Star Group, L.P.: Form 10-Q for the period ended Jun 30, 2026

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Statement Regarding Forward-Looking Disclosure

This Quarterly Report on Form 10-Q (this “Report”) includes “forward-looking statements” which represent our expectations or beliefs concerning future events that involve risks and uncertainties, including the impact of geopolitical events, such as the ongoing military conflicts in the Middle East, on wholesale product cost volatility, the price and supply of the products that we sell, our ability to purchase sufficient quantities of product to meet our customer’s needs, rapid increases in levels of inflation, the consumption patterns of our customers, our ability to obtain satisfactory gross profit margins, the effect of weather conditions on our financial performance, our ability to obtain new customers and retain existing customers, our ability to make strategic acquisitions, the impact of litigation, natural gas conversions and electrification of heating systems, future global health pandemics, recessionary economic conditions, future union relations and the outcome of current and future union negotiations, the impact of current and future governmental regulations, including federal, state and municipal laws restricting greenhouse gases ("GHG") emissions and federal, state and local environmental, health, and safety regulations, the ability to attract and retain employees, customer credit worthiness, counterparty credit worthiness, marketing plans, cyber-attacks, global supply chain issues, labor shortages and new technology, including alternative methods for heating and cooling residences. All statements other than statements of historical facts included in this Report including, without limitation, the statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere herein, are forward-looking statements. Without limiting the foregoing, the words “believe,” “anticipate,” “plan,” “expect,” “seek,” “estimate,” and similar expressions are intended to identify forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct, and actual results may differ materially from those projected as a result of certain risks and uncertainties. These risks and uncertainties include, but are not limited to, those set forth in this Report under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our Fiscal 2025 Form 10-K under Part I Item 1A “Risk Factors.” Important factors that could cause actual results to differ materially from our expectations (“Cautionary Statements”) are disclosed in this Report and in our Fiscal 2025 Form 10-K. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements. Unless otherwise required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this Report.

Liquid Product Price Volatility

Volatility, which is reflected in the wholesale price of liquid products, including home heating oil, propane and motor fuels, has a larger impact on our business when prices rise. Our customers are sensitive to wholesale product cost increases, and this often leads to customer conservation and increased gross customer losses. As a commodity, the price of the products that we sell is generally impacted by many factors, including economic and geopolitical forces and is closely linked to the price of diesel fuel. The volatility in the wholesale cost of diesel fuel as measured by the New York Mercantile Exchange (“NYMEX”), for the fiscal years ending September 30, 2022, through 2026, on a quarterly basis, is illustrated in the following chart (price per gallon):

(a) On July 31, 2026, the NYMEX ultra low sulfur diesel contract closed at $4.12 per gallon.

On February 28, 2026, the United States launched a joint military operation with Israel against Iran. After which, the wholesale prices of the products that we sell became more volatile and we experienced a significant increase in the cost of our product. The cost of home heating oil, as measured by the New York Mercantile Exchange (“NYMEX”), increased from $2.67 per gallon on February 27, 2026, peaked at $4.61 on March 20, 2026. The significant increase in volatility drove an increase in the cost of hedging instruments used for future price protected accounts and cash requirements for our current hedged inventory. Our seasonal net working capital needs increased to fund these higher costs and contributed to the cash required to finance our operating activities. The Company believes that it may experience a slowing of collection of our accounts receivable over the next few months as our customers respond to higher product prices. Further, interest expense may increase due to higher borrowings to finance higher receivables.

As of June 30, 2026, and continuing into July 2026, the NYMEX heating oil futures prices were in severe backwardation (near term future prices are higher than prices for delivery further out in time). From an inventory cost perspective, backwardation has a discouraging effect on holding physical stocks. When future prices are lower than spot prices, storing heating oil becomes economically unattractive. As of June 30, 2026, we had 10.0 million gallons of heating oil inventory on-hand. For our variable priced customers, selling prices may be elevated in the near term due to higher front-month prices. Per gallon margins for our price protected customers may be adversely impacted as the inventory cost could be higher than the hedge utilized to secure the margin at the time of delivery.

Income Taxes

New Federal Income Tax Legislation

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S., which contains several changes to corporate taxation including changes to depreciation deductions, deductions for interest expense and reinstated 100% bonus depreciation on fixed assets acquired and placed in service after January 19, 2025.

Book versus Tax Deductions

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

Estimated Depreciation and Amortization Expense

Weather Hedge Contracts

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

The Company entered into weather hedge contracts for fiscal years 2026 and 2025. The hedge period runs from November 1 through March 31, taken as a whole. The “Payment Thresholds,” or strikes, are set at various levels and are referenced against degree days for the prior ten year average. Under these contracts, the maximum amount the Company could receive is $15.0 million and the Company is additionally obligated to make an annual payment capped at $5.0 million if degree days exceed the Payment Threshold.

The temperatures experienced during the hedge periods through March 31, 2026, and March 31 2025, were colder than the strike prices in the weather hedge contracts. As a result, as of March 31, 2026, and March 31, 2025, we increased delivery and branch expense and recorded a payable under those weather hedge contracts of $5.0 million and $3.1 million, respectively. The amounts were paid in full in April 2026 and April 2025, respectively.

For fiscal 2027, the Company entered into a weather hedge contract with the same hedge period as described above; November 1 through March 31. The maximum that the Company can receive is $12.5 million annually and we are not obligated to make an annual payment if degree days exceed the Payment Threshold.

