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 May 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 May 24, 2016, announcing the Company's financial and operating results for the first quarter ended March 31, 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:  May 24, 2016
By:
/s/ E. Nikolas Tavlarios
 
Name:
E. Nikolas Tavlarios
 
Title
President
     


Exhibit 1
 
 
 



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

Generates Record Sales Volumes and Solid Operational Efficiency

New York, NY, May 24, 2016 – Aegean Marine Petroleum Network Inc. (NYSE: ANW) ("Aegean" or the "Company") today announced financial and operating results for the first quarter ended March 31, 2016.

First Quarter Financial Highlights

·
Recorded record sales volumes of 4,212,636 metric tons.
·
Achieved gross profit of $80.9 million.
·
Generated operating income of $18.3 million.
·
Recorded net income attributable to Aegean shareholders of $11.8 million or $0.24 basic and diluted earnings per share.
·
Generated EBITDA of $27.1 million.

First Quarter Operational Highlights

·
Commenced operations in Algoa Bay, South Africa, further expanding global platform.
·
Operated storage facilities, including the Fujairah terminal, at or near 100% capacity.
·
Strategically relocated certain vessels from lower-activity markets to higher-growth regions.

E. Nikolas Tavlarios, Aegean's President, commented, "In the first quarter, we recorded record sales volumes despite low commodity prices, including fuel oil at its lowest point since 2003, which impacted gross spread. Despite this economic headwind, our unique business model enabled Aegean to capitalize on growth opportunities across our global platform serving 33 markets with more than 60 ports. Consistent with our goal of opportunistically entering new markets, we launched bunkering operations in Algoa Bay, a market with strong growth potential. We are pleased with the progress to date in this and remain committed to providing customers with a faster, more efficient and affordable alternative in the region."
 
Mr. Tavlarios continued, "To ensure Aegean is well positioned for continued success, we have addressed and are implementing a number of initiatives to drive efficiency and reduce costs to strengthen the Company. These initiatives include maximizing efficient use of our diversified platform, reducing expenses across the organization, and optimizing and investing resources in the most attractive markets. As we move forward, we are confident that these decisive actions will ensure Aegean is positioned for future growth and value creation for shareholders."
1

Generating Solid Financial Results

·
Revenue – The Company reported total revenue of $752.9 million for Q1 2016, a decrease of 25.8% compared to the same period in 2015 due to the drop in oil prices. Voyage and other revenues decreased to $18.1 million or by 12.1% compared to the same period in 2015.

·
Gross profit – Gross Profit, which equals total revenue less directly attributable cost of revenue increased by 0.4% to $80.9 million in the first quarter of 2016 compared to $80.6 million in the same period in 2015.

·
Operating Expense – The Company reported operating expense of $62.6 million, an increase of $2.0 million or 3.3% compared to the same period in prior year.

·
Operating Income – Operating income for Q1 was $18.3 million, a decrease of 9.0% compared to the same period in prior year.

·
Net Income – The Company achieved net income attributable to Aegean shareholders for the three months ended March 31, 2016 of $11.8 million, or $0.24 basic and diluted earnings per share a decrease of $0.4 million or 3.3% compared to the same period in 2015.

Operational Metrics

·
Sales Volume – For the three months ended March 31, 2016, the Company reported record marine fuel sales volumes of 4,212,636 metric tons, an increase of 44.5% compared with the same period in 2015. Marine fuel sales volume excluding bulk trading was 4,120,114 metric tons, an increase of 41.3% compared with the same period in 2015.

·
EBITDA Per Metric Ton – For the three months ended March 31, 2016, the Company reported EBITDA per metric ton sold of $6.44. EBITDA per metric ton in the prior year period was $9.58 per metric ton.

·
Gross Spread Per Metric Ton – For the three months ended March 31, 2016, the Company reported gross spread per metric ton on an aggregate basis of $17.6 per metric ton. Gross spread per metric ton in the prior year period was $24.1 per metric ton.

Liquidity and Capital Resources

·
Net cash provided by operating activities was $10.9 million for the three months ended March 31, 2016. Net income as adjusted for non-cash items (as defined in Note 9 below) was $50.9 million for the period.

·
Net cash used in investing activities was $8.8 million for the three months ended March 31, 2016, primarily due to the acquisition of a second hand vessel.

·
Net cash used in financing activities was $6.0 million for the three months ended March 31, 2016, mainly due to the repayment of short-term debt.
2

·
As of March 31, 2016, the Company had cash and cash equivalents of $135.9 million and working capital of $361.2 million. Non-cash working capital, or working capital excluding cash and debt, was $489.5 million.

