~in future periods as~~the impact of~~by $6.9 million until recent ~~price changes are incorporated into~~declines in product costs were reflected in the weighted average costing calculations. Going forward, we cannot assume that ~~the~~ per gallon margins realized during the three months ended ~~March 31,~~June 30, 2020 are sustainable for future periods.

Product sales and cost of product include home heating oil, propane, other petroleum products and liquidated damages billings.

	Three Months Ended								Three Months Ended
	March 31, 2020				March 31, 2019				June 30, 2020				June 30, 2019
Home Heating Oil and Propane	Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon
Volume		136.2				173.3				51.2				36.9
Sales	$	413.5	$	3.0358	$	554.4	$	3.1989	$	121.0	$	2.3603	$	116.0	$	3.1421
Cost	$	228.0	$	1.6739	$	342.7	$	1.9776	$	58.6	$	1.1429	$	71.1	$	1.9250
Gross Profit	$	185.5	$	1.3619	$	211.7	$	1.2213	$	62.4	$	1.2174	$	44.9	$	1.2171

Motor Fuel and Other Petroleum Products	Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon
Volume		36.6				39.0				34.2				42.3
Sales	$	67.8	$	1.8534	$	83.0	$	2.1311	$	44.2	$	1.2922	$	94.7	$	2.2395
Cost	$	57.4	$	1.5683	$	72.9	$	1.8717	$	34.7	$	1.0137	$	84.0	$	1.9870
Gross Profit	$	10.4	$	0.2851	$	10.1	$	0.2594	$	9.5	$	0.2785	$	10.7	$	0.2525

Total Product	Amount (in millions)		Amount (in millions)		Amount (in millions)		Amount (in millions)
Sales	$	481.3	$	637.4	$	165.2	$	210.7
Cost	$	285.4	$	415.6	$	93.3	$	155.1
Gross Profit	$	195.9	$	221.8	$	71.9	$	55.6

For the three months ended ~~March 31,~~June 30, 2020, total product gross profit was ~~$195.9~~$71.9 million, which was ~~$25.9~~$16.3 million, or ~~11.7% less~~29.3%, more than the three months ended ~~March 31,~~June 30, 2019, as ~~a decrease in home heating oil and propane volume ($45.3 million) was somewhat offset by~~the impact of an increase in home heating oil and propane ~~margins~~volume ($~~19.1~~17.4 million) ~~and~~was only partially offset by a ~~slight increase~~decrease in gross profit from other petroleum products ($~~0.3~~1.1 million).

Total installation costs for the three months ended ~~March 31,~~June 30, 2020 decreased ~~slightly to $17.6~~by $1.9 million or ~~0.4%~~9.5%, to $17.8 million, compared to ~~$17.7~~$19.7 million of installation costs for the three months ended ~~March 31,~~June 30, 2019. Installation costs as a percentage of installation sales were ~~87.2%~~82.7% for the three months ended ~~March 31,~~June 30, 2020 and ~~86.6%~~80.9% for the three months ended ~~March 31,~~June 30, 2019.

Service expense decreased by ~~$4.0~~$5.5 million, or ~~8.5%~~13.0%, to ~~$43.7~~$36.9 million for the three months ended ~~March 31,~~June 30, 2020, representing ~~105.0%~~81.3% of service sales, versus ~~$47.7~~$42.4 million, or ~~114.2%~~87.7% of service sales, for the three months ended ~~March 31,~~June 30, 2019. We realized a combined gross profit from service and installation of ~~$0.5~~$12.2 million for the three months ended ~~March 31,~~June 30, 2020 compared to a ~~loss~~gross profit of ~~$3.2~~$10.6 million for the three months ended ~~March 31,~~June 30, 2019, or an improvement of ~~$3.7~~$1.6 million. Acquisitions positively impacted the comparison by ~~$0.5~~$0.7 million and, in the base business, service and installation gross profit improved by ~~$3.2 million~~$0.9 million. In the base business, both service revenue and expenses declined due to ~~warmer temperatures~~the impact of ~~18.2%, which reduced~~COVID-19. However, the ~~demand for~~decline in service expense was greater than the decline in revenue. A portion of the expense decline related to service work that would normally have been performed during the third quarter of fiscal 2020. We believe such service work may be performed in future periods and ~~certain measures undertaken by the company to improve its operating efficiency.~~related expenses will be incurred in those periods. Management views the service and installation department on a combined basis because many overhead functions cannot be separated or precisely allocated to either service or installation billings.

During the three months ended ~~March 31,~~June 30, 2020, the change in the fair value of derivative instruments resulted in ~~an $11.7~~a $3.3 million ~~charge~~credit due to a decrease in the market value for unexpired hedges (a ~~$15.2~~$1.4 million charge) ~~partially~~more than offset by a ~~$3.5~~$4.7 million credit due to the expiration of certain hedged positions.

During the three months ended ~~March 31,~~June 30, 2019, the change in the fair value of derivative instruments resulted in a ~~$13.4~~$1.6 million ~~credit~~charge due to ~~an increase~~a decrease in the market value for unexpired hedges (a ~~$5.5~~$2.3 million ~~credit)~~charge), ~~and~~partially offset by a ~~$7.9~~$0.7 million credit due to the expiration of certain hedged positions.

For the three months ended ~~March 31,~~June 30, 2020, delivery and branch expenses decreased ~~$25.2~~$9.9 million, or ~~22.8%~~12.0%, to ~~$85.5~~$72.8 million, compared to ~~$110.7~~$82.7 million for the three months ended ~~March 31,~~June 30, 2019, as additional costs from acquisitions of ~~$3.7~~$1.8 million were more than offset by ~~a $28.9~~an $11.7 million, or ~~26.0%~~14.1%, decrease in ~~expenses~~expense within the base business. The decline in the base business was attributable to ~~a $7.2~~lower insurance expense of $4.7 million, ~~or 18.5%, reduction in direct delivery costs due to~~ lower ~~volume, a $0.9~~bad debt expense and credit card processing fees of $2.2 million, ~~decrease in expenses related to the Company’s concierge level~~lower medical cost of ~~service program (which was greatly curtailed in January 2019),~~$1.9 million and other reductions in operating costs totaling ~~$7.6~~$2.9 million, or ~~6.9%~~3.5%, as we continue to improve Star’s operating efficiency. ~~Operating expenses were also reduced by $13.1 million~~Bad debt expense was lower due to the ~~impact of our weather hedging program. As of December 31, 2019, as previously disclosed~~decline in ~~our quarterly report on Form 10-Q for~~sales dollars and insurance expense was lower due in part to the ~~quarter ended December 31, 2019, we expected to pay $3.0 million under our weather hedge program based on prevailing conditions as of that point in time; however, the~~warm weather for ~~the weather hedge period comprised of the three months ended March 31,~~fiscal 2020 and its impact on claim experience. We believe that medical claims were ~~ultimately warmer than the hedge strikes resulting~~lower due to COVID-19 “sheltering in ~~a reversal of the $3.0 million charge previously accrued~~place” and ~~the recording of an incremental benefit and receivable in the amount of $10.1 million. This $10.1 million was received in April 2020.~~“stay at home” orders, which may have curtailed plan members seeking medical attention.

