AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 12, 2015

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Empire Petroleum Partners, LP

(Exact name of Registrant as Specified in Its Charter)

Delaware

5172

47-3945618

(State or Other Jurisdiction of

Incorporation or Organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

8350 North Central Expressway, Suite M2185

Dallas, Texas 75206

(214) 750-9313

(Address, Including Zip Code, and Telephone Number, including Area Code, of Registrant’s Principal Executive Offices)

David Potter

Chief Financial Officer

8350 North Central Expressway, Suite M2185

Dallas, Texas 75206

(214) 750-9313

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

Copies to:

William N. Finnegan IV

Latham & Watkins LLP
811 Main Street, Suite 3700
Houston, Texas 77002
(713) 546-5400

David P. Oelman

Sarah K. Morgan

Vinson & Elkins L.L.P.

1001 Fannin, Suite 2500

Houston, Texas 77002

(713) 758-2222

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

CALCULATION OF REGISTRATION FEE



Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price⁽¹⁾⁽²⁾	Amount of Registration Fee
Common units representing limited partner interests	$100,000,000	$11,620

(1)	Includes common units issuable upon exercise of the underwriters’ option to purchase additional common units.

(2)	Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated May 12, 2015

PROSPECTUS

LOGO

Common Units

Representing Limited Partner Interests

This is the initial public offering of our common units representing limited partner interests. We are offering common units of Empire Petroleum Partners, LP in this offering. Prior to this offering, there has been no public market for our common units. We currently expect the initial public offering price to be between $ and $ per common unit.

We intend to apply to list our common units on the New York Stock Exchange under the symbol “EPLP.”

Investing in our common units involves a high degree of risk. Before buying any common units, you should carefully read the discussion of material risks of investing in our common units in “Risk Factors” beginning on page 20. These risks include the following:

•

We may not generate sufficient distributable cash flow to support the payment of the minimum quarterly distribution to our unitholders.

•

A significant decrease in demand for motor fuel in the areas we serve could adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

•

A majority of our revenue is generated under fuel supply agreements that must be renegotiated or replaced periodically. If we are unable to successfully renegotiate or replace these agreements, then our results of operations, financial condition and ability to make distributions to our unitholders could be adversely affected.

•

If we are unable to make accretive acquisitions of fuel supply agreements, our future growth could be limited.

•

Any acquisitions we complete are subject to substantial risks that could reduce our ability to make distributions to our unitholders.

•

Our growth strategy requires access to new capital; unfavorable capital markets could impair our ability to grow.

•

Certain of our fuel purchase agreements with major oil companies provide for volume rebates and certain incentive payments. Some of these agreements contain minimum volume commitments and branding reimbursement obligations. If we are unable to renew these contracts on similar terms or we are subject to minimum volume penalties or reimbursement obligations, our results of operations, financial condition and ability to make distributions to our unitholders could be adversely affected.

•

Our general partner and its affiliates, including Empire Petroleum Partners, LLC, have conflicts of interest with us and limited fiduciary duties to us and our unitholders, and they may favor their own interests to our detriment and to the detriment of our other unitholders. Additionally, we have no control over the business decisions and operations of Empire, and Empire is under no obligation to adopt a business strategy that favors us.

•

Our partnership agreement restricts the remedies available to our unitholders for actions taken by our general partner that might otherwise constitute breaches of fiduciary duties.

•

Our unitholders have very limited voting rights, will not have the right to elect our general partner or the board of directors of our general partner and cannot initially remove our general partner or its directors without its consent.

•

Our tax treatment depends on our status as a partnership for federal income tax purposes. If the Internal Revenue Service were to treat us as a corporation for federal income tax purposes, which would subject us to entity-level taxation, or if we were otherwise subjected to a material amount of additional entity-level taxation, then our distributable cash flow to our unitholders would be substantially reduced.

•

Our unitholders’ share of our income will be taxable to them for federal income tax purposes even if they do not receive any cash distributions from us.


	Per Common Unit	Total
Initial public offering price	$	$
Underwriting discounts and commissions⁽¹⁾	$	$
Proceeds to Empire Petroleum Partners, LP, before expenses	$	$

(1)	Excludes an aggregate structuring fee equal to % of the gross proceeds of this offering payable to Barclays Capital Inc. and Wells Fargo Securities, LLC. Please read “Underwriting” beginning on page 199 of this prospectus for additional information regarding underwriting compensation.

We have granted the underwriters an option to purchase up to an additional common units at the initial public offering price, less underwriting discounts and commissions, within 30 days from the date of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters are offering the common units as set forth under “Underwriting.” The underwriters expect to deliver the common units on or about , 2015 through the book-entry facilities of The Depository Trust Company.


Barclays		Wells Fargo Securities

Prospectus dated , 2015

LOGO

TABLE OF CONTENTS


	Page
SUMMARY		1
Overview		1
Our Business Strategies		3
Our Competitive Strengths		4
Recent Acquisitions		6
Our Relationship With Empire		7
Risk Factors		7
Formation Transactions		7
Ownership and Organizational Structure		8
Our Management		10
Principal Executive Offices		10
Summary of Conflicts of Interest and Duties		10
The Offering		12
Summary Historical and Pro Forma Financial and Operating Data		16
RISK FACTORS		20
Risks Inherent in Our Business		20
Risks Inherent in an Investment in Us		32
Tax Risks		42
USE OF PROCEEDS		47
CAPITALIZATION		48
DILUTION		49
CASH DISTRIBUTION POLICY AND RESTRICTIONS ON DISTRIBUTIONS		50
General		50
Our Minimum Quarterly Distribution		52
Unaudited Pro Forma Adjusted EBITDA and Distributable Cash Flow for the Year Ended December 31, 2014		54
Estimated Adjusted EBITDA and Distributable Cash Flow for the Twelve Months Ending June 30, 2016		56
Significant Forecast Assumptions		59
PROVISIONS OF OUR PARTNERSHIP AGREEMENT RELATING TO CASH DISTRIBUTIONS		64
Distributions of Available Cash		64
Operating Surplus and Capital Surplus		65
Capital Expenditures		67
Subordinated Units and Subordination Period		67
Distributions of Available Cash From Operating Surplus During the Subordination Period		69
Distributions of Available Cash From Operating Surplus After the Subordination Period		69
General Partner Interest and Incentive Distribution Rights		69
Percentage Allocations of Available Cash from Operating Surplus		70
Right to Reset Incentive Distribution Levels		70
Distributions from Capital Surplus		73
Adjustment of the Minimum Quarterly Distribution and Target Distribution Levels		74
Distributions of Cash Upon Liquidation		74
SELECTED HISTORICAL AND PRO FORMA FINANCIAL AND OPERATING DATA		77

TABLE OF CONTENTS


	Page
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		80
Overview		80
Segment Information		81
Recent Trends and Outlook		81
Results of Operations		82
Liquidity and Capital Resources		97
Contractual Obligations		100
Off-Balance Sheet Arrangements		100
Impact of Inflation		100
Critical Accounting Policies		101
Quantitative and Qualitative Disclosures About Market Risk		104
INDUSTRY		105
The United States Motor Fuel Industry		105
Wholesale Motor Fuel Distribution		109
BUSINESS		112
Overview		112
Our Relationship with Empire		115
Our Business Strategies		115
Our Competitive Strengths		116
Our Business and Properties		118
Recent Acquisitions		123
Competition		123
Omnibus Agreement		124
Atlas Purchase Option		124
Seasonality		124
Insurance		125
Environmental Matters		125
Other Government Regulation		127
Employee Health and Safety		127
Title to Properties, Permits and Licenses		127
Our Employees		128
Legal Proceedings		128
MANAGEMENT		129
Management of Empire Petroleum Partners, LP		129
Directors and Executive Officers of Empire Petroleum Partners GP, LLC		130
Board Leadership Structure		131
Board Role in Risk Oversight		132
Reimbursement of Expenses		132
Compensation Discussion and Analysis		132
SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		146
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		147
Distributions and Payments to Our General Partner and Its Affiliates		147
Agreements Governing the Transactions		148
Other Agreements with Empire and Related Parties		150
Procedures for Review, Approval and Ratification of Related Person Transactions		152
CONFLICTS OF INTEREST AND DUTIES		154
Conflicts of Interest		154
Duties of Our General Partner		160

TABLE OF CONTENTS


	Page
DESCRIPTION OF THE COMMON UNITS		163
The Common Units		163
Transfer Agent and Registrar		163
Transfer of Common Units		163
Listing		164
OUR PARTNERSHIP AGREEMENT		165
Organization and Duration		165
Purpose		165
Capital Contributions		165
Voting Rights		165
Limited Liability		167
Issuance of Additional Partnership Interests		168
Amendment of Our Partnership Agreement		168
Merger, Consolidation, Conversion, Sale or Other Disposition of Assets		170
Termination and Dissolution		171
Liquidation and Distribution of Proceeds		171
Withdrawal or Removal of Our General Partner		171
Transfer of General Partner Interest		172
Transfer of Ownership Interests in Our General Partner		172
Transfer of Incentive Distribution Rights		173
Change of Management Provisions		173
Limited Call Right		173
Non-Citizen Assignees; Redemption		173
Non-Taxpaying Holders; Redemption		174
Meetings; Voting		174
Status as Limited Partner		175
Indemnification		175
Reimbursement of Expenses		175
Books and Reports		175
Right to Inspect Our Books and Records		176
Registration Rights		176
Exclusive Forum		176
UNITS ELIGIBLE FOR FUTURE SALE		177
Rule 144		177
Our Partnership Agreement and Registration Rights		177
Lock-up Agreements		178
Registration Statement on Form S-8		178
MATERIAL FEDERAL INCOME TAX CONSEQUENCES		179
Partnership Status		180
Tax Treatment of Income Earned Through Corporate Subsidiary		181
Limited Partner Status		181
Tax Consequences of Unit Ownership		182
Tax Treatment of Operations		188
Disposition of Common Units		189
Uniformity of Units		191
Tax-Exempt Organizations and Other Investors		192
Administrative Matters		192
Recent Legislative Developments		195
State, Local, Foreign and Other Tax Considerations		195

iii

TABLE OF CONTENTS


	Page
INVESTMENT IN EMPIRE PETROLEUM PARTNERS, LP BY EMPLOYEE BENEFIT PLANS		197
General Fiduciary Matters		197
Prohibited Transaction Issues		197
Plan Asset Issues		198
UNDERWRITING		199
Commissions and Expenses		199
Option to Purchase Additional Common Units		200
Lock-Up Agreements		200
Offering Price Determination		201
Indemnification		201
Stabilization, Short Positions and Penalty Bids		201
Electronic Distribution		202
Listing on the NYSE		202
Discretionary Sales		202
Stamp Taxes		202
Other Relationships		202
Direct Participation Program Requirements		203
Selling Restrictions		203
VALIDITY OF THE COMMON UNITS		204
EXPERTS		204
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		205
WHERE YOU CAN FIND ADDITIONAL INFORMATION		205
FORWARD-LOOKING STATEMENTS		206
INDEX TO FINANCIAL STATEMENTS		F-1
APPENDIX A FORM OF FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF EMPIRE PETROLEUM PARTNERS, LP		A-1

You should rely only on the information contained in this prospectus and any free writing prospectus we may authorize to be delivered to you. We have not, and the underwriters have not, authorized any other person to provide you with information different from that contained in this prospectus and any free writing prospectus. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell the common units in any jurisdiction where an offer or sale is not permitted. The information in this prospectus is accurate only as of the date of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.

This prospectus contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. Please read “Risk Factors” and “Forward-Looking Statements.”

Through and including , 2015 (the 25th day after the date of this prospectus), federal securities laws may require all dealers that effect transactions in these securities, whether or not participating in this offering, to deliver a prospectus. This requirement is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Industry and Market Data

The data included in this prospectus regarding the motor fuel distribution industry, including descriptions of trends in the market and our position and the position of our competitors within the industry, is based on a variety of sources, including independent industry publications and surveys, government publications and other published independent sources, information obtained from customers, distributors, suppliers and trade and business organizations and publicly available information, as well as our good faith estimates, which have been derived from management’s knowledge and experience in the industry in which we operate. Although we have not independently verified the accuracy or completeness of the third-party information included in this prospectus, based on management’s knowledge and experience, we believe that the third-party sources are reliable and that the third-party information included in this prospectus or in our estimates is accurate and complete.

Trademarks and Trade Names

We own or have rights to various trademarks, service marks and trade names that we use in connection with the operation of our business. This prospectus may also contain trademarks, service marks and trade names of Empire or third parties, which are the property of their respective owners. Our use or display of Empire’s or third parties’ trademarks, service marks or trade names in this prospectus is not intended to, and should not be read to, imply a relationship with or endorsement or sponsorship of us. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus may appear without the ^®, TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, service marks and trade names.

SUMMARY

This summary highlights selected information contained elsewhere in this prospectus. You should read the entire prospectus carefully, including “Risk Factors” and the audited historical consolidated financial statements and the unaudited pro forma condensed combined financial statements and the notes to those financial statements, before investing in our common units. Unless otherwise indicated, the information in this prospectus assumes that the underwriters do not exercise their option to purchase additional common units. You should read “Risk Factors” beginning on page 20 for more information about important factors that you should consider before purchasing our common units.

Unless the context otherwise requires, when used in a historical context, references in this prospectus to “Empire Petroleum Partners,” “we,” “our,” “us,” “the partnership,” or like terms, refer to Empire Petroleum Partners, LLC, a Delaware limited liability company, and its subsidiaries, or, as the context may require, to Empire Petroleum Holdings, LLC, a Delaware limited liability company, and its subsidiaries. Our predecessor for accounting purposes is Empire Petroleum Partners, LLC for the years ended December 31, 2014, 2013 and 2012, and for the period from July 7, 2011 through December 31, 2011, and is Empire Petroleum Holdings, LLC for the period from January 1, 2011 through July 6, 2011 and the year ended December 31, 2010.

Unless the context otherwise requires, when used in the present tense or in a prospective context, references in this prospectus to “Empire Petroleum Partners,” “we,” “our,” “us,” “the partnership,” or like terms refer to Empire Petroleum Partners, LP, a Delaware limited partnership, and its subsidiaries. References to “Empire” refer to Empire Petroleum Partners, LLC. References in this prospectus to “our general partner” refer to Empire Petroleum Partners GP, LLC, a Delaware limited liability company and our general partner. References in this prospectus to “Empire Services” refer to Empire Petroleum Services, LLC, a Delaware limited liability company and our wholly owned subsidiary. Although Empire Services is organized as a limited liability company, it has elected to be treated as a corporation solely for U.S. federal income tax purposes. Unless the context otherwise requires, references in this prospectus to “Recent Acquisitions” refer collectively to our acquisition of (i) motor fuel supply agreements and related assets and 18 retail fuel outlets from Atlas Oil Company, or “Atlas,” (ii) 41 retail fuel outlets from CST Brands, Inc., or “CST,” and (iii) motor fuel supply agreements and related assets from Mansfield Oil Company of Gainesville, Inc., or “Mansfield,” in each case as more fully described in “—Recent Acquisitions.” Unless otherwise noted, all operational data included in this prospectus reflects our business operations as of February 28, 2015.

Overview

We are a growth-oriented Delaware limited partnership primarily engaged in the wholesale distribution of motor fuel under long-term, fixed-margin supply agreements. We distribute motor fuel to over 1,300 retail fuel outlets across 27 states and the District of Columbia, making us one of the largest and most geographically diversified independent wholesale distributors of motor fuel in the United States. Our motor fuel distribution network serves retail fuel outlets, which we refer to as “sites,” primarily in our four core markets of Texas, the Southeast, the Great Lakes and the Mid-Atlantic regions of the United States. For the year ended December 31, 2014, pro forma for the Recent Acquisitions, we distributed approximately 919 million gallons of motor fuel under most major fuel brands, including BP, Chevron, Citgo, Conoco, Exxon, Marathon, Mobil, Phillips 66, Shell, Sunoco, Texaco and Valero.

We distribute motor fuel to:

•

1,060 sites operated by independent dealers, which we refer to as “dealer-operated sites”;

•

190 sites operated by independent consignment agents, which we refer to as “consignment sites,” where we sell motor fuel directly to consumers but do not operate the sites; and

•

61 sites that we operate, which we refer to as “company-operated sites.”

We believe that our long-term, fixed-margin motor fuel supply agreements with independent dealers, or “dealers,” provide us with stable and predictable cash flow that will support consistent distributions to our unitholders. We intend to grow our business primarily through acquisitions of wholesale fuel supply agreements, which we believe will add to the scale, stability and diversification of our motor fuel distribution network.

Since 2011, we have pursued an acquisition growth strategy and have successfully completed 12 acquisitions, increasing our annual volume of distributed motor fuel at a compound annual growth rate of 77% from 165 million gallons in 2011 to 919 million gallons in 2014, pro forma for the Recent Acquisitions. The table below illustrates our growth and the historical volumes distributed to dealer-operated sites, consignment sites and company-operated sites.


	Motor Fuel Distributed
	Year Ended December 31,
									2014 Pro Forma⁽¹⁾
	2011		2012		2013		2014		Fuel Volume		Percentage of Total
	(gallons in millions)
Dealer-Operated Sites		137		277		326		453		695		76	%
Consignment Sites		17		32		51		50		144		15	%
Company-Operated Sites		11		39		37		45		80		9	%

Total		165		348		414		548		919		100	%

(1)	Pro forma for the Recent Acquisitions. Does not include gallons attributable to one acquisition completed in March 2015.

In our wholesale motor fuel distribution business, we distribute motor fuel to independent dealer-operated sites pursuant to long-term, fixed margin supply agreements. These agreements obligate dealers to purchase motor fuel exclusively from us and typically contain minimum volume commitments. In 2014, pro forma for the Recent Acquisitions, 62% of the volume that we distributed to dealers was supported by these minimum volume commitments. When distributing motor fuel to dealer-operated sites, we have no commodity price exposure because we are able to pass on the cost of motor fuel to the dealers. We typically purchase motor fuel only after receiving a dealer order and we hold title to the fuel only for the intraday period required for delivery. In addition, following the closing of this offering, we will distribute motor fuel to our consignment sites and company-operated sites pursuant to a long-term, fixed-margin supply agreement, which we refer to as the “Empire Supply Agreement,” that we will enter into with Empire Services. Please read “Business—Our Business and Properties—Wholesale Motor Fuel Distribution—Empire Supply Agreement.”

Under our supply agreements with dealers, we typically receive a fixed margin, expressed in cents per gallon, in addition to the posted purchase price at the motor fuel supply terminal, plus transportation costs and taxes. Due to the large volume of motor fuel that we purchase, we typically benefit from volume rebates and prompt payment incentives from most major oil companies with whom we do business, some of which may not be available to smaller wholesale distributors. Pursuant to the Empire Supply Agreement, we will receive a fixed margin per gallon, in addition to the cost of purchasing and delivering the motor fuel, for motor fuel that we distribute to our consignment sites and company-operated sites. For the year ended December 31, 2014, pro forma for the Recent Acquisitions and the Empire Supply Agreement, the total gross margin per gallon that we received from the wholesale distribution of motor fuel, including fixed margins, rebates and incentive payments, was 4.6 cents per gallon, and our gross profit from the wholesale distribution of motor fuel was approximately $42.4 million, or 53% of our total gross profit.

