10-Q

!8

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 001-14129

STAR GROUP, L.P.

(Exact Name of Registrant as Specified in its Charter)

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)

Registrant’s telephone number, including area code: (203) 328-7310

N/A

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Unit	SGU	New York Stock Exchange

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.

Large accelerated filer	☐	Accelerated filer	☒
Non- accelerated filer	☐	Smaller reporting company	☐

Emerging growth company ☐

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, 2021, the registrant had 40,199,232 Common Units outstanding.

STAR GROUP, L.P. AND SUBSIDIARIES

INDEX TO FORM 10-Q

	Page
Part I Financial Information
Item 1 - Condensed Consolidated Financial Statements	3
Condensed Consolidated Balance Sheets as of March 31, 2021 (unaudited) and September 30, 2020	3
Condensed Consolidated Statements of Operations (unaudited) for the three and six months ended March 31, 2021 and March 31, 2020	4
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three and six months ended March 31, 2021 and March 31, 2020	5
Condensed Consolidated Statement of Partners’ Capital (unaudited) for the three and six months ended March 31, 2021 and March 31, 2020	6-7
Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended March 31, 2021 and March 31, 2020	8
Notes to Condensed Consolidated Financial Statements (unaudited)	9-20
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations	21-37
Item 3 - Quantitative and Qualitative Disclosures About Market Risk	38
Item 4 - Controls and Procedures	38
Part II Other Information:	39
Item 1 - Legal Proceedings	39
Item 1A - Risk Factors	39
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 6 - Exhibits	40
Signatures	41

2

Part I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

STAR GROUP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			September 30,
	2021			2020
(in thousands)	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	8,883		$	56,911
Receivables, net of allowance of $5,797 and $6,121, respectively		187,457			83,594
Inventories		59,139			50,256
Fair asset value of derivative instruments		11,416			—
Prepaid expenses and other current assets		40,821			29,554
Assets held for sale		—			6,030
Total current assets		307,716			226,345
Property and equipment, net		97,929			93,495
Operating lease right-of-use assets		96,310			99,776
Goodwill		253,199			240,327
Intangibles, net		102,479			90,293
Restricted cash		250			250
Captive insurance collateral		69,653			69,787
Deferred charges and other assets, net		18,726			18,343
Total assets	$	946,262		$	838,616
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities
Accounts payable	$	35,341		$	30,827
Liabilities held for sale		—			1,265
Revolving credit facility borrowings		35,000			—
Fair liability value of derivative instruments		—			11,437
Current maturities of long-term debt		13,000			13,000
Current portion of operating lease liabilities		18,588			19,139
Accrued expenses and other current liabilities		159,880			127,286
Unearned service contract revenue		63,929			58,430
Customer credit balances		40,257			83,471
Total current liabilities		365,995			344,855
Long-term debt		103,408			109,805
Long-term operating lease liabilities		83,444			85,908
Deferred tax liabilities, net		30,074			17,227
Other long-term liabilities		26,065			25,001
Partners’ capital
Common unitholders		353,793			273,283
General partner		(1,991	)		(2,506	)
Accumulated other comprehensive loss, net of taxes		(14,526	)		(14,957	)
Total partners’ capital		337,276			255,820
Total liabilities and partners’ capital	$	946,262		$	838,616

See accompanying notes to condensed consolidated financial statements.

3

STAR GROUP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended March 31,						Six Months Ended March 31,
(in thousands, except per unit data - unaudited)	2021			2020			2021			2020
Sales:
Product	$	539,371		$	481,275		$	839,703		$	913,963
Installations and services		64,744			61,788			137,732			138,045
Total sales		604,115			543,063			977,435			1,052,008
Cost and expenses:
Cost of product		313,552			285,350			485,699			573,023
Cost of installations and services		64,361			61,273			133,664			134,942
(Increase) decrease in the fair value of derivative instruments		(8,224	)		11,670			(25,619	)		5,253
Delivery and branch expenses		100,942			85,463			181,629			182,189
Depreciation and amortization expenses		8,268			9,089			16,225			18,139
General and administrative expenses		6,320			5,422			12,561			11,928
Finance charge income		(799	)		(1,321	)		(1,205	)		(2,034	)
Operating income		119,695			86,117			174,481			128,568
Interest expense, net		(2,136	)		(2,756	)		(3,987	)		(5,435	)
Amortization of debt issuance costs		(243	)		(253	)		(490	)		(488	)
Income before income taxes		117,316			83,108			170,004			122,645
Income tax expense		32,152			24,700			46,980			36,482
Net income	$	85,164		$	58,408		$	123,024		$	86,163
General Partner’s interest in net income		681			409			977			601
Limited Partners’ interest in net income	$	84,483		$	57,999		$	122,047		$	85,562
Basic and diluted income per Limited Partner Unit (1):	$	1.71		$	1.03		$	2.43		$	1.52
Weighted average number of Limited Partner units outstanding:
Basic and Diluted		40,382			46,244			41,324			46,760

(1) See Note 16 - Earnings Per Limited Partner Unit.

See accompanying notes to condensed consolidated financial statements.

4

STAR GROUP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Three Months Ended March 31,						Six Months Ended March 31,
(in thousands - unaudited)	2021			2020			2021			2020
Net income	$	85,164		$	58,408		$	123,024		$	86,163
Other comprehensive income:
Unrealized gain on pension plan obligation		235			455			470			910
Tax effect of unrealized gain on pension plan obligation		(64	)		(133	)		(128	)		(258	)
Unrealized gain (loss) on captive insurance collateral		(526	)		107			(866	)		43
Tax effect of unrealized gain (loss) on captive insurance collateral		110			(15	)		182			(7	)
Unrealized gain (loss) on interest rate hedges		719			(1,716	)		1,051			(1,382	)
Tax effect of unrealized gain (loss) on interest rate hedges		(190	)		460			(278	)		374
Total other comprehensive income (loss)		284			(842	)		431			(320	)
Total comprehensive income	$	85,448		$	57,566		$	123,455		$	85,843

See accompanying notes to condensed consolidated financial statements.

5

STAR GROUP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL

	Three Months Ended March 31, 2021
	Number of Units											Accum. Other			Total
(in thousands - unaudited)	Common			General Partner		Common			General Partner			Comprehensive Income (Loss)			Partners’ Capital
Balance as of December 31, 2020		40,737			326	$	279,873		$	(2,447	)	$	(14,810	)	$	262,616
Net income		—			—		84,483			681			—			85,164
Unrealized gain on pension plan obligation		—			—		—			—			235			235
Tax effect of unrealized gain on pension plan obligation		—			—		—			—			(64	)		(64	)
Unrealized loss on captive insurance collateral		—			—		—			—			(526	)		(526	)
Tax effect of unrealized loss on captive insurance collateral		—			—		—			—			110			110
Unrealized gain on interest rate hedges		—			—		—			—			719			719
Tax effect of unrealized gain on interest rate hedges		—			—		—			—			(190	)		(190	)
Distributions		—			—		(5,369	)		(225	)		—			(5,594	)
Retirement of units		(538	)		—		(5,194	)		—			—			(5,194	)
Balance as of March 31, 2021 (unaudited)		40,199			326	$	353,793		$	(1,991	)	$	(14,526	)	$	337,276
	Three Months Ended March 31, 2020
	Number of Units											Accum. Other			Total
(in thousands - unaudited)	Common			General Partner		Common			General Partner			Comprehensive Income (Loss)			Partners’ Capital
Balance as of December 30, 2019		46,404			326	$	289,268		$	(1,991	)	$	(16,379	)	$	270,898
Net income		—			—		57,999			409			—			58,408
Unrealized gain on pension plan obligation		—			—		—			—			455			455
Tax effect of unrealized gain on pension plan obligation		—			—		—			—			(133	)		(133	)
Unrealized gain on captive insurance collateral		—			—		—			—			107			107
Tax effect of unrealized gain on captive insurance collateral		—			—		—			—			(15	)		(15	)
Unrealized loss on interest rate hedges		—			—		—			—			(1,716	)		(1,716	)
Tax effect of unrealized loss on interest rate hedges		—			—		—			—			460			460
Distributions		—			—		(5,788	)		(210	)		—			(5,998	)
Retirement of units		(782	)		—		(6,511	)		—			—			(6,511	)
Balance as of March 31, 2020 (unaudited)		45,622			326	$	334,968		$	(1,792	)	$	(17,221	)	$	315,955

See accompanying notes to condensed consolidated financial statements.

6

STAR GROUP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL

	Six Months Ended March 31, 2021
	Number of Units											Accum. Other			Total
(in thousands - unaudited)	Common			General Partner		Common			General Partner			Comprehensive Income (Loss)			Partners’ Capital
Balance as of September 30, 2020		43,328			326	$	273,283		$	(2,506	)	$	(14,957	)	$	255,820
Net income		—			—		122,047			977			—			123,024
Unrealized gain on pension plan obligation		—			—		—			—			470			470
Tax effect of unrealized gain on pension plan obligation		—			—		—			—			(128	)		(128	)
Unrealized loss on captive insurance collateral		—			—		—			—			(866	)		(866	)
Tax effect of unrealized loss on captive insurance collateral		—			—		—			—			182			182
Unrealized gain on interest rate hedges		—			—		—			—			1,051			1,051
Tax effect of unrealized gain on interest rate hedges		—			—		—			—			(278	)		(278	)
Distributions		—			—		(11,071	)		(462	)		—			(11,533	)
Retirement of units		(3,129	)		—		(30,466	)		—			—			(30,466	)
Balance as of March 31, 2021 (unaudited)		40,199			326	$	353,793		$	(1,991	)	$	(14,526	)	$	337,276
	Six Months Ended March 31, 2020
	Number of Units											Accum. Other			Total
(in thousands - unaudited)	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
Net income		—			—		85,562			601			—			86,163
Unrealized gain on pension plan obligation		—			—		—			—			910			910
Tax effect of unrealized gain on pension plan obligation		—			—		—			—			(258	)		(258	)
Unrealized gain on captive insurance collateral		—			—		—			—			43			43
Tax effect of unrealized gain on captive insurance collateral		—			—		—			—			(7	)		(7	)
Unrealized loss on interest rate hedges		—			—		—			—			(1,382	)		(1,382	)
Tax effect of unrealized loss on interest rate hedges		—			—		—			—			374			374
Distributions		—			—		(11,728	)		(425	)		—			(12,153	)
Retirement of units		(2,063	)		—		(18,575	)		—			—			(18,575	)
Balance as of March 31, 2020 (unaudited)		45,622			326	$	334,968		$	(1,792	)	$	(17,221	)	$	315,955

See accompanying notes to condensed consolidated financial statements.

7

STAR GROUP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended March 31,
(in thousands - unaudited)	2021			2020
Cash flows provided by (used in) operating activities:
Net income	$	123,024		$	86,163
Adjustment to reconcile net income to net cash provided by (used in)    operating activities:
(Increase) decrease in fair value of derivative instruments		(25,619	)		5,253
Depreciation and amortization		16,715			18,627
Provision for losses on accounts receivable		256			3,203
Change in deferred taxes		12,623			222
Change in weather hedge contracts		(3,424	)		(10,053	)
Changes in operating assets and liabilities:
Increase in receivables		(103,987	)		(69,562	)
(Increase) decrease in inventories		(9,652	)		12,008
(Increase) decrease in other assets		(2,016	)		4,812
Increase (decrease) in accounts payable		5,538			(8,910	)
Decrease in customer credit balances		(43,421	)		(32,462	)
Increase in other current and long-term liabilities		35,436			41,574
Net cash provided by operating activities		5,473			50,875
Cash flows provided by (used in) investing activities:
Capital expenditures		(7,232	)		(5,684	)
Proceeds from sales of fixed assets		143			201
Proceeds from sale of propane assets		6,093			—
Purchase of investments		(603	)		(7,218	)
Acquisitions		(38,363	)		(496	)
Net cash used in investing activities		(39,962	)		(13,197	)
Cash flows provided by (used in) financing activities:
Revolving credit facility borrowings		75,154			90,202
Revolving credit facility repayments		(40,154	)		(127,659	)
Loan issuance		—			130,000
Term loan repayments		(6,500	)		(92,500	)
Distributions		(11,533	)		(12,153	)
Unit repurchases		(30,466	)		(18,575	)
Customer retainage payments		(29	)		(300	)
Payments of debt issue costs		(11	)		(1,291	)
Net cash used in financing activities		(13,539	)		(32,276	)
Net (decrease) increase in cash, cash equivalents, and restricted cash		(48,028	)		5,402
Cash, cash equivalents, and restricted cash at beginning of period		57,161			5,149
Cash, cash equivalents, and restricted cash at end of period	$	9,133		$	10,551

See accompanying notes to condensed consolidated financial statements.

8

STAR GROUP, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1) Organization

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 one 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 Company is organized as follows:

• Star is a limited partnership, which at March 31, 2021, had outstanding 40.2 million Common Units (NYSE: “SGU”), representing a 99.2 % limited partner interest in Star, and 0.3 million general partner units, representing a 0.8% general partner interest in Star. Our general partner is Kestrel Heat, LLC, a Delaware limited liability company (“Kestrel Heat” or the “general partner”). The Board of Directors of Kestrel Heat (the “Board”) is appointed by its sole member, Kestrel Energy Partners, LLC, a Delaware limited liability company (“Kestrel”).  Although Star is a partnership, it is taxed as a corporation and its distributions to unitholders are treated as taxable dividends.

• Star owns 100% of Star Acquisitions, Inc. (“SA”), a Minnesota corporation that owns 100% of Petro Holdings, Inc. (“Petro”). SA and its subsidiaries are subject to Federal and state corporate income taxes. Star’s operations are conducted through Petro and its subsidiaries. Petro is primarily a Northeast and Mid-Atlantic U.S. region retail distributor of home heating oil and propane that at March 31, 2021 served approximately 431,200 full service residential and commercial home heating oil and propane customers and 69,500 customers on a delivery only basis. We also sell gasoline and diesel fuel to approximately 26,600 customers. We install, maintain, and repair heating and air conditioning equipment and to a lesser extent provide these services outside our heating oil and propane customer base including approximately 18,300 service contracts for natural gas and other heating systems.

• Petroleum Heat and Power Co., Inc. (“PH&P”) is a 100% owned subsidiary of Star. PH&P is the borrower and Star is the guarantor of the fifth amended and restated credit agreement’s $130 million five-year senior secured term loan and the $300 million ($450 million during the heating season of December through April of each year) revolving credit facility, both due December 4, 2024. (See Note 11—Long-Term Debt and Bank Facility Borrowings)

2) Summary of Significant Accounting Policies

Basis of Presentation

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 period ended March 31, 2021 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, 2020.

Comprehensive Income

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

9

Cash, Cash Equivalents, and Restricted Cash

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, 2021, the $9.1 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of $8.9 million of cash and cash equivalents and $0.3 million of restricted cash. At September 30, 2020, the $57.2 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of $56.9 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.

Fair Value Valuation Approach

The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

• Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

• Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

• Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

Captive Insurance Collateral

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.

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.

Weather Hedge Contract

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 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 hedge period runs from November 1 through March 31, taken as a whole, for each respective fiscal year. The “Payment Thresholds,” or strikes, are set at various levels for fiscal 2020 and 2021. The maximum that the Company could receive is $12.5 million per year. In addition, for fiscal 2020 and 2021 we were obligated to make an annual payment capped at $5.0 million if degree days exceed the Payment Threshold.  As of March 31, 2021, the Company reduced delivery and branch expense and recorded a receivable under these contracts of $3.4 million, and received the amount in full in April 2021. As of March 31, 2020, the Company reduced delivery and branch expense and recorded a receivable under these contracts of $10.1 million, and received the amount in full in April 2020.

For fiscal 2022, the Company entered into a weather hedge contract with similar terms described above. The maximum that the Company can receive is $7.5 million and we do not have a potential obligation to pay.

10

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

As of March 31, 2021, we had $0.2 million and $16.6 million balances included in the captions “Accrued expenses and other current liabilities” and “Other long-term liabilities,” on our Condensed Consolidated Balance Sheet representing the remaining balance of the NETTI Fund withdrawal liability.  As of September 30, 2020, we had $0.2 million and $16.7 million balances included in the captions “Accrued expenses and other current liabilities” and “Other long-term liabilities,” on our Condensed Consolidated Balance Sheet. 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, 2021 and September 30, 2020 was $25.6 million and $29.0 million, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of this liability.

Recently Adopted Accounting Pronouncements

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. The Company adopted ASU No. 2016-13 effective October 1, 2020. The adoption of ASU No. 2016-13 did not have a material impact on the Company’s consolidated financial statements and related disclosures. See Note 3 – Revenue Recognition.

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. The Company adopted ASU No. 2017-04 effective October 1, 2020. The adoption of ASU No. 2017-04 did not have an impact on the Company’s 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 Company adopted ASU No. 2018-14 effective October 1, 2020.  The adoption of ASU No. 2018-15 did not have an impact on the Company’s consolidated financial statements and related 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 Company adopted ASU No. 2018-15 effective October 1, 2020. The adoption of ASU No. 2018-15 did not have an impact on the Company’s consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements

No recently issued accounting pronouncements are expected to have a material impact on the Company’s consolidated financial statements.

3) Revenue Recognition

The following disaggregates our revenue by major sources for the three and six months ended March 31, 2021 and March 31, 2020:

	Three Months Ended March 31,				Six Months Ended March 31,
(in thousands)	2021		2020		2021		2020
Petroleum Products:
Home heating oil and propane	$	466,401	$	413,466	$	707,213	$	756,812
Other petroleum products		72,970		67,809		132,490		157,151
Total petroleum products		539,371		481,275		839,703		913,963
Installations and Services:
Equipment installations		22,865		20,158		52,925		50,723
Equipment maintenance service contracts		27,045		27,764		53,913		55,672
Billable call services		14,834		13,866		30,894		31,650
Total installations and services		64,744		61,788		137,732		138,045
Total Sales	$	604,115	$	543,063	$	977,435	$	1,052,008

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Deferred Contract Costs 

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, 2021, the amount of deferred contract costs included in “Prepaid expenses and other current assets” and “Deferred charges and other assets, net” was $3.5 million and $6.2 million, respectively.  At September 30, 2020, the amount of deferred contract costs included in “Prepaid expenses and other current assets” and “Deferred charges and other assets, net” was $3.4 million and $5.9 million, respectively.  During the six months ended March 31, 2021 and 2020 we recognized expense of $2.0 million and $1.9 million, respectively, associated with the amortization of deferred contract costs within “Delivery and branch expenses” in the Condensed Consolidated Statement of Operations. 

Contract Liability Balances

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, 2021 and September 30, 2020 the Company had contract liabilities of $99.6 million and $139.6 million, respectively.  During the six months ended March 31, 2021, the Company recognized $107.2 million of revenue that was included in the September 30, 2020 contract liability balance.  During the six months ended March 31, 2020 the Company recognized $95.7 million of revenue that was included in the September 30, 2019 contract liability balance.

