STC is a Partner in the U.S. Environmental Protection Agency’s (“EPA”) SmartWay Transport Partnership, a national voluntary program developed by the EPA and freight industry representatives to reduce greenhouse gases and air pollution and promote cleaner, more efficient ground freight transportation.

~~Investments~~

During 2020, STC applied for and received its first bronze star rating from EcoVadis, a global leader in monitoring, benchmarking and enabling sustainability in global supply chains.

During 2022, STC won the National Tank Truck Carriers’ (“NTTC”) Heil Trophy Award for its 2021 efforts. This esteemed award recognizes tank truck operations in North America with the best safety program and safety record for the year. STC claimed NTTC’s Heil Trophy Award in the Harvison division, which spotlights carriers whose trucks traveled more than 15 million miles during the previous year. NTTC’s longest-running safety contest annually recognizes North American for-hire and private tank truck fleets with elite safety programs and records. Winners are determined by their safety records, safety and preventive maintenance programs, personnel safety programs and record, and contributions to tank truck industry and general highway safety causes.

STC is a member of Texas TRANSCAER®, a non-profit organization with membership from the chemical, transportation and emergency response industries. The mission of Texas TRANSCAER® is to promote safe transportation and handling of hazardous materials, educate about the safety and security of hazardous materials that are transported through communities, and provide education and training for emergency responders along transportation routes. As members of Texas TRANSCAER®, STC Safety Personnel assist with training events for first responders all over Texas.

Our strategy is to build long-term relationships with our customers based upon the highest level of customer service, safety and reliability. We believe that our commitment to safety, flexibility, size and capabilities provide us with a competitive advantage over other carriers.

Pipeline and Storage

Our pipeline and storage segment consists of the operations of two of our wholly-owned subsidiaries, which constitute the VEX Pipeline System: (i) Victoria Express Pipeline, L.L.C. (“VEX”), which we acquired on October 22, 2020 and which owns the VEX pipeline, and (ii) GulfMark Terminals, LLC (“GMT”), which was formed in October 2020 to hold the related terminal facility assets we acquired with the VEX Pipeline System. The VEX Pipeline System complements our existing storage terminal and dock at the Port of Victoria, where with our crude oil marketing segment, we control approximately 450,000 barrels of storage with three docks.

Through 2021, pipeline and storage segment revenues were earned from a third-party shipper under a contract that had been in place at the time of the acquisition, and revenues were also earned from GulfMark, an affiliated shipper. The third-party contract ended in 2021, and all pipeline and storage segment revenues through mid-2023 were earned from GulfMark. In mid-2023, we began receiving revenue from an unaffiliated shipper. We are also currently constructing a new pipeline connection between the VEX Pipeline System and the Max Midstream pipeline system, and we expect to complete construction and place the assets into commercial service during the second half of 2024. In addition, we are exploring new connections with several other pipeline systems, for new crude oil supply opportunities both upstream and downstream of the pipeline, to enhance the crude oil supply and take-away capability of the system.

Volume information was as follows for the periods indicated (in barrels per day):


	Year Ended December 31,
	2023	2022	2021

Pipeline throughput	9,140	11,084	7,670
Terminalling	10,026	11,296	8,132

Table of Contents

The VEX Pipeline System, with truck and storage terminals at both Cuero and the Port of Victoria, Texas, is a crude oil and condensate pipeline system, which connects the heart of the Eagle Ford Basin to the Gulf Coast waterborne market. The VEX Pipeline System includes 56 miles of 12-inch pipeline, which spans DeWitt County to Port of Victoria in Victoria County, Texas, with approximately 400,000 barrels of above ground storage at its two terminals. The pipeline system has a current capacity of 90,000 barrels per day and is regulated by the Federal Energy Regulatory Commission (“FERC”) and the Texas Railroad Commission. The VEX Pipeline System can receive crude oil by pipeline and truck, and has downstream pipeline connections to two terminals today, with potential for additional downstream connection opportunities in the future.

The Cuero terminal has 40,000 barrels per day of offload capacity via eight truck unloading stations, with two 100,000-barrel storage tanks and one 16,000-barrel storage tank. The Port of Victoria terminal has 30,000 barrels per day of truck offload capacity via six truck unloading stations and water access via two barge docks, which have been leased from the Port Authority in Victoria. The Port of Victoria has four 50,000-barrel storage tanks and one 10,000-barrel storage tank.

The VEX Pipeline System supports GulfMark’s Gulf Coast region crude oil supply and marketing business and integrates into GulfMark’s value chain, serving as the link between producers/operators and our end-user markets we supply directly along the Gulf Coast waterborne market. We have the opportunity to increase our efficiency by more effectively managing the pipeline and terminalling portion of our overall transportation costs.

Logistics and Repurposing

Our logistics and repurposing segment consists of the operations of two of our wholly-owned subsidiaries, Firebird and Phoenix, which we acquired on August 12, 2022. Firebird is headquartered in Humble, Texas, and currently operates seven terminal locations throughout Texas. Firebird transports crude oil, condensate, fuels, oils and other petroleum products on a “for hire” basis largely in the Eagle Ford basin. We do not own any of the products that we haul through Firebird; rather we act as a third-party carrier to deliver our customers’ products from point A to point B, using predominately our employees and our owned or leased tractors and trailers. However, we also use contracted independent owner-operators to provide transportation services. Firebird provides transportation services to customers under multiple load contracts in addition to loads covered under its standard price list. Our customers include major oil and chemical companies and large and mid-sized industrial companies. Firebird provides transportation services to Phoenix, and crude oil transportation services to GulfMark, when additional trucking capacity is required.

Phoenix is also headquartered in Humble, Texas. Phoenix repurposes and finds beneficial uses for off-specification fuels, lubricants, crude oil and other chemicals from producers in the U.S. With an advanced laboratory, sophisticated technology, and access to an expansive fleet of trucks, Phoenix can provide a solution for customers needing help managing off-specification fuels or oils. In addition to the removal from the customer site, Phoenix markets these refinery and plant co-products into the fuels or feedstock markets. Phoenix markets on approximately six different levels, ranging from heavy fuel oils to light-end naphthas. Phoenix utilizes Firebird’s fleet to assist in the transportation of these products, and has begun to utilize STC to also assist in the transportation of these products.

On May 4, 2023, we acquired approximately 10.6 acres of land in the Gulf Inland Industrial Park, located in Dayton, Texas, for approximately $1.8 million to build a new processing facility for Phoenix with rail spur and siding, product storage, and truck rack. Phoenix intends to build new infrastructure to service its existing customers and to create opportunities for growing the business. Phoenix also plans to relocate its headquarters from Humble, Texas to this new location. We expect to break ground on the Dayton facility during the second quarter of 2024. When completed, this facility will allow us to operate our rail and trucking business more efficiently, as well as open up opportunities to process a wider variety of products.

Table of Contents

The following table shows the age of our owned and leased tractors and trailers within our logistics and repurposing segment at December 31, 2023:


	Tractors (1) (2)	Trailers

Model Year:
2024	15	—
2023	17	—
2022	—	2
2021	21	1
2020	14	2
2019	16	2
2018	23	3
2017	—	1
2016	6	5
2015	7	18
2014	3	31
2013	1	15
2012	6	43
2011	—	16
2010 and earlier	8	71
Total	137	210

____________________

(1)Excludes 10 contracted independent owner operator tractors.

(2)Includes six 2024 tractors and two 2023 tractors that we lease from third parties under finance lease agreements. See Note 17 in the Notes to Consolidated Financial Statements for further information.

All company and independent tractors in this segment are equipped with similar in-cab communication technology and event recorders as our STC tractors, described above under “—Transportation”. All tractors are also equipped with electronic logs.

Investment in Unconsolidated ~~Affiliates~~Affiliate

We own an approximate 15 percent equity interest (less than 3 percent voting interest) in VestaCare, Inc., a California corporation (“VestaCare”), through Adams Resources Medical Management, Inc. (“ARMM”), a wholly owned subsidiary. We acquired our interest in VestaCare in April 2016 for a $2.5 million cash payment, which we impaired ~~during the third quarter of~~in 2017. VestaCare provides an array of software as a service (SaaS) electronic payment technologies to medical providers, payers and patients including VestaCare’s ~~most recent~~ product offering, VestaPay™. VestaPay™ allows medical care providers to structure fully automated and dynamically updating electronic payment plans for their patients. We do not currently have any plans to pursue additional medical-related investments. See Note 72 in the Notes to Consolidated Financial Statements for further information.

Competition

In all phases of our operations, we encounter strong competition from a number of regional and national entities. Many of these competitors possess financial resources substantially in excess of ~~ours.~~ours and may have a more expansive geographic footprint than we have. We face competition principally in establishing trade credit, pricing of available materials, quality of service and ~~quality~~location of service. Our strategy is to build long-term partnerships with our customers based upon the safety of our operations, reliability and superior customer service.

Table of Contents

Our crude oil marketing ~~division competes~~segment and our logistics and repurposing segment compete with major crude oil companies and other large industrial concerns that own or control significant refining, midstream and marketing facilities. These major crude oil companies may offer their products to others on more favorable terms than those available to us.

In the trucking industry, the tank lines transportation business is extremely competitive and fragmented. Price, service and location are the major competitive factors in each local market.

Seasonality

In the trucking industry, revenue has historically followed a seasonal pattern for various commodities and customer businesses. Peak freight demand has historically occurred in the months of September, October and November. After the December holiday season and during the remaining winter months, freight volumes are typically lower as many customers reduce shipment levels. Operating expenses have historically been higher in the winter months primarily due to decreased fuel efficiency, increased cold weather-related maintenance costs, ~~of revenue equipment,~~ and increased insurance claim costs attributable to adverse winter weather conditions. Revenue can also be impacted by weather, holidays and the number of business days that occur during a given period, as revenue is directly related to the available working days of shippers.

Although our crude oil marketing ~~business is~~segment and our logistics and repurposing segment are not materially affected by seasonality, certain aspects of our operations are impacted by seasonal changes, such as tropical weather conditions, energy demand in connection with heating and cooling requirements and the summer driving season.

Inflation and Other Cost Increases

Most of our operating expenses are inflation-sensitive, with inflation generally producing increased costs of operations. We are experiencing increased inflation in the costs of various goods and services we use to operate our business, including the cost of equipment, tires, repairs and maintenance and compensation paid to drivers. These and other factors may continue to impact our costs, expenses and capital expenditures, and could continue to have an impact on customer demand for our services as customers manage the impact of inflation on their resources.

In order to mitigate the effect of price increases on our business, from time to time, we enter into monthly commodity purchase and sale contracts for up to 300,000 barrels of crude oil and commodity purchase contracts for the purchase of diesel fuel. See Note 13 in the Notes to Consolidated Financial Statements for further information regarding these contracts.

In addition to inflation, fluctuations in fuel prices can affect profitability. Most of our transportation contracts with customers contain fuel surcharge provisions. Although we historically have been able to pass through most long-term increases in fuel prices and operating taxes to transportation customers in the form of surcharges and higher rates, there is no guarantee that this will be possible in the future. In addition, we are not able to obtain the benefit of a fuel surcharge on the crude oil marketing segment private fleet. See “Part I, Item 1A. Risk Factors.”

Table of Contents

Regulatory Matters

We are subject to an extensive variety of evolving federal, state and local laws, rules and regulations governing the storage, transportation, manufacture, use, discharge, release and disposal of product and contaminants into the environment, or otherwise relating to the protection of the environment. Below is a non-exclusive listing of the environmental laws, each as amended, that potentially impact our ~~activities.~~business.

•The Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of ~~1976, as amended.~~1976.

•The Clean Water Act of ~~1972, as amended.~~1972.

•The Clean Air Act of ~~1970, as amended.~~1970.

•The Comprehensive Environmental Response Compensation and Liability Act.

•The Toxic Substances Control Act of ~~1976, as amended.~~1976.

•The Emergency Planning and Community Right-to-Know Act.

•The Occupational Safety and Health Act of ~~1970, as amended.~~1970.

•Texas Clean Air Act.

•Texas Solid Waste Disposal Act.

•Texas Water Code.

•Texas Oil Spill Prevention and Response Act of ~~1991, as amended.~~1991.

~~Table of Contents~~

Railroad Commission of Texas (“RRC”)

The RRC regulates, among other things, the drilling and operation of crude oil and natural gas wells, the operation of crude oil and natural gas pipelines, the disposal of crude oil and natural gas production wastes, and certain storage of crude oil and natural ~~gas.~~gas in Texas. RRC regulations govern the generation, management and disposal of waste from these crude oil and natural gas operations and provide for the cleanup of contamination from crude oil and natural gas operations. These regulations primarily affect our crude oil marketing segment, our pipeline and storage segment and our logistics and repurposing segment.

Louisiana Office of Conservation

The Louisiana Office of Conservation has primary statutory responsibility for regulation and conservation of crude oil, natural gas, and other natural resources in the State of Louisiana. Their objectives are to (i) regulate the exploration and production of crude oil, natural gas and other hydrocarbons, (ii) control and allocate energy supplies and distribution thereof, and (iii) protect public safety and the environment from oilfield waste, including the regulation of underground injection and disposal practices.

~~State and Local Government Regulation~~

Many states are authorized by the U.S. Environmental Protection Agency (“EPA”) to enforce regulations promulgated under various federal statutes. In addition, there are numerous other state and local authorities that regulate the environment, some of which impose more stringent environmental standards than federal laws and regulations. The penalties for violations of state law vary, but typically include injunctive relief and recovery of damages for injury to air, water or property as well as fines for non-compliance.

Trucking Activities

Our crude oil marketing, transportation and ~~transportation~~logistics and repurposing businesses operate truck fleets pursuant to the authority of the DOT and various state authorities. Trucking operations must be conducted in accordance with various laws relating to pollution and environmental control as well as safety requirements prescribed by states and by the DOT. Matters such as weight and dimension of equipment are also subject to federal and state regulations. These regulations also require mandatory drug testing of drivers and require certain tests for alcohol levels in drivers and other safety personnel. The regulations also impose hours of service restrictions and mandatory rest periods. The trucking industry is subject to possible regulatory and legislative changes, such as increasingly stringent environmental requirements or limits on vehicle weight and size. Regulatory change may affect the economics of the industry by requiring changes in operating practices or by changing the demand for private and common or contract carrier services or the cost of providing truckload services. In addition, our tank wash facilities are subject to increasingly stringent local, state and federal environmental regulations.

Table of Contents

We have implemented security procedures for drivers and terminal facilities. Satellite tracking transponders installed in the power units are used to communicate emergencies to us and to maintain constant information as to the unit’s location. If necessary, our terminal personnel will notify local law enforcement agencies. In addition, we are able to advise a customer of the status and location of their loads. Remote cameras and enhanced lighting coverage in the staging and parking areas have augmented terminal security. We have a focus on safety in the communities in which we operate, including leveraging camera technology to enhance driver behavior and awareness. Our crude oil marketing and transportation businesses are Partners in the EPA’s SmartWay Transport Partnership, a national voluntary program developed by the EPA and freight industry representatives to reduce greenhouse gases and air pollution and promote cleaner, more efficient ground freight transportation.

FERC Regulation

The VEX Pipeline System, which we acquired in 2020, is regulated by the FERC as a common carrier interstate pipeline under the Interstate Commerce Act (“ICA”), the Energy Policy Act of 1992, and related rules and orders. The ICA and its implementing regulations give the FERC authority to regulate the rates charged for service on interstate common carrier pipelines and generally require the rates and practices of interstate liquids pipelines to be just, reasonable, not unduly discriminatory and not unduly preferential. The ICA also requires tariffs that set forth the rates a common carrier pipeline charges for providing transportation services on its interstate common carrier liquids pipelines, as well as the rules and regulations governing these services, to be maintained on file with the FERC and posted publicly. The Energy Policy Act of 1992 and its implementing regulations allow interstate common carrier liquids pipelines to annually index their rates up to a prescribed ceiling level and require that such pipelines index their rates down to the prescribed ceiling level if the index is negative. In addition, the FERC retains cost-of-service ratemaking, market-based rates and settlement rates as alternatives to the indexing approach. The ICA also permits interested parties to challenge new or changed rates and gives the FERC the authority to change rates and order refunds.

Changes in the FERC’s methodologies for approving rates could adversely affect us. In addition, challenges to our regulated rates could be filed with the FERC and future decisions by the FERC regarding our regulated rates could adversely affect our cash flows. We believe the transportation rates currently charged by our interstate liquids pipeline is in accordance with the ICA and applicable FERC regulations. However, we cannot predict the rates we will be allowed to charge in the future for transportation services by such pipeline.

Pipeline Safety

We are subject to regulation by the DOT as authorized under various provisions of Title 49 of the United States Code and comparable state statutes relating to the design, installation, testing, construction, operation, replacement and management of our pipeline facilities. Among other things, these statutes also require companies that own or operate pipelines to permit access to and copying of pertinent records, file certain reports and provide other information as required by the U.S. Secretary of Transportation. The DOT regulates natural gas and hazardous liquids pipelines through its Pipeline and Hazardous Materials Safety Administration (“PHMSA”). PHMSA continues to implement and enforce these rules and has discretion to assess significant fines should non-compliance be determined.

The development and/or implementation of more stringent requirements pursuant to DOT regulations, as well as any implementation of the PHMSA rules thereunder or reinterpretation of guidance by PHMSA or any state agencies with respect thereto, may result in us incurring significant and unanticipated expenditures to comply with such standards. Until any such proposed regulations or guidance are finalized or issued, the impact on our operations, if any, cannot be known.

Table of Contents

Regulatory Status and Potential Environmental Liability

Our operations and facilities are subject to numerous federal, state and local environmental laws and regulations including those described above, as well as associated permitting and licensing requirements. We regard compliance with applicable environmental regulations as a critical component of our overall operation, and devote significant attention to providing quality service and products to our customers, protecting the health and safety of our employees, and protecting our facilities from damage. We believe we have obtained or applied for all permits and approvals required under existing environmental laws and regulations to operate our current business. We are not subject to any pending or threatened environmental litigation or enforcement actions which could materially and adversely affect our business.

~~Table of Contents~~

We have, where appropriate, implemented operating procedures at each of our facilities designed to assure compliance with environmental laws and regulation. However, given the nature of our business, we are subject to environmental risks, and the possibility remains that our ownership of our facilities and our operations and activities could result in civil or criminal enforcement and public as well as private actions against us, which may necessitate or generate mandatory cleanup activities, revocation of required permits or licenses, denial of application for future permits, and/or significant fines, penalties or damages, any and all of which could have a material adverse effect on us. See “Item 1A. Risk Factors” for further discussion. ~~At December 31, 2017, we are not aware~~

Human Capital Resources

General

Our business strategy and ability to serve customers relies on employing talented professionals and attracting, training, developing and retaining a skilled workforce.

There is substantial competition for qualified truck drivers in the trucking industry. Recruitment, training, and retention of ~~any unresolved environmental issues~~a professional driver workforce is essential to our continued growth and fulfillment of customer needs. We hire qualified professional drivers who hold a valid commercial driver’s license, satisfy applicable federal and state safety performance and measurement requirements, and meet our hiring criteria. These guidelines relate primarily to safety history, road test evaluations, and various other evaluations, which include physical examinations and mandatory drug and alcohol testing. We provide comfortable, late model equipment, encourage direct communication with management, pay competitive wages and benefits, and offer other incentives intended to encourage driver safety, retention and long-term employment. Prior to being released for ~~which additional accounting accruals are necessary.~~individual duty, each new hire is required to undergo a mandatory training and evaluation period by a certified driver trainer/instructor. The length of this training period will be dependent on experience and the new hire adaptation to company policies and procedures.

Employees

At December 31, ~~2017,~~2023, we employed ~~575 persons. None~~741 persons, of ~~our employees are represented by a union.~~which 485, or 65 percent, were truck drivers. We believe our employee relations are ~~satisfactory.~~

~~Federal~~satisfactory, and ~~State Taxation~~

Wenone of our employees are subject to union contracts or part of a collective bargaining unit.

Independent Contractors

In addition to company drivers, we enter into contracts with independent contractors, who provide a tractor and a driver and are responsible for all operating expenses in exchange for an agreed upon fee structure. At December 31, 2023, we had 100 independent contractor operated tractors in our transportation and logistics and repurposing segments, which comprised approximately 17 percent of our professional truck driving fleet.

Table of Contents

Health and Safety

Safety is one of our guiding principles as we are committed to providing our employees a safe working environment. We have implemented safety programs and management practices to promote a culture of safety. We are continuously working toward maintaining a strong safety culture to emphasize the ~~provisions~~importance of our employees’ role in identifying, mitigating and communicating safety risks.

In light of the ~~Internal Revenue Code~~current COVID-19 pandemic, we have updated and implemented our pandemic plan to ensure the continuation of ~~1986,~~safe and reliable service to customers and to maintain the safety of our employees, as ~~amended (the “Code”)~~well as to incorporate any new governmental guidance and rules and regulations regarding workplace safety. Since the beginning of the pandemic, we have been deemed an essential entity by virtue of the transportation services we provide.

Diversity and Inclusion

We are committed to providing a professional work environment where all employees are treated with respect and dignity and provided with equal opportunities. We do not discriminate based upon race, religion, color, national origin, gender (including pregnancy, childbirth, or related medical conditions), sexual orientation, gender identity, gender expression, age, status as a protected veteran, status as an individual with a disability or other applicable legally protected characteristics. We also support the hiring of veterans and are honored to provide opportunities to men and women who have served their respective countries. ~~In accordance~~

We also partner with the ~~Code,~~Women in Trucking Association to support our efforts to advance the careers of women and gender diversity. It is our goal to empower the professional development of all employees and to operate from a mindset of sharing, caring, inclusion and equity.

We support basic human rights throughout our business enterprise and prohibit the use of child, compulsory or forced labor. Our employees are strictly prohibited from using our equipment to transport, or our facilities to shelter, unauthorized persons, or to take any other act in support of human trafficking or human rights abuses. Employees are required to immediately report any human trafficking concerns to the appropriate law enforcement agency.

We work with Truckers Against Trafficking (“TAT”) to train all over-the-road drivers on how to spot and report signs of human trafficking. Our drivers receive training from TAT and become registered as TAT trained and certified.