Tariffs

In April 2025, the U.S. government announced a baseline tariff of 10% on certain products imported from all countries and an additional individualized reciprocal tariff on some countries, including Canada and China. These tariffs terminated on February 24, 2026 following the U.S. Supreme Court’s decision in Learning Resources, Inc. v. Trump holding these tariffs to be unlawful. In the aftermath of the Supreme Court’s decision, the Trump administration imposed a temporary 10% global tariff on worldwide imported goods, which temporary tariffs automatically expired on July 24, 2026. The Trump administration replaced the expired temporary tariffs with a new tariff regime in reliance upon Section 301 of the Trade Act of 1976 which authorizes the president to issue tariffs if the U.S. government finds evidence that other countries engaged in unfair trade practices. Current uncertainties about tariffs and their effects on trading relationships may affect the cost and availability of the Company's assets, such as trucks, and potentially the products and services we sell as well as potentially contribute to inflation in the markets in which we operate. We are continuing to monitor the economic effects of such announcements, as well as opportunities to mitigate their related impacts, costs and other effects associated with the tariffs; however, these impacts remain uncertain.

Per Gallon Gross Profit Margins

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

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

At July 31, 2026, over 92% of the hedges for our ceiling customers were at their strike price (ceiling), which reduces the potential for per gallon margin expansion for these customers unless the price for home heating oil declines.

Derivatives

FASB ASC 815-10-05 Derivatives and Hedging requires that derivative instruments be recorded at fair value and included in the consolidated balance sheet as assets or liabilities. We follow hedge accounting for our interest rate swaps; to the extent our interest rate derivative instruments designated as cash flow hedges are effective, as defined under this guidance, changes in fair value are recognized in other comprehensive income until the forecasted hedged item is recognized in earnings. We have opted out of, and do not follow hedge accounting for our commodity derivative instruments as hedging instruments, as a result, the changes in fair value of the commodity derivative instruments are recognized in our statement of operations. Therefore, we experience volatility in earnings as outstanding derivative instruments are marked-to-market and non-cash gains and losses are recorded prior to the sale of the commodity to the customer. The volatility in any given period related to unrealized non-cash gains or losses on derivative instruments can be significant to our overall results. However, we ultimately expect those gains and losses to be offset by the cost of product when purchased.

Customer Attrition

We measure net customer attrition on an ongoing basis for our full service residential and commercial home heating oil and propane customers. Net customer attrition is the difference between gross customer losses and customers added through marketing efforts. Customers added through acquisitions are not included in the calculation of gross customer gains. However, additional customers that are obtained through marketing efforts or lost at newly acquired businesses are included in these calculations from the point of closing going forward. Customer attrition percentage calculations include customers added through acquisitions in the denominators of the calculations on a weighted average basis from the closing date. Gross customer losses are the result of a number of factors, including price competition, move-outs, credit losses, natural gas and electric conversions and service disruptions. When a customer moves out of an existing home, we count the “move out” as a loss, and, if we are successful in signing up the new homeowner, the “move in” is treated as a gain. Customers sourced by our buying group and association partners are included in our home heating oil and propane customer base. Therefore, any changes in the relationships with these partners could impact gross customer gains and losses going forward.

Customer gains and losses of home heating oil and propane customers

25

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

For the nine months ended June 30, 2026, the Company lost 11,000 accounts (net), or 2.7% of its home heating oil and propane customer base, compared to 13,000 accounts lost (net), or 3.1% of its home heating and oil propane customer base in the prior year comparable period. Gross customer gains were 1,300 accounts higher and gross customer losses were 700 accounts lower than the prior year's comparable period.

During the nine months ended June 30, 2026, we estimate that we lost 1.0% of our home heating oil and propane accounts to natural gas and electricity conversions, consistent with the 1.0% and 1.1% lost for the nine months ended June 30, 2025 and 2024, respectively. Losses to natural gas and electricity in our footprint for the heating oil and propane industry could be greater or less than the Company’s estimates.

Acquisitions

The timing of acquisitions and the types of products sold by acquired companies impact year-over-year comparisons. During the nine months ended June 30, 2026, the Company acquired one heating oil business for approximately $1.0 million. During fiscal 2025, the Company acquired one heating oil and three propane businesses for approximately $80.5 million. The following tables detail the Company’s acquisition activity and the associated volume sold during the 12-month period prior to the date of acquisition.

(in thousands of gallons)

Fiscal 2026 Acquisitions

(in thousands of gallons)

Fiscal 2025 Acquisitions

Protected Price Account Renewals

A substantial majority of the Company’s price-protected customers have agreements with us that are subject to annual renewal in the period between April and November of each fiscal year. If a significant number of these customers elect not to renew their price-protected agreements with us and do not continue as our customers under a variable price-plan, the Company’s near term profitability, liquidity and cash flow will be adversely impacted. As of July 31, 2026, the wholesale cost of home heating oil as measured by the New York Mercantile Exchange was $4.12 per gallon, approximately $1.72 per gallon higher than at July 31, 2025.

Based on these recent prices, our price-protected customers will be offered renewal contracts at significantly higher prices than last year, which, has adversely impacted the acceptance rate of these renewals.

Seasonality

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

Degree Day

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

Every ten years, the National Oceanic and Atmospheric Administration (“NOAA”) computes and publishes average meteorological statistics, including the average temperature for the last 30 years by geographical location, and the corresponding degree days. The latest and most widely used data covers the years from 1991 to 2020. Our calculations of “normal” weather are based on these published 30 year averages for heating degree days, weighted by volume for the locations where we have existing operations.