·
As of March 31, 2016, the Company had $957.7 million undrawn amounts under its working capital facilities and $135.9 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 March 31, 2016 was 47,545,710. The weighted average basic and diluted shares outstanding for the three months ended March 31, 2015 was 46,840,532 respectively.
 
Spyros Gianniotis, Aegean's Chief Financial Officer, stated, "We are proud to have achieved our 21st consecutive quarter of profitability.  We continue to take decisive actions to maintain our strong financial position and significant liquidity in the current challenging environment.  Aegean has continued to perform in a variety of market conditions and has executed a plan to increase earnings per share of more than 57% on an adjusted basis over the last four years. We have a track record of maintaining a strong balance sheet, responsibly managing our debt and successfully and quickly de-levering. We are confident the financial and operational actions we are taking will help enable Aegean to continue enhancing value for our shareholders in the near- and long-term."
3

Summary Consolidated Financial and Other Data (Unaudited)

   
For the Three Months Ended March 31,
 
   
2015
   
2016
 
   
(in thousands of U.S. dollars, unless otherwise stated
 
Income Statement Data:
       
Revenues - third parties  
 
$
1,010,956
   
$
748,516
 
Revenues - related companies  
   
4,147
     
4,416
 
Total revenues  
   
1,015,103
     
752,932
 
Cost of revenues - third parties  
   
892,272
     
661,626
 
Cost of revenues - related companies  
   
42,209
     
10,438
 
Total cost of revenues  
   
934,481
     
672,064
 
Gross profit  
   
80,622
     
80,868
 
Operating expenses:  
               
Selling and distribution  
   
49,817
     
50,772
 
General and administrative  
   
10,306
     
11,496
 
Amortization of intangible assets  
   
374
     
300
 
Loss on sale of vessels, net  
   
130
     
-
 
Operating income  
   
19,995
     
18,300
 
Net financing cost  
   
(9,326
)
   
(9,361
)
Foreign exchange gain, net  
   
34
     
239
 
Income taxes benefit  
   
1,521
     
2,592
 
Net income attributable to AMPNI shareholders
 
$
12,224
   
$
11,770
 
Basic earnings per share (U.S. dollars)  
 
$
0.25
   
$
0.24
 
Diluted earnings per share (U.S. dollars)
 
$
0.25
   
$
0.24
 
                 
EBITDA(1)                                                                                    
 
$
27,807
   
$
27,147
 
                 
Other Financial Data:
               
Gross spread on marine petroleum products(2)
 
$
71,610
   
$
75,068
 
Gross spread on lubricants(2)  
   
1,239
     
734
 
Gross spread on marine fuel(2)  
   
70,371
     
74,334
 
Gross spread per metric ton of marine
fuel sold (U.S. dollars) (2)  
   
24.1
     
17.6
 
Net cash (used in) / provided by operating activities
   
(23,751
)
   
10,944
 
Net cash used in investing activities  
   
(2,844
)
   
(8,755
)
Net cash used in financing activities  
 
$
(5,151
)
 
$
(6,024
)
                 
Sales Volume Data (Metric Tons): (3)
               
Total sales volumes  
   
2,915,450
     
4,212,636
 
                 
Other Operating Data:
               
Number of owned bunkering tankers, end of period(4)
   
48.0
     
49.0
 
Average number of owned bunkering tankers(4)(5)
   
48.0
     
49.0
 
Special Purpose Vessels, end of period (6)……………
   
1.0
     
1.0
 
Number of operating storage facilities, end of period(7)
   
15.0
     
14.0
 

 

4

Summary Consolidated Financial and Other Data (Unaudited)
 
 
   
As of
December 31,
2015
   
As of
March 31,
2016
 
         
   
(in thousands of U.S. dollars,
unless otherwise stated)
 
Balance Sheet Data:
   
Cash and cash equivalents  
   
139,314
     
135,886
 
Gross trade receivables  
   
317,152
     
333,699
 
Allowance for doubtful accounts  
   
(7,278
)
   
(8,059
)
Inventories  
   
114,531
     
117,826
 
Current assets  
   
730,950
     
740,638
 
Total assets  
   
1,445,555
     
1,456,501
 
Trade payables  
   
72,417
     
73,688
 
Current liabilities (including current portion of long-term debt)
   
384,555
     
379,426
 
Total debt  
   
705,559
     
703,139
 
Total liabilities  
   
824,029
     
821,797
 
Total stockholder's equity  
   
621,526
     
634,704
 
                 
Working Capital Data:
               
