10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 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, 2020

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: 1-07908

ADAMS RESOURCES & ENERGY, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	74-1753147
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

17 South Briar Hollow Lane, Suite 100

Houston, Texas 77027

(Address of Principal Executive Offices, including Zip Code)

(713) 881-3600

(Registrant’s Telephone Number, including Area Code)

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 Stock, $0.10 Par Value	AE	NYSE American LLC

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 þ No o

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 þ 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 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. o

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

A total of 4,235,750 shares of Common Stock were outstanding at May 1, 2020.

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

		Page No.
PART I.  FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets	2
	Unaudited Condensed Consolidated Statements of Operations	3
	Unaudited Condensed Consolidated Statements of Cash Flows	4
	Unaudited Condensed Consolidated Statements of Shareholders’ Equity	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32
PART II.  OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	34
Signatures		35

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	March 31,		December 31,
	2020		2019
ASSETS
Current assets:
Cash and cash equivalents	$	87,398	$	112,994
Restricted cash	8,827		9,261
Accounts receivable, net of allowance for doubtful
accounts of $117 and $141, respectively	52,941		94,534
Inventory	10,021		26,407
Derivative assets	545		—
Income tax receivable	14,495		2,569
Prepayments and other current assets	1,306		1,559
Total current assets	175,533		247,324
Property and equipment, net	65,381		69,046
Operating lease right-of-use assets, net	9,090		9,576
Intangible assets, net	1,465		1,597
Cash deposits and other assets	2,187		3,299
Total assets	$	253,656	$	330,842
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	78,245	$	147,851
Accounts payable – related party	6		5
Derivative liabilities	526		—
Current portion of finance lease obligations	2,193		2,167
Current portion of operating lease liabilities	2,203		2,252
Other current liabilities	8,808		7,302
Total current liabilities	91,981		159,577
Other long-term liabilities:
Asset retirement obligations	1,585		1,573
Finance lease obligations	3,818		4,376
Operating lease liabilities	6,887		7,323
Deferred taxes and other liabilities	10,059		6,352
Total liabilities	114,330		179,201
Commitments and contingencies (Note 13)
Shareholders’ equity:
Preferred stock – $1.00 par value, 960,000 shares
authorized, none outstanding	—		—
Common stock – $0.10 par value, 7,500,000 shares
authorized, 4,235,750 and 4,235,533 shares outstanding, respectively	423		423
Contributed capital	12,912		12,778
Retained earnings	125,991		138,440
Total shareholders’ equity	139,326		151,641
Total liabilities and shareholders’ equity	$	253,656	$	330,842

See Notes to Unaudited Condensed Consolidated Financial Statements.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended
	March 31,
	2020		2019
Revenues:
Marketing	$	337,221	$	429,761
Transportation	16,256		15,407
Total revenues	353,477		445,168
Costs and expenses:
Marketing	352,865		420,541
Transportation	13,185		13,101
General and administrative	2,894		2,684
Depreciation and amortization	4,473		3,589
Total costs and expenses	373,417		439,915
Operating (losses) earnings	(19,940)		5,253
Other income (expense):
Gain on dissolution of investment	—		498
Interest income	365		656
Interest expense	(150)		(65)
Total other income (expense), net	215		1,089
(Losses) Earnings before income taxes	(19,725)		6,342
Income tax benefit (provision)	8,298		(1,434)
Net (losses) earnings	$	(11,427)	$	4,908
(Losses) Earnings per share:
Basic net (losses) earnings per common share	$	(2.70)	$	1.16
Diluted net (losses) earnings per common share	$	(2.69)	$	1.16
Dividends per common share	$	0.24	$	0.22

See Notes to Unaudited Condensed Consolidated Financial Statements.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Three Months Ended March 31,
	2020		2019
Operating activities:
Net (losses) earnings	$	(11,427)	$	4,908
Adjustments to reconcile net (losses) earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization	4,473		3,589
Gains on sales of property	(140)		(178)
Provision for doubtful accounts	(24)		(32)
Stock-based compensation expense	134		123
Deferred income taxes	(2,689)		834
Net change in fair value contracts	(19)		19
Gain on dissolution of AREC	—		(498)
Changes in assets and liabilities:
Accounts receivable	41,617		(2,866)
Accounts receivable/payable, affiliates	1		(23)
Inventories	16,386		(6,458)
Income tax receivable	(5,530)		426
Prepayments and other current assets	253		(52)
Accounts payable	(68,384)		17,914
Accrued liabilities	1,506		2,432
Other	(3)		878
Net cash provided by (used in) operating activities	(23,846)		21,016
Investing activities:
Property and equipment additions	(2,212)		(8,351)
Proceeds from property sales	502		543
Proceeds from dissolution of AREC	—		923
Insurance and state collateral (deposits) refunds	1,128		842
Net cash used in investing activities	(582)		(6,043)
Financing activities:
Principal repayments of finance lease obligations	(532)		(218)
Payment of contingent consideration liability	(54)		—
Dividends paid on common stock	(1,016)		(928)
Net cash used in financing activities	(1,602)		(1,146)
(Decrease) Increase in cash and cash equivalents, including restricted cash	(26,030)		13,827
Cash and cash equivalents, including restricted cash, at beginning of period	122,255		117,066
Cash and cash equivalents, including restricted cash, at end of period	$	96,225	$	130,893

See Notes to Unaudited Condensed Consolidated Financial Statements.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)

							Total
	Common		Contributed		Retained		Shareholders’
	Stock		Capital		Earnings		Equity
Balance, January 1, 2020	$	423	$	12,778	$	138,440	$	151,641
Net (losses) earnings	—		—		(11,427)		(11,427)
Stock-based compensation expense	—		134		—		134
Dividends declared:
Common stock, $0.24/share	—		—		(1,016)		(1,016)
Awards under LTIP, $0.24/share	—		—		(6)		(6)
Balance, March 31, 2020	$	423	$	12,912	$	125,991	$	139,326

							Total
	Common		Contributed		Retained		Shareholders’
	Stock		Capital		Earnings		Equity
Balance, January 1, 2019	$	422	$	11,948	$	134,228	$	146,598
Net earnings	—		—		4,908		4,908
Stock-based compensation expense	—		123		—		123
Dividends declared:
Common stock, $0.22/share	—		—		(928)		(928)
Awards under LTIP, $0.22/share	—		—		(2)		(2)
Balance, March 31, 2019	$	422	$	12,071	$	138,206	$	150,699

See Notes to Unaudited Condensed Consolidated Financial Statements.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Basis of Presentation

Organization

Adams Resources & Energy, Inc. (“AE”) is a publicly traded Delaware corporation organized in 1973, the common shares of which are listed on the NYSE American LLC under the ticker symbol “AE”. We, through our subsidiaries, are primarily engaged in the business of crude oil marketing, transportation and storage in various crude oil and natural gas basins in the lower 48 states of the United States (“U.S.”). We also conduct tank truck transportation of liquid chemicals and dry bulk primarily in the lower 48 states of the U.S. with deliveries into Canada and Mexico, and with terminals in the Gulf Coast region of the U.S. Unless the context requires otherwise, references to “we,” “us,” “our,” the “Company” or “AE” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries.  

We operate and report in two business segments: (i) crude oil marketing, transportation and storage, and (ii) tank truck transportation of liquid chemicals and dry bulk. See Note 7 for further information regarding our business segments.

Basis of Presentation

Our results of operations for the three months ended March 31, 2020 are not necessarily indicative of results expected for the full year of 2020. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals necessary for fair presentation.  The condensed consolidated financial statements and the accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the rules of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”) filed with the SEC on March 6, 2020. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of our financial statements in conformity with GAAP requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. While we believe the estimates and assumptions used in the preparation of these condensed consolidated financial statements are appropriate, actual results could differ from those estimates.

Note 2. Summary of Significant Accounting Policies

Cash, Cash Equivalents and Restricted Cash

Restricted cash represents an amount held in a segregated bank account by Wells Fargo as collateral for outstanding letters of credit.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported in the unaudited condensed consolidated balance sheets that totals to the amounts shown in the unaudited condensed consolidated statements of cash flows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Cash and cash equivalents	$	87,398	$	112,994
Restricted cash	8,827		9,261
Total cash, cash equivalents and restricted cash shown in the
unaudited condensed consolidated statements of cash flows	$	96,225	$	122,255

Common Shares Outstanding

The following table reconciles our outstanding common stock for the periods indicated:

	Common
	shares
Balance, January 1, 2020	4,235,533
Vesting of restricted stock unit awards	217
Balance, March 31, 2020	4,235,750

Earnings Per Share

Basic earnings (losses) per share is computed by dividing our net earnings (losses) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (losses) per share is computed by giving effect to all potential shares of common stock outstanding, including our stock related to unvested restricted stock unit awards. Unvested restricted stock unit awards granted under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan (“2018 LTIP”) are not considered to be participating securities as the holders of these shares do not have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares (see Note 10 for further discussion).

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the calculation of basic and diluted (losses) earnings per share was as follows for the periods indicated (in thousands, except per share data):

	Three Months Ended March 31,
	2020		2019
(Losses) Earnings per share — numerator:
Net (losses) earnings	$	(11,427)	$	4,908
Denominator:
Basic weighted average number of shares outstanding	4,236		4,218
Basic (losses) earnings per share	$	(2.70)	$	1.16
Diluted (losses) earnings per share:
Diluted weighted average number of shares outstanding:
Common shares	4,236		4,218
Restricted stock unit awards	12		6
Performance share unit awards (1)	2		—
Total	4,250		4,224
Diluted (losses) earnings per share	$	(2.69)	$	1.16

_______________

(1)The dilutive effect of performance share awards are included in the calculation of diluted earnings per share when the performance share award performance conditions have been achieved. The performance conditions for the performance share unit awards granted in 2018 were achieved as of December 31, 2018.

Fair Value Measurements

The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities are recorded at fair value based on market quotations from actively traded liquid markets.

A three-tier hierarchy has been established that classifies fair value amounts recognized in the financial statements based on the observability of inputs used to estimate these fair values.  The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3).  At each balance sheet reporting date, we categorize our financial assets and liabilities using this hierarchy.

Fair value contracts consist of derivative financial instruments and are recorded as either an asset or liability measured at its fair value. Changes in fair value are recognized immediately in earnings unless the derivatives qualify for, and we elect, cash flow hedge accounting. We had no contracts designated for hedge accounting during any current reporting periods (see Note 9 for further information).

Income Taxes

Income taxes are accounted for using the asset and liability method. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of these items and their respective tax basis.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted and signed into law in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating losses (“NOL”) incurred in tax years 2018, 2019 and 2020 to offset 100 percent of taxable income and be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. We are continuing to evaluate the full impact of the CARES Act. However, we have determined that the NOL carryback provision in the CARES Act would result in a cash benefit to us, and we have recorded an income tax receivable at March 31, 2020 of approximately $6.4 million for the benefit of carrying back the NOLs for the fiscal years 2018 and 2019. We are forecasting an NOL for fiscal year 2020 and expect to carry it back to previous years. As a result, we have also included the 2020 provisional amounts in income tax receivable at March 31, 2020. As we are carrying the losses back to years beginning before January 1, 2018, the receivables were recorded at the previous 35 percent federal tax rate rather than the current statutory rate of 21 percent.

Inventory

Inventory consists of crude oil held in storage tanks and at third-party pipelines as part of our crude oil marketing operations. Crude oil inventory is carried at the lower of cost or net realizable value. At the end of each reporting period, we assess the carrying value of our inventory and make adjustments necessary to reduce the carrying value to the applicable net realizable value. Any resulting adjustments are a component of marketing costs and expenses on our consolidated statements of operations. During the three months ended March 31, 2020, we recorded a charge of $24.2 million related to the write-down of our crude oil inventory due to significant declines in prices in 2020. There were no charges recognized during the three months ended March 31, 2019.

Property and Equipment

Property and equipment is recorded at cost. Expenditures for additions, improvements and other enhancements to property and equipment are capitalized, and minor replacements, maintenance and repairs that do not extend asset life or add value are charged to expense as incurred. When property and equipment assets are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in results of operations in operating costs and expenses for the respective period. Property and equipment, except for land, is depreciated using the straight-line method over the estimated average useful lives ranging from two to thirty-nine years.

We review our long-lived assets for impairment whenever there is evidence that the carrying value of these assets may not be recoverable. Any impairment recognized is permanent and may not be restored. Property and equipment is reviewed at the lowest level of identifiable cash flows. For properties requiring impairment, the fair value is estimated based on an internal discounted cash flow model of future cash flows.

See Note 5 for additional information regarding our property and equipment.

Stock-Based Compensation

We measure all share-based payments, including the issuance of restricted stock units and performance share units to employees and board members, using a fair-value based method. The cost of services received from employees and non-employee board members in exchange for awards of equity instruments is recognized in the consolidated statements of operations based on the estimated fair value of those awards on the grant date and amortized on a straight-line basis over the requisite service period. The fair value of restricted stock unit awards and performance share unit awards is based on the closing price of our common stock on the grant date. We account for forfeitures as they occur. See Note 10 for additional information regarding our 2018 LTIP.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3. Revenue Recognition

Revenue Disaggregation

The following table disaggregates our revenue by segment and by major source for the periods indicated (in thousands):

	Reporting Segments
	Marketing		Transportation		Total
Three Months Ended March 31, 2020
Revenues from contracts with customers	$	319,717	$	16,256	$	335,973
Other (1)	17,504		—		17,504
Total revenues	$	337,221	$	16,256	$	353,477
Timing of revenue recognition:
Goods transferred at a point in time	$	319,717	$	—	$	319,717
Services transferred over time	—		16,256		16,256
Total revenues from contracts with customers	$	319,717	$	16,256	$	335,973
Three Months Ended March 31, 2019
Revenues from contracts with customers	$	360,731	$	15,407	$	376,138
Other (1)	69,030		—		69,030
Total revenues	$	429,761	$	15,407	$	445,168
Timing of revenue recognition:
Goods transferred at a point in time	$	360,731	$	—	$	360,731
Services transferred over time	—		15,407		15,407
Total revenues from contracts with customers	$	360,731	$	15,407	$	376,138

_______________

(1)Other marketing revenues are recognized under Accounting Standards Board (“ASC”) 815, Derivatives and Hedging, and ASC 845, Nonmonetary Transactions – Purchases and Sales of Inventory with the Same Counterparty.

Other Crude Oil Marketing Revenue

Certain of the commodity purchase and sale contracts utilized by our crude oil marketing business qualify as derivative instruments with certain specifically identified contracts also designated as trading activity. From the time of contract origination, these contracts are marked-to-market and recorded on a net revenue basis in the accompanying consolidated financial statements.

Certain of our crude oil contracts may be with a single counterparty to provide for similar quantities of crude oil to be bought and sold at different locations. These contracts are entered into for a variety of reasons, including effecting the transportation of the commodity, to minimize credit exposure, and/or to meet the competitive demands of the customer. These buy/sell arrangements are reflected on a net revenue basis in the accompanying consolidated financial statements.

Reporting these crude oil contracts on a gross revenue basis would increase our reported revenues as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Revenue gross-up	$	157,439	$	242,123

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 4. Prepayments and Other Current Assets

The components of prepayments and other current assets were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Insurance premiums	$	346	$	473
Rents, licenses and other	960		1,086
Total	$	1,306	$	1,559

Note 5. Property and Equipment

The historical costs of our property and equipment and related accumulated depreciation balances were as follows at the dates indicated (in thousands):

	Estimated
	Useful Life	March 31,		December 31,
	in Years	2020		2019
Tractors and trailers (1)	5 – 6	$	116,509	$	115,693
Field equipment (2)	2 – 5	25,149		25,094
Buildings	5 – 39	16,055		16,055
Office equipment	2 – 5	1,958		1,951
Land		1,790		1,790
Construction in progress		283		3,661
Total		161,744		164,244
Less accumulated depreciation		(96,363)		(95,198)
Property and equipment, net		$	65,381	$	69,046

_______________

(1)Amounts include tractors held under finance leases in our crude oil marketing segment. At March 31, 2020 and December 31, 2019, gross property and equipment associated with these assets held under finance leases were $5.5 million and $5.5 million, respectively. Accumulated amortization associated with these assets held under these finance leases were $2.0 million and $1.7 million at March 31, 2020 and December 31, 2019, respectively (see Note 12 for further information).

(2)Amounts include a tank storage and throughput arrangement in our crude oil marketing segment held under a finance lease. At March 31, 2020 and December 31, 2019, gross property and equipment associated with these assets held under a finance lease were $3.3 million and $3.3 million, respectively. Accumulated amortization associated with these assets held under a finance lease was $1.0 million and $0.7 million at March 31, 2020 and December 31, 2019, respectively (see Note 12 for further information).

Components of depreciation and amortization expense were as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Depreciation and amortization, excluding amounts under finance leases	$	3,920	$	3,344
Amortization of property and equipment under finance leases	553		245
Total depreciation and amortization	$	4,473	$	3,589

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 6. Cash Deposits and Other Assets

Components of cash deposits and other assets were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Amounts associated with liability insurance program:
Insurance collateral deposits	$	709	$	1,233
Excess loss fund	620		943
Accumulated interest income	332		609
Other amounts:
State collateral deposits	33		37
Materials and supplies	493		477
Total	$	2,187	$	3,299

We have established certain deposits to support participation in our liability insurance program and remittance of state crude oil severance taxes and other state collateral deposits. Insurance collateral deposits are held by the insurance company to cover past or potential open claims based upon a percentage of the maximum assessment under our insurance policies. Insurance collateral deposits are invested at the discretion of our insurance carrier. Excess amounts in our loss fund represent premium payments in excess of claims incurred to date that we may be entitled to recover through settlement or commutation as claim periods are closed. Interest income is earned on the majority of amounts held by the insurance companies and will be paid to us upon settlement of policy years.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 7. Segment Reporting

We operate and report in two business segments: (i) crude oil marketing, transportation and storage, and (ii) tank truck transportation of liquid chemicals and dry bulk.

