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

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE 13A-16 OR 15D-16 UNDER THE SECURITIES
EXCHANGE ACT OF 1934

For the month of August 2016

Commission File Number:  001-33179

AEGEAN MARINE PETROLEUM NETWORK INC.
(Translation of registrant's name into English)

10, Akti Kondili
185 45, Piraeus
Greece
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [ X ]     Form 40-F [   ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ________.

Note : Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ________.

Note : Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.


INFORMATION CONTAINED IN THIS FORM 6-K REPORT

Attached as Exhibit 1 to this Report on Form 6-K is a copy of the press release of Aegean Marine Petroleum Network Inc. (the "Company"), dated August 10, 2016, announcing the Company's financial and operating results for the second quarter ended June 30, 2016.

Attached as Exhibit 2 is a copy of the Company's consolidated financial statements.


SIGNATURES
 

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




  AEGEAN MARINE PETROLEUM NETWORK INC.
(registrant)
   
   
   
   
Dated:  August 10, 2016
By:     /s/ E. Nikolas Tavlarios
 
          Name:   E. Nikolas Tavlarios
          Title:     President
 



Exhibit 1
 






Aegean Marine Petroleum Network Inc.
Announces Second Quarter 2016 Financial Results

Achieves record adjusted EBITDA results of $37.9 million

Delivers sequential quarter of more than 4 million metric tons of bunker fuel sales

New York, NY, August 10, 2016 – Aegean Marine Petroleum Network Inc. (NYSE: ANW) ("Aegean" or the "Company") today announced financial and operating results for the second quarter ended June 30, 2016.

Second Quarter Financial Highlights

Compared to prior year period:
· Increased sales volumes by 29.9% to 4,092,789 metric tons.
· Increased gross profit by 19.0% to $93.4 million compared to prior year.
· Increased operating income by 95.3% to $28.9 million.
o Increased operating income adjusted for a loss on sale of non-core vessels by 111.5% to $31.3 million.
· Recorded GAAP net income attributable to Aegean shareholders of $13.5 million or $0.27 basic and diluted earnings per share.
o Net income adjusted for a loss on sale of non-core vessels was $16.0 million or $0.32 basic and diluted earnings per share.
· Generated record adjusted EBITDA of $37.9 million.
· Sold two non-core vessels, enabling $5 million in debt pay down, which is expected to result in operating cost reductions of approximately $6.4 million on an annual basis.

Second Quarter Operational Highlights

· Ramped-up operations in Algoa Bay, South Africa, further expanding global platform.
· Further optimized operations through the sale of two non-core vessels.
· Strategically relocated certain vessels from lower-activity markets to higher-growth regions.

E. Nikolas Tavlarios, Aegean's President, commented, "We generated strong operational and financial results in the quarter and are pleased with the momentum we have going into the second half of the year. During the second quarter we increased sales volumes and improved performance in many key markets, including our new operations in South Africa and Brazil. Our top- and bottom-line results benefitted from our initiatives to strengthen our global platform and optimize our geographic footprint. Our decisions to sell non-core vessels will result in cost reductions and align with our focus on strategically allocating our resources to swiftly respond to fluctuations in demand and capitalize on opportunities in markets where we see the most potential."

Mr. Tavlarios concluded, "We are seeing strong indications of continued growth for the full year 2016 and remain confident in our ability to drive profitability and increase volumes across our platform to deliver enhanced shareholder value."
 
 

 
Generating Solid Financial Results

· Revenue – The Company reported total revenue of $987.6 million for the second quarter of 2016, a decrease of 18.2% compared to the same period in 2015, primarily due to the drop in oil prices. Voyage and other revenues decreased to $19.8 million or by 8.8% compared to the same period in 2015.

· Gross Profit – Gross Profit, which equals total revenue less directly attributable cost of revenue increased by 19.0% to $93.4 million in the second quarter of 2016 compared to $78.5 million in the same period in 2015.

· Operating Expense – The Company reported operating expense of $64.5 million for the second quarter of 2016, an increase of $0.8 million or 1.3% compared to the same period in prior year.  Adjusting for the sale of non-core assets, operating expense was $62.1 million, a decrease of 2.5% compared to the same period in the prior year.

· Operating Income – Operating income for the second quarter of 2016 adjusted for the sale of non-core assets was $31.3million, an increase of 111.5% compared to the same period in the prior year.

· Net Income – Net income attributable to Aegean shareholders adjusted for the sale of non-core vessels was $16.0 million, or $0.32 basic and diluted earnings per share, an increase of $8.9 million or 125.4% compared to the same period in 2015.

Operational Metrics

· Sales Volume – For the three months ended June 30, 2016, the Company reported marine fuel sales volumes of 4,092,789 metric tons, an increase of 29.9% compared to the same period in 2015.

· Adjusted EBITDA Per Metric Ton of Marine Fuel Sold – For the three months ended June 30, 2016, the Company reported   adjusted EBITDA per metric ton of marine fuel sold of $9.26. Adjusted EBITDA per metric ton of marine fuel sold in the prior year period was $7.63 per metric ton.

· Gross Spread Per Metric Ton of Marine Fuel Sold – For the three months ended June 30, 2016, the Company reported   gross spread per metric ton of marine fuel sold on an aggregate basis of $20.9. Gross spread per metric ton of marine fuel sold in the prior year period was $22.5.


Liquidity and Capital Resources

· Net cash used in operating activities was $60.4 million for the three months ended June 30, 2016. Net income as adjusted for non-cash items (as defined in Note 9 below) was $37.1 million for the same period.

· Net cash provided by investing activities was $7.9 million for the three months ended June 30, 2016, primarily due to the sale of two non-core vessels.

· Net cash provided by financing activities was $44.5 million for the three months ended June 30, 2016, mainly due to the drawdown of short-term debt.

· As of June 30, 2016, the Company had cash and cash equivalents of $127.8 million and working capital of $387.6 million. Non-cash working capital, or working capital excluding cash and debt, was $581.6 million.

· As of June 30, 2016, the Company had $867.8 million of undrawn amounts under its working capital facilities and $127.8 million of unrestricted cash and cash equivalents to finance working capital requirements.

· The weighted average basic and diluted shares outstanding for the three months ended June 30, 2016, was 48,117,508. The weighted average basic and diluted shares outstanding for the three months ended June 30, 2015 was 47,366,134.

Spyros Gianniotis, Aegean's Chief Financial Officer, stated, "During the quarter, we achieved strong adjusted EBITDA per metric ton of marine fuel sold of $9.26, a 43.8% increase quarter over quarter. While we achieved strong results across the board, we believe adjusted EBITDA per metric ton of marine fuel sold best reflects our operational improvements.  In the second quarter we also reported a 29.9% year over year increase in volumes and improved performance without increase in operating expenses. Financial flexibility and a strong balance sheet remain important differentiators for our business. The two vessel sales during the quarter enabled us to pay down $5 million of debt and is expected to help eliminate approximately $6.4 million in operating costs on an annual basis. We have and intend to continue to actively manage our business while de-levering and strengthening our balance sheet to drive results for all Aegean shareholders."




2

Summary Consolidated Financial and Other Data (Unaudited)
   
For the Three Months Ended
June 30,
   
For the Six Months Ended
June 30,
 
   
2015
   
2016
   
2015
   
2016
 
   
(in thousands of U.S. dollars, unless otherwise stated)
 
Income Statement Data:
               
Revenues - third parties   
 
$
1,203,100
   
$
982,337
   
$
2,214,056
   
$
1,730,853
 
Revenues - related companies   
   
4,607
     
5,219
     
8,754
     
9,635
 
Total revenues   
   
1,207,707
     
987,556
     
2,222,810
     
1,740,488
 
Cost of revenues  - third parties   
   
1,078,112
     
876,495
     
1,970,384
     
1,538,121
 
Cost of revenues related companies   
   
51,114
     
17,682
     
93,323
     
28,120
 
Total cost of revenues   
   
1,129,226
     
894,177
     
2,063,707
     
1,566,241
 
Gross profit   
   
78,481
     
93,379
     
159,103
     
174,247
 
Operating expenses:   
                               
Selling and distribution   
   
52,744
     
49,943
     
102,561
     
100,715
 
General and administrative   
   
10,602
     
11,823
     
20,908
     
23,319
 
Amortization of intangible assets   
   
375
     
297
     
749
     
597
 
Loss on sale of vessels   
   
-
     
2,437
     
130
     
2,437
 
Operating income   
   
14,760
     
28,879
     
34,755
     
47,179
 
Net financing cost   
   
(8,813
)
   
(12,477
)
   
(18,139
)
   
(21,838
)
Foreign exchange gains / (losses), net   
   
658
     
(1,922
)
   
692
     
(1,683
)
Income tax benefit / (expense)   
   
543
     
(947
)
   
2,064
     
1,645
 
Net income   
   
7,148
     
13,533
     
19,372
     
25,303
 
Less income attributable to non-controlling interest
   
-
     
8
     
-
     
8
 
Net income attributable to AMPNI shareholders   
 
$
7,148
   
$
13,525
   
$
19,372
   
$
25,295
 
Basic earnings per share (U.S. dollars)   
 
