12/312021Q1FALSE0000002178P2Y00000021782021-01-012021-03-31xbrli:shares00000021782021-05-01iso4217:USD00000021782021-03-3100000021782020-12-31iso4217:USDxbrli:shares0000002178us-gaap:OilAndGasRefiningAndMarketingMember2021-01-012021-03-310000002178us-gaap:OilAndGasRefiningAndMarketingMember2020-01-012020-03-310000002178us-gaap:ShippingAndHandlingMember2021-01-012021-03-310000002178us-gaap:ShippingAndHandlingMember2020-01-012020-03-310000002178ae:PipelineAndStorageMember2021-01-012021-03-310000002178ae:PipelineAndStorageMember2020-01-012020-03-3100000021782020-01-012020-03-3100000021782019-12-3100000021782020-03-310000002178us-gaap:CommonStockMember2020-12-310000002178us-gaap:AdditionalPaidInCapitalMember2020-12-310000002178us-gaap:RetainedEarningsMember2020-12-310000002178us-gaap:RetainedEarningsMember2021-01-012021-03-310000002178us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310000002178us-gaap:CommonStockMember2021-03-310000002178us-gaap:AdditionalPaidInCapitalMember2021-03-310000002178us-gaap:RetainedEarningsMember2021-03-310000002178us-gaap:CommonStockMember2019-12-310000002178us-gaap:AdditionalPaidInCapitalMember2019-12-310000002178us-gaap:RetainedEarningsMember2019-12-310000002178us-gaap:RetainedEarningsMember2020-01-012020-03-310000002178us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310000002178us-gaap:CommonStockMember2020-03-310000002178us-gaap:AdditionalPaidInCapitalMember2020-03-310000002178us-gaap:RetainedEarningsMember2020-03-31ae:stateae:segment0000002178us-gaap:LetterOfCreditMember2021-03-310000002178us-gaap:LetterOfCreditMember2020-12-310000002178ae:InitialCapitalizationMember2021-03-310000002178ae:InitialCapitalizationMember2020-12-310000002178ae:InsurancePremiumsMember2021-03-310000002178ae:InsurancePremiumsMember2020-12-310000002178us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310000002178us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-03-310000002178us-gaap:PerformanceSharesMember2021-01-012021-03-310000002178us-gaap:PerformanceSharesMember2020-01-012020-03-31ae:contract0000002178us-gaap:DesignatedAsHedgingInstrumentMember2021-03-3100000021782020-06-012020-06-300000002178srt:MinimumMember2021-01-012021-03-310000002178srt:MaximumMember2021-01-012021-03-310000002178us-gaap:ServiceMemberae:MarketingMember2021-01-012021-03-310000002178us-gaap:ServiceMemberae:TransportationMember2021-01-012021-03-310000002178us-gaap:ServiceMemberae:PipelineAndStorageMember2021-01-012021-03-310000002178us-gaap:ServiceMember2021-01-012021-03-310000002178us-gaap:ProductAndServiceOtherMemberae:MarketingMember2021-01-012021-03-310000002178us-gaap:ProductAndServiceOtherMemberae:TransportationMember2021-01-012021-03-310000002178us-gaap:ProductAndServiceOtherMemberae:PipelineAndStorageMember2021-01-012021-03-310000002178us-gaap:ProductAndServiceOtherMember2021-01-012021-03-310000002178ae:MarketingMember2021-01-012021-03-310000002178ae:TransportationMember2021-01-012021-03-310000002178ae:PipelineAndStorageMember2021-01-012021-03-310000002178us-gaap:TransferredAtPointInTimeMemberae:MarketingMember2021-01-012021-03-310000002178us-gaap:TransferredAtPointInTimeMemberae:TransportationMember2021-01-012021-03-310000002178us-gaap:TransferredAtPointInTimeMemberae:PipelineAndStorageMember2021-01-012021-03-310000002178us-gaap:TransferredAtPointInTimeMember2021-01-012021-03-310000002178us-gaap:TransferredOverTimeMemberae:MarketingMember2021-01-012021-03-310000002178us-gaap:TransferredOverTimeMemberae:TransportationMember2021-01-012021-03-310000002178us-gaap:TransferredOverTimeMemberae:PipelineAndStorageMember2021-01-012021-03-310000002178us-gaap:TransferredOverTimeMember2021-01-012021-03-310000002178us-gaap:ServiceMemberae:MarketingMember2020-01-012020-03-310000002178us-gaap:ServiceMemberae:TransportationMember2020-01-012020-03-310000002178us-gaap:ServiceMemberae:PipelineAndStorageMember2020-01-012020-03-310000002178us-gaap:ServiceMember2020-01-012020-03-310000002178us-gaap:ProductAndServiceOtherMemberae:MarketingMember2020-01-012020-03-310000002178us-gaap:ProductAndServiceOtherMemberae:TransportationMember2020-01-012020-03-310000002178us-gaap:ProductAndServiceOtherMemberae:PipelineAndStorageMember2020-01-012020-03-310000002178us-gaap:ProductAndServiceOtherMember2020-01-012020-03-310000002178ae:MarketingMember2020-01-012020-03-310000002178ae:TransportationMember2020-01-012020-03-310000002178ae:PipelineAndStorageMember2020-01-012020-03-310000