Working capital(8)  
   
346,395
     
361,212
 
Working capital excluding cash and debt(8)
   
477,594
     
489,458
 
                 

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. EBITDA is included herein because it is a basis upon which the Company assesses its operating performance and because the Company believes that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness. The following table reconciles net income to EBITDA for the periods presented:
 
   
For the Three Months Ended March 31,
 
   
2015
   
2016
 
   
(in thousands of U.S. dollars,
unless otherwise stated)
 
Net income attributable to AMPNI shareholders
   
12,224
     
11,770
 
                 
Add: Net financing cost including amortization of financing costs
   
9,326
     
9,361
 
  Add: Income tax benefit  
   
(1,521
)
   
(2,592
)
  Add: Depreciation and amortization excluding amortization of financing costs
   
7,778
     
8,608
 
                 
EBITDA  
   
27,807
     
27,147
 







5

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 March 31,
 
   
2015
   
2016
 
         
Sales of marine petroleum products  
   
994,545
     
734,815
 
Less: Cost of marine petroleum products sold
   
(922,935
)
   
(659,747
)
Gross spread on marine petroleum products
   
71,610
     
75,068
 
Less: Gross spread on lubricants  
   
(1,239
)
   
(734
)
Gross spread on marine fuel  
   
70,371
     
74,334
 
                 
Sales volume of marine fuel (metric tons)
   
2,915,450
     
4,212,636
 
                 
Gross spread per metric ton of marine
fuel sold (U.S. dollars)  
   
24.1
     
17.6
 

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.
6

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, loss on sale of vessels, net, 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.

First Quarter 2016 Dividend Announcement
On May 23, 2016, the Company's Board of Directors declared a first quarter 2016 dividend of $0.02 per share payable on June 21, 2016 to shareholders of record as of June 7, 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, May 25th, 2016 at 8:30 A.M. Eastern Time, to discuss its first 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 (888) 438-5491 (for U.S.-based callers) or (719) 325-2428 (for international callers) and enter the passcode: 6450144.

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 6450144 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 33 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
7

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
 
 
 
 

 
8


Exhibit 2
AEGEAN MARINE PETROLEUM NETWORK INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2016 AND DECEMBER 31, 2015
(UNAUDITED)
(Expressed in thousands of U.S. dollars – except for share and per share data)
   
March 31,
2016
   
December 31,
 2015
 
ASSETS
       
CURRENT ASSETS:
       
Cash and cash equivalents
 
$
135,886
   
$
139,314
 
Trade receivables, net of allowance for doubtful accounts of $8,059 and $7,278, as of March 31, 2016 and December 31, 2015, respectively
   
325,640
     
309,874
 
Trade receivables from related parties
   
17,388
     
18,963
 
Due from related companies
   
8,742
     
6,887
 
Derivative asset
   
-
     
22,416
 
Inventories
   
117,826
     
114,531
 
Prepayments and other current assets, net of allowances for doubtful accounts of $565 as of March 31, 2016 and December 31, 2015
   
131,961
     
116,004
 
Deferred tax asset
   
2,366
     
2,133
 
Restricted cash
   
829
     
828
 
Total current assets
   
740,638
     
730,950
 
                 
FIXED ASSETS:
               
Advances for other fixed assets under construction
   
398
     
398
 
Vessels, cost
   
489,013
     
480,346
 
Vessels, accumulated depreciation
   
(113,662
)
   
(109,328
)
Vessels' net book value
   
375,351
     
371,018
 
Other fixed assets, net
   
244,764
     
246,783
 
Total fixed assets
   
620,513
     
618,199
 
                 
OTHER NON-CURRENT ASSETS:
               
Deferred charges, net
   
19,779
     
20,551
 
Intangible assets
   
8,478
     
8,778
 
Goodwill
   
66,031
     
66,031
 
Other non-current assets
   
1,062
     
1,046
 
Total non-current assets
   
95,350
     
96,406
 
                 
Total assets
   
1,456,501
     
1,445,555
 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
CURRENT LIABILITIES:
               
Short-term borrowings, net of deferred financing costs
   
234,806
     
247,406
 
Current portion of long-term debt, net of deferred financing costs
   
30,155
     
23,935
 
Trade payables to third parties
   
73,688
     
72,413
 
Trade payables to related companies
   
-
     
4
 
Other payables to related companies
   
1,164
     
1,186
 
Deferred tax liability
   
-
     
990
 
Derivative liability
   
4,890
     
-
 
Accrued and other current liabilities
   
34,723
     
38,621
 
Total current liabilities
   
379,426
     
384,555
 
                 
NON-CURRENT LIABILITIES:
               