$
0.15
   
$
0.27
   
$
0.40
   
$
0.51
 
Diluted earnings per share (U.S. dollars)
 
$
0.15
   
$
0.27
   
$
0.40
   
$
0.51
 
                                 
EBITDA (1)
 
$
24,052
   
$
35,459
   
$
51,859
   
$
62,606
 
                                 
Other Financial Data:
                               
Gross spread on marine petroleum products (2)   
 
$
71,773
   
$
86,504
   
$
143,383
   
$
161,572
 
Gross spread on lubricants (2)   
   
949
     
1,031
     
2,188
     
1,765
 
Gross spread on marine fuel (2)   
   
70,824
     
85,473
     
141,195
     
159,807
 
Gross spread per metric ton of marine
fuel sold (U.S. dollars) (2)   
   
22.5
     
20.9
     
23.3
     
19.2
 
Net cash used in operating activities   
 
$
(59,301
)
 
$
(60,441
)
 
$
(83,052
)
 
$
(49,497
)
Net cash (used in) / provided by investing activities
   
(4,784
)
   
7,878
     
(7,628
)
   
(877
)
Net cash provided by financing activities   
   
11,822
     
44,515
     
6,671
     
38,491
 
                                 
Sales Volume Data (Metric Tons): (3)
                               
Total sales volumes   
   
3,150,950
     
4,092,789
     
6,066,400
     
8,305,425
 
                                 
Other Operating Data:
                               
Number of owned bunkering tankers, end of period (4)
   
49.0
     
47.0
     
49.0
     
47.0
 
Average number of owned bunkering tankers (4)(5)
   
49.0
     
48.4
     
48.5
     
48.7
 
Special Purpose Vessels, end of period (6)   
   
1.0
     
1.0
     
1.0
     
1.0
 
Number of operating storage facilities, end of period (7)
   
15.0
     
14.0
     
15.0
     
14.0
 
 
 

 
3


Summary Consolidated Financial and Other Data (Unaudited)

   
As of
December 31,
2015
   
As of
June 30,
2016
 
         
   
(in thousands of U.S. dollars, unless otherwise stated)
 
Balance Sheet Data:
   
Cash and cash equivalents                                                                                                         
   
139,314
     
127,751
 
Gross trade receivables                                                                                                         
   
317,152
     
405,399
 
Allowance for doubtful accounts                                                                                                         
   
(7,278
)
   
(8,604
)
Inventories                                                                                                         
   
114,531
     
168,170
 
Current assets                                                                                                         
   
730,950
     
857,570
 
Total assets                                                                                                         
   
1,450,011
     
1,558,961
 
Trade payables                                                                                                         
   
72,417
     
108,572
 
Current liabilities (including current portion of long-term debt)
   
389,109
     
469,928
 
Total debt                                                                                                         
   
710,015
     
758,596
 
Total liabilities                                                                                                         
   
828,485
     
909,546
 
Total stockholder's equity                                                                                                         
   
621,526
     
649,415
 
                 
Working Capital Data:
               
Working capital (8)                                                                                                         
   
341,841
     
387,642
 
Working capital excluding cash and debt (8)                                                                                                         
   
477,594
     
581,642
 
                 

Notes:
1. EBITDA represents net income before interest, taxes, depreciation and amortization. EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and our calculation of EBITDA may not be comparable to that recorded by other companies. Adjusted EBITDA represents net income before interest, taxes, depreciation and amortization, vessel and investment impairments, gains/losses on vessel disposals and other non-recurring exceptional items. EBITDA and adjusted EBITDA are included herein because they are a basis upon which the Company assesses its operating performance.
 
Adjusted EBITDA per metric ton of marine fuel sold represents the net income before interest, taxes, depreciation and amortization, vessel and investment impairments, gains/losses on vessel disposals and other non-recurring exceptional items the Company generates per metric ton of marine fuel sold. The Company calculates adjusted EBITDA per metric ton of marine fuel sold by dividing the EBITDA by the sales volume of marine fuel. Marine fuel sales do not include sales of lubricants.
 
The following table reconciles net income attributable to AMPNI to EBITDA, adjusted EBITDA and adjusted EBITDA per metric ton of marine fuel sold for the periods presented:
 
   
For the Three Months Ended June 30,
   
For the Six Months Ended June 30,
 
   
2015
   
2016
   
2015
   
2016
 
   
(in thousands of U.S. dollars, unless otherwise stated)
 
Net income to AMPNI shareholders   
   
7,148
     
13,525
     
19,372
     
25,295
 
                                 
Add: Net financing cost including amortization of financing costs
   
8,813
     
12,447
     
18,139
     
21,838
 
  Add: Income tax (benefit) / expense   
   
(543
)
   
947
     
(2,064
)
   
(1,645
)
  Add: Depreciation and amortization excluding amortization of financing costs
   
8,634
     
8,510
     
16,412
     
17,118
 
                                 
EBITDA   
   
24,052
     
35,459
     
51,859
     
62,606
 
                                 
Add: Loss on sale of vessels   
   
-
     
2,437
     
130
     
2,437
 
Adjusted EBITDA   
   
24,052
     
37,896
     
51,989
     
65,043
 
                                 
Sales volume of marine fuel (metric tons)   
   
3,150,950
     
4,092,789
     
6,066,400
     
8,305,425
 
Adjusted EBITDA per metric ton of marine fuel sold (U.S. dollars)   
   
7.63
     
9.26
     
8.57
     
7.83
 
 
 
 
4

 
2. Gross spread on marine petroleum products represents the margin the Company generates on sales of marine fuel and lubricants. Gross spread on marine fuel represents the margin that the Company generates on sales of various classifications of marine fuel oil ("MFO") or marine gas oil ("MGO"). Gross spread on lubricants represents the margin that the Company generates on sales of lubricants. Gross spread on marine petroleum products, gross spread of MFO and gross spread on lubricants are not items recognized by U.S. GAAP and should not be considered as an alternative to gross profit or any other indicator of a Company's operating performance required by U.S. GAAP. The Company's definition of gross spread may not be the same as that used by other companies in the same or other industries. The Company calculates the above-mentioned gross spreads by subtracting from the sales of the respective marine petroleum product the cost of the respective marine petroleum product sold and cargo transportation costs. For arrangements in which the Company physically supplies the respective marine petroleum product using its bunkering tankers, costs of the respective marine petroleum products sold represents amounts paid by the Company for the respective marine petroleum product sold in the relevant reporting period. For arrangements in which the respective marine petroleum product is purchased from the Company's related company, Aegean Oil S.A., or Aegean Oil, cost of the respective marine petroleum products sold represents the total amount paid by the Company to the physical supplier for the respective marine petroleum product and its delivery to the custom arrangements, in which the Company purchases cargos of marine fuel for its floating storage facilities. Transportation costs may be included in the purchase price of marine fuels from the supplier or may be incurred separately from a transportation provider. Gross spread per metric ton of marine fuel sold represents the margin the Company generates per metric ton of marine fuel sold. The Company calculates gross spread per metric ton of marine fuel sold by dividing the gross spread on marine fuel by the sales volume of marine fuel. Marine fuel sales do not include sales of lubricants. The following table reflects the calculation of gross spread per metric ton of marine fuel sold for the periods presented:
 
   
For the Three Months Ended June 30,
   
For the Six Months Ended
June 30,
 
   
2015
   
2016
   
2015
   
2016
 
   
(in thousands of U.S. dollars, unless otherwise stated)
 
Sales of marine petroleum products   
   
1,189,488
     
967,808
     
2,184,033
     
1,702,623
 
Less: Cost of marine petroleum products sold   
   
(1,117,715
)
   
(881,304
)
   
(2,040,650
)
   
(1,541,051
)
Gross spread on marine petroleum products   
   
71,773
     
86,504
     
143,383
     
161,572
 
Less: Gross spread on lubricants   
   
(949
)
   
(1,031
)
   
(2,188
)
   
(1,765
)
Gross spread on marine fuel   
   
70,824
     
85,473
     
141,195
     
159,507
 
                                 
Sales volume of marine fuel (metric tons)   
   
3,150,950
     
4,092,789
     
6,066,400
     
8,305,425
 
                                 
Gross spread per metric ton of marine
fuel sold (U.S. dollars)   
   
22.5
     
20.9
     
23.3
     
19.2
 
 
 
3. Sales volume of marine fuel is the volume of sales of various classifications of MFO and MGO for the relevant period and is denominated in metric tons. The Company does not include the sales volume of lubricants in the calculation of gross spread per metric ton of marine fuel sold.
 
4. Bunkering fleet comprises both bunkering vessels and barges.
 
5. Figure represents average bunkering fleet number for the relevant period, as measured by the sum of the number of days each bunkering tanker or barge was used as part of the fleet during the period divided by the cumulative number of calendar days in the period multiplied by the number of bunkering tankers at the end of the period. This figure does not take into account non-operating days due to either scheduled or unscheduled maintenance.
 