002178us-gaap:TransferredAtPointInTimeMemberae:MarketingMember2020-01-012020-03-310000002178us-gaap:TransferredAtPointInTimeMemberae:TransportationMember2020-01-012020-03-310000002178us-gaap:TransferredAtPointInTimeMemberae:PipelineAndStorageMember2020-01-012020-03-310000002178us-gaap:TransferredAtPointInTimeMember2020-01-012020-03-310000002178us-gaap:TransferredOverTimeMemberae:MarketingMember2020-01-012020-03-310000002178us-gaap:TransferredOverTimeMemberae:TransportationMember2020-01-012020-03-310000002178us-gaap:TransferredOverTimeMemberae:PipelineAndStorageMember2020-01-012020-03-310000002178us-gaap:TransferredOverTimeMember2020-01-012020-03-310000002178srt:MinimumMemberus-gaap:TransportationEquipmentMember2021-01-012021-03-310000002178srt:MaximumMemberus-gaap:TransportationEquipmentMember2021-01-012021-03-310000002178us-gaap:TransportationEquipmentMember2021-03-310000002178us-gaap:TransportationEquipmentMember2020-12-310000002178us-gaap:EquipmentMembersrt:MinimumMember2021-01-012021-03-310000002178us-gaap:EquipmentMembersrt:MaximumMember2021-01-012021-03-310000002178us-gaap:EquipmentMember2021-03-310000002178us-gaap:EquipmentMember2020-12-310000002178ae:FinanceLeaseRightOfUseAssetsMembersrt:MinimumMember2021-01-012021-03-310000002178ae:FinanceLeaseRightOfUseAssetsMembersrt:MaximumMember2021-01-012021-03-310000002178ae:FinanceLeaseRightOfUseAssetsMember2021-03-310000002178ae:FinanceLeaseRightOfUseAssetsMember2020-12-310000002178us-gaap:PipelinesMembersrt:MinimumMember2021-01-012021-03-310000002178srt:MaximumMemberus-gaap:PipelinesMember2021-01-012021-03-310000002178us-gaap:PipelinesMember2021-03-310000002178us-gaap:PipelinesMember2020-12-310000002178ae:LinefillAndBaseGasMember2021-03-310000002178ae:LinefillAndBaseGasMember2020-12-310000002178us-gaap:BuildingMembersrt:MinimumMember2021-01-012021-03-310000002178us-gaap:BuildingMembersrt:MaximumMember2021-01-012021-03-310000002178us-gaap:BuildingMember2021-03-310000002178us-gaap:BuildingMember2020-12-310000002178us-gaap:OfficeEquipmentMembersrt:MinimumMember2021-01-012021-03-310000002178us-gaap:OfficeEquipmentMembersrt:MaximumMember2021-01-012021-03-310000002178us-gaap:OfficeEquipmentMember2021-03-310000002178us-gaap:OfficeEquipmentMember2020-12-310000002178us-gaap:LandMember2021-03-310000002178us-gaap:LandMember2020-12-310000002178us-gaap:ConstructionInProgressMember2021-03-310000002178us-gaap:ConstructionInProgressMember2020-12-310000002178ae:AssetsHeldUnderFinanceLeasesMemberus-gaap:TransportationEquipmentMember2021-03-310000002178ae:AssetsHeldUnderFinanceLeasesMemberus-gaap:TransportationEquipmentMember2020-12-310000002178ae:AssetsNotHeldUnderFinanceLeasesMember2021-01-012021-03-310000002178ae:AssetsNotHeldUnderFinanceLeasesMember2020-01-012020-03-310000002178ae:AssetsHeldUnderFinanceLeasesMember2021-01-012021-03-310000002178ae:AssetsHeldUnderFinanceLeasesMember2020-01-012020-03-310000002178ae:MarketingMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310000002178ae:TransportationMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310000002178ae:PipelineAndStorageMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310000002178us-gaap:CorporateNonSegmentMember2021-01-012021-03-310000002178us-gaap:OperatingSegmentsMember2021-01-012021-03-310000002178ae:MarketingMemberus-gaap:IntersegmentEliminationMember2021-01-012021-03-310000002178ae:TransportationMemberus-gaap:IntersegmentEliminationMember2021-01-012021-03-310000002178ae:PipelineAndStorageMemberus-gaap:IntersegmentEliminationMember2021-01-012021-03-310000002178us-gaap:IntersegmentEliminationMember2021-01-012021-03-310000002178ae:MarketingMemberus-gaap:OperatingSegmentsMember2020-01-012020-03-310000002178ae:TransportationMemberus-gaap:OperatingSegmentsMember2020-01-012020-03-310000002178ae:PipelineAndStorageMemberus-gaap:OperatingSegmentsMember2020-01-012020-03-310000002178us-gaap:CorporateNonSegmentMember2020-01-012020-03-310000002178us-gaap:OperatingSegmentsMember2020-01-012020-03-310000002178ae:MarketingMemberus-gaap:IntersegmentEliminationMember2020-01-012020-03-310000002178ae:TransportationMemberus-gaap:IntersegmentEliminationMember2020-01-012020-03-310000002178ae:PipelineAndStorageMemberus-gaap:IntersegmentEliminationMember2020-01-012020-03-310000002178us-gaap:IntersegmentEliminationMember2020-01-012020-03-310000002178us-gaap:LeaseholdImprovementsMember2021-01-012021-03-310000002178us-gaap:LeaseholdImprovementsMember2020-01-012020-03