Long-term debt, net of current portion and deferred financing costs
   
438,178
     
434,218
 
Deferred tax liability
   
907
     
2,563
 
Derivative liability
   
742
     
420
 
Other non-current liabilities
   
2,544
     
2,273
 
Total non-current liabilities
   
442,371
     
439,474
 
                 
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 March 31, 2016 and December 31, 2015; 52,008,492 and 51,382,492 shares issued and 50,036,853 and 49,410,853 shares outstanding at March 31, 2016 and December 31, 2015, respectively
   
520
     
514
 
Treasury stock $0.01 par value; 1,971,639 shares, repurchased at March 31, 2016 and December 31, 2015
   
(29,327
)
   
(29,327
)
Additional paid-in capital
   
396,471
     
394,068
 
Retained earnings
   
267,040
     
256,271
 
Total  AMPNI stockholders' equity
   
634,704
     
621,526
 
     
6
         
Total  equity
   
634,704
     
621,526
 
Total liabilities and equity
 
$
1,456,501
   
$
1,455,555
 

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 THREE MONTHS ENDED MARCH 31, 2016 AND 2015
(UNAUDITED)
(Expressed in thousands of U.S. dollars – except for share and per share data)

   
Three Months Ended
March 31,
 
   
2016
   
2015
 
Revenues
       
Revenues – third parties
 
$
748,516
   
$
1,010,956
 
Revenues – related companies
   
4,416
     
4,147
 
Total Revenues
   
752,932
     
1,015,103
 
                 
Cost of  Revenues
               
Cost of revenues– third parties
   
661,626
     
892,272
 
Cost of revenues – related companies
   
10,438
     
42,209
 
Total Cost of Revenues
   
672,064
     
934,481
 
                 
Gross Profit
   
80,868
     
80,622
 
                 
OPERATING EXPENSES:
               
Selling and Distribution
   
50,772
     
49,817
 
General and Administrative
   
11,496
     
10,306
 
Amortization of intangible assets
   
300
     
374
 
Loss on sale of vessels
   
-
     
130
 
Total operating expenses
   
62,568
     
60,627
 
                 
Operating income
   
18,300
     
19,995
 
                 
OTHER INCOME/(EXPENSE):
               
Interest and finance costs
   
(9,412
)
   
(9,347
)
Interest income
   
51
     
21
 
Foreign exchange gains, net
   
239
     
34
 
     
(9,122
)
   
(9,292
)
                 
Income before provision for income taxes
   
9,178
     
10,703
 
                 
Income taxes
   
2,592
     
1,521
 
                 
Net  income
   
11,770
     
12,224
 
Net income attributable to non-controlling interest
   
-
     
-
 
Net  income attributable to AMPNI shareholders
 
$
11,770
   
$
12,224
 
                 
Basic earnings per common share
 
$
0.24
   
$
0.25
 
Diluted earnings per common share
 
$
0.24
   
$
0.25
 
                 
Weighted average number of shares, basic
   
47,545,710
     
46,840,532
 
Weighted average number of shares, diluted
   
47,545,710
     
46,840,532
 


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 THREE MONTHS ENDED MARCH 31, 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
   
Par Value
                     
                                     
BALANCE, December 31, 2014
   
50,242,992
     
502
     
(1,971,639
)
   
(20
)
   
(29,307
)
   
371,924
     
224,317
     
-
   
$
567,416
 
                                                                         
- Net income
   
-
     
-
     
-
     
-
     
-
     
-
     
12,224
             
12,224
 
- Dividends declared ($0.02 per share)
   
-
     
-
     
-
     
-
     
-
     
-
     
(965
)
   
-
     
(965
)
Equity component of convertible notes
   
-
     
-
     
-
     
-
     
-
     
12,114
     
-
     
-
     
12,114
 
- Share-based compensation
   
932,500
     
10
     
-
     
-
     
-
     
2,651
     
-
     
-
     
2,661
 
                                                                         
BALANCE, March 31, 2015
   
51,175,492
     
512
     
(1,971,639
)
   
(20
)
   
(29,307
)
   
386,689
     
235,576
     
-
   
$
593,450
 



   
Common Stock
   
Treasury Stock
   
Additional Paid-in Capital
   
Retained Earnings
   
Non-Controlling Interest
   
Total
 
   
Number of Shares
   
Par Value
   
Number of Shares
   
Par Value
                     
                                     
BALANCE, December 31, 2015
   
51,382,492
     
514
     
(1,971,639
)
   