For the three months ended ~~March 31,~~June 30, 2020, depreciation and amortization expense increased ~~$1.2~~$0.2 million, or ~~15.7%~~2.7% to ~~$9.1~~$8.4 million, compared to ~~$7.9~~$8.2 million for the three months ended ~~March 31,~~June 30, 2019, largely due to acquisitions.

For the three months ended ~~March 31,~~June 30, 2020, general and administrative expenses ~~decreased~~increased by ~~$4.4~~$1.5 million or ~~44.9%~~27.0%, to ~~$5.4~~$7.0 million, from ~~$9.8~~$5.5 million for the three months ended ~~March 31,~~June 30, 2019, primarily due to ~~lower legal~~an increase in profit sharing expense. The Company accrues approximately 6.0% of Adjusted EBITDA as defined in its profit sharing plan for distribution to its employees, and ~~professional fees~~this amount is payable when the Company achieves Adjusted EBITDA of ~~$2.6 million, a $1.5 million charge related~~at least 70% of the amount budgeted. The dollar amount of the profit sharing pool is subject to ~~the~~ ~~discontinued use~~ ~~of a tank monitoring system that occurred during the three months ended March 31, 2019 (that did not recur~~increases and decreases corresponding to increases and decreases in ~~the current fiscal year),~~ ~~and other savings of $0.3 million.~~Adjusted EBITDA.

For the three months ended ~~March 31,~~June 30, 2020, finance charge income decreased to ~~$1.3~~$1.2 million from ~~$1.4~~$1.9 million for the three months ended ~~March 31,~~June 30, 2019, primarily due to lower customer late payment ~~charges.~~charges due to improved collections and lower sales volume at lower selling prices.

For the three months ended ~~March 31,~~June 30, 2020, net interest expense decreased by ~~$0.4~~$0.7 million, or ~~13.7%~~22.2%, to ~~$2.8~~$2.3 million compared to ~~$3.2~~$3.0 million for the three months ended ~~March 31,~~June 30, 2019, primarily due to a decrease in average borrowings of $~~9.4~~55.0 million from $~~213.4~~194.5 million during the three months ended ~~March 31,~~June 30, 2019 to $~~204.0~~139.5 million during the three months ended ~~March 31, 2020 and a decrease in the weighted average interest rate from~~ ~~4.9% during~~ ~~the~~ ~~three months ended March 31, 2019 to~~ ~~4.7% during~~ ~~the~~ ~~three months ended March 31,~~June 30, 2020. To hedge against rising interest rates, the Company utilizes interest rate swaps. At ~~March 31,~~June 30, 2020 ~~$66.5~~$65.3 million, or ~~51%~~51.5%, of our long term debt, was fixed.

For the three months ended ~~March 31,~~June 30, 2020, amortization of debt issuance cost was ~~$0.3~~$0.2 million, essentially unchanged from the three months ended ~~March 31,~~June 30, 2019.

For the three months ended ~~March 31,~~June 30, 2020, the Company’s income tax ~~expense~~benefit decreased by ~~$4.5~~$8.1 million to ~~$24.7~~$2.0 million, from ~~$29.2~~$10.1 million for the three months ended ~~March 31,~~June 30, 2019, due to ~~a decrease~~an increase in income before income taxes of $~~18.5~~$31.1 million, primarily ~~due to~~reflecting an increase in Adjusted EBITDA of $25.7 million and a $~~25.1~~$4.9 million non-cash ~~unfavorable~~favorable change in the fair market value of derivative instruments.The Company’s effective income tax rate decreased from 29.7% for the six months ended March 31, 2020 to 28.6% for the nine months ended June 30, 2020 primarily due to lower state taxes. Since the net loss before income taxes for the three months ended June 30, 2020 was $2.1 million, the impact of this year to date rate decrease from the second to third quarter of fiscal 2020 caused the effective income tax rate for the three months to be 97.8%.

For the three months ended ~~March 31,~~June 30, 2020, Star’s net ~~income~~loss decreased ~~$13.9~~$23.1 million, to ~~$58.4~~less than $0.1 million, primarily due to an unincrease in Adjusted EBITDA of $25.7 million, described below, and a favorable change in the fair value of derivative instruments of ~~$25.1~~$4.9 million, partially offset by ~~an increase in Adjusted EBITDA of $7.4 million, described below, and~~ a decrease in income tax expense of ~~$4.5~~$8.1 million.

For the three months ended ~~March 31,~~June 30, 2020, Adjusted EBITDA increased by ~~$7.4~~$25.7 million, ~~or 7.5%,~~ to ~~$106.9 million.~~$5.7 million compared to the three months ended June 30, 2019. Acquisitions provided ~~$4.9~~$1.2 million of Adjusted EBITDA, ~~and~~while Adjusted EBITDA in the base business increased by ~~$2.5~~$24.5 million as the impact of ~~lower volume sold (due to 18.2% warmer weather and net customer attrition) was largely offset by~~ higher ~~per gallon~~ home heating oil and propane ~~margins,~~volume sold, due to colder temperatures, lower operating expenses in the base business of ~~$20.0 million, a favorable change in the amount due under the Company’s weather hedge of $13.1~~$10.2 million, and an improvement in the net service and installation profitability of ~~$3.2 million. As discussed above, product gross profit~~$0.9 million was ~~favorably impacted by $6.9 million due to the Company’s product costing method, and the Company anticipates that product gross profit will be~~only partially reduced by a ~~similar amount over future periods.~~decline in the Company’s motor fuels business.