Consolidated Results of Operations

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

Three Months Ended June 30, 2026

Compared to the Three Months Ended June 30, 2025

Volume

For the three months ended June 30, 2026, retail volume of home heating oil and propane sold decreased by 3.4 million gallons, or 9.4%, to 32.8 million gallons, compared to 36.2 million gallons for the three months ended June 30, 2025. For those locations where we had existing operations during both periods, which we sometimes refer to as our “base business” (i.e., excluding acquisitions), temperatures (measured on a heating degree day basis) for the three months ended June 30, 2026, were 15.9% colder than the three months ended June 30, 2025, and 5.9% warmer than normal, as reported by NOAA. For the twelve months ended June 30, 2026, net customer attrition for the base business was 4.2%. The impact of fuel conservation, along with any period-to-period differences in delivery scheduling, the timing of accounts added or lost during the fiscal years, equipment efficiency, and other volume variances not otherwise described, are included in the chart below under the heading “Other.” An analysis of the change in the retail volume of home heating oil and propane, which is based on management’s estimates, sampling, and other mathematical calculations and certain assumptions, is found below:

(in millions of gallons)

(a) During this non heating season period, degree days increased by 15.9% while average temperatures from April 1 to May 31, 2026 were just 2% colder than April 1 to May 31, 2025.

The following table sets forth the percentage by volume of total home heating oil and propane sold to residential variable-price customers, residential price-protected customers and commercial/industrial/other customers for the three months ended June 30, 2026, compared to the three months ended June 30, 2025:

Volume of motor fuel and other petroleum products sold decreased by 2.9 million gallons, or 9.2%, to 29.1 million gallons for the three months ended June 30, 2026, compared to 32.0 million gallons for the three months ended June 30, 2025.

Product Sales

For the three months ended June 30, 2026, product sales increased by $50.8 million, or 23.5%, to $267.0 million, compared to $216.2 million for the three months ended June 30, 2025, due to an increase in average selling prices that was driven by an increase in combined wholesale product cost of $1.0359 per gallon, or 48.9% calculated on a weighted average, partially offset by a decrease in total volume sold of 9.3%.

Installations and Service

For the three months ended June 30, 2026, installation and service revenue increased by $1.6 million, or 1.8%, to $91.1 million, compared to $89.5 million for the three months ended June 30, 2025.

Cost of Product

For the three months ended June 30, 2026, cost of product increased $50.7 million, or 35.1%, to $195.2 million, compared to $144.5 million for the three months ended June 30, 2025, due to an increase in combined wholesale product cost of $1.0359 per gallon, or 48.9% calculated on a weighted average basis, partially offset by a decrease in total volume sold of 9.3%. Product volumes and wholesale product cost include heating oil, propane, motor fuels and other petroleum products.

Gross Profit — Product

The table below calculates our per gallon margins and reconciles product gross profit for home heating oil and propane and motor fuel and other petroleum products. We believe the change in home heating oil and propane margins should be evaluated before the effects of increases or decreases in the fair value of derivative instruments, as we believe that realized per gallon margins should not include the impact of non-cash changes in the market value of hedges before the settlement of the underlying transactions. On that basis, home heating oil and propane margins, for the three months ended June 30, 2026, increased by $0.1368 per gallon, or 8.3%, to $1.7915 per gallon, from $1.6547 per gallon during the three months ended June 30, 2025. Going forward, we cannot assume that per gallon margins realized during the three months ended June 30, 2026, are sustainable especially with the volatility in heating oil and propane costs. Product sales and cost of product include home heating oil, propane, other petroleum products and liquidated damages billings.

For the three months ended June 30, 2026, total product gross profit was $71.8 million, which was $0.1 million, or 0.2%, higher than the three months ended June 30, 2025, due to increase in home heating oil and propane margins ($4.5 million) and an increase in gross profit from other petroleum products ($1.3 million), partially offset by a decrease in home heating oil and propane volume sold ($5.7 million).

Cost of Installations and Service

Total installation costs, for the three months ended June 30, 2026, decreased by $1.5 million or 5.5%, to $25.8 million, compared to $27.3 million of installation costs for the three months ended June 30, 2025. Installation costs as a percentage of installation sales were 78.8% for the three months ended June 30, 2026, and 82.0% for the three months ended June 30, 2025. The gross profit from installation increased by $1.0 million, compared to the three months ended June 30, 2025.

Service expense increased by $1.8 million, or 3.7%, to $49.7 million for the three months ended June 30, 2026, representing 85.2% of service sales, versus $47.9 million, or 85.4% of service sales, for the three months ended June 30, 2025. A large proportion of our service expenses are incurred under fixed-fee prepaid service contract arrangements, therefore trends in service expenses may not directly correlate to trends in the related revenues. The gross profit from service increased by $0.4 million compared to the three months ended June 30, 2025.

We realized a combined gross profit from service and installation of $15.6 million for the three months ended June 30, 2026 compared to a gross profit of $14.2 million for the three months ended June 30, 2025, a $1.4 million increase.

(Increase) Decrease in the Fair Value of Derivative Instruments

During the three months ended June 30, 2026, the change in the fair value of derivative instruments resulted in an $8.0 million charge due to a $7.7 million charge due to the expiration of certain hedged positions and a $0.3 million decrease in the market value for unexpired hedges.

During the three months ended June 30, 2025, the change in the fair value of derivative instruments resulted in a $0.6 million credit as a decrease in the market value for unexpired hedges (a $2.2 million charge) was more than offset by a $2.8 million credit due to the expiration of certain hedged positions.

Delivery and Branch Expenses

For the three months ended June 30, 2026, delivery and branch expense increased $8.3 million, or 9.2%, to $98.9 million, compared to $90.6 million for the three months ended June 30, 2025. The increase was driven by a $6.2 million increase in insurance related expenses primarily due to adverse claims development, and $2.1 million of salaries, benefits and other net expense increases.