-310000002178us-gaap:MaterialReconcilingItemsMember2021-01-012021-03-310000002178us-gaap:MaterialReconcilingItemsMember2020-01-012020-03-310000002178ae:MarketingMemberus-gaap:OperatingSegmentsMember2021-03-310000002178ae:MarketingMemberus-gaap:OperatingSegmentsMember2020-12-310000002178ae:TransportationMemberus-gaap:OperatingSegmentsMember2021-03-310000002178ae:TransportationMemberus-gaap:OperatingSegmentsMember2020-12-310000002178ae:PipelineAndStorageMemberus-gaap:OperatingSegmentsMember2021-03-310000002178ae:PipelineAndStorageMemberus-gaap:OperatingSegmentsMember2020-12-310000002178us-gaap:CorporateNonSegmentMember2021-03-310000002178us-gaap:CorporateNonSegmentMember2020-12-310000002178us-gaap:OperatingSegmentsMember2021-03-310000002178us-gaap:OperatingSegmentsMember2020-12-310000002178srt:AffiliatedEntityMember2021-01-012021-03-310000002178srt:AffiliatedEntityMember2020-01-012020-03-310000002178us-gaap:CommodityContractMember2021-03-31ae:barrel_of_oil_per_day0000002178ae:April2021ThroughDecember2021Memberus-gaap:CommodityContractMember2021-01-012021-03-310000002178us-gaap:CommodityContractMember2020-12-310000002178ae:January2021ThroughDecember2021Memberus-gaap:CommodityContractMember2020-01-012020-12-310000002178us-gaap:NondesignatedMemberae:CurrentAssetsMemberus-gaap:CommodityContractMember2021-03-310000002178us-gaap:NondesignatedMemberus-gaap:OtherAssetsMemberus-gaap:CommodityContractMember2021-03-310000002178us-gaap:NondesignatedMemberae:CurrentLiabilitiesMemberus-gaap:CommodityContractMember2021-03-310000002178us-gaap:NondesignatedMemberus-gaap:CommodityContractMemberus-gaap:OtherLiabilitiesMember2021-03-310000002178us-gaap:NondesignatedMemberae:CurrentAssetsMemberus-gaap:CommodityContractMember2020-12-310000002178us-gaap:NondesignatedMemberus-gaap:OtherAssetsMemberus-gaap:CommodityContractMember2020-12-310000002178us-gaap:NondesignatedMemberae:CurrentLiabilitiesMemberus-gaap:CommodityContractMember2020-12-310000002178us-gaap:NondesignatedMemberus-gaap:CommodityContractMemberus-gaap:OtherLiabilitiesMember2020-12-310000002178us-gaap:SalesMemberus-gaap:NondesignatedMemberus-gaap:CommodityContractMember2021-01-012021-03-310000002178us-gaap:SalesMemberus-gaap:NondesignatedMemberus-gaap:CommodityContractMember2020-01-012020-03-310000002178us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-03-310000002178us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-03-310000002178us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310000002178us-gaap:FairValueMeasurementsRecurringMember2021-03-310000002178us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-12-310000002178us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-12-310000002178us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310000002178us-gaap:FairValueMeasurementsRecurringMember2020-12-310000002178ae:The2018LTIPMember2018-05-310000002178ae:The2018LTIPMember2021-03-310000002178ae:The2018LTIPMember2021-01-012021-03-310000002178ae:The2018LTIPMember2020-01-012020-03-310000002178ae:The2018LTIPMember2020-12-310000002178ae:The2018LTIPMemberus-gaap:RestrictedStockUnitsRSUMember2020-12-310000002178ae:The2018LTIPMemberus-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310000002178ae:The2018LTIPMemberus-gaap:RestrictedStockUnitsRSUMember2021-03-310000002178ae:The2018LTIPMemberus-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMember2021-01-012021-03-310000002178ae:The2018LTIPMemberus-gaap:RestrictedStockUnitsRSUMembersrt:MaximumMember2021-01-012021-03-310000002178us-gaap:PerformanceSharesMemberae:The2018LTIPMember2020-12-310000002178us-gaap:PerformanceSharesMemberae:The2018LTIPMember2021-01-012021-03-310000002178us-gaap:PerformanceSharesMemberae:The2018LTIPMember2021-03-31xbrli:pure0000002178us-gaap:SubsequentEventMemberus-gaap:LineOfCreditMember2021-05-040000002178us-gaap:SubsequentEventMemberae:FederalFundsRateMemberus-gaap:LineOfCreditMember2021-05-042021-05-040000002178us-gaap:SubsequentEventMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:LineOfCreditMember2021-05-042021-05-040000002178us-gaap:SubsequentEventMemberus-gaap:BaseRateMemberus-gaap:LineOfCreditMember2021-05-042021-05-040000002178us-gaap:SubsequentEventMemberus-gaap:LondonInterbankOfferedRateLIBORMembersrt:MinimumMemberus-gaap:LineOfCreditMember2021-05-042021-05-040000002178us-gaap:SubsequentEventMemberus-gaap:LineOfCreditMember2021-05-042021-05-04
Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