EBITDA and Adjusted EBITDA should not be considered as an alternative to net income (as an indicator of operating performance) or as an alternative to cash flow (as a measure of liquidity or ability to service debt obligations), but provide additional information for evaluating our ability to make the Minimum Quarterly Distribution. EBITDA and Adjusted EBITDA are calculated as follows:

	Three Months Ended March 31,						Three Months Ended June 30,
(in thousands)	2020			2019			2020			2019
Net income	$	58,408		$	72,325
Net loss							$	(46	)	$	(23,098	)
Plus:
Income tax expense		24,700			29,239
Income tax benefit								(2,005	)		(10,055	)
Amortization of debt issuance costs		253			244			241			253
Interest expense, net		2,756			3,194			2,308			2,967
Depreciation and amortization		9,089			7,858			8,447			8,225
EBITDA (a)		95,206			112,860			8,945			(21,708	)
(Increase) / decrease in the fair value of derivative instruments		11,670			(13,401	)		(3,279	)		1,630
Adjusted EBITDA (a)		106,876			99,459			5,666			(20,078	)
Add / (subtract)
Income tax expense		(24,700	)		(29,239	)
Income tax benefit								2,005			10,055
Interest expense, net		(2,756	)		(3,194	)		(2,308	)		(2,967	)
Provision for losses on accounts receivable		2,193			3,439			1,353			3,532
Decrease (increase) in accounts receivables		16,183			(63,506	)
Decrease in accounts receivables								74,307			124,456
Decrease in inventories		27,435			16,446			9,127			5,699
Decrease in customer credit balances		(16,564	)		(24,356	)
Increase in customer credit balances								13,925			12,299
Change in deferred taxes		(1,114	)		(8,719	)		(1,376	)		(1,871	)
Change in other operating assets and liabilities		(5,087	)		30,200			2,723			(26,442	)
Net cash provided by operating activities	$	102,466		$	20,530		$	105,422		$	104,683
Net cash used in investing activities	$	(5,534	)	$	(19,198	)	$	(5,521	)	$	(53,268	)
Net cash used in financing activities	$	(101,173	)	$	(8,749	)	$	(43,484	)	$	(62,070	)

The method of calculating Adjusted EBITDA may not be consistent with that of other companies, and EBITDA and Adjusted EBITDA both have limitations as analytical tools and so should not be viewed in isolation but in conjunction with measurements that are computed in accordance with GAAP. Some of the limitations of EBITDA and Adjusted EBITDA are:

For the ~~six~~nine months ended ~~March 31,~~June 30, 2020, the retail volume of home heating oil and propane sold decreased by ~~43.3~~29.0 million gallons, or ~~15.1%~~9.0%, to ~~243.3~~294.6 million gallons, compared to ~~286.6~~323.6 million gallons for the ~~six~~nine months ended ~~March 31,~~June 30, 2019. 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~~nine months ended ~~March 31,~~June 30, 2020 were ~~11.6%~~6.0% warmer than the ~~six~~nine months ended ~~March 31,~~June 30, 2019 and ~~13.8%~~10.2% warmer than normal, as reported by NOAA. For the twelve months ended ~~March 31,~~June 30, 2020, net customer attrition for the base business was ~~4.6%~~4.0%. 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:

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~~nine months ended ~~March 31,~~June 30, 2020 compared to the ~~six~~nine months ended ~~March 31,~~June 30, 2019:

	Six Months Ended						Nine Months Ended
Customers	March 31, 2020			March 31, 2019			June 30, 2020			June 30, 2019
Residential Variable		42.1	%		41.2	%		41.6	%		40.9	%
Residential Price-Protected (Ceiling and Fixed Price)		45.6	%		46.3	%		46.0	%		46.5	%
Commercial/Industrial		12.3	%		12.5	%		12.4	%		12.6	%
Total		100.0	%		100.0	%		100.0	%		100.0	%

Volume of other petroleum products sold decreased by ~~2.9~~11.0 million gallons, or ~~3.6%~~8.9%, to ~~78.0~~112.2 million gallons for the ~~six~~nine months ended ~~March 31,~~June 30, 2020, compared to ~~80.9~~123.2 million gallons for the ~~six~~nine months ended ~~March 31,~~June 30, 2019 ~~attributable to~~as the additional volume provided by acquisitions of 9.2 million gallons was reduced by lower wholesale volume sales (2.1 million gallons) due to the ~~11.6%~~ warmer weather and lower volume sales of motor fuels (18.1 million gallons) resulting from COVID-19’s impact on economic activity and the loss of certain accounts. We believe that the decline in motor fuel sales may continue in the near term.

For the ~~six~~nine months ended ~~March 31,~~June 30, 2020, product sales decreased $0.2 billion, or ~~16.6%~~17.4%, to ~~$0.9~~$1.1 billion, compared to ~~$1.1~~$1.3 billion for the ~~six~~nine months ended ~~March 31,~~June 30, 2019, reflecting a decrease in wholesale product cost of ~~$0.1809~~$0.3252 per gallon, or ~~9.2%~~16.6%, and a decrease in total volume sold of ~~12.6%~~8.9%.

For the ~~six~~nine months ended ~~March 31,~~June 30, 2020, installations and services revenue decreased ~~$0.5~~$6.2 million, or ~~0.3%~~2.9%, to ~~$138.0~~$205.0 million, compared to ~~$138.5~~$211.2 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2019 as the additional revenue provided from acquisitions of ~~$8.5~~$10.3 million was reduced by lower ~~revenues~~revenue in the base business of ~~$9.0~~$16.5 million. In the base business, service and installation sales declined due to net customer attrition and the impact of ~~11.6%~~ warmer weather experienced during 2019-2020 heating season, which reduced billable service revenue and the need for the installation of new equipment. During the third quarter of fiscal 2020 we ceased making non-emergency service calls that would have been performed under normal conditions due to COVID-19. These service calls may be deferred to subsequent periods and may increase our future service costs. In addition, we believe that some of our customers have

deferred non-emergency services, including the installation of new equipment due to COVID-19, which has caused a decline in equipment installation sales and reactive service calls and may continue to reduce future service and installation income.

For the ~~six~~nine months ended ~~March 31,~~June 30, 2020, cost of product decreased ~~$148.8~~$210.6 million, or ~~20.6%~~24.0%, to ~~$573.0~~$666.3 million, compared to ~~$721.9~~$876.9 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2019, due largely to a decrease in total volume sold of ~~12.6%~~8.9%, and a ~~$0.1809~~$0.3252 per gallon, or ~~9.2%~~16.6%, decrease in wholesale product cost.

Product sales and cost of product include home heating oil, propane, other petroleum products and liquidated damages billings.