Benefits

Our compensation and benefits programs are designed to attract, retain and motivate our employees and to reward them for their services and success. In addition to providing competitive salaries and other compensation opportunities, we ~~computed~~offer comprehensive and competitive benefits to our ~~income tax provision based~~eligible employees including, depending on ~~a 35 percent tax rate for the year ended December 31, 2017. On December 22, 2017, the Tax Cut~~location, life and Jobs Act was enacted into law resulting in a reduction in the federal corporate income tax rate from 35 percent to 21 percent for years beginning in 2018. We conduct a significant amount of business within the State of Texas. Texas operations are subject to a one-half percent state tax on its revenues net of cost of goods sold as defined by the state. We believe we are currently in compliance with all federalhealth (medical, dental and ~~state tax regulations.~~vision) insurance, prescription drug benefits, flexible spending accounts, parental leave, disability coverage, mental and behavioral health resources, paid time off and retirement savings plan.

Available Information

We electronically file certain documents with the U.S. Securities and Exchange Commission (“SEC”). We file ~~annual reports~~Annual Reports on Form 10-K; ~~quarterly reports~~Quarterly Reports on Form 10-Q; and ~~current reports~~Current Reports on Form 8-K (as appropriate); along with any related amendments and supplements thereto. You may read and copy any material we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information regarding the Public Reference Room by calling the SEC at (800) SEC-0330. In addition, the SEC maintains a website at ~~www.sec.gov~~ ~~that contains reports and other information regarding registrants that file electronically with the SEC.~~

Table of Contents

We also make available free of charge, through the “Investor Relations” link on our website, www.adamsresources.com, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, simultaneously with or as soon as reasonably practicable after filing such materials with, or furnishing such materials to, the ~~SEC, and on our website~~ ~~www.adamsresources.com~~.SEC. The information on our website, or information about us on any other website, is not incorporated by reference into this report.

Item 1A. Risk Factors.

An investment in our common stock involves certain risks. If any of the following key risks were to occur, it could have a material adverse effect on our financial position, results of operations and cash flows. In any such circumstance and others described below, the trading price of our securities could decline and you could lose part or all of your investment.

Risk Related to our Business

~~Table of Contents~~

~~Economic developments~~Difficulty in attracting and retaining drivers could ~~damage~~negatively affect our operations and ~~materially reduce~~limit our ~~profitability and cash flows.~~growth.

~~Potential disruptions~~There is substantial competition for qualified personnel, particularly drivers, in the ~~credit markets~~trucking industry. We operate in geographic areas where there is currently a shortage of drivers. Regulatory requirements, including electronic logging, and ~~concerns about global economic growth~~an improving U.S. jobs market, could continue to reduce the number of eligible drivers in our markets. Any shortage of drivers could result in temporary under-utilization of our equipment, difficulty in meeting our customers’ demands and increased compensation levels, each of which could have a ~~significant~~material adverse ~~impact~~effect on ~~global~~our business, results of operations and financial ~~markets~~condition. A loss of qualified drivers could lead to an increased frequency in the number of accidents, potential claims exposure and, ~~commodity prices. These factors~~indirectly, insurance costs.

Difficulty in attracting qualified drivers could ~~contribute~~also require us to limit our growth. Our strategy is to grow in part by expanding existing customer relationships into new markets. However, we may have difficulty finding qualified drivers on a ~~decline~~timely basis when presented with new customer opportunities, which could result in our ~~stock price~~inability to accept or service this business or could require us to increase the wages we pay in order to attract drivers. If we are unable to hire qualified drivers to service business opportunities in new markets, we may have to temporarily send drivers from existing terminals to those new markets, causing us to incur significant costs relating to out-of-town driver pay and corresponding market capitalization. If commodity prices experience a period of rapid decline, or a prolonged period of low commodity prices, our future earnings will be reduced. We currently do not have bank debt obligations. If the capitalexpenses. In making acquisitions and credit markets experience volatility and the availability of funds become limited, our customers and suppliers may incur increased costs associated with issuing commercial paper and/or other debt instruments and this, in turn, could adversely affect our ability to secure supply and make profitable sales.

~~General economic conditions could reduce demand for chemical based trucking services.~~

Customer demand for our products and services is substantially dependent upon the general economic conditions for the U.S., which are cyclical in nature. In particular, demand for liquid chemical truck transportation services is dependent on activity within the petrochemical sectorconverting private fleets, some of the ~~U.S. economy. Chemical sector demand typically varies with the housing~~drivers in those fleets may not meet our standards, which would require us to find qualified drivers to replace them. If we are unable to find and ~~auto markets as well as the relative strength of the U.S. dollar~~retain such qualified drivers on terms acceptable to ~~foreign currencies. A relatively strong U.S. dollar exchange rate~~us, we may be ~~adverse~~forced to forgo opportunities to expand or maintain our ~~transportation operation since it tends to suppress export demand for petrochemicals. Conversely, a weak U.S. dollar exchange rate tends to stimulate export demand for petrochemicals.~~business.

Our business is dependent on the ability to obtain trade and other credit.

Our future development and growth depends, in part, on our ability to successfully obtain credit from suppliers and other parties. ~~Trade~~We rely on trade credit arrangements ~~are relied upon~~ as a significant source of liquidity for capital requirements not satisfied by operating cash ~~flow.~~flow, our revolving line of credit or letters of credit. If global financial markets and economic conditions disrupt and reduce stability in general, and the solvency of creditors specifically, the availability of funding from credit markets would be reduced as many lenders and institutional investors would enact tighter lending standards, refuse to refinance existing debt on terms similar to current debt or, in some cases, cease to provide funding to borrowers. These issues coupled with weak economic conditions would make it more difficult for us, our suppliers and our customers to obtain funding. If we are unable to obtain trade or other forms of credit on reasonable and competitive terms, the ability to continue our marketing businesses, pursue improvements, and continue future growth will be limited. We cannot assure you that we will be able to maintain future credit arrangements on commercially reasonable terms.

~~Fluctuations in~~

Table of Contents

We have a concentrated customer base and receive half of our revenue from a small number of customers.

Our largest customers consist of large multinational integrated crude oil companies and ~~natural gas prices could have an adverse effect on us~~.

~~Our future~~independent domestic refiners of crude oil. In addition, we transact business with independent crude oil producers, major chemical companies, crude oil trading companies and a variety of commercial energy users. Within this group of customers, we derive approximately 50 percent of our revenue from four to five large crude oil refining customers. During the year ended December 31, 2023, we had sales to two customers that comprised approximately 11.4 percent and 11.1 percent, respectively, of total consolidated revenues. While we believe alternative markets are available, our financial condition ~~revenues,~~and results of operations may be adversely affected if we lose these customers or if these customers experience operating and ~~future rate of growth are materially affected by crude oil and natural gas prices that historically have been volatile and are likely to continue to be volatile~~financial performance decline or there is a decrease in ~~the future. Crude oil and natural gas prices depend on factors outside of our control. These factors include:~~their demand.

~~supply and demand for crude oil and natural gas and expectations regarding supply and demand;~~

~~political conditions in other crude oil-producing countries, including the possibility of insurgency or war in such areas;~~

~~economic conditions in the U.S. and worldwide;~~

~~governmental regulations and taxation;~~

~~impact of energy conservation efforts;~~

~~the price and availability of alternative fuel sources;~~

~~weather conditions;~~

~~availability of local, interstate and intrastate transportation systems; and~~

~~market uncertainty.~~

~~Table of Contents~~

The financial soundness of customers could affect our business and operating results.

Constraints in the financial markets and other macro-economic challenges that might affect the economy of the U.S. and other parts of the world could cause our customers to experience cash flow concerns. As a result, if our customers’ operating and financial performance deteriorates, or if they are unable to make scheduled payments or obtain credit, customers would not be able to pay, or may delay payment of, accounts receivable owed to us. Any inability of current and/or potential customers to pay for services may adversely affect our financial condition and results of operations.

We generate revenues under contracts that must be renegotiated periodically.

Substantially all of our revenues are generated under contracts which expire periodically or which must be frequently renegotiated, extended or replaced. Whether these contracts are renegotiated, extended or replaced is often subject to factors beyond our control. These factors include sudden fluctuations in crude oil and natural gas prices, our counterparties’ ability to pay for or accept the contracted volumes and, most importantly, an extremely competitive marketplace for the services we offer. We cannot assure you that the costs and pricing of our services can remain competitive in the marketplace or that we will be successful in renegotiating our contracts.

Anticipated or scheduled volumes will differ from actual or delivered volumes.

Our crude oil marketing business purchases initial production of crude oil at the wellhead under contracts requiring us to accept the actual volume produced. We generally resell this production under contracts requiring a fixed volume to be delivered. We estimate our anticipated supply and match that supply estimate for both volume and pricing formulas with committed sales volumes. Since actual wellhead volumes produced will rarely equal anticipated supply, our marketing margins may be adversely impacted. In many instances, any losses resulting from the difference between actual supply volumes compared to committed sales volumes must be absorbed by us.

We may face opposition to the operation of our pipeline and facilities from various groups.

We may face opposition to the operation of our pipeline and facilities from environmental groups, landowners, tribal groups, local groups and other advocates. Such opposition could take many forms, including organized protests, attempts to block or sabotage our operations, intervention in regulatory or administrative proceedings involving our assets, or lawsuits or other actions designed to prevent, disrupt or delay the operation of our assets and business. In addition, acts of sabotage or eco-terrorism could cause significant damage or injury to people, property or the environment or lead to extended interruptions of our operations. Any such event that interrupts the revenues generated by our operations, or which causes us to make significant expenditures not covered by insurance, could reduce our cash available for paying dividends to our shareholders and, accordingly, adversely affect our financial condition and the market price of our securities.

Table of Contents

Our pipeline integrity program as well as compliance with pipeline safety laws and regulations may impose significant costs and liabilities on us.

If we were to incur material costs in connection with our pipeline integrity program or pipeline safety laws and regulations, those costs could have a material adverse effect on our financial condition, results of operations and cash flows.

The DOT requires pipeline operators to develop integrity management programs to comprehensively evaluate their pipelines. The majority of the costs to comply with this integrity management rule are associated with pipeline integrity testing and any repairs found to be necessary as a result of such testing. Changes such as advances in pipeline inspection tools and identification of additional threats to a pipeline’s integrity, among other things, can have a significant impact on the costs to perform integrity testing and repairs. We will continue our pipeline integrity testing programs to assess and maintain the integrity of our pipeline. The results of these tests could cause us to incur significant and unanticipated capital and operating expenditures for repairs or upgrades deemed necessary to ensure the continued safe and reliable operation of our pipeline.

The rates of our regulated assets are subject to review and possible adjustment by federal and state regulators, which could adversely affect our revenues.

The FERC regulates the tariff rates and terms and conditions of service for our interstate common carrier liquids pipeline operations. To be lawful under the ICA, interstate tariff rates, terms and conditions of service must be just and reasonable and not unduly discriminatory, and must be on file with the FERC. In addition, pipelines may not confer any undue preference upon any shipper. Shippers may protest (and the FERC may investigate) the lawfulness of new or changed tariff rates. The FERC can suspend those tariff rates for up to seven months. It can also require refunds of amounts collected pursuant to rates that are ultimately found to be unlawful and prescribe new rates prospectively. The FERC and interested parties can also challenge tariff rates that have become final and effective. The FERC can also order new rates to take effect prospectively and order reparations for past rates that exceed the just and reasonable level up to two years prior to the date of a complaint. Due to the complexity of rate making, the lawfulness of any rate is never assured. A successful challenge of our rates could adversely affect our revenues.

The intrastate liquids pipeline transportation services we provide are subject to various state laws and regulations that apply to the rates we charge and the terms and conditions of the services we offer. Although state regulation typically is less onerous than FERC regulation, the rates we charge and the provision of our services may be subject to challenge.

Environmental liabilities and environmental regulations may have an adverse effect on us.

Our business is subject to environmental hazards such as spills, leaks or any discharges of petroleum products and hazardous substances. These environmental hazards could expose us to material liabilities for property damage, personal injuries, and/or environmental harms, including the costs of investigating, remediating and monitoring contaminated properties.

Table of Contents

Federal, state and local environmental laws and regulations govern many aspects of our business, such as transportation and waste management, as well as permitting and licensing requirements. There are no assurances that we will be able to comply with conditions or restrictions contained in any permit issued by a regulatory agency governing our operations. Further, additional conditions may be included in the renewal or amendment of any permit issued to or held by us, and any permit that has been issued remains subject to renewal, modification, suspension, or revocation by the agency with jurisdiction. Compliance with environmental laws and regulations can require significant costs or may require a decrease in business activities. Moreover, noncompliance with these laws and regulations could subject us to significant administrative, civil, and/or criminal fines and/or penalties, as well as potential injunctive relief. In many instances, liability is often “strict,” meaning it is imposed without a requirement of intent or fault by the regulated entity, and this can include not only fines and penalties, but also liability relating to the cleanup of contaminated properties. See discussion under “Item 1 and 2. Business and Properties —Regulatory Matters,” for additional detail.

Restrictions and covenants in our Credit Agreement reduce operating flexibility and create the potential for defaults, which could adversely affect our business, financial condition and results of operations.

Under our credit agreement with Cadence Bank (“Credit Agreement”), we may borrow or issue letters of credit in an aggregate of up to $60.0 million under a revolving credit facility, subject to our compliance with certain financial covenants. The Credit Agreement also includes a term loan in the initial principal amount of $25.0 million. At December 31, 2023, we had $21.9 million of borrowings outstanding under the term loan and $13.0 million of letters of credit issued under the Credit Agreement.

The terms of our Credit Agreement restrict our ability to, among other things (and subject in each case, to various exceptions and conditions):

•incur additional indebtedness,

•create additional liens on our assets,

•make certain investments,

•pay dividends,

•dispose of our assets or engage in a merger or other similar transaction, or

•engage in transactions with affiliates.

Our ability to comply with the financial covenants in the Credit Agreement depends on our operating performance, which in turn depends significantly on prevailing economic, financial and business conditions and other factors that are beyond our control. Therefore, despite our best efforts and execution of our strategic plan, we may be unable to comply with these financial covenants in the future.

At December 31, 2023, we were in compliance with all financial covenants. However, if in the future there are economic declines, we can make no assurance that these declines will not negatively impact our financial results and, in turn, our ability to meet these financial covenant requirements. If we fail to comply with certain covenants, including our financial covenants, we could be in default under our Credit Agreement. In the event of such a default, the lenders under the Credit Agreement are entitled to take various actions, including the acceleration of the maturity of all loans and to take all actions permitted to be taken by a secured creditor against the collateral under the related security documents and applicable law. Any of these events could adversely affect our business, financial condition and results of operations.

In addition, these restrictions reduce our operating flexibility and could prevent us from exploiting certain investment, acquisition, or other time-sensitive business opportunities.

Table of Contents

Our indebtedness, along with the variable interest rates we pay on our indebtedness, could adversely affect our business and our ability to execute our business strategy.

We have a $25.0 million term loan and a revolving credit facility that permits us to borrow up to $60.0 million in additional loans and letters of credit (with letters of credit not to exceed $30.0 million). Our Credit Agreement bears interest at variable rates, which will generally change as interest rates change. During our fiscal year ended December 31, 2023, we experienced, and we may continue to experience, increases in interest on our variable rate loans. If interest rates increase and we do not hedge such variable rates, our debt service obligations will increase even when the amount borrowed may stay the same. In an increasing interest rate environment, we bear the risk that the rates we are charged by the lenders under our Credit Agreement will increase faster than the earnings and cash flow of our business, which could reduce our profitability, adversely affect our ability to service our debt, cause us to breach covenants in our Credit Agreement, or divert capital that we would otherwise be able to use to grow the business or declare dividends in order to fulfill our debt service requirements.

Risk Related to our Industry

Public health emergencies, including the COVID-19 pandemic, could disrupt or continue to disrupt our operations and adversely impact our business and financial results.

The COVID-19 pandemic resulted in a number of adverse economic effects, including changes in consumer behavior related to the economic slowdown, disruption of historical supply and demand patterns, and changes in the work force, which has affected our business and the businesses of our customers and suppliers. These adverse economic effects of the COVID-19 outbreak have impacted our operations and services.

The COVID-19 pandemic has created business challenges primarily related to changes in the work force, which have impacted our ability to hire and retain qualified truck drivers, and created issues with the supply chain, resulting in delays in purchasing items, including new tractors. While demand for transportation of products and demand for crude oil has largely rebounded from 2020 levels during the initial stages of the pandemic, our growth has been limited in certain markets by the availability of truck drivers.

We have been seeking ways to overcome supply shortages in tractors, by additional maintenance to extend vehicle lives, shortages in tires and other inventory by having additional items on hand and increases in the price of diesel fuel by continuing to pass costs through to customers or attempting to reduce costs through efficiencies. If the pandemic continues to affect global supply chains and fuel costs, we may be unable to pass costs through to customers or maintain our operating margins.

We continue to monitor the effect of the pandemic on our financial condition, liquidity, operations, customers, industry and workforce. If the pandemic and its economic effects continue or worsen, particularly in light of new and variant strains of the virus and the plateau of vaccination rates, it may have a material adverse effect on our results of future operations, financial position and liquidity.

Should the coronavirus continue to spread, our business operations could be delayed or interrupted. For instance, our operations would be adversely impacted if a number of our administrative personnel, drivers or field personnel are infected and become ill or are quarantined. At this time, we believe that our business would generally be exempted from shelter-in-place orders or other mandated local travel restrictions as an essential service but there can be no assurance as the scope of restrictions imposed by local or state governments.

While the potential economic impact brought by and the duration of public health emergencies such as the coronavirus may be difficult to assess or predict, such emergencies may cause significant disruption of global financial markets, which may reduce our ability to access capital either at all or on favorable terms. In addition, a recession, depression or other sustained adverse market event resulting from the spread or worsening of the coronavirus or other public health emergencies could materially and adversely affect our business and financial results.

Table of Contents

General economic conditions could reduce demand for chemical-based trucking services.

Fluctuations in crude oil prices could have an adverse effect on us.

Our future financial condition, revenues, results of operations and future rate of growth are materially affected by crude oil prices that historically have been volatile and are likely to continue to be volatile in the future. Crude oil prices depend on factors outside of our control. These factors include:

•supply and demand for crude oil and expectations regarding supply and demand;

•political conditions in other crude oil-producing countries, including the possibility of insurgency or war in such areas;

•economic conditions in the U.S. and worldwide;

•the impact of public health epidemics, like the global coronavirus outbreak beginning in 2020;

•governmental regulations and taxation;

•the impact of energy conservation efforts;

•the price and availability of alternative fuel sources;

•weather conditions;

•availability of local, interstate and intrastate transportation systems; and

•market uncertainty.

Increases in the price of diesel fuel and availability of diesel fuel could have an adverse effect on us.

As an integral part of our crude oil marketing, transportation and logistics and repurposing businesses, we operate approximately 605 tractors, and diesel fuel costs are a significant component of our operating expenses. The market price for fuel can be extremely volatile and is affected by a number of economic and political factors. In addition, changes in federal or state regulations can impact the price of fuel, as well as increase the amount we pay in fuel taxes.

In our transportation segment, we typically incorporate a fuel surcharge provision in our customer contracts. During periods of high prices, we attempt to recoup rising diesel fuel costs through the pricing of our services. However, our customers may be able to negotiate contracts that minimize or eliminate our ability to pass on fuel price increases. We are also not able to obtain the benefit of a fuel surcharge on the crude oil marketing segment private fleet.

Our operations may also be adversely affected by any limit on the availability of fuel. Disruptions in the political climate in key oil producing regions in the world, particularly in the event of wars or other armed conflicts, could severely limit the availability of fuel in the U.S. In the event we face significant difficulty in obtaining fuel, our business, results of operations and financial condition would be materially adversely affected.

Insurance and claims expenses, including for self-insured risks, could significantly reduce our earnings.

Transportation of hazardous materials involves certain operating hazards such as automobile accidents, explosions, fires and pollution. Any of these operating hazards could cause serious injuries, fatalities or property damage, which could expose us to liability. The payment of any of these liabilities could reduce, or even eliminate, the funds available for other areas.

Table of Contents

Consistent with the industry standard, our insurance policies provide limited coverage for losses or liabilities relating to pollution, with broader coverage provided for sudden and accidental occurrences. Insurance might be inadequate to cover all liabilities. Obtaining insurance for our line of business can become difficult and costly. Typically, when insurance cost escalates, we may reduce our level of coverage, and more risk may be retained to offset cost increases.

Beginning in 2021, we self-insure a significant portion of our claims exposure resulting from auto liability, general liability and workers’ compensation through our wholly owned captive insurance company. Although we reserve for anticipated losses and expenses based on actuarial reviews and periodically evaluate and adjust our claims reserves to reflect our experience, estimating the number and severity of claims, as well as related costs to settle or resolve them, is inherently difficult, and such costs could exceed our estimates. Accordingly, our actual losses associated with insured claims may differ materially from our estimates and adversely affect our financial condition and results of operations in material amounts.

We maintain an insurance program for potential losses that are in excess of the amounts that we insure through the captive, as well as potential losses from other categories of claims. Although we believe our aggregate insurance limits should be sufficient to cover our historic or future claims amounts, it is possible that one or more claims could exceed our aggregate coverage limits. If any claim were to exceed our aggregate insurance coverage, we would bear the excess, in addition to the amount in the captive.

Given the current claims settlement environment, the amount of commercially available insurance coverage is decreasing, and the premiums for this coverage are increasing significantly. For the foregoing reasons, our insurance and claims expenses may increase, or we could increase our self-insured retention as policies are renewed or replaced. In addition, we may assume additional risk within our captive insurance company that we may or may not reinsure. Our results of operations and financial condition could be materially and adversely affected if (1) our costs or losses significantly exceed our aggregate self-insurance and excess coverage limits, (2) we are unable to obtain affordable insurance coverage in amounts we deem sufficient, (3) our insurance carriers fail to pay on our insurance claims, or (4) we experience a claim for which coverage is not provided.

Counterparty credit default could have an adverse effect on us.

Our revenues are generated under contracts with various counterparties, and our results of operations could be adversely affected by non-performance under the various contracts. A counterparty’s default or non-performance could be caused by factors beyond our control. A default could occur as a result of circumstances relating directly to the counterparty, or due to circumstances caused by other market participants having a direct or indirect relationship with the counterparty. We seek to mitigate the risk of default by evaluating the financial strength of potential counterparties; however, despite mitigation efforts, contractual defaults ~~may~~do occur from time to time.

~~Potentially escalating diesel fuel prices could have an adverse effect on us.~~

As an integral part of our marketing and transportation businesses, we operate approximately 390 truck-tractors, and diesel fuel costs are a significant component of our operating expenses. These costs generally fluctuate with increasing and decreasing world crude oil prices. During periods of high prices, we attempt to recoup rising diesel fuel costs through the pricing of our services; however to the extent these costs escalate, our operating earnings will generally be adversely affected.