6. Special Purpose Vessels consists of the Orion, a 550 dwt tanker which is based in our Greek market.
 
7. The Company owns two barges, the Mediterranean and Umnenga, as floating storage facilities in Greece and South Africa. The Company also operates on-land storage facilities in Las Palmas, Fujairah, Tangiers, Panama, the U.S.A., Hamburg and Barcelona.
 
The ownership of storage facilities allows the Company to mitigate its risk of supply shortages. Generally, storage costs are included in the price of refined marine fuel quoted by local suppliers. The Company expects that the ownership of storage facilities will allow it to convert the variable costs of this storage fee mark-up per metric ton quoted by suppliers into fixed costs of operating its owned storage facilities, thus enabling the Company to spread larger sales volumes over a fixed cost base and to decrease its refined fuel costs.
 
8. Working capital is defined as current assets minus current liabilities. Working capital excluding cash and debt is defined as current assets minus cash and cash equivalents minus restricted cash minus current liabilities plus short-term borrowings plus current portion of long-term debt.
 
9. Net income as adjusted for non-cash items, such as depreciation, provision for doubtful accounts, restricted stock, amortization, deferred income taxes, gain/loss on sale of vessels, impairment losses, unrealized loss/(gain) on derivatives and unrealized foreign exchange loss/(gain), net, is used to assist in evaluating our ability to make quarterly cash distributions. Net income as adjusted for non-cash items is not recognized by accounting principles generally accepted in the United States and should not be considered as an alternative to net income or any other indicator of the Company's performance required by accounting principles generally accepted in the United States. The following table reflects the calculation of net income as adjusted for non-cash items for the periods presented:
 
   
For the Three Months Ended
June 30,
   
For the Six Months Ended
June 30,
 
   
2015
   
2016
   
2015
   
2016
 
   
(in thousands of U.S. dollars, unless otherwise stated)
 
Net income   
   
7,148
     
13,533
     
19,372
     
25,303
 
Add: Depreciation   
   
6,375
     
6,353
     
12,636
     
12,792
 
Add: Provision for doubtful accounts   
   
765
     
640
     
1,409
     
1,421
 
Add: Share based compensation   
   
2,304
     
2,179
     
4,965
     
4,588
 
Add: Amortization   
   
4,530
     
4,585
     
9,014
     
9,151
 
Add: Net deferred tax expense / (benefit)   
   
(531
)
   
920
     
(2,548
)
   
(1,959
)
Add: Unrealized loss on derivatives   
   
8,230
     
6,566
     
17,239
     
34,194
 
Add: Loss on sale of vessels   
   
-
     
2,437
     
130
     
2,437
 
Add: Unrealized foreign exchange loss / (gain)   
   
146
     
(118
)
   
(539
)
   
89
 
Net income as adjusted for non-cash items
   
28,967
     
37,095
     
61,678
     
88,016
 
 

5


Second Quarter 2016 Dividend Announcement
On August 10, 2016, the Company's Board of Directors declared a second quarter 2016 dividend of $0.02 per share payable on or about September 9, 2016 to shareholders of record as of August 24, 2016. The dividend amount was determined in accordance with the Company's dividend policy of paying cash dividends on a quarterly basis subject to factors including the requirements of Marshall Islands law, future earnings, capital requirements, financial condition, future prospects and such other factors as are determined by the Company's Board of Directors. The Company anticipates retaining most of its future earnings, if any, for use in operations and business expansion.


Conference Call and Webcast Information
Aegean Marine Petroleum Network Inc. will conduct a conference call and simultaneous Internet webcast on Wednesday, August 10, 2016 at 4:30 P.M. Eastern Time, to discuss its second quarter results. Investors may access the webcast and related slide presentation, by visiting the Company's website at www.ampni.com, and clicking on the webcast link. The conference call also may be accessed via telephone by dialing (800) 524-8850 (for U.S.-based callers) or 416-204-9702 (for international callers) and enter the passcode:   2586478.

If you are unable to participate at this time, a replay of the call will be available for two weeks at 888-203-1112 or 719-457-0820.   Enter the code 2586478 to access the audio replay. The webcast will also be archived on the Company's website:
http://www.ampni.com .


About Aegean Marine Petroleum Network Inc.
Aegean Marine Petroleum Network Inc.  is an international marine fuel logistics company that markets and physically supplies refined marine fuel and lubricants to ships in port and at sea. The Company procures product from various sources (such as refineries, oil producers, and traders) and resells it to a diverse group of customers across all major commercial shipping sectors and leading cruise lines. Currently, Aegean has a global presence in over than 30 markets and a team of professionals ready to serve our customers wherever they are around the globe. For additional information please visit:  www.ampni.com


Cautionary Statement Regarding Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "intend," "anticipate," "estimate," "project," "forecast," "plan," "potential," "may," "should," "expect" and similar expressions identify forward-looking statements. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include our ability to manage growth, our ability to maintain our business in light of our proposed business and location expansion, our ability to obtain double hull secondhand bunkering tankers, the outcome of legal, tax or regulatory proceedings to which we may become a party, adverse conditions in the shipping or the marine fuel supply industries, our ability to retain our key suppliers and key customers, material disruptions in the availability or supply of crude oil or refined petroleum products, changes in the market price of petroleum, including the volatility of spot pricing, increased levels of competition, compliance or lack of compliance with various environmental and other applicable laws and regulations, our ability to collect accounts receivable, changes in the political, economic or regulatory conditions in the markets in which we operate, and the world in general, our failure to hedge certain financial risks associated with our business, our ability to maintain our current tax treatments and our failure to comply with restrictions in our credit agreements and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.

CONTACTS:
Aegean Marine Petroleum Network Inc.
(212) 430-1098
 


6


Exhibit 2
AEGEAN MARINE PETROLEUM NETWORK INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2016 AND DECEMBER 31, 2015
(UNAUDITED)
(Expressed in thousands of U.S. dollars – except for share and per share data)
 
   
June 30, 2016
   
December 31, 2015
 
ASSETS
       
CURRENT ASSETS:
       
Cash and cash equivalents
 
$
127,751
   
$
139,314
 
Trade receivables, net of allowance for doubtful accounts of $8,604 and $7,278, as of June 30, 2016 and December 31, 2015, respectively
   
396,795
     
309,874
 
Trade receivables from related parties
   
15,013
     
18,963
 
Due from related companies
   
9,314
     
6,887
 
Derivative asset
   
-
     
22,416
 
Inventories
   
168,170
     
114,531
 
Prepayments and other current assets, net of allowances for doubtful accounts of $565 as of June 30, 2016 and December 31, 2015
   
133,309
     
116,004
 
Deferred tax asset
   
1,651
     
2,133
 
Restricted cash
   
5,451
     
828
 
Vessel held for sale
   
116
     
-
 
Total current assets
   
857,570
     
730,950
 
                 
FIXED ASSETS:
               
Advances for other fixed assets under construction
   
398
     
398
 
Vessels, cost
   
469,641
     
480,346
 
Vessels, accumulated depreciation
   
(107,342
)
   
(109,328
)
Vessels' net book value
   
362,299
     
371,018
 
Other fixed assets, net
   
242,706
     
246,783
 
Total fixed assets
   
605,403
     
618,199
 
                 
OTHER NON-CURRENT ASSETS:
               
Deferred charges, net
   
21,022
     
25,007
 
Intangible assets
   
8,181
     
8,778
 
Goodwill
   
66,031
     
66,031
 
Other non-current assets
   
754
     
1,046
 
Total non-current assets
   
95,988
     
100,862
 
                 
Total assets
   
1,558,961
     
1,450,011
 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
CURRENT LIABILITIES:
               
Short-term borrowings
   
299,958
     
249,497
 
Current portion of long-term debt
   
27,244
     
26,398
 
Trade payables to third parties
   
108,513
     
72,413
 
Trade payables to related companies
   
59
     
4
 
Other payables to related companies
   
1,155
     
1,186
 
Deferred tax liability
   
-
     
990
 
Derivative liability
   
7,821
     
-
 
Accrued and other current liabilities
   
25,178
     
38,621
 
Total current liabilities
   
469,928
     
389,109
 
                 
NON-CURRENT LIABILITIES:
               
Long-term debt, net of current portion and deferred financing costs
   
431,394
     
434,120
 
Deferred tax liability
   
1,112
     
2,563
 
Derivative liability
   
4,377
     
420
 
Other non-current liabilities
   
2,735
     
2,273
 
Total non-current liabilities
   
439,618
     
439,376
 
                 
COMMITMENTS AND CONTINGENCIES
               
                 
STOCKHOLDERS' EQUITY:
               
Preferred stock, $0.01 par value; 25,000,000 shares authorized, none issued
   
-
     
-
 
Common stock, $0.01 par value; 100,000,000 shares authorized at June 30, 2016 and December 31, 2015; 52,667,492 and 51,382,492 shares issued and 50,695,853 and 49,410,853 shares outstanding at June 30, 2016 and December 31, 2015, respectively
   