FORM 10-Q
(Mark One)

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

For the quarterly period ended March 31, 2021

OR

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

For the transition period from ___  to  ___.

Commission file number: 1-07908

ADAMS RESOURCES & ENERGY, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
74-1753147
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)

17 South Briar Hollow Lane, Suite 100
Houston, Texas 77027
(Address of Principal Executive Offices, including Zip Code)
(713) 881-3600
(Registrant’s Telephone Number, including Area Code)

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

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.10 Par ValueAENYSE American LLC

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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

A total of 4,251,015 shares of Common Stock were outstanding at May 1, 2021.


Table of Contents


ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
TABLE OF CONTENTS

Page No.



1

Table of Contents


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
March 31,December 31,
20212020
ASSETS
Current assets:
Cash and cash equivalents$58,985 $39,293 
Restricted cash12,377 12,772 
Accounts receivable, net of allowance for doubtful
accounts of $113 and $114, respectively
111,068 99,799 
Accounts receivable – related party13  
Inventory29,223 19,336 
Derivative assets576 61 
Income tax receivable11,638 13,288 
Prepayments and other current assets3,621 2,964 
Total current assets227,501 187,513 
Property and equipment, net90,643 94,134 
Operating lease right-of-use assets, net7,774 8,051 
Intangible assets, net3,902 4,106 
Other assets2,482 2,383 
Total assets$332,302 $296,187 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$122,155 $85,991 
Derivative liabilities546 52 
Current portion of finance lease obligations4,494 4,112 
Current portion of operating lease liabilities2,172 2,050 
Other current liabilities19,888 22,343 
Total current liabilities149,255 114,548 
Other long-term liabilities:
Asset retirement obligations2,325 2,308 
Finance lease obligations12,202 11,507 
Operating lease liabilities5,603 6,000 
Deferred taxes and other liabilities11,900 12,732 
Total liabilities181,285 147,095 
Commitments and contingencies (Note 14)
Shareholders’ equity:
Preferred stock – $1.00 par value, 960,000 shares
authorized, none outstanding
  
Common stock – $0.10 par value, 7,500,000 shares
authorized, 4,251,015 and 4,243,716 shares outstanding, respectively
423 423 
Contributed capital13,494 13,340 
Retained earnings137,100 135,329 
Total shareholders’ equity151,017 149,092 
Total liabilities and shareholders’ equity$332,302 $296,187 

See Notes to Unaudited Condensed Consolidated Financial Statements.
2

Table of Contents


ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

Three Months Ended
March 31,
20212020
Revenues:
Marketing$304,023 $337,221 
Transportation21,235 16,256 
Pipeline and storage233  
Total revenues325,491 353,477 
Costs and expenses:
Marketing295,207 352,865 
Transportation17,460 13,185 
Pipeline and storage544  
General and administrative3,376 2,894 
Depreciation and amortization5,053 4,473 
Total costs and expenses321,640 373,417 
Operating earnings (losses)3,851 (19,940)
Other income (expense):
Interest and other income134 365 
Interest expense(220)(150)
Total other (expense) income, net(86)215 
Earnings (Losses) before income taxes3,765 (19,725)
Income tax (provision) benefit(957)8,298 
Net earnings (losses)$2,808 $(11,427)
Earnings (Losses) per share:
Basic net earnings (losses) per common share$0.66 $(2.70)
Diluted net earnings (losses) per common share$0.66 $(2.69)
Dividends per common share$0.24 $0.24 