~~Revenues are generated under contracts that must be renegotiated periodically.~~

Substantially all of our revenues are generated under contracts which expire periodically or which must be frequently renegotiated, extended or replaced. Whether these contracts are renegotiated, extended or replaced is often subject to factors beyond our control. These factors include sudden fluctuations in crude oil and natural gas prices, counterparty ability to pay for or accept the contracted volumes and, most importantly, an extremely competitive marketplace for the services we offer. We cannot assure you that the costs and pricing of our services can remain competitive in the marketplace or that we will be successful in renegotiating our contracts.

~~Anticipated or scheduled volumes will differ from actual or delivered volumes.~~

Our crude oil marketing business purchases initial production of crude oil at the wellhead under contracts requiring us to accept the actual volume produced. The resale of this production is generally under contracts requiring a fixed volume to be delivered. We estimate our anticipated supply and match that supply estimate for both volume and pricing formulas with committed sales volumes. Since actual wellhead volumes produced will never equal anticipated supply, our marketing margins may be adversely impacted. In many instances, any losses resulting from the difference between actual supply volumes compared to committed sales volumes must be absorbed by us.

~~Environmental liabilities and environmental regulations may have an adverse effect on us.~~

~~Table of Contents~~

Environmental laws and regulations govern many aspects of our business, such as drilling and exploration, production, transportation and waste management. Compliance with environmental laws and regulations can require significant costs or may require a decrease in production. Moreover, noncompliance with these laws and regulations could subject us to significant administrative, civil, and/or criminal fines and/or penalties, as well as potential injunctive relief. See discussion under Item 1 and 2. ~~Business and Properties —Regulatory Matters, and in the sections that follow, for additional detail.~~

~~Our operations could result in liabilities that may not be fully covered by insurance~~.

~~We could be adversely affected by changes in tax laws or regulations~~.

The Internal Revenue Service, the U.S. Treasury Department, Congress and the states frequently review federal or state income tax legislation. We cannot predict whether, when, or to what extent new federal or state tax laws, regulations, interpretations or rulings will be adopted. Any such legislative action may prospectively or retroactively modify tax treatment and, therefore, may adversely affect taxation of us.

The Tax Cuts and Jobs Act, signed into law on December 22, 2017, is expected to have a favorable impact on our effective tax rate and net income as reported under generally accepted accounting principles in the U.S. both in the first fiscal quarter of 2018 and subsequent reporting periods to which the Tax Cuts and Jobs Act is effective. However, given the many changes resulting from the Tax Cuts and Jobs Act, we are assessing the impact of the Tax Cuts and Jobs Act, and there can be no assurances that it will have a favorable impact. You should consult with your tax advisors with respect to the effect of the Tax Cuts and Jobs Act and any other regulatory or administrative developments and proposals and the potential effect on your investment in AE.

Our business is subject to changing government regulations.

Federal, state or local government agencies may impose environmental, labor or other regulations that increase costs and/or terminate or suspend operations. Our business is subject to federal, state and local laws and regulations. These regulations relate to, among other things, transportation of crude oil and natural gas. Existing laws and regulations could be changed, and any changes could increase costs of compliance and costs of operations.

~~Security issues exist relating to drivers, equipment and terminal facilities.~~

We transport liquid combustible materials including petrochemicals, and these materials may be a target for terrorist attacks. While we employ a variety of security measures to mitigate risks, we cannot assure you that such events will not occur.

Table of Contents

~~Current and future litigation could have an adverse effect on us.~~

We are currently involved in certain administrative and civil legal proceedings as part of the ordinary course of our business. Moreover, as incidental to operations, we sometimes become involved in various lawsuits and/or disputes. Lawsuits and other legal proceedings can involve substantial costs, including the costs associated with investigation, litigation and possible settlement, judgment, penalty or fine. Although we maintain insurance to mitigate these costs, we cannot assure you that costs associated with lawsuits or other legal proceedings will not exceed the limits of insurance policies. Our results of operations could be adversely affected if a judgment, penalty or fine is not fully covered by insurance.

Climate change legislation or regulations restricting emissions of “greenhouse gases” (“GHGs”) could result in increased operating or compliance costs and reduced demand for the crude oil ~~and natural gas~~ we ~~produce,~~ market and transport.

More stringent laws and regulations relating to climate change and GHGs may be adopted ~~and~~which could cause us to incur material expenses to comply with such laws and regulations. In 2014, the ~~absence of comprehensive federal legislation on GHG emission control, the EPA attempted to require the permitting of GHG emissions; although the~~U.S. Supreme Court ~~struck down the permitting requirements, it~~ upheld the EPA’s authority to ~~control~~regulate GHG ~~emissions when~~emissions. Pursuant to EPA regulations, a permit isgoverning GHG emission may be required, ~~due to~~in conjunction with authorization of emissions of other pollutants. The EPA also requires, ~~the reporting of~~pursuant to its GHG ~~emissions from~~Reporting Rule, specified large GHG emission sources ~~including~~to report their GHG emissions. Regulated sources include, without limitation, onshore and offshore crude oil and natural gas production facilities and onshore crude oil and natural gas processing, transmission, storage and distribution facilities. Reporting of GHG emissions from such large facilities is required on an annual basis. We do not presently operate any such large GHG ~~emission~~emissions sources, but if we were to do so, ~~in the future,~~ we would incur costs associated with evaluating and meeting this reporting obligation.

~~In May 2016,~~Our industry is subject to regular enactment of new or amended federal, state, and local environmental health and safety statutes, regulation, and ballot initiatives, as well as judicial decisions interpreting these requirements, which have become more stringent over time. We expect these trends to continue, which could lead to material increases in our costs for future environmental, health, and safety compliance. These requirements may also impose substantial capital and operating costs and operational limitations on us and may adversely affect our business.

Regulation of methane and volatile organic compound (“VOC”) emissions has varied significantly between recent administrations, but regulation of these emissions is becoming increasingly stringent. Increased regulatory oversight by the EPA ~~finalized rules~~may result in increased compliance costs for our business. More directly, these costs may extend to ~~reduce~~our customers and the industry as a whole, which could lead to a diminution in our customers’ business and their exploration and production activities, and ultimately detrimentally affect our business.

Regulation of menthane and VOC emissions from oil and gas operation in particular is becoming more pervasive and comprehensive. In December 2023, EPA issued a final rule to further regulate methane emissions and VOCs from ~~new, modified or reconstructed sources in the crude~~ oil and ~~natural~~ gas ~~sector, although~~industry sources—implementing regulations known as OOOOb and OOOOc. The rule includes a comprehensive suite of pollution reduction standards including, among others, the ~~rules are currently~~creation of a new New Source Performance Standard (NSPS) for oil and gas industry sources; a requirement that all well sites and compressor stations be routinely monitored for leaks; and the ~~subject~~creation of ~~litigation~~what is known as a Super Emitter Program that authorizes third parties to remotely monitor regulated facilities and ~~in June 2017,~~notify EPA when certain significant methane releases occur. Under OOOOb, a new NSPS includes generally more stringent standards for “new” emission sources not regulated previously under the ~~EPA proposed a 2-year stay of~~previous rules—this being any facility constructed, reconstructed, or modified after December 6, 2022. Under OOOOc, the ~~rules. The EPA announced in March 2016 that it also intends to reduce methane emissions~~rule includes the first oil and gas emission guidelines for existing sources, ~~but~~which requires states to enforce standards largely consistent with those of Subpart OOOOb on existing oil and gas emissions sources. The state implementation plans are required to be submitted within two years of the ~~EPA announced~~rule’s finalization and regulated entities will be required to comply within three years of the submittal deadline.

These rules may require us and the industry to expend material sums on compliance, including equipment repair, replacement, and monitoring, which may reduce overall industry activity and demands which could have an adverse impact on our business. Further, states may adopt laws or regulations more stringent than the federal rules, which would remain in ~~March 2017 that it no longer intends to pursue regulation~~place regardless of ~~methane emissions from existing sources. In November 2016,~~ the outcome of any federal rules stay or litigation, thus potentially causing additional impact on our business and the industry as a whole, which could adversely affect our business.

The Bureau of Land Management ~~issued~~(“BLM”) has similarly promulgated proposed and final ~~rules~~methane emission rulemakings, which also seek to reduce methane emissions from venting, flaring, and leaks during crude oil and natural gas operations on public ~~lands, although~~lands. The increased regulation of the present administration is proposing to delay the implementation dates applicable to requirements under these rules. Several states, are pursuing similar measures to regulate emissions of methane from new and existing sources within the crude oil and ~~natural~~ gas ~~source category.~~industry’s operations could adversely affect our business, our customers’ business, and others. The heightened standards may increase the cost to our customers in delivering hydrocarbons and, as a result, may result in a diminution of product transported and our business generally.

Table of Contents

In addition, the U.S. Congress has considered legislation to reduce emissions of GHGs, and many states and regions have already taken legal measures to reduce or measure GHG emission levels, often involving the planned development of GHG emission inventories and/or regional cap and trade programs. Most of these cap and trade programs require major sources of emissions or major producers of fuels to acquire and surrender emission allowances. ~~The~~Generally, the number of allowances available for purchase is reduced each year in an effort to reduce overall GHG emissions, and the cost of these allowances could escalate significantly over time. In the markets in which we currently operate, our operations are not materially affected by such GHG cap and trade programs. On an international level, almost 200 nations agreed in December 2015 to an international climate change agreement in Paris, France that calls for countries to set their own GHG emissions targets and to be transparent about the measures each country will use to achieve its GHG emissions targets. Although the ~~present administration has announced its intention to withdraw~~U.S. withdrew from the Paris accord in November 2020, it rejoined under the new administration in February 2021. Further, several states and local governments remain committed to ~~its~~the principles of the international climate agreement in their effectuation of policy and regulations. It is not possible at this time to predict how or when the U.S. might impose restrictions on GHGs as a result of the international climate change agreement. The adoption and implementation of any legislation or regulatory programs imposing GHG reporting obligations on, or limiting emissions of GHGs from, our equipment and operations could require us to incur costs to reduce emissions of GHGs associated with our operations including costs to operate and maintain our facilities, install new emission controls on our facilities, acquire allowances to authorize our GHG emissions, pay any taxes related to GHG emissions and administer and manage a GHG emissions program. Such programs also could adversely affect demand for the crude oil ~~and natural gas~~ that we market and transport.

Generally, the promulgation of climate change laws or regulations restricting or regulating GHG emissions from our operations could increase our costs to operate by increasing control technology requirements or changing regulatory obligations. In the United States, the EPA’s current and proposed regulation of GHG emissions may result in an increased cost of our operations as well as that of our customers, which in either case could adversely affect our business.

In addition to the regulation of operations, the SEC has adopted disclosure rules in March 2024 that will generally require public companies, after a transition period, to disclose climate-related risks and impacts, mitigation or adaptation activities, board oversight of climate-related risks, capitalized costs, expenses and losses incurred as a result of severe weather events and other natural conditions, and other climate-related information, and will require many public companies to monitor and report direct GHG emissions and indirect GHG emissions from the purchase of energy. Even though we will be exempt from the more onerous emissions-related disclosure requirements for so long as we continue to qualify as a “smaller reporting company,” the rules may impose substantial compliance costs on our business, the impact of which we are currently unable to quantify.

The Inflation Reduction Act may have implications for our customers and our business operations.

The Inflation Reduction Act of 2022 (“IR Act”) put in place broad-reaching tax, loan, incentive and other programs. The IR Act’s provisions include, but are not limited to: incentives for carbon capture and hydrogen projects; royalties on gas produced from federal land, including gas consumed or lost by venting, flaring or equipment releases; new charges for methane emissions from certain oil and gas operations; and new and expanded tax credits for certain renewable energy projects, among others. It is possible that, as implemented, the IR Act could in some ways alter our operations as well as those of our customers. There is the possibility that incentives for carbon capture and hydrogen projects may, among other things, prompt development of new or repurposing existing pipeline infrastructure. It is not clear how these developments will impact our business.

Table of Contents

Our reputation may be adversely affected if we are not able to achieve our Environmental, Social and Governance (“ESG”) goals.

There is increasing shareholder and stakeholder focus upon the development and implementation of more robust ESG and sustainability policies, practices, and disclosures around climate-related risk identification and mitigation—as shown by the SEC’s proposed Climate Change Disclosure Rule. This focus has included, but is not limited to, expansion of mandatory and voluntary reporting, including disclosures on climate change, sustainability efforts, natural resources, waste reduction, energy, human capital, and risk oversight. Developing and implementing these new ESG and sustainability practices, new disclosure requirement responses, and monitoring networks can involve significant costs and require extended time commitment from employees, officers, and directors.

Further, certain investors and lenders are integrating ESG factors into their decision making in conjunction with traditional financial considerations. To the extent that ESG and sustainability metrics and targets become applicable to our operations (whether voluntary, aspirational, or otherwise), our failure to achieve these targets, or a perception among key stakeholders that such targets are insufficient, unattainable, or merely placeholders, could damage our reputation, competitive position, share price, and overall business.

General Risk Factors

Economic developments could damage our operations and materially reduce our profitability and cash flows.

Potential disruptions in the credit markets and concerns about global economic growth could have a significant adverse impact on global financial markets and commodity prices. These factors could contribute to a decline in our stock price and corresponding market capitalization. If commodity prices experience a period of rapid decline, or a prolonged period of low commodity prices, our future earnings will be reduced. We currently rely on our bank Credit Agreement to issue letters of credit and to fund certain working capital needs from time to time. If the capital and credit markets experience volatility and the availability of funds become limited, our customers and suppliers may incur increased costs associated with issuing commercial paper and/or other debt instruments and this, in turn, could adversely affect our ability to secure supply and make profitable sales.

Current and future litigation could have an adverse effect on us.

We are currently involved in certain administrative and civil legal proceedings as part of the ordinary course of our business. Moreover, as incidental to operations, we sometimes become involved in various lawsuits and/or disputes. Lawsuits and other legal proceedings can involve substantial costs, including the costs associated with investigation, litigation and possible settlement, judgment, penalty or fine. Although we maintain insurance to mitigate these costs, we cannot guarantee that costs associated with lawsuits or other legal proceedings will not exceed the limits of insurance policies. Our results of operations could be adversely affected if a judgment, penalty or fine is not fully covered by insurance.

We could be adversely affected by changes in tax laws or regulations.

Table of Contents

We are subject to potential physical risks associated with climate change.

~~In an interpretative guidance on~~

The potential physical effects of climate change ~~disclosures,~~and the ~~SEC indicates that climate change~~potential increase in frequency of severe weather events on our operations and business are highly uncertain and vary largely depending on the geographical and environmental features of each facility and region. Regardless, our facilities still face the risk of these physical effects. Examples of potential physical risks include floods, water shortages and quality, hurricane-force winds, wildfires, freezing temperatures and snowstorms, and rising sea levels at our coastal or near-coastal facilities.

Our pipeline and storage facilities are fixed in place and in some cases near the coast, which may be particularly vulnerable. Depending on the physical effects of weather events, these facilities could potentially be required to temporarily or even permanently shut down operations. Further, these potential disruptions may hinder or prevent our ability to transport or receive products in these areas. Extended periods of disruption could have an adverse effect on our operations and therefore our business. Further, the ~~severity~~overall oil and gas industry within the same region may also be negatively affected and/or disrupted resulting in diminution in our business and that of ~~weather (including hurricanes~~our customers.

We currently have systems in place to manage physical risks, but if such events occur they may still have an adverse effect on our assets and ~~floods), sea levels, the arability of farmland,~~operations. We have incurred and ~~water availability~~will continue to incur costs to protect our assets from physical risks and ~~quality.~~to further mitigate such risks. If such ~~effects~~events were to occur, ~~our~~ operations ~~have the potential to~~may be adversely ~~affected. Potential adverse effects could include~~affected, including: disruption of our marketing and transportation activities, ~~including, for example, damages to our facilities from powerful winds or floods, or~~ increases in our costs of operation, or reductions in the efficiency of our operations, ~~as well as potentially~~incurrence of substantial costs to repair damaged facilities; and potential increased costs for insurance ~~coverages~~coverage in the aftermath of such ~~effects. Significant physical~~events.

These effects ~~of climate change~~ could also have an indirect effect on our financing and operations by disrupting the transportation or ~~process related~~process-related services provided by companies or suppliers with whom we have a business relationship. ~~In addition,~~Additionally, the demand for and consumption of our ~~products and~~ services (due to ~~change~~changes in both costs and weather patterns), and the economic health of the regions in which we operate, could have a material adverse ~~effect~~impact on our business, ~~financial condition, results of operations~~our customers, and ~~cash flows. We may not be able to recover through insurance some or any of the damages, losses or costs that may result from potential physical effects of climate change.~~our suppliers—thus, further indirectly impacting us.

Cyber-attacks or other disruptions to our information technology systems could lead to reduced revenue, increased costs, liability claims, fines or harm to our competitive position.

We ~~are~~rely on our information technology systems to conduct our business, including systems of third-party vendors. These systems include information used to operate our assets and cloud-based services. These systems have been subject to attempted security breaches and cyber-attacks in the past, and may be subject to such attacks in the future.

Cyber-attacks are becoming more sophisticated, and U.S. government warnings have indicated that infrastructure assets, including pipelines, may be specifically targeted by certain groups. These attacks include, without limitation, malicious software, ransomware, attempts to gain unauthorized access to data, and other electronic security breaches. These attacks may be perpetrated by state-sponsored groups, “hacktivists”, criminal organizations or private individuals (including employee malfeasance). These cybersecurity risks include cyber-attacks on both us and third parties who provide material services to us. In addition to disrupting operations, cyber security breaches could also affect our ability to operate or control our facilities, render data or systems unusable, or result in the theft of sensitive, confidential or customer information. These events could also damage our reputation, and result in losses from remedial actions, loss of business or potential liability to third parties.

Table of Contents

We may incur increasing costs in connection with our efforts to enhance and ensure security and in response to actual or attempted cybersecurity attacks. Substantial aspects of our business depend on the secure operation of our computer systems and websites. Security breaches could expose us to a risk of loss, misuse or interruption of sensitive and critical information and functions, including our own proprietary information and that of our customers, suppliers and employees. Such breaches could result in operational impacts, reputational harm, competitive disadvantage, litigation, regulatory enforcement actions and liability. While we devote substantial resources to maintaining adequate levels of cybersecurity, we cannot assure you that we will be able to prevent all of the rapidly evolving types of cyberattacks. Actual or anticipated attacks and risks may cause us to incur increasing costs for technology, personnel and services to enhance security or to respond to occurrences.

We have programs, processes and technologies in place to attempt to prevent, detect, contain, respond to and mitigate security-related threats and potential incidents. We undertake ongoing improvements to our systems, connected devices and information-sharing products in order to minimize vulnerabilities, in accordance with industry and regulatory standards; however, ~~because~~ the techniques used to obtain unauthorized access change frequently and can be difficult to ~~detect and anticipating,~~detect. Anticipating, identifying or preventing these intrusions or mitigating them if and when they occur is challenging and makes us more vulnerable to ~~cyber-attacks~~cyberattacks than other companies not similarly situated.

If our security measures are circumvented, proprietary information may be misappropriated, our operations may be disrupted, and our computers or those of our customers or other third parties may be damaged. Compromises of our security may result in an interruption of operations, violation of applicable privacy and other laws, significant legal and financial exposure, damage to our reputation, and a loss of confidence in our security measures.

Item 1B. Unresolved Staff Comments.

None.

Item 1C. Cybersecurity.

We operate in the logistics and crude oil distribution sector, which is subject to various cybersecurity risks from cybersecurity threats that could have a material adverse effect on our business, financial condition, operations, cash flows or reputation.

While we have not experienced material cybersecurity threats or incidents, or threats or incidents that are reasonably likely to materially affect us, there can be no guarantee that we will not be the subject of future successful attacks, threats or incidents. Information on cybersecurity risks and threats we face can be found in Part I, Item 1A. Risk Factors—“Cyber-attacks or other disruptions to our information technology systems could lead to reduced revenue, increased costs, liability claims, fine or harm to our competitive position”.

Our business depends on the availability, reliability and security of our information systems, networks, data, and intellectual property. Any disruption, compromise, or breach of our systems or data due to a cybersecurity threat or incident could adversely affect our operations, physical assets and infrastructure, customer service, product development and competitive position. They may also result in a breach of our contractual obligations or legal duties to protect the privacy and confidentiality of our stakeholders. Such a breach could expose us to business interruption, lost revenue, ransom payments, remediation costs, liabilities to affected parties, cybersecurity protection costs, lost assets, litigation, regulatory scrutiny and actions, reputational harm, customer dissatisfaction, harm to our relationships, or loss of market share.

Table of Contents

Governance

Our Board has delegated the primary responsibility to oversee cybersecurity matters to the Audit Committee. The Audit Committee regularly reviews the measures we implement to identify and mitigate data protection and cybersecurity risks. As part of such reviews, the Board and Audit Committee receive reports and presentations from members of our senior leadership for overseeing our cybersecurity risk management, including our Corporate Information Technology Director, which address a wide range of topics including recent developments, evolving standards, vulnerability assessments, third-party and independent reviews, the threat environment, technological trends and information security considerations arising with respect to our peers and third parties. Such members of our senior leadership also report to the Board directly at least annually on cybersecurity matters, including information security and cybersecurity risk.

At the management level, our Corporate Information Technology Director, who has extensive cybersecurity knowledge and skills gained from over 30 years of work experience at our company and elsewhere, heads the team responsible for implementing, monitoring, and maintaining information security and cybersecurity practices across our businesses and reports directly to the Chief Financial Officer.

The Corporate Information Technology Director receives reports on information security and cybersecurity threats and, in conjunction with management, regularly reviews risk management measures we implement to identify and mitigate information security and cybersecurity risks. In addition to our internal cybersecurity capabilities, we also regularly engage assessors, consultants, auditors, and other third parties to assist with assessing, identifying, and managing cybersecurity risks.

We have protocols by which certain cybersecurity incidents that meet established reporting thresholds are escalated within the Company and, where appropriate, reported promptly to the Board and Audit Committee, as well as ongoing updates regarding any such incident until it has been addressed.