Receivables and Allowance for Doubtful Accounts

Accounts receivables from customers are recorded at the invoiced amounts. Finance charges may be applied to trade receivables that are more than 30 days past due, and are recorded as finance charge income.

The allowance for doubtful accounts is the Company’s estimate of the amount of trade receivables that may not be collectible. The allowance is determined at an aggregate level by grouping accounts based on certain account criteria and its receivable aging. The allowance is based on both quantitative and qualitative factors, including historical loss experience, historical collection patterns, overdue status, aging trends, current and future economic conditions. The Company has an established process to periodically review current and past due trade receivable balances to determine the adequacy of the allowance. No single statistic or measurement determines the adequacy of the allowance. The total allowance reflects management’s estimate of losses inherent in its trade receivables at the balance sheet date. Different assumptions or changes in economic conditions could result in material changes to the allowance for doubtful accounts.

Changes in the allowance for credit losses are as follows:

(in thousands)	Credit Loss Allowance
Balance at September 30, 2020	$	6,121
Current period provision		256
Write-offs, net and other		(580	)
Balance as of March 31, 2021	$	5,797

4) Common Unit Repurchase and Retirement

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 August 2020, the Company had repurchased approximately 14.4 million Common Units under the Repurchase Plan.  In August 2020, the Board authorized an increase of the number of Common Units that remained available for the Company to repurchase from 2.0 million to a total of 6.0 million, of which 4.9 million were available for repurchase in open market transactions and 1.1 million were available for repurchase in privately-negotiated transactions. 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 under the Repurchase Plan will be retired.

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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, 2021.

The following table shows repurchases under the Repurchase Plan:

(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
Fiscal year 2012 to 2020 total		17,697	$	8.26		14,622		5,730
First quarter fiscal year 2021 total		2,591	$	9.75		1,191		4,539	(b), (c)
January 2021		429	$	9.65		429		4,110	(d)
February 2021		109	$	9.76		108		4,002
March 2021		-	$	-		-		4,002
Second quarter fiscal year 2021 total		538	$	9.67		537		4,002
April 2021		-	$	-		-		4,002	(e)

(a) Amount includes repurchase costs.

(b) On November 16, 2020, the Company purchased 1.4 million Common Units in a private transaction for aggregate consideration of approximately $13.8 million.  The purchase was made outside of the Company’s unit repurchase plan.

(c) On December 10, 2020, the Company purchased 0.4 million Common Units in a private transaction for aggregate consideration of approximately $4.2 million.  The purchase was made within the Company’s unit repurchase plan.

(d) On January 28, 2021, the Company purchased 0.1 million Common Units in a private transaction for aggregate consideration of approximately $1.3 million.  The purchase was made within the Company’s unit repurchase plan.

(e) Of the total available for repurchase, approximately 3.5 million units are available for repurchase in open market transactions and 0.5 million units are available for repurchase in privately-negotiated transactions, under the Repurchase Plan.

5) Captive Insurance Collateral

The Company considers all of its captive insurance collateral to be Level 1 available-for-sale investments. Investments at March 31, 2021 consist of the following (in thousands):

	Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)			Fair Value
Cash and Receivables	$	913	$	—	$	—		$	913
U.S. Government Sponsored Agencies		47,154		134		(60	)		47,228
Corporate Debt Securities		19,020		1,009		(56	)		19,973
Foreign Bonds and Notes		1,487		52		—			1,539
Total	$	68,574	$	1,195	$	(116	)	$	69,653

Investments at September 30, 2020 consist of the following (in thousands):

	Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)			Fair Value
Cash and Receivables	$	1,152	$	—	$	—		$	1,152
U.S. Government Sponsored Agencies		42,032		229		(26	)		42,235
Corporate Debt Securities		21,666		1,660		—			23,326
Foreign Bonds and Notes		2,992		82		—			3,074
Total	$	67,842	$	1,971	$	(26	)	$	69,787

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Maturities of investments were as follows at March 31, 2021 (in thousands):

	Net Carrying Amount
Due within one year	$	6,477
Due after one year through five years		61,007
Due after five years through ten years		2,169
Total	$	69,653

6) Derivatives and Hedging—Disclosures and Fair Value Measurements

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, 2021, 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: 6.4 million gallons of swap contracts, 4.5 million gallons of call options, 2.8 million gallons of put options, and 54.4 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, 2021, held 3.8 million gallons of long future contracts and 25.5 million gallons of short future contracts that settle in future months.  To hedge its internal fuel usage and other activities for fiscal 2021, the Company held 0.5 million gallons of call options and swap contracts that settle in future months.

As of March 31, 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 million gallons of swap contracts, 5.3 million gallons of call options, 4.0 million gallons of put options, and 52.8 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, 2020, held 32.6 million gallons of long future contracts, and 52.1 million gallons of short future contracts that settle in future months. To hedge its internal fuel usage and other activities for fiscal 2020 and 2021, the Company held 7.3 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, 2021, the Company has interest rate swap agreements in order to mitigate exposure to market risk associated with variable rate interest on $61.5 million, or 53%, 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, 2021 the fair value of the swap contracts was $(2.1) million. As of September 30, 2020, the notional value of the swap contracts was $64.0 million and the fair value of the swap contracts was $(3.1) 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, 2021, the aggregate cash posted as collateral in the normal course of business at counterparties was $1.8 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, 2021, no hedge positions and payable amounts were secured under the credit facility.

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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 commodity 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:
Derivatives Not Designated    as Hedging Instruments					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
Asset Derivatives at March 31, 2021
Commodity contracts	Fair asset value of derivative instruments	$	15,082		$	—	$	15,082
Commodity contracts	Long-term derivative liabilities included in the deferred charges and other assets, net		1,246			—		1,246
Commodity contract assets at March 31, 2021		$	16,328		$	—	$	16,328
Liability Derivatives at March 31, 2021
Commodity contracts	Fair asset value of derivative instruments	$	(3,666	)	$	—	$	(3,666	)
Commodity contracts	Long-term derivative liabilities included in the deferred charges and other assets, net		(445	)		—		(445	)
Commodity contract liabilities at March 31, 2021		$	(4,111	)	$	—	$	(4,111	)
Asset Derivatives at September 30, 2020
Commodity contracts	Fair liability value of derivative instruments	$	24,274		$	—	$	24,274
Commodity contracts	Long-term derivative liabilities included in the deferred charges and other assets, net and other long-term liabilities, net balances		1,890			—		1,890
Commodity contract assets September 30, 2020		$	26,164		$	—	$	26,164
Liability Derivatives at September 30, 2020
Commodity contracts	Fair liability value of derivative instruments	$	(35,711	)	$	—	$	(35,711	)
Commodity contracts	Long-term derivative liabilities included in the deferred charges and other assets, net and other long-term liabilities, net balances		(1,779	)		—		(1,779	)
Commodity contract liabilities September 30, 2020		$	(37,490	)	$	—	$	(37,490	)

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The Company’s commodity 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
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
Fair asset value of derivative instruments	$	15,082	$	(3,666	)	$	11,416		$	—	$	—	$	11,416
Long-term derivative assets included in    deferred charges and other assets, net		1,246		(445	)		801			—		—		801
Total at March 31, 2021	$	16,328	$	(4,111	)	$	12,217		$	—	$	—	$	12,217
Long-term derivative assets included in other long-term assets, net	$	1,605	$	(1,478	)	$	127		$	—	$	—	$	127
Fair liability value of derivative instruments		24,274		(35,711	)		(11,437	)		—		—		(11,437	)
Long-term derivative liabilities included in other long-term liabilities, net		285		(301	)		(16	)		—		—		(16	)
Total at September 30, 2020	$	26,164	$	(37,490	)	$	(11,326	)	$	—	$	—	$	(11,326	)

(In thousands)
The Effect of Derivative Instruments on the Statement of Operations
		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, 2021			Three Months Ended March 31, 2020			Six Months Ended March 31, 2021			Six Months Ended March 31, 2020
Commodity contracts	Cost of product (a)	$	(5,064	)	$	(3,700	)	$	6,514		$	2,349
Commodity contracts	Cost of installations and service (a)	$	(130	)	$	233		$	(37	)	$	224
Commodity contracts	Delivery and branch expenses (a)	$	(193	)	$	626		$	8		$	597
Commodity contracts	(Increase) / decrease in the fair value of derivative instruments (b)	$	(8,224	)	$	11,670		$	(25,619	)	$	5,253

(a) Represents realized closed positions and includes the cost of options as they expire.

(b) Represents the change in value of unrealized open positions and expired options.

7) Inventories

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, 2021		September 30, 2020
Product	$	38,993	$	29,799
Parts and equipment		20,146		20,457
Total inventory	$	59,139	$	50,256

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8) Property and Equipment

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, 2021		September 30, 2020
Property and equipment	$	231,092	$	220,220
Less: accumulated depreciation		133,163		126,725
Property and equipment, net	$	97,929	$	93,495

9) Business Combinations and Divestitures

During fiscal year 2021 the Company has acquired two propane and two heating oil dealers for an aggregate of approximately $39.3 million; $38.4 million in cash and $0.9 million of deferred liabilities.  The gross purchase price was allocated $34.2 million to intangible assets, $5.9 million to fixed assets and reduced by $0.8 million in working capital credits. The estimated working capital associated with the acquisitions is subject to a final post closing adjustment, and as of March 31, 2021 the intangibles and goodwill have been provisionally determined.  The Company will record any material adjustments to the initial estimates based on new information obtained that would have existed as of the date of the acquisition. Any adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period the adjustment arises. The Company also sold certain propane assets for cash proceeds of $6.1 million.

Through the second quarter of 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.

10) Goodwill and Intangible Assets, net

Goodwill

A summary of changes in Company’s goodwill is as follows (in thousands):

Balance as of September 30, 2020	$	240,327
Fiscal year 2021 business combinations		12,872
Balance as of March 31, 2021	$	253,199

Intangibles, net

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

	March 31, 2021						September 30, 2020
	Gross						Gross
	Carrying		Accum.				Carrying		Accum.
	Amount		Amortization		Net		Amount		Amortization		Net
Customer lists	$	401,630	$	320,809	$	80,821	$	382,942	$	312,928	$	70,014
Trade names and other intangibles		39,977		18,319		21,658		37,382		17,103		20,279
Total	$	441,607	$	339,128	$	102,479	$	420,324	$	330,031	$	90,293

Amortization expense for intangible assets was $9.1 million for the six months ended March 31, 2021, compared to $10.6 million for the six months ended March 31, 2020.

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11) Long-Term Debt and Bank Facility Borrowings

The Company’s debt is as follows (in thousands):

	March 31,				September 30,
	2021				2020
	Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)
Revolving Credit Facility Borrowings	$	35,000	$	35,000	$	—	$	—
Senior Secured Term Loan (b)		116,408		117,000		122,805		123,500
Total debt	$	151,408	$	152,000	$	122,805	$	123,500
Total short-term portion of debt	$	48,000	$	48,000	$	13,000	$	13,000
Total long-term portion of debt	$	103,408	$	104,000	$	109,805	$	110,500

(a) The face amount of the Company’s variable rate long-term debt approximates fair value.

(b) Carrying amounts are net of unamortized debt issuance costs of $0.6 million as of March 31, 2021 and $0.7 million as of September 30, 2020.

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 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.  In the first quarter of fiscal 2021 the banks waived the Excess Cash Flow requirement related to fiscal 2020.

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, 2021, the effective interest rate on the Term Loan was approximately 4.2% and the effective interest rate on revolving credit facility borrowings was approximately 2.5%. At September 30, 2020, the effective interest rate on the term loan and revolving credit facility borrowings was approximately 5.2% and 4.0%, 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, 2021, $117.0 million of the Term Loan was outstanding, $35.0 million was outstanding under the revolving credit facility, no hedge positions were secured under the credit agreement, and $3.5 million of letters of credit were issued and outstanding. At September 30, 2020, $123.5 million of the Term Loan was outstanding, no amount was outstanding under the revolving credit facility, $11.1 million of hedge positions were secured under the credit agreement, and $3.5 million of letters of credit were issued and outstanding.

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At March 31, 2021, availability was $225.5 million, and the Company was in compliance with the fixed charge coverage ratio and the senior secured leverage ratio. At September 30, 2020, availability was $203.4 million, and the Company was in compliance with the fixed charge coverage ratio and the senior secured leverage ratio.

12) Income Taxes  

 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 for the three and six months ended March 31, 2021, and March 31, 2020 are as follows:

	Three Months Ended					Six Months Ended
	March 31,					March 31,
(in thousands)	2021		2020			2021		2020
Income before income taxes	$	117,316	$	83,108		$	170,004	$	122,645
Current income tax expense		23,130		25,814			34,357		36,260
Deferred income tax expense (benefit)		9,022		(1,114	)		12,623		222
Total income tax expense	$	32,152	$	24,700		$	46,980	$	36,482

At March 31, 2021, we did not have unrecognized income tax benefits.

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.

13) Supplemental Disclosure of Cash Flow Information

	Six Months Ended
Cash paid during the period for:	March 31,
(in thousands)	2021		2020
Income taxes, net	$	4,606	$	9,992
Interest	$	4,756	$	6,543

14) Commitments and Contingencies

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, 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.

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15) Earnings Per Limited Partner Unit

The following table presents the net income allocation and per unit data:

	Three Months Ended				Six Months Ended
Basic and Diluted Earnings Per Limited Partner:	March 31,				March 31,
(in thousands, except per unit data)	2021		2020		2021		2020
Net income	$	85,164	$	58,408	$	123,024	$	86,163
Less General Partner’s interest in net income		681		409		977		601
Net income available to limited partners		84,483		57,999		122,047		85,562
Less dilutive impact of theoretical distribution of earnings *		15,457		10,283		21,798		14,631
Limited Partner’s interest in net income	$	69,026	$	47,716	$	100,249	$	70,931
Per unit data:
Basic and diluted net income available to limited partners	$	2.09	$	1.25	$	2.95	$	1.83
Less dilutive impact of theoretical distribution of earnings *		0.38		0.22		0.52		0.31
Limited Partner’s interest in net income	$	1.71	$	1.03	$	2.43	$	1.52
Weighted average number of Limited Partner units outstanding		40,382		46,244		41,324		46,760

*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 period were distributed, based on the terms of the Partnership agreement, 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.

16) Subsequent Events

Acquisition

In April 2021, the Company purchased the customer list and assets of a heating oil dealer for an aggregate amount of approximately $3.2 million; $2.3 million in cash and $0.9 million of contingent liabilities. The purchase price was allocated $3.0 million to intangible assets, $0.3 million to fixed assets and reduced by $0.1 million for working capital credits.

Quarterly Distribution Declared

In April 2021, we declared a quarterly distribution of $0.1425 per unit, or $0.57 per unit on an annualized basis, on all Common Units with respect to the second quarter of fiscal 2021, payable on May 11, 2021, to holders of record on May 3, 2021. 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, $5.7 million will be paid to the Common Unit holders, $0.3 million to the General Partner unit holders (including $0.3 million of incentive distribution as provided in our Partnership Agreement) and $0.3 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.

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Statement Regarding Forward-Looking Disclosure

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 2020 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 2020 Form 10-K. 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, 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, 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.

Impact of COVID 19 - A Global Pandemic on our Operations and Outlook

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. Public health and governmental authorities nationally and in affected regions have taken and continue to take extraordinary and wide-ranging actions to contain and combat the outbreak and spread of COVID-19, including restrictions on travel and business operations, quarantines, and 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 and continue to be significantly impacted by the virus.

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 supply chain issues impacting our ability to deliver petroleum products to our customers. However, we are experiencing disruptions in the procurement of certain home generators.  Since March 2020, we have implemented various measures in response to the COVID-19 pandemic, such as a majority of our office personnel working remotely.  While these measures have not significantly impacted our ability to serve our customers to date, these measures may become strained or result in service delays.  

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, providing personal protective equipment for our employees and providing IT infrastructure to allow many office, clerical, sales and customer service employees to work from home. At this time, we expect the annual cost of these undertakings to be approximately $1.0 million.

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The decline in economic activity impacted our motor fuels business in the third and fourth quarters of fiscal 2020 as well as the first and second quarter of fiscal 2021. While it has not yet materially impacted our ability to serve our customers, a combination of continued higher than normal unemployment benefits and an increased desire of prospective employees to work from home has impacted our ability to fully staff our customer service and sales functions.  We cannot predict how long this staffing issue will continue, but the shortage in conjunction with any kind of spike in customer activity could cause unacceptable delays in response times and increase customer losses.

As of March 31, 2021, we had accounts receivable of $187.5 million, of which $148.6 million was due from residential customers and $38.9 million due from commercial customers. Our ability to borrow from our bank group is based in part on the aging of these accounts receivable. If 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 has taken advantage of certain tax and legislative actions which permitted the Company to defer certain payroll tax withholdings relating to calendar 2020 to calendar 2021 and 2022.  

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. 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.

Impact on Liquidity of Increases and Decreases in Wholesale Product Cost

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.  While our liquidity is impacted by initial margin requirements for new future positions used to hedge our inventory, it can also be adversely impacted by sudden and sharp changes in wholesale product costs.  Likewise, our liquidity and collateral requirements are impacted by the fluctuating cost of options and swaps used to manage the market risks associated with our inventory and protected price customers.

Liquid Product Price Volatility

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, 2017, through 2021, on a quarterly basis, is illustrated in the following chart (price per gallon):

	Fiscal 2021 (a)				Fiscal 2020				Fiscal 2019				Fiscal 2018				Fiscal 2017
Quarter Ended	Low		High		Low		High		Low		High		Low		High		Low		High
December 31	$	1.08	$	1.51	$	1.86	$	2.05	$	1.66	$	2.44	$	1.74	$	2.08	$	1.39	$	1.70
March 31		1.46		1.97		0.95		2.06		1.70		2.04		1.84		2.14		1.49		1.70
June 30		—		—		0.61		1.22		1.78		2.12		1.96		2.29		1.37		1.65
September 30		—		—		1.08		1.28		1.75		2.08		2.05		2.35		1.45		1.86

(a) On April 30, 2021, the NYMEX ultra low sulfur diesel contract closed at $1.92 per gallon or $0.41 per gallon higher than the average of $1.51 in the six months of Fiscal 2021.

Income Taxes

Book versus Tax Deductions

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

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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. 

Estimated Depreciation and Amortization Expense

(In thousands) Fiscal Year	Book		Tax
2021	$	33,511	$	29,809
2022		29,073		22,225
2023		25,765		20,637
2024		21,452		19,980
2025		17,340		18,681
2026		13,368		17,943

Weather Hedge Contracts

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 applicable “Payment Thresholds,” or strikes. The hedge period runs from November 1 through March 31, taken as a whole, for each respective fiscal year. For the six months ended March 31, 2021 and March 31, 2020 we recorded a $3.4 million benefit and a $10.1 million benefit, respectively.

For fiscal 2022, we entered into a weather hedging contract under which we are entitled to a payment capped at $7.5 million if degree days are less than the Payment Threshold. The hedge period runs from November 1, 2021 through March 31, 2022 taken as a whole.

Per Gallon Gross Profit Margins

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.

Derivatives

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.

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Customer Attrition

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.