Financial information by reporting segment was as follows for the periods indicated (in thousands):

	Reporting Segments
	Marketing		Transportation		Other		Total
Three Months Ended March 31, 2020
Revenues	$	337,221	$	16,256	$	—	$	353,477
Segment operating (losses) earnings (1)	(17,651)		605		—		(17,046)
Depreciation and amortization	2,007		2,466		—		4,473
Property and equipment additions (2)	2,032		41		139		2,212
Three Months Ended March 31, 2019
Revenues	$	429,761	$	15,407	$	—	$	445,168
Segment operating (losses) earnings (1)	7,098		839		—		7,937
Depreciation and amortization	2,122		1,467		—		3,589
Property and equipment additions (3)	1,654		6,697		—		8,351

_______________

(1)Our crude oil marketing segment’s operating (losses) earnings included inventory valuation losses of $24.2 million and inventory liquidation gains of $4.5 million for the three months ended March 31, 2020 and 2019, respectively.

(2)During the three months ended March 31, 2020, we had $0.1 million of property and equipment additions for leasehold improvements at our corporate headquarters, which is not attributed or allocated to any of our reporting segments.

(3)Our crude oil marketing segment’s property and equipment additions do not include approximately $0.6 million of tractors acquired under finance leases during the three months ended March 31, 2019. See Note 12 for further information.

Segment operating (losses) earnings reflect revenues net of operating costs and depreciation and amortization expense and are reconciled to (losses) earnings before income taxes, as follows for the periods indicated (in thousands):

	Three Months Ended March 31,
	2020		2019
Segment operating (losses) earnings	$	(17,046)	$	7,937
General and administrative	(2,894)		(2,684)
Operating (losses) earnings	(19,940)		5,253
Gain on dissolution of investment	—		498
Interest income	365		656
Interest expense	(150)		(65)
(Losses) Earnings before income taxes	$	(19,725)	$	6,342

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Identifiable assets by business segment were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Reporting segment:
Marketing	$	81,887	$	141,402
Transportation	56,933		58,483
Cash and other	114,836		130,957
Total assets	$	253,656	$	330,842

There were no intersegment sales during the three months ended March 31, 2020 and 2019, respectively. Other identifiable assets are primarily corporate cash, corporate accounts receivable and properties not identified with any specific segment of our business. Accounting policies for transactions between reportable segments are consistent with applicable accounting policies as disclosed herein.

Note 8. Transactions with Affiliates

We enter into certain transactions in the normal course of business with affiliated entities including direct cost reimbursement for shared phone and administrative services. In addition, we lease our corporate office space in a building operated by 17 South Briar Hollow Lane, LLC, an affiliate of KSA Industries, Inc., which is an affiliated entity.

Activities with affiliates were as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Affiliate billings to us	$	17	$	17
Billings to affiliates	1		1
Rentals paid to affiliate	122		122

Note 9. Derivative Instruments and Fair Value Measurements

Derivative Instruments

In the normal course of our operations, our crude oil marketing segment purchases and sells crude oil. We seek to profit by procuring the commodity as it is produced and then delivering the material to the end users or the intermediate use marketplace. As typical for the industry, these transactions are made pursuant to the terms of forward month commodity purchase and/or sale contracts. Some of these contracts meet the definition of a derivative instrument, and therefore, we account for these contracts at fair value, unless the normal purchase and sale exception is applicable. These types of underlying contracts are standard for the industry and are the governing document for our crude oil marketing segment. None of our derivative instruments have been designated as hedging instruments.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

At March 31, 2020, we had in place four commodity purchase and sale contracts, all of which had fair values associated with them as the contractual prices of crude oil were outside of the range of prices specified in the agreements. These commodity purchase and sale contracts encompassed approximately:

•322 barrels per day of crude oil during April 2020; and

•258 barrels per day of crude oil during May 2020 through December 2020.

At December 31, 2019, we had in place six commodity purchase and sale contracts with no fair value associated with them as the contractual prices of crude oil were within the range of prices specified in the agreements. These commodity purchase and sale contracts encompassed approximately:

•258 barrels per day of crude oil during January 2020 through February 2020;

•322 barrels per day of crude oil during March 2020 through April 2020; and

•258 barrels per day of crude oil during May 2020 through December 2020.

The estimated fair value of forward month commodity contracts (derivatives) reflected in the accompanying unaudited condensed consolidated balance sheet were as follows at the dates indicated (in thousands):

	Balance Sheet Location and Amount
	Current		Other		Current		Other
	Assets		Assets		Liabilities		Liabilities
March 31, 2020
Asset derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	$	545	$	—	$	—	$	—
Liability derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	—		—		526		—
Less counterparty offsets	—		—		—		—
As reported fair value contracts	$	545	$	—	$	526	$	—
December 31, 2019
Asset derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	$	—	$	—	$	—	$	—
Liability derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	—		—		—		—
Less counterparty offsets	—		—		—		—
As reported fair value contracts	$	—	$	—	$	—	$	—

We only enter into commodity contracts with creditworthy counterparties and evaluate our exposure to significant counterparties on an ongoing basis. At March 31, 2020 and December 31, 2019, we were not holding nor have we posted any collateral to support our forward month fair value derivative activity. We are not subject to any credit-risk related trigger events. We have no other financial investment arrangements that would serve to offset our derivative contracts.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Forward month commodity contracts (derivatives) reflected in the accompanying unaudited condensed consolidated statements of operations were as follows for the periods indicated (in thousands):

	Gains (losses)
	Three Months Ended
	March 31,
	2020		2019
Revenues – marketing	$	19	$	(20)

Fair Value Measurements

The following tables set forth, by level with the Level 1, 2 and 3 fair value hierarchy, the carrying values of our financial assets and liabilities at the dates indicated (in thousands):

	Fair Value Measurements Using
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical Assets		Observable		Unobservable
	and Liabilities		Inputs		Inputs		Counterparty
	(Level 1)		(Level 2)		(Level 3)		Offsets		Total
March 31, 2020
Derivatives:
Current assets	$	—	$	545	$	—	$	—	$	545
Current liabilities	—		(526)		—		—		(526)
Net value	$	—	$	19	$	—	$	—	$	19
December 31, 2019
Derivatives:
Current assets	$	—	$	—	$	—	$	—	$	—
Current liabilities	—		—		—		—		—
Net value	$	—	$	—	$	—	$	—	$	—

These assets and liabilities are measured on a recurring basis and are classified based on the lowest level of input used to estimate their fair value. Our assessment of the relative significance of these inputs requires judgments.

When determining fair value measurements, we make credit valuation adjustments to reflect both our own nonperformance risk and our counterparty’s nonperformance risk. When adjusting the fair value of derivative contracts for the effect of nonperformance risk, we consider the impact of netting and any applicable credit enhancements. Credit valuation adjustments utilize Level 3 inputs, such as credit scores to evaluate the likelihood of default by us or our counterparties. At March 31, 2020 and December 31, 2019, credit valuation adjustments were not significant to the overall valuation of our fair value contracts. As a result, applicable fair value assets and liabilities are included in their entirety in the fair value hierarchy.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 10. Stock-Based Compensation Plan

We have in place a long-term incentive plan under which any employee or non-employee director who provides services to us is eligible to participate in the plan. The 2018 LTIP, which is overseen by the Compensation Committee of our Board of Directors, provides for the grant of various types of equity awards, of which restricted stock unit awards and performance-based compensation awards have been granted. The maximum number of shares authorized for issuance under the 2018 LTIP is 150,000 shares, and the 2018 LTIP is effective until May 8, 2028. After giving effect to awards granted under the 2018 LTIP, forfeitures under the 2018 LTIP and assuming the potential achievement of the maximum amounts of the performance factors through March 31, 2020, a total of 79,228 shares were available for issuance.

Compensation expense recognized in connection with equity-based awards was as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Compensation expense	$	134	$	123

At March 31, 2020 and December 31, 2019, we had $28,800 and $23,600, respectively, of accrued dividend amounts for awards granted under the 2018 LTIP.

Restricted Stock Unit Awards

The following table presents restricted stock unit award activity for the periods indicated:

		Weighted-
		Average Grant
	Number of	Date Fair Value
	Shares	per Share (1)
Restricted stock unit awards at January 1, 2020	18,782	$	37.05
Granted (2)	20,346	$	24.85
Vested	(217)	$	37.61
Forfeited	(282)	$	37.61
Restricted stock unit awards at March 31, 2020	38,629	$	30.62

_______________

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)The aggregate grant date fair value of restricted stock unit awards issued during 2020 was $0.5 million based on a grant date market price of our common shares ranging from $24.77 to $26.23 per share.

Unrecognized compensation cost associated with restricted stock unit awards was approximately $0.7 million at March 31, 2020. Due to the graded vesting provisions of these awards, we expect to recognize the remaining compensation cost for these awards over a weighted-average period of 1.7 years.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Performance Share Unit Awards

The following table presents performance share unit award activity for the periods indicated:

		Weighted-
		Average Grant
	Number of	Date Fair Value
	Shares	per Share (1)
Performance share unit awards at January 1, 2020	2,787	$	43.00
Granted (2)	10,781	$	24.92
Vested	—	$	—
Forfeited	(27)	$	43.00
Performance share unit awards at March 31, 2020	13,541	$	28.60

_______________

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)The aggregate grant date fair value of performance share unit awards issued during 2020 was $0.2 million based on a grant date market price of our common shares ranging from $24.77 to $26.23 per share and assuming a performance factor of 100 percent.

Unrecognized compensation cost associated with performance share unit awards was approximately $0.3 million at March 31, 2020. We expect to recognize the remaining compensation cost for these awards over a weighted-average period of 2.7 years.

Note 11. Supplemental Cash Flow Information

Supplemental cash flows and non-cash transactions were as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Cash paid for interest	$	150	$	65
Cash paid for federal and state income taxes	21		5
Non-cash transactions:
Change in accounts payable related to property and equipment additions	1,129		(683)
Property and equipment acquired under finance leases	—		556

See Note 12 for information related to other non-cash transactions related to leases.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 12. Leases

The following table provides the components of lease expense for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Finance lease cost:
Amortization of ROU assets	$	553	$	245
Interest on lease liabilities	74		45
Operating lease cost	679		862
Short-term lease cost	2,503		1,965
Total lease expense	$	3,809	$	3,117

The following table provides supplemental cash flow and other information related to leases for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	678	$	861
Operating cash flows from finance leases	105		30
Financing cash flows from finance leases	532		218
ROU assets obtained in exchange for new lease liabilities:
Finance leases	—		556
Operating leases	81		11,410

______________

(1)Amounts are included in Other operating activities on the unaudited condensed consolidated statements of cash flows.

The following table provides the lease terms and discount rates for the periods indicated:

	Three Months Ended
	March 31,
	2020		2019
Weighted-average remaining lease term (years):
Finance leases	2.78		4.21
Operating leases	4.58		5.41
Weighted-average discount rate:
Finance leases	4.9	%	4.7	%
Operating leases	5.0	%	5.0	%

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table provides supplemental balance sheet information related to leases at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Assets
Finance lease ROU assets (1)	$	5,830	$	6,384
Operating lease ROU assets	9,090		9,576
Liabilities
Current
Finance lease liabilities	2,193		2,167
Operating lease liabilities	2,203		2,252
Noncurrent
Finance lease liabilities	3,818		4,376
Operating lease liabilities	6,887		7,323

______________

(1)Amounts are included in Property and equipment, net on the unaudited condensed consolidated balance sheets.

The following table provides maturities of undiscounted lease liabilities at March 31, 2020 (in thousands):

	Finance		Operating
	Lease		Lease
Remainder of 2020	$	1,818	$	2,007
2021	2,426		2,285
2022	1,492		1,942
2023	642		1,778
2024	39		1,668
Thereafter	—		443
Total lease payments	6,417		10,123
Less: Interest	(406)		(1,033)
Present value of lease liabilities	6,011		9,090
Less: Current portion of lease obligation	(2,193)		(2,203)
Total long-term lease obligation	$	3,818	$	6,887

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table provides maturities of undiscounted lease liabilities at December 31, 2019 (in thousands):

	Finance		Operating
	Lease		Lease
2020	$	2,426	$	2,660
2021	2,426		2,256
2022	1,492		1,914
2023	642		1,776
2024	37		1,668
Thereafter	—		443
Total lease payments	7,023		10,717
Less: Interest	(480)		(1,142)
Present value of lease liabilities	6,543		9,575
Less: Current portion of lease obligation	(2,167)		(2,252)
Total long-term lease obligation	$	4,376	$	7,323

Note 13. Commitments and Contingencies

Insurance Policies

We establish a liability under our automobile and workers’ compensation insurance policies for expected claims incurred but not reported on a monthly basis. As claims are paid, the liability is relieved. Our accruals for automobile and workers’ compensation claims are presented in the table below.

For periods prior to October 1, 2017, we pre-funded our estimated claims, and therefore, we could either receive a return of premium paid or be assessed for additional premiums up to pre-established limits. Additionally, in certain instances, the risk of insured losses was shared with a group of similarly situated entities through an insurance captive. We have appropriately recognized estimated expenses and liabilities related to these policies for losses incurred but not reported to us or our insurance carrier. The amount of pre-funded insurance premiums left to cover potential future losses are presented in the table below. If the potential insurance claims do not further develop, the pre-funded premiums will be returned to us as a premium refund.

The amount of pre-funded insurance premiums left to cover potential future losses related to periods prior to October 1, 2017, and our accruals for automobile and workers’ compensation claims were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Pre-funded premiums for losses incurred but not reported	$	58	$	168
Accrued automobile and workers’ compensation claims	3,170		2,956

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

We maintain a self-insurance program for managing employee medical claims. A liability for expected claims incurred but not reported is established on a monthly basis. As claims are paid, the liability is relieved. We also maintain third party insurance stop-loss coverage for individual medical claims exceeding a certain minimum threshold. In addition, we maintain $1.4 million of umbrella insurance coverage for annual aggregate medical claims exceeding approximately $7.5 million. Medical accrual amounts were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Accrued medical claims	$	1,329	$	1,016

Legal Proceedings

On August 15, 2019, we received a notice from the Internal Revenue Service (the “IRS”) regarding a proposed penalty of approximately $1.2 million for our 2017 tax year information returns. The notice alleges that certain taxpayer identification numbers supplied to the IRS for our returns in 2017 were either missing or incorrect and that certain filings were late. We responded to the IRS on September 25, 2019 disputing the proposed penalty and requesting that the amount be waived, abated or a hearing held. On March 11, 2020, we received a response from the IRS indicating that they had reviewed our response and waived the full penalty. As such, this matter will not have a material impact on our consolidated financial position, results of operations or cash flows.

Litigation

From time to time as incidental to our operations, we may become involved in various lawsuits and/or disputes. Primarily as an operator of an extensive trucking fleet, we are a party to motor vehicle accidents, worker compensation claims and other items of general liability as would be typical for the industry. We are presently unaware of any claims against us that are either outside the scope of insurance coverage or that may exceed the level of insurance coverage and could potentially represent a material adverse effect on our financial position or results of operations.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with our Unaudited Condensed Consolidated Financial Statements and accompanying Notes included in this quarterly report on Form 10-Q and the Audited Consolidated Financial Statements and related Notes, together with our discussion and analysis of financial position and results of operations, included in our annual report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”), as filed on March 6, 2020 with the U.S. Securities and Exchange Commission (“SEC”).  Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).

Cautionary Statement Regarding Forward-Looking Information

This quarterly report on Form 10-Q contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and information that are based on our beliefs, as well as assumptions made by us and information currently available to us. When used in this document, words such as “anticipate,” “project,” “expect,” “plan,” “seek,” “goal,” “estimate,” “forecast,” “intend,” “could,” “should,” “would,” “will,” “believe,” “may,” “potential” and similar expressions and statements regarding our plans and objectives for future operations are intended to identify forward-looking statements. Although we believe that our expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that such expectations will prove to be correct.  Forward-looking statements are subject to a variety of risks, uncertainties and assumptions as described in more detail under Part I, Item 1A of our 2019 Form 10-K and within Part II, Item 1A of this quarterly report.  If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected or expected.  You should not put undue reliance on any forward-looking statements.  The forward-looking statements in this quarterly report speak only as of the date hereof.  Except as required by federal and state securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or any other reason.

Overview of Business

Adams Resources & Energy, Inc. (“AE”), a Delaware corporation organized in 1973, and its subsidiaries are primarily engaged in the business of crude oil marketing, transportation and storage in various crude oil and natural gas basins in the lower 48 states of the United States (“U.S.”). We also conduct tank truck transportation of liquid chemicals and dry bulk primarily in the lower 48 states of the U.S. with deliveries into Canada and Mexico, and with terminals in the Gulf Coast region of the U.S. Unless the context requires otherwise, references to “we,” “us,” “our,” the “Company” or “AE” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries.  

We operate and report in two business segments: (i) crude oil marketing, transportation and storage, and (ii) tank truck transportation of liquid chemicals and dry bulk. See Note 7 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding our business segments.

Recent Developments and Outlook

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve.

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We are dependent on our workforce of truck drivers to transport products for our customers. Developments such as social distancing and shelter-in-place directives thus far have not had a significant impact on our ability to deploy our workforce effectively as the transportation industry has been deemed an essential service under current Cybersecurity and Infrastructure Security Agency guidelines. We have taken measures to seek to ensure the safety of our employees and operations while maintaining uninterrupted service to our customers. While expected to be temporary, prolonged workforce disruptions may negatively impact our revenues in 2020 and our overall liquidity.

Thus far, the adverse economic effects of the COVID-19 outbreak have not had a material effect on demand for our transportation services based on the restrictions in place by governments trying to curb the outbreak and changes in consumer behavior. However, continued restrictions over a longer time period may lead to us not achieving our profitability goals in 2020, and our overall liquidity may decline.

Our transportation operations have remained steady during the efforts to curtail the spread of the COVID-19 outbreak in the U.S. as we have transported products including bleach, disinfectant, soap and other similar products that are in high demand.

In March 2020, members of OPEC failed to agree on crude oil production levels, which has resulted in an increased supply of crude oil and has led to a substantial decline in crude oil prices and an increasingly volatile market. As a result, our crude oil marketing operations have declined as low crude oil prices have negatively impacted production of crude oil, and demand for crude oil and other related products has significantly decreased due to the global economic slowdown from COVID-19. While we consider the lower crude oil price and decrease in demand to be temporary, if it continues, it may materially affect purchases and sales of crude oil for 2020 and our overall liquidity.