See Notes to Unaudited Condensed Consolidated Financial Statements.
3

Table of Contents


ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Three Months Ended
March 31,
20212020
Operating activities:
Net earnings (losses)$2,808 $(11,427)
Adjustments to reconcile net earnings (losses) to net cash
provided by (used in) operating activities:
Depreciation and amortization5,053 4,473 
Gains on sales of property(83)(140)
Provision for doubtful accounts(1)(24)
Stock-based compensation expense185 134 
Deferred income taxes(829)(2,689)
Net change in fair value contracts(21)(19)
Changes in assets and liabilities:
Accounts receivable(11,268)41,617 
Accounts receivable/payable, affiliates(13)1 
Inventories(9,887)16,386 
Income tax receivable1,650 (5,530)
Prepayments and other current assets(657)253 
Accounts payable36,127 (68,384)
Accrued liabilities51 1,506 
Other(114)(3)
Net cash provided by (used in) operating activities23,001 (23,846)
Investing activities:
Property and equipment additions(170)(2,212)
Proceeds from property sales1,005 502 
Insurance and state collateral (deposits) refunds 1,128 
Net cash provided by (used in) investing activities835 (582)
Financing activities:
Principal repayments of finance lease obligations(1,014)(532)
Payment for financed portion of VEX acquisition(2,500) 
Payment of contingent consideration liability (54)
Dividends paid on common stock(1,025)(1,016)
Net cash used in financing activities(4,539)(1,602)
Increase (Decrease) in cash and cash equivalents, including restricted cash19,297 (26,030)
Cash and cash equivalents, including restricted cash, at beginning of period52,065 122,255 
Cash and cash equivalents, including restricted cash, at end of period$71,362 $96,225 


See Notes to Unaudited Condensed Consolidated Financial Statements.

4

Table of Contents


ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except per share data)

Total
CommonContributedRetainedShareholders’
StockCapitalEarningsEquity
Balance, January 1, 2021$423 $13,340 $135,329 $149,092 
Net earnings— — 2,808 2,808 
Stock-based compensation expense— 185 — 185 
Cancellation of shares withheld to
cover taxes upon vesting— (31)— (31)
Dividends declared:
Common stock, $0.24/share
— — (1,019)(1,019)
Awards under LTIP, $0.24/share
— — (18)(18)
Balance, March 31, 2021$423 $13,494 $137,100 $151,017 



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


See Notes to Unaudited Condensed Consolidated Financial Statements.
5

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Basis of Presentation

Organization

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

We operate and report in three business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk; and (iii) pipeline transportation, terminalling and storage of crude oil. See Note 7 for further information regarding our business segments.

Basis of Presentation

Our results of operations for the three months ended March 31, 2021 are not necessarily indicative of results expected for the full year of 2021. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals necessary for fair presentation.  The condensed consolidated financial statements and the accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the rules of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”) filed with the SEC on March 5, 2021. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

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


6

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies

Cash, Cash Equivalents and Restricted Cash

At March 31, 2021 and December 31, 2020, $5.1 million and $5.1 million, respectively, of the restricted cash balance represented amounts held in a segregated bank account by Wells Fargo as collateral for outstanding letters of credit. At March 31, 2021 and December 31, 2020, $1.5 million and $1.5 million, respectively, of the restricted cash balance related to the initial capitalization of our captive insurance company formed in late 2020 and $5.7 million and $6.1 million, respectively, represented the amount paid to our captive insurance company for insurance premiums.

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

March 31,December 31,
20212020
Cash and cash equivalents$58,985 $39,293 
Restricted cash12,377 12,772 
Total cash, cash equivalents and restricted cash shown in the
unaudited condensed consolidated statements of cash flows$71,362 $52,065 

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 awards8,544 
Shares withheld to cover taxes upon vesting of restricted stock unit awards(1,245)
Balance, March 31, 2021
4,251,015 

Earnings Per Share

Basic earnings (losses) per share is computed by dividing our net earnings (losses) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (losses) per share is computed by giving effect to all potential shares of common stock outstanding, including our stock related to unvested restricted stock unit awards. Unvested restricted stock unit awards granted under the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan (“2018 LTIP”) are not considered to be participating securities as the holders of these shares do not have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares (see Note 11 for further discussion).


7

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A reconciliation of the calculation of basic and diluted earnings (losses) per share was as follows for the periods indicated (in thousands, except per share data):

Three Months Ended
March 31,
20212020
Earnings (losses) per share — numerator:
Net earnings (losses) $2,808 $(11,427)
Denominator:
Basic weighted average number of shares outstanding4,246 4,236 
Basic earnings (losses) per share$0.66 $(2.70)
Diluted earnings (losses) per share:
Diluted weighted average number of shares outstanding:
Common shares4,246 4,236 
Restricted stock unit awards18 12 
Performance share unit awards (1)
7 2 
Total diluted shares4,271 4,250 
Diluted earnings (losses) per share$0.66 $(2.69)
_______________
(1)The dilutive effect of performance share awards are included in the calculation of diluted earnings per share when the performance share award performance conditions have been achieved.

Fair Value Measurements

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

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

Fair value contracts consist of derivative financial instruments and are recorded as either an asset or liability measured at its fair value. Changes in fair value are recognized immediately in earnings unless the derivatives qualify for, and we elect, cash flow hedge accounting. We had no contracts designated for hedge accounting during any current reporting periods (see Note 10 for further information).


8

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED 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 these items and their respective tax basis.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted and signed into law in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating losses (“NOL”) incurred in tax years 2018, 2019 and 2020 to offset 100 percent of taxable income and be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes.