Customer gains and losses of home heating oil and propane customers

	Fiscal Year Ended
	2021							2020							2019
					Net							Net							Net
	Gross Customer				Gains /			Gross Customer				Gains /			Gross Customer				Gains /
	Gains		Losses		(Attrition)			Gains		Losses		(Attrition)			Gains		Losses		(Attrition)
First Quarter		19,100		19,900		(800	)		23,900		23,100		800			26,200		25,400		800
Second Quarter		12,600		17,800		(5,200	)		12,600		18,200		(5,600	)		12,600		22,300		(9,700	)
Third Quarter		—		—		—			8,000		13,600		(5,600	)		7,100		15,900		(8,800	)
Fourth Quarter		—		—		—			10,700		15,800		(5,100	)		13,200		20,600		(7,400	)
Total		31,700		37,700		(6,000	)		55,200		70,700		(15,500	)		59,100		84,200		(25,100	)

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

	Fiscal Year Ended
	2021									2020									2019
							Net									Net									Net
	Gross Customer						Gains /			Gross Customer						Gains /			Gross Customer						Gains /
	Gains			Losses			(Attrition)			Gains			Losses			(Attrition)			Gains			Losses			(Attrition)
First Quarter		4.4	%		4.6	%		(0.2	%)		5.3	%		5.1	%		0.2	%		5.8	%		5.6	%		0.2	%
Second Quarter		2.9	%		4.1	%		(1.2	%)		2.8	%		4.0	%		(1.2	%)		2.8	%		5.0	%		(2.2	%)
Third Quarter		—			—			—			1.8	%		3.0	%		(1.2	%)		1.6	%		3.5	%		(1.9	%)
Fourth Quarter		—			—			—			2.3	%		3.5	%		(1.2	%)		2.7	%		4.2	%		(1.5	%)
Total		7.3	%		8.7	%		(1.4	%)		12.2	%		15.6	%		(3.4	%)		12.9	%		18.3	%		(5.4	%)

For the six months ended March 31, 2021, the Company lost 6,000 accounts (net), or 1.4% of its home heating oil and propane customer base, compared to 4,800 accounts lost (net), or 1.0% of its home heating oil and propane customer base, during the six months ended March 31, 2020. Gross customer gains were 4,800 less than the prior year’s comparable period, and gross customer losses were 3,600 accounts less. The 1,200 account increase in net customer attrition was negatively impacted by the sale of certain propane assets in October 2020, which generated approximately 1,000 accounts (net) through the six months ended March 31, 2020 as compared to approximately 100 accounts (net) in October 2020.

During the six months ended March 31, 2021, we estimate that we lost 0.7% of our home heating oil and propane accounts to natural gas conversions versus 0.7% for the six months ended March 31, 2020 and 0.8% six months ended March 31, 2019.  Losses to natural gas in our footprint for the heating oil and propane industry could be greater or less than the Company’s estimates.

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Acquisitions

The timing of acquisitions and the types of products sold by acquired companies impact year-over-year comparisons.  As of March 31, 2021 the Company acquired two propane and two heating oil dealers, and in April 2021 acquired a heating oil dealer.  During fiscal 2020 the Company acquired two heating oil dealers.  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 2021 Acquisitions
Acquisition Number	Month of Acquisition	Home Heating Oil and Propane		Other Petroleum Products		Total
1	December		5,452		—		5,452
2	December		1,318		—		1,318
3	February		305		—		305
4	March		1,163		—		1,163
5	April		4,509		166		4,675
			12,747		166		12,913

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

Sale of Propane Assets

In October 2020 we sold certain propane assets, which included a customer list of approximately 12,300 customers, for $7.0 million. The following table details sales generated from the propane assets sold: 

	Years Ended September 30,
(in thousands)	2020		2019		2018
Volume:
Propane		2,741		2,765		2,885
Sales:
Petroleum Products	$	5,906	$	6,377	$	6,478
Installations and Services		1,224		1,540		2,184
Total Sales	$	7,130	$	7,917	$	8,662

Protected Price Account Renewals

A substantial majority of the Company’s price-protected customers have agreements with us that are subject to annual renewal in the period between April and November of each fiscal year. If a significant number of these customers elect not to renew their price-protected agreements with us and do not continue as our customers under a variable price-plan, the Company’s near term profitability, liquidity and cash flow will be adversely impacted.  As of April 30, 2021, the wholesale cost of home heating oil as measured by the New York Mercantile Exchange was $1.92 per gallon, approximately $1.19 per gallon higher than at April 30, 2020.  Based on these recent prices, our price-protected customers will be offered renewal contracts at significantly higher prices than last year which, may adversely impact the acceptance rate of these renewals.

Seasonality

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

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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.

Degree Day

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.

Consolidated Results of 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.

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Three Months Ended March 31, 2021

Compared to the Three Months Ended March 31, 2020

Volume

For the three months ended March 31, 2021, retail volume of home heating oil and propane sold increased by 21.4 million gallons, or 15.7%, to 157.6 million gallons, compared to 136.2 million gallons for the three months ended March 31, 2020. 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, 2021 were 16.2% colder than the three months ended March 31, 2020. Temperatures during the three months ended March 31, 2021 were 8.6% warmer than normal, as reported by NOAA. For the twelve months ended March 31, 2021, net customer attrition for the base business was 3.8%. 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: 

(in millions of gallons)	Heating Oil and Propane
Volume - Three months ended March 31, 2020		136.2
Net customer attrition		(6.5	)
Impact of colder temperatures		21.6
Acquisitions		3.4
Sale of certain propane assets		(1.0	)
Other (a)		3.9
Change		21.4
Volume - Three months ended March 31, 2021		157.6

(a) Due to the timing of deliveries attributable in part to staffing efficiencies, this favorable volume variance may reduce expected volume in future periods.

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, 2021, compared to the three months ended March 31, 2020:

	Three Months Ended
Customers	March 31, 2021			March 31, 2020
Residential Variable		44.0	%		42.0	%
Residential Price-Protected (Ceiling and Fixed Price)		44.1	%		45.5	%
Commercial/Industrial		11.9	%		12.5	%
Total		100.0	%		100.0	%

Volume of motor fuel and other petroleum products sold decreased by 0.9 million gallons, or 2.4%, to 35.7 million gallons for the three months ended March 31, 2021, compared to 36.6 million gallons for the three months ended March 31, 2020 due to lower volume sales of motor fuels (1.1 million gallons) resulting from COVID-19’s impact on economic activity and the loss of certain accounts and partially offset by higher wholesale volume sales (0.2 million gallons) due to the colder weather.  We believe that the decline in motor fuel sales may continue in the near term.

Product Sales

For the three months ended March 31, 2021, product sales increased by $58.1 million, or 12.1%, to $539.4 million, compared to $481.3 million for the three months ended March 31, 2020, reflecting an increase in total volume sold of 11.9%.

Installations and Services

For the three months ended March 31, 2021, installation and service revenue increased by $2.9 million, or 4.8%, to $64.7 million, compared to $61.8 million for the three months ended March 31, 2020.  Service and installation sales increased largely due to an increase in installation sales.

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Cost of Product

For the three months ended March 31, 2021, cost of product increased $28.2 million, or 9.9%, to $313.6 million, compared to $285.4 million for the three months ended March 31, 2020 due to the impact of an increase in total volume sold of 11.9% partially offset by a $0.0290 per gallon, or 1.8%, decrease in wholesale product cost.

Gross Profit — Product

The table below calculates our per gallon margins and reconciles product gross profit for home heating oil and propane and motor fuel and other petroleum products. We believe the change in home heating oil and propane margins should be evaluated before the effects of increases or decreases in the fair value of derivative instruments, as we believe that realized per gallon margins should not include the impact of non-cash changes in the market value of hedges before the settlement of the underlying transaction. On that basis, home heating oil and propane margins for the three months ended March 31, 2021 increased by $0.0104 per gallon, to $1.3723 per gallon, from $1.3619 per gallon during the three months ended March 31, 2020. During the three months ended March 31, 2021, per gallon margins expanded despite rising wholesale product costs.  In addition, the Company utilizes weighted average costing for computing cost of goods sold, which can delay the timing in which the effects of market changes in product costs are reflected in costs of goods because price changes are weighted into the average costing calculation rather than immediately realized.  This favorably impacted product gross profit during the three months ended March 31, 2020 by $6.9 million due to declining product prices during the period. We cannot assume that the per gallon margins realized during fiscal 2021 are sustainable for future periods. Product sales and cost of product include home heating oil, propane, motor fuel, other petroleum products and liquidated damages billings.

	Three Months Ended
	March 31, 2021				March 31, 2020
Home Heating Oil and Propane	Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon
Volume		157.6				136.2
Sales	$	466.4	$	2.9603	$	413.5	$	3.0358
Cost	$	250.2	$	1.5880	$	228.0	$	1.6739
Gross Profit	$	216.2	$	1.3723	$	185.5	$	1.3619

Motor Fuel and Other Petroleum Products	Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon
Volume		35.7				36.6
Sales	$	73.0	$	2.0438	$	67.8	$	1.8534
Cost	$	63.4	$	1.7744	$	57.4	$	1.5683
Gross Profit	$	9.6	$	0.2694	$	10.4	$	0.2851

Total Product	Amount (in millions)		Amount (in millions)
Sales	$	539.4	$	481.3
Cost	$	313.6	$	285.4
Gross Profit	$	225.8	$	195.9

For the three months ended March 31, 2021, total product gross profit was $225.8 million, which was $29.9 million, or 15.3%, greater than the three months ended March 31, 2020, as an increase in home heating oil and propane volume ($29.1 million) and an increase in home heating oil and propane margins ($1.6 million) was reduced by a slight decline in gross profit from motor fuel and other petroleum products ($0.8 million).

Cost of Installations and Services

Total installation costs for the three months ended March 31, 2021 increased by $1.7 million or 9.5%, to $19.3 million, compared to $17.6 million of installation costs for the three months ended March 31, 2020. Installation costs as a percentage of installation sales were 84.2% for the three months ended March 31, 2021 and 87.2% for the three months ended March 31, 2020.

Service expense increased by $1.4 million, or 3.2%, to $45.1 million for the three months ended March 31, 2021, representing 107.7% of service sales, versus $43.7 million, or 105.0% of service sales, for the three months ended March 31, 2020.  We realized a combined gross profit from service and installation of $0.4 million for the three months ended March 31, 2021 compared to a gross profit of $0.5 million for the three months ended March 31, 2020, a $0.1 million decline in profitability. 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.

28

(Increase) Decrease in the Fair Value of Derivative Instruments

During the three months ended March 31, 2021, the change in the fair value of derivative instruments resulted in an $8.2 million credit due to an increase in the market value for unexpired hedges (a $9.4 million credit), partially offset by a $1.2 million charge due to the expiration of certain hedged positions.

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

Delivery and Branch Expenses

For the three months ended March 31, 2021, delivery and branch expenses increased $15.4 million, or 18.1%, to $100.9 million, compared to $85.5 million for the three months ended March 31, 2020. Operating expenses increased by $13.6 million due to the impact of our weather hedging program. For the three months ended of March 31, 2021, we recorded a charge related to the program that increased delivery and branch expenses by $0.5 million. During the three months ended March 31, 2020, we recorded a benefit related to the program of $13.1 million. (The quarter ended March 31, 2020 was warmer than normal and resulted in reversing a $3.0 million expected payment by Star and recording a benefit to Star of $10.1 million for a total change of $13.1 million during the quarter.) Direct delivery expense rose by $3.3 million, or 9.9%, due to a 15.7% increase in home heating oil and propane volume and other operating costs decreased by $1.5 million, as lower bad debt and credit card processing fees ($1.4 million) and lower insurance expense ($1.3 million) was reduced by normal operating expense increases of $1.2 million.

Depreciation and Amortization Expenses

For the three months ended March 31, 2021, depreciation and amortization expenses decreased $0.8 million, or 9.0% to $8.3 million, compared to $9.1 million for the three months ended March 31, 2020 primarily due to lower amortization expense related to intangible assets that fully amortized in the prior fiscal year.

General and Administrative Expenses

For the three months ended March 31, 2021, general and administrative expenses increased by $0.9 million or 16.6%, to $6.3 million, from $5.4 million for the three months ended March 31, 2020, primarily due to higher profit sharing expense.  The Company accrues approximately 6.0% of Adjusted EBITDA as defined in its profit sharing plan for distribution to its employees. This amount is payable when the Company achieves Adjusted EBITDA of at least 70% of the amount budgeted. The dollar amount of the profit sharing pool adjusts accordingly based on Adjusted EBITDA levels achieved.

Finance Charge Income

For the three months ended March 31, 2021, finance charge income decreased to $0.8 million from $1.3 million for the three months ended March 31, 2020, primarily due to lower customer late payment charges resulting from lower past due receivable balances.

Interest Expense, Net

For the three months ended March 31, 2021, net interest expense decreased by $0.7 million, or 22.5%, to $2.1 million compared to $2.8 million for the three months ended March 31, 2020. The year-over-year change reflects a decrease in average borrowings of $21.9 million from $204.0 million for the three months ended March 31, 2020 to $182.1 million for the three months ended March 31, 2021, and a decrease in the weighted average interest rate from 4.7% for the three months ended March 31, 2020 to 3.4% for the three months ended March 31, 2021. To hedge against rising interest rates, the Company utilizes interest rate swaps.  At March 31, 2021, $61.5 million, or 53%, of our long term debt, was fixed.  

Amortization of Debt Issuance Costs

For the three months ended March 31, 2021, amortization of debt issuance cost was $0.2 million, essentially unchanged from the three months ended March 31, 2020.

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Income Tax Expense

For the three months ended March 31, 2021, the Company’s income tax expense increased by $7.5 million to $32.2 million, from $24.7 million for the three months ended March 31, 2020, due primarily to an increase in income before income taxes of $34.2 million that was driven by an $19.9 million non-cash favorable change in the fair market value of derivative instruments and $12.9 million increase in Adjusted EBITDA, described below.

Net Income

For the three months ended March 31, 2021, Star’s net income increased $26.8 million, to $85.2 million, primarily due to a favorable change in the fair value of derivative instruments of $19.9 million, a $12.9 million increase in Adjusted EBITDA, described below, lower depreciation and amortization expense of $0.8 million, and partially offset by an increase in income tax expense of $7.5 million.

Adjusted EBITDA

For the three months ended March 31, 2021, Adjusted EBITDA increased by $12.9 million, to $119.7 million compared to the three months ended March 31, 2020.  The impact of higher home heating oil and propane volume (15.7%) more than offset a $13.6 million decline in the benefit recorded from the weather hedge and an increase in total operating expenses of $2.7 million, or 3.0%. While 16.2% colder temperatures drove the increase in home heating oil and propane volume, the colder temperatures were also the primary driver of the $13.6 million decrease in the benefit recorded from the weather hedge.

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 the Company’s ability to make the Minimum Quarterly Distribution. EBITDA and Adjusted EBITDA are calculated as follows:

	Three Months Ended March 31,
(in thousands)	2021			2020
Net income	$	85,164		$	58,408
Plus:
Income tax expense		32,152			24,700
Amortization of debt issuance costs		243			253
Interest expense, net		2,136			2,756
Depreciation and amortization		8,268			9,089
EBITDA (a)		127,963			95,206
(Increase) / decrease in the fair value of derivative    instruments		(8,224	)		11,670
Adjusted EBITDA (a)		119,739			106,876
Add / (subtract)
Income tax expense		(32,152	)		(24,700	)
Interest expense, net		(2,136	)		(2,756	)
Provision for losses on accounts receivable		732			2,193
(Increase) decrease in accounts receivables		(40,998	)		16,183
(Increase) decrease in inventories		(2,475	)		27,435
Decrease in customer credit balances		(34,434	)		(16,564	)
Change in deferred taxes		9,022			(1,114	)
Change in other operating assets and liabilities		15,176			(5,087	)
Net cash provided by operating activities	$	32,474		$	102,466
Net cash used in investing activities	$	(4,059	)	$	(5,534	)
Net cash used in financing activities	$	(38,379	)	$	(101,173	)

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(a) EBITDA (Earnings from continuing operations before net interest expense, income taxes, depreciation and amortization) and Adjusted EBITDA (Earnings from continuing operations before net interest expense, income taxes, depreciation and amortization, (increase) decrease in the fair value of derivatives, other income (loss), net, multiemployer pension plan withdrawal charge, gain or loss on debt redemption, goodwill impairment, and other non-cash and non-operating charges) are non-GAAP financial measures that are used as supplemental financial measures by management and external users of our financial statements, such as investors, commercial banks and research analysts, to assess:

• our compliance with certain financial covenants included in our debt agreements;

• our financial performance without regard to financing methods, capital structure, income taxes or historical cost basis;

• our operating performance and return on invested capital compared to those of other companies in the retail distribution of refined petroleum products, without regard to financing methods and capital structure;

• our ability to generate cash sufficient to pay interest on our indebtedness and to make distributions to our partners; and

• the viability of acquisitions and capital expenditure projects and the overall rates of return of alternative investment opportunities.

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:

• EBITDA and Adjusted EBITDA do not reflect our cash used for capital expenditures.

• Although depreciation and amortization are non-cash charges, the assets being depreciated or amortized often will have to be replaced and EBITDA and Adjusted EBITDA do not reflect the cash requirements for such replacements;

• EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital requirements;

• EBITDA and Adjusted EBITDA do not reflect the cash necessary to make payments of interest or principal on our indebtedness; and EBITDA and Adjusted EBITDA do not reflect the cash required to pay taxes.

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Six Months Ended March 31, 2021

Compared to the Six Months Ended March 31, 2020

Volume

For the six months ended March 31, 2021, retail volume of home heating oil and propane sold increased by 3.8 million gallons, or 1.5%, to 247.1 million gallons, compared to 243.3 million gallons for the six months ended March 31, 2020. For those locations where we had existing operations during both periods, which we sometimes refer to as the “base business” (i.e., excluding acquisitions), temperatures (measured on a heating degree day basis) for the six months ended March 31, 2021 were 2.9% colder than the six months ended March 31, 2020. Temperatures during the six months ended March 31, 2021 were 11.4% warmer than normal, as reported by NOAA. For the twelve months ended March 31, 2021, net customer attrition for the base business was 3.8%. 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: 

(in millions of gallons)	Heating Oil and Propane
Volume - Six months ended March 31, 2020		243.3
Net customer attrition		(11.5	)
Impact of colder temperatures		6.9
Acquisitions		4.0
Sale of certain propane assets		(1.8	)
Other (a)		6.2
Change		3.8
Volume - Six months ended March 31, 2021		247.1

(a) Due to the timing of deliveries attributable in part to staffing efficiencies, this favorable volume variance may reduce expected volume in future periods.