526
     
514
 
Treasury stock $0.01 par value; 1,971,639 shares, repurchased at June 30, 2016 and December 31, 2015
   
(29,327
)
   
(29,327
)
Additional paid-in capital
   
398,644
     
394,068
 
Retained earnings
   
279,564
     
256,271
 
Total  AMPNI stockholders' equity
   
649,407
     
621,526
 
        Non-controlling interest
   
8
     
-
 
Total  equity
   
649,415
     
621,526
 
Total liabilities and equity
 
$
1,558, 961
   
$
1,450,011
 

 
The accompanying notes are an integral part of these condensed consolidated financial statements
 
 
1

AEGEAN MARINE PETROLEUM NETWORK INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2016 AND 2015
(UNAUDITED)
(Expressed in thousands of U.S. dollars – except for share and per share data)
 

 
   
Six Months Ended June 30,
 
   
2016
   
2015
 
Revenues
       
Revenues – third parties
 
$
1,730,853
   
$
2,214,056
 
Revenues – related companies
   
9,635
     
8,754
 
Total Revenues
   
1,740,488
     
2,222,810
 
                 
Cost of  Revenues
               
Cost of revenues– third parties
   
1,538,121
     
1,970,384
 
Cost of revenues – related companies
   
28,120
     
93,323
 
Total Cost of Revenues
   
1,566,241
     
2,063,707
 
                 
Gross Profit
   
174,247
     
159,103
 
                 
OPERATING EXPENSES:
               
Selling and distribution
   
100,715
     
102,561
 
General and administrative
   
23,319
     
20,908
 
Amortization of intangible assets
   
597
     
749
 
Loss on sale of vessels
   
2,437
     
130
 
Total operating expenses
   
127,068
     
124,348
 
                 
Operating income
   
47,179
     
34,755
 
                 
OTHER INCOME / (EXPENSE):
               
Interest and finance costs
   
(21,937
)
   
(18,183
)
Interest income
   
99
     
44
 
Foreign exchange (losses) / gains, net
   
(1,683
)
   
692
 
Total other expense, net
   
(23,521
)
   
(17,447
)
                 
Income before income taxes
   
23,658
     
17,308
 
                 
Income taxes
   
1,645
     
2,064
 
                 
Net  income
   
25,303
     
19,372
 
Net income attributable to non-controlling interest
   
8
     
-
 
Net  income attributable to AMPNI shareholders
 
$
25,295
   
$
19,372
 
                 
Basic earnings per common share
 
$
0.51
   
$
0.40
 
Diluted earnings per common share
 
$
0.51
   
$
0.40
 
                 
Weighted average number of shares, basic
   
47,831,606
     
47,104,784
 
Weighted average number of shares, diluted
   
47,831,606
     
47,104,784
 


The accompanying notes are an integral part of these condensed consolidated financial statements
2

AEGEAN MARINE PETROLEUM NETWORK INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
 FOR THE SIX MONTHS ENDED JUNE 30, 2016 AND 2015
(UNAUDITED)
 
(Expressed in thousands of U.S. dollars – except for share and per share data )
 

   
Common Stock
   
Treasury Stock
   
Additional Paid-in Capital
   
Retained Earnings
   
Non-Controlling Interest
   
Total
 
   
Number of Shares
   
Par Value
   
Number of Shares
   
Value
   
   
   
   
 
                                 
BALANCE, December 31, 2014
   
50,242,992
     
502
     
(1,971,639
)
   
(29,327
)
   
371,924
     
224,317
     
-
   
$
567,416
 
                                                                 
- Net income
   
-
     
-
     
-
     
-
     
-
     
19,372
             
19,372
 
- Dividends declared and paid ($0.04 per share)
   
-
     
-
     
-
     
-
     
-
     
(1,950
)
   
-
     
(1,950
)
Equity component of convertible notes
   
-
     
-
     
-
     
-
     
12,114
     
-
     
-
     
12,114
 
- Share-based compensation
   
932,500
     
10
     
-
     
-
     
4,955
     
-
     
-
     
4,965
 
BALANCE, June 30, 2015
   
51,175,492
     
512
     
(1,971,639
)
   
(29,327
)
   
388,993
     
241,739
     
-
   
$
601,917
 
                                                                 



   
Common Stock
   
Treasury Stock
   
Additional Paid-in Capital
   
Retained Earnings
   
Non-Controlling Interest
   
Total
 
   
Number of Shares
   
Par Value
   
Number of Shares
   
Value
   
   
   
   
 
                                 
BALANCE, December 31, 2015
   
51,382,492
     
514
     
(1,971,639
)
   
(29,327
)
   
394,068
     
256,271
     
-
   
$
621,526
 
                                                                 
- Net income
   
-
     
-
     
-
     
-
     
-
     
25,295
     
8
     
25,303
 
- Dividends declared and paid ($0.04 per share)
   
-
     
-
     
-
     
-
     
-
     
(2,002
)
   
-
     
(2,002
)
- Share-based compensation
   
1,285,000
     
12
     
-
     
-
     
4,576
     
-
     
-
     
4,588
 
                                                                 
BALANCE, June 30, 2016
   
52,667,492
     
526
     
(1,971,639
)
   
(29,327
)
   
398,644
     
279,564
     
8
   
$
649,415
 
                                                                 

The accompanying notes are an integral part of these condensed consolidated financial statements
3

AEGEAN MARINE PETROLEUM NETWORK INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2016 AND 2015
(UNAUDITED)
(Expressed in thousands of U.S. dollars)

   
Six Months Ended June 30,
 
   
2016
   
2015
 
Cash flows from operating activities:
       
Net income
 
$
25,303
   
$
19,372
 
Adjustments to reconcile net income to net cash used in operating activities:
               
Depreciation
   
12,792
     
12,636
 
Provision of doubtful accounts
   
1,421
     
1,409
 
Share-based compensation
   
4,588
     
4,965
 
Amortization
   
9,151
     
9,014
 
Net deferred tax benefit
   
(1,959
)
   
(2,548
)
Unrealized loss on derivatives
   
34,194
     
17,239
 
Loss on sale of vessels
   
2,437
     
130
 
Unrealized foreign exchange loss / (gain)
   
89
     
(539
)
 Decrease / (Increase) in:
               
Trade receivables
   
(84,712
)
   
(68,989
)
Due from related companies
   
(2,427
)
   
(9,112
)
Inventories
   
(53,639
)
   
(49,200
)
Prepayments and other current assets
   
(17,305
)
   
9,901
 
Increase/ (Decrease) in:
               
Trade payables
   
36,155
     
3,449
 
Other payables to related companies
   
(31
)
   
(825
)
Accrued and other current liabilities
   
(13,670
)
   
(24,407
)
Decrease in other non-current assets
   
292
     
130
 
Increase in other non-current liabilities
   
462
     
157
 
Payments for dry-docking
   
(2,638
)
   
(5,834
)
Net cash used in operating activities
   
(49,497
)
   
(83,052
)
                 
Cash flows from investing activities:
               
Advances for vessels under construction
   
-
     
(2,979
)
Vessel acquisitions
   
(8,667
)
   
-
 
Advances for other fixed assets under construction
   
-
     
(5,140
)
Net proceeds from sale of vessels
   
7,942
     
49
 
Purchase of other fixed assets
   
(150
)
   
(308
)
(Increase) / Decrease in restricted cash
   
(2
)
   
750
 
Net cash used in investing activities
   
(877
)
   
(7,628
)
                 
Cash flows from financing activities:
               
Proceeds from long-term debt
   
13,000
     
53,613
 
Repayment of long-term debt
   
(17,987
)
   
(19,176
)
Net change in short-term borrowings
   
50,461
     
(23,595
)
Increase in restricted cash
   
(4,621
)
   
-
 
Financing costs paid
   
(360
)
   
(2,221
)
Dividends paid
   
(2,002
)
   
(1,950
)
Net cash provided by financing activities
   
38,491
     
6,671
 
                 
Effect of exchange rate changes on cash and cash equivalents
   
320
     
(3,332
)
                 
Net (decrease) in cash and cash equivalents
   
(11,563
)
   
(87,341
)
Cash and cash equivalents at beginning of period
   
139,314
     
129,551
 
Cash and cash equivalents at end of period
 
$
127,751
   
$
42,210
 
                 

The accompanying notes are an integral part of these condensed consolidated financial statements
4

AEGEAN MARINE PETROLEUM NETWORK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)

 (Expressed in thousands of U.S. dollars –
except share and per share data, unless otherwise stated)

 
1. Basis of presentation and general information:

The accompanying unaudited condensed consolidated financial statements include the accounts of Aegean Marine Petroleum Network Inc. ("Aegean" or "AMPNI") and its subsidiaries (Aegean and its subsidiaries are hereinafter collectively referred to as the "Company") and have been prepared in accordance with U.S. generally accepted accounting principles ("US GAAP") for interim financial information. Accordingly, they do not include all the information and notes required by US GAAP for complete financial statements.

These unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, considered necessary for a fair statement of33 the Company's financial position, results of operations and cash flows for the periods presented. Operating results for the six months ended June 30, 2016 are not necessarily indicative of the results that might be expected for the fiscal year ending December 31, 2016.

These unaudited condensed consolidated financial statements presented in this report should be read in conjunction with the audited consolidated financial statements included in the Company's Annual Report on Form 20-F for the year ended December 31, 2015.

The carrying amounts of cash and cash equivalents, trade accounts receivable, and trade accounts payable reported in the condensed consolidated balance sheets approximate their respective fair values because of the short term nature of these accounts. The fair value of revolving credit facilities is estimated based on current rates offered to the Company for similar debt of the same remaining maturities. The carrying value approximates the fair market value for the floating rate loans due to their variable interest rate, being EURIBOR, LIBOR or EIBOR. LIBOR, EURIBOR and EIBOR rates are observable at commonly quoted intervals for the full terms of the loans and hence floating rate loans are considered Level 2 items in accordance with the fair value hierarchy. The estimated fair value of the Convertible Senior Notes at June 30, 2016 and December 31, 2015, is $108,145 and $116,218, respectively, compared to a carrying value net of finance charges of $120,644 and $118,031, respectively.


2. Significant accounting policies:

A discussion of the Company's significant accounting policies can be found in the Company's consolidated financial statements included in the Annual Report on Form 20-F for the year ended December 31, 2015. There have been no material changes to these policies in the six-month period ended June 30, 2016.

Debt issuance costs . In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs," ("ASU 2015-03"), which is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. ASU 2015-03 requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The amortization of such costs will continue to be reported as interest expense. Accordingly, the Company has adopted this accounting standard and reclassified the prior-period amounts to conform to the current-period presentation.
The retrospective effect of our adoption of ASU 2015-03, which affected only the presentation of deferred debt issuance costs in our Consolidated Balance Sheets at December 31, 2015, is as follows:
 
 
 
Deferred charges, net
   
Long-term Debt
 
   
(In thousands)
 
Amount as previously presented, before adoption of ASU 2015-03
 
$
31,652
   
$
440,765
 
Deferred debt issuance costs
   
(6,645
)
   
(6,645
)
                 
Amount as restated, after adoption of ASU 2015-03
 
$
25,007
   
$
434,120
 
                 
 
 
 
5

 
AEGEAN MARINE PETROLEUM NETWORK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)

 (Expressed in thousands of U.S. dollars –
except share and per share data, unless otherwise stated)
 
3. Trade accounts receivables factoring agreement

In connection with the factoring agreement, renewed on November 13, 2015 and valid until November 14, 2016, the Company sold $67,897 and $91,714 of trade accounts receivable during the periods ended June 30, 2016 and 2015, respectively, net of servicing fees of $320 and $345, included in the condensed consolidated statements of income.


4. Inventories:

The amounts shown in the accompanying condensed consolidated balance sheets are analyzed as follows:

   
June 30,
2016
   
December 31,
2015
 
Held for sale:
       
   Marine Fuel Oil
 
$
127,317
   
$
82,076
 
   Marine Gas Oil
   
38,789
     
30,529
 
     
166,106
     
112,605
 
Held for consumption:
               
   Marine fuel
   
1,320
     
1,124
 
   Lubricants
   
588
     
569
 
   Stores
   
6
     
14
 
   Victuals
   
150
     
219
 
     
2,064
     
1,926
 
Total
 
$
168,170
   
$
114,531
 


 
6

 
AEGEAN MARINE PETROLEUM NETWORK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)

 (Expressed in thousands of U.S. dollars –
except share and per share data, unless otherwise stated)

 
5. Vessels:

During the six months ended June 30, 2016, the movement of the account vessels was as follows:

   
Vessel Cost
   
Accumulated Depreciation
   
Net Book Value
 
Balance, December 31, 2015
 
$
480,346
     
(109,328
)
 
$
371,018
 
- Vessels acquired and delivered
   
8,667
     
-
     
8,667
 
- Vessels sold
   
(19,202
)
   
10,512
     
(8,690
)
- Depreciation
   
-
     
(8,580
)
   
(8,580
)
- Reclassified to held for sale
   
(170
)
   
54
     
(116
)
Balance, June 30, 2016
 
$
469,641
     
(107,342
)
 
$
362,299
 

 
On June 24, 2016, the Company entered into a Memorandum of Agreement to sell PT25 , a non-self-propelled bunkering barge, to a third-party purchaser, for a price of $169 (CAD 220,000). The vessel was delivered to its new owners on July 18, 2016. As of June 30, 2016, the vessel was classified as asset held for sale at the lower of its carrying amount and fair value less cost to sell.

On June 24, 2016, the Company completed the sale and delivered the double hull bunkering tanker, Sara , to an unaffiliated third-party purchaser for a price of $2,303, net of commission. The loss on the disposal of $801 was calculated as the net sales price less the carrying value of the asset group, comprising the net book value of the vessel and the unamortized dry-docking costs, of $3,104. This loss is included under the loss on sale of vessels in the condensed consolidated statements of income.

On June 7, 2016, the Company completed the sale and delivered Supporter 2 , a bunkering barge previously employed in Ghana, to an unaffiliated third-party purchaser for a price of $110, net of commission. The loss on the disposal of $15 was as the net sales price less the carrying value of the vessel of $125. This loss is included under the loss on sale of vessels in the condensed consolidated statements of income

On May 11, 2016, the Company completed the sale and delivered the double hull bunkering tanker, Aegean Champion , to an unaffiliated third-party purchaser for a price of $5,529, net of commission. The loss on the disposal of $1,621 was calculated as the net sales price less the carrying value of the asset group, comprising the net book value of the vessel and the unamortized dry-docking costs, of $7,150. This loss is included under the loss on sale of vessels in the condensed consolidated statements of income.

On March 23, 2016, the Company took delivery of Umnenga , a 66,895 dwt double hull bunkering tanker built in 1993 to deploy in its service station in South Africa. The vessel was purchased from a third-party seller with a total cost of $8,667.


6. Other fixed assets:

The amounts in the accompanying condensed consolidated balance sheets are analyzed as follows:

   
Land
   
Buildings
   
Storage Facility
   
Other
   
Total
 
Cost, December 31, 2015
 
$
9,036
   
$
3,459
   
$
226,910
   
$
21,583
   
$
260,988
 
- Additions
   
-
     
-
     
-
     
150
     
150
 
- Disposals
   
-
     
-
     
-
     
(160
)
   
(160
)
Cost, June 30, 2016
   
9,036
     
3,459
     
226,910
     
21,573
     
260,978
 
                                         
Accumulated depreciation, December 31, 2015
   
-
     
(724
)
   
(5,591
)
   
(7,890
)
   
(14,205
)
- Depreciation expense
   
-
     
(63
)
   
(2,576
)
   
(1,573
)
   
(4,212
)
- Disposals
   
-
     
-
     
-
     
145
     
145
 
Accumulated depreciation, June 30, 2016
   
-
     
(787
)
   
(8,167
)
   
(9,318
)
   
(18,272
)
                                         
Net book value, December 31, 2015
   
9,036
     
2,735
     
221,319
     
13,693
     
246,783
 
Net book value, June 30, 2016
 
$
9,036
   
$
2,672
   
$
218 743
   
$
12,255
   
$
242,706
 
 
 
7

AEGEAN MARINE PETROLEUM NETWORK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)

 (Expressed in thousands of U.S. dollars –
except share and per share data, unless otherwise stated)

 
7. Deferred charges:

During the six months ended June 30, 2016, the movement of the account deferred charges was as follows:

   
Dry-docking
   
Financing Costs
   
Total
 
Balance, December 31, 2015
 
$
20,551
   
$
4,456
   
$
25,007
 
- Additions
   
2,879
     
300
     
3,179
 
- Disposals
   
(1,689
)
   
-
     
(1,689
)
- Amortization for the period
   
(3,729
)
   
(1,746
)
   
(5,475
)
Balance, June 30, 2016
 
$
18,012
   
$
3,010
   
$
21,022
 

The amortization for dry-docking costs is included in cost of revenue and in selling and distribution cost in the accompanying condensed consolidated statements of income, according to their function. Deferred financing costs related to revolving credit facilities are presented within deferred charges. The amortization of financing costs is included in interest and finance costs in the accompanying consolidated statements of income.


8. Goodwill and intangible assets:

Goodwill: Goodwill identified represents the purchase price in excess of the fair value of the identifiable net assets of the acquired business at the date of acquisition. The Company tested its goodwill at December 31, 2015. The Company calculated the fair value of the reporting unit using the discounted cash flow method, and determined that the fair value of the reporting unit exceeded its book value including the goodwill. The discounted cash flows calculation is subject to management judgment related to revenue growth, capacity utilization, the weighted average cost of capital (WACC), of approximately 6%, and the future price of marine fuel products. No impairment loss was recorded at June 30, 2016.