We have determined that the NOL carryback provision in the CARES Act would result in a cash benefit to us for the fiscal years 2018 and 2019. We carried back our NOL for fiscal year 2018 to 2013, and in June 2020, we received a cash refund of approximately $2.7 million. We have income tax receivables at March 31, 2021 of approximately $3.7 million for the benefit of carrying back the NOL for the fiscal year 2019 to 2014 and approximately $6.8 million for the benefit of carrying back the NOL for the fiscal year 2020 to 2015 and 2016. As we are carrying the losses back to years beginning before January 1, 2018, the receivables were recorded at the previous 35 percent federal tax rate rather than the current statutory rate of 21 percent.

Inventory

Inventory consists of crude oil held in storage tanks and at third-party pipelines as part of our crude oil marketing and pipeline and storage operations. Crude oil inventory is carried at the lower of cost or net realizable value. At the end of each reporting period, we assess the carrying value of our inventory and make adjustments necessary to reduce the carrying value to the applicable net realizable value. Any resulting adjustments are a component of marketing costs and expenses or pipeline and storage expenses on our consolidated statements of operations. During the three months ended March 31, 2020, we recorded a charge of $24.2 million related to the write-down of our crude oil inventory in our crude oil marketing segment due to declines in prices.

Property and Equipment

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

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

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


9

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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 11 for additional information regarding our 2018 LTIP.


Note 3. Revenue Recognition

Revenue Disaggregation

The following table disaggregates our revenue by segment and by major source for the periods indicated (in thousands):
Reporting Segments
MarketingTransportationPipeline and storageTotal
Three Months Ended March 31, 2021
Revenues from contracts with customers$297,475 $21,235 $233 $318,943 
Other (1)
6,548   6,548 
Total revenues$304,023 $21,235 $233 $325,491 
Timing of revenue recognition:
Goods transferred at a point in time$297,475 $ $ $297,475 
Services transferred over time 21,235 233 21,468 
Total revenues from contracts with customers$297,475 $21,235 $233 $318,943 
Three Months Ended March 31, 2020
Revenues from contracts with customers$319,717 $16,256 $ $335,973 
Other (1)
17,504   17,504 
Total revenues$337,221 $16,256 $ $353,477 
Timing of revenue recognition:
Goods transferred at a point in time$319,717 $ $ $319,717 
Services transferred over time 16,256  16,256 
Total revenues from contracts with customers$319,717 $16,256 $ $335,973 
_______________
(1)Other crude oil marketing revenues are recognized under ASC 815, Derivatives and Hedging, and ASC 845, Nonmonetary Transactions – Purchases and Sales of Inventory with the Same Counterparty.

Other Crude Oil Marketing Revenue

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


10

Table of Contents

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

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

Three Months Ended
March 31,
20212020
Revenue gross-up$134,866 $157,439 



Note 4. Prepayments and Other Current Assets

The components of prepayments and other current assets were as follows at the dates indicated (in thousands):
March 31,December 31,
20212020
Insurance premiums$793 $690 
Vendor prepayment1,690 1,085 
Rents, licenses and other1,138 1,189 
Total prepayments and other current assets$3,621 $2,964 


11

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 5. Property and Equipment

The historical costs of our property and equipment and related accumulated depreciation and amortization balances were as follows at the dates indicated (in thousands):
Estimated
Useful LifeMarch 31,December 31,
in Years20212020
Tractors and trailers
56
$101,535 $101,813 
Field equipment
25
22,318 22,139 
Finance lease ROU assets (1)
36
22,357 20,266 
Pipeline and related facilities
2025
21,275 21,265 
Linefill and base gas (2)
N/A3,333 3,333 
Buildings
539
14,977 14,977 
Office equipment
25
1,905 1,893 
LandN/A1,790 1,790 
Construction in progressN/A716 1,626 
Total190,206 189,102 
Less accumulated depreciation and amortization(99,563)(94,968)
Property and equipment, net$90,643 $94,134 
_______________
(1)Our finance lease right-of-use (“ROU)” assets arise from leasing arrangements for the right to use various classes of underlying assets including tractors, trailers, a tank storage and throughput arrangement and office equipment (see Note 13 for further information). Accumulated amortization of the assets presented as “Finance lease ROU assets” was $6.2 million and $5.0 million at March 31, 2021 and December 31, 2020, respectively.
(2)Linefill and base gas represents crude oil in the VEX pipeline and storage tanks we own, and the crude oil is recorded at historical cost.

Components of depreciation and amortization expense were as follows for the periods indicated (in thousands):
Three Months Ended
March 31,
20212020
Depreciation and amortization, excluding amounts under finance leases$3,913 $3,920 
Amortization of property and equipment under finance leases1,140 553 
Total depreciation and amortization$5,053 $4,473 


12

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 6. Other Assets

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

March 31,December 31,
20212020
Amounts associated with liability insurance program:
Insurance collateral deposits$714 $714 
Excess loss fund617 617 
Accumulated interest income459 449 
Other amounts:
State collateral deposits42 31 
Materials and supplies460 488 
Other190 84 
Total other assets$2,482 $2,383 

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


13

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 7. Segment Reporting

We operate and report in three business segments: (i) crude oil marketing, transportation and storage; (ii) tank truck transportation of liquid chemicals, pressurized gases, asphalt and dry bulk; and (iii) pipeline transportation, terminalling and storage of crude oil.