(20
)
   
(29,307
)
   
394,068
     
256,271
     
-
   
$
621,526
 
                                                                         
- Net income
   
-
     
-
     
-
     
-
     
-
     
-
     
11,770
     
-
     
11,770
 
- Dividends declared ($0.02 per share)
   
-
     
-
     
-
     
-
     
-
     
-
     
(1,001
)
   
-
     
(1,001
)
- Share-based compensation
   
626,000
     
6
     
-
     
-
     
-
     
2,403
     
-
     
-
     
2,409
 
                                                                         
BALANCE, March 31, 2016
   
52,008,492
     
520
     
(1,971,639
)
   
(20
)
   
(29,307
)
   
396,471
     
267,040
     
-
   
$
634,704
 
                                                                         


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 THREE MONTHS ENDED MARCH 31, 2016 AND 2015
(UNAUDITED)

(Expressed in thousands of U.S. dollars)
   
Three Months Ended March 31,
 
   
2016
   
2015
 
Cash flows from operating activities:
       
Net income
 
$
11,770
   
$
12,224
 
Adjustments to reconcile net income to net cash provided by / (used in) operating activities:
               
Depreciation
   
6,439
     
6,261
 
Provision of doubtful accounts
   
781
     
644
 
Share-based compensation
   
2,409
     
2,661
 
Amortization
   
4,566
     
4,484
 
Net deferred tax benefit
   
(2,879
)
   
(2,017
)
Unrealized loss on derivatives
   
27,628
     
9,009
 
Loss on sale of vessels, net
   
-
     
130
 
Unrealized foreign exchange loss / (gain)
   
207
     
(685
)
 Decrease / (Increase) in:
               
Trade receivables
   
(15,379
)
   
(2,880
)
Due from related companies
   
(1,855
)
   
(7,987
)
Inventories
   
(3,295
)
   
(19,029
)
Prepayments and other current assets
   
(15,957
)
   
(8,809
)
Increase/ (Decrease) in:
               
Trade payables
   
1,271
     
2,440
 
Other payables to related companies
   
(22
)
   
(198
)
Accrued and other current liabilities
   
(3,789
)
   
(17,205
)
(Increase) / Decrease in other non-current assets
   
(16
)
   
133
 
Increase/ (decrease) in other non-current liabilities
   
271
     
(383
)
Payments for dry-docking
   
(1,206
)
   
(2,544
)
Net cash provided by / (used in) operating activities
   
10,944
     
(23,751
)
                 
Cash flows from investing activities:
               
Advances for vessels under construction
   
-
     
(2,702
)
Vessel acquisitions
   
(8,667
)
   
-
 
Net proceeds from sale of vessels
   
-
     
49
 
Purchase of other fixed assets
   
(87
)
   
(137
)
Increase in restricted cash
   
(1
)
   
(54
)
Net cash used in investing activities
   
(8,755
)
   
(2,844
)
                 
Cash flows from financing activities:
               
Proceeds from long-term debt
   
13,000
     
53,613
 
Repayment of long-term debt
   
(4,998
)
   
(9,538
)
Net change in short-term borrowings
   
(12,665
)
   
(47,380
)
Financing costs paid
   
(360
)
   
(1,846
)
Dividends paid
   
(1,001
)
   
-
 
Net cash used in financing activities
   
(6,024
)
   
(5,151
)
                 
Effect of exchange rate changes on cash and cash equivalents
   
407
     
(6,797
)
                 
Net increase / (decrease) in cash and cash equivalents
   
3,428
     
(38,543
)
Cash and cash equivalents at beginning of period
   
139,314
     
129,551
 
Cash and cash equivalents at  end of period
 
$
135,886
   
$
91,008
 
                 
 
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 presentation of the Company's financial position, results of operations and cash flows for the periods presented. Operating results for the three months ended March 31, 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.


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 three-month period ended March 31, 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 and short term Debt
 
 
(In thousands)
 
Amount as previously presented, before adoption of ASU 2015-03
 
$
31,652
   
$
716,660
 
Deferred debt issuance costs
   
(11,101
)
   
(11,101
)
                 
Amount as restated, after adoption of ASU 2015-03
 
$
20,551
   
$
705,559
 
                 
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 $24,921 and $42,748 of trade accounts receivable during the periods ended March 31, 2016 and 2015, respectively, net of servicing fees of $151 and $165, included in the condensed consolidated statements of income.