In addition to income from our wholesale distribution of motor fuel, we receive income from retail sales of motor fuel to consumers at consignment sites and company-operated sites, income from sales of convenience store merchandise at company-operated sites and rental income from 99 sites that we lease or sublease to dealers

or consignment agents. For the year ended December 31, 2014, pro forma for the Recent Acquisitions and the Empire Supply Agreement, our gross profit from retail sales of motor fuel to consumers, sales of convenience store merchandise and site leases was approximately $22.2 million, $15.0 million and $0.8 million, or 27%, 19% and 1% of our total gross profit, respectively.

We purchase motor fuel primarily from major oil companies pursuant to motor fuel purchase agreements. We are a distributor of most major motor fuel brands, including BP, Chevron, Citgo, Conoco, Exxon, Marathon, Mobil, Phillips 66, Shell, Sunoco, Texaco and Valero, as well as unbranded motor fuel. We believe that the variety and large volume of branded and unbranded motor fuel that we distribute is one of our key competitive advantages over many other wholesale motor fuel distributors. For example, we are currently able to offer most major brands of motor fuel to our dealers whereas, according to the Society of Independent Gasoline Marketers of America, or “SIGMA,” the average member of SIGMA offered four or fewer of the approximately 15 major brands of motor fuel in 2014. As an independent wholesale distributor with strong, unbiased relationships with a diverse group of major oil companies, we are able to tailor our distribution of specific brands to dealers in geographic regions with demonstrated brand preferences. For example, we are the second largest distributor of Shell-branded fuel in Texas, the third largest distributor of Phillips 66-branded fuel in the Midwest, one of the five largest distributors of BP-branded fuel in Georgia and one of the ten largest distributors of Chevron-branded fuel across six southern states from Texas to Florida.

For the year ended December 31, 2014, pro forma for the Recent Acquisitions, we had gross profit of $80.4 million, Adjusted EBITDA of $38.9 million and net loss of $3.2 million. Please read “—Summary Historical and Pro Forma Financial and Operating Data—Non-GAAP Financial Measures” for the definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to our most directly comparable financial measures calculated and presented in accordance with U.S. generally accepted accounting principles, or “GAAP.”

Our Business Strategies

Our primary business objectives are to maintain stable cash flow and increase our quarterly cash distribution per unit over time. We intend to accomplish these objectives by executing the following strategies:

•

Grow Our Motor Fuel Distribution Volume Through Accretive Acquisitions. Since 2011, we have grown our motor fuel distribution volume at a compound annual growth rate of 77% through 12 acquisitions, ten of which were sourced outside of a competitive auction process. We intend to continue to leverage our dedicated acquisition team, as well as our relationships with dealers and Empire’s equityholders, to source accretive acquisition opportunities pursuant to the following strategies:

•

Capitalize on Highly Fragmented Distributor Market. According to Petroleum Trends International, Inc., as of January 2015, there were approximately 4,850 domestic wholesale fuel distributors, reflecting the fragmented nature of our industry. In addition, in recent years, major oil companies have been increasing the minimum volume, scale and credit requirements for their motor fuel distribution partners. As a result, we believe there is considerable opportunity for consolidation in our industry given the large number of wholesale fuel distributors with limited scale that may consider selling their businesses.

•

Focus on Acquiring Wholesale Volume with Stable, Fixed-Margin Cash Flow. We intend to focus on maintaining stable, fixed-margin cash flow generated primarily under long-term wholesale motor fuel supply agreements. We will therefore generally prioritize acquisition opportunities that will rapidly increase the volume of motor fuel that we distribute in our wholesale business rather than focusing on acquisitions of company-operated sites or real estate. By increasing our wholesale motor fuel distribution volume, both through multi-site acquisitions and single-site additions, we believe that we will be able to realize improved purchasing power and leverage our flexible and

scalable distribution platform, thus expanding our opportunities for particularly accretive acquisitions.

•

Target Growth in Existing Core Markets and Opportunistically Expand into New Markets. We believe that targeting acquisitions in and around our current core markets will allow us to improve our purchasing power with major oil companies and leverage our existing personnel in these markets. In addition, we have a proven ability to expand into and quickly achieve scale in new markets, and we will continue to evaluate acquisition opportunities in new markets. We intend to pursue high-quality assets in attractive markets and focus on the acquisition of long-term wholesale motor fuel supply agreement portfolios.

•

Focus on Dealer-Operated Sites and Maintain Independence. We will continue to focus on wholesale motor fuel distribution to dealer-operated sites. We intend to strengthen our relationships with dealers by focusing on customer service, offering a wide variety of brands, competitive pricing, surety and promptness of supply and a variety of dealer programs aimed at improving our dealers’ businesses. Unlike some of our competitors, as an independent wholesale distributor, we are able to maintain alignment of interests with our dealers and avoid direct competition with them in most circumstances. While we will acquire and operate sites in select situations, our strategy is to ultimately lease most of the sites we acquire to dealers and generate stable, fixed-margin cash flow from long-term wholesale motor fuel supply agreements and rental income. We believe that our dealer focus will continue to strengthen our reputation and allow us to organically grow our business by entering into supply agreements with new dealers and more favorable long-term supply agreements with dealers with whom we have existing relationships.

•

Continue to Develop and Capitalize on Our Relationships with Major Oil Companies. We are one of the largest and most geographically diversified independent wholesale distributors of motor fuel in the United States, and we distribute a wide variety of fuel brands, including BP, Chevron, Citgo, Conoco, Exxon, Marathon, Mobil, Phillips 66, Shell, Sunoco, Texaco and Valero. Over 85% of the motor fuel that we distribute, pro forma for the Recent Acquisitions, is branded motor fuel. As our wholesale distribution business continues to grow, we expect to benefit from more favorable prompt payment incentives, volume rebates, procurement costs and other economies of scale.

•

Maintain Financial Flexibility and Conservative Leverage. We plan to pursue a disciplined financial policy and maintain a conservative capital structure, which we believe will allow us to take advantage of attractive acquisition opportunities. At the closing of this offering, we expect to have available borrowing capacity of approximately $173 million under our $250 million revolving credit facility. This facility also has a $75 million accordion feature. We believe that this borrowing capacity, together with our cash from operations and our ability to access the debt and equity capital markets will allow us to fund potential future acquisitions and our working capital needs.

For a more detailed description of our business strategies, please read “Business—Our Business Strategies.”

Our Competitive Strengths

We believe we will be able to execute our business strategies successfully because of the following competitive strengths:

•

Stable Cash Flow from Long-Term, Fixed-Margin Wholesale Supply Agreements with Limited Commodity Exposure. We generate revenue primarily through long-term, fixed-margin wholesale motor fuel supply agreements with dealers. During the year ended December 31, 2014, pro forma for the Recent Acquisitions, approximately 76% of our motor fuel sales by volume were made to dealers pursuant to fixed-margin supply agreements, approximately 90% of which were long-term contracts.

Our supply agreements generally have an initial term of 10 years and, as of February 28, 2015, had an average remaining term of approximately 8.7 years. When distributing motor fuel to dealer-operated sites, we have no commodity price exposure because we pass on the cost of motor fuel to dealers. The transportation costs that we incur are also passed through to dealers.

•

Proven Track Record of Volume Growth Through Acquisitions; Scalable Platform and Robust Acquisition Pipeline. We have a proven track record of volume growth and a dedicated acquisition team that identifies, evaluates, executes and integrates acquisition opportunities that drive accretive growth. Since 2011, we have successfully completed 12 acquisitions, ten of which were sourced outside of a competitive auction process, increasing our annual volume of distributed motor fuel at a compound annual growth rate of 77%. Four of the 12 sellers in our acquisitions since 2011 now hold equity interests in Empire and have extensive contacts throughout the motor fuel distribution industry. In addition, we have demonstrated that our business is predictably scalable. From 2012 to 2014, pro forma for the Recent Acquisitions, our Adjusted EBITDA per gallon increased steadily each year from 2.4 cents per gallon to 4.2 cents per gallon, highlighting the benefits of the growing economies of scale we expect to continue to realize going forward. We believe that our dedicated acquisition team, along with our relationships with dealers and Empire’s equityholders, position us to successfully pursue accretive acquisitions in our highly fragmented industry. We have a robust acquisition pipeline and have identified numerous potential targets that we believe would significantly increase the volume of motor fuel that we distribute and further leverage our scalable platform.

•

Leading Independent Wholesale Distributor and Strong Relationships with a Diversified Dealer Base. Unlike some of our competitors that are more focused on company-operated sites, we are an independent wholesale distributor primarily focused on motor fuel distribution to independent dealer-operated sites, which limits the competitive tension between our dealers and us. We have established strong relationships with our dealers by focusing on customer service, offering a wide variety of brands, competitive pricing, surety and promptness of supply and a variety of dealer programs aimed at improving our dealers’ businesses. Our dealer base is highly diversified and no single dealer accounts for more than 5% of our volume.

•

Favorable Fuel Purchase Agreements Through Our Scale and Strong Relationships with Major Oil Companies. We are one of the largest and most geographically diversified independent wholesale motor fuel distributors in the United States, and we believe that we can leverage our size and strong relationships with major oil companies to obtain favorable terms in our fuel purchase agreements. Major oil companies continue to raise the minimum volume, scale and credit requirements for their motor fuel distribution partners. We believe this benefits us, given the volume of motor fuel we purchase, the size of our motor fuel distribution network, our creditworthiness and our growth strategy.

•

Financial Flexibility to Fund Acquisitions. At the closing of this offering, we expect to have available borrowing capacity of approximately $173 million under our $250 million revolving credit facility. This facility also has a $75 million accordion feature. We believe that the borrowing capacity available under our revolving credit facility, together with our cash flow from operations and our ability to access the debt and equity capital markets, will provide us with the financial flexibility to fund future acquisitions, including those in our robust acquisition pipeline. Additionally, we believe that our ability to make acquisitions with both cash and partnership interests will expand our universe of potential acquisition opportunities and help us pursue further accretive growth for our unitholders.

•

Our Experienced and Incentivized Management Team. With an average of over 20 years of industry experience, our management team has a proven ability to build relationships with dealers and major oil companies, acquire and develop motor fuel distribution assets, integrate acquisitions and grow operations while maintaining financial discipline. Prior to joining Empire, our chief executive officer, with the assistance of our chief operating officer, led the expansion of Murphy USA’s retail operations

from zero to nearly 4 billion gallons of motor fuel sold annually over a span of 13 years. Additionally, our management team will collectively own approximately 8.5% of our general partner, further incentivizing the successful implementation of our growth strategy.

For a more detailed description of our competitive strengths, please read “Business—Our Competitive Strengths.”

Recent Acquisitions

In 2014 and 2015, we completed six acquisitions, adding approximately 534 million annual gallons and an additional 69 owned or leased sites to our motor fuel distribution network. The three acquisitions described below were transformational, accounting for approximately 425 million annual gallons and 59 owned or leased sites.

Acquisition of Atlas Assets

On January 12, 2015, we acquired motor fuel supply agreements and related assets and 18 sites from Atlas for total consideration of $81.6 million. The assets acquired from Atlas are concentrated in the Great Lakes region of the United States and added approximately 211 million annual gallons to our motor fuel distribution network. The Atlas asset acquisition established a new market for us in the Great Lakes region, increased the volume of motor fuel purchased from and strengthened our relationships with the Marathon and Phillips 66 motor fuel brands, and provided us with a strategic equity partner that currently owns approximately 11% of Empire and has the right to appoint one member to Empire’s board of directors. We acquired substantially all of Atlas’ retail motor fuel business, and Atlas has retained all of its commercial motor fuel distribution business. Pursuant to the purchase agreement with Atlas, Atlas granted Empire a purchase option until January 2020, which we refer to as the “Atlas Purchase Option,” on any retail motor fuel business that Atlas sources during such period. Empire will contribute its rights to the Atlas Purchase Option to us in connection with this offering. Please read “Business—Atlas Purchase Option.”

Acquisition of CST Sites

Beginning on November 10, 2014 and continuing through December 12, 2014, we acquired 41 sites from CST in Texas and Colorado for a total purchase price of $43.9 million. The assets acquired from CST added approximately 40 million annual gallons to our motor fuel distribution network. The CST asset acquisition expanded our geographic footprint in Texas, added Colorado to our motor fuel distribution network, increased the volume of motor fuel purchased from and strengthened our relationship with the Valero motor fuel brand, and added attractive assets to our real estate portfolio.

Acquisition of Mansfield Assets

On September 24, 2014, we acquired motor fuel supply agreements and related assets from Mansfield for total consideration of $30.6 million. The assets acquired from Mansfield are concentrated in the Southeast region of the United States and added approximately 174 million annual gallons to our motor fuel distribution network. The Mansfield asset acquisition expanded our footprint into eight new states, strengthened our position in certain of our core markets, increased the volume of motor fuel purchased from and strengthened our relationships with the BP, Citgo, Exxon, Mobil and Valero motor fuel brands, increased the volume of unbranded motor fuel that we distribute, and provided us with a strategic equity partner that currently owns approximately 3% of Empire. We acquired substantially all of Mansfield’s retail motor fuel business, and Mansfield has retained all of its commercial motor fuel distribution business.

Our Relationship With Empire

We benefit from our relationship with Empire, a Dallas-based private company, and its equityholders. In connection with the closing of this offering, Empire will contribute substantially all of its assets and liabilities to us and will continue to own and control our general partner. In addition, our omnibus agreement will provide that Empire grant us a right of first offer, which we refer to as the “Empire Right of First Offer,” for a period of five years following the closing of this offering on any assets or real estate that Empire acquires in the motor fuel distribution business before selling or transferring any such assets to a third party.

Empire is controlled by American Infrastructure MLP Fund, L.P. and its affiliated funds, or “AIM,” a group of private investment funds. Two of Empire’s equityholders, Atlas and Mansfield, are engaged in fuel supply, logistics and services operations in the United States. We believe that these equityholders provide us with additional industry knowledge and relationships and increase our potential for future accretive growth opportunities. In addition, Atlas has granted Empire the Atlas Purchase Option, which will be contributed to us in connection with this offering. Please read “Business—Atlas Purchase Option.”

We believe that Empire and its equityholders have a strong incentive to support our business and our growth. After the completion of this offering, Empire will own % of our common units and all of our subordinated units (representing an aggregate % limited partner interest in us), as well as approximately 91.5% of our general partner, which owns a non-economic general partner interest in us and will own all of our incentive distribution rights. The remaining approximately 8.5% interest in our general partner will be owned by members of our management team.

Risk Factors

An investment in our common units involves risks associated with our business, our partnership structure and the tax characteristics of our common units. You should carefully consider the risks described in “Risk Factors” and the other information in this prospectus before investing in our common units. If any of these risks were to occur, our results of operations, financial condition and ability to make distributions to our unitholders could be adversely affected, and you could lose all or part of your investment.

Formation Transactions

In connection with this offering, Empire will contribute substantially all of its assets and liabilities to us.

In addition, in connection with this offering, we will:

•

issue common units and subordinated units to Empire, representing an aggregate % limited partner interest in us;

•

issue all of the incentive distribution rights to our general partner, which will also retain a non-economic general partner interest in us;

•

issue common units to the public in this offering, representing a % limited partner interest in us;

•

amend and restate our existing $250 million revolving credit facility;

•

apply the net proceeds from this offering as described in “Use of Proceeds”;

•

contribute our consignment agreements, company-operated sites and certain of our leased properties to Empire Services, a taxable subsidiary, as described under “Material Federal Income Tax Consequences”;

•

enter into the Empire Supply Agreement with Empire Services; and

•

enter into an omnibus agreement with Empire and our general partner.

Ownership and Organizational Structure

After giving effect to the transactions described above, assuming the underwriters’ option to purchase additional common units from us is not exercised, our partnership interests will be held as follows:


Public Common Units		%
Empire Units:
Common Units		%
Subordinated Units		%
Non-Economic General Partner Interest	0.0	%⁽¹⁾

Total	100.0	%

(1)	Our general partner owns a non-economic general partner interest in us. Please read “Provisions of Our Partnership Agreement Relating to Cash Distributions—General Partner Interest and Incentive Distribution Rights.”

The following simplified diagram depicts our organizational structure after giving effect to the transactions described above.

LOGO

(1)

AIM Empire Holdings, LLC controls the board of directors of Empire Petroleum Partners, LLC, which has the ability to appoint all of the members of the board of directors of our general partner. No other equityholder of Empire Petroleum Partners, LLC controls more than 37.4% of the outstanding limited liability company interests of Empire Petroleum Partners, LLC.

(2)	Empire Petroleum Services, LLC, through which we will conduct our retail operations, has elected to be treated as a corporation solely for U.S. federal income tax purposes.

Our Management

We are managed by the board of directors and executive officers of our general partner, Empire Petroleum Partners GP, LLC. The executive officers of our general partner will remain employees of Empire. Empire will own approximately 91.5% of our general partner and has the right to appoint, modify or replace at any time the entire board of directors of our general partner, including the independent directors appointed in accordance with the listing standards established by the New York Stock Exchange, or the “NYSE.” Unlike shareholders in a publicly traded corporation who are entitled to vote in the election of directors, our unitholders will not be entitled to elect our general partner or the board of directors of our general partner. For more information about the directors and executive officers of our general partner, please read “Management.” Following this offering, Empire will own % of our outstanding common units and all of our outstanding subordinated units, as well as approximately 91.5% of our general partner, which owns a non-economic general partner interest in us and will own all of our incentive distribution rights. The remaining approximately 8.5% interest in our general partner will be owned by members of our management team.

In order to maintain operational flexibility, our operations will be conducted through, and our operating assets will be owned by, our operating subsidiaries. Our general partner has the sole responsibility for providing the personnel necessary to conduct our operations, whether through directly hiring, or causing our subsidiaries to hire, additional employees or by obtaining the services of personnel employed by others. All of the personnel that will conduct our business immediately following the closing of this offering will be employed or contracted by one or more of our subsidiaries or by our general partner and its affiliates. We refer to these individuals collectively as our employees because they provide services directly to us.

Following the consummation of this offering, neither our general partner nor its affiliates will receive any management fee or other compensation in connection with our general partner’s management of our business, but, pursuant to our partnership agreement and our omnibus agreement, we will reimburse our general partner and its affiliates, including Empire, for all expenses they incur and payments they make on our behalf. These expenses include the costs of employee and director compensation and benefits properly allocable to us, and all other expenses necessary or appropriate for the conduct of our business and allocable to us. Our partnership agreement provides that our general partner will determine in good faith the expenses that are allocable to us. Please read “Certain Relationships and Related Party Transactions—Agreements Governing the Transactions—Omnibus Agreement.”

Principal Executive Offices

Our principal executive offices are located at 8350 North Central Expressway, Suite M2185, Dallas, Texas, 75206, and our telephone number is (214) 750-9313. Following the completion of this offering, our website will be located at http://www. .com. We intend to make our periodic reports and other information filed with or furnished to the Securities and Exchange Commission, or the “SEC,” available, free of charge, through our website, as soon as reasonably practicable after those reports and other information are electronically filed with or furnished to the SEC. Information on our website or any other website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus.

Summary of Conflicts of Interest and Duties

Under our partnership agreement, our general partner has a legal duty to manage us in a manner it believes is in our best interest. However, the officers and directors of our general partner also have duties to manage the business of our general partner in a manner that is also in the best interests of Empire and the other owners of our general partner. As a result of this relationship, conflicts of interest may arise in the future between us and our unitholders, on the one hand, and our general partner and its affiliates, including Empire, on the other hand. For

example, our general partner will be entitled to make determinations that affect the amount of cash distributions we make to our unitholders, which in turn has an effect on whether our general partner receives cash distributions on the incentive distribution rights it owns. In addition, our general partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make a distribution on the subordinated units, to make incentive distributions or to accelerate the expiration of the subordination period. All of these actions are permitted under our partnership agreement and will not be a breach of any duty (fiduciary or otherwise) of our general partner. Please read “Conflicts of Interest and Duties.”