	Six Months Ended								Nine Months Ended
	March 31, 2020				March 31, 2019				June 30, 2020				June 30, 2019
Home Heating Oil and Propane	Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon
Volume		243.3				286.6				294.6				323.6
Sales	$	756.8	$	3.1102	$	918.6	$	3.2046	$	877.8	$	2.9797	$	1,034.6	$	3.1975
Cost	$	436.7	$	1.7947	$	565.1	$	1.9714	$	495.3	$	1.6813	$	636.1	$	1.9661
Gross Profit	$	320.1	$	1.3155	$	353.5	$	1.2332	$	382.5	$	1.2984	$	398.5	$	1.2314

Motor Fuel and Other Petroleum Products	Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon
Volume		78.0				80.9				112.2				123.2
Sales	$	157.2	$	2.0143	$	177.5	$	2.1946	$	201.4	$	1.7941	$	272.2	$	2.2100
Cost	$	136.3	$	1.7471	$	156.8	$	1.9382	$	171.0	$	1.5234	$	240.8	$	1.9549
Gross Profit	$	20.9	$	0.2672	$	20.7	$	0.2564	$	30.4	$	0.2707	$	31.4	$	0.2551

Total Product	Amount (in millions)		Amount (in millions)		Amount (in millions)		Amount (in millions)
Sales	$	914.0	$	1,096.1	$	1,079.2	$	1,306.8
Cost	$	573.0	$	721.9	$	666.3	$	876.9
Gross Profit	$	341.0	$	374.2	$	412.9	$	429.9

For the ~~six~~nine months ended ~~March 31,~~June 30, 2020, total product gross profit was ~~$341.0~~$412.9 million, which was ~~$33.2~~$17.0 million, or ~~8.9%~~4.0%, less than the ~~six~~nine months ended ~~March 31,~~June 30, 2019, as a decrease in home heating oil and propane volume sold ($~~53.4~~35.7 million) and gross profit from other petroleum products ($1.0 million) was slightly offset by higher margins ($~~20.0 million) and an increase in gross profit from other petroleum products ($0.2~~19.7 million).

Total installation costs for the ~~six~~nine months ended ~~March 31,~~June 30, 2020 decreased ~~slightly~~ to ~~$42.4~~$60.2 million, compared to ~~$42.5~~$62.2 million in installation costs for the ~~six~~nine months ended ~~March 31,~~June 30, 2019. Installation costs as a percentage of installation sales were ~~83.5%~~83.3% for the ~~six~~nine months ended ~~March 31,~~June 30, 2020 and ~~84.4%~~83.2% for the ~~six~~nine months ended ~~March 31,~~June 30, 2019.

Service expense decreased by ~~$4.6~~$10.2 million, or ~~4.8%~~7.3%, to ~~$92.6~~$129.5 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2020, representing ~~106.0%~~97.6% of service sales, versus ~~$97.2~~$139.7 million, or ~~110.3%~~102.3% of service sales, for the ~~six~~nine months ended ~~March 31,~~June 30, 2019. We realized a combined gross profit from service and installation of ~~$3.1~~$15.3 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2020 compared to a gross ~~loss~~profit of ~~$1.2~~$9.4 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2019, an improvement of ~~$4.3~~$5.9 million in profitability. Acquisitions positively impacted the comparison by ~~$1.4~~$2.2 million and in the base business, service gross profit improved by ~~$2.9~~$3.7 million due to warmer temperatures of ~~11.6%~~6.0% which reduced the demand for service, and certain measures undertaken by the company to improve operating efficiency. In the base business, both service revenue and expenses declined due to the impact of COVID-19 during the

~~efficiency.~~ third quarter of fiscal 2020; however, the decline in service expense was greater than the decline in revenue. A portion of the expense decline related to service work that would normally have been performed during the third quarter of fiscal 2020. We believe such service work may be performed in future periods and related expenses will be incurred in those periods. Management views the service and installation department on a combined basis because many overhead functions cannot be separated or precisely allocated to either service or installation billings.

During the ~~six~~nine months ended ~~March 31,~~June 30, 2020, the change in the fair value of derivative instruments resulted in a ~~$5.3~~$2.0 million charge due to a decrease in the market value for unexpired hedges (an $11.3 million charge) partially offset by a $9.3 million credit due to the expiration of certain hedged positions.

During the nine months ended June 30, 2019, the change in the fair value of derivative instruments resulted in a $19.3 million charge due to a decrease in the market value for unexpired hedges (a ~~$14.0~~$5.4 million charge) ~~partially offset by an $8.7 million credit due to the expiration of certain hedged positions~~.

During the six months ended March 31, 2019, the change in the fair value of derivative instruments resulted in a $17.6 million charge due to a decrease in the market value for unexpired hedges (a $5.3 million charge), and a ~~$12.3~~$13.9 million charge due to the expiration of certain hedged positions.

For the ~~six~~nine months ended ~~March 31,~~June 30, 2020, delivery and branch expenses decreased ~~$31.2~~$41.1 million, or ~~14.6%~~13.9%, to ~~$182.2~~$254.9 million, compared to ~~$213.4~~$296.0 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2019, as additional costs from acquisitions of ~~$7.6~~$9.4 million were more than offset by a ~~$38.8~~$50.5 million, or ~~18.2%~~17.1%, decrease in expenses within the base business. The decline in the base business was attributable to a $10.0 million, or ~~14.4%~~11.1%, reduction in direct delivery costs due to lower volume, lower insurance expense of $6.1 million, a ~~$3.5~~$4.0 million decrease in expenses related to the Company’s concierge level of service program (which was greatly curtailed in January 2019), lower bad debt expense and credit card processing fees of $4.1 million, lower medical cost of $3.3 million and other reductions in operating costs totaling ~~$13.1~~$10.8 million, or ~~6.1%~~3.6%, as we continue to improve Star’s operating efficiency. Bad debt expense was lower due to the decline in sales dollars, and insurance expense was lower due in part to the warm weather for fiscal 2020 and its impact on claim experience. We believe that medical claims were lower due to COVID-19 “sheltering in place” and “stay at home” orders, which curtailed plan members seeking medical attention. Operating expenses were also reduced by $12.2 million due to the impact of our weather hedging program. As of ~~March 31,~~June 30, 2019 we recorded a charge of $2.1 million, versus a benefit ~~and receivable~~ of $10.1 million as of ~~March 31, 2020. The $10.1 million was received in April~~June 30, 2020.

For the ~~six~~nine months ended ~~March 31,~~June 30, 2020, depreciation and amortization expense increased ~~$2.5~~$2.8 million, or ~~16.3%~~11.6%, to ~~$18.1~~$26.6 million, compared to ~~$15.6~~$23.8 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2019 largely due to acquisitions.