Risk Management and Strategy

We have implemented a risk-based approach to identify and assess the cybersecurity threats that could affect our business and information systems. This approach includes a variety of mechanisms, controls, technologies, methods, systems, protocols and physical safeguards, along with the use of third-party consultants and experts, that are reasonably designed to protect our information, and that of our stakeholders, against cybersecurity threats that may result in material adverse effects on the confidentiality, integrity, and availability of our information systems. We monitor and evaluate our cybersecurity posture and performance on an ongoing basis through regular vulnerability scans, penetration tests and threat intelligence feeds.

We continue to improve our cybersecurity risk assessment program and activities for assessing, identifying and managing cybersecurity risks through industry standard security frameworks and leading practices, including risk assessments and remediations, software and services, continuous systems monitoring, vendor risk management processes, incident response plans, phishing simulations, employee training, and communication programs, among other measures. We also employ processes designed to assess, identify, and manage the potential impact of a security incident at various customers and critical partners, including third-party vendors, service providers, or any cybersecurity incident otherwise impacting the third-party technology and systems we use.

We engage with third-party service providers in order to maintain awareness of the latest security trends and continuously promote comprehensive cybersecurity practices consistent with industry best practices.

Table of Contents

Item 3. Legal Proceedings.

From time to time as incidental to our operations, we may become involved in various lawsuits and/or disputes. ~~Primarily as~~As an operator of an extensive trucking fleet, we are a party to motor vehicle accidents, workers’ compensation claims and other items of general liability as would be typical for the industry. We are currently 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.

See Note 1318 in the Notes to Consolidated Financial Statements for further discussion.

Item 4. Mine Safety Disclosures.

Not applicable.

PART II


~~Item 5.~~	~~Market for Registrant’s Common Stock, Related Stockholder Matters, and Issuer Purchases of Equity Securities.~~

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is traded on the NYSE ~~MKT~~American under the ticker symbol “AE”. As of ~~February 28, 2018,~~March 1, 2024, there were approximately ~~140~~109 shareholders of record of our common ~~shares. The following table presents high and low sales prices for~~shares, however, the actual number of beneficial holders of our common stock ~~for~~may be substantially greater than the ~~periods presented as reported by the NYSE MKT and the amount,~~stated number of holders of record ~~date and payment date of the quarterly cash dividends we paid on each~~because a substantial portion of our common ~~shares with respect~~stock is held in street name.

We have paid dividends to ~~such periods.~~our common shareholders each year since 1994. Our Board of Directors expects to continue paying dividends for the foreseeable future, although the declaration, amount and timing of any dividends falls within the sole discretion of our Board, whose decision will depend on many factors, including our financial condition, earnings, capital requirements and other factors that our Board may deem relevant.

Cash Dividend History
Price Ranges Per Record Payment
High Low Share Date Date
2015
1st Quarter $73.28 $47.31 $0.22 6/3/2015 6/17/2015
2nd Quarter $70.00 $39.00 $0.22 9/3/2015 9/17/2015
3rd Quarter $48.60 $38.88 $0.22 12/2/2015 12/16/2015
4th Quarter $46.86 $33.55 $0.22 3/11/2016 3/23/2016

2016
1st Quarter $43.00 $30.00 $0.22 6/3/2016 6/17/2016
2nd Quarter $44.27 $35.25 $0.22 9/6/2016 9/19/2016
3rd Quarter $39.47 $29.64 $0.22 12/5/2016 12/19/2016
4th Quarter $44.00 $35.17 $0.22 3/10/2017 3/24/2017

2017
1st Quarter $41.99 $34.23 $0.22 6/2/2017 6/16/2017
2nd Quarter $43.80 $35.64 $0.22 9/6/2017 9/20/2017
3rd Quarter $42.77 $32.80 $0.22 12/5/2017 12/19/2017
4th Quarter $50.59 $40.36 $0.22 3/9/2018 3/23/2018

Issuer Purchases of Equity Securities

None.

Table of Contents

Performance Graph

The following graph compares the total shareholder return performance of our common stock with the performance of: (i) the Standard & Poor’s 500 Stock Index (“S&P 500”) and (ii) the S&P 500 Integrated Oil and Gas ~~Index.~~Index (“S&P Integrated Oil & Gas”). The graph assumes that $100 was invested in our common stock and each comparison index beginning on December 31, ~~2012~~2018 and that all dividends were reinvested on a quarterly basis on the ex-dividend dates. The graph was prepared under the applicable rules of the SEC based on data supplied by Research Data Group. The stock performance shown on the graph is not necessarily indicative of future price performance.

The information under the caption “Performance Graph” above is not deemed to be “filed” as part of the Annual Report on Form 10-K, and is not subject to the liability provisions of Section 18 of the Exchange Act. Such information will not be deemed incorporated by reference into any filing we make under the Securities Act unless we explicitly incorporate it into such filing at such time.


	December 31,
	2018		2019		2020		2021		2022		2023

Adams Resources & Energy, Inc.	$	100.00	$	101.14	$	66.46	$	79.27	$	114.09	$	78.79
S&P 500	100.00		131.49		155.68		200.37		164.08		207.21
S&P Integrated Oil & Gas	100.00		107.19		71.37		109.06		192.43		175.08

Item 6. [Reserved]

December 31,
2012 2013 2014 2015 2016 2017

Adams Resources & Energy, Inc. $ 100.00
$ 197.45
$ 146.15
$ 114.46
$ 120.99
$ 135.74
S&P 500 100.00
132.39
150.51
152.59
170.84
208.14
S&P Integrated Oil & Gas 100.00
121.53
113.35
97.64
121.21
123.73

Table of Contents

~~Item 6.~~ ~~Selected Financial Data.~~

The following table presents our selected historical consolidated financial data. This information has been derived from and should be read in conjunction with our audited financial statements included under Part II, Item 8 of this annual report, which presents our audited balance sheets as of December 31, 2017 and 2016 and related consolidated statements of operations, cash flows and shareholders’ equity for the three years ended December 31, 2017, 2016 and 2015, respectively. As presented in the table, amounts are in thousands (except per share data).

Year Ended December 31,
2017 2016 2015 2014 2013
Statements of operations data:
Revenues:
Marketing $ 1,267,275
$ 1,043,775
$ 1,875,885
$ 4,050,497
$ 3,863,057
Transportation 53,358
52,355
63,331
68,968
68,783
Oil and natural gas 1,427
3,410
5,063
13,361
14,129
Total revenues 1,322,060
1,099,540
1,944,279
4,132,826
3,945,969

Costs and expenses:
Marketing 1,247,763
1,016,733
1,841,893
4,020,017
3,815,006
Transportation 48,538
45,154
52,076
56,802
56,504
Oil and natural gas 948
2,084
6,931
7,817
6,117
Oil and natural gas property impairments ⁽¹⁾
3
313
12,082
8,009
2,631
Oil and natural gas property sale ⁽²⁾
—
—
—
(2,528 ) —
General and administrative 9,707
10,410
9,939
8,613
9,060
Depreciation, depletion and amortization 13,599
18,792
23,717
24,615
22,275

Operating earnings (losses) 1,502
6,054
(2,359 ) 9,481
34,376

Loss on deconsolidation of subsidiary ⁽³⁾
(3,505 ) —
—
—
—
Impairment of investment in unconsolidated
affiliate ⁽⁴⁾
(2,500 ) —
—
—
—
Interest income (expense) 1,076
580
314
299
174

Earnings (losses) from continuing operations (3,427 ) 6,634
(2,045 ) 9,780
34,550

Income tax (provision) benefit 2,945
(2,691 ) 770
(3,561 ) (12,429 )

Earnings (losses) before investment in
unconsolidated affiliate
and discontinued operations (482 ) 3,943
(1,275 ) 6,219
22,121

Discontinued operations, net of taxes —
—
—
304
(511 )
Losses from investment in unconsolidated
affiliate, net of tax ⁽⁵⁾
—
(1,430 ) —
—
—
Net (losses) earnings $ (482 ) $ 2,513
$ (1,275 ) $ 6,523
$ 21,610

Earnings (losses) per share:
From continuing operations $ (0.11 ) $ 0.94
$ (0.30 ) $ 1.48
$ 5.24
From investment in unconsolidated
affiliate —
(0.34 ) —
—
—
From discontinued operations —
—
—
0.07
(0.12 )
Basic and diluted earnings per share $ (0.11 ) $ 0.60
$ (0.30 ) $ 1.55
$ 5.12

Dividends per common share $ 0.88
$ 0.88
$ 0.88
$ 0.88
$ 0.66

~~Table of Contents~~

December 31,
2017 2016 2015 2014 2013
Balance sheet data:

Cash $ 109,393
$ 87,342
$ 91,877
$ 80,184
$ 60,733
Total assets 282,704
246,872
243,215
340,814
448,082
Long-term debt —
—
—
—
—
Shareholders’ equity 147,119
151,312
152,510
157,497
154,685
Dividends on common shares 3,711
3,711
3,712
3,711
2,783

~~________________________~~


~~(1)~~	~~During 2015, we recognized an impairment of $10.3 million on producing properties, and an impairment of $1.8 million on non-producing properties.~~


~~(2)~~	~~During 2014, we sold certain crude oil and natural gas producing properties for $4.1 million, producing a net gain of $2.5 million.~~


~~(3)~~	~~During 2017, we recognized an impairment related to the bankruptcy, deconsolidation and sale of our upstream crude oil and natural gas exploration and production subsidiary.~~


~~(4)~~	~~During 2017, we recognized an impairment on our medical investment in VestaCare.~~


~~(5)~~	During 2016, we recognized losses and an impairment on our medical investment in Bencap LLC (“Bencap”). We have no other medical-related investments, and we currently do not have any plans to pursue additional medical-related investments.

~~Table of Contents~~

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following information should be read in conjunction with our Consolidated Financial Statements and accompanying notes included under Part II, Item 8 of this annual report. Our financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the ~~United States (“~~U.S.~~”).~~

Overview of Business

Adams Resources & Energy, Inc. ~~(“AE”), a Delaware corporation organized in 1973,~~ and its subsidiaries are primarily engaged in ~~the business~~crude oil marketing, truck and pipeline transportation of crude oil, ~~marketing, transportation~~and terminalling and storage in various crude oil and natural gas basins in the lower 48 states of the U.S. ~~We also~~In addition, we conduct tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk ~~and ISO tank container storage and transportation~~ primarily in the lower 48 states of the U.S. with deliveries into Canada and Mexico, and with seventeen terminals across the U.S. We also recycle and repurpose off-specification fuels, lubricants, crude oil and other chemicals from producers in the ~~Gulf Coast region of the~~ U.S.

~~Historically, we have operated~~We operate and ~~reported~~report in ~~three~~four business segments: (i) crude oil marketing, transportation and ~~storage,~~storage; (ii) tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk; (iii) pipeline transportation, terminalling and storage of crude oil; and (iv) interstate bulk transportation logistics of crude oil, condensate, fuels, oils and ~~ISO tank container storage~~other petroleum products and ~~transportation,~~recycling and ~~(iii) upstream~~repurposing of off-specification fuels, lubricants, crude oil and natural gas exploration and production. We exited the upstream crude oil and natural gas exploration and production business during 2017 with the sale of our upstream crude oil and natural gas exploration and production assets.

~~2017 Developments~~

~~Subsidiary Bankruptcy, Deconsolidation and Sale~~

On April 21, 2017, one of our wholly owned subsidiaries, AREC, filed a voluntary petition in the U.S. Bankruptcy Court seeking relief under Chapter 11 of Title 11 of the Bankruptcy Code. AREC operated its business and managed its properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and order of the Bankruptcy Court. AE was the primary creditor in the Chapter 11 process.

During the second quarter of 2017, we recorded a non-cash charge of approximately $1.6 million associated with the deconsolidation of AREC, which reflected the excess of the net assets of AREC over its estimated fair value based on an expected sales transaction price of approximately $5.0 million, net of estimated transaction costs. During the third quarter of 2017, Bankruptcy Court approval was obtained on three asset purchase and sales agreements with three unaffiliated parties, and AREC closed on the sales of substantially all of its assets.

In October 2017, AREC submitted its liquidation plan to the Bankruptcy Court for approval. In connection with the sales of these assets and submission of the liquidation plan, we recognized an additional loss of $1.9 million during the third quarter of 2017, which represents the difference between the proceeds we expect to be paid upon settlement of the bankruptcy, net of anticipated remaining closing costs identified as part of the liquidation plan, and the book value of our cost method investment. In December 2017, we received proceeds of approximately $2.8 million from AREC related to the settlement of a portion of the bankruptcy process. We obtained approval of a confirmed plan in December 2017, and we expect the case to be dismissed during the first half of 2018. We anticipate receiving an additional $0.4 million in 2018 when the bankruptcy case is dismissed.

~~In connection with the bankruptcy filing, AREC entered into the DIP Credit Agreement with AE, which was repaid during the third quarter of 2017 with proceeds from the sales of the assets.~~other chemicals. See Note 39 in the Notes to Consolidated Financial Statements for further ~~information.~~information regarding our business segments.

~~Table of Contents~~

~~Voluntary Early Retirement Program~~

In August 2017, we implemented a voluntary early retirement program for certain employees, which resulted in an increase in personnel expenses of approximately $1.4 million. Of this amount, approximately $1.0 million was included in general and administrative expenses and $0.4 million was included in operating expenses.

~~Impairment of Investment in Unconsolidated Affiliate~~

During the third quarter of 2017, we completed a review of our investment in VestaCare and determined that there was an other than temporary impairment as the current projected operating results of VestaCare did not support the carrying value of our investment. As such, we recognized a pre-tax impairment charge of $2.5 million during the third quarter of 2017 related to our investment in VestaCare. See Note 7 in the Notes to Consolidated Financial Statements for further information.

Results of Operations

Crude Oil Marketing

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


	Year Ended December 31,
	2017		2016		Change ⁽¹⁾		2015		Change ⁽¹⁾
	Year Ended December 31,																								Year Ended December 31,
	2023														2023			2022				Change (1)				2021					Change (1)

Revenues	$	1,267,275	$	1,043,775	21.4	%	$	1,875,885	(44.4	%)
Operating earnings	11,700		17,045		(31.4	%)	22,895		(25.6	%)
Revenues
Revenues												$	2,585,355			$	3,232,193		(20.0	%)			$	1,930,042				67.5	%
Operating earnings (2)											Operating earnings (2)	17,029				15,874			7.3	%			25,243					(37.1	%)
Depreciation and amortization	7,812		9,997		(21.9	%)	11,097		(9.9	%)	Depreciation and amortization	8,042		7,724			7,724	4.1		4.1	%				6,673		15.8			15.8	%
Driver commissions	13,058		14,933		(12.6	%)	22,262		(32.9	%)
Gains on sales of assets											Gains on sales of assets	2,730				1,738			57.1	%			368					372.3	%
Driver compensation											Driver compensation	19,560				19,598			(0.2	%)			17,717					10.6	%
Insurance	4,509		7,442		(39.4	%)	8,732		(14.8	%)	Insurance	7,261		7,954			7,954	(8.7		(8.7	%)				6,193		28.4			28.4	%
Fuel	5,278		5,397		(2.2	%)	9,928		(45.6	%)	Fuel	10,427		12,518			12,518	(16.7		(16.7	%)				8,064		55.2			55.2	%

____________________


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

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

(2)Operating earnings included net inventory valuation losses of $0.8 million, net inventory valuation losses of $2.0 million and net inventory liquidation gains of $10.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Table of Contents

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


	Year Ended December 31,
	2017		2016		2015
	Year Ended December 31,								Year Ended December 31,
	2023						2023	2022		2021
Field level purchase volumes – per day ⁽¹⁾
Crude oil – barrels
Crude oil – barrels
Crude oil – barrels	67,447		72,900		106,400

Average purchase price
Average purchase price
Average purchase price
Crude oil – per barrel	$	49.88	$	39.30	$	45.41
Crude oil – per barrel
Crude oil – per barrel

____________________


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

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

~~2017~~

2023 compared to ~~2016~~2022. Crude oil marketing revenues decreased by $646.8 million during the year ended December 31, 2023 as compared to 2022, primarily as a result of a decrease in the market price of crude oil, which decreased revenues by approximately $444.4 million, and lower crude oil volumes, which decreased revenues by approximately $202.4 million. The average crude oil price was $92.63 per barrel for 2022, which decreased to $74.96 per barrel for 2023. Revenues from our volumes are mostly based upon the market price in our market areas, primarily in the Gulf Coast. The decrease in the market price of crude oil during 2023 as compared to 2022 was primarily due to weakness in the Chinese economy and concern over economic recession, which caused crude oil prices to fall. During the third quarter of 2023, OPEC oil production cuts and U.S. inventory draws from the Mid-Continent and Gulf Coast resulted in an increase in crude oil prices.

Revenues also decreased due to the termination on October 31, 2023 and non-renewal of our five year purchase contract in North Texas and South Central Oklahoma (the “Red River area”). In October 2018, we acquired a trucking company that owned approximately 113 tractors and 126 trailers operating in the Red River area, and subsequently entered into a new revenue agreement at that time. During the five year period, volumes handled in the Red River area ranged from an average of 25,000 to 28,000 barrels per day. The purchase price for Red River area volumes was based on a contractual price for volumes in North Texas and Oklahoma, which had been slightly lower than the purchase price for legacy volumes. The termination of this contract has resulted in a decrease in the average crude oil volumes for the crude oil marketing segment beginning in November 2023.

Driver compensation remained relatively flat during the year ended December 31, 2023 as compared to 2022, despite a decrease in the overall driver count in 2023. At the end of October 2023, we had approximately 49 drivers dedicated to the Red River area, which were either terminated or redeployed to other areas of our businesses.

Insurance costs decreased by $0.7 million during the year ended December 31, 2023 as compared to 2022, primarily due to a lower overall driver count in 2023 and premium reductions due to our safety performance during the current year, partially offset by an overall increase in insurance premiums. Fuel costs decreased by $2.1 million during the year ended December 31, 2023 as compared to 2022, consistent with a lower driver count and lower fuel prices in 2023, as compared to 2022.

Depreciation and amortization expense increased by $0.3 million during the year ended December 31, 2023 as compared to 2022, primarily due to the timing of purchases and retirements of tractors and other field equipment during 2022 and 2023. In connection with the termination of the Red River contract, we sold 36 tractors and 65 trailers during the fourth quarter of 2023, resulting in gains of approximately $2.4 million, and also transferred tractors and trailers to other areas of our businesses.

Table of Contents

Our crude oil marketing operating earnings for the year ended December 31, 2023 increased by $1.2 million as compared to 2022, primarily as a result of inventory valuation losses of $2.0 million in 2022 compared to valuation losses of $0.8 million in 2023 (as shown in the table below) and lower fuel costs and insurance costs in 2023 as compared to 2022, partially offset by a decrease in the average market price of crude oil and a decrease in crude oil volumes in 2023.

2022 compared to 2021. Crude oil marketing revenues increased by ~~$223.5~~$1,302.2 million during the year ended December 31, ~~2017~~2022 as compared to ~~2016~~2021, primarily as a result of an increase in the market price of crude oil, which increased revenues by approximately ~~$329.7~~$1,104.2 million, ~~partially offset by lower~~and higher crude oil volumes, which ~~decreased~~increased revenues by approximately ~~$106.2~~$198.0 million. The average crude oil price ~~received~~ was ~~$39.30~~$65.48 for ~~2016,~~2021, which increased to ~~$49.88~~$92.63 for ~~2017.~~2022. Revenues from our volumes are mostly based upon the market price in our market areas, primarily in the Gulf Coast. The market price of crude oil increased during 2022 as compared to 2021 primarily as a result of a return of global crude oil demand following the pandemic, which combined with a perceived shortage of global crude oil production. In addition, the invasion of Ukraine by Russia contributed to an increase in the market price of crude oil in the first half of 2022. In the second half of 2022, weakness in the Chinese economy and concern over economic recession caused crude oil prices to fall, while still remaining historically high.

Driver compensation increased by $1.9 million during the year ended December 31, 2022 as compared to 2021, primarily as a result of higher volumes transported in 2022 and an increase in driver pay as compared to 2021, partially offset by a lower overall driver count in 2022.

Insurance costs increased by $1.8 million during the year ended December 31, 2022 as compared to 2021, primarily due to an increase in insurance premiums, partially offset by a lower overall driver count in 2022. Fuel costs increased by $4.5 million during the year ended December 31, 2022 as compared to 2021, consistent with higher fuel prices in 2022, as compared to 2021.

~~Table~~Depreciation and amortization expense increased by $1.1 million during the year ended December 31, 2022 as compared to 2021, primarily due to the timing of ~~Contents~~purchases and retirements of tractors and other field equipment during 2021 and 2022.

Our crude oil marketing operating earnings for the year ended December 31, ~~2017~~2022 decreased by ~~$5.3~~$9.4 million as compared to ~~2016,~~2021, primarily as a result of declines in crude oil volumes, including declines as a result of the effects of Hurricane Harvey, which affected the Gulf Coast area in late August and early September 2017, as well as a narrowing of margins during 2017. Operating earnings were also impacted by inventory valuation ~~changes~~losses of $2.0 million in 2022 as compared to inventory liquidation gains of $10.3 million in 2021 (as shown in the table below), and ~~the implementation~~higher operating expenses in August 2017 of a voluntary early retirement program for certain employees, which resulted in an increase in personnel expenses of approximately $0.4 million. During the latter part of 2017, volumes began increasing as activity in certain marketing areas increased primarily as a result of increased wellhead purchases.

~~Driver commissions decreased by $1.9 million during the year ended December 31, 2017~~2022 as compared to 2016, primarily as a result of the decrease in crude oil marketing volumes in 2017. Insurance costs decreased by $2.9 million during the year ended December 31, 2017 as compared to 2016, primarily as a result of favorable driver safety performance and reduced mileage during 2017 as compared to 2016. Fuel costs decreased by $0.1 million during the year ended December 31, 2017 as compared to 2016 consistent with decreased marketing volumes and lower crude oil prices during 2016,2021, partially offset by an increase in the ~~price of diesel fuel during 2017 as compared to 2016.~~

~~2016 compared to 2015~~. Crude oil marketing revenues decreased by $832.1 million during the year ended December 31, 2016 as compared to 2015, primarily as a result of lower crude oil volumes, which decreased revenues by approximately $475.5 million and a decrease in theaverage market price of crude oil which decreased revenues by approximately $356.6 million. The average crude oil price received was $45.41 for 2015, which decreased to $39.30 for 2016. Lower crude oil prices resulted in curtailed drilling efforts in most areas. Crude marketing volumes decreased as a result of lower wellhead purchases in 2016 as compared to 2015.