Delaware law provides that a Delaware limited partnership may, in its partnership agreement, expand, restrict or eliminate the fiduciary duties otherwise owed by a general partner to limited partners and the partnership, provided that a partnership agreement may not eliminate the implied contractual covenant of good faith and fair dealing. This implied covenant is a judicial doctrine utilized by Delaware courts in connection with interpreting ambiguities in partnership agreements and other contracts and does not form the basis of any separate or independent fiduciary duty in addition to the express contractual duties set forth in our partnership agreement. Under the implied contractual covenant of good faith and fair dealing, a court will enforce the reasonable expectations of the partners where the language in the partnership agreement does not provide for a clear course of action.

As permitted by Delaware law, our partnership agreement contains various provisions replacing the fiduciary duties that would otherwise be owed by our general partner with contractual standards governing the duties of the general partner and contractual methods of resolving conflicts of interest. The effect of these provisions is to restrict the remedies available to our unitholders for actions that might otherwise constitute breaches of our general partner’s fiduciary duties. Our partnership agreement also provides that affiliates of our general partner, including Empire and its affiliates, are not restricted from competing with us, and neither our general partner nor its affiliates have any obligation to present business opportunities to us; provided, that Empire and Atlas have limited obligations to provide business opportunities to us pursuant to the Empire Right of First Offer and Atlas Purchase Option, respectively, and two of Empire’s equityholders, Atlas and Mansfield, are subject to limited non-compete agreements with us that will expire in 2020 and 2019, respectively. Please read “Business—Omnibus Agreement” and “Business—Atlas Purchase Option.” By purchasing a common unit, the purchaser agrees to be bound by the terms of our partnership agreement, and, pursuant to the terms of our partnership agreement each holder of common units consents to various actions and potential conflicts of interest contemplated in our partnership agreement that might otherwise be considered a breach of fiduciary or other duties under Delaware law. Please read “Conflicts of Interest and Duties—Duties of Our General Partner” and “Certain Relationships and Related Party Transactions.”

The Offering

Common units offered to the public

common units.

common units if the underwriters exercise in full their option to purchase additional common units.

Units outstanding after this offering

common units and subordinated units, representing a % and % limited partner interest in us, respectively. Our general partner owns a non-economic general partner interest in us and will own all of the incentive distribution rights. If the underwriters exercise their option to purchase additional common units, we will use the net proceeds from that exercise to redeem from Empire the number of common units issued upon such exercise, at a price per common unit equal to the proceeds per common unit in this offering before expenses but after deducting underwriting discounts, commissions and the structuring fee.

Use of proceeds

We intend to use the estimated net proceeds of approximately $ million from this offering, based on an initial public offering price of $ per common unit (the midpoint of the price range set forth on the cover page of this prospectus), after deducting underwriting discounts, commissions and the structuring fee to:

•

repay $ million in borrowings outstanding under our revolving credit facility;

•

make a distribution to Empire of $ , a portion of which will be used to reimburse Empire for certain capital expenditures it incurred with respect to assets contributed to us; and

•

for general partnership purposes, including transaction fees and expenses of this offering.

If the underwriters exercise their option to purchase additional common units, we will use the net proceeds from that exercise to redeem from Empire the number of common units issued upon such exercise, at a price per common unit equal to the proceeds per common unit in this offering before expenses but after deducting underwriting discounts, commissions and the structuring fee. Accordingly, any exercise of the underwriters’ option will not affect the total number of units outstanding or the amount of cash needed to pay the minimum quarterly distribution on all of our units. Please read “Use of Proceeds.”

Cash distributions

We intend to pay the minimum quarterly distribution of $ per unit ($ per unit on an annualized basis) to the extent we have sufficient cash from operations after establishment of cash reserves and payment of fees and expenses, including payments to our general partner and its affiliates. We refer to this cash amount after reserves and the payment of fees and expenses as “available cash.” Our ability to pay the minimum quarterly distribution is subject to various restrictions and other factors described in more detail under the caption “Cash Distribution Policy and Restrictions on Distributions.”

For the quarter in which this offering closes, we will pay a prorated distribution on our units covering the period from the completion of the offering through , 2015, based on the actual length of that period.

In general, we will pay any cash distribution we make each quarter in the following manner:

•

first, to the holders of common units until each common unit has received the minimum quarterly distribution of $ plus any arrearages from prior quarters;

•

second, to the holders of subordinated units until each subordinated unit has received the minimum quarterly distribution of $ ; and

•

third, to the holders of common and subordinated units, pro rata, until each unit has received a distribution of $ .

If cash distributions to our unitholders exceed $ per unit in any quarter, our general partner will receive increasing percentages, up to 50.0%, of the cash we distribute in excess of that amount. We refer to these distributions as “incentive distributions.”

If we do not have sufficient available cash at the end of each quarter, we may, but are under no obligation to, borrow funds to pay the minimum quarterly distribution to our unitholders.

The amount of distributable cash flow we must generate to support the payment of the minimum quarterly distribution for four quarters on all of our common units and subordinated units to be outstanding immediately after this offering is approximately $ million (or an average of approximately $ million per quarter).

The amount of pro forma distributable cash flow generated during the year ended December 31, 2014 would have been sufficient to support the payment of the full minimum quarterly distribution on all of our common and subordinated units during that period. Please read “Cash Distribution Policy and Restrictions on Distributions—Unaudited Pro Forma Adjusted EBITDA and Distributable Cash Flow for the Year Ended December 31, 2014.”

We believe, based on our financial forecast and related assumptions included in “Cash Distribution Policy and Restrictions on Distributions—Estimated Adjusted EBITDA and Distributable Cash Flow for the Twelve Months Ending June 30, 2016,” that we will generate sufficient distributable cash flow to support the payment of the aggregate minimum quarterly distribution of $ million on all of our common units and subordinated units for the twelve months ending June 30, 2016. However, we do not have a legal obligation to pay distributions at our minimum quarterly distribution rate or at any other rate except as provided in our partnership agreement, and there is no guarantee that we will pay quarterly distributions to our unitholders. Please read “Cash Distribution Policy and Restrictions on Distributions.”

Subordinated units

Empire will initially own all of our subordinated units. The principal difference between our common units and subordinated units is that for any quarter during the subordination period, holders of the subordinated units will not be entitled to receive any distribution until the common units have received the minimum quarterly distribution for such quarter plus any arrearages in the payment of the minimum quarterly distribution from prior quarters. Subordinated units will not accrue arrearages.

Conversion of subordinated units

The subordination period will end on the first business day after the date that we have earned and paid distributions of at least (1) $ (the annualized minimum quarterly distribution) on each of the outstanding common units and subordinated units for each of three consecutive, non-overlapping four quarter periods ending on or after , 2018, or (2) $ (150% of the annualized minimum quarterly distribution) on each of the outstanding common units and subordinated units and the related distributions on the incentive distribution rights for any four-quarter period ending on or after , 2016, in each case provided there are no arrearages in payment of the minimum quarterly distributions on our common units at that time.

When the subordination period ends, each outstanding subordinated unit will convert into one common unit, and common units will no longer be entitled to arrearages. Please read “Provisions of Our Partnership Agreement Relating to Cash Distributions—Subordinated Units and Subordination Period.”

Limited voting rights

Our general partner will manage and operate us. Unlike the holders of common stock in a corporation who are entitled to vote in the election of directors, our unitholders will not be entitled to elect our general partner or its directors on an annual or other continuing basis. Our general partner may not be removed unless such removal is both (i) for cause and (ii) approved by a vote of holders of at least 66²/₃% of the outstanding common and subordinated units, voting together as a single class, including any units owned by our general partner and its affiliates. Upon consummation of this offering and after giving effect to the formation transactions, Empire will own % of our total outstanding common units and subordinated units on an aggregate basis (or % of our total outstanding common units and subordinated units on an aggregate basis if the underwriters exercise in full their option to purchase additional common units). As a result, our public unitholders cannot initially remove our general partner without its consent. Please read “Our Partnership Agreement—Voting Rights.”

Issuance of additional partnership interests

Our partnership agreement authorizes us to issue an unlimited number of additional partnership interests, including partnership interests that are senior to our common units, as well as options, rights, warrants and appreciation rights relating to partnership interests for any

partnership purpose at any time and from time to time to such persons for such consideration and on such terms and conditions as our general partner shall determine in its sole discretion, all without the approval of our unitholders. Our unitholders will not have preemptive or participation rights to purchase their pro rata share of any additional partnership interests issued. Please read “Units Eligible for Future Sale” and “Our Partnership Agreement—Issuance of Additional Partnership Interests.”

Limited call right

If at any time our general partner and its affiliates own more than 80% of the outstanding common units, our general partner has the right, but not the obligation, to purchase all of the remaining common units at a price equal to the greater of (1) the average of the daily closing price of our common units over the 20 trading days preceding the date that is three business days before notice of exercise of the call right is first mailed and (2) the highest per-unit price paid by our general partner or any of its affiliates for common units during the 90-day period preceding the date such notice is first mailed. At the completion of this offering and assuming the underwriters’ option to purchase additional common units from us is not exercised, our general partner and its affiliates will own % of our common units. After the end of the subordination period (which could occur as early as within the quarter ending , 2016), assuming no additional issuances of common units by us (other than upon the conversion of the subordinated units), Empire will own % of our outstanding common units and therefore would not be able to exercise the call right at that time. Please read “Our Partnership Agreement—Limited Call Right.”

Estimated ratio of taxable income to distributions

We estimate that if you own the common units you purchase in this offering through the record date for distributions for the period ending December 31, 2018, you will be allocated, on a cumulative basis, an amount of federal taxable income for that period that will be % or less of the cash distributed to you with respect to that period. For example, if you receive an annual distribution of $ per unit, we estimate that your average allocable federal taxable income per year will be no more than approximately $ per unit. Thereafter, the ratio of allocable taxable income to cash distributions to you could substantially increase. Please read “Material Federal Income Tax Consequences—Tax Consequences of Unit Ownership—Ratio of Taxable Income to Distributions” for the basis of this estimate.

Material federal income tax consequences

For a discussion of the material federal income tax consequences that may be relevant to our prospective unitholders who are individual citizens or residents of the United States, please read “Material Federal Income Tax Consequences.”

Exchange listing

We intend to apply to list our common units on the NYSE, under the symbol “EPLP.”

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL AND OPERATING DATA

The following table shows summary historical financial and operating data of Empire, our accounting predecessor for the periods and as of the dates indicated, and summary unaudited pro forma financial and operating data of Empire Petroleum Partners, LP for the period and as of the date indicated. The summary historical financial data of Empire as of and for the years ended December 31, 2014, 2013 and 2012 are derived from the audited historical consolidated financial statements of Empire appearing elsewhere in this prospectus. The following table should be read together with, and is qualified in its entirety by reference to, the audited historical consolidated financial statements and the unaudited pro forma condensed combined financial statements and the accompanying notes included elsewhere in this prospectus. The table should also be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The summary unaudited pro forma financial data presented in the following table as of and for the year ended December 31, 2014 are derived from the unaudited pro forma condensed combined financial statements included elsewhere in this prospectus. The unaudited pro forma balance sheet gives effect to the acquisition of certain assets from Atlas and assumes the offering and the related transactions occurred as of December 31, 2014, and the unaudited pro forma statement of income for the year ended December 31, 2014 gives effect to the Recent Acquisitions and assumes the offering and the related transactions occurred as of January 1, 2014. These transactions include, and the unaudited pro forma condensed combined financial statements give effect to, the following:

•

the contribution by Empire of substantially all of its assets and liabilities to us;

•

our issuance to Empire of common units and subordinated units;

•

our issuance of all of the incentive distribution rights to our general partner, which will also retain a non-economic general partner interest in us;

•

our issuance of common units to the public in this offering, representing a % limited partner interest in us;

•

the amendment and restatement of our revolving credit facility;

•

the application of the net proceeds from this offering as described in “Use of Proceeds”;

•

our contribution of our consignment agreements, company-operated sites and certain of our leased properties to Empire Services, a taxable subsidiary, as described under “Material Federal Income Tax Consequences”;

•

our entry into the Empire Supply Agreement with Empire Services; and

•

our entry into an omnibus agreement with Empire and our general partner.

The unaudited pro forma condensed combined financial statements do not give effect to an estimated $2.0 million in incremental general and administrative expenses that we expect to incur annually as a result of being a separate publicly traded partnership.


	Predecessor Historical									Partnership Pro Forma
	Year Ended December 31,									Year Ended December 31,
	2014			2013			2012			2014
										(unaudited)
	(in thousands, except per unit data)
Statement of Income Data:
Revenue:
Motor fuel sales	$	1,466,605		$	1,210,188		$	1,051,904		$	2,614,591
Merchandise sales		25,871			22,909			24,424			51,799
Rental income and other		6,120			8,063			11,077			7,572

Total revenue		1,498,596			1,241,160			1,087,405			2,673,962
Cost of sales (excluding depreciation, amortization and accretion expenses):
Motor fuel sales		1,422,017			1,174,859			1,023,994			2,549,961
Merchandise sales		18,855			16,238			17,879			36,819
Rental income and other		6,775			7,420			10,483			6,775

Total cost of sales (excluding depreciation, amortization and accretion expenses)		1,447,647			1,198,517			1,052,356			2,593,555

Total gross profit (excluding depreciation, amortization and accretion expenses)		50,949			42,643			35,049			80,407

Operating expenses:
Selling, general and administrative expenses		30,057			28,874			27,012			53,000
Depreciation, amortization and accretion expenses		13,526			8,445			6,549			28,031
Acquisition expenses		2,586			809			2,938			—
(Gain) on sale of assets		(860	)		(158	)		—			(860	)

Total operating expenses		45,309			37,970			36,499			80,171

Operating income (loss)		5,640			4,673			(1,450	)		236

Other expense:
Interest expense, net		3,607			2,752			2,001			3,627
Other expense (income)		—			—			—			(318	)

Total other expense		3,607			2,752			2,001			3,309

Income (loss) from continuing operations before income taxes		2,033			1,921			(3,451	)		(3,073	)
Provision for income taxes		141			159			14			141

Income (loss) from continuing operations		1,892			1,762			(3,465	)		(3,214	)
Income (loss) from discontinued operations		—			5,263			(196	)		—

Net income (loss)	$	1,892		$	7,025		$	(3,661	)	$	(3,214	)

Earnings (loss) per unit—basic and diluted:
Income (loss) from continuing operations	$	0.32		$	0.32		$	(0.71	)
Income (loss) from discontinued operations		—			0.94			(0.04	)

Net income (loss) per unit	$	0.32		$	1.26		$	(0.75	)

Weighted-average units outstanding—basic and diluted		5,844,042			5,587,284			4,890,850

Other Financial Data (unaudited):
Adjusted EBITDA⁽¹⁾	$	21,892		$	14,502		$	8,317		$	38,901
Capital expenditures, including acquisitions	$	99,746		$	5,763		$	35,506
Cash Flow Data:
Net cash provided by (used in):
Operating activities	$	18,557		$	7,228		$	2,253
Investing activities	$	(96,185	)	$	29,577		$	(34,940	)
Financing activities	$	90,582		$	(38,626	)	$	29,740


	Predecessor Historical									Partnership Pro Forma
	Year Ended December 31,									Year Ended December 31,
	2014			2013			2012			2014
										(unaudited)
	(in thousands, except operating data)
Balance Sheet Data (at period end):
Cash	$	15,458		$	2,504		$	4,325		$
Property and equipment, net		97,702			53,255			81,741
Total assets		282,358			153,152			181,156
Long-term debt		88,774			39,104			58,480			77,000
Total liabilities		146,724			72,108			95,376
Members’ equity		135,634			81,044			85,780
Total liabilities and members’ equity:		282,358			153,152			181,156

Operating Data (unaudited):
Motor fuel gallons distributed (millions)
Dealer-operated sites		453			326			277			695
Consignment sites		50			51			32			144
Company-operated sites		45			37			39			80

Total gallons distributed		548			414			348			919
Fuel gross margin (cents per gallon)		8.1	¢		8.5	¢		8.0	¢		7.0	¢
Number of sites (period end)		1,062			698			663			1,311

(1)	For a definition of the non-GAAP financial measure of Adjusted EBITDA and a reconciliation to our most directly comparable financial measures calculated and presented in accordance with GAAP, please read “ —Non-GAAP Financial Measures.”

Non-GAAP Financial Measures

We define EBITDA as net income before interest expense, income tax expense, depreciation, amortization and accretion expenses. We define Adjusted EBITDA as EBITDA, as further adjusted to exclude certain non-recurring items, such as the gain or loss on sale of assets, acquisition expenses and non-cash items. Adjusted EBITDA should not be considered an alternative to net income (determined in accordance with GAAP) as an indication of our performance, and we believe that to understand our operating performance further, Adjusted EBITDA should be compared with our reported net income in accordance with GAAP, as presented in our consolidated financial statements.

Adjusted EBITDA is a non-GAAP supplemental financial measure that management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess:

•

our operating performance as compared to other publicly traded limited partnerships, without regard to financing methods;

•

the ability of our business to generate sufficient cash to make distributions to our unitholders;

•

our ability to incur and service debt and fund capital expenditures; and

•

the viability of acquisitions and the returns on investment of various investment opportunities.

We believe that the presentation of Adjusted EBITDA in this prospectus provides information useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to Adjusted EBITDA are net income and net cash provided by operating activities. Adjusted EBITDA should not be considered an alternative to GAAP net income, net cash provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA has important limitations as an analytical tool because it excludes some, but not all, items that

affect net income or net cash provided by operating activities, and these measures may vary from those of other companies. As a result, Adjusted EBITDA, as presented in this prospectus, may not be comparable to similarly titled measures of other companies, including our competitors, thereby diminishing their utility. Further, you should not consider Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP.

The following table presents a reconciliation of net income to Adjusted EBITDA.


	Predecessor Historical																		Partnership Pro Forma
	Empire Petroleum Partners, LLC												Empire Petroleum Holdings, LLC
	Year Ended December 31,									Period from July 7, 2011 through December 31, 2011			Period from January 1, 2011 through July 6, 2011			Year Ended December 31, 2010			Year Ended December 31, 2014
	2014			2013			2012			Period from July 7, 2011 through December 31, 2011			Period from January 1, 2011 through July 6, 2011			Year Ended December 31, 2010			Year Ended December 31, 2014
													(unaudited)						(unaudited)
	(in thousands)
Net Income (loss)	$	1,892		$	7,025		$	(3,661	)	$	(10,936	)	$	(230	)	$	88		$	(3,214	)
Depreciation, amortization and accretion expenses		13,526			8,445			6,549			1,409			1,339			1,086			28,031
Interest expense, net		3,607			2,752			2,001			582			256			143			3,627
Provision for (benefit from) income taxes		141			159			14			—			—			(209	)		141

EBITDA		19,166			18,381			4,903			(8,945	)		1,365			1,108			28,585

Acquisition expenses		2,586			809			2,938			10,091			887			267			—
(Gain) on sale of assets		(860	)		(158	)		—			—			—			—			(860	)
Other expense (income)		1,000			733			280			75			377			306			116
Selling, general and administrative expenses not acquired⁽¹⁾		—			—			—			—			—			—			11,060
(Income) loss from discontinued operations		—			(5,263	)		196			—			—			—			—

Adjusted EBITDA	$	21,892		$	14,502		$	8,317		$	1,221		$	2,629		$	1,681		$	38,901

(1)

Reflects the elimination of expenses contained in the carve-out financial statements of Atlas, CST and Mansfield that were included in our unaudited pro forma statement of operations but were not acquired by us in connection with the Recent Acquisitions. Please read our unaudited pro forma condensed combined financial statements included elsewhere in this prospectus.