At March 31, 2020, we had 494,812 barrels of crude oil in inventory, and during the three months ended March 31, 2020, we recognized an inventory valuation loss of approximately $24.2 million as the price of our inventory declined from $61.93 per barrel at December 31, 2019 to $20.25 per barrel at March 31, 2020. Further valuation losses may occur if the price of crude oil continues to decline.

The safety of our employees and operations while providing uninterrupted service to our customers remains our primary focus. We are actively monitoring the global situation and its effect on our financial condition, liquidity, operations, customers, industry and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, we cannot estimate the length or gravity of the impacts of these events at this time. If the pandemic and decline in oil prices continue, they may have a material adverse effect on our results of future operations, financial position and liquidity in 2020.

We plan to continue to operate our remaining business segments with internally generated cash flows during the remainder of 2020, but intend to remain flexible as the focus will be on increasing efficiencies and on business development opportunities. During the remainder of 2020, we plan to leverage our investment in our transportation segment’s Houston terminal with the continued efforts to diversify service offerings, and we plan to grow in new or existing areas with our crude oil marketing segment.

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Results of Operations

Marketing

Our crude oil marketing segment revenues, operating (losses) earnings and selected costs were as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019		Change (1)
Revenues	$	337,221	$	429,761	(22	%)
Operating (losses) earnings (2)	(17,651)		7,098		(349	%)
Depreciation and amortization	2,007		2,122		(5	%)
Driver compensation	5,293		6,033		(12	%)
Insurance	2,474		1,991		24	%
Fuel	2,034		2,449		(17	%)

_______________

(1)Represents the percentage increase (decrease) from the prior year period.

(2)Operating (losses) earnings included inventory valuation losses of $24.2 million for the three months ended March 31, 2020, and inventory liquidation gains of $4.5 million for the three months ended March 31, 2019, as discussed further below.

Volume and price information were as follows for the periods indicated:

	Three Months Ended
	March 31,
	2020		2019
Field level purchase volumes – per day (1)
Crude oil – barrels	109,253		113,279
Average purchase price
Crude oil – per barrel	$	44.87	$	54.26

_______________

(1)Reflects the volume purchased from third parties at the field level of operations.

Crude oil marketing revenues decreased by $92.5 million during the three months ended March 31, 2020 as compared to the three months ended March 31, 2019, primarily as a result of a decrease in the market price of crude oil, which decreased revenues by approximately $84.0 million, and lower overall crude oil volumes, which decreased revenues by approximately $8.5 million. The average crude oil price received was $54.26 for the three months ended March 31, 2019, which decreased to $44.87 for the three months ended March 31, 2020. The effect of the COVID-19 outbreak and the failure of OPEC to agree on crude oil production levels did not have a significant impact on our crude oil marketing revenues during the three months ended March 31, 2020, since these events generally occurred in late March 2020. However, we expect these events to have a more significant impact on our crude oil marketing activities during the second quarter of 2020, given the timing of the drop in crude oil prices.

Our crude oil marketing operating (losses) earnings for the three months ended March 31, 2020 decreased by $24.7 million, from earnings of $7.1 million during the 2019 period to a loss of $17.7 million in the 2020 period, primarily due to inventory valuation changes (as shown in the following table) and lower crude oil prices and volumes, partially offset by lower fuel and driver compensation costs.

Driver compensation decreased by $0.7 million during the three months ended March 31, 2020 as compared to the same period in 2019, primarily as a result of a decrease in the number of drivers and volumes transported in the 2020 period as compared to the 2019 period.

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Insurance costs increased by $0.5 million during the three months ended March 31, 2020 as compared to the same period in 2019, primarily due to insurance premium true-ups, partially offset by a lower driver count and lower miles driven in the 2020 period. Fuel costs decreased by $0.4 million during the three months ended March 31, 2020 as compared to the same period in 2019, consistent with a lower driver count and lower miles driven in the current period.

Depreciation and amortization expense decreased by $0.1 million during the three months ended March 31, 2020 as compared to the same period in 2019, primarily due to the timing of purchases and retirements of tractors and other field equipment during 2019.

Field Level Operating Earnings (Non-GAAP Financial Measure). Inventory valuations and forward commodity contract (derivatives or mark-to-market) valuations are two significant factors affecting comparative crude oil marketing segment operating earnings. As a purchaser and shipper of crude oil, we hold inventory in storage tanks and third-party pipelines. During periods of increasing crude oil prices, we recognize inventory liquidation gains while during periods of falling prices, we recognize inventory liquidation and valuation losses.

Crude oil marketing operating earnings can be affected by the valuations of our forward month commodity contracts (derivative instruments). These non-cash valuations are calculated and recorded at each period end based on the underlying data existing as of such date. We generally enter into these derivative contracts as part of a pricing strategy based on crude oil purchases at the wellhead (field level). The valuation of derivative instruments at period end requires the recognition of non-cash “mark-to-market” gains and losses.

The impact of inventory liquidations and derivative valuations on our crude oil marketing segment operating (losses) earnings is summarized in the following reconciliation of our non-GAAP financial measure for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
As reported segment operating (losses) earnings (1)	$	(17,651)	$	7,098
Add (subtract):
Inventory liquidation gains	—		(4,462)
Inventory valuation losses	24,215		—
Derivative valuation (gains) losses	(19)		20
Field level operating earnings (2)	$	6,545	$	2,656

_______________

(1)Segment operating (losses) earnings included inventory valuation losses of $24.2 million for the three months ended March 31, 2020, and inventory liquidation gains of $4.5 million for the three months ended March 31, 2019.

(2)The use of field level operating earnings is unique to us, not a substitute for a GAAP measure and may not be comparable to any similar measures developed by industry participants. We utilize this data to evaluate the profitability of our operations.

Field level operating earnings and field level purchase volumes depict our day-to-day operation of acquiring crude oil at the wellhead, transporting the product and delivering the product to market sales point. Field level operating earnings increased during the three months ended March 31, 2020 as compared to the same period in 2019 primarily due to higher crude oil margins, lower fuel, insurance and driver compensation costs, partially offset by decreased crude oil prices and volumes.

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We held crude oil inventory at a weighted average composite price as follows at the dates indicated (in barrels):

	March 31, 2020			December 31, 2019
		Average			Average
	Barrels	Price		Barrels	Price
Crude oil inventory	494,812	$	20.25	426,397	$	61.93

Prices received for crude oil have been volatile and unpredictable with price volatility expected to continue. See “Recent Developments” above, “Part II, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q and “Part I, Item 1A. Risk Factors” in our 2019 Form 10-K.

Transportation

Our transportation segment revenues, operating earnings and selected costs were as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019		Change (1)
Revenues	$	16,256	$	15,407	6	%
Operating earnings	$	605	$	839	(28	%)
Depreciation and amortization	$	2,466	$	1,467	68	%
Driver commissions	$	2,607	$	2,829	(8	%)
Insurance	$	1,524	$	1,681	(9	%)
Fuel	$	1,281	$	1,720	(26	%)
Maintenance expense	$	831	$	1,019	(18	%)
Mileage (000s)	5,240		5,075		3	%

_______________

(1)Represents the percentage increase (decrease) from the prior year period.

Our revenue rate structure includes a component for fuel costs in which fuel cost fluctuations are largely passed through to the customer over time. Revenues, net of fuel cost, were as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Total transportation revenue	$	16,256	$	15,407
Diesel fuel cost	(1,281)		(1,720)
Revenues, net of fuel cost (1)	$	14,975	$	13,687

_______________

(1) Revenues, net of fuel cost, is a non-GAAP financial measure and is utilized for internal analysis of the results of our transportation segment.

Transportation revenues increased by $0.8 million during the three months ended March 31, 2020 as compared to the three months ended March 31, 2019, primarily as a result of the previously announced acquisition of the assets of a transportation company (the “EH Transport acquisition”) in May 2019, and due to an increase in business activities as a result of the COVID-19 outbreak. In connection with the EH Transport acquisition, we hired more drivers and added new customers and product lines, which resulted in an increase in revenues and miles traveled.

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As a result of the COVID-19 outbreak, our transportation operations have remained steady overall as we have transported products in higher demand, including bleach, disinfectant, soap and other similar products, which offset decreased transportation demand for certain other products that we transport. Revenues, net of fuel cost, increased by $1.3 million during the three months ended March 31, 2020, primarily as a result of increased miles traveled during the 2020 period.

Our transportation operating earnings for the three months ended March 31, 2020 decreased by $0.2 million as compared to the same period in 2019, primarily due to higher depreciation and amortization expense related to the EH Transport asset acquisition and new assets placed into service, partially offset by lower fuel costs, insurance expense and other operating expenses.

Fuel costs decreased by $0.4 million during the three months ended March 31, 2020 as compared to the three months ended March 31, 2019, primarily as a result of a decrease in the price of diesel during the 2020 period as compared to the 2019 period, partially offset by an increase in miles traveled. Depreciation and amortization expense increased by $1.0 million during the three months ended March 31, 2020 as compared to the same period in 2019, primarily as a result of the acquisition of the assets of EH Transport during the second quarter of 2019 and the purchase of new tractors and trailers in 2019.

General and Administrative Expense

General and administrative expense increased by $0.2 million during the three months ended March 31, 2020 as compared to the same period in 2019 primarily due to higher outside service fees, insurance costs and salaries and wages, partially offset by lower audit fees and legal fees.

Gain on Dissolution of Investment

During the first quarter of 2019, we received a cash payment from Adams Resources Exploration Corporation (“AREC”) totaling approximately $0.9 million, related to the final settlement of its bankruptcy and dissolution. AREC had been one of our wholly owned subsidiaries, until its bankruptcy filing in April 2017. Of the amount received, approximately $0.4 million was offset against a receivable that had been set up as of December 31, 2018 and $0.5 million was recorded as a gain in our unaudited condensed consolidated financial statements during the three months ended March 31, 2019.

Income Taxes

Provision for (benefit from) income taxes is based upon federal and state tax rates, and variations in amounts are consistent with taxable income (loss) in the respective accounting periods.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted and signed into law in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating losses (“NOL”) incurred in tax years 2018, 2019 and 2020 to offset 100 percent of taxable income and be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. We are continuing to evaluate the full impact of the CARES Act. However, we have determined that the NOL carryback provision in the CARES Act would result in a cash benefit to us, and we have recorded an income tax receivable at March 31, 2020 of approximately $6.4 million for the benefit of carrying back the NOLs for the fiscal years 2018 and 2019. We are forecasting an NOL for fiscal year 2020 and expect to carry it back to previous years. As a result, we have also included the 2020 provisional amounts in income tax receivable at March 31, 2020. As we are carrying the losses back to years beginning before January 1, 2018, the receivables were recorded at the previous 35 percent federal tax rate rather than the current statutory rate of 21 percent.

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Liquidity and Capital Resources

Liquidity

Our liquidity is from our cash balance and net cash provided by operating activities and is therefore dependent on the success of future operations. If our cash inflow subsides or turns negative, we will evaluate our investment plan accordingly and remain flexible.

At March 31, 2020 and December 31, 2019, we had no bank debt or other forms of debenture obligations. We maintain cash balances in order to meet the timing of day-to-day cash needs. Cash and cash equivalents (excluding restricted cash) and working capital, the excess of current assets over current liabilities, were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Cash and cash equivalents	$	87,398	$	112,994
Working capital	83,552		87,747

Although our cash balance decreased from December 31, 2019, we believe current cash balances, together with expected cash generated from future operations, and the ease of financing truck and trailer additions through leasing arrangements (should the need arise) will be sufficient to meet our short-term and long-term liquidity needs.

We utilize cash from operations to make discretionary investments in our crude oil marketing and transportation businesses. With the exception of operating and finance lease commitments primarily associated with storage tank terminal arrangements, leased office space and tractors, our future commitments and planned investments can be readily curtailed if operating cash flows decrease. See “Other Items” below for information regarding our operating and finance lease obligations.

The most significant item affecting future increases or decreases in liquidity is earnings from operations, and these earnings are dependent on the success of future operations. See “Part II, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q and “Part I, Item 1A. Risk Factors” in our 2019 Form 10-K.

Cash Flows from Operating, Investing and Financing Activities

Our consolidated cash flows from operating, investing and financing activities were as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Cash provided by (used in):
Operating activities	$	(23,846)	$	21,016
Investing activities	(582)		(6,043)
Financing activities	(1,602)		(1,146)

Operating activities. Net cash flows used in operating activities was $23.8 million for the three months ended March 31, 2020 compared to net cash flows provided by operating activities of $21.0 million. The decrease in net cash flows from operating activities of $44.9 million was primarily due to lower earnings as a result of inventory valuation losses recognized in the current period, and a decrease in accounts payable due to a reduction in the price of crude oil.

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At various times each month, we may make cash prepayments and/or early payments in advance of the normal due date to certain suppliers of crude oil within our crude oil marketing operations. Crude oil supply prepayments are recouped and advanced from month to month as the suppliers deliver product to us. In addition, in order to secure crude oil supply, we may also “early pay” our suppliers in advance of the normal payment due date of the twentieth of the month following the month of production. These “early payments” reduce cash and accounts payable as of the balance sheet date. We also require certain customers to make similar early payments or to post cash collateral with us in order to support their purchases from us. Early payments and cash collateral received from customers increases cash and reduces accounts receivable as of the balance sheet date.

Early payments were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Early payments received	$	34,684	$	54,108

We rely heavily on our ability to obtain open-line trade credit from our suppliers especially with respect to our crude oil marketing operations. During December 2019, we received several early payments from certain customers in our crude oil marketing operations, while during March 2020, we received a lower amount of early payments. Our cash balance decreased by approximately $25.6 million as of March 31, 2020 relative to the year ended December 31, 2019 primarily as a result of the timing of the receipt of these early payments received during each period.

Investing activities. Net cash flows used in investing activities for the three months ended March 31, 2020 decreased by $5.5 million when compared to the same period in 2019. This decrease was primarily due to a decrease of $6.1 million in capital spending for property and equipment (see following table) and the receipt in 2019 of $0.9 million in cash proceeds related to the final settlement of AREC’s bankruptcy, partially offset by a decrease of $0.3 million in insurance and state collateral refunds.

Capital spending was as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Crude oil marketing (1)	$	2,032	$	1,654
Transportation (2)	41		6,697
Other (3)	139		—
Capital spending	$	2,212	$	8,351

_______________

(1)2020 amount primarily relates to the purchase of 16 tractors and other field equipment. 2019 amount primarily relates to the purchase of eight tractors and other field equipment.

(2)2019 amount primarily relates to the purchase of 40 tractors and other field equipment.

(3)Amount relates to leasehold improvements at our corporate headquarters, which is not attributed to any of our reporting segments.

Financing activities. Cash used in financing activities for the three months ended March 31, 2020 increased by $0.5 million when compared to the same period in 2019. The increase was primarily due to an increase of $0.3 million in principal repayments made for finance lease obligations in our crude oil marketing segment for certain of our tractors and a tank storage and throughput arrangement. During the three months ended March 31, 2020, we paid a cash dividend of $0.24 per common share, or a total of $1.0 million, while during the three months ended March 31, 2020, we paid a cash dividend of $0.22 per common share, or a total of $0.9 million. See “Other Items” below for further information regarding our finance leases.

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Other Items

Contractual Obligations

The following table summarizes our significant contractual obligations at March 31, 2020 (in thousands):

			Payments due by period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Finance lease obligations (1)	$	6,417	$	1,833	$	4,116	$	468	$	—
Operating lease obligations (2)	10,123		1,341		4,433		3,490		859
Total contractual obligations	$	16,540	$	3,174	$	8,549	$	3,958	$	859

_______________

(1)Amounts represent our principal contractual commitments, including interest, outstanding under finance leases for certain tractors and tank storage and throughput arrangements in our crude oil marketing segment.

(2)Amounts represent rental obligations under non-cancelable operating leases and terminal arrangements with terms in excess of one year.

See Note 12 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding our finance and operating leases.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably expected to have a material current or future effect on our financial position, results of operations or cash flows.

Recent Accounting Pronouncements    

For information regarding recent accounting pronouncements, see Note 2 in the Notes to Unaudited Condensed Consolidated Financial Statements.

Related Party Transactions

For more information regarding related party transactions, see Note 8 in the Notes to Unaudited Condensed Consolidated Financial Statements.

Critical Accounting Policies and Use of Estimates

A discussion of our critical accounting policies and estimates is included in our 2019 Form 10-K. Certain of these accounting policies require the use of estimates. There have been no material changes to our accounting policies since the disclosures provided in our 2019 Form 10-K.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes to our “Quantitative and Qualitative Disclosures about Market Risk” that have occurred since the disclosures provided in our 2019 Form 10-K.

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Item 4. Disclosure Controls and Procedures

As of the end of the period covered by this quarterly report, our management carried out an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 and 15d-15(e) of the Exchange Act. Based on this evaluation, as of the end of the period covered by this quarterly report, our Chief Executive Officer and our Chief Financial Officer concluded:

(i)that our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow for timely decisions regarding required disclosures; and

(ii)that our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(e) under the Exchange Act) during the fiscal quarter ended March 31, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time as incidental to our operations, we may become involved in various lawsuits and/or disputes. Primarily as an operator of an extensive trucking fleet, we are a party to motor vehicle accidents, worker compensation claims and other items of general liability as would be typical for the industry. We are presently unaware of any claims against us that are either outside the scope of insurance coverage or that may exceed the level of insurance coverage and could potentially represent a material adverse effect on our financial position or results of operations.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in our 2019 Form 10-K and the risk factors and other cautionary statements contained in our other SEC filings, which could materially affect our businesses, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. Except as set forth below, there have been no material changes in our Risk Factors from those disclosed in Item 1A of our 2019 Form 10-K or our other SEC filings.

The ongoing COVID-19 pandemic and the recent OPEC price war could disrupt our operations and adversely impact our business and financial results.

The recent outbreak of COVID-19 has resulted in the implementation of significant governmental measures to control the spread of the virus, including quarantines, travel restrictions, business shutdowns and restrictions on non-essential activities in the United States and abroad. As a result, the global economy has been marked by significant slowdown and uncertainty, which has led to a precipitous decline in crude oil prices in response to demand concerns, further exacerbated by the OPEC price war during the first quarter of 2020 and global storage considerations.