For the ~~six~~nine months ended ~~March 31,~~June 30, 2020, general and administrative expenses decreased by ~~$5.8~~$4.3 million, or ~~32.5%~~18.4%, to ~~$11.9~~$18.9 million from ~~$17.7~~$23.1 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2019, primarily due to lower legal and professional expenses of ~~$3.6~~$4.4 million, a $1.5 million charge related to the discontinued use of a tank monitoring system that occurred during the ~~six~~nine months ended ~~March 31,~~June 30, 2019 (and did not recur in the current fiscal year), and other savings of ~~$0.7 million.~~$1.1 million, partially offset by a $2.7 million increase in profit sharing expense. The Company accrues approximately 6.0% of Adjusted EBITDA as defined in its profit sharing plan for distribution to its employees, and 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 is subject to increases and decreases corresponding to increases and decreases in Adjusted EBITDA.

For the ~~six~~nine months ended ~~March 31,~~June 30, 2020, finance charge income decreased to ~~$2.0~~$3.3 million from ~~$2.3~~$4.2 million for the ~~six month~~nine months ended ~~March 31,~~June 30, 2019, primarily due to lower customer late payment ~~charges.~~charges due to improved collections and lower sales volume at lower selling prices.

For the ~~six~~nine months ended ~~March 31,~~June 30, 2020, net interest expense decreased by ~~$0.3~~$0.9 million, or ~~4.8%~~10.8%, to ~~$5.4~~$7.7 million compared to ~~$5.7~~$8.7 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2019. The change year-over-year reflects ~~an increase~~a decrease in average borrowings of $$7.0~~16.9~~ million from $~~177.1~~182.9 million during the ~~six~~nine months ended ~~March 31,~~June 30, 2019 to ~~$194.0~~$175.9 million during the ~~six~~nine months ended ~~March 31,~~June 30, 2020, ~~offset by~~and a decrease in the weighted average interest rate from 5.2% during the ~~six~~nine months ended ~~March 31,~~June 30, 2019 to ~~4.9~~5.0% during the ~~six~~nine months ended ~~March 31,~~June 30, 2020. ~~The increase in average borrowings of $16.9~~ ~~million was largely used to fund acquisitions.~~ To hedge against rising interest rates, the Company utilizes interest rate swaps. At ~~March 31,~~June 30, 2020, ~~$66.5~~

$65.3 million, or ~~51%~~51.5%, of our long term debt, was fixed. Interest income increased by ~~$0.3~~$0.2 million primarily due to higher cash deposited into our captive insurance company.

For the ~~six~~nine months ended ~~March 31,~~June 30, 2020, amortization of debt issuance costs was ~~$0.5~~$0.7 million, essentially unchanged from the ~~six~~nine months ended ~~March 31,~~June 30, 2019.

For the ~~six~~nine months ended ~~March 31,~~June 30, 2020, the Company’s income tax expense increased by ~~$6.3~~$14.3 million, to ~~$36.5~~$34.5 million, from ~~$30.2~~$20.2 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2019, due primarily to an increase in income before income taxes of $~~17.8~~$48.9 million, ~~that was~~ primarily due toan increase in Adjusted EBITDA of $33.4 million and a $~~12.4~~$17.3 million non-cash favorable change in the fair market value of derivative instruments.

For the ~~six~~nine months ended ~~March 31,~~June 30, 2020, net income increased ~~$11.5~~$34.6 million, or ~~15.4%~~67.1%, to ~~$86.2~~$86.1 million due primarily to a $33.4 million increase in Adjusted EBITDA, described below, and a favorable change in the fair value of derivative instruments of ~~$12.4~~$17.3 million, ~~and a $7.7 million increase in Adjusted EBITDA, described below, that was~~ partially offset by a ~~$6.3~~$14.3 million increase in income tax expense.

For the ~~six~~nine months ended ~~March 31,~~June 30, 2020, Adjusted EBITDA increased by ~~$7.7~~$33.4 million, or ~~5.3%~~26.9%, to ~~$152.0 million.~~$157.6 million compared to the nine months ended June 30, 2019. Acquisitions provided $~~8.0~~9.2 million of Adjusted EBITDA, ~~and~~while Adjusted EBITDA in the base business ~~decreased~~increased by $~~0.3~~24.2 million ~~million as~~. In the base business, the impact of ~~lower volume sold (due to 11.6% warmer weather and net customer attrition) was largely offset by~~ higher per gallon home heating oil and propane margins of 6.3 cents per gallon, lower operating expenses in the base business of ~~$32.1~~$54.8 million, a favorable change in the amount due under the Company’s weather hedge of $12.2 million, and an improvement in the net service and installation profitability of ~~$2.9 million. As discussed above, product gross profit~~$3.7 million was ~~favorably impacted~~only partially offset by ~~$6.9 million~~the impact of lower volume sold (due to 6.0% warmer weather, net customer attrition and other factors) and the decline in our motor fuels business. With regard to our weather hedge, we benefited by lower degree days in fiscal 2020 due to warmer weather during the ~~Company’s product costing method,~~winter hedge period – resulting in us collecting $10.1 million. The third quarter of fiscal 2020, by contrast, was colder than normal and resulted in us selling more volume than anticipated. If the ~~Company anticipates that product gross profit will be reduced~~additional degree days in the third quarter had occurred in the period covered by ~~a similar amount over future periods.~~the weather hedge (November to March) the payout under our weather hedge would have been less than $2.0 million.

EBITDA and Adjusted EBITDA should not be considered as an alternative to net income (as an indicator of operating performance) or as an alternative to cash flow (as a measure of liquidity or ability to service debt obligations), but provide additional information to us for evaluating our ability to make the Minimum Quarterly Distribution. EBITDA and Adjusted EBITDA are calculated as follows:

	Six Months Ended March 31,						Nine Months Ended June 30,
(in thousands)	2020			2019			2020			2019
Net income	$	86,163		$	74,640		$	86,117		$	51,542
Plus:
Income tax expense		36,482			30,212			34,477			20,157
Amortization of debt issuance costs		488			503			729			756
Interest expense, net		5,435			5,710			7,743			8,677
Depreciation and amortization		18,139			15,603			26,586			23,828
EBITDA (a)		146,707			126,668			155,652			104,960
(Increase) / decrease in the fair value of derivative instruments		5,253			17,638			1,974			19,268
Adjusted EBITDA (a)		151,960			144,306			157,626			124,228
Add / (subtract)
Income tax expense		(36,482	)		(30,212	)		(34,477	)		(20,157	)
Interest expense, net		(5,435	)		(5,710	)		(7,743	)		(8,677	)
Provision for losses on accounts receivable		3,203			4,968			4,556			8,500
Increase in accounts receivables		(69,562	)		(159,249	)
Decrease (increase) in inventories		12,008			(3,741	)
Decrease (increase) in accounts receivables								4,745			(34,793	)
Decrease in inventories								21,135			1,958
Decrease in customer credit balances		(32,462	)		(38,476	)		(18,537	)		(26,177	)
Change in deferred taxes		222			(9,335	)		(1,154	)		(11,206	)
Change in other operating assets and liabilities		27,423			55,088			30,146			28,646
Net cash provided by (used in) operating activities	$	50,875		$	(42,361	)
Net cash provided by operating activities							$	156,297		$	62,322
Net cash used in investing activities	$	(13,197	)	$	(27,310	)	$	(18,718	)	$	(80,578	)
Net cash (used in) provided by financing activities	$	(32,276	)	$	71,512		$	(75,760	)	$	9,442

We use the indirect method to prepare our Consolidated Statements of Cash Flows. Under this method, we reconcile net income to cash flows provided by operating activities by adjusting net income for those items that impact net income but do not result in actual cash receipts or payment during the period.

Due to the seasonal nature of our business, cash is generally used in operations during the winter (our first and second fiscal quarters) as we require additional working capital to support the high volume of sales during this period, and cash is generally provided by operating activities during the spring and summer (our third and fourth fiscal quarters) when customer payments exceed the cost of deliveries.

During the ~~six~~nine months ended ~~March 31,~~June 30, 2020, cash provided by operating activities increased ~~$93.2~~$94.0 million to ~~$50.9~~$156.3 million, compared to ~~$42.4~~$62.3 million of cash used in operating activities during the ~~six~~nine months ended ~~March 31,~~June 30, 2019. The increase was driven by a ~~$95.7~~$47.2 million favorable change in accounts receivable (including customer credit balances) due to improved collections and lower sales volume at lower selling prices, $26.1 million increase in cash flows from operations, a ~~$15.7~~$19.2 million favorable change in inventory due primarily to ~~fewer gallons~~lower cost of liquid product on hand as of ~~March 31,~~June 30, 2020 ~~at lower cost~~ as compared to ~~March 31,~~June 30, 2019, which were partially offset by a $6.5 million unfavorable change in accounts payable due primarily to the timing of inventory purchases, a $6.2 million increase in income taxes paid, a $2.7 million reduction in cash flows from operations,and $1.8 million lower escheatment payments to state authorities, and ~~$1.0~~partially offset by $0.3 million of other changes in working capital.

Our capital expenditures for the ~~six~~nine months ended ~~March 31,~~June 30, 2020 totaled $~~5.7~~8.6 million, as we invested in computer hardware and software ($~~1.4~~1.9 million), refurbished certain physical plants ($~~1.4~~2.0 million), expanded our propane operations ($~~1.0~~1.1 million) and made additions to our fleet and other equipment ($~~1.9~~3.6 million).

During the ~~six~~nine months ended ~~March 31,~~June 30, 2020, we deposited $~~6.4~~8.9 million into an irrevocable trust to secure certain liabilities for our captive insurance company and another $~~0.8~~1.1 million of earnings were reinvested into the irrevocable trust. The cash deposited into the trust is shown on our balance sheet as captive insurance collateral and, correspondingly, reduced cash on our balance sheet. We believe that investments into the irrevocable trust will lower our letter of credit fees, increase interest income on invested cash balances, and provide us with certain tax advantages attributable to a captive insurance company.

During the ~~six~~nine months ended ~~March 31,~~June 30, 2020, the Company acquired the customer list and the assets of a heating oil dealer for an aggregate purchase price of approximately $0.5 million.

Our capital expenditures for the ~~six~~nine months ended ~~March 31,~~June 30, 2019 totaled $~~6.8~~8.2 million, as we invested in computer hardware and software ($~~3.0~~3.5 million), refurbished certain physical plants ($~~0.8~~1.0 million), expanded our propane operations ($~~1.9~~2.1 million) and made additions to our fleet and other equipment ($~~1.1~~1.6 million).

During the ~~six~~nine months ended ~~March 31,~~June 30, 2019, we deposited ~~$6.8~~$9.5 million into an irrevocable trust to secure certain liabilities for our captive insurance company and another ~~$0.8~~$1.1 million of earnings were reinvested into the irrevocable trust.

During the ~~six~~nine months ended ~~March 31,~~June 30, 2019 the Company acquired ~~a propane dealer~~two liquid product dealers and the assets of one of its subcontractors for an aggregate purchase price of approximately ~~$13.7~~$62.8 million. The gross purchase price was allocated ~~$11.2~~$44.9 million to intangible assets, ~~$2.7~~$13.1 million to fixed assets, $0.1 million to other long-term assets and ~~reduced by $0.2~~$4.7 million for working ~~capital credits.~~capital.

During the ~~six~~nine months ended ~~March 31,~~June 30, 2020, we refinanced our five-year term loan and the revolving credit facility with the execution of the fifth amended and restated revolving credit facility agreement. The $130 million of proceeds from the new term loan were used to repay the $90.0 million outstanding balance of the term loan, $39.0 million of the revolving credit facility borrowings under the old credit facility, and $1.0 million of debt issuance costs. We also paid an additional ~~$0.3~~$0.6 million of debt issuance costs, ~~borrowed~~repaid an additional net balance of ~~$1.5~~$22.5 million under our revolving credit facility, repaid $~~2.5~~5.8 million of our term loan, repurchased ~~2.1~~3.2 million Common Units for $~~18.6~~28.0 million in connection with our unit repurchase plan, and paid distributions of $~~11.8~~17.7 million to our Common Unit holders and ~~$0.4~~$0.7 million to our General Partner unit holders (including ~~$0.4~~$0.6 million of incentive distributions as provided in our Partnership Agreement).

During the ~~six~~nine months ended ~~March 31,~~June 30, 2019 we paid distributions of ~~$12.3~~$18.6 million to our Common Unit holders and ~~$0.4~~$0.6 million to our General Partner unit holders (including ~~$0.3~~$0.5 million of incentive distributions as provided in our Partnership Agreement). We borrowed $139.3 million under our revolving credit facility and subsequently repaid ~~$25.8~~$70.3 million. We also repaid ~~$2.5~~$5.0 million of our term loan and repurchased ~~2.8~~3.7 million common units for ~~$26.4~~$34.9 million in connection with our unit repurchase plan.