Depreciation and Amortization Expenses

For the three months ended June 30, 2026, depreciation and amortization expenses decreased $0.9 million, or 9.4%, to $8.3 million, compared to $9.2 million for the three months ended June 30, 2025, primarily due to intangible assets that fully amortized in the prior fiscal year.

General and Administrative Expenses

For the three months ended June 30, 2026, general and administrative expenses increased by $0.4 million or 6.3%, to $8.0 million, from $7.6 million for the three months ended June 30, 2025, due primarily to a $0.3 million increase in profit sharing expense and a $0.1 million increase in salaries and benefits expenses. The Company accrues approximately 6.0% of Adjusted EBITDA as defined in its profit sharing plan for distribution to its employees. This amount is payable if/when the Company achieves Adjusted EBITDA of at least 70% of the amount budgeted. The dollar amount of the profit sharing pool adjusts accordingly based on Adjusted EBITDA levels achieved.

Finance Charge Income

For the three months ended June 30, 2026, finance charge income increased $0.1 million or 5.9%, to $1.9 million, from $1.8 million for the three months ended June 30, 2025.

Interest Expense, Net

For the three months ended June 30, 2026, interest expense was $3.6 million, essentially unchanged from the three months ended June 30, 2025. Average borrowings increased by $4.9 million from $203.5 million for the three months ended June 30, 2025, to $208.4 million for the three months ended June 30, 2026, and were offset by the weighted average interest rate decline from 7.0% for the three months ended June 30, 2025, to 6.6% for the three months ended June 30, 2026. To hedge against rising interest rates, the Company utilizes interest rate swaps. At June 30, 2026, approximately 41% of borrowings under Star's variable-rate long term debt were not subject to interest rate changes as a result of interest rate swaps.

Amortization of Debt Issuance Costs

For the three months ended June 30, 2026, amortization of debt issuance cost was $0.3 million, essentially unchanged from the three months ended June 30, 2025.

Income Tax Benefit

For the three months ended June 30, 2026, the Company’s income tax benefit increased by $3.4 million to $9.9 million, from $6.5 million for the three months ended June 30, 2025. The increase in the income tax benefit was driven by a $14.8 million increase in the loss before income taxes.

Net Loss

For the three months ended June 30, 2026, Star’s net loss increased $11.4 million, to $28.0 million, compared to the three months ended June 30, 2025, primarily due to an unfavorable change in the fair value of derivative instruments of $8.6 million and a $7.1 million increase in the Adjusted EBITDA loss that was partially offset by a $3.4 million increase in income tax benefit and a $0.9 million decrease in depreciation and amortization expenses.

Adjusted EBITDA Loss

For the three months ended June 30, 2026, Adjusted EBITDA loss increased $7.1 million, to $17.7 million, compared to the three months ended June 30, 2025, as higher home heating oil and propane per gallon margins, an improvement in service and installation profitability and the additional gross profit from other petroleum products was more than offset by higher operating expenses and lower home heating oil and propane volume sold.

EBITDA and Adjusted EBITDA should not be considered as an alternative to net income, as an indicator of operating performance, or as an alternative to cash flow, as a measure of liquidity or ability to service debt obligations, but provides additional information for evaluating the Company’s ability to make the minimum quarterly distribution. EBITDA and Adjusted EBITDA are calculated as follows:

(in thousands)

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

• our compliance with certain financial covenants included in our debt agreements;
• our financial performance without regard to financing methods, capital structure, income taxes or historical cost basis;
• our operating performance and return on invested capital compared to those of other companies in the retail distribution of refined petroleum products, without regard to financing methods and capital structure;
• our ability to generate cash sufficient to pay interest on our indebtedness and to make distributions to our partners; and
• the viability of acquisitions and capital expenditure projects and the overall rates of return of alternative investment opportunities.

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

• EBITDA and Adjusted EBITDA do not reflect our cash used for capital expenditures.
• Although depreciation and amortization are non-cash charges, the assets being depreciated or amortized often will have to be replaced and EBITDA and Adjusted EBITDA do not reflect the cash requirements for such replacements;
• EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital requirements;
• EBITDA and Adjusted EBITDA do not reflect the cash necessary to make payments of interest or principal on our indebtedness; and EBITDA and Adjusted EBITDA do not reflect the cash required to pay taxes.

Nine Months Ended June 30, 2026

Compared to the Nine Months Ended June 30, 2025

Volume

For the nine months ended June 30, 2026, retail volume of home heating oil and propane sold increased by 8.6 million gallons, or 3.3%, to 271.2 million gallons, compared to 262.6 million gallons for the nine months ended June 30, 2025. For those locations where we had existing operations during both periods, which we sometimes refer to as our “base business” (i.e., excluding acquisitions), temperatures (measured on a heating degree day basis) for the nine months ended June 30, 2026, were 11.5% colder than the nine months ended June 30, 2025, and 2.9% colder than normal, as reported by NOAA. For the twelve months ended June 30, 2026, net customer attrition for the base business was 4.2%. The impact of fuel conservation, along with any period-to-period differences in delivery scheduling, the timing of accounts added or lost during the fiscal years, equipment efficiency, and other volume variances not otherwise described, are included in the chart below under the heading “Other.” An analysis of the change in the retail volume of home heating oil and propane, which is based on management’s estimates, sampling, and other mathematical calculations and certain assumptions, is found below:

(in millions of gallons)

The following table sets forth the percentage by volume of total home heating oil and propane sold to residential variable-price customers, residential price-protected customers and commercial/industrial/other customers for the nine months ended June 30, 2026, compared to the nine months ended June 30, 2025:

Volume of motor fuel and other petroleum products sold decreased by 5.9 million gallons, or 6.4%, to 85.7 million gallons for the nine months ended June 30, 2026, compared to 91.6 million gallons for the nine months ended June 30, 2025.