The following chart sets forth the percentage by volume of total home heating oil sold to residential variable-price customers, residential price-protected customers and commercial/industrial/other customers for the six months ended March 31, 2021, compared to the six months ended March 31, 2020:

	Six Months Ended
Customers	March 31, 2021			March 31, 2020
Residential Variable		43.5	%		42.1	%
Residential Price-Protected (Ceiling and Fixed Price)		44.6	%		45.6	%
Commercial/Industrial		11.9	%		12.3	%
Total		100.0	%		100.0	%

Volume of motor fuel and other petroleum products sold decreased by 4.6 million gallons, or 5.9%, to 73.4 million gallons for the six months ended March 31, 2021, compared to 78.0 million gallons for the six months ended March 31, 2020 due to lower volume sales of motor fuels (4.3 million gallons) resulting from COVID-19’s impact on economic activity and the loss of certain accounts and lower wholesale volume sales (0.3 million gallons).  We believe that the decline in motor fuel sales may continue in the near term.

Product Sales

For the six months ended March 31, 2021, product sales decreased by $0.1 billion, or 8.1%, to $0.8 billion, compared to $0.9 billion for the six months ended March 31, 2020, largely due to a decrease in wholesale product cost of $0.2676 per gallon, or 15.0%.

Installations and Services

For the six months ended March 31, 2021, installation and service revenue decreased by $0.3 million, or 0.2%, to $137.7 million, compared to $138.0 million for the six months ended March 31, 2020.

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Cost of Product

For the six months ended March 31, 2021, cost of product decreased $87.3 million, or 15.2%, to $485.7 million, compared to $573.0 million for the six months ended March 31, 2020 due to the impact of a $0.2676 per gallon, or 15.0%, decrease in wholesale product cost.

Gross Profit — Product

The table below calculates our per gallon margins and reconciles product gross profit for home heating oil and propane and motor fuel and other petroleum products. We believe the change in home heating oil and propane margins should be evaluated before the effects of increases or decreases in the fair value of derivative instruments, as we believe that realized per gallon margins should not include the impact of non-cash changes in the market value of hedges before the settlement of the underlying transaction. On that basis, home heating oil and propane margins for the six months ended March 31, 2021 increased by $0.0374 per gallon, to $1.3529 per gallon, from $1.3155 per gallon during the six months ended March 31, 2020. During the six months ended March 31, 2021, per gallon margins expanded despite rising wholesale product costs.  In addition, the Company utilizes weighted average costing for computing cost of goods sold, which can delay the timing in which the effects of market changes in product costs are reflected in costs of goods because price changes are weighted into the average costing calculation rather than immediately realized.  This favorably impacted product gross profit during the six months ended March 31, 2020 by $6.9 million due to declining product prices during the period. We cannot assume that the per gallon margins realized during fiscal 2021 are sustainable for future periods. Product sales and cost of product include home heating oil, propane, motor fuel, other petroleum products and liquidated damages billings.

	Six Months Ended
	March 31, 2021				March 31, 2020
Home Heating Oil and Propane	Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon
Volume		247.1				243.3
Sales	$	707.2	$	2.8623	$	756.8	$	3.1102
Cost	$	372.9	$	1.5094	$	436.7	$	1.7947
Gross Profit	$	334.3	$	1.3529	$	320.1	$	1.3155

Motor Fuel and Other Petroleum Products	Amount (in millions)		Per Gallon		Amount (in millions)		Per Gallon
Volume		73.4				78.0
Sales	$	132.5	$	1.8054	$	157.2	$	2.0143
Cost	$	112.8	$	1.5365	$	136.3	$	1.7471
Gross Profit	$	19.7	$	0.2689	$	20.9	$	0.2672

Total Product	Amount (in millions)		Amount (in millions)
Sales	$	839.7	$	914.0
Cost	$	485.7	$	573.0
Gross Profit	$	354.0	$	341.0

For the six months ended March 31, 2021, total product gross profit was $354.0 million, which was $13.0 million, or 3.8% more than for the six months ended March 31, 2020, as a $4.9 million increase in home heating oil and propane volume and $9.3 million increase in home heating oil and propane margins were slightly reduced by a $1.2 million decrease in gross profit from motor fuel and other petroleum products.

Cost of Installations and Services

Total installation costs for the six months ended March 31, 2021 increased by $0.4 million or 1.0%, to $42.8 million, compared to $42.4 million of installation costs for the six months ended March 31, 2020. Installation costs as a percentage of installation sales were 80.9% for the six months ended March 31, 2021 and 83.5% for the six months ended March 31, 2020.

Service expense decreased by $1.7 million, or 1.9%, to $90.9 million for the six months ended March 31, 2021, representing 107.2% of service sales, versus $92.6 million, or 106.0% of service sales, for the six months ended March 31, 2020.  We realized a combined gross profit from service and installation of $4.1 million for the six months ended March 31, 2021 compared to a gross profit of $3.1 million for the six months ended March 31, 2020, a $1.0 million improvement in profitability. 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.

33

(Increase) Decrease in the Fair Value of Derivative Instruments

During the six months ended March 31, 2021, the change in the fair value of derivative instruments resulted in a $25.6 million credit consisting of a $13.6 million credit due to an increase in the market value for unexpired hedges and a $12.0 million credit due to the expiration of certain hedged positions.

During the six months ended March 31, 2020, the change in the fair value of derivative instruments resulted in a $5.3 million charge consisting of a $14.0 million charge due to a decrease in the market value for unexpired hedges partially offset by an $8.7 million credit due to the expiration of certain hedged positions.

Delivery and Branch Expenses

For the six months ended March 31, 2021, delivery and branch expenses decreased $0.6 million, or 0.3%, to $181.6 million, compared to $182.2 million for the six months ended March 31, 2020, as an unfavorable $6.7 million change in the benefit recorded from the weather hedge was more than offset by a reduction in operating costs of $7.3 million, or 4.0%. The benefit recorded from the weather hedge of $3.4 million reduced delivery and branch expenses versus the prior year comparable year’s quarter in which we recorded a weather hedge benefit of $10.1 million. The 4.0% reduction in operating costs compares favorably to the 1.5% increase in home heating oil and propane volume. Lower bad debt and credit card processing fees ($3.0 million), lower insurance expense ($3.0 million) and other expense savings of $1.3 million drove the $7.3 million reduction in operating costs.

Depreciation and Amortization Expenses

For the six months ended March 31, 2021, depreciation and amortization expenses decreased $1.9 million, or 10.6% to $16.2 million, compared to $18.1 million for the six months ended March 31, 2020, primarily due to lower amortization expense related to intangible assets that fully amortized in the prior fiscal year.

General and Administrative Expenses

For the six months ended March 31, 2021, general and administrative expenses increased by $0.7 million or 5.3% to $12.6 million from $11.9 million for the six months ended March 31, 2020, primarily due to higher 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 adjusts accordingly based on Adjusted EBITDA levels achieved.

Finance Charge Income

For the six months ended March 31, 2021, finance charge income decreased to $1.2 million from $2.0 million for the six months ended March 31, 2020, primarily due to lower customer late payment charges resulting from lower past due receivable balances.

Interest Expense, Net

For the six months ended March 31, 2021, net interest expense decreased by $1.4 million, or 26.6%, to $4.0 million compared to $5.4 million for the six months ended March 31, 2020.  The year-over-year change reflects a decrease in average borrowings of $37.8 million from $194.0 million for the six months ended March 31, 2020 to $156.2 million for the six months ended March 31, 2021, and a decrease in the weighted average interest rate from 4.9% for the six months ended March 31, 2020 to 3.8% for the six months ended March 31, 2021. To hedge against rising interest rates, the Company utilizes interest rate swaps.  At March 31, 2021, $61.5 million, or 53%, of our long term debt, was fixed.  

Amortization of Debt Issuance Costs

For the six months ended March 31, 2021, amortization of debt issuance cost was $0.5 million, essentially unchanged from the six months ended March 31, 2020.

Income Tax Expense

For the six months ended March 31, 2021, the Company’s income tax expense increased by $10.5 million to $47.0 million, from $36.5 million for the six months ended March 31, 2020, due primarily to an increase in income before income taxes of $47.4 million that was driven by an $30.9 million non-cash favorable change in the fair market value of derivative instruments.

34

Net Income

For the six months ended March 31, 2021, Star’s net income increased $36.9 million, to $123.0 million, primarily due to a favorable change in the fair value of derivative instruments of $30.9 million, a $13.1 million increase in Adjusted EBITDA, described below, and lower depreciation and amortization expense of $1.9 million, partially offset by an increase in income tax expense of $10.5 million.

Adjusted EBITDA

For the six months ended March 31, 2021, Adjusted EBITDA increased by $13.1 million, to $165.1 million compared to the six months ended March 31, 2020.  The impact of slightly higher home heating oil and propane volume (1.5%) an increase in home heating oil and propane margins ($0.0374 per gallon) and lower total operating expenses ($6.6 million) more than offset a $6.7 million decline in the benefit recorded from the weather hedge. While colder temperatures of 2.9% drove the increase in home heating oil and propane volume, the colder temperatures was also the primary driver of the decrease in the benefit ($6.7 million) under our weather hedges.

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 the Company’s ability to make the Minimum Quarterly Distribution. EBITDA and Adjusted EBITDA are calculated as follows:

	Six Months Ended March 31,
(in thousands)	2021			2020
Net income	$	123,024		$	86,163
Plus:
Income tax expense		46,980			36,482
Amortization of debt issuance costs		490			488
Interest expense, net		3,987			5,435
Depreciation and amortization		16,225			18,139
EBITDA (a)		190,706			146,707
(Increase) / decrease in the fair value of derivative instruments		(25,619	)		5,253
Adjusted EBITDA (a)		165,087			151,960
Add / (subtract)
Income tax expense		(46,980	)		(36,482	)
Interest expense, net		(3,987	)		(5,435	)
Provision for losses on accounts receivable		256			3,203
Increase in accounts receivables		(103,987	)		(69,562	)
(Increase) decrease in inventories		(9,652	)		12,008
Decrease in customer credit balances		(43,421	)		(32,462	)
Change in deferred taxes		12,623			222
Change in other operating assets and liabilities		35,534			27,423
Net cash provided by operating activities	$	5,473		$	50,875
Net cash used in investing activities	$	(39,962	)	$	(13,197	)
Net cash used in financing activities	$	(13,539	)	$	(32,276	)

(a) EBITDA (Earnings from continuing operations before net interest expense, income taxes, depreciation and amortization) and Adjusted EBITDA (Earnings from continuing operations before net interest expense, income taxes, depreciation and amortization, (increase) decrease in the fair value of derivatives, other income (loss), net, multiemployer pension plan withdrawal charge, gain or loss on debt redemption, goodwill impairment, and other non-cash and non-operating charges) are non-GAAP financial measures that are used as supplemental financial measures by management and external users of our financial statements, such as investors, commercial banks and research analysts, to assess:

• our compliance with certain financial covenants included in our debt agreements;

• our financial performance without regard to financing methods, capital structure, income taxes or historical cost basis;

• our operating performance and return on invested capital compared to those of other companies in the retail distribution of refined petroleum products, without regard to financing methods and capital structure;

• our ability to generate cash sufficient to pay interest on our indebtedness and to make distributions to our partners; and

• the viability of acquisitions and capital expenditure projects and the overall rates of return of alternative investment opportunities.

35

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:

• EBITDA and Adjusted EBITDA do not reflect our cash used for capital expenditures.

• Although depreciation and amortization are non-cash charges, the assets being depreciated or amortized often will have to be replaced and EBITDA and Adjusted EBITDA do not reflect the cash requirements for such replacements;

• EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital requirements;

• EBITDA and Adjusted EBITDA do not reflect the cash necessary to make payments of interest or principal on our indebtedness; and EBITDA and Adjusted EBITDA do not reflect the cash required to pay taxes.

DISCUSSION OF CASH FLOWS

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.

Operating Activities

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 months ended March 31, 2021, cash provided by operating activities decreased $45.4 million to $5.5 million, compared to $50.9 million of cash provided by operating activities during the six months ended March 31, 2020.  The decrease was driven by a $45.4 million unfavorable change in accounts receivable (including customer credit balances) due to colder temperatures and higher sales volume in the second quarter of fiscal 2021 compared to the second quarter of fiscal 2020, a $21.7 million unfavorable change in inventory due primarily to the higher cost of liquid product on hand as of March 31, 2021 as compared to March 31, 2020, a $12.6 million unfavorable change in amounts receivable/accrued for settled derivative contracts due primary to higher NYMEX ultra low sulfur diesel contract pricing as of March 31, 2021 as compared to March 31, 2020, and $0.3 million of other changes in working capital, that was partially offset by a $20.2 million increase in cash flows from operations, and a $14.4 million favorable change in accounts payable due to the pricing and timing of inventory purchases.

Investing Activities

During the six months ended March 31, 2021, the Company acquired two propane and two heating oil dealers for an aggregate of approximately $39.3 million; $38.4 million in cash and $0.9 million of deferred liabilities.  The gross purchase price was allocated $34.2 million to intangible assets, $5.9 million to fixed assets and reduced by $0.8 million in working capital credits.

Our capital expenditures for the six months ended March 31, 2021 totaled $7.2 million, as we invested in computer hardware and software ($1.0 million), refurbished certain physical plants ($1.4 million), expanded our propane operations ($1.1 million) and made additions to our fleet and other equipment ($3.7 million).

During the six months ended March 31, 2021, $0.6 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 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.

On October 27, 2020, the Company sold certain propane assets for cash proceeds of $6.1 million.

Our capital expenditures for the six months ended March 31, 2020 totaled $5.7 million, as we invested in computer hardware and software ($1.4 million), refurbished certain physical plants ($1.4 million), expanded our propane operations ($1.0 million) and made additions to our fleet and other equipment ($1.9 million). During the six months ended March 31, 2020, we also deposited $6.4 million into an irrevocable trust to secure certain liabilities for our captive insurance company and another $0.8 million of earnings were reinvested into the irrevocable trust. During the six months ended March 31, 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.

Financing Activities

During the six months ended March 31, 2021, we repaid $6.5 million of our term loan, borrowed $75.2 million under our revolving credit facility and subsequently repaid $40.2 million, repurchased 3.1 million Common Units for $30.5 million primarily in

36

connection with our unit repurchase plan, and paid distributions of $11.1 million to our Common Unit holders and $0.5 million to our General Partner unit holders (including $0.4 million of incentive distributions as provided in our Partnership Agreement).

During the six months ended March 31, 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 million of debt issuance costs, borrowed an additional net balance of $1.5 million under our revolving credit facility, repaid $2.5 million of our term loan, repurchased 2.1 million Common Units for $18.6 million in connection with our unit repurchase plan, and paid distributions of $11.8 million to our Common Unit holders and $0.4 million to our General Partner unit holders (including $0.4 million of incentive distributions as provided in our Partnership Agreement).

FINANCING AND SOURCES OF LIQUIDITY

Liquidity and Capital Resources Comparatives

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, 2021 ($8.9 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 from subsequent seasonal reductions in inventory and accounts receivable. As of March 31, 2021, we had accounts receivable of $187.5 million of which $148.6 million is due from residential customers and $38.9 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, 2021, we had $35.0 million in borrowings under our revolving credit facility, $117.0 million outstanding under our term loan, and $3.5 million in letters of credit outstanding.

Under the terms of the fifth amended and restated 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 30^th or September 30^th, and no more than 4.5 as of December 31^st or March 31^st. As of March 31, 2021, Availability, as defined in the fifth amended and restated revolving credit facility agreement, was $225.5 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 2021 are estimated to be approximately $10.0 million to $12.0 million, excluding the capital requirements for leased fleet. In addition, we plan to invest approximately $0.5 million to $0.9 million in our propane operations. Distributions for the balance of fiscal 2021, at the current quarterly level of $0.1425 per unit, would result in aggregate payments of approximately $11.5 million to Common Unit holders, $0.5 million to our General Partner (including $0.5 million of incentive distribution as provided for in our Partnership Agreement) and $0.5 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. Over the last two fiscal years, the Company was required to deposit on average $9.2 million into our captive insurance company as collateral. For fiscal 2021, we are not required to make any additional deposits.  Further, 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.

Contractual Obligations and Off-Balance Sheet Arrangements

There has been no material change to Contractual Obligations and Off-Balance Sheet Arrangements since our September 30, 2020 Form 10-K disclosure and therefore, the table has not been included in this Form 10-Q.

Recent Accounting Pronouncements

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.

37

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

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, 2021, we had outstanding borrowings totaling $152.0 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 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, 2021, the potential impact on our hedging activity would be to increase the fair market value of these outstanding derivatives by $5.6 million to a fair market value of $17.8 million; and conversely a hypothetical ten percent decrease in the cost of product would decrease the fair market value of these outstanding derivatives by $4.5 million to a fair market value of $7.7 million.

Item 4.

Controls and Procedures

a) Evaluation of disclosure controls and procedures

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, 2021. 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, 2021 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.

b) Change in internal control over financial reporting

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.

c) Other

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, 2021, that our disclosure controls and procedures were effective in achieving that level of reasonable assurance.

38

PART II OTHER INFORMATION

Item 1.

Legal Proceedings

In the opinion of management, we are not a party to any litigation, which individually or in the aggregate could reasonably be expected to have a material adverse effect on our results of operations, financial position or liquidity.

Item 1A.

Risk Factors

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 2020 Form 10-K. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Note 4 to the Condensed Consolidated Financial Statements concerning the Company’s repurchase of Common Units during the six months ended March 31, 2021 is incorporated into this Item 2 by reference.

39

Item 6.

Exhibits

(a) Exhibits Included Within:

10.1	Unit Purchase Agreement, dated as of January 27, 2021, between the Company and Moab Partners, L.P. (incorporated by reference to Exhibit 10.3 to Registrant’s Quarterly Report on Form 10-Q filed with the Commission on February 3,  2021)
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, 2021, 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.INS	Inline XBRL Instance Document.
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)

40

SIGNATURES

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:

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 5, 2021
Signature	Title	Date
/s/ Cory A. Czekanski Cory A. Czekanski	Vice President – Controller Kestrel Heat LLC (Principal Accounting Officer)	May 5, 2021

41

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Jeffrey M. Woosnam, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Star Group, L.P. (“Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information and;

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 5, 2021

/s/ Jeffrey M. Woosnam

Jeffrey M. Woosnam

President and Chief Executive Officer

Star Group, L.P.

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Richard F. Ambury, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Star Group, L.P. (“Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrants’ other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(c) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information and;

(d) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 5, 2021

/s/ Richard F. Ambury

Richard F. Ambury

Chief Financial Officer

Star Group, L.P.

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Star Group, L.P. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey M. Woosnam, President and Chief Executive Officer of the Company, certify to my knowledge pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, following due inquiry, I believe that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to Star Group, L.P. and will be retained by Star Group, L.P. and furnished to the Securities and Exchange Commission or its staff upon request.

	STAR GROUP, L.P.
	By:	KESTREL HEAT, LLC (General Partner)
Date: May 5, 2021
	By:	/s/ Jeffrey M. Woosnam
		Jeffrey M. Woosnam
		President and Chief Executive Officer
		Star Group, L.P.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Star Group, L.P. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard F. Ambury, Chief Financial Officer of the Company, certify to my knowledge pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, following due inquiry, I believe that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to Star Group, L.P. and will be retained by Star Group, L.P. and furnished to the Securities and Exchange Commission or its staff upon request.