Our primary uses of liquidity are to provide funds for our working capital, capital expenditures, distributions on our units, acquisitions and unit repurchases. Our ability to provide funds for such uses depends on our future performance, which will be subject to prevailing economic, financial, and business conditions, especially in light of the impact of COVID-19, weather, the ability to collect current and future accounts receivable, the ability to pass on the full impact of high product costs to customers, the effects of high net customer attrition, conservation and other factors. Capital requirements, at least in the near term, are expected to be provided by cash flows from operating activities, cash on hand as of ~~March 31,~~June 30, 2020 ($~~10.3~~66.7 million) or a combination thereof. To the extent future capital requirements exceed cash on hand plus cash flows from operating activities, we anticipate that working capital will be financed by our revolving credit facility, as discussed below, and ~~reduced~~ from subsequent seasonal reductions in inventory and accounts receivable. As of ~~March 31,~~June 30, 2020, we had accounts receivable of ~~$187.1~~$111.9 million of which ~~$149.4~~$85.3 million is due from residential customers and ~~$37.7~~$26.6 million is due from commercial customers. Our ability to borrow from our bank group is based in part on the aging of these accounts receivable. If these balances do not meet the eligibility tests as found in our fifth amended and restated credit agreement, our ability to borrow will be reduced and our anticipated cash flow from operating activities will also be reduced. As of ~~March 31,~~June 30, 2020, we had ~~$24.0~~ no~~million in~~ borrowings under our revolving credit facility, ~~$130~~$126.8 million under our term loan and $4.4 million in letters of credit outstanding. ~~We are also analyzing whether to participate in certain Federal Reserve-backed loan programs adopted in the wake of the coronavirus pandemic that are available to companies our size.~~

Under the terms of our credit agreement, we must maintain at all times Availability (borrowing base less amounts borrowed and letters of credit issued) of 15% of the maximum facility size and a fixed charge coverage ratio of not less than 1.15. We must also maintain a senior secured leverage ratio that cannot be more than 3.0 as of June 30th or September 30th, and no more than 4.5 as of December 31st or March 31st. As of ~~March 31,~~June 30, 2020, Availability, as defined in the credit agreement, was ~~$210.4~~$226.4 million, and we were in compliance with the fixed charge coverage ratio and senior secured leverage ratio.

Maintenance capital expenditures for the remainder of fiscal 2020 are estimated to be approximately ~~$4.0~~$4.0 million to ~~$5.5~~$5.0 million, excluding the capital requirements for leased fleet. In addition, we plan to invest approximately ~~$0.5~~$0.2 million to ~~$1.0~~$0.3 million in our propane operations. Distributions for the balance of fiscal 2020, at the current quarterly level of $0.1325 per unit, would result in an aggregate of approximately ~~$12.0~~$5.8 million to Common Unit holders, ~~$0.5~~$0.2 million to the General Partner (including ~~$0.5~~$0.2 million of incentive distribution as provided for in our Partnership Agreement) and ~~$0.5~~$0.2 million to management pursuant to the management incentive compensation plan which provides for certain members of management to receive incentive distributions that would otherwise be payable to the General Partner. Under the terms of our credit facility, our term loan is repayable in quarterly

payments of $3.25 million (the first of which was made on April 1, 2020) and, depending on our fiscal 2020 results, we may be required to make an additional annual payment (See Note 11 - Long-Term Debt and Bank Facility Borrowings). In addition, subject to any additional liquidity issues or concerns resulting from the current COVID-19 pandemic, we intend to continue to repurchase Common Units pursuant to our unit repurchase plan, as amended from time to time, and seek attractive acquisition opportunities within the Availability constraints of our revolving credit facility and funding resources.

There has been no material change to Contractual Obligations and Off-Balance Sheet Arrangements since our September 30, 2019 Form 10-K disclosure and therefore, the table has not been included in this Form 10-Q.

Refer to Note 2 – Summary of Significant Accounting Policies for discussion regarding the impact of accounting standards that were recently adopted and issued but not yet effective, on our consolidated financial statements.

We are exposed to interest rate risk primarily through our bank credit facilities. We utilize these borrowings to meet our working capital needs.

At ~~March 31,~~June 30, 2020, we had outstanding borrowings totaling $~~154.0~~$126.8 million, which are subject to variable interest rates under our credit agreement. In the event that interest rates associated with this facility were to increase 100 basis points, the after tax impact on annual future cash flows would be a decrease of $~~1.1~~$0.9 million.

We regularly use derivative financial instruments to manage our exposure to market risk related to changes in the current and future market price of home heating oil and vehicle fuels. The value of market sensitive derivative instruments is subject to change as a result of movements in market prices. Sensitivity analysis is a technique used to evaluate the impact of hypothetical market value changes. Based on a hypothetical ten percent increase in the cost of product at ~~March 31,~~June 30, 2020, the potential impact on our hedging activity would be to increase the fair market value of these outstanding derivatives by ~~$0.4~~$2.0 million to a fair market value of ~~$(13.8)~~$(8.1) million; and conversely a hypothetical ten percent decrease in the cost of product would decrease the fair market value of these outstanding derivatives by ~~less than $0.1~~$1.2 million to a fair market value of ~~$(14.2)~~$(11.3) million.

The General Partner’s chief executive officer and chief financial officer evaluated the effectiveness of the Company’s disclosure controls and procedures (as that term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended) as of ~~March 31,~~June 30, 2020. Based on that evaluation, such chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were effective as of ~~March 31,~~June 30, 2020 at the reasonable level of assurance. For purposes of Rule 13a-15(e), the term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Act”) (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its chief executive officer and chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

No changes in the Company’s internal control over financial reporting occurred during the Company’s most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

The General Partner and the Company believe that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a Company have been detected. Therefore, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our disclosure controls and procedures are designed to provide such reasonable assurances of achieving our desired control objectives, and the chief executive officer and chief financial officer of the General Partner have concluded, as of ~~March 31,~~June 30, 2020, that our disclosure controls and procedures were effective in achieving that level of reasonable assurance.

The following risk factor is in addition to our risk factors included in Part I Item 1A. “Risk Factors” in our Fiscal 2019 Form 10-K that could affect our business, financial condition and results of operations In addition to the other information set forth in this Report, investors should carefully review and consider the information regarding certain factors, which could materially affect our business, results of operations, financial condition and cash flows set forth in Part I Item 1A. “Risk Factors” in our Fiscal 2019 Form ~~10-K.~~10-K and in Part II Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

Our business, results of operations, financial condition and cash flows may be adversely affected by global public health pandemics, including COVID-19, an infectious disease caused by the novel coronavirus, and their related impact on the economy and financial markets.