Product Sales

For the nine months ended June 30, 2026, product sales increased by $124.1 million, or 9.7%, to $1,404.8 million, compared to $1,280.7 million for the nine months ended June 30, 2025, due to an increase in average selling prices and an increase in total volume sold of 0.8%.

Installations and Service

For the nine months ended June 30, 2026, installation and service revenue increased by $3.3 million, or 1.3%, to $259.3 million, compared to $256.0 million for the nine months ended June 30, 2025, driven by a concerted effort to expand these offerings to our customers as well as price increases and $1.0 million of sales generated from recent acquisitions.

Cost of Product

For the nine months ended June 30, 2026, cost of product increased $76.0 million, or 9.5%, to $876.2 million, compared to $800.2 million for the nine months ended June 30, 2025, due to an increase in the combined wholesale product cost of $0.1954 per gallon, or 8.6% calculated on a weighted average and an increase in total volume sold of 0.8%. Product volumes and wholesale product cost include heating oil, propane, motor fuels and other petroleum products.

Gross Profit — Product

The table below calculates our per gallon margins and reconciles product gross profit for home heating oil and propane and motor fuel and other petroleum products. We believe the change in home heating oil and propane margins should be evaluated before the effects of increases or decreases in the fair value of derivative instruments, as we believe that realized per gallon margins should not include the impact of non-cash changes in the market value of hedges before the settlement of the underlying transactions. On that basis, home heating oil and propane margins, for the nine months ended June 30, 2026, increased by $0.1174 per gallon, or 6.9%, to $1.8230 per gallon, from $1.7056 per gallon during the nine months ended June 30, 2025. Going forward, we cannot assume that per gallon margins realized during the nine months ended June 30, 2026, are sustainable especially with the volatility in heating oil and propane costs. Product sales and cost of product include home heating oil, propane, other petroleum products and liquidated damages billings.

For the nine months ended June 30, 2026, total product gross profit was $528.6 million, which was $48.1 million, or 10.0%, higher than the nine months ended June 30, 2025, due to an increase in home heating oil and propane margins ($31.9 million), an increase in home heating oil and propane volume sold ($14.7 million), and an increase in gross profit from other petroleum products ($1.5 million).

Cost of Installations and Service

Total installation costs, for the nine months ended June 30, 2026, decreased by $1.9 million or 2.3%, to $80.0 million, compared to $81.9 million of installation costs for the nine months ended June 30, 2025. Installation costs as a percentage of installation sales were 79.5% for the nine months ended June 30, 2026, and 81.8% for the nine months ended June 30, 2025. The gross profit from installation increased by $2.5 million, compared to the nine months ended June 30, 2025.

Service expense increased by $8.4 million, or 5.5%, to $159.6 million for the nine months ended June 30, 2026, representing 100.6% of service sales, versus $151.2 million, or 97.0% of service sales, for the nine months ended June 30, 2025. The increase in service expense was driven by higher service call volume due to the extreme weather conditions that were 11.5% colder than last year and were approximately 25% colder than expected for a three week period. We experienced a significant increase in the number of snowstorms as well as an increase in snowfall levels across our operating areas with some areas experiencing over 60 inches of snow which negatively impacted our operational efficiency. Propane tank installations were higher as well which led to higher service expenses. A large proportion of our service expenses are incurred under fixed-fee prepaid service contract arrangements, therefore trends in service expenses may not directly correlate to trends in the related revenues. The loss from service increased by $5.7 million compared to the nine months ended June 30, 2025.

We realized a combined gross profit from service and installation of $19.7 million for the nine months ended June 30, 2026 compared to a gross profit of $22.9 million for the nine months ended June 30, 2025, a $3.2 million decrease. While installation gross profit increased by $2.5 million, the service gross profit loss increased by $5.7 million due to higher expenses from increased demand for service and an increase in propane tank installations.

(Increase) Decrease in the Fair Value of Derivative Instruments

During the nine months ended June 30, 2026, the change in the fair value of derivative instruments resulted in a $13.4 million credit due to a $12.1 million increase in the market value for unexpired hedges and an $1.3 million credit due to the expiration of certain hedged positions.

During the nine months ended June 30, 2025, the change in the fair value of derivative instruments resulted in a $12.0 million credit as a $2.3 million charge due to decrease in the market value for unexpired hedges was more than offset by a $14.3 million credit due to the expiration of certain hedged positions.

Delivery and Branch Expenses

For the nine months ended June 30, 2026, delivery and branch expense increased $23.8 million, or 7.5%, to $338.7 million, compared to $314.9 million for the nine months ended June 30, 2025. The increase was driven by an $18.5 million increase in net base business expenses, $3.4 million of expenses from recent acquisitions, and a $1.9 million increase in expenses related to the Company's weather hedge contracts. Temperatures from November 2025 through March 2026 were colder than the weather hedge contract strike prices, and the Company recorded an expense under those contracts of $5.0 million, as compared to $3.1 million for the nine months ended June 30, 2025. The increase in net base business expenses was largely driven by an $11.3 million increase in insurance related expenses due to adverse claims development and, to a lesser extent, higher claims activity associated with the colder temperatures. Temperatures were 11.5% colder than last year and were approximately 25% colder than planned for a three-week period. The Company experienced a significant increase in the number of snowstorms, as well as much higher snowfall levels across its operating areas, with some areas receiving over 60 inches of snow, negatively impacting its business productivity. While home heating oil and propane volume in the base business rose by 1.0%, the extreme weather conditions impacted direct operating costs, which increased $7.7 million, or 3.9%, and were partially offset by $0.5 million of other net expense decreases in the base business.