~~Our marketing segment operating earnings for the year ended December 31, 2016 decreased by $5.9 million as compared to 2015, primarily as a result of declines~~and an increase in crude oil volumes ~~and a decrease~~ in ~~the market price of crude oil. Volume declines resulted from a decrease in wellhead purchases, partially offset by inventory valuation changes (as shown in the table below).~~2022.

Driver commissions decreased by $7.3 million during the year ended December 31, 2016 as compared to 2015, primarily as a result of the decrease in crude oil marketing volumes. Insurance costs decreased by $1.3 million during the year ended December 31, 2016 as compared to 2015, primarily as a result of favorable driver safety performance during 2016 as compared to 2015. Fuel costs decreased by $4.5 million during the year ended December 31, 2016 as compared to 2015 consistent with decreased marketing volumes and lower crude oil prices during 2016 as compared to 2015.

Field Level Operating Earnings (Non-GAAP Financial Measure). Inventory valuations and forward ~~commodity contract (derivatives or mark-to-market)~~derivative instrument (mark-to-market) valuations are two significant factors affecting comparative crude oil marketing segment operating ~~earnings.~~earnings or losses. As a purchaser and shipper of crude oil, we hold inventory in storage tanks and third-party pipelines. ~~During~~Generally, 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).~~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~~to protect crude oil ~~purchases at the wellhead (field level).~~inventory value from market price fluctuations. The valuation of derivative instruments at period end requires the recognition of non-cash “mark-to-market” gains and losses.

Table of Contents

The impact of inventory liquidations and valuations and derivative valuations on our crude oil marketing segment operating earnings is summarized in the following reconciliation of our non-GAAP financial measure and provides management a measure of the business unit’s performance by removing the impact of inventory valuation and liquidation adjustments for the periods indicated (in thousands):


	Year Ended December 31,										Year Ended December 31,
	2023								2023	2022		2021

	Year Ended December 31,
	2017			2016			2015

As reported segment operating earnings ⁽¹⁾	$	11,700		$	17,045		$	22,895
As reported segment operating earnings
As reported segment operating earnings
As reported segment operating earnings
Add (subtract):
Inventory liquidation gains	(3,372		)	(8,243		)	—
Inventory liquidation gains
Inventory liquidation gains
Inventory valuation losses	—			—			5,357
Derivative valuation (gains) losses	27			(243		)	188
Field level operating earnings ⁽²⁾	$	8,355		$	8,559		$	28,440
Derivative valuation gains
Field level operating earnings (1)

____________________


~~(1)~~	Segment operating earnings included inventory liquidation gains of $3.3 million and $8.2 million for the years ended December 31, 2017 and 2016, respectively, and inventory valuation losses of $5.4 million for the year ended December 31, 2015.


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

(1)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 points. Field level operating earnings decreased slightly during the year ended December 31, ~~2017~~2023 as compared to ~~2016,~~2022, primarily due to ~~increased personnel costs related to~~a decrease in the ~~voluntary early retirement program,~~average market price of crude oil and a decrease in crude oil volumes in 2023, partially offset by ~~increased volumes~~lower fuel costs and ~~the effects of a newly negotiated barge contract, which reduced operating expenses, beginning~~insurance costs in ~~the third quarter of 2017.~~2023 as compared to 2022.

Field level operating earnings ~~decreased~~increased during the year ended December 31, ~~2016~~2022 as compared to ~~2015 as competition and additional industry infrastructure development progressed~~2021, primarily due to an increase in the ~~region. A key factor in unit margins is the value difference between~~average market price of crude oil ~~supplies~~and an increase in ~~the mid-continent region of the U.S. versus~~ crude oil ~~supply~~volumes in 2022, which increased revenues, partially offset by higher operating costs in ~~the eastern region of the U.S. We have been able to capture some of this value difference by shipping crude oil from the Texas Gulf Coast to other locations.~~2022.

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


	December 31,
	2023			2022			2021
		Average			Average			Average
	Barrels	Price		Barrels	Price		Barrels	Price

Crude oil inventory	267,731	$	72.35	328,562	$	78.39	259,489	$	71.86

December 31,
2017 2016 2015
Average Average Average
Barrels Price Barrels Price Barrels Price

Crude oil inventory 198,011
$ 61.57
255,146
$ 51.22
261,718
$ 29.31

Historically, prices received for crude oil have been volatile and unpredictable with price volatility expected to continue. See “Item 1A. Risk Factors.”

Table of Contents

Transportation

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


	Year Ended December 31,
	2017			2016			Change ⁽¹⁾		2015		Change ⁽¹⁾
	Year Ended December 31,																													Year Ended December 31,
	2023																2023				2022						Change (1)				2021						Change (1)

Revenues	$	53,358		$	52,355		1.9	%	$	63,331	(17.3	%)
Operating earnings (losses)	$	(544	)	$	(48	)	1033.3	%	$	3,701	(101.3	%)
Revenues
Revenues														$	98,359			$	112,376			(12.5		%)				$	94,498				18.9	%
Operating earnings													Operating earnings	$	5,091			$	10,891			(53.3		%)				$	7,104				53.3	%
Depreciation and amortization	$	5,364		$	7,249		(26.0	%)	$	7,554	(4.0	%)	Depreciation and amortization	$	12,277	$		$	11,512	6.6			6.6		%				$	12,099	(4.9			(4.9		%)
Driver commissions	$	11,546		$	11,227		2.8	%	$	13,265	(15.4	%)	Driver commissions	$	14,020	$		$	15,193	(7.7			(7.7		%)				$	14,948	1.6			1.6		%
Insurance	$	5,452		$	4,952		10.1	%	$	4,543	9.0	%	Insurance	$	7,884	$		$	8,760	(10.0			(10.0		%)				$	8,368	4.7			4.7		%
Fuel	$	6,401		$	5,688		12.5	%	$	8,134	(30.1	%)	Fuel	$	10,280	$		$	12,574	(18.2			(18.2		%)				$	8,201	53.3			53.3		%
Maintenance expense	$	6,061		$	5,410		12.0	%	$	6,365	(15.0	%)	Maintenance expense	$	4,683	$		$	5,282	(11.3			(11.3		%)				$	3,932	34.3			34.3		%
Mileage (000s)	21,836			22,611			(3.4	%)	25,205		(10.3	%)	Mileage (000s)	25,487		26,510			26,510		(3.9			(3.9		%)				27,902		(5.0			(5.0		%)

____________________


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

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

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,~~costs, were as follows for the periods indicated (in thousands):


	Year Ended December 31,
	2017			2016			2015
	Year Ended December 31,											Year Ended December 31,
	2023									2023	2022		2021

Total transportation revenue	$	53,358		$	52,355		$	63,331
Total transportation revenue
Total transportation revenue
Diesel fuel cost	(6,401		)	(5,688		)	(8,134		)
Revenues, net of fuel cost ⁽¹⁾	$	46,957		$	46,667		$	55,197
Revenues, net of fuel costs (1)

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Common Shares Outstanding

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


						Common
						shares

Balance, January 1, 2021						4,243,716
Vesting of restricted stock unit awards (see Note 15)						14,244
Vesting of performance share unit awards (see Note 15)						2,461
Shares withheld to cover taxes upon vesting of equity awards						(3,043)
Shares sold under at-the-market offering program						97,623
Balance, December 31, 2021						4,355,001
Vesting of restricted stock unit awards (see Note 15)						21,814
Vesting of performance share unit awards (see Note 15)						3,125
Shares withheld to cover taxes upon vesting of equity awards						(3,806)
Shares sold under at-the-market offering program						46,524
Issuance of shares in acquisition (see Note 6)						15,259
Repurchase of common shares (see Note 10)						(1,942,433)
Balance, December 31, 2022						2,495,484
Vesting of restricted stock unit awards (see Note 15)						22,227
Vesting of performance share unit awards (see Note 15)						12,680
Shares withheld to cover taxes upon vesting of equity awards						(8,089)
Shares sold under at-the-market offering program						14,680
Vesting of shares issued in acquisition (see Note 6)						10,172
Balance, December 31, 2023						2,547,154

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 product 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.

Earnings Per Share

Basic earnings per share is computed by dividing our net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by giving effect to all potential common shares outstanding, including shares related to unvested restricted stock unit awards. Unvested restricted stock unit awards granted under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan, as amended and restated (“2018 LTIP”), or granted as employment inducement awards outside of the 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 15 for further information).

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


	Year Ended December 31,
	2023		2022		2021
Earnings per share – numerator:
Net earnings	$	212	$	3,487	$	11,888

Denominator:
Basic weighted average number of shares outstanding (1)	2,535		4,053		4,283
Basic earnings per share	$	0.08	$	0.86	$	2.78

Diluted earnings per share:

Diluted weighted average number of shares outstanding:
Common shares (1)	2,535		4,053		4,283
Restricted stock unit awards	18		23		23
Performance share unit awards (2)	15		15		17
Total	2,568		4,091		4,323

Diluted earnings per share	$	0.08	$	0.85	$	2.75

_______________

(1)On October 31, 2022, we repurchased 1,942,433 shares from an affiliate (see Note 10 for further information). As these shares were outstanding for the majority of 2022, the weighted average number of shares outstanding for 2022 reflects the impact of those shares being outstanding through October 31, 2022.

(2)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 2021, 2022 and 2023 were achieved as of December 31, 2021, 2022 and 2023, respectively.

Employee Benefits

We maintain a 401(k) savings plan for the benefit of our employees. We do not maintain any other pension or retirement plans. Our 401(k) plan contributory expenses were as follows for the periods indicated (in thousands):


	Year Ended December 31,
	2023		2022		2021

Contributory expenses	$	1,431	$	1,283	$	1,159

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended December 31,
2017 2016 2015

Contributory expenses $ 734
$ 757
$ 768
Equity At-The-Market Offerings

~~Earnings Per Share~~On December 23, 2020, we entered into an At Market Issuance Sales Agreement with B. Riley Securities, Inc., as agent (“Agent”), under which we may offer to sell our common shares through or to the Agent for cash from time to time. Shares sold under the agreement were as follows for the periods indicated (in thousands, except share data):

Earnings per share are based on the weighted average number of shares of common stock and potentially dilutive common stock shares outstanding during the period. The weighted average number of shares outstanding was 4,217,596 for each of the years ended December 31, 2017, 2016 and 2015. There were no potentially dilutive securities outstanding during those periods.


	Year Ended December 31,
	2023		2022		2021

Gross proceeds from sale of common shares	$	598	$	1,869	$	2,996
Less offering costs paid to Agent	(27)		(84)		(135)
Less other offering costs	(22)		(61)		(31)
Net proceeds from sale of common shares	$	549	$	1,724	$	2,830

Number of common shares sold	14,680		46,524		97,623
Average price per share	$	40.74	$	40.20	$	30.70

Fair Value Measurements

The carrying amounts reported in the 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. The fair value of our term loan under our credit agreement (see Note 12 for further information) is representative of the carrying value based upon the variable terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the debt.

Our fair value estimates are based on either (i) actual market data or (ii) assumptions that other market participants would use in pricing an asset or liability, including estimates of risk, in the principal market of the asset or liability at a specified measurement date. Recognized valuation techniques employ inputs such as contractual prices, quoted market prices or rates, operating costs, discount factors and business growth rates. These inputs may be either readily observable, corroborated by market data or generally unobservable. In developing our estimates of fair value, we endeavor to utilize the best information available and apply market-based data to the highest extent possible. Accordingly, we utilize valuation techniques (such as the market approach) that maximize the use of observable inputs and minimize the use of unobservable inputs.

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 such 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.

~~Table of Contents~~

~~ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

The characteristics of the fair value amounts classified within each level of the hierarchy are described as follows:

•Level 1 fair values are based on quoted prices, which are available in active markets for identical assets or liabilities as of the measurement date. Active markets are defined as those in which transactions for identical assets or liabilities occur with sufficient frequency so as to provide pricing information on an ongoing basis. For Level 1 valuation of marketable securities, we utilize market quotations provided by our primary financial institution. For the valuations of derivative financial instruments, we utilize the New York Mercantile Exchange (“NYMEX”) for certain commodity valuations.

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

•Level 2 fair values are based on (a) quoted prices for similar assets or liabilities in active markets, (b) quoted prices for identical assets or liabilities but in markets that are not actively traded or in which little information is released to the public, (c) observable inputs other than quoted prices, and (d) inputs derived from observable market data. Source data for Level 2 inputs include information provided by the NYMEX, published price data and indices, third party price survey data and broker provided forward price statistics.

•Level 3 fair values are based on unobservable market data inputs for assets or liabilities.

See Note 6 for a discussion of the Level 3 inputs used in the determination of the fair value of the intangible assets acquired in asset acquisitions and intangible assets acquired and contingent consideration issued in a business combination.

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 of the current reporting periods (see Note 1013 for further information).

Fair value estimates are based on assumptions that market participants would use when pricing an asset or liability, and we use a fair value hierarchy of three levels that prioritizes the information used to develop those assumptions. Currently, for all items presented herein, we utilize a market approach to valuing our contracts. On a contract by contract, forward month by forward month basis, we obtain observable market data for valuing our contracts. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data.

Impairment Testing for Long-Lived Assets and Goodwill

Long-lived assets (primarily property and ~~equipment)~~equipment and intangible assets) are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Long-lived assets with carrying values that are not expected to be recovered through future cash flows are written-down to their estimated fair values. The carrying value of a long-lived asset is deemed not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the asset’s carrying value exceeds the sum of its undiscounted cash flows, a non-cash asset impairment charge equal to the excess of the asset’s carrying value over its estimated fair value is recorded. Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at a specified measurement date. We measure fair value using market price indicators or, in the absence of such data, appropriate valuation techniques. ~~See~~

Goodwill, which represents the cost of an acquired business in excess of the fair value of its net assets at the acquisition date, is subject to annual impairment testing in the fourth quarter of each year or when events or changes in circumstances indicate that the carrying amount of the goodwill may not be recoverable. We recognized goodwill in a business combination, which occurred in August 2022 (see Note 106 for ~~information regarding~~further information). We will test goodwill for impairment ~~charges related~~at the reporting unit (or operating segment) level following guidance in ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. An impairment of goodwill represents the amount by which a reporting unit’s carrying value (including its respective goodwill) exceeds its fair value, not to ~~long-lived assets.~~exceed the carrying amount of the reporting unit’s goodwill.

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 such items and their respective tax basis (see Note 1114 for further information). On December 22, 2017, the Tax Cut and Jobs Act was enacted into law resulting in a reduction in the federal corporate income tax rate from 35 percent to 21 percent for years beginning in 2018, which impacted our income tax provision or benefit.

We are subject to income taxes in the U.S. and numerous states. We record uncertain tax positions on the basis of a two-step process in which (1) we determine whether it is more-likely-than-not the tax positions will ~~impact~~be sustained on the basis of technical merits of the position and (2) for those tax positions meeting the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

Interest and penalties related to income taxes are included in the benefit (provision) for income taxes in our ~~deferred~~consolidated statements of operations.

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 ~~assets~~years 2018, 2019 and ~~liabilities.~~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.

The NOL carryback provision in the CARES Act resulted in cash benefits to us for the fiscal years 2018, 2019 and 2020. We carried back our NOL for fiscal year 2018 to 2013 and received a cash refund of approximately $2.7 million in June 2020. We carried back our NOL for the fiscal year 2019 to 2014 and received a cash refund of approximately $3.7 million in April 2021. We carried back our NOL for fiscal year 2020 to 2015 and 2016 and received a cash refund of approximately $6.9 million in June 2022.

~~Table of Contents~~

~~ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

Inventory, and Linefill and Base Gas

Inventory consists of crude oil held in storage tanks and at third-party pipelines as part of our crude oil marketing and pipeline and storage operations. Crude oil inventory is carried at the lower of ~~average~~ 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 or pipeline and storage costs and expenses on our consolidated statements of operations.

~~Letter~~Linefill and base gas in assets we own are recorded at historical cost and consist of ~~Credit Facility~~crude oil. We classify as linefill or base gas our proportionate share of barrels used to fill a pipeline that we own and barrels that represent the minimum working requirements in storage tanks that we own. These crude oil barrels are not considered to be available for sale because the volumes must be maintained in order to continue normal operation of the related pipeline or tanks. Linefill and base gas are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Linefill and base gas are included in “Property and equipment” on our Consolidated Balance Sheets. See Note 5 for additional information regarding linefill and base gas.

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Investment in Unconsolidated Affiliate

We ~~maintain~~own an approximate 15 percent equity interest (less than 3 percent voting interest) in VestaCare, Inc., a Credit and Security Agreement with Wells Fargo Bank, National Association to provide up to a $60 million stand-by letter of credit facility used to support crude oil purchases within our crude oil marketing segment and for other purposes. We are currently using the letter of credit facilityCalifornia corporation (“VestaCare”), which we purchased for a ~~letter of credit related to our insurance program. This facility is collateralized by the eligible accounts receivable within the crude oil marketing segment and expires on August 27, 2019.~~

~~The issued stand-by letters of credit are canceled as the underlying purchase obligations are satisfied by~~$2.5 million cash payment ~~when due. The letter~~in 2016. VestaCare provides an array of ~~credit facility places certain restrictions on Gulfmark Energy, Inc., one~~software as a service (SaaS) electronic payment technologies to medical providers, payers and patients including VestaCare’s product offering, VestaPay™. VestaPay™ allows medical care providers to structure fully automated and dynamically updating electronic payment plans for their patients. We account for this investment under the cost method of accounting. During 2017, we reviewed our ~~wholly owned subsidiaries. These restrictions include~~investment in VestaCare and determined that the ~~maintenance~~current projected operating results did not support the carrying value of the investment. As a ~~combined 1.1~~result, during 2017, we recognized an impairment charge of $2.5 million to ~~1.0 current ratio and the maintenance of positive net earnings excluding inventory valuation changes, as defined, among other restrictions. We are currently~~write-off our investment in ~~compliance with all such financial covenants.~~VestaCare. At December 31, ~~2017,~~2023, we ~~had $2.2 million outstanding under this facility. No letter of credit amounts were outstanding at December 31, 2016.~~continue to own an approximate 15 percent equity interest in VestaCare.

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 of ~~three~~two to ~~twenty~~thirty-nine years.

Oil and natural gas exploration and development expenditures were accounted for in accordance with the successful efforts method of accounting. Direct costs of acquiring developed or undeveloped leasehold acreage, including lease bonus, brokerage and other fees, were capitalized. Exploratory drilling costs were initially capitalized until the properties were evaluated and determined to be either productive or nonproductive. These evaluations were made on a quarterly basis. If an exploratory well was determined to be nonproductive, the costs of drilling the well were charged to expense. Costs incurred to drill and complete development wells, including dry holes, were capitalized. At December 31, 2017 and 2016, we had no unevaluated or “suspended” exploratory drilling costs. In April 2017, our upstream crude oil and natural gas exploration and production subsidiary was deconsolidated and accounted for under the cost method of accounting (see Notes 1 and 3 for further discussion).

We capitalize interest costs, if any, incurred in connection with major capital expenditures while the asset is in its construction phase. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life as a component of depreciation expense. When capitalized interest is recorded, it reduces interest expense.

Asset retirement obligations (“AROs”) are legal obligations associated with the retirement of tangible long-lived assets that result from their acquisition, construction, development and/or normal operation. When an ARO is incurred, we record a liability for the ARO and capitalize an equal amount as an increase in the carrying value of the related long-lived asset. ARO amounts are measured at their estimated fair value using expected present value techniques. Over time, the ARO liability is accreted to its present value (through accretion expense), and the capitalized amount is depreciated over the remaining useful life of the related long-lived asset. We will incur a gain or loss to the extent that our ARO liabilities are not settled at their recorded amounts.

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

Stock-Based Compensation

We measure all share-based payment awards, including the issuance of restricted stock unit awards and performance share unit awards 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 is 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 15 for additional information regarding our 2018 LTIP.

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The fair market value of the common shares issued in this transaction was determined based upon the closing share price of AE common stock on August 12, 2022 of $33.75, discounted to present value using the appropriate discount rate.

We accounted for the acquisition of Firebird and Phoenix under the acquisition method in accordance with ASC 805, Business Combinations. The allocation of purchase consideration was based upon the estimated fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in the acquisition.

During the second quarter of 2023, based upon a review of the terms of the contingent consideration calculation, we determined that no payment would be made to the Sellers, and as such, we adjusted our accrual of $2.6 million that had been recorded as part of the purchase price allocation. The reversal of the accrual for the contingent consideration is included in general and administrative expense on our consolidated statements of operations.

The following table presents the final purchase price allocation of the identifiable assets acquired and liabilities assumed at the acquisition date of August 12, 2022 (in thousands):


Assets acquired:
Cash and cash equivalents	$	2,203
Accounts receivable	4,653
Inventory	643
Other current assets	137
Property and equipment	24,809
Intangible assets	7,607
Goodwill	6,673
Other assets	458
Total assets acquired	$	47,183

Liabilities assumed:
Accounts payable and other accrued liabilities	$	(1,696)
Deferred tax liabilities	(6,207)
Total liabilities assumed	$	(7,903)
Net assets acquired	$	39,280

The purchase price allocation was subject to revision as acquisition-date fair value analyses were completed and if additional information about facts and circumstances that existed at the acquisition date became available. During the second quarter of 2023, we revised the fair value of certain tractors and trailers, resulting in a decrease in the amount allocated to property and equipment of $0.2 million and with a corresponding increase in goodwill. No other changes to the purchase price allocation occurred. The purchase price consideration, as well as the estimated fair values of the assets acquired and liabilities assumed, was finalized during the second quarter of 2023.

The estimated fair value of the acquired property and equipment was determined using a combination of the cost approach and the market approach, specifically determining the replacement cost value of each type of asset.

Acquired identifiable intangible assets consists of approximately $5.1 million for customer relationships, $2.2 million for trade names, and $0.3 million for noncompete agreements entered into with the Sellers in connection with the acquisition. The estimated fair value of the acquired customer relationship intangible assets was determined using an income approach, specifically a discounted cash flow analysis, and are being amortized on a modified straight-line basis over a period of ten years, with the amortization more heavily weighted in the earlier years. The income approach estimates the future benefits of the customer relationships and deducts the expenses incurred in servicing the relationships and the contributions from the other business assets to derive the future net

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

benefits of these assets. The future net benefits are discounted back to present value using the appropriate discount rate, which results in the value of the customer relationships. The estimated fair value of the trade names was determined using the relief from royalty method, a form of the income approach, and are being amortized on a straight-line basis over a period of 15 years. The estimated fair value of the noncompete agreements was determined using an income approach, specifically a discounted cash flow analysis, and are being amortized over a period of five years.