A global public health pandemic, including COVID-19, poses the risk that we or our employees, vendors, or customers may be prevented from conducting business activities for an indefinite period of time, including shutdowns that may be requested or mandated by governmental authorities, restrictions on travel to or from locations where we obtain product, provide services or where our customers are located. While as of the date hereof, we have been deemed an essential business by state and local governmental officials and are therefore permitted to continue operations during the COVID-19 pandemic, our continued status as an essential business in all or certain of our markets could change by subsequent order and is beyond our control If workers at one or more of our offices or the offices of our suppliers become ill or are quarantined and in either or both events are therefore unable to work, our operations could be subject to disruption. Further, our customers’ financial condition may be adversely impacted as a result of the impacts of COVID-19, or another global public health pandemic, and efforts taken to prevent its spread, which could result in reduced demand or impact their ability to pay for our products and services. The COVID-19 pandemic has also caused, and is likely to continue to cause, severe economic, market and other disruptions worldwide. We cannot assure you that conditions in the bank lending, capital and other financial markets will not continue to deteriorate as a result of the pandemic, or that our access to capital and other sources of funding will not become constrained, which could adversely affect the availability and terms of future borrowings,

renewals or refinancings. The extent, if any, to which the COVID-19 pandemic will impact our business remains uncertain, however, there could be a material adverse impact on our business, financial condition, results of operations, or cash flows.

The potential effects of COVID-19 also could impact many of our risk factors, included in Part 1, Item A of our Fiscal 2019 Form 10-K, including, but not limited to our profitability, laws and regulations affecting our business, fluctuations in the financial markets and hedging, the availability of future borrowings, the costs of current and future borrowings, valuation of our pension assets and obligations, and credit risks of our customers and counterparties. However, given the evolving health, economic, social, and governmental environments, the potential impact that COVID-19 could have on our risk factors that are further described in our Fiscal 2019 Form 10-K remain uncertain.

Note 4 to the Condensed Consolidated Financial Statements concerning the Company’s repurchase of Common Units during the ~~six~~nine months ended ~~March 31,~~June 30, 2020 is incorporated into this Item 2 by reference.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf of the undersigned thereunto duly authorized:

Delaware	06-1437793
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

9 West Broad Street Stamford, Connecticut	06902
(Address of principal executive office)

		Page
Part I Financial Information
Item 1 - Condensed Consolidated Financial Statements		3
Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30, 2020 (unaudited) and September 30, 2019		3
Condensed Consolidated Statements of Operations (unaudited) for the three and ~~six~~nine months ended ~~March 31,~~June 30, 2020 and ~~March 31,~~June 30, 2019		4
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three and ~~six~~nine months ended ~~March 31,~~June 30, 2020 and ~~March 31,~~June 30, 2019		5
Condensed Consolidated Statement of Partners’ Capital (unaudited) for the three and ~~six~~nine months ended ~~March 31,~~June 30, 2020 and ~~March 31,~~June 30, 2019		6-7
Condensed Consolidated Statements of Cash Flows (unaudited) for the ~~six~~nine months ended ~~March 31,~~June 30, 2020 and ~~March 31,~~June 30, 2019		8
Notes to Condensed Consolidated Financial Statements (unaudited)		9-22
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations		23-39
Item 3 - Quantitative and Qualitative Disclosures About Market Risk		40
Item 4 - Controls and Procedures		40
Part II Other Information:		41
Item 1 - Legal Proceedings		41
Item 1A - Risk Factors		~~41-42~~41
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds		4241
Item 6 - Exhibits		4342
Signatures		4443

(in millions of gallons)	Heating Oil and Propane
Volume - Three months ended ~~March 31,~~June 30, 2019		~~173.3~~36.9
Net customer attrition		(1.8	)
Impact of colder temperatures		14.3
Acquisitions		~~5.5~~1.5
~~Impact of warmer temperatures~~Other (a)		~~(30.5~~	)
~~Net customer attrition~~0.3		~~(8.6~~	)
~~Other~~		~~(3.5~~	)
Change		~~(37.1~~14.3	)
Volume - Three months ended ~~March 31,~~June 30, 2020		~~136.2~~51.2

(in millions of gallons)	Heating Oil and Propane
Volume - ~~Six~~Nine months ended ~~March 31,~~June 30, 2019		~~286.6~~323.6
~~Acquisitions~~Net customer attrition		~~9.8~~(16.6	)
Impact of warmer temperatures		(~~32.0~~18.2	)
~~Net customer attrition~~Acquisitions		11.3
Other (a)		(~~15.3~~	)
~~Other~~		~~(5.8~~5.5	)
Change		(~~43.3~~29.0	)
Volume - ~~Six~~Nine months ended ~~March 31,~~June 30, 2020		~~243.3~~294.6



31.1	Certification of Chief Executive Officer, Star Group, L.P., pursuant to Rule 13a-14(a)/15d-14(a).

31.2	Certification of Chief Financial Officer, Star Group, L.P., pursuant to Rule 13a-14(a)/15d-14(a).

32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101	The following materials from the Star Group, L.P. Quarterly Report on Form 10-Q for the quarter ended ~~March 31,~~June 30, 2020, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Partners’ Capital, (v) the Condensed Consolidated Statements of Cash Flows and (vi) related notes.

101.SCH	Inline XBRL Taxonomy Extension Schema Document.

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.

104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

Large accelerated filer	☐	Accelerated filer	☒

Non- accelerated filer	☐	Smaller reporting company	☐

(in thousands of gallons)
Fiscal 2019 Acquisitions
Acquisition Number	Month of Acquisition	Home Heating Oil and Propane		Other Petroleum Products		Total
1	November		130		—		130
2	January (a)		—		—		—
3	May		13,200		6,772		19,972
			13,330		6,772		20,102



Star Group, L.P.
(Registrant)

By:	Kestrel Heat LLC AS GENERAL PARTNER


Signature	Title	Date

/s/ Richard F. Ambury Richard F. Ambury	Executive Vice President, Chief Financial Officer, Treasurer and Secretary Kestrel Heat LLC (Principal Financial Officer)	~~May 4,~~August 3, 2020

Signature	Title	Date

/s/ Cory A. Czekanski Cory A. Czekanski	Vice President – Controller Kestrel Heat LLC (Principal Accounting Officer)	~~May 4,~~August 3, 2020