	STAR GROUP, L.P.
	By:	KESTREL HEAT, LLC (General Partner)
		/s/ Richard F. Ambury
Date: May 5, 2021	By:	Richard F. Ambury
		Chief Financial Officer
		Star Group, L.P.

XML

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2021	Apr. 30, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Trading Symbol	SGU
Title of 12(b) Security	Common Unit
Security Exchange Name	NYSE
Entity Registrant Name	STAR GROUP, L.P.
Entity Central Index Key	0001002590
Entity Tax Identification Number	06-1437793
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	DE
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-14129
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		40,199,232
Entity Address, Address Line One	9 West Broad Street
Entity Address, City or Town	Stamford
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06902
City Area Code	(203)
Local Phone Number	328-7310

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Current assets
Cash and cash equivalents	$ 8,883	$ 56,911
Receivables, net of allowance of $5,797 and $6,121, respectively	187,457	83,594
Inventories	59,139	50,256
Fair asset value of derivative instruments	11,416
Prepaid expenses and other current assets	40,821	29,554
Assets held for sale		6,030
Total current assets	307,716	226,345
Property and equipment, net	97,929	93,495
Operating lease right-of-use assets	96,310	99,776
Goodwill	253,199	240,327
Intangibles, net	102,479	90,293
Restricted cash	250	250
Captive insurance collateral	69,653	69,787
Deferred charges and other assets, net	18,726	18,343
Total assets	946,262	838,616
Current liabilities
Accounts payable	35,341	30,827
Liabilities held for sale		1,265
Revolving credit facility borrowings	35,000
Fair liability value of derivative instruments		11,437
Current maturities of long-term debt	13,000	13,000
Current portion of operating lease liabilities	18,588	19,139
Accrued expenses and other current liabilities	159,880	127,286
Unearned service contract revenue	63,929	58,430
Customer credit balances	40,257	83,471
Total current liabilities	365,995	344,855
Long-term debt	103,408	109,805
Long-term operating lease liabilities	83,444	85,908
Deferred tax liabilities, net	30,074	17,227
Other long-term liabilities	26,065	25,001
Partners’ capital
Common unitholders	353,793	273,283
General partner	(1,991)	(2,506)
Accumulated other comprehensive loss, net of taxes	(14,526)	(14,957)
Total partners’ capital	337,276	255,820
Total liabilities and partners’ capital	$ 946,262	$ 838,616

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Statement Of Financial Position [Abstract]
Receivables, allowance	$ 5,797	$ 6,121

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
		Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Sales:
Total sales		$ 604,115	$ 543,063	$ 977,435	$ 1,052,008
Cost and expenses:
(Increase) decrease in the fair value of derivative instruments	[1]	(8,224)	11,670	(25,619)	5,253
Delivery and branch expenses		100,942	85,463	181,629	182,189
Depreciation and amortization expenses		8,268	9,089	16,225	18,139
General and administrative expenses		6,320	5,422	12,561	11,928
Finance charge income		(799)	(1,321)	(1,205)	(2,034)
Operating income		119,695	86,117	174,481	128,568
Interest expense, net		(2,136)	(2,756)	(3,987)	(5,435)
Amortization of debt issuance costs		(243)	(253)	(490)	(488)
Income before income taxes		117,316	83,108	170,004	122,645
Income tax expense		32,152	24,700	46,980	36,482
Net income		85,164	58,408	123,024	86,163
General Partner’s interest in net income		681	409	977	601
Limited Partners’ interest in net income		$ 84,483	$ 57,999	$ 122,047	$ 85,562
Basic and diluted income per Limited Partner Unit:	[2]	$ 1.71	$ 1.03	$ 2.43	$ 1.52
Weighted average number of Limited Partner units outstanding:
Basic and Diluted		40,382	46,244	41,324	46,760
Product
Sales:
Total sales		$ 539,371	$ 481,275	$ 839,703	$ 913,963
Installations and services
Sales:
Total sales		64,744	61,788	137,732	138,045
Cost of product
Cost and expenses:
Cost and expenses		313,552	285,350	485,699	573,023
Cost of installations and services
Cost and expenses:
Cost and expenses		$ 64,361	$ 61,273	$ 133,664	$ 134,942

[1] Represents the change in value of unrealized open positions and expired options.

[2] See Note 16 - Earnings Per Limited Partner Unit.

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 85,164	$ 58,408	$ 123,024	$ 86,163
Other comprehensive income:
Unrealized gain on pension plan obligation	235	455	470	910
Tax effect of unrealized gain on pension plan obligation	(64)	(133)	(128)	(258)
Unrealized gain (loss) on captive insurance collateral	(526)	107	(866)	43
Tax effect of unrealized gain (loss) on captive insurance collateral	110	(15)	182	(7)
Unrealized gain (loss) on interest rate hedges	719	(1,716)	1,051	(1,382)
Tax effect of unrealized gain (loss) on interest rate hedges	(190)	460	(278)	374
Total other comprehensive income (loss)	284	(842)	431	(320)
Total comprehensive income	$ 85,448	$ 57,566	$ 123,455	$ 85,843

XML

CONDENSED CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL - USD ($) shares in Thousands, $ in Thousands	Total	General Partner	Common Stock	Accumulated Other Comprehensive Income (Loss)
Beginning Balance at Sep. 30, 2019	$ 260,840	$ (1,968)	$ 279,709	$ (16,901)
Beginning Balance, unit at Sep. 30, 2019		326	47,685
Net income	86,163	$ 601	$ 85,562
Unrealized gain on pension plan obligation	910			910
Tax effect of unrealized gain on pension plan obligation	(258)			(258)
Unrealized gain (loss) on captive insurance collateral	43			43
Tax effect of unrealized gain (loss) on captive insurance collateral	(7)			(7)
Unrealized gain (loss) on interest rate hedges	(1,382)			(1,382)
Tax effect of unrealized gain (loss) on interest rate hedges	374			374
Distributions	(12,153)	(425)	(11,728)
Retirement of units	(18,575)		$ (18,575)
Retirement of units, shares			(2,063)
Ending Balance at Mar. 31, 2020	315,955	$ (1,792)	$ 334,968	(17,221)
Ending Balance, Unit at Mar. 31, 2020		326	45,622
Beginning Balance at Dec. 31, 2019	270,898	$ (1,991)	$ 289,268	(16,379)
Beginning Balance, unit at Dec. 31, 2019		326	46,404
Net income	58,408	$ 409	$ 57,999
Unrealized gain on pension plan obligation	455			455
Tax effect of unrealized gain on pension plan obligation	(133)			(133)
Unrealized gain (loss) on captive insurance collateral	107			107
Tax effect of unrealized gain (loss) on captive insurance collateral	(15)			(15)
Unrealized gain (loss) on interest rate hedges	(1,716)			(1,716)
Tax effect of unrealized gain (loss) on interest rate hedges	460			460
Distributions	(5,998)	(210)	(5,788)
Retirement of units	(6,511)		$ (6,511)
Retirement of units, shares			(782)
Ending Balance at Mar. 31, 2020	315,955	$ (1,792)	$ 334,968	(17,221)
Ending Balance, Unit at Mar. 31, 2020		326	45,622
Beginning Balance at Sep. 30, 2020	255,820	$ (2,506)	$ 273,283	(14,957)
Beginning Balance, unit at Sep. 30, 2020		326	43,328
Ending Balance at Dec. 31, 2020	262,616	$ (2,447)	$ 279,873	(14,810)
Ending Balance, Unit at Dec. 31, 2020		326	40,737
Beginning Balance at Sep. 30, 2020	255,820	$ (2,506)	$ 273,283	(14,957)
Beginning Balance, unit at Sep. 30, 2020		326	43,328
Net income	123,024	$ 977	$ 122,047
Unrealized gain on pension plan obligation	470			470
Tax effect of unrealized gain on pension plan obligation	(128)			(128)
Unrealized gain (loss) on captive insurance collateral	(866)			(866)
Tax effect of unrealized gain (loss) on captive insurance collateral	182			182
Unrealized gain (loss) on interest rate hedges	1,051			1,051
Tax effect of unrealized gain (loss) on interest rate hedges	(278)			(278)
Distributions	(11,533)	(462)	(11,071)
Retirement of units	(30,466)		$ (30,466)
Retirement of units, shares			(3,129)
Ending Balance at Mar. 31, 2021	337,276	$ (1,991)	$ 353,793	(14,526)
Ending Balance, Unit at Mar. 31, 2021		326	40,199
Beginning Balance at Dec. 31, 2020	262,616	$ (2,447)	$ 279,873	(14,810)
Beginning Balance, unit at Dec. 31, 2020		326	40,737
Net income	85,164	$ 681	$ 84,483
Unrealized gain on pension plan obligation	235			235
Tax effect of unrealized gain on pension plan obligation	(64)			(64)
Unrealized gain (loss) on captive insurance collateral	(526)			(526)
Tax effect of unrealized gain (loss) on captive insurance collateral	110			110
Unrealized gain (loss) on interest rate hedges	719			719
Tax effect of unrealized gain (loss) on interest rate hedges	(190)			(190)
Distributions	(5,594)	(225)	(5,369)
Retirement of units	(5,194)		$ (5,194)
Retirement of units, shares			(538)
Ending Balance at Mar. 31, 2021	$ 337,276	$ (1,991)	$ 353,793	$ (14,526)
Ending Balance, Unit at Mar. 31, 2021		326	40,199

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands		6 Months Ended
		Mar. 31, 2021	Mar. 31, 2020
Cash flows provided by (used in) operating activities:
Net income		$ 123,024	$ 86,163
Adjustment to reconcile net income to net cash provided by (used in) operating activities:
(Increase) decrease in the fair value of derivative instruments	[1]	(25,619)	5,253
Depreciation and amortization		16,715	18,627
Provision for losses on accounts receivable		256	3,203
Change in deferred taxes		12,623	222
Change in weather hedge contracts		(3,424)	(10,053)
Changes in operating assets and liabilities:
Increase in receivables		(103,987)	(69,562)
(Increase) decrease in inventories		(9,652)	12,008
(Increase) decrease in other assets		(2,016)	4,812
Increase (decrease) in accounts payable		5,538	(8,910)
Decrease in customer credit balances		(43,421)	(32,462)
Increase in other current and long-term liabilities		35,436	41,574
Net cash provided by operating activities		5,473	50,875
Cash flows provided by (used in) investing activities:
Capital expenditures		(7,232)	(5,684)
Proceeds from sales of fixed assets		143	201
Proceeds from sale of propane assets		6,093
Purchase of investments		(603)	(7,218)
Acquisitions		(38,363)	(496)
Net cash used in investing activities		(39,962)	(13,197)
Cash flows provided by (used in) financing activities:
Revolving credit facility borrowings		75,154	90,202
Revolving credit facility repayments		(40,154)	(127,659)
Loan issuance			130,000
Term loan repayments		(6,500)	(92,500)
Distributions		(11,533)	(12,153)
Unit repurchases		(30,466)	(18,575)
Customer retainage payments		(29)	(300)
Payments of debt issue costs		(11)	(1,291)
Net cash used in financing activities		(13,539)	(32,276)
Net (decrease) increase in cash, cash equivalents, and restricted cash		(48,028)	5,402
Cash, cash equivalents, and restricted cash at beginning of period		57,161	5,149
Cash, cash equivalents, and restricted cash at end of period		$ 9,133	$ 10,551

[1] Represents the change in value of unrealized open positions and expired options.

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Organization

6 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Organization

1) Organization

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 one 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 Company is organized as follows:

• Star is a limited partnership, which at March 31, 2021, had outstanding 40.2 million Common Units (NYSE: “SGU”), representing a 99.2 % limited partner interest in Star, and 0.3 million general partner units, representing a 0.8% general partner interest in Star. Our general partner is Kestrel Heat, LLC, a Delaware limited liability company (“Kestrel Heat” or the “general partner”). The Board of Directors of Kestrel Heat (the “Board”) is appointed by its sole member, Kestrel Energy Partners, LLC, a Delaware limited liability company (“Kestrel”).  Although Star is a partnership, it is taxed as a corporation and its distributions to unitholders are treated as taxable dividends.

• Star owns 100% of Star Acquisitions, Inc. (“SA”), a Minnesota corporation that owns 100% of Petro Holdings, Inc. (“Petro”). SA and its subsidiaries are subject to Federal and state corporate income taxes. Star’s operations are conducted through Petro and its subsidiaries. Petro is primarily a Northeast and Mid-Atlantic U.S. region retail distributor of home heating oil and propane that at March 31, 2021 served approximately 431,200 full service residential and commercial home heating oil and propane customers and 69,500 customers on a delivery only basis. We also sell gasoline and diesel fuel to approximately 26,600 customers. We install, maintain, and repair heating and air conditioning equipment and to a lesser extent provide these services outside our heating oil and propane customer base including approximately 18,300 service contracts for natural gas and other heating systems.

• Petroleum Heat and Power Co., Inc. (“PH&P”) is a 100% owned subsidiary of Star. PH&P is the borrower and Star is the guarantor of the fifth amended and restated credit agreement’s $130 million five-year senior secured term loan and the $300 million ($450 million during the heating season of December through April of each year) revolving credit facility, both due December 4, 2024. (See Note 11—Long-Term Debt and Bank Facility Borrowings)

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Summary of Significant Accounting Policies

6 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2) Summary of Significant Accounting Policies

Basis of Presentation

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 period ended March 31, 2021 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, 2020.

Comprehensive Income

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

Cash, Cash Equivalents, and Restricted Cash

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, 2021, the $9.1 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of $8.9 million of cash and cash equivalents and $0.3 million of restricted cash. At September 30, 2020, the $57.2 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of $56.9 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.

Fair Value Valuation Approach

The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

• Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

• Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

• Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

Captive Insurance Collateral

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.

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.

Weather Hedge Contract

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 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 hedge period runs from November 1 through March 31, taken as a whole, for each respective fiscal year. The “Payment Thresholds,” or strikes, are set at various levels for fiscal 2020 and 2021. The maximum that the Company could receive is $12.5 million per year. In addition, for fiscal 2020 and 2021 we were obligated to make an annual payment capped at $5.0 million if degree days exceed the Payment Threshold.  As of March 31, 2021, the Company reduced delivery and branch expense and recorded a receivable under these contracts of $3.4 million, and received the amount in full in April 2021. As of March 31, 2020, the Company reduced delivery and branch expense and recorded a receivable under these contracts of $10.1 million, and received the amount in full in April 2020.

For fiscal 2022, the Company entered into a weather hedge contract with similar terms described above. The maximum that the Company can receive is $7.5 million and we do not have a potential obligation to pay.

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

As of March 31, 2021, we had $0.2 million and $16.6 million balances included in the captions “Accrued expenses and other current liabilities” and “Other long-term liabilities,” on our Condensed Consolidated Balance Sheet representing the remaining balance of the NETTI Fund withdrawal liability.  As of September 30, 2020, we had $0.2 million and $16.7 million balances included in the captions “Accrued expenses and other current liabilities” and “Other long-term liabilities,” on our Condensed Consolidated Balance Sheet. 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, 2021 and September 30, 2020 was $25.6 million and $29.0 million, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of this liability.

Recently Adopted Accounting Pronouncements

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. The Company adopted ASU No. 2016-13 effective October 1, 2020. The adoption of ASU No. 2016-13 did not have a material impact on the Company’s consolidated financial statements and related disclosures. See Note 3 – Revenue Recognition.

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. The Company adopted ASU No. 2017-04 effective October 1, 2020. The adoption of ASU No. 2017-04 did not have an impact on the Company’s 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 Company adopted ASU No. 2018-14 effective October 1, 2020.  The adoption of ASU No. 2018-15 did not have an impact on the Company’s consolidated financial statements and related 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 Company adopted ASU No. 2018-15 effective October 1, 2020. The adoption of ASU No. 2018-15 did not have an impact on the Company’s consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements

No recently issued accounting pronouncements are expected to have a material impact on the Company’s consolidated financial statements.

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Revenue Recognition

6 Months Ended

Mar. 31, 2021

Revenue From Contract With Customer [Abstract]

Revenue Recognition

3) Revenue Recognition

The following disaggregates our revenue by major sources for the three and six months ended March 31, 2021 and March 31, 2020:

	Three Months Ended March 31,				Six Months Ended March 31,
(in thousands)	2021		2020		2021		2020
Petroleum Products:
Home heating oil and propane	$	466,401	$	413,466	$	707,213	$	756,812
Other petroleum products		72,970		67,809		132,490		157,151
Total petroleum products		539,371		481,275		839,703		913,963
Installations and Services:
Equipment installations		22,865		20,158		52,925		50,723
Equipment maintenance service contracts		27,045		27,764		53,913		55,672
Billable call services		14,834		13,866		30,894		31,650
Total installations and services		64,744		61,788		137,732		138,045
Total Sales	$	604,115	$	543,063	$	977,435	$	1,052,008

Deferred Contract Costs 

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, 2021, the amount of deferred contract costs included in “Prepaid expenses and other current assets” and “Deferred charges and other assets, net” was $3.5 million and $6.2 million, respectively.  At September 30, 2020, the amount of deferred contract costs included in “Prepaid expenses and other current assets” and “Deferred charges and other assets, net” was $3.4 million and $5.9 million, respectively.  During the six months ended March 31, 2021 and 2020 we recognized expense of $2.0 million and $1.9 million, respectively, associated with the amortization of deferred contract costs within “Delivery and branch expenses” in the Condensed Consolidated Statement of Operations. 

Contract Liability Balances

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, 2021 and September 30, 2020 the Company had contract liabilities of $99.6 million and $139.6 million, respectively.  During the six months ended March 31, 2021, the Company recognized $107.2 million of revenue that was included in the September 30, 2020 contract liability balance.  During the six months ended March 31, 2020 the Company recognized $95.7 million of revenue that was included in the September 30, 2019 contract liability balance.

Receivables and Allowance for Doubtful Accounts

Accounts receivables from customers are recorded at the invoiced amounts. Finance charges may be applied to trade receivables that are more than 30 days past due, and are recorded as finance charge income.

The allowance for doubtful accounts is the Company’s estimate of the amount of trade receivables that may not be collectible. The allowance is determined at an aggregate level by grouping accounts based on certain account criteria and its receivable aging. The allowance is based on both quantitative and qualitative factors, including historical loss experience, historical collection patterns, overdue status, aging trends, current and future economic conditions. The Company has an established process to periodically review current and past due trade receivable balances to determine the adequacy of the allowance. No single statistic or measurement determines the adequacy of the allowance. The total allowance reflects management’s estimate of losses inherent in its trade receivables at the balance sheet date. Different assumptions or changes in economic conditions could result in material changes to the allowance for doubtful accounts.