The goodwill of approximately $6.7 million arising from this acquisition is primarily attributed to our ability to generate increased revenues, earnings and cash flow by expanding our addressable market and client base and with the assembled workforce that we acquired. None of the goodwill is expected to be deductible for tax purposes. We recorded net tax liabilities of approximately $6.2 million related to the tax effect of our estimated fair value allocations.

The discounted cash flow analysis used to estimate the fair value of the Firebird and Phoenix intangible assets relied on Level 3 fair value inputs. Level 3 fair values are based on unobservable inputs. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset at the measurement date. The valuations were based on the information that was available as of the acquisition date, and the expectations and assumptions that have been deemed reasonable by our management. There are inherent uncertainties and management judgment required in these determinations. The fair value measurements of the assets acquired and liabilities assumed were based on valuations involving significant unobservable inputs, or Level 3 in the fair value hierarchy.

This newly acquired business contributed $22.3 million of revenues and $0.2 million of net earnings to our consolidated revenues and net earnings, respectively, for the period from acquisition through December 31, 2022. We incurred approximately $0.4 million of acquisition costs in connection with this acquisition, which have been expensed in general and administrative expense as incurred.

In connection with the acquisition of Firebird and Phoenix, we entered into four operating lease agreements for office and terminal locations with Scott Bosard, one of the Sellers, for periods ranging from two to five years (see Note 10 and Note 17 for further information).

Unaudited Pro Forma Financial Information

The unaudited pro forma condensed consolidated results of operations in the table below are provided for illustrative purposes only and summarize the combined results of our operations and those of Firebird and Phoenix. For purposes of this pro forma presentation, the acquisition of Firebird and Phoenix is assumed to have occurred on January 1, 2021. The pro forma financial information for all periods presented also includes the estimated business combination accounting effects resulting from this acquisition, notably amortization expense from the acquired intangible assets and certain other integration related impacts. This unaudited pro forma financial information should not be relied upon as being indicative of the historical results that would have been obtained if the acquisition had actually occurred on January 1, 2021, nor of the results of operations that may be obtained in the future (in thousands).


	Year Ended December 31,
	2022		2021

Revenues	$	3,411,168	$	2,074,803
Net earnings	5,538		13,822

Basic net earnings per common share	$	1.36	$	3.22
Diluted net earnings per common share	$	1.35	$	3.19

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 7. Other Assets

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


	December 31,
	2023		2022

Insurance collateral deposits	$	605	$	463
State collateral deposits	23		23
Materials and supplies	1,050		1,257
Debt issuance costs	1,259		1,595
Other	371		360
Total other assets	$	3,308	$	3,698

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~~expected losses under our insurance policies. 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.~~

programs. Insurance collateral deposits are invested at the discretion of our insurance carrier. ~~This fair value measure relies on inputs~~

Note 8. Intangible Assets and Goodwill

Intangible Assets

The following table summarizes our intangible assets at the dates indicated (in thousands):


	December 31, 2023						December 31, 2022
	Gross		Accumulated				Gross		Accumulated
	Value		Amortization		Net		Value		Amortization		Net
Customer relationships:
EH Transport (1)	$	1,703	$	(1,237)	$	466	$	1,703	$	(1,010)	$	693
CTL (2)	3,173		(1,745)		1,428		3,173		(1,286)		1,887
Phoenix (3)	5,072		(1,223)		3,849		5,072		(360)		4,712
Total customer relationships	9,948		(4,205)		5,743		9,948		(2,656)		7,292
Trade names (3)	2,218		(205)		2,013		2,218		(57)		2,161
Noncompete agreements (3)	317		(88)		229		317		(25)		292
Intangible assets, net	$	12,483	$	(4,498)	$	7,985	$	12,483	$	(2,738)	$	9,745

____________

(1)Amount relates to the acquisition of transportation assets from ~~quoted prices for similar~~EH Transport, Inc. in 2019, and are included in our transportation segment. These assets are being amortized using a modified straight-line approach and ~~is thus categorized as~~have a ~~“Level 3” valuation~~remaining useful life of approximately 2.5 years.

(2)Amount relates to the acquisition of transportation assets from Comcar Industries, Inc. in 2020, and are included in our transportation segment. These assets are being amortized using a modified straight-line approach and have a remaining useful life of approximately 3.5 years.

(3)Amounts relate to the ~~fair value hierarchy (see~~acquisition of Firebird and Phoenix in 2022, and are included in our logistics and repurposing segment. Customer relationships, trade names and noncompete agreements have remaining useful lives of approximately 8.5 years, 13.5 years and 3.5 years, respectively. See Note 106 for further ~~information).~~information.

~~Note 7. Investments in Unconsolidated Affiliates~~

~~At December 31, 2017, we had no remaining balances in our medical-related investments. We currently do not have any plans to pursue additional medical-related investments.~~

~~Bencap~~

In December 2015, we formed a new wholly owned subsidiary, Adams Resources Medical Management, Inc. (“ARMM”), and in January 2016, ARMM acquired a 30 percent member interest in Bencap LLC (“Bencap”) for a $2.2 million cash payment. Bencap provides medical insurance brokerage and medical claims auditing services to employers utilizing ERISA governed employee benefit plans. We accounted for this investment under the equity method of accounting.

Under the terms of the investment agreement, Bencap had the option to request borrowings from us of up to $1.5 million (on or after December 5, 2016 but before October 31, 2018) that we were required to provide or forfeit our 30 percent member interest. During 2016, our management determined that we were unlikely to provide additional funding due to Bencap’s lower than projected revenue growth and operating losses since investment inception. We completed a review of our equity method investment in Bencap during 2016 and determined that there was an other than temporary impairment. During the third quarter of 2016, we recognized an after-tax net loss of $1.4 million to write-off our investment in Bencap, which consisted of a pre-tax impairment charge of approximately $1.7 million, pre-tax losses from the equity method investment of $0.5 million and an income tax benefit of $0.8 million. In February 2017, in accordance with the terms of the investment agreement, Bencap requested additional funding of approximately $0.5 million from us. We declined the additional funding request and as a result, forfeited our 30 percent member interest in Bencap. At December 31, 2017, we had no further ownership interest in Bencap.

~~VestaCare~~

In April 2016, ARMM acquired an approximate 15 percent equity interest (less than 3 percent voting interest) in VestaCare, Inc., a California corporation (“VestaCare”), for a $2.5 million cash payment. VestaCare provides an array of software as a service (SaaS) electronic payment technologies to medical providers, payers and patients including VestaCare’s most recent product offering, VestaPay™. VestaPay™ allows medical care providers to structure fully automated and dynamically updating electronic payment plans for their patients. We account for this investment under the cost method of accounting. During the third quarter of 2017, we reviewed our investment in VestaCare and determined that the current projected operating results did not support the carrying value of the investment. As such, during the third quarter of 2017, we recognized an impairment charge of $2.5 million to write-off our investment in VestaCare. At December 31, 2017, we continue to own an approximate 15 percent equity interest in VestaCare.

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~AREC~~

~~As a result of AREC’s voluntary bankruptcy filing in April 2017~~During the years ended December 31, 2023, 2022 and ~~our loss of control of AREC, we deconsolidated AREC in April 2017, and~~2021, we recorded $1.8 million, $1.2 million and $0.8 million, respectively, of amortization expense related to these intangible assets.

The following table presents our ~~investment~~forecast of amortization expense associated with these intangible assets for the years indicated (in thousands):


	2024		2025		2026		2027		2028









Amortization expense	$	1,658	$	1,555	$	1,306	$	908	$	575

Customer Relationship Intangible Assets. Customer relationship intangible assets represent the estimated economic value assigned to commercial relationships acquired in ~~this subsidiary under~~connection with business and asset acquisitions. The estimated fair value of each customer relationship intangible asset was determined at the ~~cost method~~time of ~~accounting. We recorded~~acquisition using a ~~non-cash charge during~~discounted cash flow analysis, which incorporated various assumptions regarding the ~~second quarter~~acquired business or assets. The assumptions may include Level 3 fair value inputs, including the rate of ~~2017~~retention of ~~approximately $1.6 million~~the customers of the acquisition, the rate of retention of our existing business and projected future revenues associated with the ~~deconsolidation~~customers. The customer relationship intangible assets are being amortized in a manner that closely resembles the pattern in which we expect to benefit from the relationships.

Trade Names and Noncompete Agreements Intangible Assets. Trade names intangible assets represent the estimated economic value of ~~AREC,~~the commercial trade names acquired in connection with the Firebird and Phoenix acquisition in August 2022. The trade names intangible assets are being amortized on a straight-line basis over the period in which ~~reflected~~we expect to benefit from the use of the trade names.

Noncompete agreements intangible assets represent the estimated economic value of the three noncompete agreements that we entered into with the former owners of Firebird and Phoenix. The noncompete agreements intangible assets are being amortized on a straight-line basis over the term of the agreements.

Goodwill

Goodwill represents the cost of an acquired business in excess of the fair value of the net assets of AREC over its estimated fair value based on the expected sales transaction price, net of estimated transaction costs. As a result of the sale of substantially all of AREC’s assets during the third quarter of 2017, we recognized an additional loss of $1.9at acquisition. Our goodwill balance was $6.7 million ~~which represents the difference between the net proceeds we expect to be paid upon settlement of the bankruptcy, net of anticipated remaining closing costs identified as part of the liquidation plan,~~at December 31, 2023 and ~~the book value of our cost method investment. In December 2017, we received proceeds of approximately $2.8 million from AREC related~~relates to the ~~settlement of a portion of the bankruptcy process. At December 31, 2017,~~Firebird and Phoenix acquisition included in our remaining investment in AREC was $0.4 million (see Note 3 for further information). The remaining investment will be removed upon settlement of the bankruptcy, which is anticipated during the first half of 2018.logistics and repurposing segment.

~~Table of Contents~~

~~ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

Note 8.9. Segment Reporting

~~Historically, our three reporting segments have been:~~We operate and report in four business segments: (i) crude oil marketing, transportation and ~~storage,~~storage; (ii) tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk; (iii) pipeline transportation, terminalling and storage of crude oil; and (iv) interstate bulk transportation logistics of crude oil, condensate, fuels, oils and ~~ISO tank container storage~~other petroleum products and ~~transportation,~~recycling and ~~(iii) upstream~~repurposing of off-specification fuels, lubricants, crude oil and ~~natural gas exploration~~other chemicals. Our business segments are generally organized and ~~production. Our upstream crude oil and natural gas exploration and production wholly owned subsidiary filed for bankruptcy in April 2017 (see~~managed according to the types of services rendered. See Note 3 for ~~further information), and as~~ a ~~result of our loss of control~~summary of the ~~wholly owned subsidiary, AREC was deconsolidated~~types of products and services from which each segment derives its revenues.

Our Chief Operating Decision Maker (“CODM”) (our Chief Executive Officer) evaluates segment performance based on measures including segment operating earnings (losses) and capital spending (property and equipment additions). Segment operating earnings (losses) is ~~accounted for under the cost method of accounting. AREC remained a reportable~~calculated as segment ~~until its deconsolidation, effective April 30, 2017.~~revenues less segment operating costs and depreciation and amortization expense.

~~Information concerning our various business activities was follows for the periods indicated (in thousands):~~

Reporting Segments
Marketing Transportation Oil and Gas Total

Year Ended December 31, 2017
Revenues $ 1,267,275
$ 53,358
$ 1,427
$ 1,322,060
Segment operating (losses) earnings ^{(1) (2)}
11,700
(544 ) 53
11,209
Depreciation, depletion and amortization 7,812
5,364
423
13,599
Property and equipment additions ⁽³⁾
468
351
1,825
2,644

Year Ended December 31, 2016
Revenues $ 1,043,775
$ 52,355
$ 3,410
$ 1,099,540
Segment operating (losses) earnings ⁽¹⁾
17,045
(48 ) (533 ) 16,464
Depreciation, depletion and amortization 9,997
7,249
1,546
18,792
Property and equipment additions 1,321
6,868
295
8,484

Year Ended December 31, 2015
Revenues $ 1,875,885
$ 63,331
$ 5,063
$ 1,944,279
Segment operating (losses) earnings ^{(1) (4)}
22,895
3,701
(19,016 ) 7,580
Depreciation, depletion and amortization 11,097
7,554
5,066
23,717
Property and equipment additions 2,126
6,579
2,369
11,074

~~_________________~~


~~(1)~~	Our marketing segment’s operating earnings included inventory liquidation gains of $3.3 million and $8.2 million for the years ended December 31, 2017 and 2016, respectively, and inventory valuation losses of $5.4 million for the year ended December 31, 2015.


~~(2)~~	~~Segment operating (losses) earnings includes approximately $0.4 million of costs related to a voluntary early retirement program that was implemented in August 2017.~~


~~(3)~~	Our marketing segment’s property and equipment additions do not include approximately $1.8 million of tractors acquired during the third quarter of 2017 under capital leases. See Note 13 for further information.


~~(4)~~	~~Our crude oil and natural gassegment’s operating earnings included property impairments of $12.1 million for the year ended December 31, 2015.~~

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


	Reporting Segments
	Crude oil marketing		Trans-portation		Pipeline and storage		Logistics and repurposing (1)		Other		Total

Year Ended December 31, 2023
Segment revenues (2)	$	2,585,355	$	98,769	$	3,267	$	65,920	$	—	$	2,753,311
Less: Intersegment revenues (2)	—		(410)		(2,944)		(4,664)		—		(8,018)
Revenues	$	2,585,355	$	98,359	$	323	$	61,256	$	—	$	2,745,293

Segment operating earnings (losses) (3)	17,029		5,091		(3,855)		(934)		—		17,331
Depreciation and amortization	8,042		12,277		1,071		6,473		—		27,863
Property and equipment additions (4) (5)	1,185		5,130		1,503		3,967		112		11,897

Year Ended December 31, 2022
Segment revenues (2)	$	3,232,193	$	112,653	$	3,804	$	24,654	$	—	$	3,373,304
Less: Intersegment revenues (2)	—		(277)		(3,804)		(2,306)		—		(6,387)
Revenues	$	3,232,193	$	112,376	$	—	$	22,348	$	—	$	3,366,917

Segment operating earnings (losses) (3)	15,874		10,891		(3,579)		303		—		23,489
Depreciation and amortization	7,724		11,512		1,077		2,394		—		22,707
Property and equipment additions (4) (5)	4,534		1,608		1,050		282		17		7,491

Year Ended December 31, 2021
Segment revenues (2)	$	1,930,042	$	94,824	$	4,524	$	—	$	—	$	2,029,390
Less: Intersegment revenues (2)	—		(326)		(3,860)		—		—		(4,186)
Revenues	$	1,930,042	$	94,498	$	664	$	—	$	—	$	2,025,204

Segment operating earnings (losses) (3)	25,243		7,104		(2,487)		—		—		29,860
Depreciation and amortization	6,673		12,099		1,025		—		—		19,797
Property and equipment additions (4) (5)	3,245		7,960		1,169		—		8		12,382

_______________

(1)On August 12, 2022, we acquired a transportation logistics and recycling and repurposing business, resulting in a new operating segment. See Note 6 for further information.

(2)Segment revenues include intersegment amounts that are eliminated due to consolidation in operating costs and expenses in our consolidated statements of operations. Intersegment activities are conducted at posted tariff rates where applicable, or otherwise at rates similar to those charged to third parties or rates that we believe approximate market at the time the agreement is executed.

(3)Our crude oil marketing segment’s operating earnings included net inventory valuation losses of $0.8 million, net inventory valuation losses of $2.0 million, and net inventory liquidation gains of $10.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

(4)Our segment property and equipment additions do not include assets acquired under finance leases during the years ended December 31, 2023, 2022 and 2021. See Note 17 for further information.

(5)Amounts included in property and equipment additions for Other are additions for computer or other office equipment and a company vehicle at our corporate headquarters, which were not attributed or allocated to any of our reporting segments.

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Year Ended December 31,
2017 2016 2015

Segment operating earnings $ 11,209
$ 16,464
$ 7,580
General and administrative ⁽¹⁾
(9,707 ) (10,410 ) (9,939 )
Operating earnings (losses) 1,502
6,054
(2,359 )
Loss on deconsolidation of subsidiary (3,505 ) —
—
Impairment of investment in unconsolidated affiliate (2,500 ) —
—
Interest income 1,103
582
327
Interest expense (27 ) (2 ) (13 )
(Losses) earnings before income taxes and investment
in unconsolidated affiliate $ (3,427 ) $ 6,634
$ (2,045 )


	Year Ended December 31,
	2023		2022		2021

Segment operating earnings	$	17,331	$	23,489	$	29,860
General and administrative	(14,932)		(17,718)		(13,701)
Operating earnings	2,399		5,771		16,159
Interest income	1,471		921		243
Interest expense	(3,384)		(1,287)		(746)
Earnings before income taxes	$	486	$	5,405	$	15,656

~~_______________~~


~~(1)~~	~~General and administrative expenses for the year ended December 31, 2017 included approximately $1.0 million of costs related to a voluntary early retirement program we implemented in August 2017.~~

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


	December 31,
	2017		2016		2015
	December 31,								December 31,
	2023						2023	2022		2021

Reporting segment:
Reporting segment:
Reporting segment:
Marketing
Marketing
Marketing	$	134,745	$	107,257	$	96,723
Transportation	29,069		32,120		35,010
Oil and Gas ⁽¹⁾	425		7,279		8,930
Cash and other	118,465		100,216		102,552
Pipeline and storage
Logistics and repurposing (1)
Cash and other (2)
Total assets	$	282,704	$	246,872	$	243,215

~~____________________~~


~~(1)~~	~~At December 31, 2017, amount represents our remaining cost method investment in this segment. See Note 3 for further information.~~

_________________

~~Intersegment sales are insignificant.~~ (1)On August 12, 2022, we acquired a transportation logistics and recycling and repurposing business, resulting in a new operating segment. See Note 6 for further information.

(2)Other identifiable assets are primarily corporate cash, corporate accounts receivable, ~~investments~~properties and ~~properties~~operating lease right-of-use assets not identified with any specific segment of our business.

All of our property and equipment is located in the U.S. Substantially all of our consolidated revenues are earned in the U.S. and derived from a wide customer base. Accounting policies for transactions between ~~reportable~~business segments are consistent with applicable accounting policies as disclosed herein.

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9.10. Transactions with Affiliates

We enter into certain transactions in the normal course of business with affiliated ~~entities including~~entities. Activities with affiliates were as follows for the periods indicated (in thousands):


	Year Ended December 31,
	2023		2022		2021

KSA and affiliate billings to us	$	—	$	7	$	13
Billings to KSA and affiliates	9		21		14
Rentals paid to affiliate of KSA	232		549		605
Payments to an affiliate of KSA for purchase of vehicles (1)	157		78		469
Rentals paid to affiliates of Scott Bosard (2)	562		170		—
Crude oil purchases from affiliate (3)	19,391		4,044		—

_________________

(1)Amounts paid to West Point Buick GMC were for the purchase of three, two and twelve pickup trucks during the years ended December 31, 2023, 2022 and 2021, respectively, and are net of trade-in values.

(2)2022 amounts are for rentals paid to affiliates of Scott Bosard from the period from August 12, 2022 through December 31, 2022, the period in which Scott Bosard is a related party in 2022.

(3)From time to time, GulfMark purchases crude oil from Endeavor Natural Gas, L.P., of which a member of our Board of Directors is the Managing Partner.

Affiliated transactions included direct cost reimbursement for shared phone and administrative ~~services. In addition, we~~services from KSA Industries, Inc. (“KSA”), an affiliated entity. We lease our corporate office space in a building operated by 17 South Briar Hollow Lane, LLC, an affiliate of KSA. In addition, we purchase pickup trucks from West Point Buick GMC, an ~~affiliated entity.~~affiliate of KSA. KSA was our largest shareholder until October 31, 2022.

~~We utilize~~On October 31, 2022, we entered into a Stock Repurchase Agreement (the “Repurchase Agreement”) with KSA and certain members of the family of the late Kenneth Stanley Adams, Jr., our ~~former affiliate, Bencap, to administer certain~~founder (collectively, the “KSA Sellers”). Under the terms of the Repurchase Agreement, we purchased an aggregate of 1,942,433 shares of our ~~employee medical benefit programs including~~common stock from the KSA Sellers for an aggregate purchase price of $69.9 million, at a ~~detail audit~~price of ~~individual medical claims~~$36.00 per share. The purchase price was funded with the proceeds of the $25.0 million term loan under our credit agreement with Cadence Bank (see Note 1312 for further information)~~. Bencap earns a fee~~, with the balance funded with cash on hand at the time of the transaction.

An affiliate of KSA served on our Board of Directors through the date of our 2023 annual meeting, when he retired. As of May 31, 2023, KSA and its affiliates are no longer related parties. The table above consequently does not reflect any payments to or from usKSA after that date.

In connection with the acquisition of Firebird and Phoenix on August 12, 2022 (see Note 6 for ~~providing such services at a discounted amount~~further information), we entered into four operating lease agreements for office and terminal locations with entities owned by Scott Bosard, one of the Sellers, for periods ranging from ~~its standard charge~~two to ~~non-affiliates. As discussed in Note 7, at December 31, 2017, we have no further ownership interest in Bencap.~~five years.

2018 $ 398
2019 398
2020 398
2021 398
2022 255
Thereafter —
Total minimum lease payments 1,847
Less: Amount representing interest (158 )
Present value of capital lease obligations 1,689
Less current portion of capital lease obligations (338 )
Total long-term capital lease obligations $ 1,351

~~Operating Lease Obligations~~

We lease certain property and equipment under noncancellable and cancelable operating leases. Our significant lease agreements consist of (i) arrangements with independent truck owner-operators for use of their equipment and driver services; (ii) leased office space; and (iii) certain lease and terminal access contracts in order to provide tank storage and dock access for our crude oil marketing business. Currently, our significant lease agreements have terms that range from one to eight years.