The following table presents reconciliation of net cash provided by (used in) operating activities to Adjusted EBITDA.


	Predecessor Historical
	Empire Petroleum Partners, LLC												Empire Petroleum Holdings, LLC
	Year Ended December 31,									Period from July 7, 2011 through December 31, 2011			Period from January 1, 2011 through July 6, 2011		Year Ended December 31, 2010
	2014			2013			2012			Period from July 7, 2011 through December 31, 2011			Period from January 1, 2011 through July 6, 2011		Year Ended December 31, 2010
													(unaudited)
	(in thousands)
Net cash provided by (used in) operating activities	$	18,557		$	7,228		$	2,253		$	(17,650	)	$	342	$	1,774
Changes in operating assets and liabilities		(2,998	)		4,661			2,684			9,624			767		(714	)
Gain on sale of assets		860			158			—			—			—		—
Interest expense, net		3,607			2,752			2,001			582			256		143
Provision for (benefit from) income taxes		141			159			14			—			—		(209	)
Other		(1,001	)		3,423			(2,049	)		(1,501	)		—		114

EBITDA		19,166			18,381			4,903			(8,945	)		1,365		1,108

Acquisition expenses		2,586			809			2,938			10,091			887		267
(Gain) on sale of assets		(860	)		(158	)		—			—			—		—
Other expense (income)		1,000			733			280			75			377		306
(Income) loss from discontinued operations		—			(5,263	)		196			—			—		—

Adjusted EBITDA	$	21,892		$	14,502		$	8,317		$	1,221		$	2,629	$	1,681

RISK FACTORS

Limited partner interests are inherently different from the capital stock of a corporation, although many of the business risks to which we are subject are similar to those that would be faced by a corporation engaged in a similar business. You should carefully consider the following risk factors together with all of the other information included in this prospectus in evaluating an investment in our common units.

If any of the following risks were to occur, our results of operations, financial condition and ability to make distributions to our unitholders could be materially adversely affected. In that case, we might not be able to make distributions to our unitholders, the trading price of our common units could decline, and you could lose all or part of your investment in us.

Risks Inherent in Our Business

We may not generate sufficient distributable cash flow to support the payment of the minimum quarterly distribution to our unitholders.

In order to support the payment of the minimum quarterly distribution of $ per unit per quarter, or $ per unit on an annualized basis, we must generate distributable cash flow of approximately $ million per quarter, or approximately $ million per year, based on the number of common units and subordinated units to be outstanding immediately after the completion of this offering. We may not generate sufficient distributable cash flow to support the payment of the minimum quarterly distribution to our unitholders. The amount of cash we can distribute on our common and subordinated units principally depends upon the amount of cash we generate from our operations, which will fluctuate from quarter to quarter based on a number of factors, some of which are beyond our control, including, among other things:

•

demand for motor fuel in the markets we serve, including seasonal fluctuations in demand, and the margin per gallon we earn distributing motor fuel;

•

competition from other companies that sell and distribute motor fuel products in our market areas;

•

the inability to renew expiring fuel supply agreements with dealers or negotiate acceptable leases for our sites;

•

regulatory action affecting the supply of or demand for motor fuel, our operations, our existing contracts or our operating costs;

•

volatility of prices for motor fuel; and

•

prevailing economic conditions.

In addition, the actual amount of cash we have available for distribution will depend on other factors including:

•

the amount of our operating expenses and general and administrative expenses, including any fees and expenses of our general partner and its affiliates that we are required to reimburse;

•

our debt service requirements and other liabilities;

•

changes in interest rates;

•

fluctuations in our working capital needs;

•

the level and timing of our maintenance capital expenditures;

•

the cost of acquisitions, if any;

•

our ability to borrow funds and access capital markets;

•

restrictions on distributions contained in any of our debt agreements;

•

the amount of cash reserves established by our general partner; and

•

other business risks affecting our cash levels.

For a description of additional restrictions and factors that may affect our ability to pay cash distributions, please read “Cash Distribution Policy and Restrictions on Distributions.”

The assumptions underlying our forecast of Adjusted EBITDA and distributable cash flow that we include in “Cash Distribution Policy and Restrictions on Distributions” are inherently uncertain and subject to significant business, economic, financial, regulatory and competitive risks and uncertainties that could cause our actual distributable cash flow to differ materially from our forecast.

The forecast of Adjusted EBITDA and distributable cash flow set forth in “Cash Distribution Policy and Restrictions on Distributions” includes our forecast of our results of operations, Adjusted EBITDA and distributable cash flow for the twelve months ending June 30, 2016. Our ability to pay the full minimum quarterly distribution in the forecast period is based on a number of assumptions that may not prove to be correct, including, but not limited to, the volume of motor fuel that we will distribute to independent dealers and Empire Services, the margins that we will receive on volumes distributed to independent dealers and Empire Services, the amount of income that we will receive from retail sales of motor fuel to consumers at consignment sites and company-operated sites and sales of merchandise at company-operated sites, and the amount of rental income that we will receive from sites that we lease or sublease to independent dealers.

Our financial forecast has been prepared by our management, and we have neither received nor requested an opinion or report on it from our or any other independent auditor. The assumptions underlying the forecast are inherently uncertain and are subject to significant business, economic, financial, regulatory and competitive risks and uncertainties that could cause actual results to differ materially from that which is forecasted. If we do not achieve our forecasted results, we may not be able to pay the minimum quarterly distribution or any amount on our common units or subordinated units, in which event the market price of our common units may decline materially. Please read “Cash Distribution Policy and Restrictions on Distributions.”

A significant decrease in demand for motor fuel in the areas we serve could adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

A significant decrease in demand for motor fuel in the areas we serve could significantly reduce our revenues and, therefore, could adversely affect our results of operations, financial condition and ability to make distributions to our unitholders. Our revenues are dependent on various trends, such as trends in automobile and commercial truck traffic, travel and tourism in our areas of operation, and these trends can change. Furthermore, seasonal fluctuations or regulatory action, including government imposed fuel efficiency standards, may affect demand for motor fuel. Because certain of our operating costs and expenses, such as our general and administrative costs, are fixed and do not vary with the volumes of motor fuel we distribute, our costs and expenses might not decrease ratably or at all should we experience a reduction in our volumes distributed. As a result, if our fuel distribution volumes decrease, our results of operations, financial condition and ability to make distributions to our unitholders could be adversely affected.

A majority of our revenue is generated under fuel supply agreements with independent dealers. As these supply agreements expire, they must be renegotiated or replaced. Our fuel supply agreements generally have an initial term of 10 years and, as of February 28, 2015, had an average remaining term of approximately 8.7 years. Our dealers have no obligation to renew their fuel supply agreements with us on similar terms or at all.

We also receive rental income from 99 sites that we lease or sublease to dealers or consignment agents. Our lessees have no obligation to renew their leases on similar terms or at all. Our leases typically have an initial term of 3 to 10 years, and, as of February 28, 2015, had an average remaining term of approximately 3.7 years.

We may be unable to renegotiate or replace our fuel supply agreements or leases when they expire, and the terms of any renegotiated fuel supply agreements or leases may not be as favorable as the terms of the agreements or leases they replace. Whether these fuel supply agreements and leases are successfully renegotiated or replaced is frequently subject to factors beyond our control. Such factors include fluctuations in motor fuel prices, a dealer’s ability to pay for or accept the contracted volumes, fluctuations in market rental rates and a competitive marketplace for the services offered by us. If we cannot successfully renegotiate or replace our fuel supply agreements or leases or must renegotiate or replace them on less favorable terms, revenues from these arrangements could decline and our results of operations, financial condition and ability to make distributions to our unitholders could be adversely affected.

The amount of cash we will have available for distribution to our unitholders depends primarily on our cash flow rather than on our profitability, which may prevent us from making cash distributions even during periods when we record net income.

The amount of cash we have available for distribution depends primarily on our cash flow and not solely on profitability, which will be affected by non-cash items. As a result, we may make cash distributions during periods when we record losses for financial accounting purposes and may not make cash distributions during periods when we record net income for financial accounting purposes.

If we are unable to make accretive acquisitions of fuel supply agreements, our future growth could be limited.

Our ability to grow and maintain our existing motor fuel distribution volumes depends substantially on our ability to acquire fuel supply agreements that increase the volumes of motor fuel that we distribute to independent dealers and thereby increase our distributable cash flow per unit. However, we are experiencing increased competition for the fuel supply agreements we contemplate acquiring and may be unable to make accretive acquisitions. Weak economic conditions and competition for such acquisitions could limit our ability to fully execute our growth strategy. Our future growth and ability to increase distributions will be limited if we are unable to make accretive acquisitions from third parties because, among other reasons:

•

we are unable to identify attractive third-party acquisition opportunities;

•

we are unable to negotiate acceptable purchase agreements with third parties;

•

we are unable to obtain financing for these acquisitions on economically acceptable terms;

•

we are unable to obtain necessary governmental or third-party consents; or

•

we are outbid by competitors.

Further, certain fuel purchase agreements that we may seek to acquire may contain purchase options, typically lasting between 30 and 60 days, pursuant to which the applicable oil company may purchase sites selling its branded motor fuel. If any such option were exercised, we would not be able to acquire the desired sites. Additionally, with the exception of the Empire Right of First Offer, the Atlas Purchase Option and the limited non-compete agreements to which Atlas and Mansfield are subject, Empire and its affiliates are not restricted from competing with us in the future and have no obligation or duty to present us with acquisition opportunities. Please read “Conflicts of Interest and Duties.”

Any acquisitions we complete are subject to substantial risks that could reduce our ability to make distributions to our unitholders.

Even if we do make acquisitions that we believe will be accretive, these acquisitions may nevertheless result in less cash generated from operations on a per unit basis. Any acquisition involves potential risks, including, among other things:

•

mistaken assumptions about revenues and costs, including potential growth;

•

the ability to successfully integrate the assets we acquire;

•

the assumption of unknown liabilities for which we are not indemnified or insured or for which our indemnity or insurance is inadequate, including liabilities arising out of spills or releases of motor fuel or resulting from a prior owner’s noncompliance with applicable federal, state or local laws;

•

the diversion of management’s and certain employees’ attention from other business concerns;

•

decreases in our liquidity by the use of our cash from operations or borrowing capacity to finance acquisitions;

•

unforeseen difficulties of operating in new geographic areas or with new dealers; and

•

increased costs relating to our financial controls, information systems, management resources and human resources that may be required to grow to support future growth.

Our growth strategy requires access to new capital; unfavorable capital markets could impair our ability to grow.

We continuously consider and enter into discussions regarding potential acquisitions. Any limitations on our access to new capital will impair our ability to execute this strategy. If our cost of capital becomes too expensive, our ability to acquire strategic and accretive assets will be limited. We may not be able to raise the necessary funds on satisfactory terms, if at all. The primary factors that influence our cost of equity include market conditions, including our then current unit price, fees we pay to underwriters and other offering costs, which include amounts we pay for legal and accounting services. Weak economic conditions and volatility and disruption in the financial markets could increase the cost of raising money in the debt and equity capital markets substantially while diminishing the availability of funds from those markets.

Certain of our fuel purchase agreements with major oil companies provide for volume rebates, certain of which increase as we increase the volume of motor fuel that we purchase. We also receive incentive payments, including prompt payment incentives, for distributing branded motor fuel to new sites and paying amounts due under our fuel purchase agreements within a specified time frame. Further, certain of our fuel purchase agreements contain minimum volume commitments and branding reimbursement obligations. If we are unable to renew these contracts on similar terms or we are subject to minimum volume penalties or reimbursement obligations, our gross profit could decrease, which could, in turn, adversely affect our results of operations, financial condition and ability to make distributions to our unitholders. Additionally, certain of our fuel purchase agreements require that all or a portion of any incentive payments we receive for distributing motor fuel to new sites be repaid in the event that the sites are closed or switched to another brand within a stated number of years. As of December 31, 2014 and 2013, the estimated amount of deferred branding incentives that would have to be repaid upon debranding at these sites was approximately $17.9 million and $18.3 million, respectively. Of these amounts, as of December 31, 2014 and 2013, approximately $16.8 million and $17.9 million, respectively, would

have been the responsibility of our branded dealers under reimbursement agreements with the dealer. In the event our dealers were to default on this reimbursement obligation, we would be required to make the necessary payment.

We may not be able to lease sites we own or sublease sites we lease on favorable terms and any such failure could adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

We may lease or sublease certain sites to dealers or consignment agents. If we are unable to obtain tenants or subtenants on favorable terms for sites we own or lease, the resulting rental payments may be insufficient to cover our costs for the site. We cannot provide any assurance that the margins on our distribution of motor fuel to these sites will be sufficient to offset our operating costs or unfavorable lease terms. The occurrence of these events could adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

We are exposed to performance risk in our supply chain, as well as from our dealers. If the major oil companies from which we purchase motor fuel are unable to sell to us sufficient amounts of motor fuel, or if the third parties with whom we contract to transport motor fuel fail to make timely deliveries to our sites, we may be unable to satisfy our dealers’ demand for motor fuel. Additionally, if our dealers are unable to continue operating, demand for our services could be adversely affected.

We rely upon major oil companies to timely provide the volumes and types of motor fuel that we supply to dealers. We purchase motor fuel from a variety of major oil companies pursuant to our fuel purchase agreements and rely exclusively on third-party transportation companies to transport all of the motor fuel we distribute. Generally, our fuel purchase agreements do not guarantee that we will receive all of the volumes that we need to fulfill the demands of dealers to whom we distribute motor fuel. Furthermore, some of the crude oil that supplies the refineries that produce a significant portion of the fuel that we purchase comes from other countries, which could be disrupted by political events. If shortages in crude oil occur, whether as a result of political events or otherwise, or if one or more of the transportation companies with whom we contract becomes unwilling or unable to timely provide transportation services, we may be unable to meet our dealers’ demand for motor fuel. Additionally, in times of extreme market demand or supply disruption, we may be unable to acquire or contract for the transportation of enough motor fuel to satisfy the fuel demand of our dealers.

All of the motor fuel that we distribute is transported from motor fuel supply terminals to retail fuel outlets by third-party transportation companies. A change in transportation providers, disruption in service or a significant change in our relationships with these third-party transportation companies could have a material adverse effect on our results of operations, financial condition and ability to make distributions to our unitholders.

We are also exposed to the performance risk of our dealers. If, for any reason, our dealers are unable to operate effectively and profitably, they may fail to make required payments or discontinue operations, which would reduce demand for our motor fuel distribution services and adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

Historically, prices for motor fuel have been volatile, and significant changes in such prices in the future may adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

Crude oil and domestic wholesale motor fuel markets are volatile. General political conditions, acts of war or terrorism and instability in oil producing regions could significantly impact crude oil supplies and wholesale motor fuel costs. This volatility makes it extremely difficult to predict the impact future wholesale cost fluctuations will have on our operating results and financial condition. When prices for motor fuel rise,

independent dealers may have insufficient credit to purchase motor fuel from us at their historical volumes. Higher prices for motor fuel may, among other things, reduce our access to trade credit support or cause it to become more expensive, impact consumer demand for motor fuel and decrease the amount of borrowings available for working capital under our credit agreement as a result of available commitments.

As motor fuel prices decrease, so do our prompt payment incentives, which are generally calculated as a percentage of the total purchase price of the motor fuel we distribute. Conversely, as motor fuel prices increase, the margins we realize in our retail segment generally decrease as a result of the delay with which retail prices respond to wholesale price changes. For the year ended December 31, 2014, pro forma for the Recent Acquisitions and the Empire Supply Agreement, our gross profit from retail sales of motor fuel to consumers accounted for approximately 27% of our total gross profit. Our recent acquisition of company-operated sites from CST, as well as the expansion of our consignment business following the acquisitions from Atlas and Mansfield, has increased our exposure to such volatility due to the greater degree of volatility associated with our retail motor fuel operations at company-operated sites as compared with our wholesale distribution of motor fuel to dealer-operated sites.

Decreases in consumer spending, travel and tourism in the areas we serve could adversely impact our business.

At retail fuel outlets, consumer traffic is generally driven by consumer preferences and spending trends, growth rates for commercial truck traffic and trends in travel and weather. Changes in economic conditions generally, or in the regions in which we operate, could adversely affect consumer spending patterns and travel in our markets. In particular, weakening economic conditions may result in decreases in miles driven and discretionary consumer spending and travel, which affect spending on motor fuel and convenience items. In addition, changes in the types of products and services demanded by consumers who visit the sites that we serve or our consignment sites and company-operated sites, may adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

Increasing consumer preferences for alternative motor fuels, or improvements in fuel efficiency, could adversely impact our results of operations, financial condition and ability to make distributions to our unitholders.

Any technological advancements, regulatory changes or changes in consumer preferences causing a significant shift toward alternative motor fuels, or non-fuel dependent means of transportation, could reduce demand for conventional petroleum-based motor fuels. Additionally, a shift toward electric, hydrogen, natural gas or other alternative or non-fuel-powered vehicles could fundamentally change consumers’ spending habits or lead to new forms of fueling destinations or new competitive pressures. Finally, new technologies have been developed and governmental mandates have been implemented to improve fuel efficiency. Any of these outcomes could potentially result in decreased consumer demand for motor fuel, which could have a material adverse effect on our results of operations, financial condition and ability to make distributions to our unitholders.

The wholesale motor fuel distribution industry is characterized by intense competition and fragmentation, and our failure to effectively compete could result in lower margins.

The market for distribution of wholesale motor fuel is highly competitive and fragmented, which results in narrow margins. We have numerous competitors, some of which may have significantly greater resources and name recognition than us. We rely on our ability to provide reliable services and to control our operating costs in order to maintain our margins and competitive position. If we fail to maintain the quality of our services, certain dealers to whom we supply motor fuel could choose alternative distribution sources and our income and cash flow could decrease. While major integrated oil companies have generally continued to divest retail sites and the corresponding wholesale distribution to such sites, those major oil companies could shift from this strategy and

decide to distribute their own products in direct competition with us, or large dealers could attempt to buy directly from the major oil companies. The occurrence of any of these events could result in lower margins which may adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

The motor fuel distribution business is subject to seasonal trends, which may affect our revenues and ability to make distributions.

Demand for motor fuel is higher during the late spring and summer months than during the fall and winter. Travel, recreation and construction activities typically increase in these months in the geographic areas in which we operate, increasing the demand for motor fuel. Therefore, the volume of motor fuel that we distribute is typically somewhat higher in the second and third quarters of the year. As a result, our results from operations may vary from period to period, affecting our revenues and ability to make cash distributions.

Severe weather could adversely affect our business by damaging our facilities and communications network or the facilities and communications networks of major oil companies from whom we purchase motor fuel or dealers to whom we distribute motor fuel.

The retail fuel outlets we serve are located in regions potentially susceptible to severe weather. A severe storm or natural disaster could damage our and our dealers’ facilities or communications networks and those of the major oil companies from whom we purchase motor fuel, as well as interfere with our ability to distribute motor fuel to dealers or to our consignment sites and company-operated sites. If warmer temperatures, or other climate changes, lead to changes in extreme weather events, including increased frequency, duration or severity, these weather-related risks could become more pronounced. Any weather-related catastrophe or disruption could have a material adverse effect on our results of operations, financial condition and ability to make distributions to our unitholders, potentially causing losses beyond the limits of the insurance we currently carry.