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As a result, our crude oil marketing operations have declined, as low crude oil prices have negatively impacted production of crude oil, and demand for crude oil and other related products has significantly decreased. While we consider the lower crude oil price and decrease in demand to be temporary, if it continues, it may materially affect purchases and sales of crude oil for 2020, which affects demand for our services and our overall liquidity. We are actively monitoring our financial condition, liquidity, operations, customers, industry and workforce. Although we cannot estimate the length or gravity of the impacts of these events at this time, if the pandemic and decline in oil prices continue, they may have a material adverse effect on our results of future operations, financial position and liquidity in 2020.

The implementation of governmental restrictions related to COVID-19 has not had a significant impact on our ability to deploy our workforce effectively, as the transportation industry has been deemed an essential service, but limitations or restrictions could be enacted in the future that would impact our operations. Additionally, we may also experience temporary disruptions in our workforce related to COVID-19, which may negatively affect our revenues in 2020 and our overall liquidity.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit
Number	Exhibit
3.1	Certificate of Incorporation of Adams Resources & Energy, Inc., as amended (incorporated by reference to Exhibit 3.1 to Form 10-K for the fiscal year ended December 31, 2019).
3.2	Bylaws of Adams Resources & Energy, Inc., as amended (incorporated by reference to Exhibit 3(b) to Form 10-K for the year ended December 31, 2012).
10.1+*	Form of Employee Performance Share Unit Award Agreement for 2020 Awards under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan.
31.1*	Sarbanes-Oxley Section 302 certification of Executive Chairman pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Sarbanes-Oxley Section 302 certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Sarbanes-Oxley Section 906 certification of Executive Chairman pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Sarbanes-Oxley Section 906 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.CAL*	Inline XBRL Calculation Linkbase Document
101.DEF*	Inline XBRL Definition Linkbase Document
101.INS*	Inline XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.LAB*	Inline XBRL Labels Linkbase Document
101.PRE*	Inline XBRL Presentation Linkbase Document
101.SCH*	Inline XBRL Schema Document
104*	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

____________

*Filed or furnished (in the case of Exhibits 32.1 and 32.2) with this report.

+ Management contract or compensation plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			ADAMS RESOURCES & ENERGY, INC.
			(Registrant)
Date:	May 7, 2020	By:	/s/ Kevin J. Roycraft
			Kevin J. Roycraft
			Chief Executive Officer
			(Principal Executive Officer)
		By:	/s/ Tracy E. Ohmart
			Tracy E. Ohmart
			Chief Financial Officer
			(Principal Financial Officer and Principal
			Accounting Officer)

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EX-10.1

Exhibit 10.1

2020 PERFORMANCE SHARE UNIT AWARD AGREEMENT

THIS PERFORMANCE SHARE UNIT AWARD AGREEMENT (this “Agreement”) is made as of the 9th day of March, 2020 (the “Grant Date”), between ADAMS RESOURCES & ENERGY, INC., a Delaware corporation (“Company”), and all of its Affiliates (collectively, the “Company”), and _________________ (the “Employee”). A copy of the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan (the “Plan”) is annexed to this Agreement and shall be deemed a part hereof as if fully set forth herein. Unless the context otherwise requires, all terms that are not defined in this Agreement but which are defined in the Plan shall have the same meaning given to them in the Plan when used herein.

1.Award. Pursuant to the Plan, as of the Grant Date, ______ Restricted Stock Units (the “Performance Share Units”) shall be granted to Employee as a matter of separate inducement and not in lieu of any salary or other compensation for Employee’s services, subject to the acceptance by the Employee of the terms and conditions of this Agreement. The Employee acknowledges receipt of a copy of the Plan, and agrees that the Performance Share Units shall be subject to all of the terms and provisions of the Plan, including future amendments thereto, if any, pursuant to the terms thereof, and to all of the terms and conditions of this Agreement.

2.Performance Share Units. The Employee hereby accepts the Performance Share Units when issued and agrees with respect thereto as follows:

a.Payment and Determination of Value. Except as otherwise provided in Section 10 below, Company shall provide to the Employee one share of the Company’s common stock, $0.10 par value per share for each Performance Share Unit on its scheduled vesting date. If any dividends are paid with respect to a share of the Company’s common stock during the vesting period, an equivalent amount shall accrue and be held by the Company without interest until the Performance Share Units become vested, at which time such amount shall be paid to the Employee, or are forfeited, at which time such amount shall be forfeited.

b.Vesting. An Employee’s Performance Share Units shall become vested based on (i) continued service with the Company until the third (3rd) anniversary of the Vesting Commencement Date, and (ii) the attainment of the Performance Criteria specified on Exhibit A to this Agreement. Any portion of the Performance Share Units that does not become vested in accordance with the preceding provisions of this Section 2(b) and Exhibit A shall be forfeited to the Company for no consideration as of the date of the termination of the Employee’s employment with the Company.

For purposes of this Agreement, the “Vesting Commencement Date” shall be March 1, 2020.

c.Termination of Employment. If the Employee terminates his or her employment with the Company prior to the third (3rd) anniversary of the Vesting Commencement Date, then the Performance Share Units shall be forfeited to the Company for no consideration as of the date of the termination of the Employee’s employment with the Company, except that:

(i) if the Employee is determined to be Disabled or in the event of the death of the Employee, all of the Employee’s Performance Share Units shall become vested upon the later of (A) the completion of the Performance Period (as specified on Exhibit A), or (B) the date the Employee terminates employment with the Company, based upon the actual level of performance. In such case, Employee (or Employee’s legal representative, or the person, if any, who acquired the Performance Share Units by bequest or inheritance or by reason of the death of Employee), shall be entitled to receive any payment with respect to the Performance Share Units in accordance with this Agreement; and

1

(ii) if the Employee’s employment with the Company terminates by reason of retirement following the date on which such Employee has either (I) reached sixty (60) years of age, and completed at least ten (10) years of service as an employee of the Company, or (II) reached sixty-five (65) years of age, then the Performance Share Units shall become vested upon the later of (A) the completion of the Performance Period, or (B) the date the Employee terminates employment with the Company, based upon the actual level of performance, provided, however, that the Employee shall not receive such shares until their original scheduled vesting date.

Any payment made in connection with Section 2(c)(i) above shall be paid thirty (30) days after the Employee’s termination date.

3.Transfer Restrictions. The Performance Share Units may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or otherwise disposed of by the Employee.

4.Shareholder Rights. The Employee shall not have any of the rights of a shareholder of the Company with respect to the Performance Share Units.

5.Corporate Acts. The existence of the Performance Share Units shall not affect in any way the right or power of the Board of Directors of the Company or the shareholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of debt or equity securities, the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding.

6.Withholding of Tax. To the extent that the receipt of the Performance Share Units results in compensation income to the Employee for federal or state income tax purposes, the Employee may elect to either (i) deliver to the Company at the time of such receipt, as the case may be, such amount of money as the Company may require to meet its withholding obligation under applicable tax laws or regulations, or (ii) have the Company withhold a portion of the shares of the Company’s common stock distributable to the Employee under this Agreement that does not exceed the amount of taxes to be withheld by reason of such resulting compensation income. If the Employee does not make a timely election regarding the manner this tax withholding obligation will be satisfied, then the Company shall withhold a portion of the shares of the Company’s common stock distributable to the Employee under this Agreement that does not exceed the amount of taxes to be withheld by reason of such resulting compensation income.

7.Employment Relationship. For purposes of this Agreement, the Employee shall be considered to be in the employment of the Company as long as the Employee remains an employee of either the Company or an Affiliate (as such term is defined in the Plan). Nothing in the adoption of the Plan or the award of the Performance Share Units thereunder pursuant to this Agreement shall confer upon the Employee the right to continued employment by the Company or affect in any way the right of the Company to terminate such employment at any time. Unless otherwise provided in a written employment agreement or by applicable law, the Employee’s employment by the Company shall be on an at-will basis, and the employment relationship may be terminated at any time by either the Employee or the Company for any reason whatsoever, with or without cause. Any question as to whether and when there has been a termination of such employment, and the cause of such termination, shall be determined by the Committee, and its determination shall be final.

8.Notices. Any notices or other communications provided for in this Agreement shall be sufficient if in writing. In the case of the Employee, such notices or communications shall be effectively delivered when hand delivered to the Employee at his or her principal place of employment or when sent by registered or certified mail to the Employee at the last address the Employee has filed with the Company. In the case of the Company, such notices or communications shall be effectively delivered when sent by registered or certified mail to the Company at its principal executive offices.

2

9.Entire Agreement; Amendment. This Agreement replaces and merges all previous agreements and discussions relating to the same or similar subject matters between the Employee and the Company and constitutes the entire agreement between the Employee and the Company with respect to the subject matter of this Agreement. This Agreement may not be modified in any respect by any verbal statement, representation or agreement made by any employee, officer, or representative of the Company or by any written agreement unless signed by an officer of the Company who is expressly authorized by the Company to execute such document. In addition, if it is subsequently determined by the Committee, in its sole discretion, that the terms and conditions of this Agreement and/or the Plan are not compliant with Code Section 409A, or any Treasury regulations or Internal Revenue Service guidance promulgated thereunder, this Agreement and/or the Plan may be amended by the Company accordingly.

10.Code Section 409A. If and to the extent any portion of any payment provided to the Employee under this Agreement in connection with the Employee’s separation from service (as defined in Section 409A of Internal Revenue Code of 1986, as amended (“Code Section 409A”) is determined to constitute “nonqualified deferred compensation” within the meaning of Code Section 409A and the Employee is a “specified employee” as defined in Code Section 409A(a)(2)(B)(i), as determined by the Company in accordance with the procedures separately adopted by the Company for this purpose, by which determination the Employee, as a condition to accepting benefits under this Agreement and the Plan, agrees that he or she is bound, such portion of the shares of Company’s common stock to be delivered on a vesting date shall not be delivered before the earlier of (i) the day that is six months plus one day after the date of separation from service (as determined under Code Section 409A) or (ii) the tenth (10th) day after the date of the Employee’s death (as applicable, the “New Payment Date”). The shares that otherwise would have been delivered to the Employee during the period between the date of separation from service and the New Payment Date shall be delivered to the Employee on such New Payment Date, and any remaining shares will be delivered on their original schedule. If the Employee becomes Disabled and such disability does not satisfy the requirements of Code Section 409A, then the Employee’s shares shall be delivered on the original scheduled vesting date. Neither the Company nor the Employee shall have the right to accelerate or defer the delivery of any such shares except to the extent specifically permitted or required by Code Section 409A. This Agreement is intended to comply with the provisions of Code Section 409A and this Agreement and the Plan shall, to the extent practicable, be construed in accordance therewith. Terms defined in this Agreement and the Plan shall have the meanings given such terms under Code Section 409A if and to the extent required to comply with Code Section 409A. In any event, the Company makes no representations or warranty and shall have no liability to the Employee or any other person if any provisions of or payments under this Agreement are determined to constitute deferred compensation subject to Code Section 409A but not to satisfy the conditions of that section.

11.Binding Effect. This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Employee.

12.Miscellaneous. In the event of any conflict or inconsistency between the terms of this Agreement and the terms of the Plan, including any amendments or supplements thereto, the terms of this Agreement shall be controlling.

[Remainder of page intentionally left blank]

3

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer thereunto duly authorized, and the Employee has agreed to and accepted the terms of this Agreement, all as of the date first above written.

COMPANY

ADAMS RESOURCES & ENERGY, INC.

By:

Name:

Title:

EMPLOYEE

By:

Date:

4

Exhibit A

2020 Performance Criteria

        The Employee’s Performance Share Units shall become vested based on the satisfaction of both the (i) the time vesting requirement described in Section 2(b)(i) of the Agreement, and (ii) the Performance Criteria described in this Exhibit A. The initial number of Performance Share Units specified in Section 1 of the Agreement shall be the “target” number of shares of Stock that may be delivered upon settlement of the Performance Share Units subject to the Agreement. This initial number of Performance Share Units shall be adjusted based on the attainment of the Performance Criteria described in Section 3 below.

1.Performance Period: The performance period shall be the period between January 1, 2020 and December 31, 2020.

2.Award Value: The Performance Share Units subject to this Agreement will be earned based on the Company’s performance for the Performance Period. Following the end of the Performance Period, the Committee shall determine the number of Performance Share Units earned for the Performance Period.

3.Performance Criteria: Seventy-five percent (75%) of the Award shall be earned based on the Company’s attainment of the Adjusted Pre-Tax Cash Flow (“APTCF”) factor described in Section 3(a) below. Twenty-five percent (25%) of the Award shall be earned based on the Company’s attainment of Adjusted Pre-Tax Earnings (“APTE”) factor described in Section 3(b) below.

(a) Adjusted Pre-Tax Cash Flow – APTCF is defined as pre-tax cash flow as adjusted to reflect (i) net earnings or losses; (ii) income tax benefits; (iii) depreciation, depletion and amortization; (iv) gains or losses on sales of property; (v) inventory liquidation gains; (vi) inventory valuation losses; (vii) net changes in the fair value of contracts, as each such adjustment is reported in the Company’s publicly filed financial statements for the fiscal year ending December 31, 2020; and (viii) any other adjustments the Company includes in the calculation of adjusted cash flow, as approved by the Company’s Board of Directors and reported in the Company’s earnings release. The Award Level for the APTCF factor for the Performance Period shall be determined based on the following table:

	Adjusted Pre-Tax Cash	% of Target Performance Share
Performance Level	Flow Amount	Units Earned1
Maximum	$30,875,000	200%
Target	$24,700,000	100%
Threshold	$18,525,000	50%
<Threshold	<$18,525,000	—%

_____________

¹Linear interpolation will be applicable to the percentages between the Performance Levels.

5

(b) Adjusted Pre-Tax Earnings – APTE shall be determined based on the Company’s net earnings during the Performance Period, as adjusted to reflect (i) income tax benefits; (ii) gains or losses on sales of property; (iii) inventory liquidation gains; (iv) inventory valuation losses; (v) net changes in the fair value of contracts, as each such adjustment is reported in the Company’s publicly filed financial statements for the fiscal year ending December 31, 2020; and (vi) any other adjustments included by the Company in the calculation of its net earnings, as approved by the Company’s Board of Directors and reported in its earnings release. The Award Level for the APTE factor for the Performance Period shall be determined based on the following table:

	Adjusted Pre-Tax	% of Target Performance Share
Performance Level	Earnings Amount	Units Earned1
Maximum	$8,500,000	200%
Target	$6,800,000	100%
Threshold	$5,100,000	50%
<Threshold	<$5,100,000	—%

_____________

¹Linear interpolation will be applicable to the percentages between the Performance Levels.

(c) Forfeiture. Any portion of the Performance Share Units which are not earned at the end of the Performance Period shall be forfeited as of the last day of the Performance Period.

6

EX-31.1

Exhibit 31.1

SARBANES-OXLEY SECTION 302 CERTIFICATION

I, Kevin J. Roycraft, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Adams Resources & Energy, Inc.;

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 control 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 control over financial reporting, or caused such internal control 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 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 7, 2020	By:	/s/ Kevin J. Roycraft
			Kevin J. Roycraft
			Chief Executive Officer
			(Principal Executive Officer)

EX-31.2

Exhibit 31.2

SARBANES-OXLEY SECTION 302 CERTIFICATION

I, Tracy E. Ohmart, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Adams Resources & Energy, Inc.;

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 control 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 control over financial reporting, or caused such internal control 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 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 7, 2020	By:	/s/ Tracy E. Ohmart
			Tracy E. Ohmart
			Chief Financial Officer

EX-32.1

Exhibit 32.1

SARBANES-OXLEY SECTION 906 CERTIFICATION

CERTIFICATION OF KEVIN J. ROYCRAFT,

CHIEF EXECUTIVE OFFICER OF ADAMS RESOURCES & ENERGY, INC.

In connection with the quarterly report of Adams Resources & Energy, Inc. (the “Registrant”) on Form 10-Q for the quarterly period ended March 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kevin J. Roycraft, Chief Executive Officer of the Registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) 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 results of operations of the Registrant.

Date:	May 7, 2020	By:	/s/ Kevin J. Roycraft
			Kevin J. Roycraft
			Chief Executive Officer
			(Principal Executive Officer)

EX-32.2

Exhibit 32.2

SARBANES-OXLEY SECTION 906 CERTIFICATION

CERTIFICATION OF TRACY E. OHMART,

CHIEF FINANCIAL OFFICER OF ADAMS RESOURCES & ENERGY, INC.

In connection with the quarterly report of Adams Resources & Energy, Inc. (the “Registrant”) on Form 10-Q for the quarterly period ended March 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tracy E. Ohmart, Chief Financial Officer of the Registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) 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 results of operations of the Registrant.