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Lease expense is charged to operating costs and expenses on a straight-line basis over the period of expected economic benefit. Contingent rental payments are expensed as incurred. We are generally required to perform routine maintenance on the underlying leased assets. Maintenance and repairs of leased assets resulting from our operations are charged to expense as incurred. Rental expense was as followsOur accruals for ~~the periods indicated (in thousands):~~

Year Ended December 31,
2017 2016 2015

Rental expense $ 12,073
$ 11,314
$ 11,168

At December 31, 2017, rental obligations under non-cancelable operating leases and terminal arrangements with terms in excess of one year for the next five years and thereafter are payable as follows (in thousands):

2018 2019 2020 2021 2022 Thereafter Total

Operating leases $ 2,758
$ 463
$ 68
$ 63
$ 32
$ 23
$ 3,407

~~Insurance Policies~~

~~Under our~~ automobile, ~~and~~ workers’ compensation ~~insurance policies that were in place through September 30, 2017, we pre-funded our estimated losses,~~ 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 totaled as follows at the dates indicated (in thousands):

December 31,
2017 2016

Pre-funded premiums for losses incurred but not reported $ 988
$ 2,657

~~If the potential insurance claims do not further develop, the pre-funded premiums will be returned to us as a premium refund.~~

Effective October 1, 2017, we changed the structure of our automobile and workers’ compensation insurance policies. We have exited the group captive and now establish a liability for expected claims incurred but not reported on a monthly basis as we move forward. As claims are paid, the liability is relieved. At December 31, 2017, our accrual for automobile and workers’ compensation claims was $0.5 million.

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 annual aggregate medical claims ~~exceeding $4.5 million. Medical accrual amounts~~ were as follows at the dates indicated (in thousands):

December 31,
2017 2016

Accrued medical claims $ 1,329
$ 1,411


	December 31,
	2023		2022


Accrued automobile and workers’ compensation claims	$	5,804	$	5,579
Accrued medical claims	997		1,007

~~Table of Contents~~

~~ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

Litigation

AREC was named as a defendant in a number of Louisiana lawsuits involving alleged environmental contamination from prior drilling operations. Such suits typically allege improper disposal of oilfield wastes in earthen pits, with one matter involving allegations that drilling operations in 1986 contributed to the formation of a sinkhole in 2012 (the “Sinkhole Cases”). The Sinkhole Cases, while arising from a singular event, include a number of different lawsuits brought in Louisiana State Court and one consolidated action in the United States District Court for the Eastern District of Louisiana. In addition to the Sinkhole Cases, AREC is also currently involved in two other suits. These suits are styled ~~LePetit Chateau Deluxe v. Adams Resources Exploration Corporation~~ ~~dated March 2004 filed in Acadia Parish, Louisiana, and~~ ~~Henning Management, LLC v. Adams Resources Exploration Corporation~~ ~~dated November 2013 filed in Jefferson Davis Parish, Louisiana. Each suit involves multiple industry defendants with substantially larger proportional interest in the properties. In the~~ ~~LePetit Chateau Deluxe~~ ~~matter, all the larger defendants have settled the case.~~

The plaintiffs in each of these matters are seeking unspecified compensatory and punitive damages. While we do not believe that these claims will result in a material adverse effect on us, significant attorney fees may be incurred to address claims related to these suits. At December 31, 2016, we had $0.5 million accrued for future legal costs for these matters. During May 2017, AREC was dismissed without prejudice as a party to the suit with ~~Henning Management.~~ We also determined that the likelihood of future claims from other remaining litigation was remote. As such, we released the $0.5 million accrual for future legal settlements related to these matters. At December 31, 2017, we had no remaining accruals for legal costs for these matters.

From time to time as incidental to our operations, we may become involved in various lawsuits and/or disputes. ~~Primarily as~~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.~~operations or cash flows.

Guarantees

~~AE issues~~We issue parent guarantees of commitments associated with the activities of ~~its~~our subsidiary companies. The guarantees generally result from subsidiary commodity purchase obligations, subsidiary operating lease commitments and subsidiary banking transactions. The nature of these arrangements is to guarantee the performance of the subsidiary in meeting their respective underlying obligations. ~~The parent~~We would only be called upon to perform under the guarantee in the event of a payment default by the applicable subsidiary company. In satisfying ~~such~~these obligations, ~~the parent~~we would first look to the assets of the defaulting subsidiary company.

At December 31, ~~2017,~~2023, parental guaranteed obligations were approximately ~~$48.2~~$58.2 million. Currently, neither AEwe nor any of ~~its~~our subsidiaries has any other types of guarantees outstanding that require liability ~~recognition.~~recognition, except for the residual value guarantees for certain of our finance leases (see Note 17 for further discussion).

Note ~~14.~~19. Concentration of Credit Risk

We may incur credit risk to the extent our customers do not fulfill their obligations to us pursuant to contractual terms. Risks of nonpayment and nonperformance by our customers are a major consideration in our business, and our credit procedures and policies may not be adequate to sufficiently eliminate customer credit risk. Managing credit risk involves a number of considerations, such as the financial profile of the customer, the value of collateral held, if any, specific terms and duration of the contractual agreement, and the customer’s sensitivity to economic developments. We have established various procedures to manage credit exposure, including initial credit approval, credit limits and rights of offset. We also utilize letters of credit and guarantees to limit exposure.

~~Table of Contents~~

~~ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

Our largest customers consist of large multinational integrated crude oil companies and independent domestic refiners of crude oil. In addition, we transact business with independent crude oil producers, major chemical ~~concerns,~~companies, crude oil trading companies and a variety of commercial energy users. Within this group of customers, we derive approximately 50 percent of our revenues from ~~three~~four to five large crude oil refining customers. While we have ongoing established relationships with certain domestic refiners of crude oil, alternative markets are readily available since we supply less than one percent of U.S. domestic refiner demand. As a fungible commodity delivered to major Gulf Coast supply points, our crude oil sales can be readily delivered to alternative end markets.

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables reflect the percentages of individual customer sales in excess of 10 percent of our consolidated revenues and individual customer receivables in excess of 10 percent of our total consolidated receivables for the periods indicated. We believe that a loss of any of ~~those~~the customers where we currently derive more than 10 percent of our revenues would not have a material adverse effect on our operations as ~~shown in the table below:~~we would be able to replace that customer’s activity with a similar customer or customers.


Individual customer sales						Individual customer receivables in excess
in excess of 10% of revenues						of 10% of total receivables
Year Ended December 31,						December 31,
2023		2022		2021		2023		2022		2021

11.4	%	22.4	%	23.7	%	—	%	—	%	11.5	%
11.1	%	11.3	%	11.6	%	16	%	10.8	%	17.0	%
						23	%	16.0	%	12.6	%

Individual customer sales Individual customer receivables in excess
in excess of 10% of revenues of 10% of total receivables
for the year ended December 31, at December 31,
2017 2016 2015 2017 2016 2015

22.8 % 18.2 % 24.4 % 19.1 % 20.9 % 20.3 %
17.1 % 16.5 % 13.8 % 15.0 % 14.0 % 16.5 %
10.8 % 15.9 % 11.1 % 10.1 % 12.7 %
10.7 % 10.6 % 10.4 %

Table of Contents

~~ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~Note 15. Quarterly Financial Information (Unaudited)~~

~~The following table presents selected quarterly financial data for the periods indicated (in thousands, except per share data):~~

First Second Third Fourth
Quarter Quarter Quarter Quarter
Year Ended December 31, 2017
Revenues $ 303,087
$ 315,202
$ 295,311
$ 408,460
Operating (losses) earnings (1,584 ) 619
(1,290 ) 3,757
Earnings (losses) from continuing operations (860 ) (282 ) (3,033 ) 3,693
Net (losses) earnings (860 ) (282 ) (3,033 ) 3,693

Earnings (losses) per share:
From continuing operations $ (0.20 ) $ (0.07 ) $ (0.72 ) $ 0.88
From investment in unconsolidated
affiliate —
—
—
—
Basic and diluted net (losses) earnings per share $ (0.20 ) $ (0.07 ) $ (0.72 ) $ 0.88

Year Ended December 31, 2016
Revenues $ 250,531
$ 293,163
$ 256,877
$ 298,969
Operating (losses) earnings 2,339
5,601
(1,822 ) (64 )
Earnings (losses) from continuing operations 1,554
3,540
(983 ) (168 )
Net (losses) earnings 1,430
3,404
(2,153 ) (168 )

Earnings (losses) per share:
From continuing operations $ 0.37
$ 0.84
$ (0.23 ) $ (0.04 )
From investment in unconsolidated
affiliate (0.03 ) (0.03 ) (0.28 ) —
Basic and diluted net (losses) earnings per share $ 0.34
$ 0.81
$ (0.51 ) $ (0.04 )

~~Table of Contents~~

~~ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~Note 16. Oil and Gas Producing Activities (Unaudited)~~

Our wholly owned subsidiary, AREC, participated in the exploration and development of domestic crude oil and natural gas properties primarily in the Permian Basin of West Texas and the Haynesville Shale. AREC’s offices were maintained in Houston, and at December 31, 2016, we held an interest in 470 producing wells of which we operated six. As discussed further in Note 3, AREC was deconsolidated effective with its bankruptcy filing in April 2017, and we recorded our investment in AREC under the cost method of accounting in April 2017. During the third quarter of 2017, AREC closed on the sale of substantially all of its assets. As a result of the sales of these assets, we no longer have an ownership interest in any crude oil and natural gas producing activities. In the disclosures and tables below, amounts for 2017 are for the period from January 1, 2017 through April 30, 2017, as a result of the deconsolidation of AREC due to its bankruptcy filing.

~~Crude Oil and Natural Gas Producing Activities~~

~~Total costs incurred in crude oil and natural gas exploration and development activities, all within the U.S., were as follows for the periods indicated (in thousands):~~

Year Ended December 31,
2017 2016 2015
Property acquisition costs:
Unproved $ 4
$ 32
$ 348
Proved —
—
—
Exploration costs:
Expensed 5
291
1,667
Capitalized —
—
—
Development costs 1,815
—
370
Total costs incurred $ 1,824
$ 323
$ 2,385

~~The aggregate capitalized costs relative to crude oil and natural gas producing activities were as follows at the dates indicated (in thousands):~~

December 31,
2017 2016

Unproved crude oil and natural gas properties $ —
$ —
Proved crude oil and natural gas properties —
62,784
Subtotal —
62,784
Accumulated depreciation, depletion and amortization —
(56,426 )
Net capitalized cost $ —
$ 6,358

~~Table of Contents~~

~~ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~Estimated Crude Oil and Natural Gas Reserves~~

The following information regarding estimates of our proved crude oil and natural gas reserves, substantially all located onshore in Texas and Louisiana, was based on reports prepared on our behalf by our independent petroleum engineers. Because crude oil and natural gas reserve estimates are inherently imprecise and require extensive judgments of reservoir engineering data, they are generally less precise than estimates made in conjunction with financial disclosures. The revisions of previous estimates as reflected in the table below result from changes in commodity pricing assumptions and from more precise engineering calculations based upon additional production histories and price changes. As discussed previously, AREC was deconsolidated effective with its bankruptcy filing in April 2017, and we recorded our investment in AREC under the cost method of accounting in April 2017. During the third quarter of 2017, AREC closed on the sale of substantially all of its assets. As a result of the sales of these assets, we no longer have an ownership interested in any crude oil and natural gas producing activities. In the tables below, amounts for 2017 are for the period from January 1, 2017 through April 30, 2017, as a result of the deconsolidation of AREC due to its bankruptcy filing.

~~Proved developed and undeveloped reserves were as follows for the periods indicated (in thousands):~~

Year Ended December 31,
2017 2016 2015
Natural Crude Natural Crude Natural Crude
Gas Oil Gas Oil Gas Oil
(Mcf) (Bbls) (Mcf) (Bbls) (Mcf) (Bbls)
Total proved reserves:
Beginning of year 4,214
187
4,835
226
5,611
318
Revisions of previous estimates —
—
65
24
27
(2 )
Crude oil and natural gas reserves sold (4,067 ) (170 ) (175 ) (4 ) —
(3 )
Extensions, discoveries and other
reserve additions 42
6
151
18
86
13
Production (189 ) (23 ) (662 ) (77 ) (889 ) (100 )
End of year —
—
4,214
187
4,835
226

~~The components of our previously owned proved crude oil and natural gas reserves, all within the U.S., were as follows for the periods indicated (in thousands):~~

Year Ended December 31,
2017 2016 2015
Natural Crude Natural Crude Natural Crude
Gas Oil Gas Oil Gas Oil
(Mcf) (Bbls) (Mcf) (Bbls) (Mcf) (Bbls)

Proved developed reserves —
—
4,214
187
4,813
223
Proved undeveloped reserves —
—
—
—
22
3
Total proved reserves —
—
4,214
187
4,835
226

We had developed internal policies and controls for estimating and recording crude oil and natural gas reserve data. The estimation and recording of proved reserves is required to be in compliance with SEC definitions and guidance. We assigned responsibility for compliance in reserve bookings to the office of President of AREC. No portion of this individual’s compensation was directly dependent on the quantity of reserves booked. Reserve estimates are required to be made by qualified reserve estimators, as defined by Society of Petroleum Engineers’ Standards.

~~Table of Contents~~

~~ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

We employed a third party petroleum consultant, Ryder Scott Company, to prepare our crude oil and natural gas reserve data estimates as of December 31, 2016 and 2015. The firm of Ryder Scott is well recognized within the industry for more than 50 years. As prescribed by the SEC, such proved reserves were estimated using 12-month average crude oil and natural gas prices, based on the first-day-of-the-month price for each month in the period, and year-end production and development costs for each of the years presented, all without escalation.

The process of estimating crude oil and natural gas reserves is complex and requires significant judgment. Uncertainties are inherent in estimating quantities of proved reserves, including many factors beyond the estimator’s control. Reserve engineering is a subjective process of estimating subsurface accumulations of crude oil and natural gas that cannot be measured in an exact manner, and the accuracy of any reserve estimate is a function of the quality of available data and the interpretation thereof. As a result, assessments by different engineers often vary, sometimes significantly. In addition, physical factors such as the results of drilling, testing and production subsequent to the date of an estimate, as well as economic factors such as changes in product prices, may justify revision of such estimates. Accordingly, crude oil and natural gas quantities ultimately recovered will vary from reserve estimates.

~~Standardized Measure of Discounted Future Net Cash Flows from Crude Oil and Natural Gas Operations and Changes Therein~~

The standardized measure of discounted future net cash flows was determined based on the economic conditions in effect at the end of the years presented, except in those instances where fixed and determinable gas price escalations were included in contracts. The disclosures below do not purport to present the fair market value of our previously owned crude oil and natural gas reserves. An estimate of the fair market value would also take into account, among other things, the recovery of reserves in excess of proved reserves, anticipated future changes in prices and costs, a discount factor more representative of the time value of money and risks inherent in reserve estimates. The standardized measure of discounted future net cash flows was as follows for the periods indicated (in thousands):

Year Ended December 31,
2017 2016 2015

Future gross revenues $ —
$ 17,938
$ 23,040
Future costs:
Lease operating expenses —
(12,421 ) (14,524 )
Development costs —
(38 ) (103 )
Future net cash flows before income taxes —
5,479
8,413
Discount at 10% per annum —
(2,002 ) (2,987 )
Discounted future net cash flows before income taxes —
3,477
5,426
Future income taxes, net of discount at 10% per annum —
(1,217 ) (1,899 )
Standardized measure of discounted future net cash flows $ —
$ 2,260
$ 3,527

The estimated value of crude oil and natural gas reserves and future net revenues derived therefrom are highly dependent upon crude oil and natural gas commodity price assumptions. For such estimates, our independent petroleum engineers assumed market prices as presented in the table below:

Year Ended December 31,
2017 2016 2015
Market price:
Crude oil per barrel $ —
$ 38.34
$ 45.83
Natural gas per thousand cubic feet (Mcf) $ —
$ 2.56
$ 2.62

~~Table of Contents~~

~~ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

These prices were based on the unweighted arithmetic average of the prices in effect on the first day of the month for each month of the respective twelve month periods as required by SEC regulations. The prices reported in the reserve disclosures for natural gas included the value of associated natural gas liquids. Crude oil and natural gas reserve values and future net cash flow estimates are very sensitive to pricing assumptions and will vary accordingly.

~~The effect of income taxes and discounting on the standardized measure of discounted future net cash flows was as follows for the periods indicated (in thousands):~~

Year Ended December 31,
2017 2016 2015

Future net cash flows before income taxes $ —
$ 5,479
$ 8,413
Future income taxes —
(1,918 ) (2,945 )
Future net cash flows —
3,561
5,468
Discount at 10% per annum —
(1,301 ) (1,941 )
Standardized measure of discounted future net cash flows $ —
$ 2,260
$ 3,527

~~The principal sources of changes in the standardized measure of discounted future net cash flows were as follows for the periods indicated (in thousands):~~

Year Ended December 31,
2017 2016 2015

Beginning of year $ 2,260
$ 3,527
$ 15,744
Sale of crude oil and natural gas reserves (2,732 ) (350 ) (54 )
Net change in prices and production costs —
(1,391 ) (17,622 )
New field discoveries and extensions, net of future
production costs
94
275
292
Sales of crude oil and natural gas produced, net of production costs (476 ) 87
1,038
Net change due to revisions in quantity estimates —
181
38
Accretion of discount 130
194
1,116
Production rate changes and other (493 ) (945 ) (3,603 )
Net change in income taxes 1,217
682
6,578
End of year $ —
$ 2,260
$ 3,527

~~Results of Operations for Crude Oil and Natural Gas Producing Activities~~

~~The results of crude oil and natural gas producing activities, excluding corporate overhead and interest costs, were as follows for the periods indicated (in thousands):~~

Year Ended December 31,
2017 2016 2015

Revenues $ 1,427
$ 3,410
$ 5,063
Costs and expenses:
Production (951 ) (3,337 ) (7,022 )
Producing property impairment —
(30 ) (10,324 )
Exploration —
—
(1,667 )
Depreciation, depletion and amortization (423 ) (1,546 ) (5,066 )
Operating loss before income taxes 53
(1,503 ) (19,016 )
Income tax benefit (expense) (19 ) 526
6,656
Operating earnings (losses) $ 34
$ (977 ) $ (12,360 )

~~Table of Contents~~


~~Item 9.~~	~~Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.~~

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

On June 7, 2017, we dismissed Deloitte & Touche, LLP (“Deloitte”) as our independent registered public accounting firm. There was no dispute or disagreement with the firm on any issue. On June 7, 2017, we appointed KPMG LLP as our new independent registered public accounting firm to perform independent audit services for the fiscal year ended December 31, 2017.

None.

Item 9A. Controls and Procedures.

Disclosure Controls and Procedures

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

(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.~~

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

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) during the fourth quarter of ~~2017,~~2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL~~

~~OVER FINANCIAL REPORTING AS OF DECEMBER~~Management’s Annual Report on Internal Control Over Financial Reporting as of December 31, ~~2017~~2023

Management of Adams Resources & Energy, Inc. and its consolidated subsidiaries is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is a process designed under the supervision of our Chief Executive ~~Chairman~~Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

Management, including the Company’s Chief Executive ~~Chairman~~Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2017.~~2023. In making this assessment, management used the criteria described in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment, management, including the Company’s Chief Executive ~~Chairman~~Officer and Chief Financial Officer, concluded that internal control over financial reporting was effective as of December 31, ~~2017.~~2023.

~~Table of Contents~~

KPMG LLP has issued its attestation report regarding our internal control over financial reporting. That report is included within this Item 9A (See “Report of Independent Registered Public Accounting Firm”).

Table of Contents

Pursuant to the requirements of Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended, this annual report on Internal Control Over Financial Reporting has been signed below by the following persons on behalf of the registrant and in their respective capacities indicated below on March ~~12, 2018.~~13, 2024.



/s/ ~~Townes G. Pressler~~Kevin J. Roycraft						/s/ ~~Josh C. Anders~~Tracy E. Ohmart
~~Townes G. Pressler~~Kevin J. Roycraft						~~Josh C. Anders~~Tracy E. Ohmart
Chief Executive ~~Chairman~~Officer						Chief Financial Officer

~~REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Adams Resources & Energy, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Adams Resources & Energy, Inc.’s and ~~subsidiaries~~subsidiaries’ (the ~~“Company”)~~Company) internal control over financial reporting as of December 31, ~~2017,~~2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2017,~~2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance ~~sheet~~sheets of the Company as of December 31, ~~2017,~~2023 and 2022, the related consolidated statements of operations, cash flows, and shareholders’ equity ~~and cash flows~~ for each of the ~~year~~years in the three-year period ended December 31, ~~2017,~~2023, and the related notes (collectively, the consolidated financial statements), and our report dated March ~~12, 2018~~13, 2024 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control ~~Over~~over Financial Reporting as of December 31, ~~2017.~~2023. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Table of Contents

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

/s/ KPMG LLP

Houston, Texas

March ~~12, 2018~~13, 2024

Item 9B. Other Information.

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

None.

PART III


~~Item 10.~~	~~Directors, Executive Officers and Corporate Governance.~~

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this item will be included in our definitive Proxy Statement in connection with our ~~2018~~2024 Annual Meeting of Shareholders (the ~~“2018~~“2024 Proxy Statement”), which will be filed with the SEC within 120 days after the end of the fiscal year ended December 31, ~~2017,~~2023, under the headings “Election of ~~Directors”~~Directors,” “Executive Officers,” “Delinquent Section 16(a) Reports” and ~~“Executive Officers”~~“Code of Ethics” and is incorporated herein by reference.


~~Item 11.~~	~~Executive Compensation.~~

Item 11. Executive Compensation.

The information required by this item will be set forth in our ~~2018~~2024 Proxy Statement, which will be filed with the SEC within 120 days after the end of the fiscal year ended December 31, ~~2017,~~2023, under the ~~heading “Executive~~headings “Summary Compensation Table,” “Compensation Overview” and “2023 Director Compensation” and is incorporated herein by reference.

Table of Contents


~~Item 12.~~	~~Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.~~

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item will be set forth in our ~~2018~~2024 Proxy Statement, which will be filed with the SEC within 120 days after the end of the fiscal year ended December 31, ~~2017,~~2023, under the ~~heading “Voting Securities~~headings “Security Ownership of Certain Beneficial Owners and ~~Principal Holders Thereof”~~Management” and “Securities Authorized for Issuance under Equity Compensation Plans” and is incorporated herein by reference.

~~Table of Contents~~


~~Item 13.~~	~~Certain Relationships and Related Transactions, and Director Independence.~~

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this item will be set forth in our ~~2018~~2024 Proxy Statement, which will be filed with the SEC within 120 days after the end of the fiscal year ended December 31, ~~2017,~~2023, under the headings “Transactions with Related ~~Parties”~~Persons” and “Director Independence” and is incorporated herein by reference.