The operations at sites we own or lease are subject to inherent risk, operational hazards and unforeseen interruptions and insurance may not adequately cover any such exposure. The occurrence of a significant event or release of motor fuel that is not fully insured could adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

The presence of flammable and combustible products at our sites poses inherent risks and operational hazards, including, but not limited to, fires, explosions and spills or releases of motor fuel, any of which could cause severe damage to or destruction of property and equipment, personal injury or loss of life and pollution or other environmental damage. Furthermore, our operations are subject to unforeseen interruptions such as natural disasters, adverse weather and other events beyond our control. In addition, our owned and leased sites are subject to unforeseen casualty and condemnation events that may partially or wholly prevent our continued operation of such sites. If any of these events were to occur, we could incur substantial losses and curtailment of operations.

Negative events or developments associated with the brands we distribute could adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

We believe that the success of our operations is dependent, in part, on the continuing favorable reputation, market value and name recognition associated with the motor fuel brands that we distribute. Erosion of the value of those brands could have an adverse impact on the volumes of motor fuel we distribute, which in turn could have a material adverse effect on our business, results of operations and ability to make distributions to our unitholders. For example, in 2010, sales of BP-branded motor fuel decreased at some of our sites following the Deepwater Horizon oil spill.

Our future debt levels may impair our financial condition.

We estimate that we will have approximately $77.0 million of debt outstanding at the closing of this offering. At the closing of this offering, we expect to have available borrowing capacity of approximately $173.0 million under our revolving credit facility. The level of our future indebtedness could have important consequences to us, including:

•

making it more difficult for us to satisfy our obligations with respect to our credit agreement governing our revolving credit facility;

•

limiting our ability to borrow additional amounts to fund working capital, capital expenditures, acquisitions, debt service requirements, the execution of our growth strategy and other activities;

•

requiring us to dedicate a substantial portion of our cash flow from operations to pay interest on our debt, which would reduce our cash flow available to fund working capital, capital expenditures, acquisitions, execution of our growth strategy and other activities;

•

making us more vulnerable to adverse changes in general economic conditions, our industry and government regulations and in our business by limiting our flexibility in planning for, and making it more difficult for us to react quickly to, changing conditions; and

•

placing us at a competitive disadvantage compared with our competitors that have less debt.

In addition, we may not be able to generate sufficient cash flow from our operations to repay our indebtedness when it becomes due and to meet our other cash needs. Our ability to service our debt will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control. In addition, our ability to service our debt will depend on market interest rates, since we anticipate that the interest rates applicable to our borrowings will fluctuate. If we are not able to pay our debts as they become due, we will be required to pursue one or more alternative strategies, such as selling assets, refinancing or restructuring our indebtedness or selling additional debt or equity securities. We may not be able to refinance our debt or sell additional debt or equity securities or our assets on favorable terms, if at all, and if we must sell our assets, it may adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

Our revolving credit facility, as amended and restated, will have restrictions and financial covenants that may restrict our business and financing activities and our ability to make distributions to our unitholders.

The operating and financial restrictions and covenants that we expect will be contained in our revolving credit facility and any future financing agreements may restrict our ability to finance future operations or capital needs, to engage in or expand our business activities or to make distributions to our unitholders. Our future ability to comply with these restrictions and covenants is uncertain and will be affected by the levels of cash flow from our operations and other events or circumstances beyond our control. If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired. If we violate any provisions of our revolving credit facility and such violations are not cured or waived within the appropriate time periods provided in such credit facility, a significant portion of our indebtedness may become immediately due and payable, our ability to make distributions to our unitholders will be inhibited and our lenders’ commitment to make further loans to us may terminate. We might not have, or be able to obtain, sufficient funds to make these accelerated payments. Please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Revolving Credit Facility.”

An increase in interest rates will increase our borrowing costs and may cause the market price of our common units to decline.

Borrowings under our revolving credit facility will bear interest at variable rates. If market interest rates increase, such variable-rate debt will create higher debt service requirements, which could adversely affect our

cash flow and ability to make distributions to our unitholders. In addition, in exchange for accepting these risks, investors may expect to receive a higher rate of return than would otherwise be obtainable from lower-risk investments. Accordingly, as interest rates rise, the ability of investors to obtain higher risk-adjusted rates of return by purchasing government-backed debt securities may cause a corresponding decline in demand for riskier investments generally, including yield-based equity investments such as publicly traded limited partnership interests. Reduced demand for our common units resulting from investors seeking other more favorable investment opportunities may cause the trading price of our common units to decline.

We and our dealers are subject to numerous federal, state and local laws and regulations governing environmental protection and operational safety that require substantial expenditures and affect the way we and our dealers operate, which could have a material effect on our business, results of operations or our ability to make distributions to our unitholders.

We and our dealers are subject to extensive federal, state and local laws and regulations, including those relating to ownership and operation of underground storage tanks; the release or discharge of regulated materials into the air, water and soil; the generation, storage, handling, use, transportation and disposal of hazardous materials; the exposure of persons to regulated materials; and the health and safety of our employees. We do not transport any of the motor fuel we deliver and instead rely on third-party transportation companies that are also subject to these federal, state and local laws. We also may be subject to liabilities resulting from our prior operations, including liabilities related to product liability, releases from underground storage tanks, premises-liability claims, and allegations of exposures of third parties to toxic substances. Failure to comply with these laws and regulations may trigger a variety of administrative, civil and criminal enforcement measures, including the assessment of monetary penalties, the imposition of remedial requirements and the issuance of orders enjoining or otherwise curtailing future operations, which could have a material adverse effect on our business, results of operations or our ability to make distributions to our unitholders.

Of particular significance to us are:

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Underground storage tanks: Changes in the laws and regulations governing the ownership and operation of underground storage tanks could result in more stringent and costly compliance requirements. For example, in November 2011, the U.S. Environmental Protection Agency, or the “EPA,” proposed changes to the underground storage tank rules that, among other things, would impose requirements relating to secondary containment for new and replaced tanks and piping, operator training, and periodic inspection of underground storage tank systems. This proposed rulemaking remains pending. If these changes are adopted, they could result in increased compliance costs, which costs could be significant.

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Greenhouse gas emissions: Through the operation of our marketing facilities, our operations emit greenhouse gases, or “GHGs,” including carbon dioxide. Greenhouse gases are believed to be contributing to global warming and other climatic changes. Various legislative and regulatory measures that address the monitoring, reporting or restriction of GHG emissions are in various stages of review, discussion or implementation. These include federal and state actions to develop programs for the reduction of GHG emissions as well as proposals that would create a cap-and-trade system that would require us to purchase carbon emission allowances for emissions at our marketing facilities and emissions caused by the use of the fuels that we distribute. Any legislative and regulatory initiatives that are enacted to reduce the emissions of GHGs could have a material adverse impact on our business, financial condition and results of operations by increasing our regulatory compliance expenses, increasing our motor fuel costs and decreasing consumer demand for motor fuel.

For example, in response to findings that emissions of GHGs present an endangerment to public health and the environment, the EPA has adopted regulations under existing provisions of the federal Clean Air Act that require a reduction in emissions of GHGs from motor vehicles. These EPA rulemakings could materially adversely affect the demand for the refined petroleum products that we distribute. In addition, Congress has from time to time considered legislation to reduce emissions of GHGs, but no such legislation has been adopted. Such federal legislation may impose a carbon emissions tax or establish a

cap-and-trade program or additional regulation by the EPA. In the absence of new federal legislation, some states have taken measures to reduce emissions of GHGs through GHG emission inventories and regional GHG cap-and-trade programs. The adoption of any federal or state legislation or regulation that requires reporting of GHGs or otherwise limits emissions of GHGs from our equipment and operations could require us to incur costs to reduce emissions of GHGs associated with our operations or could adversely affect demand for the refined petroleum products that we distribute.

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Natural resource damages: Certain federal and state government regulators have sought compensation from companies like us for natural resource damages as an adjunct to remediation programs. A substantial increase in natural resource damage claims at such remedial sites could result in substantially increased costs to us.

Where releases of refined petroleum products, renewable fuels and crude oil have occurred, federal and state laws and regulations require that contamination caused by such releases be assessed and remediated to meet applicable standards. Certain environmental laws impose strict, joint and several liability for costs required to clean up and restore sites where motor fuels or other waste products have been disposed or otherwise are released. The costs associated with the investigation and remediation of contamination, as well as any associated third-party claims, could be substantial, and could have a material adverse effect on our business, results of operations and our ability to make distributions to our unitholders. In addition, while we have no plans to transport the motor fuel we distribute, if we were to conduct activities that resulted in our being deemed a transporter of motor fuel, or if we were held, under applicable law, to have negligently entrusted the motor fuel we distribute to third parties, we could have added exposure to costs and liabilities under environmental laws and regulations in the event of a release of motor fuel. Such added exposure could adversely impact our results of operations, financial condition and ability to make distributions to our unitholders.

Compliance with current and future environmental laws and regulations could require us to make significant expenditures, increasing the overall cost of operating our businesses, including capital costs to construct, maintain and upgrade equipment and facilities. To the extent these expenditures are not ultimately passed on to our dealers, lessees or sublessees, our results of operations, financial condition and ability to make distributions to our unitholders could be materially adversely affected.

New, stricter environmental laws and regulations could significantly increase our costs, which could adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

The trend in environmental regulation is towards more restrictions and limitations on activities that may affect the environment. Our results of operations, financial condition and ability to make distributions to our unitholders may be materially adversely affected by increased costs and liabilities resulting from any changes in environmental laws and regulations that result in more stringent and costly waste handling, storage, transport, disposal or remediation requirements. We try to anticipate future regulatory requirements that might be imposed and plan accordingly to remain in compliance with changing environmental laws and regulations and to minimize the costs of such compliance. However, there can be no assurances as to the timing and type of such changes in or reinterpretation of existing laws and regulations or the promulgation of new laws and regulations or the amount of any required expenditures associated therewith.

We are subject to federal, state and local laws and regulations that govern the product quality specifications of the refined petroleum products we purchase, store, transport and sell to dealers and consumers at our consignment sites and company-operated sites.

Various federal, state and local government agencies have the authority to prescribe specific product quality specifications for certain commodities, including commodities that we distribute. Changes in product quality specifications, such as reduced sulfur content in refined petroleum products, or other more stringent requirements for fuels, could reduce our ability to procure product, require us to incur additional handling costs and require the

expenditure of capital. If we are unable to procure product or recover these costs through increased sales, we may not be able to meet our financial obligations. Failure to comply with these regulations could result in substantial penalties.

The dangers inherent in the storage of motor fuel could cause disruptions in our operations and could expose us to potentially significant losses, costs or liabilities.

Motor fuel is stored in underground and above ground storage tanks at sites that we own or operate and at consignment sites where we retain title to the motor fuel that we sell. Our operations are subject to significant hazards and risks inherent in storing motor fuel. These hazards and risks include, but are not limited to, fires, explosions, spills, discharges and other releases, any of which could result in distribution difficulties and disruptions, environmental pollution, governmentally-imposed fines or clean-up obligations, personal injury or wrongful death claims and other damage to our properties and the properties of others. Any such event could significantly disrupt our operations or expose us to significant liabilities, to the extent such liabilities are not covered by insurance. Therefore, the occurrence of such an event could adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

We are not fully insured against all risks incident to our business.

We are not fully insured against all risks incident to our business. We may be unable to obtain or maintain insurance with the coverage that we desire at reasonable rates. As a result of market conditions, the premiums and deductibles for certain of our insurance policies have increased and could continue to do so. Certain insurance coverage could become unavailable or available only for reduced amounts of coverage or at commercially unreasonable rates. If we were to incur a significant liability for which we were not fully insured, it could have a material adverse effect on our results of operations, financial condition and ability to make distributions to our unitholders.

We rely on the major oil companies from which we purchase motor fuel to provide trade credit terms to adequately fund our on-going operations.

Our business is impacted by the availability of trade credit to fund motor fuel purchases. An actual or perceived downgrade in our liquidity or operations could cause major oil companies to seek credit support in the form of additional collateral, limit the extension of trade credit, or otherwise materially modify their payment terms. Any material changes in our payment terms, including early payment incentives, or availability of trade credit provided by major oil companies could impact our liquidity, results of operations, financial condition and ability to make distributions to our unitholders.

Because we depend on our senior management’s experience and knowledge of our industry, our results of operations, financial condition and ability to make distributions to our unitholders could be adversely affected if we lose key members of our senior management team.

We are dependent on the expertise and continued efforts of our senior management team. If, for any reason, our senior executives leave or do not continue to be active in our management, our results of operations, financial condition and ability to make distributions to our unitholders could be adversely affected. In addition, we do not maintain life insurance on our senior executives and other employees.

Future litigation could adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

We are occasionally exposed to various litigation claims in the ordinary course of our business, including dealer litigation and industry-wide or class-action claims arising from the equipment or processes we use or employ or industry-specific business practices. If we were to become subject to any such claims in the future, our defense costs and any resulting awards or settlement amounts may not be fully covered by our insurance policies. An unfavorable outcome or settlement of any future lawsuits could adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

Terrorist attacks and threatened or actual war may adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

Our business is affected by general economic conditions and fluctuations in consumer confidence and spending, which can decline as a result of numerous factors outside of our control. Terrorist attacks or threats, whether within the United States or abroad, rumors or threats of war, actual conflicts involving the United States or its allies, or military or trade disruptions impacting our sources of motor fuel or our dealers may adversely impact our results of operations, financial condition and ability to make distributions to our unitholders. Specifically, strategic targets such as energy related assets (which could include refineries that produce the motor fuel we purchase or ports in which crude oil is delivered) may be at greater risk of future terrorist attacks than other targets in the United States. These occurrences could have an adverse impact on energy prices, including prices for motor fuel, and an adverse impact on our operations. Any or a combination of these occurrences could adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

We rely on our information technology systems to manage numerous aspects of our business, and a disruption of these systems or an act of cyber-terrorism could adversely affect our results of operations, financial condition and ability to make distributions to our unitholders.

We depend on our information technology, or “IT,” systems to manage numerous aspects of our business transactions and provide analytical information to management. Our IT systems are an essential component of our business and growth strategies, and a serious disruption to our IT systems could significantly limit our ability to manage and operate our business efficiently. While we have invested significant amounts in the protection of our IT systems and maintain what we believe are adequate security controls over individually identifiable dealer, employee and vendor data provided to us, these systems are vulnerable to, among other things, damage and interruption from power loss or natural disasters, computer system and network failures, loss of telecommunications services, physical and electronic loss of data, cyber-security breaches or cyber-terrorism, and computer viruses. Cyberattacks are rapidly evolving and becoming increasingly sophisticated.

A successful cyberattack resulting in the loss of sensitive dealer, employee or vendor data could adversely affect our reputation, results of operations, financial condition and liquidity, and could result in litigation against us or the imposition of penalties. Moreover, a security breach could require that we expend significant additional resources to upgrade further the security measures that we employ to guard against cyberattacks. Any disruption could cause our business and competitive position to suffer and cause our operating results to be reduced.

If we fail to develop or maintain an effective system of internal controls, we may not be able to report our financial results accurately or prevent fraud, which may have a negative impact on the market price of our common units.

Upon the completion of this offering, we will become subject to the public reporting requirements of the Securities Exchange Act of 1934, as amended, or the “Exchange Act,” including the rules thereunder that will require our management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of our internal control over financial reporting. Effective internal controls are necessary for us to provide reliable and timely financial reports, prevent fraud and to operate successfully as a publicly traded partnership. We prepare our consolidated financial statements in accordance with GAAP, but our internal accounting controls may not meet all standards applicable to companies with publicly traded securities. Our efforts to develop and maintain our internal controls may not be successful, and we may be unable to maintain effective controls over our financial processes and reporting in the future or to comply with our obligations under Section 404 of the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley, which we refer to as Section 404.

Given the difficulties inherent in the design and operation of internal controls over financial reporting, in addition to our limited accounting personnel and management resources, we can provide no assurance as to our,

or our independent registered public accounting firm’s, future conclusions about the effectiveness of our internal controls, and we may incur significant costs in our efforts to comply with Section 404. Any failure to implement and maintain effective internal controls over financial reporting will subject us to regulatory scrutiny and a loss of confidence in our reported financial information, which could have an adverse effect on our business and may have a negative effect on the trading price of our common units.

Although we will be required to disclose changes made in our internal control and procedures on a quarterly basis, we will not be required to make our first annual assessment of our internal controls over financial reporting pursuant to Section 404 until the year following our first annual report required to be filed with the SEC.

Risks Inherent in an Investment in Us

Our general partner and its affiliates, including Empire, have conflicts of interest with us and limited fiduciary duties to us and our unitholders, and they may favor their own interests to our detriment and to the detriment of our unitholders. Additionally, we have no control over the business decisions and operations of Empire, and Empire is under no obligation to adopt a business strategy that favors us.

Following this offering, Empire will own approximately 91.5% of the outstanding equity interests of our general partner and will appoint all of the officers and directors of our general partner. Although our general partner has a duty to manage us in a manner that is in the best interests of our partnership and our unitholders, the directors and officers of our general partner also have a duty to manage our general partner in a manner that is in the best interests of Empire and the other owners of our general partner. Conflicts of interest may arise between Empire and our general partner, on the one hand, and us and our unitholders, on the other hand. In resolving these conflicts of interest, our general partner may favor its own interests and the interests of Empire over our interests and the interests of our common unitholders. These conflicts include the following situations, among others:

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neither our partnership agreement nor any other agreement requires Empire to pursue a business strategy that favors us or utilizes our assets, which could involve decisions by Empire to pursue and grow particular markets, or undertake acquisition opportunities for itself. The directors and officers of Empire have a fiduciary duty to make these decisions in the best interests of Empire, which may be contrary to our interests;

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Empire may be constrained by the terms of its debt instruments from taking actions, or refraining from taking actions, that may be in our best interests;

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with the exception of the Empire Right of First Offer, the Atlas Purchase Option and the limited non-compete agreements to which Atlas and Mansfield are subject, the affiliates of our general partner, including Empire, are not limited in their ability to compete with us and may offer business opportunities or sell assets to third parties;

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our general partner is allowed to take into account the interests of parties other than us, such as Empire, in resolving conflicts of interest;

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our partnership agreement replaces the fiduciary duties that would otherwise be owed by our general partner with contractual standards governing its duties, limiting our general partner’s liabilities and restricting the remedies available to our unitholders for actions that, without such limitations, might constitute breaches of fiduciary duty;

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except in limited circumstances, our general partner has the power and authority to conduct our business without unitholder approval;

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our general partner will determine the amount and timing of asset purchases and sales, borrowings, issuance of additional partnership securities and the creation, reduction or increase of cash reserves, each of which can affect our distributable cash flow;

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our general partner will determine the amount and timing of any of our cash expenditures and whether a cash expenditure is classified as an expansion capital expenditure, which would not reduce operating surplus, or a maintenance capital expenditure, which would reduce our operating surplus. This determination can affect the amount of available cash from operating surplus that is distributed to our unitholders and to our general partner, the amount of adjusted operating surplus generated in any given period and the ability of the subordinated units to convert into common units;

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our general partner will determine which costs incurred by it are reimbursable by us;

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our general partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make a distribution on the subordinated units, to make incentive distributions or to accelerate the expiration of the subordination period;

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our partnership agreement permits us to classify up to $ million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus. This cash may be used to fund distributions on our subordinated units or to our general partner in respect of the incentive distribution rights;

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our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf;

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our general partner intends to limit its liability regarding our contractual and other obligations;

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our general partner may exercise its right to call and purchase all of the common units not owned by it and its affiliates if it and its affiliates own more than 80% of the common units;

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our general partner controls the enforcement of obligations owed to us by our general partner and its affiliates, including any commercial agreements we may enter into with Empire;

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our general partner decides whether to retain separate counsel, accountants or others to perform services for us; and

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our general partner may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to our general partner’s incentive distribution rights without the approval of the conflicts committee of the board of directors of our general partner, which we refer to as our “conflicts committee,” or our unitholders. This election may result in lower distributions to our common unitholders in certain situations.