Intangible assets: The Company has identified finite-lived intangible assets associated with concession agreements acquired with the purchase of the Las Palmas and Panama subsidiaries, a non-compete covenant acquired with the Aegean NWE. The values recorded have been recognized at the date of the acquisition and are amortized on a straight line basis over their useful life.

The amounts in the accompanying condensed consolidated balance sheets are analyzed as follows:

   
Concession agreements
Non-compete covenant
Total
Cost as of
December  31, 2015
$        12,025
3,365
$        15,390
June 30, 2016
12,025
3,365
15,390
Accumulated
Amortization as of
December  31, 2015
(3,639)
(2,973)
(6,612)
June 30, 2016
(3,976)
(3,233)
(7,209)
NBV as of
December  31, 2015
8,386
392
8,778
June 30, 2016
8,049
132
8,181
Future Amortization
Expense
July 1, to December 31, 2016
341
132
473
2017
676
-
676
 
2018
676
-
676
 
2019
676
-
676
 
2020
678
-
678
 
Thereafter
5,002
-
5,002

 
8

AEGEAN MARINE PETROLEUM NETWORK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)

 (Expressed in thousands of U.S. dollars –
except share and per share data, unless otherwise stated)

 
 
9. Total debt:

The amounts comprising total debt are presented in the accompanying condensed consolidated balance sheet as follows:

 
Loan Facility
 
June 30,
2016
   
December 31,
2015
 
Short-term borrowings:
       
Revolving overdraft facility dated 5/6/2015
 
$
-
   
$
5,356
 
Security agreement dated 8/12/2015
   
87,650
     
80,000
 
Borrowing base facility agreement dated 9/16/2015
   
212,308
     
164,141
 
Total short-term borrowings
 
$
299,958
   
$
249,497
 
 
Long-term debt:
               
Secured syndicated term loan dated 8/30/2005
 
$
16,630
   
$
17,780
 
Secured term loan facility dated 12/19/2006
   
10,020
     
11,420
 
Secured term loan dated 10/25/2006
   
15,298
     
16,043
 
Secured term loan dated 10/27/2006
   
9,317
     
9,929
 
Secured syndicated term loan dated 10/30/2006
   
40,804
     
42,518
 
Secured term loan dated 9/12/2008
   
18,991
     
21,128
 
Secured syndicated term loan dated 4/24/2008
   
22,645
     
23,627
 
Secured syndicated term loan dated 7/8/2008
   
-
     
341
 
Secured term loan dated 4/1/2010
   
856
     
977
 
Roll over agreement dated 4/1/2010
   
4,100
     
4,233
 
Roll over agreement dated 3/21/2014
   
3,564
     
3,786
 
Senior convertible notes 2013, net of discount
   
79,238
     
77,911
 
Senior convertible notes 2015, net of discount
   
43,542
     
42,658
 
Borrowing base facility agreement dated 9/18/2014
   
75,000
     
75,000
 
Term loan facility agreement dated 10/7/2015
   
116,817
     
119,812
 
Secured term loan dated 3/22/2016
   
7,654
     
-
 
Less: Deferred financing costs
   
(5,838
)
   
(6,645
)
Total
   
458,638
     
460,518
 
Less:  Current portion of long-term debt
   
(27,244
)
   
(26,398
)
Long-term debt, net of current portion and deferred financing costs
 
$
431,394
   
$
434,120
 

 
The above dates show the later of the date of the facility, the date of the most recent renewal or the date the loan was assumed by the Company.
 
The amortization of deferred financing costs is included in interest and finance costs in the accompanying condensed consolidated statements of income.

On March 22, 2016, the Company entered into a secured credit facility for an amount of $13,000. The loan bears interest at LIBOR plus a margin.

As at June 30, 2016, the Company was in compliance with all of its financial covenants contained in its credit facilities.

The annual principal payments of long-term debt required to be made after June 30, 2016 are as follows:
 
   
Amount
 
July 1 to December 31, 2016
 
$
14,376
 
2017
   
108,532
 
2018
   
179,581
 
2019
   
78,448
 
2020
   
41,069
 
2021 and thereafter
   
54,240
 
Total principal payments
   
476,246
 
Less: Unamortized portion of notes' discount
   
(11,770
)
Less: Deferred financing costs
   
(5,838
)
Total long-term debt
 
$
458,638
 

9

 
AEGEAN MARINE PETROLEUM NETWORK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)

 (Expressed in thousands of U.S. dollars –
except share and per share data, unless otherwise stated)

 
10. Derivatives and fair value measurements:

The Company uses derivatives in accordance with its overall risk management strategy.  The changes in the fair value of these derivatives are recognized immediately through earnings.

The following describes the Company's derivative classifications:

The Company enters into interest rate swap contracts to economically hedge its exposure to variability in its floating rate long-term debt.  Under the terms of the interest rate swaps, the Company and the bank agreed to exchange at specified intervals the difference between paying fixed rate and floating rate interest amount calculated by reference to the agreed principal amount and maturity.  Interest rate swaps allow the Company to convert long-term borrowings issued at floating rates to equivalent fixed rates.

As of June 30, 2016 and December 31, 2015, the Company was committed to the following interest rate swap arrangements:
 
   
As of June 30, 2016
   
Interest Rate Index
Principal Amount
Fair Value/Carrying
Amount of Liability
Remaining term
 
Fixed Interest Rate
U.S. Dollar-denominated Interest Rate Swap
 
Euribor
$4,100
$511
9.75
2.35%
U.S. Dollar-denominated Interest Rate Swap
 
Libor
$75,000
$1,583
4.93
1.39%
U.S. Dollar-denominated Interest Rate Swap
 
Libor
$75,000
$1,410
4.92
1.35%
             
             
   
As of December 31, 2015
   
Interest Rate Index
Principal Amount
Fair Value/ Carrying
Amount of Liability
Weighted-average remaining term
 
Fixed Interest Rate
U.S. Dollar-denominated Interest Rate Swap
 
 
Euribor
$4,233
$420
10.25
2.35%


The Company is exposed to credit loss in the event of non-performance by the counterparties to the interest rate swap agreements. In order to minimize counterparty risk, the Company enters into derivative transactions with counterparties that are rated AAA or at least A at the time of the transactions.

The Company enters into foreign currency contracts to hedge its exposure to variability in foreign currency related to the repayment of its long-term debt in foreign currency.  Under the terms of the foreign currency contracts, the Company agreed with the bank to exchange currencies at specified exchange rates for the scheduled outflows from the loan repayment. As of June 30, 2016, the Company was committed to 5 year currency arrangements to exchange currencies at agreed rates and for amounts related to the repayment of its foreign currency long-term loan.

The Company uses fuel pricing contracts to hedge exposure to changes in the net cost of marine fuel purchases. The Company has the right of offset with the counterparty of the fuel pricing contracts, and settles outstanding balances on a monthly basis.  Therefore, these amounts are presented on a net basis in the condensed consolidated balance sheets (on a gross basis: an asset of $27,362 and a liability of $35,050, as of June 30, 2016 and an asset of $46,949 and a liability of $24,533 as of December 31, 2015).

The following table presents information about our derivative instruments measured at fair value and their locations on the condensed consolidated balance sheets:
 
 
     
As of
 
 
Balance Sheet Location 
 
June 30, 2016
   
December 31, 2015
 
 
Fuel pricing contracts
         
Derivative asset, current
 
$
-
   
$
22,416
 
Fuel pricing contracts
Derivative liability, current
   
(7,688
)
   
-
 
Currency contracts
Derivative liability, current
   
(133
)
   
-
 
Currency contracts
Derivative liability, non-current
   
(873
)
   
-
 
Interest rate swaps
Derivative liability, non-current
   
(3,504
)
   
(420
)
Total, net
   
$
(12,198
)
 
$
21,996
 



10


AEGEAN MARINE PETROLEUM NETWORK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)

 (Expressed in thousands of U.S. dollars –
except share and per share data, unless otherwise stated)

 

The following table presents the effect and financial statement location of our derivative instruments on our condensed consolidated statements of income for the six months ended June 30, 2016 and 2015:

 
Six months ended June 30,
 
Income/ (Loss)
Statements of Income Location
 
2016
   
2015
 
           
Fuel pricing contracts
Cost of  revenue - third parties
 
$
(39,540
)
 
$
(6,192
)
Currency contracts
Foreign exchange losses, net
   
(1,006
)
   
-
 
Interest rate swaps
Interest and finance costs
   
(3,139
)
   
119
 
Total
   
$
(43,685
)
 
$
(6,073
)

The following table sets forth by level our assets/ liabilities that are measured at fair value on a recurring basis.  As required by the fair value guidance, assets/ liabilities are categorized in their entirety based on the lowest level of input that is significant to the fair value measurement.