Depreciation and Amortization Expenses

For the nine months ended June 30, 2026, depreciation and amortization expenses decreased $0.6 million, or 2.5%, to $25.4 million, compared to $26.0 million for the nine months ended June 30, 2025, primarily due to intangible assets that fully amortized in the prior fiscal year.

General and Administrative Expenses

For the nine months ended June 30, 2026, general and administrative expenses increased by $1.4 million or 6.2%, to $24.3 million, from $22.9 million for the nine months ended June 30, 2025, primarily due to a $1.1 million increase in profit sharing expense and a $0.8 million increase in salaries and benefits expenses, that was partially offset by a $0.5 million decrease in legal, professional and other expenses. The Company accrues approximately 6.0% of Adjusted EBITDA as defined in its profit sharing plan for distribution to its employees. This amount is payable if/when the Company achieves Adjusted EBITDA of at least 70% of the amount budgeted. The dollar amount of the profit sharing pool adjusts accordingly based on Adjusted EBITDA levels achieved.

Finance Charge Income

For the nine months ended June 30, 2026, finance charge income increased $0.1 million or 4.4%, to $4.0 million, from $3.9 million for the nine months ended June 30, 2025, due to slightly higher late customer payment charges on aged receivables.

Interest Expense, Net

For the nine months ended June 30, 2026, interest expense, net increased by $0.4 million, or 3.9%, to $11.5 million compared to $11.1 million for the nine months ended June 30, 2025. The year-over-year change was attributable to a reduction in interest income of $1.2 million due to lower invested cash balances of $78 million. In September 2024, the company increased its term loan and prefunded an acquisition that closed in January 2025 for $66.9 million. This was partially offset by a $0.8 million decrease in gross interest expense as the weighted average interest rate declined from 7.0% for the nine months ended June 30, 2025, to 6.6% for the nine months ended June 30, 2026, and was slightly offset by a $1.4 million increase in average borrowings from $224.8 million for the nine months ended June 30, 2025, to $226.2 million for the nine months ended June 30, 2026. To hedge against rising interest rates, the Company utilizes interest rate swaps. At June 30, 2026, approximately 41% of borrowings under Star's variable-rate long term debt were not subject to interest rate changes as a result of interest rate swaps.

Amortization of Debt Issuance Costs

For the nine months ended June 30, 2026, amortization of debt issuance cost was $0.8 million, essentially unchanged from the nine months ended June 30, 2025.

Income Tax Expense

For the nine months ended June 30, 2026, the Company’s income tax expense increased by $7.6 million to $48.9 million, from $41.3 million for the nine months ended June 30, 2025. The increase in the income tax expense was driven by a $21.5 million increase in income before income taxes.

Net Income

For the nine months ended June 30, 2026, Star’s net income increased $13.9 million, to $116.1 million, compared to the nine months ended June 30, 2025, primarily due to a $19.9 million increase in the Adjusted EBITDA, a favorable change in the fair value of derivative instruments of $1.4 million and a $0.6 million decrease in depreciation and amortization expenses that was partially offset by a $7.6 million increase in income tax expense and a $0.4 million increase in net interest expense.

Adjusted EBITDA

For the nine months ended June 30, 2026, Adjusted EBITDA increased $19.9 million, to $189.3 million, compared to the nine months ended June 30, 2025, primarily due to a $15.0 million increase in Adjusted EBITDA in the base business and a $6.8 million increase in Adjusted EBITDA from recent acquisitions that was partially offset by a $1.9 million increase in expense related to the Company's weather hedge contracts due to the colder temperatures. The increase in Adjusted EBITDA in the base business was driven by higher home heating oil and propane volume sold due to colder weather, an increase in home heating oil and propane per gallon margins, higher installation profitability, partially reduced by an increase in delivery, branch and service related expenses.

EBITDA and Adjusted EBITDA should not be considered as an alternative to net income, as an indicator of operating performance, or as an alternative to cash flow, as a measure of liquidity or ability to service debt obligations, but provides additional information for evaluating the Company’s ability to make the minimum quarterly distribution. EBITDA and Adjusted EBITDA are calculated as follows:

(in thousands)

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

• our compliance with certain financial covenants included in our debt agreements;
• our financial performance without regard to financing methods, capital structure, income taxes or historical cost basis;
• our operating performance and return on invested capital compared to those of other companies in the retail distribution of refined petroleum products, without regard to financing methods and capital structure;
• our ability to generate cash sufficient to pay interest on our indebtedness and to make distributions to our partners; and
• the viability of acquisitions and capital expenditure projects and the overall rates of return of alternative investment opportunities.

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

• EBITDA and Adjusted EBITDA do not reflect our cash used for capital expenditures.
• Although depreciation and amortization are non-cash charges, the assets being depreciated or amortized often will have to be replaced and EBITDA and Adjusted EBITDA do not reflect the cash requirements for such replacements;
• EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital requirements;
• EBITDA and Adjusted EBITDA do not reflect the cash necessary to make payments of interest or principal on our indebtedness; and EBITDA and Adjusted EBITDA do not reflect the cash required to pay taxes.