Changes in the allowance for credit losses are as follows:

(in thousands)	Credit Loss Allowance
Balance at September 30, 2020	$	6,121
Current period provision		256
Write-offs, net and other		(580	)
Balance as of March 31, 2021	$	5,797

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Common Unit Repurchase and Retirement

6 Months Ended

Mar. 31, 2021

Equity [Abstract]

Common Unit Repurchase and Retirement

4) Common Unit Repurchase and Retirement

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 August 2020, the Company had repurchased approximately 14.4 million Common Units under the Repurchase Plan.  In August 2020, the Board authorized an increase of the number of Common Units that remained available for the Company to repurchase from 2.0 million to a total of 6.0 million, of which 4.9 million were available for repurchase in open market transactions and 1.1 million were available for repurchase in privately-negotiated transactions. 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 under 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, 2021.

The following table shows repurchases under the Repurchase Plan:

(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
Fiscal year 2012 to 2020 total		17,697	$	8.26		14,622		5,730
First quarter fiscal year 2021 total		2,591	$	9.75		1,191		4,539	(b), (c)
January 2021		429	$	9.65		429		4,110	(d)
February 2021		109	$	9.76		108		4,002
March 2021		-	$	-		-		4,002
Second quarter fiscal year 2021 total		538	$	9.67		537		4,002
April 2021		-	$	-		-		4,002	(e)

(a) Amount includes repurchase costs.

(b) On November 16, 2020, the Company purchased 1.4 million Common Units in a private transaction for aggregate consideration of approximately $13.8 million.  The purchase was made outside of the Company’s unit repurchase plan.

(c) On December 10, 2020, the Company purchased 0.4 million Common Units in a private transaction for aggregate consideration of approximately $4.2 million.  The purchase was made within the Company’s unit repurchase plan.

(d) On January 28, 2021, the Company purchased 0.1 million Common Units in a private transaction for aggregate consideration of approximately $1.3 million.  The purchase was made within the Company’s unit repurchase plan.

(e) Of the total available for repurchase, approximately 3.5 million units are available for repurchase in open market transactions and 0.5 million units are available for repurchase in privately-negotiated transactions, under the Repurchase Plan.

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Captive Insurance Collateral

6 Months Ended

Mar. 31, 2021

Investments Debt And Equity Securities [Abstract]

Captive Insurance Collateral

5) Captive Insurance Collateral

The Company considers all of its captive insurance collateral to be Level 1 available-for-sale investments. Investments at March 31, 2021 consist of the following (in thousands):

	Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)			Fair Value
Cash and Receivables	$	913	$	—	$	—		$	913
U.S. Government Sponsored Agencies		47,154		134		(60	)		47,228
Corporate Debt Securities		19,020		1,009		(56	)		19,973
Foreign Bonds and Notes		1,487		52		—			1,539
Total	$	68,574	$	1,195	$	(116	)	$	69,653

Investments at September 30, 2020 consist of the following (in thousands):

	Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)			Fair Value
Cash and Receivables	$	1,152	$	—	$	—		$	1,152
U.S. Government Sponsored Agencies		42,032		229		(26	)		42,235
Corporate Debt Securities		21,666		1,660		—			23,326
Foreign Bonds and Notes		2,992		82		—			3,074
Total	$	67,842	$	1,971	$	(26	)	$	69,787

Maturities of investments were as follows at March 31, 2021 (in thousands):

	Net Carrying Amount
Due within one year	$	6,477
Due after one year through five years		61,007
Due after five years through ten years		2,169
Total	$	69,653

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Derivatives and Hedging-Disclosures and Fair Value Measurements

6 Months Ended

Mar. 31, 2021

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivatives and Hedging-Disclosures and Fair Value Measurements

6) Derivatives and Hedging—Disclosures and Fair Value Measurements

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, 2021, 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: 6.4 million gallons of swap contracts, 4.5 million gallons of call options, 2.8 million gallons of put options, and 54.4 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, 2021, held 3.8 million gallons of long future contracts and 25.5 million gallons of short future contracts that settle in future months.  To hedge its internal fuel usage and other activities for fiscal 2021, the Company held 0.5 million gallons of call options and swap contracts that settle in future months.

As of March 31, 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 million gallons of swap contracts, 5.3 million gallons of call options, 4.0 million gallons of put options, and 52.8 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, 2020, held 32.6 million gallons of long future contracts, and 52.1 million gallons of short future contracts that settle in future months. To hedge its internal fuel usage and other activities for fiscal 2020 and 2021, the Company held 7.3 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, 2021, the Company has interest rate swap agreements in order to mitigate exposure to market risk associated with variable rate interest on $61.5 million, or 53%, 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, 2021 the fair value of the swap contracts was $(2.1) million. As of September 30, 2020, the notional value of the swap contracts was $64.0 million and the fair value of the swap contracts was $(3.1) 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, 2021, the aggregate cash posted as collateral in the normal course of business at counterparties was $1.8 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, 2021, no hedge positions and payable amounts were secured under the credit facility.

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 commodity 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:
Derivatives Not Designated    as Hedging Instruments					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
Asset Derivatives at March 31, 2021
Commodity contracts	Fair asset value of derivative instruments	$	15,082		$	—	$	15,082
Commodity contracts	Long-term derivative liabilities included in the deferred charges and other assets, net		1,246			—		1,246
Commodity contract assets at March 31, 2021		$	16,328		$	—	$	16,328
Liability Derivatives at March 31, 2021
Commodity contracts	Fair asset value of derivative instruments	$	(3,666	)	$	—	$	(3,666	)
Commodity contracts	Long-term derivative liabilities included in the deferred charges and other assets, net		(445	)		—		(445	)
Commodity contract liabilities at March 31, 2021		$	(4,111	)	$	—	$	(4,111	)
Asset Derivatives at September 30, 2020
Commodity contracts	Fair liability value of derivative instruments	$	24,274		$	—	$	24,274
Commodity contracts	Long-term derivative liabilities included in the deferred charges and other assets, net and other long-term liabilities, net balances		1,890			—		1,890
Commodity contract assets September 30, 2020		$	26,164		$	—	$	26,164
Liability Derivatives at September 30, 2020
Commodity contracts	Fair liability value of derivative instruments	$	(35,711	)	$	—	$	(35,711	)
Commodity contracts	Long-term derivative liabilities included in the deferred charges and other assets, net and other long-term liabilities, net balances		(1,779	)		—		(1,779	)
Commodity contract liabilities September 30, 2020		$	(37,490	)	$	—	$	(37,490	)

The Company’s commodity 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
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
Fair asset value of derivative instruments	$	15,082	$	(3,666	)	$	11,416		$	—	$	—	$	11,416
Long-term derivative assets included in    deferred charges and other assets, net		1,246		(445	)		801			—		—		801
Total at March 31, 2021	$	16,328	$	(4,111	)	$	12,217		$	—	$	—	$	12,217
Long-term derivative assets included in other long-term assets, net	$	1,605	$	(1,478	)	$	127		$	—	$	—	$	127
Fair liability value of derivative instruments		24,274		(35,711	)		(11,437	)		—		—		(11,437	)
Long-term derivative liabilities included in other long-term liabilities, net		285		(301	)		(16	)		—		—		(16	)
Total at September 30, 2020	$	26,164	$	(37,490	)	$	(11,326	)	$	—	$	—	$	(11,326	)

(In thousands)
The Effect of Derivative Instruments on the Statement of Operations
		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, 2021			Three Months Ended March 31, 2020			Six Months Ended March 31, 2021			Six Months Ended March 31, 2020
Commodity contracts	Cost of product (a)	$	(5,064	)	$	(3,700	)	$	6,514		$	2,349
Commodity contracts	Cost of installations and service (a)	$	(130	)	$	233		$	(37	)	$	224
Commodity contracts	Delivery and branch expenses (a)	$	(193	)	$	626		$	8		$	597
Commodity contracts	(Increase) / decrease in the fair value of derivative instruments (b)	$	(8,224	)	$	11,670		$	(25,619	)	$	5,253

(a) Represents realized closed positions and includes the cost of options as they expire.

(b) Represents the change in value of unrealized open positions and expired options.

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Inventories

6 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Inventories

7) Inventories

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, 2021		September 30, 2020
Product	$	38,993	$	29,799
Parts and equipment		20,146		20,457
Total inventory	$	59,139	$	50,256

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Property and Equipment

6 Months Ended

Mar. 31, 2021

Property Plant And Equipment [Abstract]

Property and Equipment

8) Property and Equipment

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, 2021		September 30, 2020
Property and equipment	$	231,092	$	220,220
Less: accumulated depreciation		133,163		126,725
Property and equipment, net	$	97,929	$	93,495

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Business Combinations and Divestitures

6 Months Ended

Mar. 31, 2021

Business Combinations [Abstract]

Business Combinations and Divestitures

9) Business Combinations and Divestitures

During fiscal year 2021 the Company has acquired two propane and two heating oil dealers for an aggregate of approximately $39.3 million; $38.4 million in cash and $0.9 million of deferred liabilities.  The gross purchase price was allocated $34.2 million to intangible assets, $5.9 million to fixed assets and reduced by $0.8 million in working capital credits. The estimated working capital associated with the acquisitions is subject to a final post closing adjustment, and as of March 31, 2021 the intangibles and goodwill have been provisionally determined.  The Company will record any material adjustments to the initial estimates based on new information obtained that would have existed as of the date of the acquisition. Any adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period the adjustment arises. The Company also sold certain propane assets for cash proceeds of $6.1 million.

Through the second quarter of 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.

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Goodwill and Intangible Assets, net

6 Months Ended

Mar. 31, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets, net

10) Goodwill and Intangible Assets, net

Goodwill

A summary of changes in Company’s goodwill is as follows (in thousands):

Balance as of September 30, 2020	$	240,327
Fiscal year 2021 business combinations		12,872
Balance as of March 31, 2021	$	253,199

Intangibles, net

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

	March 31, 2021						September 30, 2020
	Gross						Gross
	Carrying		Accum.				Carrying		Accum.
	Amount		Amortization		Net		Amount		Amortization		Net
Customer lists	$	401,630	$	320,809	$	80,821	$	382,942	$	312,928	$	70,014
Trade names and other intangibles		39,977		18,319		21,658		37,382		17,103		20,279
Total	$	441,607	$	339,128	$	102,479	$	420,324	$	330,031	$	90,293

Amortization expense for intangible assets was $9.1 million for the six months ended March 31, 2021, compared to $10.6 million for the six months ended March 31, 2020.

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Long-Term Debt and Bank Facility Borrowings

6 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Long-Term Debt and Bank Facility Borrowings

11) Long-Term Debt and Bank Facility Borrowings

The Company’s debt is as follows (in thousands):

	March 31,				September 30,
	2021				2020
	Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)
Revolving Credit Facility Borrowings	$	35,000	$	35,000	$	—	$	—
Senior Secured Term Loan (b)		116,408		117,000		122,805		123,500
Total debt	$	151,408	$	152,000	$	122,805	$	123,500
Total short-term portion of debt	$	48,000	$	48,000	$	13,000	$	13,000
Total long-term portion of debt	$	103,408	$	104,000	$	109,805	$	110,500

(a) The face amount of the Company’s variable rate long-term debt approximates fair value.

(b) Carrying amounts are net of unamortized debt issuance costs of $0.6 million as of March 31, 2021 and $0.7 million as of September 30, 2020.

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 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.  In the first quarter of fiscal 2021 the banks waived the Excess Cash Flow requirement related to fiscal 2020.

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, 2021, the effective interest rate on the Term Loan was approximately 4.2% and the effective interest rate on revolving credit facility borrowings was approximately 2.5%. At September 30, 2020, the effective interest rate on the term loan and revolving credit facility borrowings was approximately 5.2% and 4.0%, 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, 2021, $117.0 million of the Term Loan was outstanding, $35.0 million was outstanding under the revolving credit facility, no hedge positions were secured under the credit agreement, and $3.5 million of letters of credit were issued and outstanding. At September 30, 2020, $123.5 million of the Term Loan was outstanding, no amount was outstanding under the revolving credit facility, $11.1 million of hedge positions were secured under the credit agreement, and $3.5 million of letters of credit were issued and outstanding.

At March 31, 2021, availability was $225.5 million, and the Company was in compliance with the fixed charge coverage ratio and the senior secured leverage ratio. At September 30, 2020, availability was $203.4 million, and the Company was in compliance with the fixed charge coverage ratio and the senior secured leverage ratio.

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Income Taxes

6 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

12) Income Taxes  

 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 for the three and six months ended March 31, 2021, and March 31, 2020 are as follows:

	Three Months Ended					Six Months Ended
	March 31,					March 31,
(in thousands)	2021		2020			2021		2020
Income before income taxes	$	117,316	$	83,108		$	170,004	$	122,645
Current income tax expense		23,130		25,814			34,357		36,260
Deferred income tax expense (benefit)		9,022		(1,114	)		12,623		222
Total income tax expense	$	32,152	$	24,700		$	46,980	$	36,482

At March 31, 2021, we did not have unrecognized income tax benefits.

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.

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Supplemental Disclosure of Cash Flow Information

6 Months Ended

Mar. 31, 2021

Supplemental Cash Flow Elements [Abstract]

Supplemental Disclosure of Cash Flow Information

13) Supplemental Disclosure of Cash Flow Information

	Six Months Ended
Cash paid during the period for:	March 31,
(in thousands)	2021		2020
Income taxes, net	$	4,606	$	9,992
Interest	$	4,756	$	6,543

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Commitments and Contingencies

6 Months Ended

Mar. 31, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

14) Commitments and Contingencies

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, 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.

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Earnings Per Limited Partner Unit

6 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Earnings Per Limited Partner Unit

15) Earnings Per Limited Partner Unit

The following table presents the net income allocation and per unit data:

	Three Months Ended				Six Months Ended
Basic and Diluted Earnings Per Limited Partner:	March 31,				March 31,
(in thousands, except per unit data)	2021		2020		2021		2020
Net income	$	85,164	$	58,408	$	123,024	$	86,163
Less General Partner’s interest in net income		681		409		977		601
Net income available to limited partners		84,483		57,999		122,047		85,562
Less dilutive impact of theoretical distribution of earnings *		15,457		10,283		21,798		14,631
Limited Partner’s interest in net income	$	69,026	$	47,716	$	100,249	$	70,931
Per unit data:
Basic and diluted net income available to limited partners	$	2.09	$	1.25	$	2.95	$	1.83
Less dilutive impact of theoretical distribution of earnings *		0.38		0.22		0.52		0.31
Limited Partner’s interest in net income	$	1.71	$	1.03	$	2.43	$	1.52
Weighted average number of Limited Partner units outstanding		40,382		46,244		41,324		46,760

*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 period were distributed, based on the terms of the Partnership agreement, 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.

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Subsequent Events

6 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

16) Subsequent Events

Acquisition

In April 2021, the Company purchased the customer list and assets of a heating oil dealer for an aggregate amount of approximately $3.2 million; $2.3 million in cash and $0.9 million of contingent liabilities. The purchase price was allocated $3.0 million to intangible assets, $0.3 million to fixed assets and reduced by $0.1 million for working capital credits.

Quarterly Distribution Declared

In April 2021, we declared a quarterly distribution of $0.1425 per unit, or $0.57 per unit on an annualized basis, on all Common Units with respect to the second quarter of fiscal 2021, payable on May 11, 2021, to holders of record on May 3, 2021. 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, $5.7 million will be paid to the Common Unit holders, $0.3 million to the General Partner unit holders (including $0.3 million of incentive distribution as provided in our Partnership Agreement) and $0.3 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.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

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 period ended March 31, 2021 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, 2020.

Comprehensive Income

Comprehensive Income

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

Cash, Cash Equivalents, and Restricted Cash

Cash, Cash Equivalents, and Restricted Cash

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, 2021, the $9.1 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of $8.9 million of cash and cash equivalents and $0.3 million of restricted cash. At September 30, 2020, the $57.2 million of cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows is composed of $56.9 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.

Fair Value Valuation Approach

Fair Value Valuation Approach

The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

• Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

• Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

• Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

Captive Insurance Collateral

Captive Insurance Collateral

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.

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.

Weather Hedge Contract

Weather Hedge Contract

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 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 hedge period runs from November 1 through March 31, taken as a whole, for each respective fiscal year. The “Payment Thresholds,” or strikes, are set at various levels for fiscal 2020 and 2021. The maximum that the Company could receive is $12.5 million per year. In addition, for fiscal 2020 and 2021 we were obligated to make an annual payment capped at $5.0 million if degree days exceed the Payment Threshold.  As of March 31, 2021, the Company reduced delivery and branch expense and recorded a receivable under these contracts of $3.4 million, and received the amount in full in April 2021. As of March 31, 2020, the Company reduced delivery and branch expense and recorded a receivable under these contracts of $10.1 million, and received the amount in full in April 2020.

For fiscal 2022, the Company entered into a weather hedge contract with similar terms described above. The maximum that the Company can receive is $7.5 million and we do not have a potential obligation to pay.

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

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

As of March 31, 2021, we had $0.2 million and $16.6 million balances included in the captions “Accrued expenses and other current liabilities” and “Other long-term liabilities,” on our Condensed Consolidated Balance Sheet representing the remaining balance of the NETTI Fund withdrawal liability.  As of September 30, 2020, we had $0.2 million and $16.7 million balances included in the captions “Accrued expenses and other current liabilities” and “Other long-term liabilities,” on our Condensed Consolidated Balance Sheet. 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, 2021 and September 30, 2020 was $25.6 million and $29.0 million, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of this liability.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

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. The Company adopted ASU No. 2016-13 effective October 1, 2020. The adoption of ASU No. 2016-13 did not have a material impact on the Company’s consolidated financial statements and related disclosures. See Note 3 – Revenue Recognition.

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. The Company adopted ASU No. 2017-04 effective October 1, 2020. The adoption of ASU No. 2017-04 did not have an impact on the Company’s 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 Company adopted ASU No. 2018-14 effective October 1, 2020.  The adoption of ASU No. 2018-15 did not have an impact on the Company’s consolidated financial statements and related 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 Company adopted ASU No. 2018-15 effective October 1, 2020. The adoption of ASU No. 2018-15 did not have an impact on the Company’s consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

No recently issued accounting pronouncements are expected to have a material impact on the Company’s consolidated financial statements.

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Revenue Recognition (Tables)

6 Months Ended

Mar. 31, 2021

Revenue From Contract With Customer [Abstract]

Summary of Disaggregation of Revenue by Major Sources

The following disaggregates our revenue by major sources for the three and six months ended March 31, 2021 and March 31, 2020:

	Three Months Ended March 31,				Six Months Ended March 31,
(in thousands)	2021		2020		2021		2020
Petroleum Products:
Home heating oil and propane	$	466,401	$	413,466	$	707,213	$	756,812
Other petroleum products		72,970		67,809		132,490		157,151
Total petroleum products		539,371		481,275		839,703		913,963
Installations and Services:
Equipment installations		22,865		20,158		52,925		50,723
Equipment maintenance service contracts		27,045		27,764		53,913		55,672
Billable call services		14,834		13,866		30,894		31,650
Total installations and services		64,744		61,788		137,732		138,045
Total Sales	$	604,115	$	543,063	$	977,435	$	1,052,008

Summary of Changes in Allowance for Credit Losses

Changes in the allowance for credit losses are as follows:

(in thousands)	Credit Loss Allowance
Balance at September 30, 2020	$	6,121
Current period provision		256
Write-offs, net and other		(580	)
Balance as of March 31, 2021	$	5,797

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Common Unit Repurchase and Retirement (Tables)

6 Months Ended

Mar. 31, 2021

Equity [Abstract]

Company's Repurchase Activities

The following table shows repurchases under the Repurchase Plan:

(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
Fiscal year 2012 to 2020 total		17,697	$	8.26		14,622		5,730
First quarter fiscal year 2021 total		2,591	$	9.75		1,191		4,539	(b), (c)
January 2021		429	$	9.65		429		4,110	(d)
February 2021		109	$	9.76		108		4,002
March 2021		-	$	-		-		4,002
Second quarter fiscal year 2021 total		538	$	9.67		537		4,002
April 2021		-	$	-		-		4,002	(e)

(a) Amount includes repurchase costs.