       
Fair value measurements at June 30, 2016
 
Liabilities
 
Total
   
Quoted prices in
active markets
(Level 1)
   
Significant other
observable inputs
(Level 2)
   
Significant unobservable inputs
(Level 3)
 
Interest rate swaps
 
$
(3,504
)
   
-
   
$
(3,504
)
   
-
 
Currency contracts
   
(1,006
)
           
(1,006
)
       
Fuel pricing contracts
   
(7,688
)
   
-
     
(7,688
)
   
-
 
                                 
Total
 
$
(12,198
)
   
-
   
$
(12,198
)
   
-
 
           
 
Fair value measurements at December 31, 2015
 
Assets/ (Liabilities)
 
Total
   
Quoted prices in
active markets
(Level 1)
   
Significant other
observable inputs
(Level 2)
   
Significant unobservable inputs
(Level 3)
 
Interest rate swaps
 
$
(420
)
   
-
   
$
(420
)
   
-
 
Fuel pricing contracts
   
22,416
     
-
     
22,416
     
-
 
                                 
Total
 
$
21,996
     
-
   
$
21,996
     
-
 


The fair value of the interest rate swaps is determined using the discounted cash flow method based on market-based EURIBOR or LIBOR rates swap yield curves, taking into account current interest rates. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit spreads, measures of volatility, and correlations of such inputs.

The fair value of the foreign currency contracts is determined based on the agreed fixed and the current exchange currency for the amount agreed to be exchanged on each contract.

The Company uses observable inputs to calculate the mark-to-market valuation of the fuel pricing derivatives. Fuel pricing contracts are valued using quoted market prices of the underlying commodity. During the periods ended June 30, 2016 and 2015, the Company entered into fuel pricing contracts for 14,763,764 metric tons and 8,720,373 metric tons, respectively.

The Company's derivatives trade in over the counter markets, and as such, model inputs are generally observable and do not require significant management judgment. Such instruments are classified within Level 2 of the fair value hierarchy.

11

 
AEGEAN MARINE PETROLEUM NETWORK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)

 (Expressed in thousands of U.S. dollars –
except share and per share data, unless otherwise stated)

 
11. Revenues and Cost of revenues:

The amounts in the accompanying condensed consolidated statements of income are analyzed as follows:
 
 
 
Six Months Ended June 30,
 
   
2016
   
2015
 
 
 
   
 
Sales of marine petroleum products
 
$
1,702,623
   
$
2,184,033
 
Voyage revenues
   
12,621
     
14,517
 
Other revenues
   
25,244
     
24,260
 
Total Revenues
   
1,740,488
     
2,222,810
 
 
               
Cost of marine petroleum products
   
1,541,051
     
2,040,650
 
Cost of voyage revenues
   
7,103
     
7,561
 
Cost of other revenues
   
18,087
     
15,496
 
Total Cost of Revenues
 
$
1,566,241
   
$
2,063,707
 

 
Included in the cost of revenues is depreciation of $2,967 and $2,064 for the six months ended June 30, 2016 and 2015, respectively.

12. Selling and distribution:

The amounts in the accompanying condensed consolidated statements of income are analyzed as follows:
 
   
Six Months Ended June 30,
 
   
2016
   
2015
 
 
 
   
 
Salaries
 
$
26,942
   
$
25,323
 
Depreciation
   
7,441
     
7,336
 
Vessel hire charges
   
10,047
     
14,269
 
Amortization of dry-docking costs
   
3,225
     
2,622
 
Vessel operating expenses
   
14,293
     
13,966
 
Bunkers consumption
   
6,097
     
9,642
 
Storage costs
   
22,238
     
20,135
 
Broker commissions
   
2,505
     
2,854
 
Provision for doubtful accounts
   
1,421
     
1,409
 
Other
   
6,506
     
5,005
 
Selling and Distribution expenses
 
$
100,715
   
$
102,561
 
 
13. General and administrative:

The amounts in the accompanying condensed consolidated statements of income are analyzed as follows:
 
 
 
Six Months Ended June 30,
 
   
2016
   
2015
 
 
       
Salaries
 
$
9,679
   
$
9,541
 
Depreciation
   
1,454
     
1,349
 
Office expenses
   
12,186
     
10,018
 
General and Administrative expenses
 
$
23,319
   
$
20,908
 

 
12

 
AEGEAN MARINE PETROLEUM NETWORK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)

 (Expressed in thousands of U.S. dollars –
except share and per share data, unless otherwise stated) 
 

14. Commitments and contingencies:

Lease commitments: The Company leases certain property under operating leases, which require the Company to pay maintenance, insurance and other expenses in addition to annual rentals. The minimum annual payments under all non-cancelable operating leases at June 30, 2016 are as follows:

July 1 to December 31, 2016
 
$
19,453
 
2017
   
27,603
 
2018
   
25,714
 
2019
   
13,757
 
2020
   
13,319
 
Thereafter
   
139,542
 
Total minimum annual payments under all noncancelable operating leases
 
$
239,388
 

Rent expense under operating leases was $21,421 and $16,806 for the six months period ended June 30, 2016 and 2015, respectively.
 
Legal Matters :
 
In November 2005, an unrelated party filed a declaratory action against one of the Company's subsidiaries before the First Instance Court of Piraeus, Greece. The plaintiff asserted that he was instrumental in the negotiation of the Company's eight-year Fuel Purchase Agreement with a government refinery in Jamaica and sought a judicial affirmation of his alleged contractual right to receive a commission of $0.01 per metric ton of marine fuel over the term of the contract. In December 2008, the First Instance Court of Piraeus dismissed the plaintiff's action as vague and inadmissible, however the Company appealed that decision on the grounds that there was no contract between the Company and the plaintiff and that the court lacked jurisdiction. While the action was pending in Greece, the plaintiff commenced a new action involving the same cause of action before the Commercial Court of Paris, France, which dismissed that action in June 2009. The plaintiff's appeal of the dismissal was denied by the Paris Court of Appeal in February 2010. In January 2012, the plaintiff commenced a new action relating to the same allegations before the Commercial Court of Paris, which was dismissed on June 27, 2012 in favor of the competence and jurisdiction of the Greek courts. In July 2012, the plaintiff filed a "contredit," an appeal procedure under French law. In November 2013, the Court held that there is no matter pending in Greece that would allow the French courts to decline jurisdiction to the benefit of the Greek proceedings. As a result, the case is to return to the Commercial Court of Paris which should have to examine the admissibility of Mr. Varouxis' claim in France. The relevant pleadings were issued on December 18, 2015. According to its decision the French Court held that Varouxis is entitled to a part compensation based on a half of its claim fee of $0.01 per metric ton sold but limited to the amount of $670 with respect to the years 2005 to 2008. The Judgement is enforceable subject to the submission by Mr Varouxis to AMP of a bank guarantee as counter-security covering the reimbursement to AMP of the said sum plus interest. Until now Mr. Varouxis has been unable to submit a properly worded bank guarantee. In the meantime, both AMP and Mr. Varouxis have filed contrary appeals versus the decision issued. In any event our position continues to be that this claim is unwarranted and lacking in merit.
 
On December 18, 2014, the Company and Aegean Bunkering (USA) LLC, or the Aegean Parties, filed a one-count complaint for breach of contract against Hess Corporation, or Hess, in New York Supreme Court, New York County (653887/2014). In the complaint, the Aegean Parties allege that Hess breached certain express representations and warranties in representing its financial condition in an agreement pursuant to which Hess sold its bunker oil business to Aegean Bunkering (USA) LLC. The Aegean Parties claim approximately $28,000 in compensatory damages, exclusive of interest and costs. On February 9, 2015, Hess filed an answer to the complaint. During the course of discovery, through co-counsel Boies Schiller & Flexner LLP, the Aegean Parties filed a motion for leave to amend the complaint on December 15, 2015. The proposed amended complaint added a claim for fraud and fraudulent inducement in connection with the Agreement, seeking approximately $127 million in compensatory damages, exclusive of interest and costs, and punitive damages in an amount to be determined at trial. On Hess's consent, the Aegean Parties' motion to amend the complaint was granted on January 15, 2016. On February 3, 2016, Hess filed a motion to dismiss the amended complaint in part, specifically, the fraud and fraudulent inducement claim and portions of the contract claim. The Aegean Parties' responded to the motion to dismiss on March 4, 2016, and Hess submitted its reply on March 18, 2016. The parties are now awaiting a decision from the Court.
 
The Company has supplied bunkers through agreements with various entities of the O.W. Bunker Group, which filed for bankruptcy in November 2014. The Company issued notice to members of the O.W. Bunker Group for the request of payment for the value of the bunkers supplied. The Company's exposure for these supplies amounts to $4,951, of which $2,922 is recorded as a provision for doubtful accounts in our consolidated balance sheets.  The Company believes that the respective members of the O.W. Bunker Group were never the rightful owners of the bunkers and is currently trying to work out escrow or other practical solutions with the end users. The Company expects to recover the amount of at least $2,029.
 