Under the terms of our partnership agreement, the doctrine of corporate opportunity, or any analogous doctrine, does not apply to our general partner or any of its affiliates and their respective executive officers, directors and owners. Any such person or entity that becomes aware of a potential transaction, agreement, arrangement or other matter that may be an opportunity for us will not have any duty to communicate or offer such opportunity to us. Any such person or entity will not be liable to us or to any limited partner for breach of any fiduciary duty or other duty by reason of the fact that such person or entity pursues or acquires such opportunity for itself, directs such opportunity to another person or entity or does not communicate such opportunity or information to us. This may create actual and potential conflicts of interest between us and affiliates of our general partner and result in less than favorable treatment of us and our unitholders. Please read “Certain Relationships and Related Party Transactions” and “Conflicts of Interest and Duties.”

Our general partner intends to limit its liability regarding our obligations.

Our general partner intends to limit its liability under contractual arrangements so that the counterparties to such arrangements have recourse only against our assets, and not against our general partner or its assets. Our general partner may therefore cause us to incur indebtedness or other obligations that are nonrecourse to our general partner. Our partnership agreement permits our general partner to limit its liability, even if we could have obtained more favorable terms without the limitation on liability. In addition, we are obligated to reimburse or indemnify our

general partner to the extent that it incurs obligations on our behalf. Any such reimbursement or indemnification payments would reduce the amount of cash otherwise available for distribution to our unitholders.

Our management has no experience in managing our business as a U.S. publicly traded partnership.

Our executive management team and internal accounting staff have no experience in managing our business and reporting as a U.S. publicly traded partnership. As a result, we may not be able to anticipate or respond to material changes or other events in our business as effectively as if our executive management team and accounting staff had such experience. Furthermore, our pursuit of an acquisition growth strategy may place significant strain on our management resources, thereby limiting our ability to execute our day-to-day business activities.

You will experience immediate and substantial dilution in net tangible book value of $ per common unit.

The initial public offering price of $ per common unit exceeds our pro forma net tangible book value of $ per unit. Based on the initial public offering price of $ per common unit, you will incur immediate and substantial dilution of $ per common unit. This dilution results primarily because the assets contributed by Empire are recorded in accordance with GAAP at their historical cost, and not their fair value. Please read “Dilution.”

Our partnership agreement requires that we distribute all of our available cash, which could limit our ability to grow and make acquisitions.

Our partnership agreement requires that we distribute all of our available cash to our unitholders. As a result, we expect to rely primarily upon external financing sources, including commercial bank borrowings and the issuance of debt and equity securities, to fund our acquisitions and expansion capital expenditures. Therefore, to the extent we are unable to finance our growth externally, our cash distribution policy will significantly impair our ability to grow.

In addition, because we will distribute all of our available cash, our growth may not be as fast as that of businesses that reinvest their available cash to expand ongoing operations. To the extent we issue additional partnership interests in connection with any acquisitions or expansion capital expenditures, the payment of distributions on those additional partnership interests may increase the risk that we will be unable to maintain or increase our per unit distribution level. There are no limitations in our partnership agreement or our revolving credit agreement on our ability to issue additional partnership interests, including units ranking senior to our common units as to distributions or in liquidation or that have special voting and other rights, and our unitholders will have no preemptive or other rights (solely as a result of their status as our unitholders) to purchase any such additional partnership interests. The incurrence of additional commercial borrowings or other debt to finance our growth strategy would result in increased interest expense, which in turn, may reduce the amount of cash that we have available to distribute to our unitholders.

While our partnership agreement requires us to distribute all of our available cash, our partnership agreement, including the provisions requiring us to make cash distributions, may be amended.

While our partnership agreement requires us to distribute all of our available cash, our partnership agreement, including the provisions requiring us to make cash distributions, may be amended. Our partnership agreement generally may not be amended during the subordination period without the approval of our public common unitholders. However, our partnership agreement can be amended with the consent of our general partner and the approval of a majority of the outstanding common units after the subordination period has ended. Please read “Our Partnership Agreement—Amendment of Our Partnership Agreement.”

Our partnership agreement replaces our general partner’s fiduciary duties to our unitholders with contractual standards governing its duties.

As permitted by Delaware law, our partnership agreement contains various provisions replacing the fiduciary duties that would otherwise be owed by our general partner with contractual standards governing the duties of the general partner and contractual methods of resolving conflicts of interest. The effect of these provisions is to restrict the remedies available to our unitholders for actions that might otherwise constitute breaches of our general partner’s fiduciary duties. Our partnership agreement also provides that affiliates of our general partner, including Empire, are not restricted from competing with us, and neither our general partner nor its affiliates have any obligation to present business opportunities to us. By purchasing a common unit, the purchaser agrees to be bound by the terms of our partnership agreement, and pursuant to the terms of our partnership agreement each holder of common units consents to various actions and potential conflicts of interest contemplated in our partnership agreement that might otherwise be considered a breach of fiduciary or other duties under Delaware law. Please read “Conflicts of Interest and Duties—Duties of Our General Partner” and “Certain Relationships and Related Party Transactions.”

Our partnership agreement restricts the remedies available to our unitholders for actions taken by our general partner that might otherwise constitute breaches of fiduciary duties.

Our partnership agreement contains provisions that restrict the remedies available to our unitholders for actions taken by our general partner that might otherwise constitute breaches of fiduciary duties under Delaware law. For example, our partnership agreement:

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provides that whenever our general partner makes a determination or takes, or declines to take, any other action in its capacity as our general partner, our general partner is required to make such determination, or take or decline to take such other action, in good faith, meaning that it subjectively believed that the determination or the decision to take or decline to take such action was in the best interests of our partnership, and will not be subject to any other or different standard imposed by our partnership agreement, Delaware law, or any other law, rule or regulation, or at equity;

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provides that our general partner will not have any liability to us or our unitholders for decisions made in its capacity as a general partner so long as it acted in good faith;

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provides that our general partner and its officers and directors will not be liable for monetary damages to us or our limited partners resulting from any act or omission unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our general partner or its officers and directors, as the case may be, acted in bad faith or engaged in actual fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the conduct was criminal; and

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provides that our general partner will not be in breach of its obligations under our partnership agreement or its fiduciary duties to us or our limited partners if a transaction with an affiliate or the resolution of a conflict of interest is approved in accordance with, or otherwise meets the standards set forth in, our partnership agreement.

In connection with a situation involving a transaction with an affiliate or a conflict of interest, our partnership agreement provides that any determination by our general partner must be made in good faith, meaning that it subjectively believed that the determination or the decision to take or decline to take such action was in the best interests of our partnership, and that our conflicts committee and the board of directors of our general partner are entitled to a presumption that they acted in good faith. In any proceeding brought by or on behalf of any limited partner or the partnership, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption. Please read “Conflicts of Interest and Duties.”

Cost reimbursements, which will be determined in our general partner’s sole discretion, and fees due to our general partner and its affiliates for services provided may be substantial and will reduce the amount of cash we have available for distribution to you.

Under our partnership agreement, we are required to reimburse our general partner and its affiliates for all costs and expenses that they incur on our behalf for managing and controlling our business and operations. Except to the extent specified under our omnibus agreement, our general partner determines the amount of these expenses. Under the terms of the omnibus agreement, we will be required to reimburse our general partner for expenses related to certain general and administrative services our general partner will provide to us in support of our business. Our general partner and its affiliates also may provide us other services for which we will be charged fees as determined by our general partner. The costs and expenses for which we will reimburse our general partner and its affiliates may include salary, bonus, incentive compensation and other amounts paid to persons who perform services for us or on our behalf and expenses allocated to our general partner by its affiliates. The costs and expenses for which we are required to reimburse our general partner and its affiliates are not subject to any caps or other limits. Payments to our general partner and its affiliates may be substantial and will reduce the amount of cash we have available to distribute to our unitholders.

Unlike the holders of common stock in a corporation, our unitholders have only limited voting rights on matters affecting our business and, therefore, limited ability to influence management’s decisions regarding our business. For example, unlike holders of stock in a public corporation, our unitholders will not have “say-on-pay” advisory voting rights. Our unitholders will not have the right to elect our general partner or the board of directors of our general partner on an annual or other continuing basis. The board of directors of our general partner is chosen by Empire. Furthermore, if our unitholders are dissatisfied with the performance of our general partner, they will have little ability to remove our general partner. As a result of these limitations, the price at which our common units will trade could be diminished because of the absence or reduction of a takeover premium in the trading price.

Our unitholders will be unable initially to remove our general partner without its consent because our general partner and its affiliates will own sufficient units upon completion of the offering to be able to prevent its removal. In addition, our general partner may only be removed for cause. “Cause” is narrowly defined under our partnership agreement to mean that a court of competent jurisdiction has entered a final, non-appealable judgment finding the general partner liable for actual fraud or willful or wanton misconduct in its capacity as our general partner. Cause does not include most cases of charges of poor management of the business. Even if cause for removal exists, the vote of the holders of at least 66²/₃% of all outstanding common units and subordinated units voting together as a single class is required to remove our general partner. At the closing of this offering, our general partner and its affiliates will own % of our total outstanding common units and subordinated units on an aggregate basis (or % of our total outstanding common units and subordinated units on an aggregate basis if the underwriters’ option to purchase additional common units is exercised in full).

Furthermore, our unitholders’ voting rights are further restricted by the partnership agreement provision providing that any units held by a person that owns 20% or more of any class of units then outstanding, other than our general partner, its affiliates, their transferees, and persons who acquired such units with the prior approval of the board of directors of our general partner, cannot vote on any matter.

Our partnership agreement also contains provisions limiting the ability of our unitholders to call meetings or to acquire information about our operations, as well as other provisions limiting our unitholders’ ability to influence the manner or direction of management.

Control of our general partner may be transferred to a third party without unitholder consent.

Our general partner may transfer its general partner interest to a third party at any time without the consent of our unitholders. Furthermore, our partnership agreement does not restrict the ability of Empire to transfer all or a portion of its ownership interest in our general partner to a third party. If Empire transfers all of its ownership interest in our general partner, the new owner of Empire’s interest would have the ability to immediately replace the board of directors and officers of our general partner with its own designees and thereby exert significant control over the decisions made by the board of directors and officers.

The incentive distribution rights of our general partner may be transferred to a third party without unitholder consent.

Our general partner may transfer its incentive distribution rights to a third party at any time without the consent of our unitholders. If our general partner transfers its incentive distribution rights to a third party, it will have less incentive to grow our partnership and increase distributions. A transfer of incentive distribution rights by our general partner could reduce the likelihood of Empire selling or contributing additional assets that it may acquire in the future to us, which in turn could impact our ability to grow.

We may issue additional partnership interests without unitholder approval, which would dilute unitholder interests.

At any time, we may issue an unlimited number of general partner interests or limited partner interests of any type without the approval of our unitholders, and our unitholders will have no preemptive or other rights (solely as a result of their status as unitholders) to purchase any such general partner interests or limited partner interests. Further, there are no limitations in our partnership agreement on our ability to issue partnership interests that rank equal or senior to our common units as to distributions or in liquidation or that have special voting rights and other rights. The issuance by us of additional common units or other partnership interests of equal or senior rank will have the following effects:

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our unitholders’ proportionate ownership interest in us will decrease;

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the amount of cash we have available to distribute on each unit may decrease;

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because a lower percentage of total outstanding units will be subordinated units, the risk that a shortfall in the payment of the minimum quarterly distribution will be borne by our common unitholders will increase;

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the ratio of taxable income to distributions may increase;

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the relative voting strength of each previously outstanding unit may be diminished; and

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the market price of the common units may decline.

The issuance by us of additional general partner interests may have the following effects, among others, if such general partner interests are issued to a person who is not an affiliate of Empire:

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management of our business may no longer reside solely with our current general partner; and

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affiliates of the newly admitted general partner may compete with us, and neither that general partner nor such affiliates will have any obligation to present business opportunities to us.

Empire may sell units in the public or private markets, and such sales could have an adverse impact on the trading price of the common units.

After the completion of the formation transactions and the closing of this offering, assuming that the underwriters do not exercise their option to purchase additional common units, Empire will hold common units and subordinated units. All of the subordinated units will convert into common units at the end of the subordination period and may convert earlier under certain circumstances. In addition, we have agreed to provide Empire with certain registration rights under applicable securities laws. Please read “Units Eligible for Future Sale.” The sale of these units in the public or private markets could have an adverse impact on the price of the common units.

Other than the requirement in our partnership agreement to distribute all of our available cash each quarter, we have no legal obligation to make quarterly cash distributions, and our general partner has considerable discretion to establish cash reserves that would reduce the amount of available cash we distribute to our unitholders.

Generally, our available cash is comprised of cash on hand at the end of a quarter after the payment of our expenses and the establishment of cash reserves plus, if the board of directors of our general partner so determines, all or any portion of additional cash on hand resulting from working capital borrowings made after the end of the quarter. Our partnership agreement permits our general partner to establish cash reserves for the proper conduct of our business (including reserves for our future capital expenditures and anticipated future debt service requirements), to comply with applicable law or agreements to which we are a party, or to provide funds for future distributions to our unitholders. As a result, even when there is no change in the amount of distributable cash flow that we generate, our general partner has considerable discretion to establish cash reserves, which would result in a reduction in the amount of available cash we distribute to our unitholders. Accordingly, there is no guarantee that we will make quarterly distributions to our unitholders at our minimum quarterly distribution rate or at any other rate, and we have no legal obligation to do so.

Empire, its affiliates and its equityholders may compete with us, and Empire, as the owner of approximately 91.5% of the outstanding equity interests of our general partner at the closing of this offering, will decide when, if, and how we complete acquisitions.

Neither our partnership agreement nor our omnibus agreement will prohibit Empire, any of its affiliates or any of its equityholders from owning assets or engaging in businesses that compete directly or indirectly with us. Under the terms of our partnership agreement, the doctrine of corporate opportunity, or any analogous doctrine, will not apply to our general partner, any of its affiliates, including Empire, or any of Empire’s equityholders. Any such entity that becomes aware of a potential transaction, agreement, arrangement or other matter that may be an opportunity for us will not have any duty to communicate or offer such opportunity to us. Consequently, Empire, its affiliates and any of its equityholders may acquire additional assets in the future without any obligation to offer us the opportunity to purchase any of those assets. As a result, competition from Empire, its affiliates or any of its equityholders could materially and adversely impact our results of operations, financial condition and ability to make distributions to our unitholders. Two of Empire’s equityholders, Atlas and Mansfield, are subject to limited non-compete agreements with us that will expire in 2020 and 2019, respectively. Upon expiration of these agreements, Atlas and Mansfield may compete with us and any such competition could materially and adversely impact our results of operations, financial condition and ability to make distributions to our unitholders.

Our general partner has a limited call right that may require you to sell your common units at an undesirable time or price.

If at any time our general partner and its affiliates own more than 80% of our then-outstanding common units, our general partner will have the right, but not the obligation, which it may assign to any of its affiliates or to us, to acquire all, but not less than all, of the common units held by unaffiliated persons at a price not less than their then-current market price. As a result, you may be required to sell your common units at an undesirable time or price and may not receive any return on your investment. You may also incur a tax liability upon a sale of your units. At the closing of this offering, and assuming no exercise of the underwriters’ option to purchase additional common units, Empire will own, directly or indirectly, an aggregate of approximately % of our common units. After the end of the subordination period (which could occur as early as the quarter ending , 2016), assuming no additional issuances of common units by us (other than upon the conversion of the subordinated units), Empire will own approximately % of our outstanding common units. For additional information about our general partner’s call right, please read “Our Partnership Agreement—Limited Call Right.”

Your liability may not be limited if a court finds that unitholder action constitutes control of our business.

A general partner of a partnership generally has unlimited liability for the obligations of the partnership, except for those contractual obligations of the partnership that are expressly made without recourse to the general partner. Our partnership is organized under Delaware law, and we conduct business in a number of other states. The limitations on the liability of holders of limited partner interests for the obligations of a limited partnership have not been clearly established in some of the other states in which we do business. You could be liable for any and all of our obligations as if you were a general partner if a court or government agency were to determine that (i) we were conducting business in a state but had not complied with that particular state’s partnership statute; or (ii) your right to take certain actions under our partnership agreement constitute “control” of our business. For a discussion of the implications of the limitations of liability on a unitholder, please read “Our Partnership Agreement—Limited Liability.”

Our unitholders may have liability to repay distributions that were wrongfully distributed to them.

Under certain circumstances, our unitholders may have to repay amounts wrongfully returned or distributed to them. Under Section 17-607 of the Delaware Revised Uniform Limited Partnership Act, or the “Delaware Act,” we may not make a distribution to you if the distribution would cause our liabilities to exceed the fair value of our assets. Delaware law provides that for a period of three years from the date of the impermissible distribution, limited partners who received the distribution and who knew at the time of the distribution that it violated Delaware law will be liable to the limited partnership for the distribution amount. Transferees of common units are liable for the obligations of the transferor to make contributions to the partnership that are known to the transferee at the time of transfer and for unknown obligations if the liabilities could be determined from our partnership agreement. Liabilities to partners on account of their partnership interest and liabilities that are non-recourse to the partnership are counted for purposes of determining whether a distribution is permitted.

There is no existing market for our common units, and a trading market that will provide you with adequate liquidity may not develop. The price of our common units may fluctuate significantly, and you could lose all or part of your investment.

Prior to this offering, there has been no public market for our common units. After this offering, there will be only publicly traded common units, assuming the underwriters’ option to purchase additional common units from us is not exercised. In addition, Empire will own an aggregate of common units and subordinated units, representing an aggregate % limited partner interest in us. We do not know the extent to which investor interest will lead to the development of an active trading market or how liquid that market might be. You may not be able to resell your common units at or above the initial public offering price. Additionally, the lack of liquidity may result in wide bid-ask spreads, contribute to significant fluctuations in the market price of the common units and limit the number of investors who are able to buy the common units.

The initial public offering price for the common units offered hereby will be determined by negotiations between us and the representatives of the underwriters and may not be indicative of the market price of the common units that will prevail in the trading market. The market price of our common units may decline below the initial public offering price. The market price of our common units may be influenced by many factors, some of which are beyond our control, including:

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our quarterly distribution;

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our quarterly or annual earnings or those of other companies in our industry;

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announcements by us or our competitors of significant contracts or acquisitions;

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changes in accounting standards, policies, guidance, interpretations or principles;

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general economic conditions;

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volatility in the capital and credit markets;

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the failure of securities analysts to cover our common units after this offering or changes in financial estimates by analysts;

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future sales of our common units; and

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the other factors described in these “Risk Factors.”

Our general partner, or any transferee holding incentive distribution rights, may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to its incentive distribution rights, without the approval of our conflicts committee or our unitholders. This could result in lower distributions to our unitholders.