~~Item 14.~~	~~Principal Accounting Fees and Services~~

Item 14. Principal Accountant Fees and Services.

Our independent registered accounting public accounting firm is KPMG LLP, Houston, TX, Auditor Firm ID: 185.

The information required by this item will be set forth in our ~~2018~~2024 Proxy Statement, which will be filed with the SEC within 120 days after the end of the fiscal year ended December 31, ~~2017,~~2023, under the heading “Principal ~~Accounting~~Accountant Fees and Services” and is incorporated herein by reference.

PART IV


~~Item 15.~~	~~Exhibits, Financial Statement Schedules~~

Item 15. Exhibits and Financial Statement Schedules.

(a)The following documents are filed as a part of this annual report:


~~(1)~~	~~Financial Statements: See “Index to Consolidated Financial Statements” beginning on page~~ 34 ~~of this annual report for the financial statements included herein.~~

(1)Financial Statements: See “Index to Consolidated Financial Statements” beginning on page 50 of this annual report for the financial statements included herein.


~~(2)~~	Financial Statement Schedules: The separate filing of financial statement schedules has been omitted because such schedules are either not applicable or the information called for therein appears in the footnotes of our Consolidated Financial Statements.


~~(3)~~	~~Exhibits:~~

(2)Financial Statement Schedules: The separate filing of financial statement schedules has been omitted because such schedules are either not applicable or the information called for therein appears in the footnotes of our Consolidated Financial Statements.

(3)Exhibits:



	Exhibit Number			Exhibit


2.1			Purchase Agreement dated August 12, 2022 by and among GulfMark Asset Holdings, LLC, Scott Bosard, Trey Bosard and Tyler Bosard (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on August 17, 2022).
3.1
			~~3.1~~	Certificate of Incorporation of Adams Resources & Energy, Inc., as amended (incorporated by reference to Exhibit ~~3(a) to~~3.1 of the Annual Report on Form 10-K for the year ended December 31, ~~1987)~~2019).
	3.2			Bylaws of Adams Resources & Energy, Inc., as amended (incorporated by reference to Exhibit ~~3(b)~~3.2 to Current Report on Form ~~10-K for the year ended December 31, 2012)~~8-K filed on November 1, 2022).
			~~3.3~~4.1	~~Adams Resources & Energy, Inc. and Subsidiaries’ Code of Ethics (incorporated by reference to Exhibit 3(d) to Form 10-K for the year ended December 31, 2002).~~
	~~4.1~~	Specimen common stock certificate (incorporated by reference to Exhibit ~~4(a) to~~4.1 of the Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~1991)~~2019).

Table of Contents


Exhibit Number	Exhibit


4.2	~~Credit and Security Agreement between Gulfmark Energy, Inc., Adams Resources Marketing, Ltd., and Wells Fargo Bank, National Association dated August 27, 2009~~Description of Securities Registered Under Section 12 of the Exchange Act (incorporated by reference to Exhibit ~~4(b) to Quarterly~~4.3 of the Annual Report on Form ~~10-Q~~10-K for the ~~period~~year ended ~~September 30, 2009)~~December 31, 2019).
	10.1+	Form of Indemnification Agreement for directors and executive officers (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on May 15, 2015).
	10.2+	~~Retirement Agreement, dated February 26, 2015, by and between~~ Adams Resources & Energy, Inc. Amended and ~~Frank T. “Chip” Webster~~Restated 2018 Long-Term Incentive Plan, effective as of May 10, 2022 (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on ~~February 26, 2015)~~May 10, 2022).
	~~10.3~~10.3+	~~Sixth Amendment to Credit and Security~~Form of Director Restricted Stock Unit Award Agreement ~~dated as of September 28, 2017 between Gulfmark~~under the Adams Resources & Energy, Inc.~~, and Wells Fargo Bank, National Association~~ 2018 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 toof the Quarterly Report on Form 10-Q for the period ended ~~September~~June 30, ~~2017)~~2018).

~~Table of Contents~~


10.4+			Form of Employee Restricted Stock Unit Award Agreement under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q for the period ended June 30, 2018).
10.5+	Form of Employee Performance Share Unit Award Agreement for 2021 Awards under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q for the period ended March 31, 2021). ~~Number~~		~~Exhibit~~
10.6+	Form of Employee Performance Share Unit Award Agreement for 2022 Awards under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q for the period ended March 31, 2022).
	10.4*10.7+	~~Debtor in Possession Credit and Security~~Form of Employee Performance Share Unit Award Agreement for 2023 Awards under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan, as amended (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q for the period ended March 31, 2023).
10.8	At Market Issuance Sales Agreement, dated asDecember 23, 2020, by and between Adams Resources & Energy, Inc. and B. Riley Securities, Inc. (incorporated by reference to Exhibit 1.2 of ~~April 25, 2017~~Form S-3 filed on December 23, 2020).
10.9+	Employment Agreement dated August 12, 2022 by and between Trey Bosard and Phoenix Oil, Inc. (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on August 17, 2022).
10.10+	Change of Control Plan (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed on August 17, 2022).
10.11	Credit Agreement dated October 27, 2022 by and among Adams Resources ~~Exploration Corporation,~~& Energy, Inc., GulfMark Asset Holdings, LLC, Service Transport Company, and Cadence Bank, as ~~Borrower,~~administrative agent, swingline lender and issuing lender, and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on November 1, 2022).
10.12	Amendment No. 1 dated August 2, 2023 to Credit Agreement dated October 27, 2022 by and among Adams Resources & Energy, Inc., GulfMark Asset Holdings, LLC, Service Transport Company, and Cadence Bank, as ~~Lender.~~administrative agent, swingline lender and issuing lender,and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on August 2, 2023).
10.13	Stock Repurchase Agreement dated October 31, 2022 by and among Adams Resources & Energy, Inc., KSA Industries, Inc. and the other parties identified as sellers therein (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on November 1, 2022).
21*	Subsidiaries of the registrant.
	23.1*	Consent of ~~Ryder Scott Company.~~KPMG LLP.
	31.1*	Sarbanes-Oxley Section 302 Certification of Chief Executive 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.

Table of Contents


Exhibit Number	Exhibit


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 Chief Executive Officer pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2*	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.
	~~99.1~~97*	~~Ryder Scott Company Report as of December 31, 2016 (incorporated by reference to Exhibit 99.1 to Annual Report on Form 10-K for the year ended December 31, 2016).~~Adams Resources & Energy, Inc. Incentive Compensation Recoupment Policy.
	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 ~~for~~or furnished (in the case of Exhibits 32.1 and 32.2) with this report.

+ Management contract or compensation plan or arrangement.

Item 16. Form 10-K Summary.


~~Item 16.~~	~~Form 10-K Summary~~

Not applicable.

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 on March ~~12, 2018.~~13, 2024.



ADAMS RESOURCES & ENERGY, INC.
		(Registrant)


	By:	/s/ ~~Townes G. Pressler~~Kevin J. Roycraft
		~~Townes G. Pressler~~Kevin J. Roycraft
		Chief Executive ~~Chairman~~Officer
		(Principal Executive Officer)

	By:	/s/ ~~Josh C. Anders~~Tracy E. Ohmart
		~~Josh C. Anders~~Tracy E. Ohmart
		Chief Financial Officer
		(Principal Financial Officer and Principal
		Accounting Officer)

100

Table of Contents

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated below on March ~~12, 2018.~~13, 2024.


Signature		Title

~~Signature~~	~~Title~~

/s/ Townes G. Pressler	Director and ~~Executive~~ Chairman of the Board
Townes G. Pressler
~~/s/ Larry E. Bell~~		~~Director~~
~~Larry E. Bell~~
/s/ Murray E. Brasseux	Director
Murray E. Brasseux

/s/ Dennis E. Dominic		Director
Dennis E. Dominic

/s/ Michelle A. Earley		Director
Michelle A. Earley

/s/ Richard C. Jenner		Director
Richard C. Jenner

/s/ John O. Niemann Jr.		Director
John O. Niemann Jr.

/s/ ~~E.C. Reinauer, Jr.~~Kevin J. Roycraft		Director
~~E.C. Reinauer, Jr.~~Kevin J. Roycraft
~~/s/ W.R. Scofield~~		~~Director~~
~~W.R. Scofield~~

101



	Year Ended December 31,
	2017		2016		2015

Crude oil
Volume – barrels ⁽¹⁾	11,643		34,200		50,000
Average price per barrel	$	49.44	$	38.07	$	46.51

Natural gas
Volume – Mcf ⁽¹⁾	189,488		662,000		889,000
Average price per Mcf	$	2.86	$	2.26	$	2.46

Natural gas liquids
Volume – barrels ⁽¹⁾	11,204		42,500		42,100
Average price per barrel	$	26.77	$	14.39	$	12.70


	Year Ended December 31,
	2017			2016			2015
	Year Ended December 31,											Year Ended December 31,
	2023									2023	2022		2021

Cash provided by (used in):
Cash provided by (used in):
Cash provided by (used in):
Operating activities
Operating activities
Operating activities	$	26,096		$	6,944		$	25,477
Investing activities	(216		)	(7,768		)	(10,072		)
Financing activities	(3,829		)	(3,711		)	(3,712		)


	December 31,
	2023		2022		2021

Early payments received	$	32,850	$	45,265	$	52,841

Early payments to suppliers	4,546		14,055		5,732



	December 31,
	2017		2016		2015

Early payments received	$	20,078	$	15,032	$	16,770
Cash collateral received	—		—		840
Prepayments to suppliers	—		—		167
Early payments to suppliers	6,100		14,382		11,645



			Payments due by period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years

Capital lease obligations ⁽¹⁾	$	1,847	$	398	$	796	$	653	$	—
Operating lease obligations ⁽²⁾	3,407		2,758		531		95		23
Purchase obligations ⁽³⁾	123,238		123,238		—		—		—
Total contractual obligations	$	128,492	$	126,394	$	1,327	$	748	$	23



	Page Number
PART I
Item 1 and 2.		Business and Properties.	32
Item 1A.		Risk Factors.	914
Item 1B.		Unresolved Staff Comments.	1425
Item 3.1C.		~~Legal Proceedings.~~Cybersecurity.	1525
Item 3.		Legal Proceedings.	27
Item 4.		Mine Safety Disclosures.	1527

PART II
Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	1527
Item 6.		~~Selected Financial Data.~~[Reserved]	1728
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations.	1929
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk.	3349
Item 8.		Financial Statements and Supplementary Data.	3450
Item 9.		Changes in and Disagreements ~~with~~With Accountants on Accounting and Financial Disclosure.	7094
Item 9A.		Controls and Procedures.	7094
Item 9B.		Other Information.	7296

~~PART III~~
Item 9C.		Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	96

PART III
Item 10.		Directors, Executive Officers and Corporate Governance.	7296
Item 11.		Executive Compensation.	7296
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	7297
Item 13.		Certain Relationships and Related Transactions, and Director Independence.	7397
Item 14.		Principal Accountant Fees and Services.	7397

PART IV
Item 15.		Exhibits and Financial Statement Schedules.	7397
Item 16.		Form 10-K Summary.	7499

Signatures			75100


	Tractors ⁽¹⁾	Trailers
	Tractors (1)		Tractors (1)	Trailers (2)

Model Year:
Model Year:
Model Year:
2024
2024
2024
2023
2022
2021
2020
2019
2018	16	—
2017	4	—
2015	19	3
2014	39	23
2013	59	41
2012	7	14
2011	—	75
2008 and earlier	—	45
2010 and earlier
Total	144	201


~~(1)~~	~~Includes 15 tractors that we lease from a third party under a capital lease agreement. See Note 13 in the Notes to Consolidated Financial Statements for further information.~~


	Tractors (1) (2)	Trailers (3)

Model Year:
2024	24	34
2023	37	22
2022	31	51
2021	33	12
2020	129	100
2019	49	—
2018	—	20
2016	—	6
2015	2	75
2014	—	34
2013	—	5
2012	—	28
2008 and earlier	—	348
Total	305	735



			Cash Dividend History
	Price Ranges		Per	Record	Payment
	High	Low	Share	Date	Date
2015
1st Quarter	$73.28	$47.31	$0.22	6/3/2015	6/17/2015
2nd Quarter	$70.00	$39.00	$0.22	9/3/2015	9/17/2015
3rd Quarter	$48.60	$38.88	$0.22	12/2/2015	12/16/2015
4th Quarter	$46.86	$33.55	$0.22	3/11/2016	3/23/2016

2016
1st Quarter	$43.00	$30.00	$0.22	6/3/2016	6/17/2016
2nd Quarter	$44.27	$35.25	$0.22	9/6/2016	9/19/2016
3rd Quarter	$39.47	$29.64	$0.22	12/5/2016	12/19/2016
4th Quarter	$44.00	$35.17	$0.22	3/10/2017	3/24/2017

2017
1st Quarter	$41.99	$34.23	$0.22	6/2/2017	6/16/2017
2nd Quarter	$43.80	$35.64	$0.22	9/6/2017	9/20/2017
3rd Quarter	$42.77	$32.80	$0.22	12/5/2017	12/19/2017
4th Quarter	$50.59	$40.36	$0.22	3/9/2018	3/23/2018


~~(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.~~


~~(2)~~	~~Results for 2017 represents amounts for the period from January 1, 2017 through April 30, 2017.~~


~~(1)~~	~~Volumes for 2017 are only through April 30, 2017 as a result of the deconsolidation of this subsidiary due to its bankruptcy filing.~~


	Year Ended December 31,
	2023		2022 (1)

Revenues	$	61,256	$	22,348
Operating (losses) earnings	(934)		303
Depreciation and amortization	6,473		2,394
Driver commissions	8,927		3,767
Insurance	2,559		776
Fuel	3,673		1,796


~~(1)~~	~~Our marketing segment amount for 2017 does not include approximately $1.8 million of tractors acquired under capital leases.~~


~~(1)~~	(1)Amounts ~~represent our principal contractual commitments, including interest, outstanding under capital leases we entered into during 2017 for certain tractors in our marketing segment.~~


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


~~(3)~~	Amount represents commitments to purchase certain quantities of crude oil substantially in January 2018 in connection with our crude oil marketing activities. These commodity purchase obligations are the basis for commodity sales, which generate the cash flow necessary to meet such purchase obligations.


			Payments due by period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years


Credit Agreement (1)	$	26,942	$	4,094	$	7,612	$	15,236	$	—
Finance lease obligations (2)	29,198		7,463		12,899		8,836		—
Operating lease obligations (3)	6,168		3,009		2,320		821		18
Purchase obligations:
Crude oil marketing — crude oil (4)	137,257		137,257		—		—		—
Tractors and trailers (5)	7,632		7,632		—		—		—
Total contractual obligations	$	207,197	$	159,455	$	22,831	$	24,893	$	18


		Page No.

	~~Page No.~~
~~Reports~~Report of Independent Registered Public Accounting ~~Firms~~Firm	3551

Consolidated Balance Sheets as of December 31, ~~2017~~2023 and ~~2016~~2022		3753

Consolidated Statements of Operations for the Years Ended December 31, ~~2017, 2016~~2023, 2022 and ~~2015~~2021		3854

Consolidated Statements of Cash Flows for the Years Ended December 31, ~~2017, 2016~~2023, 2022 and ~~2015~~2021		3955

Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, ~~2017, 2016~~2023, 2022 and ~~2015~~2021		4056

Notes to Consolidated Financial Statements
Note 1 – Organization and Basis of Presentation		4157
Note 2 – Summary of Significant Accounting Policies		4257
Note 3 – ~~Subsidiary Bankruptcy, Deconsolidation and Sale~~Revenue Recognition		4765
Note 4 – Prepayments and Other Current Assets		4868
Note 5 – Property and Equipment		4969
Note 6 – ~~Cash Deposits and Other Assets~~Acquisition		5070
Note 7 – ~~Investments in Unconsolidated Affiliates~~Other Assets		5173
Note 8 – ~~Segment Reporting~~Intangible Assets and Goodwill		5373
Note 9 – Segment Reporting		74
Note 10 – Transactions with Affiliates		5477
Note 1011 – Other Current Liabilities		78
Note 12 – Long-Term Debt		78
Note 13 – Derivative Instruments and Fair Value Measurements		5581
Note 1114 – Income Taxes		5983
Note 1215 – Stock-Based Compensation Plan		85
Note 16 – Supplemental Cash Flow Information		6188
Note 1317 – Leases		88
Note 18 – Commitments and Contingencies		6191
Note 1419 – Concentration of Credit Risk		6392
~~Note 15 – Quarterly Financial Information (Unaudited)~~		65
~~Note 16 – Oil and Gas Producing Activities (Unaudited)~~	66


							Total
	Common		Contributed		Retained		Shareholders’
	Stock		Capital		Earnings		Equity

Balance, January 1, 2021	$	423	$	13,340	$	135,329	$	149,092
Net earnings	—		—		11,888		11,888
Stock-based compensation expense	—		854		—		854
Shares sold under at-the-market
offering program	9		2,821		—		2,830
Vesting of restricted awards	1		(1)		—		—
Cancellation of shares withheld to cover
taxes upon vesting of restricted awards	—		(101)		—		(101)
Dividends declared:
Common stock, $0.96 per share	—		—		(4,112)		(4,112)
Awards under LTIP, $0.96 per share	—		—		(65)		(65)
Balance, December 31, 2021	433		16,913		143,040		160,386
Net earnings	—		—		3,487		3,487
Stock-based compensation expense	—		1,022		—		1,022
Shares sold under at-the-market
offering program	5		1,719		—		1,724
Vesting of restricted awards	2		(2)		—		—
Cancellation of shares withheld to cover
taxes upon vesting of restricted awards	—		(110)		—		(110)
Issuance of common shares for acquisition	2		423		—		425
Repurchase of common shares	(194)		—		(69,734)		(69,928)
Dividends declared:
Common stock, $0.96 per share	—		—		(3,746)		(3,746)
Awards under LTIP, $0.96 per share	—		—		(83)		(83)
Balance, December 31, 2022	248		19,965		72,964		93,177
Net earnings	—		—		212		212
Stock-based compensation expense	—		1,193		—		1,193
Shares sold under at-the-market
offering program	1		548		—		549
Vesting of restricted awards	4		318		—		322
Cancellation of shares withheld to cover
taxes upon vesting of restricted awards	—		(222)		—		(222)
Dividends declared:
Common stock, $0.96 per share	—		—		(2,434)		(2,434)
Awards under LTIP, $0.96 per share	—		—		(81)		(81)
Balance, December 31, 2023	$	253	$	21,802	$	70,661	$	92,716


	Estimated
		Useful Life
		Useful Life
		Useful Life							December 31,
	in Years							in Years		2023	2022

	Estimated
	Useful Life	December 31,
	in Years	2017			2016

Tractors and trailers ⁽¹⁾	5 – 6	$	88,065		$	89,576
Oil and gas (successful efforts)		—			62,784
Tractors and trailers
Tractors and trailers
Tractors and trailers
Field equipment	2 – 5	18,490			18,282
Finance lease ROU assets (1)
Pipeline and related facilities
Linefill and base gas (2)
Buildings	5 – 39	15,727			15,707
Office equipment	1 – 5	1,929			1,913
Land		1,790			1,790
Construction in progress		275			596
Total		126,276			190,648
Less accumulated depreciation		(96,914		)	(144,323		)
Total property and equipment, at cost
Less accumulated depreciation and amortization
Property and equipment, net		$	29,362		$	46,325


~~(1)~~	2017 includes assets held under capital leases. During the third quarter of 2017, we entered into capital leases for certain tractors in our marketing segment. Gross property and equipment and accumulated amortization associated with assets held under capital leases were $1.8 million and $0.1 million, respectively, at December 31, 2017 (see Note 13 for further information).


~~(1)~~	~~Relates to our upstream crude oil and natural gas exploration and production subsidiary that was deconsolidated in April 2017 as a result of its bankruptcy filing (see Note 3 for further information).~~


Cash	$	35,350
Value of AE common shares issued	1,364
Contingent consideration arrangement	2,566
Fair value of total consideration transferred	$	39,280


~~(1)~~	In connection with the operation of certain crude oil and natural gas properties, we charged related parties for administrative overhead. In late 2016, these charges ended as properties were either plugged and abandoned or operating responsibilities for these properties were transferred to another entity.


~~(2)~~	~~Amount represents fees paid to Bencap through the forfeiture of our investment during the first quarter of 2017. As a result of the investment forfeiture, Bencap is no longer an affiliate.~~


2024	$	2,500
2025	2,500
2026	2,500
2027	14,375
2028	—
Thereafter	—
Total debt maturities	$	21,875



	December 31, 2017
	Balance Sheet Location and Amount
	Current		Other		Current		Other
	Assets		Assets		Liabilities		Liabilities
Asset derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	$	166	$	—	$	—	$	—
Liability derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	—		—		145		—
Less counterparty offsets	—		—		—		—
As reported fair value contracts	$	166	$	—	$	145	$	—



	December 31, 2016
	Balance Sheet Location and Amount
	Current			Other		Current			Other
	Assets			Assets		Liabilities			Liabilities
Asset derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	$	378		$	—	$	—		$	—
Liability derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation	—			—		330			—
Less counterparty offsets	(266		)	—		(266		)	—
As reported fair value contracts	$	112		$	—	$	64		$	—



	Gains (Losses)
	Year Ended December 31,
	2017			2016		2015

Revenues – marketing	$	(26	)	$	243	$	(188	)



	December 31, 2016
	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

Derivatives:
Current assets	$	—	$	378		$	—	$	(266	)	$	112
Current liabilities	—		(330		)	—		266			(64		)
Net value	$	—	$	48		$	—	$	—		$	48



			Fair Value Measurements at the End of the Reporting Period Using
			Quoted Prices
			in Active		Significant
	Carrying		Markets for		Other		Significant		Total
	Value at		Identical Assets		Observable		Unobservable		Non-Cash
	December 31,		and Liabilities		Inputs		Inputs		Impairment
	2017		(Level 1)		(Level 2)		(Level 3)		Loss

Oil and gas properties -
Investment in AREC	$	425	$	—	$	425	$	—	$	3,505
Investment in VestaCare	—		—		—		—		2,500
									$	6,005


~~(1)~~	~~2016 includes a tax benefit of~~ ~~$0.8 million~~ ~~related to losses from our investment in Bencap, and is included in the loss from investment in unconsolidated affiliate category on the consolidated statements of operations.~~


~~(1)~~	~~2016 includes the pre-tax loss from investment in unconsolidated affiliate of $2.2 million.~~