A Company's subsidiary, Aegean Oil Terminal Corporation, has provided storage facilities through agreements to Alco Shipping Services LLC and Alco Fuel Trading LLC. In breach of their obligations under their agreements the debtors failed to deliver any products to the terminal and to pay the invoices in the principal sum of $450. Following various demands for payment and in the absence of payment, the Company's subsidiary has terminated their agreement and commenced legal proceedings against the debtors in the High Court of London. After lodging with the court the relevant application, claim for and witness statements the Company's subsidiary received a sealed order from the High Court in London giving permission to service the Claim Form and Particulars of Claim out of the jurisdiction upon the debtors in UAE. The UK Foreign and Commonwealth Office have now returned the service process request with the documents unserved due to the fact that the debtors have moved offices. The debtors do not have a valid defense and once the claim form is served upon them the Company expects to proceed to obtain a summary judgment from the High Court in London. As soon as a judgment is obtained the Company expects to proceed to execute the same by way of arrest and sale of any of the nine ships the debtors own.

Aegean Oil Terminal Corporation has also provided storage facilities through agreements to House of Gas Trading DMCC. In breach of their obligations under their agreements the debtors failed to deliver any products to the terminal and to pay the invoices in the principal sum of $882. Following various demands for payment and in the absence of payment, the Company has terminated their agreement and commenced legal proceedings against the debtors in the High Court of London. After lodging with the court the relevant application, claim for and witness statements the Company's subsidiary received a sealed order from the High Court in London giving permission to service the Claim Form and Particulars of Claim out of the jurisdiction upon the debtors in UAE. The UK Foreign and Commonwealth Office have not yet returned the service process request. The debtors do not have a valid defense and once the claim form is served upon them the Company expects to proceed to obtain a summary judgment from the High Court in London. As soon as a judgment is obtained the Company expects to proceed to execute the same by way of arrest and sale of their assets.

Various claims, suits, and complains, including those involving government regulations and product liability, arise in the ordinary course of business. In addition, losses may arise from disputes with charterers and agents and insurance and other claims with suppliers relating to the operations of the Company's vessels. Currently, management is not aware of any such claims or contingent liabilities for which a provision should be established in the accompanying consolidated financial statements.
 
Environmental and other liabilities: The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the Company's exposure. Currently, management is not aware of any such claims or contingent liabilities for which a provision should be established in these condensed consolidated financial statements. The Company's Protection and Indemnity ("P&I") insurance policies cover third-party liability and other expenses related to injury or death of crew, passengers and other third parties, loss or damage of cargo, claims arising from collisions with other vessels, damage to other third-party property, and pollution arising from oil or other substances.  The Company's coverage under the P&I insurance policies, except for pollution, are unlimited. Coverage for pollution is $1,000,000 per vessel per incident.

13

 
AEGEAN MARINE PETROLEUM NETWORK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)

 (Expressed in thousands of U.S. dollars –
except share and per share data, unless otherwise stated) 

 
15. Equity incentive plan:

The Company measures stock-based compensation cost at grant date, based on the estimated fair value of the award which is determined by the closing price of the Company's common stock traded on the NYSE on the grant date, and recognizes the cost as expense on a straight-line basis (net of estimated forfeitures) over the requisite service period. The expense is recorded in the general and administrative expenses in the accompanying condensed consolidated statements of income. Aegean is incorporated in a non-taxable jurisdiction and accordingly, no deferred tax assets are recognized for these stock-based incentive awards.
 
All grants of nonvested stock issued under the 2015 Plan are subject to accelerated vesting upon certain circumstances set forth in the 2015 Plan.
 
The following table summarizes the status of the Company's non-vested shares outstanding for the six months ended June 30, 2016:
 
   
Non-vested Stock
   
Weighted Average Grant Date Market Price
 
January 1, 2016
   
1,965,983
   
$
11.05
 
Granted
   
1,313,000
     
6.60
 
Vested
   
(862,573
)
   
8.62
 
Forfeited
   
(20,000
)
   
-
 
June 30, 2016
   
2,396,410
   
$
9.19
 

 
Total compensation cost of $4,576 was recognized and included in the general and administrative expenses under the accompanying condensed consolidated statements of income for the six months ended June 30, 2016.
 
As of June 30, 2016, there was $14,640 of total unrecognized compensation cost related to nonvested share-based compensation awards. This unrecognized compensation at June 30, 2016, is expected to be recognized as compensation expense over a weighted average period of 1.8 years as follows:
 
   
Amount
 
July 1 to December 31, 2016
 
$
4,914
 
2017
   
6,580
 
2018
   
2,722
 
2019
   
424
 
   
$
14,640
 


16. Earnings per common share:

The computation of basic earnings per share is based on the weighted average number of common shares outstanding during the period using the two class method. The computation of diluted earnings per share assumes the granting of non-vested share-based compensation awards (refer to Note 15), for which the assumed proceeds upon grant are deemed to be the amount of compensation cost attributable to future services and not yet recognized using the treasury stock method, to the extent dilutive.

As of June 30, 2016 and 2015, the Company excluded 2,396,410 and 1,768,983 non-vested shares, respectively, as anti-dilutive. Non-vested share-based payment awards that contain rights to receive non forfeitable dividends or dividend equivalents (whether paid or unpaid) and participate equally in undistributed earnings are participating securities, and thus, are included in the two-class method of computing earnings per share.

The treasury stock method is used in calculating diluted earnings per share for the Notes as the Company expects to settle the principal in cash.

The components of the calculation of basic earnings per common share and diluted earnings per common share are as follows:

   
Six Months Ended June 30,
 
   
2016
   
2015
 
         
Net income attributable to AMPNI shareholders
 
$
25,295
   
$
19,372
 
                 
Less: Dividends declared and undistributed earnings allocated to unvested shares
   
(1,103
)
   
(717
)
Income available to AMPNI common stockholders, basic and diluted
 
$
24,192
   
$
18,655
 
                 
Basic weighted average number
of common shares outstanding
   
47,831,606
     
47,104,784
 
                 
Diluted weighted average number
of common shares outstanding
   
47,831,606
     
47,104,784
 
                 
Basic earnings per common share
 
$
0.51
   
$
0.40
 
Diluted earnings per common share
 
$
0.51
   
$
0.40
 


14

 
AEGEAN MARINE PETROLEUM NETWORK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)

 (Expressed in thousands of U.S. dollars –
except share and per share data, unless otherwise stated) 

 


17. Income taxes:

The Company operates through its subsidiaries, which are subject to several tax jurisdictions. The income tax expense/ (benefit) for the periods presented and the respective effective tax rates for such periods are as follows:

   
Six Months Ended June 30,
 
   
2016
   
2015
 
Current tax expense
 
$
314
   
$
484
 
Net deferred tax benefit
   
(1,959
)
   
(2,548
)
Income tax benefit
 
$
(1,645
)
 
$
(2,064
)
Effective tax rate reconciliation
   
79.09
%
   
27.34
%

Our provision for income taxes for each of the six-month periods ended June 30, 2016 and 2015 was calculated for the Company's subsidiaries based in Belgium, Canada, Germany, Russia and the U.S. that are subject to federal and state income taxes.

The reconciliation between the statutory tax expense on income from continuing operations to the income tax expense/ (benefit) recorded in the financial statements is as follows:

   
Six Months Ended June 30,
 
   
2016
   
2015
 
Income tax benefit on profit before tax at statutory rates
 
$
(774
)
 
$
(2,522
)
Effect of permanent differences
   
(871
)
   
458
 
Total tax benefit
 
$
(1,645
)
 
$
(2,064
)
 
Deferred income taxes that derive from our Belgian subsidiaries, are the result of provisions of the tax laws that either require or permit certain items of income or expense to be reported for tax purposes in different periods than they are reported for financial reporting.


18. Business segments and geographical information:

The Company is primarily a physical supplier in the downstream marine petroleum products industry. Marine petroleum products mainly consist of different classifications of marine fuel oil, marine gas oil and lubricants.

The Company cannot and does not identify expenses, profitability or other financial performance measures by type of marine petroleum product supplied, geographical area served, nature of services performed or on anything other than on a consolidated basis (although the Company is able to segregate revenues on these various bases). As a result, management, including the chief operating decision maker, reviews operating results on a consolidated basis only. Therefore, the Company has determined that it has only one operating segment.

The Company is domiciled in the Marshall Islands but provides no services in that location. It is impracticable to disclose revenues from external customers attributable to individual foreign countries because where the customer is invoiced is not necessarily the country of domicile. In addition, due to the nature of the shipping industry, where services are provided on a worldwide basis, the country of domicile of the customer does not provide useful information regarding the risk that this disclosure is intended to address.

The Company's long-lived assets mainly consist of bunkering tankers which are positioned across the Company's existing territories and which management, including the chief operating decision maker, reviews on a periodic basis and reposition among the Company's existing or new territories to optimize the vessel per geographical territory ratio.

The Company's vessels operate within or outside the territorial waters of each geographical location and, under international law, shipping vessels usually fall under the jurisdiction of the country of the flag they sail. The Company's vessels are not permanently located within particular territorial waters and the Company is free to mobilize all its vessels worldwide at its own discretion.


19. Subsequent events:

Delivery of vessel: On July 18, 2016, the Company completed the sale and delivered the non-self-propelled bunkering barge, PT25 , to an unaffiliated third-party, for a price of $169 (CAD 220,000), resulting in a total gain of approximately $47.
 


 

15