4. Inventories:

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

   
March 31,
2016
   
December 31,
2015
 
Held for sale:
       
   Marine Fuel Oil
 
$
85,879
   
$
82,076
 
   Marine Gas Oil
   
30,091
     
30,529
 
     
115,970
     
112,605
 
Held for consumption:
               
   Marine fuel
   
1,144
     
1,124
 
   Lubricants
   
555
     
569
 
   Stores
   
8
     
14
 
   Victuals
   
149
     
219
 
     
1,856
     
1,926
 
Total
 
$
117,826
   
$
114,531
 


5. Vessels:

During the three months ended March 31, 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
   
-
     
-
     
-
 
- Depreciation
   
-
     
(4,334
)
   
(4,334
)
Balance, March 31, 2016
 
$
489,013
     
(113,662
)
 
$
375,351
 


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

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)

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
   
-
     
-
     
-
     
87
     
87
 
- Disposals
   
-
     
-
     
-
     
(27
)
   
(27
)
Cost, March  31, 2016
   
9,036
     
3,459
     
226,910
     
21,643
     
261,048
 
                                         
Accumulated depreciation, December 31, 2015
   
-
     
(724
)
   
(5,591
)
   
(7,890
)
   
(14,205
)
- Depreciation expense
   
-
     
(31
)
   
(1,288
)
   
(786
)
   
(2,105
)
- Disposals
   
-
     
-
     
-
     
26
     
26
 
Accumulated depreciation, March 31, 2016
   
-
     
(755
)
   
(6,879
)
   
(8,650
)
   
(16,284
)
                                         
Net book value, December 31, 2015
   
9,036
     
2,735
     
221,319
     
13,693
     
246,783
 
Net book value,
March 31, 2016
 
$
9,036
   
$
2,704
   
$
220,031
   
$
12,993
   
$
244,764
 


7. Deferred Charges:

During the three months ended March 31, 2016, the movement of the account deferred charges was as follows:

   
Dry-docking
 
Balance, December 31, 2015
 
$
20,551
 
- Additions
   
1,097
 
- Disposals
   
-
 
- Amortization for the period
   
(1,869
)
Balance, March 31, 2016
 
$
19,779
 

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.


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 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 7%, and the future price of marine fuel products. No impairment loss was recorded at March 31, 2016.
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)
 

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 per
December  31, 2015
$                       12,025
3,365
$                      15,390
March 31, 2016
12,025
3,365
15,390
Accumulated Amortization as per
December  31, 2015
(3,639)
(2,973)
(6,612)
March 31, 2016
(3,808)
(3,104)
(6,912)
NBV as per
December  31, 2015
8,386
392
8,778
March 31, 2016
8,217
261
8,478
Amortization Schedule
April 1, to December 31, 2016
509
261
770
2017
676
-
676
 
2018
676
-
676
 
2019
676
-
676
 
2020
678
-
678
 
Thereafter
5,002
-
5,002


9. Total Debt:

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

 
Loan Facility
 
March 31,
2016
   
December 31,
2015
 
Short-term borrowings:
       
Revolving overdraft facility dated 5/6/2015
 
$
-
   
$
5,356
 
Security agreement dated 8/12/2015
   
73,100
     
80,000
 
Borrowing base facility agreement dated 9/16/2015
   
163,732
     
164,141
 
Total short-term borrowings
   
236,832
     
249,497
 
Less: Deferred financing costs
   
(2,026
)
   
(2,091
)
Total short-term borrowings, net of deferred financing costs
 
$
234,806
   
$
247,406
 
 
Long-term debt:
               
Secured syndicated term loan dated 8/30/2005
 
$
17,200
   
$
17,780
 
Secured term loan facility under
senior secured credit facility dated 12/19/2006
   
10,720
     
11,420
 
Secured term loan dated 10/25/2006
   
15,671
     
16,043
 
Secured term loan dated 10/27/2006
   
9,623
     
9,929
 
Secured syndicated term loan dated 10/30/2006
   
41,661
     
42,518
 
Secured term loan dated 9/12/2008
   
20,059
     
21,128
 
Secured syndicated term loan dated 4/24/2008
   
23,136
     
23,627
 
Secured syndicated term loan dated 7/8/2008
   
-
     
341
 
Secured term loan dated 4/1/2010
   
946
     
977
 
Roll over agreement dated 4/1/2010
   
4,300
     
4,233
 
Roll over agreement dated 3/21/2014
   
3,675
     
3,786
 
Senior convertible notes 2013
   
78,565
     
77,911
 
Senior convertible notes 2015
   
43,100
     
42,658
 
Borrowing base facility agreement dated 9/18/2014
   
75,000
     
75,000
 
Term loan facility agreement dated 10/7/2015
   
119,812
     
119,812
 
Secured term loan dated 3/22/2016
   
13,000
     
-
 
Less: Deferred financing costs
   
(8,135
)
   