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

Reporting Segments
MarketingTransportationPipeline and storageOtherTotal
Three Months Ended March 31, 2021
Segment revenues (1)
$304,023 $21,268 $419 $ $325,710 
Less: Intersegment revenues (1)
 (33)(186) (219)
Revenues$304,023 $21,235 $233 $ $325,491 
Segment operating earnings (losses) (2)
7,018 774 (565) 7,227 
Depreciation and amortization1,798 3,001 254  5,053 
Property and equipment additions (3)(4)(5)
210 (58)10 8 170 
Three Months Ended March 31, 2020
Segment revenues$337,221 $16,256 $ $ $353,477 
Less: Intersegment revenues     
Revenues$337,221 $16,256 $ $ $353,477 
Segment operating earnings (losses) (2)
(17,651)605   (17,046)
Depreciation and amortization2,007 2,466   4,473 
Property and equipment additions (3) (4)
2,032 41  139 2,212 
_______________
(1)Segment revenues include intersegment amounts that are eliminated in operating costs and expenses in our unaudited condensed 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.
(2)Our crude oil marketing segment’s operating (losses) earnings included inventory liquidation gains of $6.9 million and inventory valuation losses of $24.2 million for the three months ended March 31, 2021 and 2020, respectively.
(3)Our segment property and equipment additions do not include assets acquired under finance leases during the three months ended March 31, 2021. See Note 13 for further information.
(4)During the three months ended March 31, 2021 and 2020, we had $8.0 thousand and $0.1 million, respectively, of property and equipment additions for computer equipment and leasehold improvements at our corporate headquarters, which were not attributed or allocated to any of our reporting segments.
(5)During the three months ended March 31, 2021, we received a refund of approximately $0.3 million for amounts previously spent in our transportation segment, which has been reflected as a reduction in property and equipment additions.


14

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Segment operating earnings (losses) reflect revenues net of operating costs and depreciation and amortization expense and are reconciled to earnings (losses) before income taxes, as follows for the periods indicated (in thousands):
Three Months Ended
March 31,
20212020
Segment operating earnings (losses)$7,227 $(17,046)
General and administrative(3,376)(2,894)
Operating earnings (losses)3,851 (19,940)
Interest and other income134 365 
Interest expense(220)(150)
Earnings (losses) before income taxes$3,765 $(19,725)

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

March 31,December 31,
20212020
Reporting segment:
Marketing$153,723 $128,441 
Transportation65,572 72,247 
Pipeline and storage24,290 24,541 
Cash and other (1)
88,717 70,958 
Total assets$332,302 $296,187 
_______________
(1)Other identifiable assets are primarily corporate cash, corporate accounts receivable, properties and operating lease right-of-use assets not identified with any specific segment of our business.

Accounting policies for transactions between reportable segments are consistent with applicable accounting policies as disclosed herein.


Note 8. Transactions with Affiliates

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

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

Three Months Ended
March 31,
20212020
Affiliate billings to us$12 $17 
Billings to affiliates1 1 
Rentals paid to affiliate174 122 


15

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 9. Other Current Liabilities

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

March 31,December 31,
20212020
Accrued purchase price for VEX acquisition$7,500 $10,000 
Accrual for payroll, benefits and bonuses5,865 6,575 
Accrued automobile and workers’ compensation claims3,913 3,171 
Accrued medical claims1,033 915 
Other1,577 1,682 
Total other current liabilities $19,888 $22,343 


Note 10. Derivative Instruments and Fair Value Measurements

Derivative Instruments

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

At March 31, 2021, we had in place seven commodity purchase and sale contracts, of which five had a fair value associated with them as the contractual prices of crude oil were outside of the range of prices specified in the agreements. These commodity purchase and sale contracts encompassed approximately 740 barrels per day of crude oil during April 2021 through December 2021.
At December 31, 2020, we had in place six commodity purchase and sale contracts, of which three had a fair value associated with them as the contractual prices of crude oil were outside the range of prices specified in the agreements. These commodity purchase and sale contracts encompassed approximately 192 barrels per day of crude oil during January 2021 through December 2021.
16

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The estimated fair value of forward month commodity contracts (derivatives) reflected in the accompanying unaudited condensed consolidated balance sheets were as follows at the dates indicated (in thousands):
Balance Sheet Location and Amount
CurrentOtherCurrentOther
AssetsAssetsLiabilitiesLiabilities
March 31, 2021
Asset derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation$576 $ $ $ 
Liability derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation  546  
Less counterparty offsets    
As reported fair value contracts$576 $ $546 $ 
December 31, 2020
Asset derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation$61 $ $ $ 
Liability derivatives:
Fair value forward hydrocarbon commodity
contracts at gross valuation  52  
Less counterparty offsets    
As reported fair value contracts$61 $ $52 $ 

We only enter into commodity contracts with creditworthy counterparties and evaluate our exposure to significant counterparties on an ongoing basis. At March 31, 2021 and December 31, 2020, we were not holding nor have we posted any collateral to support our forward month fair value derivative activity. We are not subject to any credit-risk related trigger events. We have no other financial investment arrangements that would serve to offset our derivative contracts.