The holder or holders of a majority of the incentive distribution rights, which is initially our general partner, have the right, at any time when there are no subordinated units outstanding and the holders have received incentive distributions at the highest level to which they are entitled (50%) for each of the prior four consecutive fiscal quarters (and the amount of each such distribution did not exceed adjusted operating surplus for each such quarter), to reset the minimum quarterly distribution and the initial target distribution levels at higher levels based on our cash distribution at the time of the exercise of the reset election. Following a reset election, the minimum quarterly distribution will be reset to an amount equal to the average cash distribution per unit for the two fiscal quarters immediately preceding the reset election (such amount is referred to as the “reset minimum quarterly distribution”), and the target distribution levels will be reset to correspondingly higher levels based on percentage increases above the reset minimum quarterly distribution. Our general partner has the right to transfer the incentive distribution rights at any time, in whole or in part, and any transferee holding a majority of the incentive distribution rights shall have the same rights as our general partner with respect to resetting target distributions.

In the event of a reset of the minimum quarterly distribution and the target distribution levels, the holders of the incentive distribution rights will be entitled to receive, in the aggregate, the number of common units equal to that number of common units which would have entitled the holders to an average aggregate quarterly cash distribution in the prior two quarters equal to the average of the distributions on the incentive distribution rights in the prior two quarters. We anticipate that our general partner would exercise this reset right in order to facilitate acquisitions or internal growth projects that would not otherwise be sufficiently accretive to cash distributions per common unit. It is possible, however, that our general partner or a transferee could exercise this reset election at a time when it is experiencing, or expects to experience, declines in the cash distributions it receives related to its incentive distribution rights and may therefore desire to be issued common units rather than retain the right to receive incentive distribution payments based on target distribution levels that are less certain to be achieved in the then current business environment. This risk could be elevated if our incentive distribution rights have been transferred to a third party. As a result, a reset election may cause our common unitholders to experience dilution in the amount of cash distributions that they would have otherwise received had we not issued common units to our general partner in connection with resetting the target distribution levels. Please read “Provisions of Our Partnership Agreement Relating to Cash Distributions—Right to Reset Incentive Distribution Levels.”

The NYSE does not require a publicly traded partnership like us to comply with certain of its corporate governance requirements.

We intend to apply to list our common units on the NYSE. Unlike most corporations, we are not required by NYSE rules to have, and we do not intend to have, a majority of independent directors on our general partner’s board of directors or a compensation committee or a nominating and corporate governance committee. Additionally, any future issuance of additional common units or other securities, including to affiliates, will not be subject to the NYSE’s shareholder approval rules. Accordingly, our unitholders will not have the same protections afforded to certain corporations that are subject to all of the NYSE corporate governance requirements. Please read “Management.”

Our partnership agreement includes exclusive forum, venue and jurisdiction provisions and a waiver of the right to a jury trial. By purchasing a common unit, a limited partner is irrevocably consenting to these provisions regarding claims, suits, actions or proceedings, submitting to the exclusive jurisdiction of Delaware courts and waiving a right to a jury trial.

Our partnership agreement is governed by Delaware law. Our partnership agreement includes exclusive forum, venue and jurisdiction provisions designating Delaware courts as the exclusive venue for most claims, suits, actions and proceedings involving us or our officers, directors and employees. Our partnership agreement also includes an irrevocable waiver of the right to trial by jury in all such claims, suits, actions and proceedings. Please read “Our Partnership Agreement—Exclusive Forum.” By purchasing a common unit, a limited partner is irrevocably consenting to these limitations and provisions regarding claims, suits, actions or proceedings and submitting to the exclusive jurisdiction of Delaware courts. If a dispute were to arise between a limited partner and us or our officers, directors or employees, the limited partner may be required to pursue its legal remedies in Delaware which may be an inconvenient or distant location and which is considered to be a more corporate-friendly environment. These provisions may have the effect of discouraging lawsuits against us and our general partner’s directors and officers.

We will incur increased costs as a result of being a publicly traded partnership, including the cost of additional finance and accounting systems, procedures and controls in order to satisfy our new public company reporting requirements.

As a result of the completion of this offering, we will become a publicly traded partnership and be subject to additional reporting requirements. We have no history operating as a publicly traded partnership. As a publicly traded partnership, we will incur significant additional legal, accounting and other expenses. In addition, the Sarbanes-Oxley Act and related rules implemented by the SEC and the NYSE have mandated changes in the corporate governance practices of publicly traded companies. We expect these rules and regulations to increase our legal and financial compliance costs and to make our activities more time-consuming and costly. For example, as a result of becoming a publicly traded partnership, we are required to have at least three independent directors, create an audit committee and adopt policies regarding internal controls and disclosure controls and procedures, including the preparation of reports on internal controls over financial reporting. In addition, we will incur additional costs associated with our publicly traded partnership reporting requirements. We also expect these new rules and regulations to make it more difficult and more expensive for our general partner to obtain director and officer liability insurance and possibly to result in our general partner having to accept reduced policy limits and coverage. As a result, it may be more difficult for our general partner to attract and retain qualified persons to serve on its board of directors or as executive officers.

Any failure to achieve and maintain an effective internal control environment could have a material adverse effect on our business and unit price. In addition, we may need to hire additional compliance, accounting and financial staff with appropriate public company experience and technical knowledge, and we may not be able to do so in a timely fashion. As a result, we may need to rely on outside consultants to provide these services for us until qualified personnel are hired. These obligations will increase our operating expenses and could divert our management’s attention from our operations.

We have included $2.0 million of incremental annual costs associated with being a publicly traded partnership in our financial forecast included elsewhere in this prospectus. However, it is possible that our actual incremental costs of being a publicly traded partnership could be higher than we currently estimate.

Tax Risks

In addition to reading the following risk factors, please read “Material Federal Income Tax Consequences” for a more complete discussion of the expected material federal income tax consequences of owning and disposing of our common units.

Our tax treatment depends on our status as a partnership for federal income tax purposes. If the Internal Revenue Service, or “IRS,” were to treat us as a corporation for federal income tax purposes, which would subject us to entity-level taxation, or if we were otherwise subjected to a material amount of additional entity-level taxation, then our distributable cash flow to our unitholders would be substantially reduced.

The anticipated after-tax economic benefit of an investment in our common units depends largely on our being treated as a partnership for federal income tax purposes. We have not requested a ruling from the IRS on this or on any other tax matter affecting us.

Despite the fact that we are a limited partnership under Delaware law, it is possible in certain circumstances for a partnership such as ours to be treated as a corporation for federal income tax purposes. A change in our business, a change in current law or our failure to satisfy the requirements under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”) could cause us to be treated as a corporation for federal income tax purposes or otherwise subject us to taxation as an entity.

If we were treated as a corporation for federal income tax purposes, we would pay federal income tax on our taxable income at the corporate tax rate, which is currently a maximum of 35%, and would likely pay state and local income tax at varying rates. Distributions would generally be taxed again as corporate dividends (to the extent of our current and accumulated earnings and profits), and no income, gains, losses, deductions or credits would flow through to our unitholders. Because a tax would be imposed upon us as a corporation, our distributable cash flow would be substantially reduced and we might need to raise funds to pay such corporate level-tax. In addition, changes in current state law may subject us to additional entity-level taxation by individual states. Because of state budget deficits and other reasons, several states are evaluating ways to subject partnerships to entity-level taxation through the imposition of state income, franchise and other forms of taxation. For example, the State of Texas currently imposes a franchise tax on the taxable margin of corporations and other entities, including limited partnerships. Imposition of any such taxes may substantially reduce the cash available for distribution to our unitholders. Therefore, if we were treated as a corporation for federal income tax purposes or otherwise subjected to a material amount of entity-level taxation, there would be a material reduction in the anticipated cash flow and after-tax return to our unitholders, likely causing a substantial reduction in the value of our common units.

Our partnership agreement provides that, if a law is enacted or existing law is modified or interpreted in a manner that subjects us to taxation as a corporation or otherwise subjects us to entity-level taxation for federal, state or local income tax purposes, the minimum quarterly distribution amount and the target distribution levels may be adjusted to reflect the impact of that law on us.

The present federal income tax treatment of publicly traded partnerships, including us, or an investment in our common units may be modified by administrative, legislative or judicial interpretation at any time. For example, members of Congress and the President have periodically considered substantive changes to the existing federal income tax laws that would affect the tax treatment of certain publicly traded partnerships, including the elimination of partnership tax treatment for publicly traded partnerships. Any modification to the federal income tax laws and interpretations thereof may or may not be retroactively applied and could make it

more difficult or impossible for us to satisfy the requirements of the exception pursuant to which we will be treated as a partnership for federal income tax purposes. Please read “Material Federal Income Tax Consequences—Partnership Status.” We are unable to predict whether any such changes will ultimately be enacted. However, it is possible that a change in law could affect us, and any such changes could negatively impact the value of an investment in our common units.

Our unitholders’ share of our income will be taxable to them for federal income tax purposes even if they do not receive any cash distributions from us.

Because a unitholder will be treated as a partner to whom we will allocate taxable income that could be different in amount than the cash we distribute, a unitholder’s allocable share of our taxable income will be taxable to him, which may require the payment of federal income taxes and, in some cases, state and local income taxes, on his share of our taxable income even if he receives no cash distributions from us. Our unitholders may not receive cash distributions from us equal to their share of our taxable income or even equal to the actual tax liability that results from that income.

If the IRS contests the federal income tax positions we take, the market for our common units may be adversely impacted and the cost of any IRS contest will reduce our cash available for distribution to our unitholders.

We have not requested a ruling from the IRS with respect to our treatment as a partnership for federal income tax purposes. The IRS may adopt positions that differ from the conclusions of our counsel expressed in this prospectus or from the positions we take, and the IRS’s positions may ultimately be sustained. It may be necessary to resort to administrative or court proceedings to sustain some or all of our counsel’s conclusions or the positions we take and such positions may not ultimately be sustained. A court may not agree with some or all of our counsel’s conclusions or the positions we take. Any contest with the IRS, and the outcome of any IRS contest, may have a materially adverse impact on the market for our common units and the price at which they trade. In addition, our costs of any contest with the IRS will be borne indirectly by our unitholders (including holders of our subordinated units) because the costs will reduce our distributable cash flow.

Tax gain or loss on the disposition of our common units could be more or less than expected.

If our unitholders sell common units, they will recognize a gain or loss for federal income tax purposes equal to the difference between the amount realized and their tax basis in those common units. Because distributions in excess of their allocable share of our net taxable income decrease their tax basis in their common units, the amount, if any, of such prior excess distributions with respect to the common units a unitholder sells will, in effect, become taxable income to the unitholder if he sells such common units at a price greater than his tax basis in those common units, even if the price received is less than his original cost. Furthermore, a substantial portion of the amount realized on any sale of a unitholder’s common units, whether or not representing gain, may be taxed as ordinary income due to potential recapture items, including depreciation recapture. In addition, because the amount realized includes a unitholder’s share of our nonrecourse liabilities, a unitholder that sells common units may incur a tax liability in excess of the amount of cash received from the sale. Please read “Material Federal Income Tax Consequences—Disposition of Common Units—Recognition of Gain or Loss” for a further discussion of the foregoing.

Tax-exempt entities and non-U.S. persons face unique tax issues from owning our common units that may result in adverse tax consequences to them.

An investment in our common units by tax-exempt entities, such as employee benefit plans and individual retirement accounts (known as IRAs), and non-U.S. persons raises issues unique to them. For example, a substantial portion of our income allocated to organizations that are exempt from federal income tax, including IRAs and other retirement plans, will be unrelated business taxable income and will be taxable to them.

Distributions to non-U.S. persons will be reduced by withholding taxes at the highest applicable effective tax rate, and non-U.S. persons will be required to file federal income tax returns and pay tax on their share of our taxable income. Tax-exempt entities and non-U.S. persons should consult a tax advisor before investing in our common units.

Our subsidiary, Empire Services, conducts certain activities that may not generate qualifying income and is treated as a corporation for U.S. federal income tax purposes. Corporate federal income tax paid by this subsidiary will reduce our cash available for distribution to our unitholders.

In order to maintain our status as a partnership for U.S. federal income tax purposes, 90% or more of our gross income in each tax year must be qualifying income under Section 7704 of the Internal Revenue Code. For a discussion of qualifying income, please read “Material Federal Income Tax Consequences—Partnership Status.” Latham & Watkins LLP is unable to opine as to whether the income generated by certain portions of our operations is qualifying income. In an attempt to ensure that 90% or more of our gross income in each tax year will be qualifying income, we currently intend to conduct a portion of these operations in a separate subsidiary that is treated as a corporation for U.S. federal income tax purposes. For the twelve months ending December 31, 2015, we forecast that these operations will represent approximately % of our total gross profit.

Empire Services will conduct our retail motor fuel sales and sales of convenience store merchandise and other ancillary products. This corporate subsidiary is subject to corporate-level tax, which will reduce the cash available for distribution to us and, in turn, to our unitholders. Distributions from our corporate subsidiary will generally be taxed to our unitholders as dividend income to the extent of the current and accumulated earnings and profits of the corporate subsidiary. An individual unitholder’s share of dividend income from our corporate subsidiary will constitute portfolio income that cannot be offset by the unitholder’s share of our other losses or deductions. If the IRS were to successfully assert that our corporate subsidiary has more tax liability than we anticipate or legislation were enacted that increased the corporate tax rate, our cash available for distribution to our unitholders would be further reduced.

We will treat each purchaser of our common units as having the same tax benefits without regard to the actual common units purchased. The IRS may challenge this treatment, which could adversely affect the value of our common units.

Because we cannot match transferors and transferees of common units and because of other reasons, we will adopt depreciation and amortization positions that may not conform to all aspects of existing and proposed Treasury regulations promulgated under the Internal Revenue Code (the “Treasury Regulations”). A successful IRS challenge to those positions could adversely affect the amount of tax benefits available to our unitholders. Latham & Watkins LLP is unable to opine as to the validity of such filing positions. It also could affect the timing of these tax benefits or the amount of gain from a unitholder’s sale of common units and could have a negative impact on the value of our common units or result in audit adjustments to a unitholder’s tax returns. Please read “Material Federal Income Tax Consequences—Tax Consequences of Unit Ownership—Section 754 Election” for a further discussion of the effect of the depreciation and amortization positions we will adopt.

We will prorate our items of income, gain, loss and deduction for federal income tax purposes between transferors and transferees of our units each month based upon the ownership of our units on the first business day of each month, instead of on the basis of the date a particular unit is transferred. The IRS may challenge this treatment, which could change the allocation of items of income, gain, loss and deduction among our unitholders.

We will prorate our items of income, gain, loss and deduction for federal income tax purposes between transferors and transferees of our units each month based upon the ownership of our units on the first business day of each month, instead of on the basis of the date a particular unit is transferred. The use of this proration method may not be permitted under existing Treasury Regulations, and, accordingly, our counsel is unable to

opine as to the validity of this method. The U.S. Department of the Treasury and the IRS have issued proposed regulations that provide a safe harbor pursuant to which publicly traded partnerships may use a similar monthly simplifying convention to allocate tax items among transferor and transferee unitholders. Nonetheless, the proposed regulations do not specifically authorize the use of the proration method we will adopt. If the IRS were to challenge this method or new Treasury Regulations were issued, we may be required to change the allocation of items of income, gain, loss and deduction among our unitholders. Latham & Watkins LLP is unable to opine as to whether our monthly convention for allocating taxable income and losses is permitted by existing Treasury Regulations. Please read “Material Federal Income Tax Consequences—Disposition of Common Units—Allocations Between Transferors and Transferees.”

A unitholder whose common units are loaned to a “short seller” to effect a short sale of common units may be considered as having disposed of those common units. If so, he would no longer be treated for federal income tax purposes as a partner with respect to those common units during the period of the loan and may recognize gain or loss from the disposition.

Because a unitholder whose common units are loaned to a “short seller” to effect a short sale of common units may be considered as having disposed of the loaned common units, he may no longer be treated for federal income tax purposes as a partner with respect to those common units during the period of the loan to the short seller and the unitholder may recognize gain or loss from such disposition. Moreover, during the period of the loan to the short seller, any of our income, gain, loss or deduction with respect to those common units may not be reportable by the unitholder and any cash distributions received by the unitholder as to those common units could be fully taxable as ordinary income. Latham & Watkins LLP has not rendered an opinion regarding the treatment of a unitholder where common units are loaned to a short seller to effect a short sale of common units; therefore, our unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a loan to a short seller are urged to consult a tax advisor to discuss whether it is advisable to modify any applicable brokerage account agreements to prohibit their brokers from loaning their common units.

We will adopt certain valuation methodologies in determining a unitholder’s allocations of income, gain, loss and deduction. The IRS may challenge these methodologies or the resulting allocations, and such a challenge could adversely affect the value of our common units.

In determining the items of income, gain, loss and deduction allocable to our unitholders, in certain circumstances, including when we issue additional units, we must determine the fair market value of our assets. Although we may from time to time consult with professional appraisers regarding valuation matters, we make many fair market value estimates using a methodology based on the market value of our common units as a means to measure the fair market value of our assets. The IRS may challenge these valuation methods and the resulting allocations of income, gain, loss and deduction.

A successful IRS challenge to these methods or allocations could adversely affect the amount, character and timing of taxable income or loss allocated to our unitholders. It also could affect the amount of gain from our unitholders’ sale of common units and could have a negative impact on the value of our common units or result in audit adjustments to our unitholders’ tax returns without the benefit of additional deductions.

The sale or exchange of 50% or more of our capital and profits interests during any twelve-month period will result in the termination of our partnership for federal income tax purposes.

We will be considered to have technically terminated our partnership for federal income tax purposes if there is a sale or exchange of 50% or more of the total interests in our capital and profits within a twelve-month period. For purposes of determining whether the 50% threshold has been met, multiple sales of the same interest will be counted only once. Our technical termination would, among other things, result in the closing of our taxable year for all our unitholders, which would result in us filing two tax returns (and our unitholders could receive two Schedules K-1 if relief was not available, as described below) for one fiscal year and could result in a

deferral of depreciation deductions allowable in computing our taxable income. In the case of a unitholder reporting on a taxable year other than a fiscal year ending December 31, the closing of our taxable year may also result in more than twelve months of our taxable income or loss being includable in his taxable income for the year of termination. Our termination currently would not affect our classification as a partnership for federal income tax purposes, but instead we would be treated as a new partnership for federal income tax purposes. If treated as a new partnership, we must make new tax elections, including a new election under Section 754 of the Internal Revenue Code, and could be subject to penalties if we are unable to determine that a termination occurred. The IRS has announced a publicly traded partnership technical termination relief program whereby, if a publicly traded partnership that technically terminated requests publicly traded partnership technical termination relief and such relief is granted by the IRS, among other things, the partnership will only have to provide one Schedule K-1 to our unitholders for the year notwithstanding two partnership tax years. Please read “Material Federal Income Tax Consequences—Disposition of Common Units—Constructive Termination” for a discussion of the consequences of our technical termination for federal income tax purposes.

As a result of investing in our common units, our unitholders may become subject to state and local taxes and return filing requirements in jurisdictions where we operate or own or acquire properties.

In addition to federal income taxes, our unitholders will likely be subject to other taxes, including state and local taxes, unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which we conduct business or control property now or in the future, even if they do not live in any of those jurisdictions. Our unitholders will likely be required to file state and local income tax returns and pay state and local income taxes in some or all of these various jurisdictions. Further, our unitholders may be subject to penalties for failure to comply with those requirements. We initially expect to conduct business or own property in Alabama, Arkansas, California, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, New Mexico, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, D.C. and West Virginia, and many of these jurisdictions impose a personal income tax on individuals. As we make acquisitions or otherwise expand our business, we may conduct business or control property in additional states that impose a personal income tax. It is our unitholders’ responsibility to file all federal, state and local tax returns. Our counsel has not rendered an opinion on the state or local tax consequences of an investment in our common units. Please consult your tax advisor.