(b) On November 16, 2020, the Company purchased 1.4 million Common Units in a private transaction for aggregate consideration of approximately $13.8 million.  The purchase was made outside of the Company’s unit repurchase plan.

(c) On December 10, 2020, the Company purchased 0.4 million Common Units in a private transaction for aggregate consideration of approximately $4.2 million.  The purchase was made within the Company’s unit repurchase plan.

(d) On January 28, 2021, the Company purchased 0.1 million Common Units in a private transaction for aggregate consideration of approximately $1.3 million.  The purchase was made within the Company’s unit repurchase plan.

(e) Of the total available for repurchase, approximately 3.5 million units are available for repurchase in open market transactions and 0.5 million units are available for repurchase in privately-negotiated transactions, under the Repurchase Plan.

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Captive Insurance Collateral (Tables)

6 Months Ended

Mar. 31, 2021

Investments Debt And Equity Securities [Abstract]

Schedule of Captive Insurance Collateral to be Level 1 Available-for-sale Investments

The Company considers all of its captive insurance collateral to be Level 1 available-for-sale investments. Investments at March 31, 2021 consist of the following (in thousands):

	Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)			Fair Value
Cash and Receivables	$	913	$	—	$	—		$	913
U.S. Government Sponsored Agencies		47,154		134		(60	)		47,228
Corporate Debt Securities		19,020		1,009		(56	)		19,973
Foreign Bonds and Notes		1,487		52		—			1,539
Total	$	68,574	$	1,195	$	(116	)	$	69,653

Investments at September 30, 2020 consist of the following (in thousands):

	Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)			Fair Value
Cash and Receivables	$	1,152	$	—	$	—		$	1,152
U.S. Government Sponsored Agencies		42,032		229		(26	)		42,235
Corporate Debt Securities		21,666		1,660		—			23,326
Foreign Bonds and Notes		2,992		82		—			3,074
Total	$	67,842	$	1,971	$	(26	)	$	69,787

Schedule of Maturities of Investments

Maturities of investments were as follows at March 31, 2021 (in thousands):

	Net Carrying Amount
Due within one year	$	6,477
Due after one year through five years		61,007
Due after five years through ten years		2,169
Total	$	69,653

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Derivatives and Hedging-Disclosures and Fair Value Measurements (Tables)

6 Months Ended

Mar. 31, 2021

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Company's Commodity Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The Company’s commodity 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:
Derivatives Not Designated    as Hedging Instruments					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
Asset Derivatives at March 31, 2021
Commodity contracts	Fair asset value of derivative instruments	$	15,082		$	—	$	15,082
Commodity contracts	Long-term derivative liabilities included in the deferred charges and other assets, net		1,246			—		1,246
Commodity contract assets at March 31, 2021		$	16,328		$	—	$	16,328
Liability Derivatives at March 31, 2021
Commodity contracts	Fair asset value of derivative instruments	$	(3,666	)	$	—	$	(3,666	)
Commodity contracts	Long-term derivative liabilities included in the deferred charges and other assets, net		(445	)		—		(445	)
Commodity contract liabilities at March 31, 2021		$	(4,111	)	$	—	$	(4,111	)
Asset Derivatives at September 30, 2020
Commodity contracts	Fair liability value of derivative instruments	$	24,274		$	—	$	24,274
Commodity contracts	Long-term derivative liabilities included in the deferred charges and other assets, net and other long-term liabilities, net balances		1,890			—		1,890
Commodity contract assets September 30, 2020		$	26,164		$	—	$	26,164
Liability Derivatives at September 30, 2020
Commodity contracts	Fair liability value of derivative instruments	$	(35,711	)	$	—	$	(35,711	)
Commodity contracts	Long-term derivative liabilities included in the deferred charges and other assets, net and other long-term liabilities, net balances		(1,779	)		—		(1,779	)
Commodity contract liabilities September 30, 2020		$	(37,490	)	$	—	$	(37,490	)

Company's Commodity Derivatives Assets (Liabilities) Offset by Counterparty

The Company’s commodity 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
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
Fair asset value of derivative instruments	$	15,082	$	(3,666	)	$	11,416		$	—	$	—	$	11,416
Long-term derivative assets included in    deferred charges and other assets, net		1,246		(445	)		801			—		—		801
Total at March 31, 2021	$	16,328	$	(4,111	)	$	12,217		$	—	$	—	$	12,217
Long-term derivative assets included in other long-term assets, net	$	1,605	$	(1,478	)	$	127		$	—	$	—	$	127
Fair liability value of derivative instruments		24,274		(35,711	)		(11,437	)		—		—		(11,437	)
Long-term derivative liabilities included in other long-term liabilities, net		285		(301	)		(16	)		—		—		(16	)
Total at September 30, 2020	$	26,164	$	(37,490	)	$	(11,326	)	$	—	$	—	$	(11,326	)

Company's Commodity Derivatives Assets (Liabilities) Offset by Counterparty

The Company’s commodity 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
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
Fair asset value of derivative instruments	$	15,082	$	(3,666	)	$	11,416		$	—	$	—	$	11,416
Long-term derivative assets included in    deferred charges and other assets, net		1,246		(445	)		801			—		—		801
Total at March 31, 2021	$	16,328	$	(4,111	)	$	12,217		$	—	$	—	$	12,217
Long-term derivative assets included in other long-term assets, net	$	1,605	$	(1,478	)	$	127		$	—	$	—	$	127
Fair liability value of derivative instruments		24,274		(35,711	)		(11,437	)		—		—		(11,437	)
Long-term derivative liabilities included in other long-term liabilities, net		285		(301	)		(16	)		—		—		(16	)
Total at September 30, 2020	$	26,164	$	(37,490	)	$	(11,326	)	$	—	$	—	$	(11,326	)

Company's Effect on Derivative Instruments on the Statement of Operations

(In thousands)
The Effect of Derivative Instruments on the Statement of Operations
		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, 2021			Three Months Ended March 31, 2020			Six Months Ended March 31, 2021			Six Months Ended March 31, 2020
Commodity contracts	Cost of product (a)	$	(5,064	)	$	(3,700	)	$	6,514		$	2,349
Commodity contracts	Cost of installations and service (a)	$	(130	)	$	233		$	(37	)	$	224
Commodity contracts	Delivery and branch expenses (a)	$	(193	)	$	626		$	8		$	597
Commodity contracts	(Increase) / decrease in the fair value of derivative instruments (b)	$	(8,224	)	$	11,670		$	(25,619	)	$	5,253

(a) Represents realized closed positions and includes the cost of options as they expire.

(b) Represents the change in value of unrealized open positions and expired options.

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Inventories (Tables)

6 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Components of Inventory

The components of inventory were as follows (in thousands):

	March 31, 2021		September 30, 2020
Product	$	38,993	$	29,799
Parts and equipment		20,146		20,457
Total inventory	$	59,139	$	50,256

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Property and Equipment (Tables)

6 Months Ended

Mar. 31, 2021

Property Plant And Equipment [Abstract]

Property and Equipment

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, 2021		September 30, 2020
Property and equipment	$	231,092	$	220,220
Less: accumulated depreciation		133,163		126,725
Property and equipment, net	$	97,929	$	93,495

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Goodwill and Intangible Assets, net (Tables)

6 Months Ended

Mar. 31, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Changes in Company's Goodwill

A summary of changes in Company’s goodwill is as follows (in thousands):

Balance as of September 30, 2020	$	240,327
Fiscal year 2021 business combinations		12,872
Balance as of March 31, 2021	$	253,199

Intangible Assets Subject to Amortization

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

	March 31, 2021						September 30, 2020
	Gross						Gross
	Carrying		Accum.				Carrying		Accum.
	Amount		Amortization		Net		Amount		Amortization		Net
Customer lists	$	401,630	$	320,809	$	80,821	$	382,942	$	312,928	$	70,014
Trade names and other intangibles		39,977		18,319		21,658		37,382		17,103		20,279
Total	$	441,607	$	339,128	$	102,479	$	420,324	$	330,031	$	90,293

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Long-Term Debt and Bank Facility Borrowings (Tables)

6 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Company's Debt

The Company’s debt is as follows (in thousands):

	March 31,				September 30,
	2021				2020
	Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)
Revolving Credit Facility Borrowings	$	35,000	$	35,000	$	—	$	—
Senior Secured Term Loan (b)		116,408		117,000		122,805		123,500
Total debt	$	151,408	$	152,000	$	122,805	$	123,500
Total short-term portion of debt	$	48,000	$	48,000	$	13,000	$	13,000
Total long-term portion of debt	$	103,408	$	104,000	$	109,805	$	110,500

(a) The face amount of the Company’s variable rate long-term debt approximates fair value.

(b) Carrying amounts are net of unamortized debt issuance costs of $0.6 million as of March 31, 2021 and $0.7 million as of September 30, 2020.

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Income Taxes (Tables)

6 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Current and Deferred Income Tax Expense

The current and deferred income tax expense for the three and six months ended March 31, 2021, and March 31, 2020 are as follows:

	Three Months Ended					Six Months Ended
	March 31,					March 31,
(in thousands)	2021		2020			2021		2020
Income before income taxes	$	117,316	$	83,108		$	170,004	$	122,645
Current income tax expense		23,130		25,814			34,357		36,260
Deferred income tax expense (benefit)		9,022		(1,114	)		12,623		222
Total income tax expense	$	32,152	$	24,700		$	46,980	$	36,482

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Supplemental Disclosure of Cash Flow Information (Tables)

6 Months Ended

Mar. 31, 2021

Supplemental Cash Flow Elements [Abstract]

Schedule of Supplemental Disclosure of Cash Flow Information

	Six Months Ended
Cash paid during the period for:	March 31,
(in thousands)	2021		2020
Income taxes, net	$	4,606	$	9,992
Interest	$	4,756	$	6,543

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Earnings Per Limited Partner Unit (Tables)

6 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Net Income Allocation and Per Unit Data

The following table presents the net income allocation and per unit data:

	Three Months Ended				Six Months Ended
Basic and Diluted Earnings Per Limited Partner:	March 31,				March 31,
(in thousands, except per unit data)	2021		2020		2021		2020
Net income	$	85,164	$	58,408	$	123,024	$	86,163
Less General Partner’s interest in net income		681		409		977		601
Net income available to limited partners		84,483		57,999		122,047		85,562
Less dilutive impact of theoretical distribution of earnings *		15,457		10,283		21,798		14,631
Limited Partner’s interest in net income	$	69,026	$	47,716	$	100,249	$	70,931
Per unit data:
Basic and diluted net income available to limited partners	$	2.09	$	1.25	$	2.95	$	1.83
Less dilutive impact of theoretical distribution of earnings *		0.38		0.22		0.52		0.31
Limited Partner’s interest in net income	$	1.71	$	1.03	$	2.43	$	1.52
Weighted average number of Limited Partner units outstanding		40,382		46,244		41,324		46,760

*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 period were distributed, based on the terms of the Partnership agreement, 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.

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Organization - Additional Information (Detail) shares in Thousands		6 Months Ended
	Dec. 04, 2019 USD ($)	Mar. 31, 2021 Segment Customer Contract shares	Dec. 31, 2020 shares	Sep. 30, 2020 shares	Mar. 31, 2020 shares	Dec. 31, 2019 shares	Sep. 30, 2019 shares
Limited Partners' Capital Account [Line Items]
Number of reportable segments | Segment		1
Fifth Amendment
Limited Partners' Capital Account [Line Items]
Non Seasonal maximum borrowing capacity under revolving credit facility | $	$ 300,000,000
Maximum borrowing capacity (heating season December to April) under revolving credit facility | $	$ 450,000,000
Due date of debt	Dec. 04, 2024
Fifth Amendment | Term Loan
Limited Partners' Capital Account [Line Items]
Outstanding term loan | $	$ 130,000,000
Senior secured term loan maturity period	5 years
Petro Holdings, Inc
Limited Partners' Capital Account [Line Items]
Ownership interest of Star Acquisitions Inc.		100.00%
Number of residential and commercial home heating oil and propane customers served | Customer		431,200
Number of customers to whom only home heating oil, gasoline and diesel were sells on a delivery only basis | Customer		69,500
Number of service contracts for natural gas and other heating systems | Contract		18,300
Number of customers to whom sell gasoline and diesel fuel | Customer		26,600
Star Group L.P.
Limited Partners' Capital Account [Line Items]
Percentage of limited partner interest		99.20%
Percentage of general partner interest		0.80%
Star Acquisitions, Inc
Limited Partners' Capital Account [Line Items]
Ownership interest of partnership		100.00%
Petroleum Heat and Power Co., Inc.
Limited Partners' Capital Account [Line Items]
Ownership interest of partnership		100.00%
Common Stock
Limited Partners' Capital Account [Line Items]
Number of outstanding units | shares		40,199	40,737	43,328	45,622	46,404	47,685
General Partner
Limited Partners' Capital Account [Line Items]
Number of outstanding units | shares		326	326	326	326	326	326

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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($)	6 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2019
Schedule Of Significant Accounting Policies [Line Items]
Cash, cash equivalents, and restricted cash	$ 9,133,000	$ 10,551,000			$ 57,161,000	$ 5,149,000
Cash and cash equivalents	8,883,000				56,911,000
Restricted cash	250,000				250,000
Derivative maximum payout					5,000,000.0
Accrued expenses and other current liabilities	159,880,000				127,286,000
Other long-term liabilities	26,065,000				25,001,000
New England Teamsters & Trucking Industry Pension Fund
Schedule Of Significant Accounting Policies [Line Items]
Accrued expenses and other current liabilities	200,000				200,000
Other long-term liabilities	16,600,000				16,700,000
New England Teamsters & Trucking Industry Pension Fund | Significant Other Observable Inputs Level 2
Schedule Of Significant Accounting Policies [Line Items]
Multiemployer plan discounted withdrawal liability	25,600,000				29,000,000.0
Financial Products Corporation | Delivery and branch expenses
Schedule Of Significant Accounting Policies [Line Items]
Charge on weather hedge contract	$ (3,400,000)	$ (10,100,000)
Scenario Forecast
Schedule Of Significant Accounting Policies [Line Items]
Derivative maximum payout			$ 0	$ 5,000,000.0
Maximum
Schedule Of Significant Accounting Policies [Line Items]
Cash equivalents, highly liquid investments maturity	3 months
Derivative maximum receivable					$ 12,500,000
Maximum | Scenario Forecast
Schedule Of Significant Accounting Policies [Line Items]
Derivative maximum receivable			$ 7,500,000	$ 12,500,000

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Revenue Recognition - Summary of Disaggregation of Revenue by Major Sources (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Disaggregation Of Revenue [Line Items]
Total sales	$ 604,115	$ 543,063	$ 977,435	$ 1,052,008
Home heating oil and propane
Disaggregation Of Revenue [Line Items]
Total sales	466,401	413,466	707,213	756,812
Other petroleum products
Disaggregation Of Revenue [Line Items]
Total sales	72,970	67,809	132,490	157,151
Petroleum products
Disaggregation Of Revenue [Line Items]
Total sales	539,371	481,275	839,703	913,963
Equipment installations
Disaggregation Of Revenue [Line Items]
Total sales	22,865	20,158	52,925	50,723
Equipment maintenance service contracts
Disaggregation Of Revenue [Line Items]
Total sales	27,045	27,764	53,913	55,672
Billable call services
Disaggregation Of Revenue [Line Items]
Total sales	14,834	13,866	30,894	31,650
Installations and services
Disaggregation Of Revenue [Line Items]
Total sales	$ 64,744	$ 61,788	$ 137,732	$ 138,045

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Revenue Recognition - Additional Information (Detail) - USD ($) $ in Millions	6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Sep. 30, 2020
Revenue Recognition [Line Items]
Contract costs, amortization period	5 years
Contract liabilities	$ 99.6		$ 139.6
Contract with customer liability, revenue recognized	$ 107.2	$ 95.7
Maximum
Revenue Recognition [Line Items]
Contract liabilities recognition service contract period	1 year
Delivery and Branch Expenses
Revenue Recognition [Line Items]
Amortization of deferred contract costs	$ 2.0	$ 1.9
Prepaid Expense and Other Current Assets
Revenue Recognition [Line Items]
Deferred contract costs,current	3.5		3.4
Deferred Charges and Other Assets, Net
Revenue Recognition [Line Items]
Deferred contract costs,non current	$ 6.2		$ 5.9

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Revenue Recognition - Summary of Changes in Allowance for Credit Losses (Detail) $ in Thousands	6 Months Ended
	Mar. 31, 2021 USD ($)
Revenue From Contract With Customer [Abstract]
Balance at September 30, 2020	$ 6,121
Current period provision	256
Write-offs, net and other	(580)
Balance as of March 31, 2021	$ 5,797

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Common Unit Repurchase and Retirement - Additional Information (Detail) - USD ($) shares in Thousands		1 Months Ended		3 Months Ended		98 Months Ended	99 Months Ended
	Dec. 04, 2019	Feb. 28, 2021	Jan. 31, 2021	Mar. 31, 2021	Dec. 31, 2020	Aug. 31, 2020	Sep. 30, 2020	Jul. 31, 2020
Capital Unit [Line Items]
Company's common units authorized for repurchase						6,000		2,000
Fifth Amendment
Capital Unit [Line Items]
Availability required to repurchase common units	$ 45,000,000
Percentage of the maximum facility size on a historical proforma and forward-looking basis	15.00%
Non Seasonal maximum borrowing capacity under revolving credit facility	$ 300,000,000
Minimum fixed charge coverage ratio for distributions to unit holders or to repurchase common units	115.00%
Repurchase Plan
Capital Unit [Line Items]
Company's common units repurchased and retired		109	429	538	2,591	14,400	17,697
Common Stock Available for Repurchase Under Privately Negotiated Transactions
Capital Unit [Line Items]
Company's common units authorized for repurchase						1,100
Common Stock Available for Repurchase Under Open Market Transactions
Capital Unit [Line Items]
Company's common units authorized for repurchase						4,900

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Common Unit Repurchase and Retirement - Company's Repurchase Activities (Detail) - $ / shares shares in Thousands		1 Months Ended			3 Months Ended			98 Months Ended	99 Months Ended
		Feb. 28, 2021	Jan. 31, 2021		Mar. 31, 2021	Dec. 31, 2020		Aug. 31, 2020	Sep. 30, 2020	Apr. 30, 2021
Repurchase Plan
Capital Unit [Line Items]
Total Number of Units Purchased		109	429		538	2,591		14,400	17,697
Average Price Paid per Unit	[1]	$ 9.76	$ 9.65		$ 9.67	$ 9.75			$ 8.26
Maximum Number of Units that May Yet Be Purchased		4,002	4,110	[2]	4,002	4,539	[3],[4]		5,730
Publicly Announced Plans or Programs As Part of Repurchase Plan
Capital Unit [Line Items]
Total Number of Units Purchased		108	429		537	1,191			14,622
Subsequent Event | Repurchase Plan
Capital Unit [Line Items]
Maximum Number of Units that May Yet Be Purchased	[5]									4,002

[1] Amount includes repurchase costs.