Date:	May 7, 2020	By:	/s/ Tracy E. Ohmart
			Tracy E. Ohmart
			Chief Financial Officer

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Cash Deposits and Other Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Insurance collateral deposits	$ 709	$ 1,233
Excess loss fund	620	943
Accumulated interest income	332	609
State collateral deposits	33	37
Materials and supplies	493	477
Total	$ 2,187	$ 3,299

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Transactions with Affiliates (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Transactions with Affiliates [Abstract]
Billings to affiliates	$ 335,973	$ 376,138
Affiliated entities
Transactions with Affiliates [Abstract]
Affiliate billings to us	17	17
Billings to affiliates	1	1
Rentals paid to affiliate	$ 122	$ 122

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Cash Deposits and Other Assets (Tables)

3 Months Ended

Mar. 31, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Components of cash deposits and other assets

Components of cash deposits and other assets were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Amounts associated with liability insurance program:
Insurance collateral deposits	$	709	$	1,233
Excess loss fund	620		943
Accumulated interest income	332		609
Other amounts:
State collateral deposits	33		37
Materials and supplies	493		477
Total	$	2,187	$	3,299

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Summary of Cash and Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported in the unaudited condensed consolidated balance sheets that totals to the amounts shown in the unaudited condensed consolidated statements of cash flows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Cash and cash equivalents	$	87,398	$	112,994
Restricted cash	8,827		9,261
Total cash, cash equivalents and restricted cash shown in the
unaudited condensed consolidated statements of cash flows	$	96,225	$	122,255

Schedule of Common Stock Outstanding

The following table reconciles our outstanding common stock for the periods indicated:

	Common
	shares
Balance, January 1, 2020	4,235,533
Vesting of restricted stock unit awards	217
Balance, March 31, 2020	4,235,750

Schedule of Earnings Per Share, Basic and Diluted

A reconciliation of the calculation of basic and diluted (losses) earnings per share was as follows for the periods indicated (in thousands, except per share data):

	Three Months Ended March 31,
	2020		2019
(Losses) Earnings per share — numerator:
Net (losses) earnings	$	(11,427)	$	4,908
Denominator:
Basic weighted average number of shares outstanding	4,236		4,218
Basic (losses) earnings per share	$	(2.70)	$	1.16
Diluted (losses) earnings per share:
Diluted weighted average number of shares outstanding:
Common shares	4,236		4,218
Restricted stock unit awards	12		6
Performance share unit awards (1)	2		—
Total	4,250		4,224
Diluted (losses) earnings per share	$	(2.69)	$	1.16

_______________

(1)The dilutive effect of performance share awards are included in the calculation of diluted earnings per share when the performance share award performance conditions have been achieved. The performance conditions for the performance share unit awards granted in 2018 were achieved as of December 31, 2018.

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Supplemental Cash Flow Information

3 Months Ended

Mar. 31, 2020

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

Supplemental Cash Flow Information

Supplemental cash flows and non-cash transactions were as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Cash paid for interest	$	150	$	65
Cash paid for federal and state income taxes	21		5
Non-cash transactions:
Change in accounts payable related to property and equipment additions	1,129		(683)
Property and equipment acquired under finance leases	—		556

See Note 12 for information related to other non-cash transactions related to leases.

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Segment Reporting

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

We operate and report in two business segments: (i) crude oil marketing, transportation and storage, and (ii) tank truck transportation of liquid chemicals and dry bulk.

Financial information by reporting segment was as follows for the periods indicated (in thousands):

	Reporting Segments
	Marketing		Transportation		Other		Total
Three Months Ended March 31, 2020
Revenues	$	337,221	$	16,256	$	—	$	353,477
Segment operating (losses) earnings (1)	(17,651)		605		—		(17,046)
Depreciation and amortization	2,007		2,466		—		4,473
Property and equipment additions (2)	2,032		41		139		2,212
Three Months Ended March 31, 2019
Revenues	$	429,761	$	15,407	$	—	$	445,168
Segment operating (losses) earnings (1)	7,098		839		—		7,937
Depreciation and amortization	2,122		1,467		—		3,589
Property and equipment additions (3)	1,654		6,697		—		8,351

_______________

(1)Our crude oil marketing segment’s operating (losses) earnings included inventory valuation losses of $24.2 million and inventory liquidation gains of $4.5 million for the three months ended March 31, 2020 and 2019, respectively.

(2)During the three months ended March 31, 2020, we had $0.1 million of property and equipment additions for leasehold improvements at our corporate headquarters, which is not attributed or allocated to any of our reporting segments.

(3)Our crude oil marketing segment’s property and equipment additions do not include approximately $0.6 million of tractors acquired under finance leases during the three months ended March 31, 2019. See Note 12 for further information.

Segment operating (losses) earnings reflect revenues net of operating costs and depreciation and amortization expense and are reconciled to (losses) earnings before income taxes, as follows for the periods indicated (in thousands):

	Three Months Ended March 31,
	2020		2019
Segment operating (losses) earnings	$	(17,046)	$	7,937
General and administrative	(2,894)		(2,684)
Operating (losses) earnings	(19,940)		5,253
Gain on dissolution of investment	—		498
Interest income	365		656
Interest expense	(150)		(65)
(Losses) Earnings before income taxes	$	(19,725)	$	6,342

Identifiable assets by business segment were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Reporting segment:
Marketing	$	81,887	$	141,402
Transportation	56,933		58,483
Cash and other	114,836		130,957
Total assets	$	253,656	$	330,842

There were no intersegment sales during the three months ended March 31, 2020 and 2019, respectively. Other identifiable assets are primarily corporate cash, corporate accounts receivable and properties not identified with any specific segment of our business. Accounting policies for transactions between reportable segments are consistent with applicable accounting policies as disclosed herein.

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Revenue Recognition

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Revenue Disaggregation

The following table disaggregates our revenue by segment and by major source for the periods indicated (in thousands):

	Reporting Segments
	Marketing		Transportation		Total
Three Months Ended March 31, 2020
Revenues from contracts with customers	$	319,717	$	16,256	$	335,973
Other (1)	17,504		—		17,504
Total revenues	$	337,221	$	16,256	$	353,477
Timing of revenue recognition:
Goods transferred at a point in time	$	319,717	$	—	$	319,717
Services transferred over time	—		16,256		16,256
Total revenues from contracts with customers	$	319,717	$	16,256	$	335,973
Three Months Ended March 31, 2019
Revenues from contracts with customers	$	360,731	$	15,407	$	376,138
Other (1)	69,030		—		69,030
Total revenues	$	429,761	$	15,407	$	445,168
Timing of revenue recognition:
Goods transferred at a point in time	$	360,731	$	—	$	360,731
Services transferred over time	—		15,407		15,407
Total revenues from contracts with customers	$	360,731	$	15,407	$	376,138

_______________

(1)Other marketing revenues are recognized under Accounting Standards Board (“ASC”) 815, Derivatives and Hedging, and ASC 845, Nonmonetary Transactions – Purchases and Sales of Inventory with the Same Counterparty.

Other Crude Oil Marketing Revenue

Certain of the commodity purchase and sale contracts utilized by our crude oil marketing business qualify as derivative instruments with certain specifically identified contracts also designated as trading activity. From the time of contract origination, these contracts are marked-to-market and recorded on a net revenue basis in the accompanying consolidated financial statements.

Certain of our crude oil contracts may be with a single counterparty to provide for similar quantities of crude oil to be bought and sold at different locations. These contracts are entered into for a variety of reasons, including effecting the transportation of the commodity, to minimize credit exposure, and/or to meet the competitive demands of the customer. These buy/sell arrangements are reflected on a net revenue basis in the accompanying consolidated financial statements.

Reporting these crude oil contracts on a gross revenue basis would increase our reported revenues as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Revenue gross-up	$	157,439	$	242,123

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of expenses and losses incurred but not reported and accrued workers' compensation

The amount of pre-funded insurance premiums left to cover potential future losses related to periods prior to October 1, 2017, and our accruals for automobile and workers’ compensation claims were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Pre-funded premiums for losses incurred but not reported	$	58	$	168
Accrued automobile and workers’ compensation claims	3,170		2,956

Schedule of accrued medical claims

Medical accrual amounts were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Accrued medical claims	$	1,329	$	1,016

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Summary of Significant Accounting Policies - Reconciliation of Basic and Diluted Earnings (Losses) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Basic earnings per share:
Net (losses) earnings	$ (11,427)	$ 4,908
Basic weighted average number of shares outstanding (in shares)	4,236	4,218
Basic earnings per share (in dollars per share)	$ (2.70)	$ 1.16
Diluted weighted average number of shares outstanding:
Basic weighted average number of shares outstanding (in shares)	4,236	4,218
Total (in shares)	4,250	4,224
Diluted earnings per share (in dollars per share)	$ (2.69)	$ 1.16
Restricted stock unit awards
Diluted weighted average number of shares outstanding:
Unit awards	12	6
Performance Unit Awards
Diluted weighted average number of shares outstanding:
Unit awards	2	0

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Organization and Basis of Presentation

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

Organization and Basis of Presentation

Organization

Adams Resources & Energy, Inc. (“AE”) is a publicly traded Delaware corporation organized in 1973, the common shares of which are listed on the NYSE American LLC under the ticker symbol “AE”. We, through our subsidiaries, are primarily engaged in the business of crude oil marketing, transportation and storage in various crude oil and natural gas basins in the lower 48 states of the United States (“U.S.”). We also conduct tank truck transportation of liquid chemicals and dry bulk primarily in the lower 48 states of the U.S. with deliveries into Canada and Mexico, and with terminals in the Gulf Coast region of the U.S. Unless the context requires otherwise, references to “we,” “us,” “our,” the “Company” or “AE” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries.  

We operate and report in two business segments: (i) crude oil marketing, transportation and storage, and (ii) tank truck transportation of liquid chemicals and dry bulk. See Note 7 for further information regarding our business segments.

Basis of Presentation

Our results of operations for the three months ended March 31, 2020 are not necessarily indicative of results expected for the full year of 2020. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals necessary for fair presentation.  The condensed consolidated financial statements and the accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the rules of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”) filed with the SEC on March 6, 2020. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of our financial statements in conformity with GAAP requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. While we believe the estimates and assumptions used in the preparation of these condensed consolidated financial statements are appropriate, actual results could differ from those estimates.

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Commitments and Contingencies - Schedule of Accrued Medical Claims (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Aug. 15, 2019
Commitments and Contingencies Disclosure [Abstract]
Umbrellas insurance coverage	$ 1,400
Aggregate medical claims for umbrella insurance coverage per calendar year	7,500
Accrued medical claims	$ 1,329	$ 1,016
Income tax examination, proposed penalty			$ 1,200

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Stock-Based Compensation Plan (Details) - The 2018 LTIP - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	May 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)	79,228			150,000
Compensation expense	$ 134,000	$ 123,000
Accrued dividends	$ 28,800		$ 23,600
Restricted stock unit awards
Number of Shares
Unit awards, beginning balance (in shares)	18,782
Granted (in shares)	20,346
Vested (in shares)	(217)
Forfeited (in shares)	(282)
Unit awards, ending balance (in shares)	38,629
Weighted Average Grant Date Fair Value per Share
Unit awards, beginning balance (in dollars per share)	$ 37.05
Granted (in dollars per share)	24.85
Vested (in dollars per share)	37.61
Forfeited (in dollars per share)	37.61
Unit awards, ending balance (in dollars per share)	$ 30.62
Aggregate grant date fair value awards issues	$ 500,000
Unrecognized compensation cost	$ 700,000
Period for recognition for remaining compensation cost	1 year 8 months 12 days
Restricted stock unit awards | Minimum
Weighted Average Grant Date Fair Value per Share
Granted (in dollars per share)	$ 24.77
Restricted stock unit awards | Maximum
Weighted Average Grant Date Fair Value per Share
Granted (in dollars per share)	$ 26.23
Performance Unit Awards
Number of Shares
Unit awards, beginning balance (in shares)	2,787
Granted (in shares)	10,781
Vested (in shares)	0
Forfeited (in shares)	(27)
Unit awards, ending balance (in shares)	13,541
Weighted Average Grant Date Fair Value per Share
Unit awards, beginning balance (in dollars per share)	$ 43.00
Granted (in dollars per share)	24.92
Vested (in dollars per share)	0
Forfeited (in dollars per share)	43.00
Unit awards, ending balance (in dollars per share)	$ 28.60
Aggregate grant date fair value awards issues	$ 200,000
Performance factor	100000.00%
Unrecognized compensation cost	$ 300,000
Period for recognition for remaining compensation cost	2 years 8 months 12 days
Performance Unit Awards | Minimum
Weighted Average Grant Date Fair Value per Share
Granted (in dollars per share)	$ 24.77
Performance Unit Awards | Maximum
Weighted Average Grant Date Fair Value per Share
Granted (in dollars per share)	$ 26.23

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues:
Total revenues	$ 353,477	$ 445,168
Costs and expenses:
General and administrative	2,894	2,684
Depreciation and amortization	4,473	3,589
Total costs and expenses	373,417	439,915
Operating (losses) earnings	(19,940)	5,253
Other income (expense):
Gain on dissolution of investment	0	498
Interest income	365	656
Interest expense	(150)	(65)
Total other income (expense), net	215	1,089
(Losses) Earnings before income taxes	(19,725)	6,342
Income tax benefit (provision)	8,298	(1,434)
Net (losses) earnings	$ (11,427)	$ 4,908
(Losses) Earnings per share:
Basic net (losses) earnings per common share (in dollars per share)	$ (2.70)	$ 1.16
Diluted net (losses) earnings per common share (in dollars per share)	(2.69)	1.16
Dividends per common share (in dollars per share)	$ 0.24	$ 0.22
Marketing
Revenues:
Total revenues	$ 337,221	$ 429,761
Costs and expenses:
Cost of goods and services sold	352,865	420,541
Transportation
Revenues:
Total revenues	16,256	15,407
Costs and expenses:
Cost of goods and services sold	$ 13,185	$ 13,101

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Transactions with Affiliates

3 Months Ended

Mar. 31, 2020

Related Party Transactions [Abstract]

Transactions with Affiliates

Transactions with Affiliates

We enter into certain transactions in the normal course of business with affiliated entities including direct cost reimbursement for shared phone and administrative services. In addition, we lease our corporate office space in a building operated by 17 South Briar Hollow Lane, LLC, an affiliate of KSA Industries, Inc., which is an affiliated entity.

Activities with affiliates were as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Affiliate billings to us	$	17	$	17
Billings to affiliates	1		1
Rentals paid to affiliate	122		122

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Prepayments and Other Current Assets

3 Months Ended

Mar. 31, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepayments and Other Current Assets

Prepayments and Other Current Assets

The components of prepayments and other current assets were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Insurance premiums	$	346	$	473
Rents, licenses and other	960		1,086
Total	$	1,306	$	1,559

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Leases

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases

Leases

The following table provides the components of lease expense for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Finance lease cost:
Amortization of ROU assets	$	553	$	245
Interest on lease liabilities	74		45
Operating lease cost	679		862
Short-term lease cost	2,503		1,965
Total lease expense	$	3,809	$	3,117

The following table provides supplemental cash flow and other information related to leases for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	678	$	861
Operating cash flows from finance leases	105		30
Financing cash flows from finance leases	532		218
ROU assets obtained in exchange for new lease liabilities:
Finance leases	—		556
Operating leases	81		11,410

______________

(1)Amounts are included in Other operating activities on the unaudited condensed consolidated statements of cash flows.

The following table provides the lease terms and discount rates for the periods indicated:

	Three Months Ended
	March 31,
	2020		2019
Weighted-average remaining lease term (years):
Finance leases	2.78		4.21
Operating leases	4.58		5.41
Weighted-average discount rate:
Finance leases	4.9	%	4.7	%
Operating leases	5.0	%	5.0	%

The following table provides supplemental balance sheet information related to leases at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Assets
Finance lease ROU assets (1)	$	5,830	$	6,384
Operating lease ROU assets	9,090		9,576
Liabilities
Current
Finance lease liabilities	2,193		2,167
Operating lease liabilities	2,203		2,252
Noncurrent
Finance lease liabilities	3,818		4,376
Operating lease liabilities	6,887		7,323

______________

(1)Amounts are included in Property and equipment, net on the unaudited condensed consolidated balance sheets.

The following table provides maturities of undiscounted lease liabilities at March 31, 2020 (in thousands):

	Finance		Operating
	Lease		Lease
Remainder of 2020	$	1,818	$	2,007
2021	2,426		2,285
2022	1,492		1,942
2023	642		1,778
2024	39		1,668
Thereafter	—		443
Total lease payments	6,417		10,123
Less: Interest	(406)		(1,033)
Present value of lease liabilities	6,011		9,090
Less: Current portion of lease obligation	(2,193)		(2,203)
Total long-term lease obligation	$	3,818	$	6,887

The following table provides maturities of undiscounted lease liabilities at December 31, 2019 (in thousands):

	Finance		Operating
	Lease		Lease
2020	$	2,426	$	2,660
2021	2,426		2,256
2022	1,492		1,914
2023	642		1,776
2024	37		1,668
Thereafter	—		443
Total lease payments	7,023		10,717
Less: Interest	(480)		(1,142)
Present value of lease liabilities	6,543		9,575
Less: Current portion of lease obligation	(2,167)		(2,252)
Total long-term lease obligation	$	4,376	$	7,323

Leases

Leases

The following table provides the components of lease expense for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Finance lease cost:
Amortization of ROU assets	$	553	$	245
Interest on lease liabilities	74		45
Operating lease cost	679		862
Short-term lease cost	2,503		1,965
Total lease expense	$	3,809	$	3,117

The following table provides supplemental cash flow and other information related to leases for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	678	$	861
Operating cash flows from finance leases	105		30
Financing cash flows from finance leases	532		218
ROU assets obtained in exchange for new lease liabilities:
Finance leases	—		556
Operating leases	81		11,410

______________

(1)Amounts are included in Other operating activities on the unaudited condensed consolidated statements of cash flows.

The following table provides the lease terms and discount rates for the periods indicated:

	Three Months Ended
	March 31,
	2020		2019
Weighted-average remaining lease term (years):
Finance leases	2.78		4.21
Operating leases	4.58		5.41
Weighted-average discount rate:
Finance leases	4.9	%	4.7	%
Operating leases	5.0	%	5.0	%

The following table provides supplemental balance sheet information related to leases at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Assets
Finance lease ROU assets (1)	$	5,830	$	6,384
Operating lease ROU assets	9,090		9,576
Liabilities
Current
Finance lease liabilities	2,193		2,167
Operating lease liabilities	2,203		2,252
Noncurrent
Finance lease liabilities	3,818		4,376
Operating lease liabilities	6,887		7,323

______________

(1)Amounts are included in Property and equipment, net on the unaudited condensed consolidated balance sheets.