DISCUSSION OF CASH FLOWS

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

Operating Activities

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

During the nine months ended June 30, 2026, cash provided by operating activities increased $0.7 million, to $57.2 million, compared to $56.5 million during the nine months ended June 30, 2025, primarily due to an $11.3 million increase in cash flows from operations and increases in accruals for insurance, taxes and other working capital changes provided $16.1 million of cash. These increases were partially offset by a $21.7 million increase in accounts receivable due from customers on a comparable basis (including accounts receivable and customer credit balance accounts) of which $15.9 million represents an increase in receivables from customers on budget payment plans due to the increased volume sold and higher selling prices compared to the prior year. In addition, due to an increase in wholesale product costs, we used $5.0 million in cash to finance an increase in inventory, including related collateral.

Investing Activities

During the nine months ended June 30, 2026 the Company acquired one heating oil business for approximately $1.0 million in cash. The gross purchase price was allocated $1.2 million to intangible assets, $0.6 million to goodwill, $0.3 million to fixed assets and reduced by $1.1 million of negative working capital.

For the nine months ended June 30, 2026, our capital expenditures totaled $10.2 million, as we invested in computer hardware and software ($1.9 million), refurbished certain physical plants ($3.4 million), expanded our propane operations ($0.6 million) and made additions to our fleet and other equipment ($4.3 million).

During the nine months ended June 30, 2026, $2.4 million of earnings were reinvested into an irrevocable trust established in connection with our captive insurance company. The cash deposited into the trust is shown on our balance sheet as captive insurance collateral and, correspondingly, reduced cash on our balance sheet. We believe that investments into the irrevocable trust lower our letter of credit fees, increase interest income on invested cash balances, and provide us with certain tax advantages attributable to a captive insurance company.

During the nine months ended June 30, 2025, the Company acquired one heating oil and three propane businesses for approximately $80.5 million in cash. The gross purchase price was allocated $38.7 million to intangible assets, $17.7 million to goodwill, $25.2 million to fixed assets and reduced by $1.1 million of negative working capital. The Company also acquired certain intangible and fixed assets for $7.7 million and sold certain assets for cash proceeds of $0.3 million.

Our capital expenditures for the nine months ended June 30, 2025 totaled $10.4 million, as we invested in computer hardware and software ($1.3 million), refurbished certain physical plants ($1.2 million), expanded our propane operations ($1.0 million) and made additions to our fleet and other equipment ($6.9 million).

During the nine months ended June 30, 2025, $1.8 million of earnings were reinvested into the irrevocable trust.

Financing Activities

During the nine months ended June 30, 2026, we repaid $15.8 million of our term loan, borrowed $93.6 million under our revolving credit facility and subsequently repaid $93.6 million, repurchased 0.5 million Common Units, at an average price paid of $11.95 per unit, for $5.5 million, in connection with our unit repurchase plan, and paid distributions of $18.6 million to our Common Unit holders and $1.3 million to our General Partner unit holders (including $1.2 million of incentive distributions as provided in our Partnership Agreement).

During the nine months ended June 30, 2025, we repaid $15.8 million of our term loan, borrowed $75.4 million under our revolving credit facility and subsequently repaid $75.4 million, repurchased 0.8 million Common Units, at an average price paid of $11.99 per unit, for $10.0 million, in connection with our unit repurchase plan, and paid distributions of $18.3 million to our Common Unit holders and $1.2 million to our General Partner unit holders (including $1.1 million of incentive distributions as provided in our Partnership Agreement).

FINANCING AND SOURCES OF LIQUIDITY

Liquidity and Capital Resources Comparatives

Our primary uses of liquidity are to provide funds for our working capital, capital expenditures, distributions on our units, acquisitions and unit repurchases. Our ability to provide funds for such uses depends on our future performance, which will be subject to prevailing economic, financial, geopolitical and business conditions, tariff regimes, weather, the ability to collect current and future accounts receivable, the ability to pass on the full impact of high product costs to customers, the effects of high net customer attrition, conservation, inflation and other factors.

Capital requirements, at least in the near term, are expected to be provided by cash flows from operating activities, cash on hand as of June 30, 2026, of $27.0 million, or a combination thereof. We believe that these cash sources will also be sufficient to satisfy our capital requirements in the longer-term. However, if they are not sufficient, we anticipate that working capital will be financed by our revolving credit facility, as discussed below, and from subsequent seasonal reductions in inventory and receivables. Also, as of June 30, 2026, we had accounts receivable of $160.1 million of which $113.4 million is due from residential customers (reflecting a $20.2 million increase in amounts due from customers on budget payment plans compared to June 30, 2025 due to increased volumes sold resulting from the colder than expected weather) and $46.7 million is due from commercial customers. Our ability to borrow from our bank group is based in part on the aging of these accounts receivables. If these balances do not meet the eligibility tests as defined in our credit agreement, our ability to borrow will be reduced and our anticipated cash flow from operating activities will also be reduced. As of June 30, 2026, we had no borrowings under the revolving credit facility, $173.3 million outstanding under our term loan, $3.0 million in letters of credit outstanding and no hedge positions were secured under the credit agreement.

Under the terms of the credit agreement, if Availability (as defined in the credit agreement) is less than the greater of (a) 12.5% of the Line Cap (lesser of the aggregate revolving commitment and the borrowing base) which was $29.1 million as of June 30, 2026 and (b) $35.0 million, we must maintain a fixed charge coverage ratio of 1.10. We are also required to maintain a senior secured leverage ratio that cannot be more than 3.0 as of June 30th or September 30th, and no more than 5.5 as of December 31st or March 31st. As of June 30, 2026, Availability, as defined in the credit agreement, as amended, was $229.9 million and we were in compliance with the financial covenants.