(9,010
)
Total
   
468,333
     
458,153
 
Less:  Current portion of long-term debt, net of deferred financing costs
   
(30,155
)
   
(23,935
)
Long-term debt, net of current portion and deferred financing costs
 
$
438,178
   
$
434,218
 

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.
 
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)
 
 
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 March 31, 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 March 31, 2016 are as follows:

   
Amount
 
April 1 to December 31, 2016
 
$
26,203
 
2017
   
108,752
 
2018
   
179,801
 
2019
   
79,228
 
2020
   
41,079
 
2021 and thereafter
   
54,290
 
Total principal payments
   
489,353
 
Less: Unamortized portion of notes' discount
   
(12,885
)
Less: Deferred financing costs
   
(8,135
)
Total long-term debt
 
$
468,333
 


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.
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)


As of March 31, 2016 and December 31, 2015, the Company was committed to the following 15 year interest rate swap arrangement:
 
 
       As of March 31, 2016    
 
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
$4,300
$504
10.0
2.35%
 
 
 
       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
$4204
10.25
2.35%
 
 
 
The Company is exposed to credit loss in the event of non-performance by the counterparty to the interest rate swap agreement. 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 March 31, 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 $19,114 and a liability of $23,960, as of March 31, 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
 
March 31, 2016
   
December 31, 2015
 
 
Fuel pricing contracts
         
Derivative asset, current
 
$
-
   
$
22,416
 
Fuel pricing contracts
Derivative liability, current
   
(4,846
)
   
-
 
Currency contracts
Derivative liability, current
   
(44
)
   
-
 
Currency contracts
Derivative liability, non-current
   
(237
)
   
-
 
Interest rates contracts
Derivative liability, non-current
   
(504
)
   
(420
)
Total, net
   
$
(5,631
)
 
$
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 three months ended March 31, 2016 and 2015:

 
Three months ended March 31,
 
Income/ (Loss)
Statements of Income Location
 
2016
   
2015
 
           
Fuel pricing contracts
Cost of  revenue - third parties
 
$
(9,852
)
 
$
(3,523
)
Currency contracts
Foreign exchange gains, net
   
(281
)
   
-
 
Interest rate contracts
Interest and finance costs
   
(58
)
   
14
 
Total
   
$
(10,191
)
 
$
(3,509
)

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
March 31, 2016
     
Liabilities
 
Total
   
Quoted prices in active markets
(Level 1)
   
Significant other observable inputs
(Level 2)
   
Significant unobservable inputs
(Level 3)
 
Interest Rate Swap
 
$
(504
)
   
-
   
$
(504
)
   
-
 
Currency contracts
   
(281
)
           
(281
)
       
Fuel pricing contracts
   
(4,846
)
   
-
     
(4,846
)
   
-
 
                                 
Total
 
$
(5,631
)
   
-
   
$
(5,631
)
   
-
 
 
 
 
 
   
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 Swap
 
$
(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 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.
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)

 
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 March 31, 2016 and 2015, the Company entered into fuel pricing contracts for 7,225,743 metric tons and 10,560,610 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. Revenues and Cost of Revenues:

The amounts in the accompanying condensed consolidated statements of income are analyzed as follows:
   
Three Months Ended March 31,
 
   
2016
   
2015
 
         
Sales of marine petroleum products
 
$
734,815
   
$
994,545
 
Voyage revenues
   
6,011
     
8,414
 
Other revenues
   
12,106
     
12,144
 
Total Revenues
   
752,932
     
1,015,103
 
                 
Cost of marine petroleum products
   
659,747
     
922,935
 
Cost of voyage revenues
   
3,524
     
3,868
 
Cost of other revenues
   
8,793
     
7,678
 
Total Cost of Revenues
 
$
672,064
   
$
934,481
 

Included in the cost of revenues is depreciation of $1,294 and $1,020 for the three months ended March 31, 2016 and 2015, respectively.