The following table provides maturities of undiscounted lease liabilities at March 31, 2020 (in thousands):

	Finance		Operating
	Lease		Lease
Remainder of 2020	$	1,818	$	2,007
2021	2,426		2,285
2022	1,492		1,942
2023	642		1,778
2024	39		1,668
Thereafter	—		443
Total lease payments	6,417		10,123
Less: Interest	(406)		(1,033)
Present value of lease liabilities	6,011		9,090
Less: Current portion of lease obligation	(2,193)		(2,203)
Total long-term lease obligation	$	3,818	$	6,887

The following table provides maturities of undiscounted lease liabilities at December 31, 2019 (in thousands):

	Finance		Operating
	Lease		Lease
2020	$	2,426	$	2,660
2021	2,426		2,256
2022	1,492		1,914
2023	642		1,776
2024	37		1,668
Thereafter	—		443
Total lease payments	7,023		10,717
Less: Interest	(480)		(1,142)
Present value of lease liabilities	6,543		9,575
Less: Current portion of lease obligation	(2,167)		(2,252)
Total long-term lease obligation	$	4,376	$	7,323

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Leases (Tables)

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Lease, Cost

The following table provides the components of lease expense for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Finance lease cost:
Amortization of ROU assets	$	553	$	245
Interest on lease liabilities	74		45
Operating lease cost	679		862
Short-term lease cost	2,503		1,965
Total lease expense	$	3,809	$	3,117

The following table provides supplemental cash flow and other information related to leases for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	678	$	861
Operating cash flows from finance leases	105		30
Financing cash flows from finance leases	532		218
ROU assets obtained in exchange for new lease liabilities:
Finance leases	—		556
Operating leases	81		11,410

______________

(1)Amounts are included in Other operating activities on the unaudited condensed consolidated statements of cash flows.

The following table provides the lease terms and discount rates for the periods indicated:

	Three Months Ended
	March 31,
	2020		2019
Weighted-average remaining lease term (years):
Finance leases	2.78		4.21
Operating leases	4.58		5.41
Weighted-average discount rate:
Finance leases	4.9	%	4.7	%
Operating leases	5.0	%	5.0	%

Assets And Liabilities, Lessee

The following table provides supplemental balance sheet information related to leases at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Assets
Finance lease ROU assets (1)	$	5,830	$	6,384
Operating lease ROU assets	9,090		9,576
Liabilities
Current
Finance lease liabilities	2,193		2,167
Operating lease liabilities	2,203		2,252
Noncurrent
Finance lease liabilities	3,818		4,376
Operating lease liabilities	6,887		7,323

______________

(1)Amounts are included in Property and equipment, net on the unaudited condensed consolidated balance sheets.

Lessee, Operating Lease, Liability, Maturity

The following table provides maturities of undiscounted lease liabilities at March 31, 2020 (in thousands):

	Finance		Operating
	Lease		Lease
Remainder of 2020	$	1,818	$	2,007
2021	2,426		2,285
2022	1,492		1,942
2023	642		1,778
2024	39		1,668
Thereafter	—		443
Total lease payments	6,417		10,123
Less: Interest	(406)		(1,033)
Present value of lease liabilities	6,011		9,090
Less: Current portion of lease obligation	(2,193)		(2,203)
Total long-term lease obligation	$	3,818	$	6,887

Finance Lease, Liability, Maturity

The following table provides maturities of undiscounted lease liabilities at March 31, 2020 (in thousands):

	Finance		Operating
	Lease		Lease
Remainder of 2020	$	1,818	$	2,007
2021	2,426		2,285
2022	1,492		1,942
2023	642		1,778
2024	39		1,668
Thereafter	—		443
Total lease payments	6,417		10,123
Less: Interest	(406)		(1,033)
Present value of lease liabilities	6,011		9,090
Less: Current portion of lease obligation	(2,193)		(2,203)
Total long-term lease obligation	$	3,818	$	6,887

Schedule of Principal Contractual Commitments Outstanding Under Capital Leases

The following table provides maturities of undiscounted lease liabilities at December 31, 2019 (in thousands):

	Finance		Operating
	Lease		Lease
2020	$	2,426	$	2,660
2021	2,426		2,256
2022	1,492		1,914
2023	642		1,776
2024	37		1,668
Thereafter	—		443
Total lease payments	7,023		10,717
Less: Interest	(480)		(1,142)
Present value of lease liabilities	6,543		9,575
Less: Current portion of lease obligation	(2,167)		(2,252)
Total long-term lease obligation	$	4,376	$	7,323

Schedule of Principal Contractual Commitments Outstanding Under Operating Leases

The following table provides maturities of undiscounted lease liabilities at December 31, 2019 (in thousands):

	Finance		Operating
	Lease		Lease
2020	$	2,426	$	2,660
2021	2,426		2,256
2022	1,492		1,914
2023	642		1,776
2024	37		1,668
Thereafter	—		443
Total lease payments	7,023		10,717
Less: Interest	(480)		(1,142)
Present value of lease liabilities	6,543		9,575
Less: Current portion of lease obligation	(2,167)		(2,252)
Total long-term lease obligation	$	4,376	$	7,323

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Summary of Significant Accounting Policies - Common Shares Outstanding (Details)	3 Months Ended
	Mar. 31, 2020 shares
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)	4,235,533
Vesting of restricted stock unit awards (in shares)	217
Ending balance (in shares)	4,235,750

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Operating activities:
Net (losses) earnings	$ (11,427)	$ 4,908
Adjustments to reconcile net losses earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	4,473	3,589
Gains on sales of property	(140)	(178)
Provision for doubtful accounts	(24)	(32)
Stock-based compensation expense	134	123
Deferred income taxes	(2,689)	834
Net change in fair value contracts	(19)	19
Gain on dissolution of AREC	0	(498)
Changes in assets and liabilities:
Accounts receivable	41,617	(2,866)
Accounts receivable/payable, affiliates	1	(23)
Inventories	16,386	(6,458)
Income tax receivable	(5,530)	426
Prepayments and other current assets	253	(52)
Accounts payable	(68,384)	17,914
Accrued liabilities	1,506	2,432
Other	(3)	878
Net cash provided by (used in) operating activities	(23,846)	21,016
Investing activities:
Property and equipment additions	(2,212)	(8,351)
Proceeds from property sales	502	543
Proceeds from dissolution of AREC	0	923
Insurance and state collateral (deposits) refunds	1,128	842
Net cash used in investing activities	(582)	(6,043)
Financing activities:
Principal repayments of finance lease obligations	(532)	(218)
Payment of contingent consideration liability	(54)	0
Dividends paid on common stock	(1,016)	(928)
Net cash used in financing activities	(1,602)	(1,146)
(Decrease) Increase in cash and cash equivalents, including restricted cash	(26,030)	13,827
Cash and cash equivalents, including restricted cash, at beginning of period	122,255	117,066
Cash and cash equivalents, including restricted cash, at end of period	$ 96,225	$ 130,893

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Cover Page - shares	3 Months Ended
	Mar. 31, 2020	May 01, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	1-07908
Entity Registrant Name	ADAMS RESOURCES & ENERGY, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	74-1753147
Entity Address, Address Line One	17 South Briar Hollow Lane
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77027
City Area Code	713
Local Phone Number	881-3600
Title of 12(b) Security	Common Stock, $0.10 Par Value
Trading Symbol	AE
Security Exchange Name	NYSEAMER
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		4,235,750
Document Fiscal Year Focus	2020
Entity Central Index Key	0000002178
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Amendment Flag	false

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Cash, Cash Equivalents and Restricted Cash

Restricted cash represents an amount held in a segregated bank account by Wells Fargo as collateral for outstanding letters of credit.

The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported in the unaudited condensed consolidated balance sheets that totals to the amounts shown in the unaudited condensed consolidated statements of cash flows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Cash and cash equivalents	$	87,398	$	112,994
Restricted cash	8,827		9,261
Total cash, cash equivalents and restricted cash shown in the
unaudited condensed consolidated statements of cash flows	$	96,225	$	122,255

Common Shares Outstanding

The following table reconciles our outstanding common stock for the periods indicated:

	Common
	shares
Balance, January 1, 2020	4,235,533
Vesting of restricted stock unit awards	217
Balance, March 31, 2020	4,235,750

Earnings Per Share

Basic earnings (losses) per share is computed by dividing our net earnings (losses) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (losses) per share is computed by giving effect to all potential shares of common stock outstanding, including our stock related to unvested restricted stock unit awards. Unvested restricted stock unit awards granted under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan (“2018 LTIP”) are not considered to be participating securities as the holders of these shares do not have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares (see Note 10 for further discussion).

A reconciliation of the calculation of basic and diluted (losses) earnings per share was as follows for the periods indicated (in thousands, except per share data):

	Three Months Ended March 31,
	2020		2019
(Losses) Earnings per share — numerator:
Net (losses) earnings	$	(11,427)	$	4,908
Denominator:
Basic weighted average number of shares outstanding	4,236		4,218
Basic (losses) earnings per share	$	(2.70)	$	1.16
Diluted (losses) earnings per share:
Diluted weighted average number of shares outstanding:
Common shares	4,236		4,218
Restricted stock unit awards	12		6
Performance share unit awards (1)	2		—
Total	4,250		4,224
Diluted (losses) earnings per share	$	(2.69)	$	1.16

_______________

(1)The dilutive effect of performance share awards are included in the calculation of diluted earnings per share when the performance share award performance conditions have been achieved. The performance conditions for the performance share unit awards granted in 2018 were achieved as of December 31, 2018.

Fair Value Measurements

The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities are recorded at fair value based on market quotations from actively traded liquid markets.

A three-tier hierarchy has been established that classifies fair value amounts recognized in the financial statements based on the observability of inputs used to estimate these fair values.  The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3).  At each balance sheet reporting date, we categorize our financial assets and liabilities using this hierarchy.

Fair value contracts consist of derivative financial instruments and are recorded as either an asset or liability measured at its fair value. Changes in fair value are recognized immediately in earnings unless the derivatives qualify for, and we elect, cash flow hedge accounting. We had no contracts designated for hedge accounting during any current reporting periods (see Note 9 for further information).

Income Taxes

Income taxes are accounted for using the asset and liability method. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of these items and their respective tax basis.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted and signed into law in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating losses (“NOL”) incurred in tax years 2018, 2019 and 2020 to offset 100 percent of taxable income and be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. We are continuing to evaluate the full impact of the CARES Act. However, we have determined that the NOL carryback provision in the CARES Act would result in a cash benefit to us, and we have recorded an income tax receivable at March 31, 2020 of approximately $6.4 million for the benefit of carrying back the NOLs for the fiscal years 2018 and 2019. We are forecasting an NOL for fiscal year 2020 and expect to carry it back to previous years. As a result, we have also included the 2020 provisional amounts in income tax receivable at March 31, 2020. As we are carrying the losses back to years beginning before January 1, 2018, the receivables were recorded at the previous 35 percent federal tax rate rather than the current statutory rate of 21 percent.

Inventory

Inventory consists of crude oil held in storage tanks and at third-party pipelines as part of our crude oil marketing operations. Crude oil inventory is carried at the lower of cost or net realizable value. At the end of each reporting period, we assess the carrying value of our inventory and make adjustments necessary to reduce the carrying value to the applicable net realizable value. Any resulting adjustments are a component of marketing costs and expenses on our consolidated statements of operations. During the three months ended March 31, 2020, we recorded a charge of $24.2 million related to the write-down of our crude oil inventory due to significant declines in prices in 2020. There were no charges recognized during the three months ended March 31, 2019.

Property and Equipment

Property and equipment is recorded at cost. Expenditures for additions, improvements and other enhancements to property and equipment are capitalized, and minor replacements, maintenance and repairs that do not extend asset life or add value are charged to expense as incurred. When property and equipment assets are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in results of operations in operating costs and expenses for the respective period. Property and equipment, except for land, is depreciated using the straight-line method over the estimated average useful lives ranging from two to thirty-nine years.

We review our long-lived assets for impairment whenever there is evidence that the carrying value of these assets may not be recoverable. Any impairment recognized is permanent and may not be restored. Property and equipment is reviewed at the lowest level of identifiable cash flows. For properties requiring impairment, the fair value is estimated based on an internal discounted cash flow model of future cash flows.

See Note 5 for additional information regarding our property and equipment.

Stock-Based Compensation

We measure all share-based payments, including the issuance of restricted stock units and performance share units to employees and board members, using a fair-value based method. The cost of services received from employees and non-employee board members in exchange for awards of equity instruments is recognized in the consolidated statements of operations based on the estimated fair value of those awards on the grant date and amortized on a straight-line basis over the requisite service period. The fair value of restricted stock unit awards and performance share unit awards is based on the closing price of our common stock on the grant date. We account for forfeitures as they occur. See Note 10 for additional information regarding our 2018 LTIP.

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Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Supplemental Cash Flow Elements [Abstract]
Cash paid for interest	$ 150	$ 65
Cash paid for federal and state income taxes	21	5
Non-cash transactions:
Change in accounts payable related to property and equipment additions	1,129	(683)
Property and equipment acquired under finance leases	$ 0	$ 556

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Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 161,744		$ 164,244
Less accumulated depreciation	(96,363)		(95,198)
Property and equipment, net	65,381		69,046
Total depreciation and amortization	$ 4,473	$ 3,589
Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	2 years
Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	39 years
Assets not held under finance eases
Property, Plant and Equipment [Line Items]
Total depreciation and amortization	$ 3,920	3,344
Assets held under finance leases
Property, Plant and Equipment [Line Items]
Total depreciation and amortization	553	$ 245
Tractors and trailers
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 116,509		115,693
Tractors and trailers | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	5 years
Tractors and trailers | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	6 years
Tractors and trailers | Assets held under finance leases
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 5,500		5,500
Less accumulated depreciation	(2,000)		(1,700)
Field equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 25,149		25,094
Field equipment | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	2 years
Field equipment | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	5 years
Field equipment | Assets held under finance leases
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 3,300		3,300
Less accumulated depreciation	(1,000)		(700)
Buildings
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 16,055		16,055
Buildings | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	5 years
Buildings | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	39 years
Office equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,958		1,951
Office equipment | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	2 years
Office equipment | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	5 years
Land
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,790		1,790
Construction in progress
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 283		$ 3,661

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Segment Reporting - Identifiable Assets by Industry Segment (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Segment Reconciliation [Abstract]
Total assets	$ 253,656	$ 330,842
Operating Segments
Segment Reconciliation [Abstract]
Total assets	253,656	330,842
Operating Segments | Marketing
Segment Reconciliation [Abstract]
Total assets	81,887	141,402
Operating Segments | Transportation
Segment Reconciliation [Abstract]
Total assets	56,933	58,483
Cash and other
Segment Reconciliation [Abstract]
Total assets	$ 114,836	$ 130,957

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Information concerning business activities

nformation by reporting segment was as follows for the periods indicated (in thousands):

	Reporting Segments
	Marketing		Transportation		Other		Total
Three Months Ended March 31, 2020
Revenues	$	337,221	$	16,256	$	—	$	353,477
Segment operating (losses) earnings (1)	(17,651)		605		—		(17,046)
Depreciation and amortization	2,007		2,466		—		4,473
Property and equipment additions (2)	2,032		41		139		2,212
Three Months Ended March 31, 2019
Revenues	$	429,761	$	15,407	$	—	$	445,168
Segment operating (losses) earnings (1)	7,098		839		—		7,937
Depreciation and amortization	2,122		1,467		—		3,589
Property and equipment additions (3)	1,654		6,697		—		8,351

_______________

(1)Our crude oil marketing segment’s operating (losses) earnings included inventory valuation losses of $24.2 million and inventory liquidation gains of $4.5 million for the three months ended March 31, 2020 and 2019, respectively.

(2)During the three months ended March 31, 2020, we had $0.1 million of property and equipment additions for leasehold improvements at our corporate headquarters, which is not attributed or allocated to any of our reporting segments.

(3)Our crude oil marketing segment’s property and equipment additions do not include approximately $0.6 million of tractors acquired under finance leases during the three months ended March 31, 2019. See Note 12 for further information.

Reconciliation of segment earnings to earnings before income taxes

Segment operating (losses) earnings reflect revenues net of operating costs and depreciation and amortization expense and are reconciled to (losses) earnings before income taxes, as follows for the periods indicated (in thousands):

	Three Months Ended March 31,
	2020		2019
Segment operating (losses) earnings	$	(17,046)	$	7,937
General and administrative	(2,894)		(2,684)
Operating (losses) earnings	(19,940)		5,253
Gain on dissolution of investment	—		498
Interest income	365		656
Interest expense	(150)		(65)
(Losses) Earnings before income taxes	$	(19,725)	$	6,342

Identifiable assets by industry segment

Identifiable assets by business segment were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Reporting segment:
Marketing	$	81,887	$	141,402
Transportation	56,933		58,483
Cash and other	114,836		130,957
Total assets	$	253,656	$	330,842

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table disaggregates our revenue by segment and by major source for the periods indicated (in thousands):

	Reporting Segments
	Marketing		Transportation		Total
Three Months Ended March 31, 2020
Revenues from contracts with customers	$	319,717	$	16,256	$	335,973
Other (1)	17,504		—		17,504
Total revenues	$	337,221	$	16,256	$	353,477
Timing of revenue recognition:
Goods transferred at a point in time	$	319,717	$	—	$	319,717
Services transferred over time	—		16,256		16,256
Total revenues from contracts with customers	$	319,717	$	16,256	$	335,973
Three Months Ended March 31, 2019
Revenues from contracts with customers	$	360,731	$	15,407	$	376,138
Other (1)	69,030		—		69,030
Total revenues	$	429,761	$	15,407	$	445,168
Timing of revenue recognition:
Goods transferred at a point in time	$	360,731	$	—	$	360,731
Services transferred over time	—		15,407		15,407
Total revenues from contracts with customers	$	360,731	$	15,407	$	376,138

_______________

(1)Other marketing revenues are recognized under Accounting Standards Board (“ASC”) 815, Derivatives and Hedging, and ASC 845, Nonmonetary Transactions – Purchases and Sales of Inventory with the Same Counterparty.

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

Reporting these crude oil contracts on a gross revenue basis would increase our reported revenues as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Revenue gross-up	$	157,439	$	242,123

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Stock-Based Compensation Plan (Tables)

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Share-based Payment Arrangement

Compensation expense recognized in connection with equity-based awards was as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Compensation expense	$	134	$	123

Share-based Compensation, Activity

The following table presents restricted stock unit award activity for the periods indicated:

		Weighted-
		Average Grant
	Number of	Date Fair Value
	Shares	per Share (1)
Restricted stock unit awards at January 1, 2020	18,782	$	37.05
Granted (2)	20,346	$	24.85
Vested	(217)	$	37.61
Forfeited	(282)	$	37.61
Restricted stock unit awards at March 31, 2020	38,629	$	30.62

_______________

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)The aggregate grant date fair value of restricted stock unit awards issued during 2020 was $0.5 million based on a grant date market price of our common shares ranging from $24.77 to $26.23 per share.