Maintenance capital expenditures for the remainder of fiscal 2026 are estimated to be approximately $5.5 million to $6.5 million, excluding the capital requirements for leased fleet. In addition, we plan to invest $0.1 million to $0.2 million in our propane operations. If, and only to the extent that, cash distributions to our unitholders remain at the current quarterly level of $0.1975 per unit for the balance of fiscal 2026, the Company would make aggregate payments of approximately $6.5 million to Common Unit holders, $0.5 million to our General Partner (including $0.4 million of incentive distribution as provided for in our Partnership Agreement) and $0.4 million to management pursuant to the management incentive compensation plan which provides for certain members of management to receive incentive distributions that would otherwise be payable to the General Partner. The amount of cash distributions payable to our unitholders, if any, depends on the amount of cash flow generated by the Company and our compliance with certain financial covenants under our credit agreement. Under the terms of our credit agreement, our term loan is repayable in quarterly payments of $5.3 million and we expect to pay $5.3 million for the remainder of fiscal 2026. Further, subject to any additional liquidity issues or concerns resulting from wholesale price volatility, we intend to continue to repurchase Common Units pursuant to our unit repurchase plan, as amended from time to time, and seek attractive acquisition opportunities within the Availability constraints of our revolving credit facility and funding resources.

Contractual Obligations and Off-Balance Sheet Arrangements

There has been no material change to Contractual Obligations and Off-Balance Sheet Arrangements since our September 30, 2025, Form 10-K disclosure and therefore, the table has not been included in this Form 10-Q.

Recent Accounting Pronouncements

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

Critical Accounting Policy and Critical Accounting Estimates

We believe that there have been no significant changes to our critical accounting policy and critical accounting estimates during the nine months ended June 30, 2026, as compared to those we disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our annual report on Form 10-K for the fiscal year ended September 30, 2025. While our critical accounting policies and estimates have not changed in any significant way during the nine months ended June 30, 2026, the following provides disclosures about our critical accounting policy and critical accounting estimates.

Critical Accounting Policy

Fair Values of Derivatives

FASB ASC 815-10-05, Derivatives and Hedging, requires that derivative instruments be recorded at fair value and included in the consolidated balance sheet as assets or liabilities. The Company has elected not to designate its commodity derivative instruments as hedging instruments under this guidance, and therefore the change in fair value of those derivative instruments are recognized in our statement of operations.

We have established the fair value of our derivative instruments using estimates determined by our counterparties and subsequently evaluated them internally using established index prices and other sources. These values are based upon, among other things, futures prices, volatility, time-to-maturity value and credit risk. The estimate of fair value we report in our financial statements changes as these estimates are revised to reflect actual results, changes in market conditions, or other factors, many of which are beyond our control.

Critical Accounting Estimates

Self-Insurance Liabilities

We currently self-insure a portion of workers’ compensation, auto, general liability and medical claims. We establish and periodically evaluate self-insurance liabilities based upon expectations as to what our ultimate liability may be for outstanding claims using developmental factors based upon historical claim experience, including frequency, severity, demographic factors and other actuarial assumptions, supplemented with the support of a qualified third-party actuary. As of September 30, 2025, we had approximately $78.8 million of self-insurance liabilities. The ultimate resolution of these claims could differ materially from the assumptions used to calculate the self-insurance liabilities, which could have a material adverse effect on results of operations.

Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

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

At June 30, 2026, we had outstanding borrowings totaling $173.3 million that are subject to variable interest rates under our credit agreement, and $71.9 million of interest rate swaps to mitigate exposure to interest rate risk associated with variable interest rates. In the event that interest rates associated with this facility were to increase 100 basis points, the after tax impact on annual future cash flows would be a decrease of $0.7 million.

Commodity Price Risk

We regularly use derivative financial instruments to manage our exposure to commodity price risk related to changes in the current and future market price of home heating oil and vehicle fuels. The value of market sensitive derivative instruments is subject to change as a result of movements in market prices. Sensitivity analysis is a technique used to evaluate the impact of hypothetical market value changes. Based on a hypothetical ten percent increase in the cost of product at June 30, 2026, the potential impact on our hedging activity would be to increase the fair market value of these outstanding derivatives by $7.5 million from $11.0 million to a fair market value of $18.5 million; and conversely a hypothetical ten percent decrease in the cost of product would decrease the fair market value of these outstanding derivatives by $6.5 million to a fair market value of $4.5 million.

For a broader discussion of risks, including those related to market conditions, please refer to Part I Item 1A "Risk Factors in our Fiscal 2025 Form 10-K.

Controls and Procedures

a) Evaluation of disclosure controls and procedures

The General Partner’s chief executive officer and chief financial officer evaluated the effectiveness of the Company’s disclosure controls and procedures (as that term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended) as of June 30, 2026. Based on that evaluation, such chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2026, at the reasonable level of assurance. For purposes of Rule 13a-15(e), the term disclosure controls and procedures means the controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Act”) (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its chief executive officer and chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

b) Change in internal control over financial reporting

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

c) Other

The General Partner and the Company believe that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a Company have been detected. Therefore, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our disclosure controls and procedures are designed to provide such reasonable assurances of achieving our desired control objectives, and the chief executive officer and chief financial officer of the General Partner have concluded, as of June 30, 2026, that our disclosure controls and procedures were effective in achieving that level of reasonable assurance.

Risk Factors

In addition to the other information set forth in this Report, investors should carefully review and consider the information regarding certain factors, which could materially affect our business, results of operations, financial condition and cash flows set forth in Part I Item 1A. “Risk Factors” in our Fiscal 2025 Form 10-K report. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.