12. Selling and Distribution:

The amounts in the accompanying condensed consolidated statements of income are analyzed as follows:
   
Three Months Ended March 31,
 
   
2016
   
2015
 
         
Salaries
 
$
12,888
   
$
12,281
 
Depreciation
   
3,779
     
3,583
 
Vessel hire charges
   
5,396
     
7,705
 
Amortization of dry-docking costs
   
1,629
     
1,257
 
Vessel operating expenses
   
7,315
     
6,251
 
Bunkers consumption
   
3,170
     
4,274
 
Storage costs
   
11,219
     
9,993
 
Broker commissions
   
1,381
     
1,332
 
Provision for doubtful accounts
   
805
     
644
 
Other
   
3,190
     
2,497
 
Selling and Distribution expenses
 
$
50,772
   
$
49,817
 

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)

 
13. General and Administrative:

The amounts in the accompanying condensed consolidated statements of income are analyzed as follows:
   
Three Months Ended March 31,
 
   
2016
   
2015
 
         
Salaries
 
$
5,114
   
$
4,678
 
Depreciation
   
728
     
666
 
Office expenses
   
5,654
     
4,962
 
General and Administrative expenses
 
$
11,496
   
$
10,306
 


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 March 31, 2016 are as follows:

April 1 to December 31, 2016
 
$
26,255
 
2017
   
26,278
 
2018
   
25,450
 
2019
   
13,498
 
2020
   
13,056
 
Thereafter
   
137,993
 
Total minimum annual payments under all noncancelable operating leases
 
$
242,530
 

Rent expense under operating leases was $10,395 and $7,247 for the three months period ended March 31, 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. The Company is not in a position to comment further on this matter at this time.
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)

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 is not in a position to comment further on this matter at this time.

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.
14


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.


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 three months ended March 31, 2016:

   
Non-vested Stock
   
Weighted Average Grant Date Market Price
 
January 1, 2016
   
1,965,983
   
$
11.05
 
Granted
   
646,000
     
7.63
 
Vested
   
(311,739
)
   
11.49
 
Forfeited
   
(20,000
)
   
-
 
March 31, 2016
   
2,280,244
   
$
9.72
 

Total compensation cost of $2,403 was recognized and included in the general and administrative expenses under accompanying condensed consolidated statements of income for the three months ended March 31, 2016.
15

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)


As of March 31, 2016, there was $13,081 of total unrecognized compensation cost related to nonvested share-based compensation awards. This unrecognized compensation at March 31, 2016, is expected to be recognized as compensation expense over a weighted average period of 2.0 years as follows:

   
Amount
 
April 1 to December 31, 2016
 
$
5,836
 
2017
   
5,161
 
2018
   
1,829
 
2019
   
255
 
   
$
13,081
 


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 16), 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 March 31, 2016 and 2015, the Company excluded 2,280,244 and 1,939,816 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:


   
Three Months Ended March 31,
 
   
2016
   
2015
 
         
Net and diluted income
 
$
11,770
   
$
12,224
 
                 
Less: Dividends declared and undistributed earnings allocated to unvested shares
   
(503
)
   
(475
)
Basic and diluted income
available to common stockholders
 
$
11,267
   
$
11,749
 
                 
Basic weighted average number
of common shares outstanding
   
47,575,710
     
46,840,532
 
                 
Diluted weighted average number
of common shares outstanding
   
47,575,710
     
46,840,532
 
                 
Basic earnings per common share
 
$
0.24
   
$
0.25
 
Diluted earnings per common share
 
$
0.24
   
$
0.25
 
16

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:

   
Three Months Ended March 31,
 
   
2016
   
2015
 
Current tax expense
 
$
(287
)
 
$
496
 
Net deferred tax benefit
   
2,879
     
(2,017
)
Income tax expense/ (benefit)
 
$
2,592
   
$
(1,521
)
Effective tax rate
Reconciliation
   
36.53
%
   
26.63
%

Our provision for income taxes for each of the three-month periods ended March 31, 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:

   
Three Months Ended March 31,
 
   
2016
   
2015
 
Income tax expense on profit before tax at statutory rates
 
$
2,803
   
$
(2,097
)
Effect of permanent differences
   
(211
)
   
576
 
Total tax expense/ (benefit)
 
$
2,592
   
$
(1,521
)

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.
17


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:

Sale of vessel: On April 14, 2016, the Company signed a Memorandum of Agreement to sell its vessel Aegean Champion, a 23,400 dwt double hull bunkering tanker built in 1991, to a third-party purchaser, for a purchase price of $5,700, resulting in a total loss of approximately $1,500.  The vessel was delivered to its new owner on May 11, 2016.

18