Unrecognized compensation cost associated with restricted stock unit awards was approximately $0.7 million at March 31, 2020. Due to the graded vesting provisions of these awards, we expect to recognize the remaining compensation cost for these awards over a weighted-average period of 1.7 years.

Performance Share Unit Awards

The following table presents performance share unit award activity for the periods indicated:

		Weighted-
		Average Grant
	Number of	Date Fair Value
	Shares	per Share (1)
Performance share unit awards at January 1, 2020	2,787	$	43.00
Granted (2)	10,781	$	24.92
Vested	—	$	—
Forfeited	(27)	$	43.00
Performance share unit awards at March 31, 2020	13,541	$	28.60

_______________

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)The aggregate grant date fair value of performance share unit awards issued during 2020 was $0.2 million based on a grant date market price of our common shares ranging from $24.77 to $26.23 per share and assuming a performance factor of 100 percent.

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Organization and Basis of Presentation (Details)	3 Months Ended
	Mar. 31, 2020 segment state
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of states in which entity operates | state	48
Number of operating segments	2
Number of reportable segments	2

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Summary of Significant Accounting Policies - Inventory and Property and Equipment (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Accounting Policies [Abstract]
CARES Act, cash benefits	$ 6,400,000
Inventory write-down	$ 24,200,000	$ 0
Minimum
Property, Plant and Equipment [Abstract]
Property and equipment, useful life	2 years
Maximum
Property, Plant and Equipment [Abstract]
Property and equipment, useful life	39 years

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Stock-Based Compensation Plan

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation Plan

Stock-Based Compensation Plan

We have in place a long-term incentive plan under which any employee or non-employee director who provides services to us is eligible to participate in the plan. The 2018 LTIP, which is overseen by the Compensation Committee of our Board of Directors, provides for the grant of various types of equity awards, of which restricted stock unit awards and performance-based compensation awards have been granted. The maximum number of shares authorized for issuance under the 2018 LTIP is 150,000 shares, and the 2018 LTIP is effective until May 8, 2028. After giving effect to awards granted under the 2018 LTIP, forfeitures under the 2018 LTIP and assuming the potential achievement of the maximum amounts of the performance factors through March 31, 2020, a total of 79,228 shares were available for issuance.

Compensation expense recognized in connection with equity-based awards was as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Compensation expense	$	134	$	123

At March 31, 2020 and December 31, 2019, we had $28,800 and $23,600, respectively, of accrued dividend amounts for awards granted under the 2018 LTIP.

Restricted Stock Unit Awards

The following table presents restricted stock unit award activity for the periods indicated:

		Weighted-
		Average Grant
	Number of	Date Fair Value
	Shares	per Share (1)
Restricted stock unit awards at January 1, 2020	18,782	$	37.05
Granted (2)	20,346	$	24.85
Vested	(217)	$	37.61
Forfeited	(282)	$	37.61
Restricted stock unit awards at March 31, 2020	38,629	$	30.62

_______________

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)The aggregate grant date fair value of restricted stock unit awards issued during 2020 was $0.5 million based on a grant date market price of our common shares ranging from $24.77 to $26.23 per share.

Unrecognized compensation cost associated with restricted stock unit awards was approximately $0.7 million at March 31, 2020. Due to the graded vesting provisions of these awards, we expect to recognize the remaining compensation cost for these awards over a weighted-average period of 1.7 years.

Performance Share Unit Awards

The following table presents performance share unit award activity for the periods indicated:

		Weighted-
		Average Grant
	Number of	Date Fair Value
	Shares	per Share (1)
Performance share unit awards at January 1, 2020	2,787	$	43.00
Granted (2)	10,781	$	24.92
Vested	—	$	—
Forfeited	(27)	$	43.00
Performance share unit awards at March 31, 2020	13,541	$	28.60

_______________

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)The aggregate grant date fair value of performance share unit awards issued during 2020 was $0.2 million based on a grant date market price of our common shares ranging from $24.77 to $26.23 per share and assuming a performance factor of 100 percent.

Unrecognized compensation cost associated with performance share unit awards was approximately $0.3 million at March 31, 2020. We expect to recognize the remaining compensation cost for these awards over a weighted-average period of 2.7 years.

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Cash Deposits and Other Assets

3 Months Ended

Mar. 31, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Cash Deposits and Other Assets

Cash Deposits and Other Assets

Components of cash deposits and other assets were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Amounts associated with liability insurance program:
Insurance collateral deposits	$	709	$	1,233
Excess loss fund	620		943
Accumulated interest income	332		609
Other amounts:
State collateral deposits	33		37
Materials and supplies	493		477
Total	$	2,187	$	3,299

We have established certain deposits to support participation in our liability insurance program and remittance of state crude oil severance taxes and other state collateral deposits. Insurance collateral deposits are held by the insurance company to cover past or potential open claims based upon a percentage of the maximum assessment under our insurance policies. Insurance collateral deposits are invested at the discretion of our insurance carrier. Excess amounts in our loss fund represent premium payments in excess of claims incurred to date that we may be entitled to recover through settlement or commutation as claim periods are closed. Interest income is earned on the majority of amounts held by the insurance companies and will be paid to us upon settlement of policy years.

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement of Stockholders' Equity [Abstract]
Dividends per common share (in dollars per share)	$ 0.24	$ 0.22
Awards under LTIP (in dollars per share)	$ 0.24	$ 0.22

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Allowance for doubtful accounts	$ 117	$ 141
Shareholders’ equity:
Preferred stock - par value (in dollars per share)	$ 1.00	$ 1.00
Preferred stock - shares authorized (in shares)	960,000	960,000
Preferred stock - shares outstanding (in shares)	0	0
Common stock - par value (in dollars per share)	$ 0.10	$ 0.10
Common stock - shares authorized (in shares)	7,500,000	7,500,000
Common stock - shares outstanding (in shares)	4,235,750	4,235,533

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Commitments and Contingencies - Pre-funded Insurance (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Pre-funded premiums for losses incurred but not reported	$ 58	$ 168
Accrued automobile and workers’ compensation claims	$ 3,170	$ 2,956

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Derivative Instruments and Fair Value Measurements - Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Derivatives:
Current assets	$ 545	$ 0
Current assets, counterparty offsets	0	0
Current liabilities	(526)	0
Current liabilities, counterparty offsets	0	0
Net value	19	0
Net value, counterparty offsets	0	0
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)
Derivatives:
Current assets	0	0
Current liabilities	0	0
Net value	0	0
Significant Other Observable Inputs (Level 2)
Derivatives:
Current assets	545	0
Current liabilities	(526)	0
Net value	19	0
Significant Unobservable Inputs (Level 3)
Derivatives:
Current assets	0	0
Current liabilities	0	0
Net value	$ 0	$ 0

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Revenue Recognition - Other Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Total revenues from contracts with customers	$ 335,973	$ 376,138
Accounting Standards Update 2014-09 | Revenue gross-up
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Total revenues from contracts with customers	$ 157,439	$ 242,123

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Segment Reporting - Information Concerning Business Activities (Details)	3 Months Ended
	Mar. 31, 2020 USD ($) segment	Mar. 31, 2019 USD ($)
Segment Reporting [Abstract]
Number of reportable segments | segment	2
Number of operating segments | segment	2
Segment Reporting Information [Line Items]
Revenues	$ 353,477,000	$ 445,168,000
Segment operating (losses) earnings	(19,940,000)	5,253,000
Depreciation and amortization	4,473,000	3,589,000
Property and equipment additions	2,212,000	8,351,000
Property and equipment acquired under finance leases		600,000
Leasehold Improvements
Segment Reporting Information [Line Items]
Property and equipment additions	100,000
Marketing
Segment Reporting Information [Line Items]
Revenues	337,221,000	429,761,000
Depreciation and amortization	2,007,000	2,122,000
Property and equipment additions	2,032,000	1,654,000
Inventory liquidation (losses) gains	(24,200,000)	4,500,000
Transportation
Segment Reporting Information [Line Items]
Revenues	16,256,000	15,407,000
Depreciation and amortization	2,466,000	1,467,000
Property and equipment additions	41,000	6,697,000
Other
Segment Reporting Information [Line Items]
Revenues	0	0
Depreciation and amortization	0	0
Property and equipment additions	139,000	0
Operating Segments
Segment Reporting Information [Line Items]
Segment operating (losses) earnings	(17,046,000)	7,937,000
Operating Segments | Marketing
Segment Reporting Information [Line Items]
Segment operating (losses) earnings	(17,651,000)	7,098,000
Operating Segments | Transportation
Segment Reporting Information [Line Items]
Segment operating (losses) earnings	605,000	839,000
Operating Segments | Other
Segment Reporting Information [Line Items]
Segment operating (losses) earnings	0	0
Intersegment
Segment Reporting Information [Line Items]
Revenues	$ 0	$ 0

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Derivative Instruments and Fair Value Measurements - Narrative (Details) - Commodity Contract	3 Months Ended	12 Months Ended
	Mar. 31, 2020 barrel_of_oil_per_day contract	Dec. 31, 2019 barrel_of_oil_per_day contract
Derivative Instruments, Gain (Loss) [Line Items]
Number of contracts held | contract	4	6
April 2020
Derivative Instruments, Gain (Loss) [Line Items]
Production	322
May 2020 through December 2020
Derivative Instruments, Gain (Loss) [Line Items]
Production	258	258
January 2020 through February 2020
Derivative Instruments, Gain (Loss) [Line Items]
Production		258
March 2020 through April 2020
Derivative Instruments, Gain (Loss) [Line Items]
Production		322

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Derivative Instruments and Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives reflected in the consolidated balance sheet

The estimated fair value of forward month commodity contracts (derivatives) reflected in the accompanying unaudited condensed consolidated balance sheet were as follows at the dates indicated (in thousands):

	Balance Sheet Location and Amount
	Current		Other		Current		Other
	Assets		Assets		Liabilities		Liabilities
March 31, 2020
Asset derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	$	545	$	—	$	—	$	—
Liability derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	—		—		526		—
Less counterparty offsets	—		—		—		—
As reported fair value contracts	$	545	$	—	$	526	$	—
December 31, 2019
Asset derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	$	—	$	—	$	—	$	—
Liability derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	—		—		—		—
Less counterparty offsets	—		—		—		—
As reported fair value contracts	$	—	$	—	$	—	$	—

Derivatives reflected in the consolidated statement of operations

Forward month commodity contracts (derivatives) reflected in the accompanying unaudited condensed consolidated statements of operations were as follows for the periods indicated (in thousands):

	Gains (losses)
	Three Months Ended
	March 31,
	2020		2019
Revenues – marketing	$	19	$	(20)

Fair value assets and liabilities

The following tables set forth, by level with the Level 1, 2 and 3 fair value hierarchy, the carrying values of our financial assets and liabilities at the dates indicated (in thousands):

	Fair Value Measurements Using
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical Assets		Observable		Unobservable
	and Liabilities		Inputs		Inputs		Counterparty
	(Level 1)		(Level 2)		(Level 3)		Offsets		Total
March 31, 2020
Derivatives:
Current assets	$	—	$	545	$	—	$	—	$	545
Current liabilities	—		(526)		—		—		(526)
Net value	$	—	$	19	$	—	$	—	$	19
December 31, 2019
Derivatives:
Current assets	$	—	$	—	$	—	$	—	$	—
Current liabilities	—		—		—		—		—
Net value	$	—	$	—	$	—	$	—	$	—

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Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2020

Property, Plant and Equipment [Abstract]

Property and equipment

The historical costs of our property and equipment and related accumulated depreciation balances were as follows at the dates indicated (in thousands):

	Estimated
	Useful Life	March 31,		December 31,
	in Years	2020		2019
Tractors and trailers (1)	5 – 6	$	116,509	$	115,693
Field equipment (2)	2 – 5	25,149		25,094
Buildings	5 – 39	16,055		16,055
Office equipment	2 – 5	1,958		1,951
Land		1,790		1,790
Construction in progress		283		3,661
Total		161,744		164,244
Less accumulated depreciation		(96,363)		(95,198)
Property and equipment, net		$	65,381	$	69,046

_______________

(1)Amounts include tractors held under finance leases in our crude oil marketing segment. At March 31, 2020 and December 31, 2019, gross property and equipment associated with these assets held under finance leases were $5.5 million and $5.5 million, respectively. Accumulated amortization associated with these assets held under these finance leases were $2.0 million and $1.7 million at March 31, 2020 and December 31, 2019, respectively (see Note 12 for further information).

(2)Amounts include a tank storage and throughput arrangement in our crude oil marketing segment held under a finance lease. At March 31, 2020 and December 31, 2019, gross property and equipment associated with these assets held under a finance lease were $3.3 million and $3.3 million, respectively. Accumulated amortization associated with these assets held under a finance lease was $1.0 million and $0.7 million at March 31, 2020 and December 31, 2019, respectively (see Note 12 for further information).

Components of depreciation and amortization expense were as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Depreciation and amortization, excluding amounts under finance leases	$	3,920	$	3,344
Amortization of property and equipment under finance leases	553		245
Total depreciation and amortization	$	4,473	$	3,589

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Organization

Organization

Adams Resources & Energy, Inc. (“AE”) is a publicly traded Delaware corporation organized in 1973, the common shares of which are listed on the NYSE American LLC under the ticker symbol “AE”. We, through our subsidiaries, are primarily engaged in the business of crude oil marketing, transportation and storage in various crude oil and natural gas basins in the lower 48 states of the United States (“U.S.”). We also conduct tank truck transportation of liquid chemicals and dry bulk primarily in the lower 48 states of the U.S. with deliveries into Canada and Mexico, and with terminals in the Gulf Coast region of the U.S. Unless the context requires otherwise, references to “we,” “us,” “our,” the “Company” or “AE” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries.  

We operate and report in two business segments: (i) crude oil marketing, transportation and storage, and (ii) tank truck transportation of liquid chemicals and dry bulk. See Note 7 for further information regarding our business segments.

Basis of Presentation

Basis of Presentation

Our results of operations for the three months ended March 31, 2020 are not necessarily indicative of results expected for the full year of 2020. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals necessary for fair presentation.  The condensed consolidated financial statements and the accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the rules of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”) filed with the SEC on March 6, 2020. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

Use of EstimatesThe preparation of our financial statements in conformity with GAAP requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. While we believe the estimates and assumptions used in the preparation of these condensed consolidated financial statements are appropriate, actual results could differ from those estimates.

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted CashRestricted cash represents an amount held in a segregated bank account by Wells Fargo as collateral for outstanding letters of credit.

Earnings Per Share

Earnings Per ShareBasic earnings (losses) per share is computed by dividing our net earnings (losses) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (losses) per share is computed by giving effect to all potential shares of common stock outstanding, including our stock related to unvested restricted stock unit awards. Unvested restricted stock unit awards granted under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan (“2018 LTIP”) are not considered to be participating securities as the holders of these shares do not have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares (see Note 10 for further discussion).

Fair Value Measurements

Fair Value Measurements

The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities are recorded at fair value based on market quotations from actively traded liquid markets.

A three-tier hierarchy has been established that classifies fair value amounts recognized in the financial statements based on the observability of inputs used to estimate these fair values.  The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3).  At each balance sheet reporting date, we categorize our financial assets and liabilities using this hierarchy.

Fair value contracts consist of derivative financial instruments and are recorded as either an asset or liability measured at its fair value. Changes in fair value are recognized immediately in earnings unless the derivatives qualify for, and we elect, cash flow hedge accounting. We had no contracts designated for hedge accounting during any current reporting periods (see Note 9 for further information).

Income Taxes

Income Taxes

Income taxes are accounted for using the asset and liability method. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of these items and their respective tax basis.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted and signed into law in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating losses (“NOL”) incurred in tax years 2018, 2019 and 2020 to offset 100 percent of taxable income and be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. We are continuing to evaluate the full impact of the CARES Act. However, we have determined that the NOL carryback provision in the CARES Act would result in a cash benefit to us, and we have recorded an income tax receivable at March 31, 2020 of approximately $6.4 million for the benefit of carrying back the NOLs for the fiscal years 2018 and 2019. We are forecasting an NOL for fiscal year 2020 and expect to carry it back to previous years. As a result, we have also included the 2020 provisional amounts in income tax receivable at March 31, 2020. As we are carrying the losses back to years beginning before January 1, 2018, the receivables were recorded at the previous 35 percent federal tax rate rather than the current statutory rate of 21 percent.

Inventory

InventoryInventory consists of crude oil held in storage tanks and at third-party pipelines as part of our crude oil marketing operations. Crude oil inventory is carried at the lower of cost or net realizable value. At the end of each reporting period, we assess the carrying value of our inventory and make adjustments necessary to reduce the carrying value to the applicable net realizable value. Any resulting adjustments are a component of marketing costs and expenses on our consolidated statements of operations. During the three months ended March 31, 2020, we recorded a charge of $24.2 million related to the write-down of our crude oil inventory due to significant declines in prices in 2020. There were no charges recognized during the three months ended March 31, 2019.

Property and Equipment

Property and Equipment

Property and equipment is recorded at cost. Expenditures for additions, improvements and other enhancements to property and equipment are capitalized, and minor replacements, maintenance and repairs that do not extend asset life or add value are charged to expense as incurred. When property and equipment assets are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in results of operations in operating costs and expenses for the respective period. Property and equipment, except for land, is depreciated using the straight-line method over the estimated average useful lives ranging from two to thirty-nine years.

We review our long-lived assets for impairment whenever there is evidence that the carrying value of these assets may not be recoverable. Any impairment recognized is permanent and may not be restored. Property and equipment is reviewed at the lowest level of identifiable cash flows. For properties requiring impairment, the fair value is estimated based on an internal discounted cash flow model of future cash flows.

Stock-Based Compensation

Stock-Based CompensationWe measure all share-based payments, including the issuance of restricted stock units and performance share units to employees and board members, using a fair-value based method. The cost of services received from employees and non-employee board members in exchange for awards of equity instruments is recognized in the consolidated statements of operations based on the estimated fair value of those awards on the grant date and amortized on a straight-line basis over the requisite service period. The fair value of restricted stock unit awards and performance share unit awards is based on the closing price of our common stock on the grant date. We account for forfeitures as they occur.