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

Gains (losses)
Three Months Ended
March 31,
20212020
Revenues – marketing$20 $19 


17

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Fair Value Measurements

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

Fair Value Measurements Using
Quoted Prices
in ActiveSignificant
Markets forOtherSignificant
Identical AssetsObservableUnobservable
and LiabilitiesInputsInputsCounterparty
(Level 1)(Level 2)(Level 3)OffsetsTotal
March 31, 2021
Derivatives:
Current assets$ $576 $ $ $576 
Current liabilities (546)  (546)
Net value$ $30 $ $ $30 
December 31, 2020
Derivatives:
Current assets$ $61 $ $ $61 
Current liabilities (52)  (52)
Net value$ $9 $ $ $9 

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

When determining fair value measurements, we make credit valuation adjustments to reflect both our own nonperformance risk and our counterparty’s nonperformance risk. When adjusting the fair value of derivative contracts for the effect of nonperformance risk, we consider the impact of netting and any applicable credit enhancements. Credit valuation adjustments utilize Level 3 inputs, such as credit scores to evaluate the likelihood of default by us or our counterparties. At March 31, 2021 and December 31, 2020, credit valuation adjustments were not significant to the overall valuation of our fair value contracts. As a result, applicable fair value assets and liabilities are included in their entirety in the fair value hierarchy.
18

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 11. Stock-Based Compensation Plan

We have in place a long-term incentive plan in which any employee or non-employee director who provides services to us is eligible to participate. The 2018 LTIP, which is overseen by the Compensation Committee of our Board of Directors, provides for the grant of various types of equity awards, of which restricted stock unit awards and performance-based compensation awards have been granted. The maximum number of shares authorized for issuance under the 2018 LTIP is 150,000 shares, and the 2018 LTIP is effective until May 8, 2028. After giving effect to awards granted and forfeitures made under the 2018 LTIP, the achievement of performance factors through December 31, 2020, and assuming the potential achievement of the maximum amounts of the performance factors through March 31, 2021, a total of 37,761 shares were available for issuance.

Compensation expense recognized in connection with equity-based awards was as follows for the periods indicated (in thousands):
Three Months Ended
March 31,
20212020
Compensation expense$185 $134 

At March 31, 2021 and December 31, 2020, we had $62,900 and $50,800, respectively, of accrued dividend amounts for awards granted under the 2018 LTIP.

Restricted Stock Unit Awards

The following table presents restricted stock unit award activity for the periods indicated:
Weighted-
Average Grant
Number ofDate Fair Value
Shares
per Share (1)
Restricted stock unit awards at January 1, 2021
27,490 $28.64 
Granted (2)
26,369 $29.70 
Vested(8,544)$24.83 
Forfeited $ 
Restricted stock unit awards at March 31, 2021
45,315 $29.97 
_______________
(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.
(2)The aggregate grant date fair value of restricted stock unit awards issued during 2021 was $0.8 million based on a grant date market price of our common shares ranging from $29.70 to $30.00 per share.

Unrecognized compensation cost associated with restricted stock unit awards was approximately $0.9 million at March 31, 2021. Due to the graded vesting provisions of these awards, we expect to recognize the remaining compensation cost for these awards over a weighted-average period of 1.7 years.


19

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Performance Share Unit Awards

The following table presents performance share unit award activity for the periods indicated:
Weighted-
Average Grant
Number ofDate Fair Value
Shares
per Share (1)
Performance share unit awards at January 1, 2021
16,241 $27.67 
Granted (2)
12,205 $29.70 
Vested $ 
Forfeited $ 
Performance share unit awards at March 31, 2021
28,446 $28.54 
_______________
(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.
(2)The aggregate grant date fair value of performance share unit awards issued during 2021 was $0.4 million based on a grant date market price of our common shares of $29.70 per share and assuming a performance factor of 100 percent.

Unrecognized compensation cost associated with performance share unit awards was approximately $0.6 million at March 31, 2021. We expect to recognize the remaining compensation cost for these awards over a weighted-average period of 2.5 years.


Note 12. Supplemental Cash Flow Information

Supplemental cash flows and non-cash transactions were as follows for the periods indicated (in thousands):
Three Months Ended
March 31,
20212020
Cash paid for interest$220 $150 
Cash paid for federal and state income taxes2 21 
Non-cash transactions:
Change in accounts payable related to property and equipment additions(44)1,129 
Property and equipment acquired under finance leases2,091  

See Note 13 for information related to other non-cash transactions related to leases.


20

Table of Contents

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 13. Leases

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

Three Months Ended
March 31,
20212020
Finance lease cost:
Amortization of ROU assets$1,140 $553 
Interest on lease liabilities110 74 
Operating lease cost623 679 
Short-term lease cost3,212 2,503 
Variable lease cost1