[2] On January 28, 2021, the Company purchased 0.1 million Common Units in a private transaction for aggregate consideration of approximately $1.3 million.  The purchase was made within the Company’s unit repurchase plan.

[3] On December 10, 2020, the Company purchased 0.4 million Common Units in a private transaction for aggregate consideration of approximately $4.2 million.  The purchase was made within the Company’s unit repurchase plan.

[4] On November 16, 2020, the Company purchased 1.4 million Common Units in a private transaction for aggregate consideration of approximately $13.8 million.  The purchase was made outside of the Company’s unit repurchase plan.

[5] Of the total available for repurchase, approximately 3.5 million units are available for repurchase in open market transactions and 0.5 million units are available for repurchase in privately-negotiated transactions, under the Repurchase Plan.

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Common Unit Repurchase and Retirement - Company's Repurchase Activities (Parenthetical) (Detail) - USD ($) shares in Millions, $ in Millions	Jan. 28, 2021	Dec. 10, 2020	Nov. 16, 2020	Apr. 30, 2021	Aug. 31, 2020	Jul. 31, 2020
Capital Unit [Line Items]
Company's common units authorized for repurchase					6.0	2.0
Private Transaction
Capital Unit [Line Items]
Company's common units repurchased	0.1	0.4	1.4
Aggregate consideration paid for common units purchased	$ 1.3	$ 4.2	$ 13.8
Common Stock Available for Repurchase Under Open Market Transactions
Capital Unit [Line Items]
Company's common units authorized for repurchase					4.9
Common Stock Available for Repurchase Under Open Market Transactions | Subsequent Event
Capital Unit [Line Items]
Company's common units authorized for repurchase				3.5
Common Stock Available for Repurchase Under Privately Negotiated Transactions
Capital Unit [Line Items]
Company's common units authorized for repurchase					1.1
Common Stock Available for Repurchase Under Privately Negotiated Transactions | Subsequent Event
Capital Unit [Line Items]
Company's common units authorized for repurchase				0.5

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Captive Insurance Collateral - Schedule of Captive Insurance Collateral to be Level 1 Available-for-sale Investments (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 68,574	$ 67,842
Gross Unrealized Gain	1,195	1,971
Gross Unrealized (Loss)	(116)	(26)
Fair Value	69,653	69,787
Cash and Receivables
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	913	1,152
Fair Value	913	1,152
U.S. Government Sponsored Agencies
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	47,154	42,032
Gross Unrealized Gain	134	229
Gross Unrealized (Loss)	(60)	(26)
Fair Value	47,228	42,235
Corporate Debt Securities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	19,020	21,666
Gross Unrealized Gain	1,009	1,660
Gross Unrealized (Loss)	(56)
Fair Value	19,973	23,326
Foreign Bonds and Notes
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	1,487	2,992
Gross Unrealized Gain	52	82
Gross Unrealized (Loss)	0	0
Fair Value	$ 1,539	$ 3,074

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Captive Insurance Collateral - Schedule of Maturities of Investments (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Investments Debt And Equity Securities [Abstract]
Due within one year	$ 6,477
Due after one year through five years	61,007
Due after five years through ten years	2,169
Total	$ 69,653	$ 69,787

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Derivatives and Hedging-Disclosures and Fair Value Measurements - Additional Information (Detail) gal in Millions	6 Months Ended
	Mar. 31, 2021 USD ($) gal	Mar. 31, 2020 gal	Sep. 30, 2020 USD ($)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Hedging positions and payable amounts secured under credit facility | $	$ 0		$ 11,100,000
Prepaid expense and other current assets
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Aggregated cash posted as collateral in normal course of business | $	1,800,000
Interest rate swap
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional Value | $	$ 61,500,000		64,000,000.0
Percentage of market risk exposure of long term debt	53.00%
Fair Value | $	$ (2,100,000)		$ (3,100,000)
Call Option
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative activity volume	4.5	5.3
Call Option | Synthetic calls
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative activity volume	54.4	52.8
Put Option
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative activity volume	2.8	4.0
Swap Contracts Bought
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative activity volume	6.4	8.9
Swap Contracts Bought | Short
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative activity volume		0.2
Future Contracts | Long
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative activity volume	3.8	32.6
Future Contracts | Short
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative activity volume	25.5	52.1
Hedge its Internal Fuel Usage and Other Related Activities Call Options and Swap Contracts Bought
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative activity volume	0.5	7.3

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Derivatives and Hedging-Disclosures and Fair Value Measurements - Company's Commodity Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - Derivatives Not Designated as Hedging Instruments under FASB ASC 815-10 - Commodity Contract - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets, commodity contracts	$ 16,328	$ 26,164
Derivative Liabilities, commodity contracts	(4,111)	(37,490)
Fair liability and fair asset value of derivative instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets, commodity contracts	15,082	24,274
Derivative Liabilities, commodity contracts	(3,666)	(35,711)
Deferred charges and other assets, net and other long-term liabilities, net balances
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets, commodity contracts	1,246	1,890
Derivative Liabilities, commodity contracts	(445)	(1,779)
Significant Other Observable Inputs Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets, commodity contracts	16,328	26,164
Derivative Liabilities, commodity contracts	(4,111)	(37,490)
Significant Other Observable Inputs Level 2 | Fair liability and fair asset value of derivative instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets, commodity contracts	15,082	24,274
Derivative Liabilities, commodity contracts	(3,666)	(35,711)
Significant Other Observable Inputs Level 2 | Deferred charges and other assets, net and other long-term liabilities, net balances
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets, commodity contracts	1,246	1,890
Derivative Liabilities, commodity contracts	$ (445)	$ (1,779)

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Derivatives and Hedging-Disclosures and Fair Value Measurements - Offsetting of Financial Assets (Liabilities) and Derivative Assets (Liabilities) (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Net Assets (Liabilities) Presented in the Statement of Financial Position		$ (11,437)
Subject to an enforceable master netting arrangement
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Gross Assets Recognized	$ 16,328	26,164
Gross Liabilities Offset in the Statement of Financial Position	(4,111)	(37,490)
Net Assets (Liabilities) Presented in the Statement of Financial Position	12,217	(11,326)
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments		0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received		0
Gross Amounts Not Offset in the Statement of Financial Position, Net Amount	12,217	(11,326)
Subject to an enforceable master netting arrangement | Fair asset value of derivative instruments
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Gross Assets Recognized	15,082
Gross Liabilities Offset in the Statement of Financial Position	(3,666)
Net Assets (Liabilities) Presented in the Statement of Financial Position	11,416
Gross Amounts Not Offset in the Statement of Financial Position, Net Amount	11,416
Subject to an enforceable master netting arrangement | Other long-term assets, net
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Gross Assets Recognized	1,246	1,605
Gross Liabilities Offset in the Statement of Financial Position	(445)	(1,478)
Net Assets (Liabilities) Presented in the Statement of Financial Position	801	127
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments		0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received		0
Gross Amounts Not Offset in the Statement of Financial Position, Net Amount	$ 801	127
Subject to an enforceable master netting arrangement | Fair liability and fair asset value of derivative instruments
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Gross Assets Recognized		24,274
Gross Liabilities Offset in the Statement of Financial Position		(35,711)
Net Assets (Liabilities) Presented in the Statement of Financial Position		(11,437)
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments		0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received		0
Gross Amounts Not Offset in the Statement of Financial Position, Net Amount		(11,437)
Subject to an enforceable master netting arrangement | Other long-term liabilities
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items]
Gross Assets Recognized		285
Gross Liabilities Offset in the Statement of Financial Position		(301)
Net Assets (Liabilities) Presented in the Statement of Financial Position		(16)
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments		0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received		0
Gross Amounts Not Offset in the Statement of Financial Position, Net Amount		$ (16)

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Derivatives and Hedging-Disclosures and Fair Value Measurements - Effect of Derivative Instruments on Statement of Operations (Detail) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (Gain) or Loss Unrealized, commodity contracts	[1]	$ (8,224)	$ 11,670	$ (25,619)	$ 5,253
Fair Value, Measurements, Recurring | Derivatives Not Designated as Hedging Instruments under FASB ASC 815-10 | Commodity Contract | Cost of product
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (Gain) or Loss Recognized, commodity contracts	[2]	(5,064)	(3,700)	6,514	2,349
Fair Value, Measurements, Recurring | Derivatives Not Designated as Hedging Instruments under FASB ASC 815-10 | Commodity Contract | Cost of installations and service
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (Gain) or Loss Recognized, commodity contracts	[2]	(130)	233	(37)	224
Fair Value, Measurements, Recurring | Derivatives Not Designated as Hedging Instruments under FASB ASC 815-10 | Commodity Contract | Delivery and branch expenses
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (Gain) or Loss Recognized, commodity contracts	[2]	$ (193)	$ 626	$ 8	$ 597

[1] Represents the change in value of unrealized open positions and expired options.

[2] Represents realized closed positions and includes the cost of options as they expire.

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Inventories - Components of Inventory (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Inventory Disclosure [Abstract]
Product	$ 38,993	$ 29,799
Parts and equipment	20,146	20,457
Total inventory	$ 59,139	$ 50,256

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Property and Equipment - Component of Property and Equipment (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Property Plant And Equipment [Abstract]
Property and equipment	$ 231,092	$ 220,220
Less: accumulated depreciation	133,163	126,725
Property and equipment, net	$ 97,929	$ 93,495

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Business Combinations and Divestitures - Additional Information (Detail) $ in Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Mar. 31, 2020 USD ($)	Mar. 31, 2021 USD ($)	Sep. 30, 2021 PartnershipUnit
Propane Assets
Business Acquisition [Line Items]
Cash proceeds from sale of assets		$ 6.1
Propane Dealers | Scenario Forecast
Business Acquisition [Line Items]
Number of businesses acquired | PartnershipUnit			2
Heating Oil Dealers | Scenario Forecast
Business Acquisition [Line Items]
Number of businesses acquired | PartnershipUnit			2
Propane and Heating Oil Dealers
Business Acquisition [Line Items]
Aggregate purchase price partnership acquired		39.3
Cash paid		38.4
Deferred liabilities		0.9
Aggregate purchase price allocation, intangible assets		34.2
Aggregate purchase price allocation, fixed assets		5.9
Gross purchase price increased (reduced) by working capital credits		$ (0.8)
Acquired Business
Business Acquisition [Line Items]
Aggregate purchase price partnership acquired	$ 0.5

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Goodwill and Intangible Assets, net - Summary of Changes in Company's Goodwill (Detail) $ in Thousands	6 Months Ended
	Mar. 31, 2021 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Balance on beginning	$ 240,327
Fiscal year 2021 business combinations	12,872
Balance on ending	$ 253,199

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Goodwill and Intangible Assets, net - Intangible Assets Subject to Amortization (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 441,607	$ 420,324
Accum. Amortization	339,128	330,031
Net	102,479	90,293
Customer Lists
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	401,630	382,942
Accum. Amortization	320,809	312,928
Net	80,821	70,014
Trade Names And Other Intangibles
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	39,977	37,382
Accum. Amortization	18,319	17,103
Net	$ 21,658	$ 20,279

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Goodwill and Intangible Assets, net - Additional Information (Detail) - USD ($) $ in Millions	6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization expense for intangible assets	$ 9.1	$ 10.6

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Long-Term Debt and Bank Facility Borrowings - Company's Debt (Detail) - USD ($) $ in Thousands		Mar. 31, 2021	Sep. 30, 2020
Debt Instrument [Line Items]
Long-term debt, carrying Amount		$ 151,408	$ 122,805
Current maturities of long-term debt, carrying Amount		48,000	13,000
Long-term debt		103,408	109,805
Long-term debt, fair value	[1]	152,000	123,500
Current maturities of long-term debt, fair value	[1]	48,000	13,000
Long-term portion of debt, fair value	[1]	104,000	110,500
Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility borrowings, carrying Amount		35,000	0
Credit facility borrowings, fair value	[1]	35,000	0
Term Loan
Debt Instrument [Line Items]
Long-term debt, carrying Amount	[2]	116,408	122,805
Long-term debt, fair value	[1],[2]	$ 117,000	$ 123,500

[1] The face amount of the Company’s variable rate long-term debt approximates fair value.

[2] Carrying amounts are net of unamortized debt issuance costs of $0.6 million as of March 31, 2021 and $0.7 million as of September 30, 2020.

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Long-Term Debt and Bank Facility Borrowings - Company's Debt (Parenthetical) (Detail) - USD ($) $ in Millions	Mar. 31, 2021	Sep. 30, 2020
Term Loan
Debt Instrument [Line Items]
Unamortized debt issuance costs	$ 0.6	$ 0.7

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Long-Term Debt and Bank Facility Borrowings - Additional Information (Detail) - USD ($)		Dec. 04, 2019	Mar. 31, 2021	Sep. 30, 2020
Debt Instrument [Line Items]
Hedging positions and payable amounts secured under credit facility			$ 0	$ 11,100,000
Letters of credit issued and outstanding			3,500,000	3,500,000
Long-term debt, fair value	[1]		152,000,000	123,500,000
Revolving credit facility outstanding			35,000,000
Availability under credit agreement			$ 225,500,000	$ 203,400,000
Term Loan
Debt Instrument [Line Items]
Debt instrument, effective interest rate			4.20%	5.20%
Long-term debt, fair value	[1],[2]		$ 117,000,000	$ 123,500,000
Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, effective interest rate			2.50%	4.00%
Revolving credit facility outstanding			$ 35,000,000.0	$ 0
Fifth Amendment
Debt Instrument [Line Items]
Non Seasonal maximum borrowing capacity under revolving credit facility		$ 300,000,000
Maximum borrowing capacity (heating season December to April) under revolving credit facility		450,000,000
Issuance of line of credit for working capital purposes		$ 25,000,000
Senior secured term loan maturity date		Dec. 04, 2024
Facility size that can be increased without consulting bank group		$ 200,000,000
Term loan annual payment percentage		25.00%
Commitment fee on the unused portion of the facility from December through April		0.30%
Commitment fee on the unused portion of the facility from May through November		0.20%
Minimum fixed charge coverage ratio		110.00%
Availability percentage to maximum facility size		12.50%
Fifth Amendment | Maximum
Debt Instrument [Line Items]
Senior secured leverage ratio during quarters ending June or September		300.00%
Senior secured leverage ratio during quarters ending December or March		450.00%
Fifth Amendment | Quarterly
Debt Instrument [Line Items]
Term loan periodic payment		$ 3,250,000
Fifth Amendment | Annually | Maximum
Debt Instrument [Line Items]
Term loan periodic payment		12,000,000
Fifth Amendment | Term Loan
Debt Instrument [Line Items]
Outstanding term loan		$ 130,000,000
Senior secured term loan maturity period		5 years

[1] The face amount of the Company’s variable rate long-term debt approximates fair value.

[2] Carrying amounts are net of unamortized debt issuance costs of $0.6 million as of March 31, 2021 and $0.7 million as of September 30, 2020.

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Income Taxes - Current and Deferred Income Tax Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Deferred Income Tax Assets And Liabilities
Income before income taxes	$ 117,316	$ 83,108	$ 170,004	$ 122,645
Current income tax expense	23,130	25,814	34,357	36,260
Deferred income tax expense (benefit)	9,022	(1,114)	12,623	222
Total income tax expense	$ 32,152	$ 24,700	$ 46,980	$ 36,482

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Income Taxes - Additional Information (Detail)	6 Months Ended
	Mar. 31, 2021 USD ($)
Income Tax Disclosure [Line Items]
Unrecognized income tax benefits	$ 0
Federal
Income Tax Disclosure [Abstract]
Number of years for examination	4 years
New York
Income Tax Disclosure [Abstract]
Number of years for examination	4 years
Connecticut
Income Tax Disclosure [Abstract]
Number of years for examination	4 years
Pennsylvania
Income Tax Disclosure [Abstract]
Number of years for examination	4 years
New Jersey
Income Tax Disclosure [Abstract]
Number of years for examination	5 years

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Supplemental Disclosure of Cash Flow Information - Schedule of Supplemental Disclosure of Cash Flow Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash paid during the period for:
Income taxes, net	$ 4,606	$ 9,992
Interest	$ 4,756	$ 6,543

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Earnings Per Limited Partner Unit - Net Income Allocation and Per Unit Data (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
		Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Basic and Diluted Earnings Per Limited Partner:
Net income		$ 85,164	$ 58,408	$ 123,024	$ 86,163
Less General Partner’s interest in net income		681	409	977	601
Net income available to limited partners		84,483	57,999	122,047	85,562
Less dilutive impact of theoretical distribution of earnings	[1]	15,457	10,283	21,798	14,631
Limited Partner’s interest in net income		$ 69,026	$ 47,716	$ 100,249	$ 70,931
Per unit data:
Basic and diluted net income available to limited partners		$ 2.09	$ 1.25	$ 2.95	$ 1.83
Less dilutive impact of theoretical distribution of earnings	[1]	0.38	0.22	0.52	0.31
Limited Partner’s interest in net income	[2]	$ 1.71	$ 1.03	$ 2.43	$ 1.52
Weighted average number of Limited Partner units outstanding		40,382	46,244	41,324	46,760

[1] 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 period were distributed, based on the terms of the Partnership agreement, 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.

[2] See Note 16 - Earnings Per Limited Partner Unit.

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Subsequent Events - Additional Information (Detail) - Subsequent Event $ / shares in Units, $ in Millions	1 Months Ended
	Apr. 30, 2021 USD ($) $ / shares
Dividend Declared
Subsequent Event [Line Items]
Distribution declared | $ / shares	$ 0.1425
Partners capital projected distribution amount on annualized basis | $ / shares	0.57
Minimum dividend distribution per unit | $ / shares	$ 0.0675
Amount to paid to common unit holders	$ 5.7
Amount to paid to the General Partner	0.3
Incentive distribution to the General Partner	0.3
Incentive distributions to management	$ 0.3
Dividend payable date	May 11, 2021
Dividend record date	May 03, 2021
Heating Oil Dealers
Subsequent Event [Line Items]
Aggregate purchase price	$ 3.2
Cash paid	2.3
Contingent liabilities	0.9
Aggregate purchase price allocation, intangible assets	3.0
Aggregate purchase price allocation, fixed assets	0.3
Gross purchase price increased (reduced) by working capital credits	$ (0.1)