Other Marketing Revenue

Other Crude Oil Marketing Revenue

Certain of the commodity purchase and sale contracts utilized by our crude oil marketing business qualify as derivative instruments with certain specifically identified contracts also designated as trading activity. From the time of contract origination, these contracts are marked-to-market and recorded on a net revenue basis in the accompanying consolidated financial statements.

Certain of our crude oil contracts may be with a single counterparty to provide for similar quantities of crude oil to be bought and sold at different locations. These contracts are entered into for a variety of reasons, including effecting the transportation of the commodity, to minimize credit exposure, and/or to meet the competitive demands of the customer. These buy/sell arrangements are reflected on a net revenue basis in the accompanying consolidated financial statements

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Derivative Instruments and Fair Value Measurements - Use of Derivative Instruments (Details) - Commodity Contract - Not Designated as Hedging Instrument - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current Assets
Derivatives, Fair Value [Line Items]
Asset derivatives	$ 545	$ 0
Liability derivatives	0	0
Less counterparty offsets	0	0
As reported fair value contracts	545	0
Other Assets
Derivatives, Fair Value [Line Items]
Asset derivatives	0	0
Liability derivatives	0	0
Less counterparty offsets	0	0
As reported fair value contracts	0	0
Current Liabilities
Derivatives, Fair Value [Line Items]
Asset derivatives	0	0
Liability derivatives	526	0
Less counterparty offsets	0	0
As reported fair value contracts	526	0
Other Liabilities
Derivatives, Fair Value [Line Items]
Asset derivatives	0	0
Liability derivatives	0	0
Less counterparty offsets	0	0
As reported fair value contracts	$ 0	$ 0

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Prepayments and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Insurance premiums	$ 346	$ 473
Rents, licenses and other	960	1,086
Total	$ 1,306	$ 1,559

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Segment Reporting - Reconciliation of Segment Earnings to Earnings Before Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Operating (losses) earnings	$ (19,940)	$ 5,253
Gain on dissolution of investment	0	498
Interest income	365	656
Interest expense	(150)	(65)
(Losses) Earnings before income taxes	(19,725)	6,342
Operating Segments
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Operating (losses) earnings	(17,046)	7,937
General and administrative
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Operating (losses) earnings	(2,894)	(2,684)
Segment reconciling items
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Gain on dissolution of investment	0	498
Interest income	365	656
Interest expense	$ (150)	$ (65)

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Prepayments and Other Current Assets (Tables)

3 Months Ended

Mar. 31, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Components of Prepayments and Other Current Assets

The components of prepayments and other current assets were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Insurance premiums	$	346	$	473
Rents, licenses and other	960		1,086
Total	$	1,306	$	1,559

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Insurance Policies

We establish a liability under our automobile and workers’ compensation insurance policies for expected claims incurred but not reported on a monthly basis. As claims are paid, the liability is relieved. Our accruals for automobile and workers’ compensation claims are presented in the table below.

For periods prior to October 1, 2017, we pre-funded our estimated claims, and therefore, we could either receive a return of premium paid or be assessed for additional premiums up to pre-established limits. Additionally, in certain instances, the risk of insured losses was shared with a group of similarly situated entities through an insurance captive. We have appropriately recognized estimated expenses and liabilities related to these policies for losses incurred but not reported to us or our insurance carrier. The amount of pre-funded insurance premiums left to cover potential future losses are presented in the table below. If the potential insurance claims do not further develop, the pre-funded premiums will be returned to us as a premium refund.

The amount of pre-funded insurance premiums left to cover potential future losses related to periods prior to October 1, 2017, and our accruals for automobile and workers’ compensation claims were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Pre-funded premiums for losses incurred but not reported	$	58	$	168
Accrued automobile and workers’ compensation claims	3,170		2,956

We maintain a self-insurance program for managing employee medical claims. A liability for expected claims incurred but not reported is established on a monthly basis. As claims are paid, the liability is relieved. We also maintain third party insurance stop-loss coverage for individual medical claims exceeding a certain minimum threshold. In addition, we maintain $1.4 million of umbrella insurance coverage for annual aggregate medical claims exceeding approximately $7.5 million. Medical accrual amounts were as follows at the dates indicated (in thousands):

	March 31,		December 31,
	2020		2019
Accrued medical claims	$	1,329	$	1,016

Legal Proceedings

On August 15, 2019, we received a notice from the Internal Revenue Service (the “IRS”) regarding a proposed penalty of approximately $1.2 million for our 2017 tax year information returns. The notice alleges that certain taxpayer identification numbers supplied to the IRS for our returns in 2017 were either missing or incorrect and that certain filings were late. We responded to the IRS on September 25, 2019 disputing the proposed penalty and requesting that the amount be waived, abated or a hearing held. On March 11, 2020, we received a response from the IRS indicating that they had reviewed our response and waived the full penalty. As such, this matter will not have a material impact on our consolidated financial position, results of operations or cash flows.

Litigation

From time to time as incidental to our operations, we may become involved in various lawsuits and/or disputes. Primarily as an operator of an extensive trucking fleet, we are a party to motor vehicle accidents, worker compensation claims and other items of general liability as would be typical for the industry. We are presently unaware of any claims against us that are either outside the scope of insurance coverage or that may exceed the level of insurance coverage and could potentially represent a material adverse effect on our financial position or results of operations.

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Transactions with Affiliates (Tables)

3 Months Ended

Mar. 31, 2020

Related Party Transactions [Abstract]

Activities with affiliates

Activities with affiliates were as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Affiliate billings to us	$	17	$	17
Billings to affiliates	1		1
Rentals paid to affiliate	122		122

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Revenue Recognition - Revenue Disaggregation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	$ 335,973	$ 376,138
Total revenues	353,477	445,168
Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	319,717	360,731
Services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	16,256	15,407
Revenues from contracts with customers
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	335,973	376,138
Other
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	17,504	69,030
Marketing
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	319,717	360,731
Total revenues	337,221	429,761
Marketing | Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	319,717	360,731
Marketing | Services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0
Marketing | Revenues from contracts with customers
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	319,717	360,731
Marketing | Other
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	17,504	69,030
Transportation
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	16,256	15,407
Total revenues	16,256	15,407
Transportation | Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0
Transportation | Services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	16,256	15,407
Transportation | Revenues from contracts with customers
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	16,256	15,407
Transportation | Other
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	$ 0	$ 0

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Supplemental Cash Flow Information (Tables)

3 Months Ended

Mar. 31, 2020

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

Supplemental cash flows and non-cash transactions were as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Cash paid for interest	$	150	$	65
Cash paid for federal and state income taxes	21		5
Non-cash transactions:
Change in accounts payable related to property and equipment additions	1,129		(683)
Property and equipment acquired under finance leases	—		556

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Summary of Significant Accounting Policies - Reconciliation of Cash and Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Cash and cash equivalents	$ 87,398	$ 112,994
Restricted cash	8,827	9,261
Total cash, cash equivalents and restricted cash shown in the unaudited condensed consolidated statements of cash flows	$ 96,225	$ 122,255	$ 130,893	$ 117,066

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Derivative Instruments and Fair Value Measurements

3 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Fair Value Measurements

Derivative Instruments and Fair Value Measurements

Derivative Instruments

In the normal course of our operations, our crude oil marketing segment purchases and sells crude oil. We seek to profit by procuring the commodity as it is produced and then delivering the material to the end users or the intermediate use marketplace. As typical for the industry, these transactions are made pursuant to the terms of forward month commodity purchase and/or sale contracts. Some of these contracts meet the definition of a derivative instrument, and therefore, we account for these contracts at fair value, unless the normal purchase and sale exception is applicable. These types of underlying contracts are standard for the industry and are the governing document for our crude oil marketing segment. None of our derivative instruments have been designated as hedging instruments.

At March 31, 2020, we had in place four commodity purchase and sale contracts, all of which had fair values associated with them as the contractual prices of crude oil were outside of the range of prices specified in the agreements. These commodity purchase and sale contracts encompassed approximately:

•322 barrels per day of crude oil during April 2020; and

•258 barrels per day of crude oil during May 2020 through December 2020.

At December 31, 2019, we had in place six commodity purchase and sale contracts with no fair value associated with them as the contractual prices of crude oil were within the range of prices specified in the agreements. These commodity purchase and sale contracts encompassed approximately:

•258 barrels per day of crude oil during January 2020 through February 2020;

•322 barrels per day of crude oil during March 2020 through April 2020; and

•258 barrels per day of crude oil during May 2020 through December 2020.

The estimated fair value of forward month commodity contracts (derivatives) reflected in the accompanying unaudited condensed consolidated balance sheet were as follows at the dates indicated (in thousands):

	Balance Sheet Location and Amount
	Current		Other		Current		Other
	Assets		Assets		Liabilities		Liabilities
March 31, 2020
Asset derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	$	545	$	—	$	—	$	—
Liability derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	—		—		526		—
Less counterparty offsets	—		—		—		—
As reported fair value contracts	$	545	$	—	$	526	$	—
December 31, 2019
Asset derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	$	—	$	—	$	—	$	—
Liability derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	—		—		—		—
Less counterparty offsets	—		—		—		—
As reported fair value contracts	$	—	$	—	$	—	$	—

We only enter into commodity contracts with creditworthy counterparties and evaluate our exposure to significant counterparties on an ongoing basis. At March 31, 2020 and December 31, 2019, we were not holding nor have we posted any collateral to support our forward month fair value derivative activity. We are not subject to any credit-risk related trigger events. We have no other financial investment arrangements that would serve to offset our derivative contracts.

Forward month commodity contracts (derivatives) reflected in the accompanying unaudited condensed consolidated statements of operations were as follows for the periods indicated (in thousands):

	Gains (losses)
	Three Months Ended
	March 31,
	2020		2019
Revenues – marketing	$	19	$	(20)

Fair Value Measurements

The following tables set forth, by level with the Level 1, 2 and 3 fair value hierarchy, the carrying values of our financial assets and liabilities at the dates indicated (in thousands):

	Fair Value Measurements Using
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical Assets		Observable		Unobservable
	and Liabilities		Inputs		Inputs		Counterparty
	(Level 1)		(Level 2)		(Level 3)		Offsets		Total
March 31, 2020
Derivatives:
Current assets	$	—	$	545	$	—	$	—	$	545
Current liabilities	—		(526)		—		—		(526)
Net value	$	—	$	19	$	—	$	—	$	19
December 31, 2019
Derivatives:
Current assets	$	—	$	—	$	—	$	—	$	—
Current liabilities	—		—		—		—		—
Net value	$	—	$	—	$	—	$	—	$	—

These assets and liabilities are measured on a recurring basis and are classified based on the lowest level of input used to estimate their fair value. Our assessment of the relative significance of these inputs requires judgments.

When determining fair value measurements, we make credit valuation adjustments to reflect both our own nonperformance risk and our counterparty’s nonperformance risk. When adjusting the fair value of derivative contracts for the effect of nonperformance risk, we consider the impact of netting and any applicable credit enhancements. Credit valuation adjustments utilize Level 3 inputs, such as credit scores to evaluate the likelihood of default by us or our counterparties. At March 31, 2020 and December 31, 2019, credit valuation adjustments were not significant to the overall valuation of our fair value contracts. As a result, applicable fair value assets and liabilities are included in their entirety in the fair value hierarchy.

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Property and Equipment

3 Months Ended

Mar. 31, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

The historical costs of our property and equipment and related accumulated depreciation balances were as follows at the dates indicated (in thousands):

	Estimated
	Useful Life	March 31,		December 31,
	in Years	2020		2019
Tractors and trailers (1)	5 – 6	$	116,509	$	115,693
Field equipment (2)	2 – 5	25,149		25,094
Buildings	5 – 39	16,055		16,055
Office equipment	2 – 5	1,958		1,951
Land		1,790		1,790
Construction in progress		283		3,661
Total		161,744		164,244
Less accumulated depreciation		(96,363)		(95,198)
Property and equipment, net		$	65,381	$	69,046

_______________

(1)Amounts include tractors held under finance leases in our crude oil marketing segment. At March 31, 2020 and December 31, 2019, gross property and equipment associated with these assets held under finance leases were $5.5 million and $5.5 million, respectively. Accumulated amortization associated with these assets held under these finance leases were $2.0 million and $1.7 million at March 31, 2020 and December 31, 2019, respectively (see Note 12 for further information).

(2)Amounts include a tank storage and throughput arrangement in our crude oil marketing segment held under a finance lease. At March 31, 2020 and December 31, 2019, gross property and equipment associated with these assets held under a finance lease were $3.3 million and $3.3 million, respectively. Accumulated amortization associated with these assets held under a finance lease was $1.0 million and $0.7 million at March 31, 2020 and December 31, 2019, respectively (see Note 12 for further information).

Components of depreciation and amortization expense were as follows for the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2020		2019
Depreciation and amortization, excluding amounts under finance leases	$	3,920	$	3,344
Amortization of property and equipment under finance leases	553		245
Total depreciation and amortization	$	4,473	$	3,589

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Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Lease, Cost [Abstract]
Amortization of ROU assets	$ 553	$ 245
Interest on lease liabilities	74	45
Operating lease cost	679	862
Short-term lease cost	2,503	1,965
Total lease expense	3,809	3,117
Operating cash flows from operating leases	678	861
Operating cash flows from finance leases	105	30
Financing cash flows from finance leases	532	218
ROU assets obtained in exchange for new lease liabilities, Finance leases	0	556
ROU assets obtained in exchange for new lease liabilities, Operating leases	$ 81	$ 11,410
Weighted-average remaining lease term (years), Finance leases	2 years 9 months 10 days	4 years 2 months 15 days
Weighted-average remaining lease term (years), Operating leases	4 years 6 months 29 days	5 years 4 months 28 days
Weighted-average discount rate, Finance leases	4.90%	4.70%
Weighted-average discount rate, Operating leases	5.00%	5.00%
Assets and Liabilities, Lessee [Abstract]
Finance lease ROU assets	$ 5,830		$ 6,384
Operating lease ROU assets	9,090		9,576
Finance lease liabilities, Current	2,193		2,167
Operating lease liabilities, Current	2,203		2,252
Finance lease liabilities, Noncurrent	3,818		4,376
Operating lease liabilities, Noncurrent	6,887		7,323
Finance Lease Liabilities, Payments
Remainder of 2020	1,818
2021	2,426
2022	1,492
2023	642
2024	39
Thereafter	0
Total lease payments	6,417
Less: Interest	(406)
Present value of lease liabilities	6,011
Less: Current portion of lease obligation	(2,193)		(2,167)
Finance lease obligations	3,818		4,376
Operating Lease Liabilities, Payments Due
Remainder of 2020	2,007
2021	2,285
2022	1,942
2023	1,778
2024	1,668
Thereafter	443
Total lease payments	10,123
Less: Interest	(1,033)		(1,142)
Present value of lease liabilities	9,090		9,575
Less: Current portion of lease obligation	(2,203)		(2,252)
Total long-term lease obligation	$ 6,887		7,323
Capital Lease Maturities
2019			2,426
2020			2,426
2021			1,492
2022			642
2023			37
Thereafter			0
Total lease payments			7,023
Less: Interest			(480)
Present value of lease liabilities			6,543
Less: Current portion of lease obligation			(2,167)
Total long-term lease obligation			4,376
Operating Lease Maturities
2019			2,660
2020			2,256
2021			1,914
2022			1,776
2023			1,668
Thereafter			443
Total lease payments			$ 10,717

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Derivative Instruments and Fair Value Measurements - Gain (Loss) on Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues – marketing | Not Designated as Hedging Instrument | Commodity Contract
Derivative [Line Items]
Gain (loss) on derivative	$ 19	$ (20)

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Contributed Capital	Retained Earnings
Beginning balance at Dec. 31, 2018	$ 146,598	$ 422	$ 11,948	$ 134,228
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (losses) earnings	4,908			4,908
Stock-based compensation expense	123		123
Dividends declared:
Common stock, $0.24/share	(928)			(928)
Awards under LTIP, $0.24/share	(2)			(2)
Ending balance at Mar. 31, 2019	150,699	422	12,071	138,206
Beginning balance at Dec. 31, 2019	151,641	423	12,778	138,440
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (losses) earnings	(11,427)			(11,427)
Stock-based compensation expense	134		134
Dividends declared:
Common stock, $0.24/share	(1,016)			(1,016)
Awards under LTIP, $0.24/share	(6)			(6)
Ending balance at Mar. 31, 2020	$ 139,326	$ 423	$ 12,912	$ 125,991

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 87,398	$ 112,994
Restricted cash	8,827	9,261
Accounts receivable, net of allowance for doubtful accounts of $117 and $141, respectively	52,941	94,534
Inventory	10,021	26,407
Derivative assets	545	0
Income tax receivable	14,495	2,569
Prepayments and other current assets	1,306	1,559
Total current assets	175,533	247,324
Property and equipment, net	65,381	69,046
Operating lease right-of-use assets, net	9,090	9,576
Intangible assets, net	1,465	1,597
Cash deposits and other assets	2,187	3,299
Total assets	253,656	330,842
Current liabilities:
Accounts payable	78,245	147,851
Accounts payable – related party	6	5
Derivative liabilities	526	0
Current portion of finance lease obligations	2,193	2,167
Current portion of operating lease liabilities	2,203	2,252
Other current liabilities	8,808	7,302
Total current liabilities	91,981	159,577
Other long-term liabilities:
Asset retirement obligations	1,585	1,573
Finance lease obligations	3,818	4,376
Operating lease liabilities	6,887	7,323
Deferred taxes and other liabilities	10,059	6,352
Total liabilities	114,330	179,201
Commitments and contingencies (Note 13)
Shareholders’ equity:
Preferred stock - $1.00 par value, 960,000 shares authorized, none outstanding	0	0
Common stock - $0.10 par value, 7,500,000 shares authorized, 4,235,750 and 4,235,533 shares outstanding, respectively	423	423
Contributed capital	12,912	12,778
Retained earnings	125,991	138,440
Total shareholders’ equity	139,326	151,641
Total liabilities and shareholders’ equity	$ 253,656	$ 330,842