USE OF PROCEEDS

We expect to receive net proceeds of approximately $ million from the sale of common units offered by this prospectus, based on an assumed initial public offering price of $ per common unit (the midpoint of the price range set forth on the cover page of this prospectus), after deducting underwriting discounts, commissions and the structuring fee. Our estimate assumes the underwriters’ option to purchase additional common units from us is not exercised.

We intend to use the net proceeds from this offering as follows:

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repay $ million in borrowings outstanding under our revolving credit facility;

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make a cash distribution to Empire of $ , a portion of which will be used to reimburse Empire for certain capital expenditures it incurred with respect to assets contributed to us; and

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for general partnership purposes, including transaction fees and expenses of this offering.

Our revolving credit facility is being amended and restated in connection with the closing of this offering. Our revolving credit facility will bear interest at a LIBOR based rate, which, as of , 2015, was %, and will mature in . At the closing of this offering, we expect to have available borrowing capacity of approximately $173 million under our revolving credit facility. Certain of the underwriters and their respective affiliates are lenders under our revolving credit facility and will receive a portion of the proceeds from this offering pursuant to the repayment of a portion of the borrowings thereunder. Please read “Underwriting—Other Relationships.”

The net proceeds from any exercise by the underwriters of their option to purchase additional common units will be used to redeem from Empire a number of common units equal to the number of common units issued upon exercise of the option at a price per common unit equal to the net proceeds per common unit in this offering before expenses but after deducting underwriting discounts and commissions and the structuring fee. Accordingly, any exercise of the underwriters’ option will not affect the total number of units outstanding or the amount of cash needed to pay the minimum quarterly distribution on all units. Please read “Underwriting.”

A $1.00 increase (decrease) in the assumed initial public offering price of $ per common unit would increase (decrease) the net proceeds to us from this offering by approximately $ million, assuming the number of common units offered by us, as set forth on the cover page of this prospectus remains the same and assuming the underwriters do not exercise their option to purchase additional common units, and after deducting the underwriting discounts and commissions and the structuring fee. The actual initial public offering price is subject to market conditions and negotiations between us and the underwriters.

Depending on market conditions at the time of pricing of this offering and other considerations, we may sell fewer or more common units than the number set forth on the cover page of this prospectus.

The underwriters may, from time to time, engage in transactions with and perform services for us and our affiliates in the ordinary course of business. Please read “Underwriting.”

CAPITALIZATION

The following table shows:

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the historical cash and cash equivalents and capitalization of our predecessor as of December 31, 2014; and

•

our pro forma cash and cash equivalents and capitalization as of December 31, 2014, giving effect to the pro forma adjustments described in our unaudited pro forma condensed combined financial statements included elsewhere in this prospectus, including this offering and the application of the net proceeds of this offering in the manner described under “Use of Proceeds” and the other transactions described under “Summary—Formation Transactions.”

This table is derived from, should be read together with and is qualified in its entirety by reference to the audited historical consolidated financial statements and the unaudited pro forma condensed combined financial statements and the accompanying notes included elsewhere in this prospectus. You should also read this table in conjunction with “Summary—Formation Transactions,” “Use of Proceeds” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”


	As of December 31, 2014
	Historical		Pro Forma
	(in thousands)
Cash	$	15,458	$

Long-term debt
Revolving credit facility⁽¹⁾	$	88,700	$	77,000
Other long-term debt		81		—

Total long-term debt (including current maturities)	$	88,781	$	77,000

Partners’ capital
Equity	$	135,634	$
Common units—Public
Common units—Empire		—
Subordinated units—Empire		—
General partner interest		—

Total partners’ capital		135,634

Total capitalization	$	224,415	$

(1)

As of , 2015, our predecessor had an aggregate of $ of borrowings outstanding under our revolving credit facility. Our revolving credit facility will be amended and restated in connection with the closing of this offering, and we intend to use a portion of the net proceeds of this offering to repay approximately $ million outstanding under our revolving credit facility.

DILUTION

Dilution is the amount by which the offering price per common unit in this offering will exceed the pro forma net tangible book value per unit after the offering. On a pro forma basis as of December 31, 2014, after giving effect to the offering of common units and the related transactions, our net tangible book value was approximately $ , or $ per unit. Purchasers of common units in this offering will experience substantial and immediate dilution in pro forma net tangible book value per unit.


Assumed initial public offering price per common unit⁽¹⁾
Pro forma net tangible book value per unit before this offering⁽²⁾
Less: Distribution to Empire per common unit⁽³⁾
Add: Increase in net tangible book value per unit attributable to purchasers in this offering

Less: Pro forma net tangible book value per unit after this offering⁽⁴⁾

Immediate dilution in net tangible book value per common unit to purchasers in this offering⁽⁵⁾

(1)	Represents the midpoint of the price range set forth on the cover page of this prospectus.

(2)	Determined by dividing by the number of units ( common units and subordinated units) to be issued to Empire in exchange for its contribution of assets and liabilities to us.

(3)

Determined by dividing by the number of units (common units and subordinated units) to be issued to Empire for its contribution of assets and liabilities to us. At the closing of this offering, we intend to make a distribution of $ million to Empire from the net proceeds from this offering and net borrowings under our revolving credit facility.

(4)

Determined by dividing our pro forma net tangible book value, after giving effect to the use of the net proceeds of the offering, by the total number of units ( common units and subordinated units) to be outstanding after the offering. When calculating pro forma net tangible book value per common unit, our proportionate limited partner interest in intangible assets and deferred charges amounts of approximately $ and $ , respectively, are excluded from the calculation of pro forma net tangible book value.

(5)

Because the total number of units outstanding following this offering will not be impacted by any exercise of the underwriters’ option to purchase additional common units and any net proceeds from any such exercise will not be retained by us, there will be no change to the dilution in net tangible book value per common unit to purchasers in this offering due to any such exercise.

The following table sets forth the number of units that we will issue and the total consideration contributed to us by Empire in respect of their units and by the purchasers of common units in this offering upon consummation of the transactions contemplated by this prospectus.

Units acquired

Total
consideration

Number

Amount (in millions)

Empire⁽¹⁾⁽²⁾

Purchasers in this offering

Total

(1)

Upon the consummation of the transactions described in this prospectus, including the formation transactions and the offering, Empire will own common units, subordinated units and approximately 91.5% of our general partner, which owns a non-economic general partner interest in us and will own all of our incentive distribution rights.

(2)	Assumes the underwriters’ option to purchase additional common units from us is not exercised.

CASH DISTRIBUTION POLICY AND RESTRICTIONS ON DISTRIBUTIONS

The following discussion of our cash distribution policy should be read in conjunction with the specific assumptions included in this section. In addition, “Forward-Looking Statements” and “Risk Factors” should be read for information regarding statements that do not relate strictly to historical or current facts and regarding certain risks inherent in our business.

For additional information regarding our historical and pro forma results of operations, please refer to the audited historical consolidated financial statements and the unaudited pro forma condensed combined financial statements and the accompanying notes included elsewhere in this prospectus.

General

Rationale for Our Cash Distribution Policy

Our partnership agreement requires that we distribute all of our available cash quarterly. This requirement forms the basis of our cash distribution policy and reflects a basic judgment that our unitholders will be better served by us distributing, rather than retaining, our available cash. Under our current cash distribution policy, we intend to make a minimum quarterly distribution to our unitholders of $ per unit, or $ per unit on an annualized basis, to the extent we have sufficient available cash after the establishment of cash reserves and the payment of costs and expenses, including the payment of expenses to our general partner. However, other than the requirement in our partnership agreement to distribute all of our available cash each quarter, we have no legal obligation to pay quarterly cash distributions in this or any other amount, and the board of directors of our general partner has considerable discretion to determine the amount of our available cash each quarter. In addition, the board of directors of our general partner may change our cash distribution policy at any time, subject to the requirement in our partnership agreement to distribute all of our available cash quarterly. Generally, our available cash is the sum of (1) all cash on hand at the end of a quarter after the payment of our expenses and the establishment of cash reserves and (2) if the board of directors of our general partner so determines, all or any portion of additional cash on hand resulting from working capital borrowings made after the end of the quarter. Because we are not subject to an entity-level federal income tax, we expect to have more cash to distribute than would be the case if we were subject to federal income tax. If we do not generate sufficient available cash from operations, we may, but are under no obligation to, borrow funds to pay the minimum quarterly distribution to our unitholders.

Limitations on Cash Distributions and Our Ability to Change Our Cash Distribution Policy

Although our partnership agreement requires that we distribute all of our available cash quarterly, there is no guarantee that we will pay quarterly distributions to our unitholders at our minimum quarterly distribution rate or at any other rate, and we have no legal obligation to do so. Our current cash distribution policy is subject to certain restrictions, as well as the considerable discretion of the board of directors of our general partner in determining the amount of our available cash each quarter. The following factors will affect our ability to pay cash distributions, as well as the amount of any cash distributions we pay:

•

We expect that our cash distribution policy will be subject to restrictions on cash distributions under our revolving credit facility. We expect that one such restriction would prohibit us from making cash distributions while an event of default has occurred and is continuing under our revolving credit facility, notwithstanding our cash distribution policy. Please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Revolving Credit Facility.”

•

The amount of cash that we distribute and the decision to pay any distribution is determined by the board of directors of our general partner, taking into consideration the terms of our partnership agreement. Specifically, the board of directors of our general partner will have the authority to establish

cash reserves to provide for the proper conduct of our business, comply with applicable law or any agreement to which we are a party or by which we are bound or our assets are subject and provide funds for future cash distributions to our unitholders, and the establishment of or increase in those reserves could result in a reduction in cash distributions from levels we currently anticipate. Any decision to establish cash reserves made by the board of directors of our general partner in good faith will be binding on our unitholders.

•

While our partnership agreement requires us to distribute all of our available cash, our partnership agreement, including the provisions requiring us to pay cash distributions, may be amended. During the subordination period, our partnership agreement may not be amended without the approval of our public common unitholders, except in a limited number of circumstances when our general partner can amend our partnership agreement without any unitholder approval. Please read “Our Partnership Agreement—Amendment of Our Partnership Agreement—No Unitholder Approval.” However, after the subordination period has ended, our partnership agreement may be amended with the consent of our general partner and the approval of a majority of the outstanding common units, including common units owned by our general partner and its affiliates. Following the completion of this offering, Empire will own approximately 91.5% of the outstanding equity interests of our general partner and will own common units and subordinated units, representing an aggregate % limited partner interest in us (or common units and subordinated units, representing an aggregate % limited partner interest in us, if the underwriters exercise in full their option to purchase additional common units).

•

Under Section 17-607 of the Delaware Act, we may not pay a cash distribution if the distribution would cause our liabilities to exceed the fair value of our assets.

•

We may lack sufficient cash to make distributions to our unitholders due to cash flow shortfalls attributable to a number of operational, commercial or other factors as well as increases in our operating and maintenance or general and administrative expenses, principal and interest payments on our debt, tax expenses, working capital requirements and anticipated cash needs. Our available cash is directly impacted by our cash expenses necessary to run our business and will be reduced dollar-for-dollar to the extent such uses of cash increase. Please read “Provisions of Our Partnership Agreement Relating to Cash Distributions—Distributions of Available Cash.”

•

Our ability to make distributions to our unitholders depends on the performance of our operating subsidiaries and their ability to distribute cash to us.

•

If and to the extent our available cash materially declines from quarter to quarter, we may elect to change our current cash distribution policy and reduce the amount of our quarterly distributions in order to service or repay our debt or fund expansion capital expenditures.

To the extent that the board of directors of our general partner determines not to distribute the full minimum quarterly distribution on our common units with respect to any quarter during the subordination period, the common units will accrue an arrearage equal to the difference between the minimum quarterly distribution and the amount of the distribution actually paid on the common units with respect to that quarter. The aggregate amount of any such arrearages must be paid on the common units before any distributions of available cash from operating surplus may be made on the subordinated units and before any subordinated units may convert into common units. The subordinated units will not accrue any arrearages. Any shortfall in the payment of the minimum quarterly distribution on the common units with respect to any quarter during the subordination period may decrease the likelihood that our quarterly distribution rate would increase in subsequent quarters. Please read “Provisions of Our Partnership Agreement Relating to Cash Distributions—Subordinated Units and Subordination Period.”

Our Ability to Grow is Dependent on our Ability to Access External Expansion Capital

Our partnership agreement requires us to distribute all of our available cash to our unitholders on a quarterly basis. As a result, we expect that we will rely primarily upon our cash reserves and external financing sources, including borrowings under our revolving credit facility and the future issuance of equity and debt securities, to fund future acquisitions and other expansion capital expenditures. To the extent we are unable to finance growth with external sources of capital, the requirement in our partnership agreement to distribute all of our available cash will significantly impair our ability to grow. In addition, because we will distribute all of our available cash, our growth may not be as fast as businesses that reinvest all of their available cash to expand ongoing operations. We expect that our revolving credit facility will restrict our ability to incur additional debt, including through the issuance of debt securities. Please read “Risk Factors—Risks Inherent in Our Business—Our revolving credit facility, as amended and restated, will have restrictions and financial covenants that may restrict our business and financing activities and our ability to make distributions to our unitholders.” To the extent we issue additional partnership interests, the payment of distributions on those additional partnership interests may increase the risk that we will be unable to maintain or increase our cash distributions per common unit. There are no limitations in our partnership agreement on our ability to issue additional partnership interests, including partnership interests ranking senior to our common units, and our unitholders will have no preemptive or other rights (solely as a result of their status as our unitholders) to purchase any such additional partnership interests. If we incur additional debt (under our revolving credit facility or otherwise) to finance our growth strategy, we will have increased interest expense, which in turn will reduce the available cash that we have to distribute to our unitholders. Please read “Risk Factors—Risks Inherent in an Investment in Us—Our partnership agreement requires that we distribute all of our available cash, which could limit our ability to grow and make acquisitions.”

Our Minimum Quarterly Distribution

Upon the consummation of this offering, our partnership agreement will provide for a minimum quarterly distribution of $ per unit for each whole quarter, or $ per unit on an annualized basis. Our ability to pay cash distributions at the minimum quarterly distribution rate will be subject to the factors described above under “—General—Limitations on Cash Distributions and Our Ability to Change Our Cash Distribution Policy.” Quarterly distributions, if any, will be made within 60 days after the end of each calendar quarter to holders of record on the applicable record date. We do not expect to pay distributions for the period that begins on , 2015 and ends on the day prior to the closing of this offering. We will prorate the amount of our first distribution for the period from the date of the closing of this offering through , 2015 based on the actual length of that period.

The amount of available cash needed to pay the minimum quarterly distribution on all of our common units and subordinated units to be outstanding immediately after this offering for one quarter and on an annualized basis is summarized in the table below.


		Aggregate Minimum Quarterly Distribution
	Number of Units	One Quarter	Annualized (Four Quarters)
Publicly held common units		$	$
Common units held by Empire
Subordinated units held by Empire

Total		$	$

Our general partner owns a non-economic general partner interest in us, which will not entitle it to receive cash distributions, and will also own all of our incentive distributions rights, which entitle the holder to increasing percentages, up to a maximum of 50%, of the cash we distribute in excess of $ per unit per quarter.

During the subordination period, before we pay any quarterly distributions to our subordinated our unitholders, our common unitholders are entitled to receive payment of the full minimum quarterly distribution

for such quarter plus any arrearages in distributions of the minimum quarterly distribution from prior quarters. Please read “Provisions of Our Partnership Agreement Relating to Cash Distributions—Subordinated Units and Subordination Period.” We cannot guarantee, however, that we will pay distributions on our common units at our minimum quarterly distribution rate or at any other rate in any quarter. In addition, following the subordination period, assuming we have not issued any additional partnership interests, the annualized aggregate minimum quarterly distribution on our common units (including the subordinated units that have converted into common units) will equal $ and common units will no longer be entitled to priority distributions over the formerly subordinated units or arrearages.

Although holders of our common units may pursue judicial action to enforce provisions of our partnership agreement, including those related to requirements to pay cash distributions as described above, our partnership agreement provides that any determination made by our general partner in its capacity as our general partner must be made in good faith and that any such determination will not be subject to any other standard imposed by the Delaware Act or any other law, rule or regulation or at equity. Our partnership agreement provides that, in order for a determination by our general partner to be made in “good faith,” our general partner must subjectively believe that the determination is in the best interests of our partnership. In making such determination, our general partner may take into account the totality of the circumstances or the totality of the relationships between the parties involved, including other relationships or transactions that may be particularly favorable or advantageous to us. Please read “Conflicts of Interest and Duties.”

The provision in our partnership agreement requiring us to distribute all of our available cash quarterly may not be modified without amending our partnership agreement; however, as described above, the actual amount of our cash distributions for any quarter is subject to fluctuations based on the amount of cash we generate from our business, the amount of reserves the board of directors of our general partner establishes in accordance with our partnership agreement and the amount of available cash from working capital borrowings.

Additionally, the board of directors of our general partner may reduce the minimum quarterly distribution and the target distribution levels if legislation is enacted or modified that results in our becoming taxable as a corporation or otherwise subject to taxation as an entity for federal, state or local income tax purposes. In such an event, the minimum quarterly distribution and the target distribution levels may be reduced proportionately by the percentage decrease in our available cash resulting from the estimated tax liability we would incur in the quarter in which such legislation is effective. The minimum quarterly distribution will also be proportionately adjusted in the event of any distribution, combination or subdivision of common units in accordance with the partnership agreement, or in the event of a distribution of available cash from capital surplus. Please read “Provisions of Our Partnership Agreement Relating to Cash Distributions—Adjustment of the Minimum Quarterly Distribution and Target Distribution Levels.” The minimum quarterly distribution is also subject to adjustment if the holder(s) of the incentive distribution rights (initially only our general partner) elect to reset the target distribution levels related to the incentive distribution rights. In connection with any such reset, the minimum quarterly distribution will be reset to an amount equal to the average cash distribution amount per common unit for the two quarters immediately preceding the reset. Please read “Provisions of Our Partnership Agreement Relating to Cash Distributions—Right to Reset Incentive Distribution Levels.”

In the sections that follow, we present in detail the basis for our belief that we will be able to fully fund our annualized minimum quarterly distribution of $ per unit for the twelve months ending June 30, 2016. In those sections, we present two tables, consisting of:

•

“Unaudited Pro Forma Adjusted EBITDA and Distributable Cash Flow for the Year Ended December 31, 2014,” in which we present the amount of Adjusted EBITDA and distributable cash flow we would have generated on a pro forma basis for the year ended December 31, 2014, derived from our unaudited pro forma condensed combined financial statements that are included in this prospectus, as adjusted to give pro forma effect to this offering, the related formation transactions and the Recent Acquisitions; and

•

“Estimated Adjusted EBITDA and Distributable Cash Flow for the Twelve Months Ending June 30, 2016,” in which we provide our forecast of Adjusted EBITDA and distributable cash flow reflecting our ability to support the payment of the minimum quarterly distribution on all common units and subordinated units for the twelve months ending June 30, 2016.

Unaudited Pro Forma Adjusted EBITDA and Distributable Cash Flow for the Year Ended December 31, 2014

If we had completed the transactions contemplated in this prospectus on January 1, 2014, pro forma Adjusted EBITDA and distributable cash flow generated for the year ended December 31, 2014 would have been $38.9 million and $31.4 million, respectively. The amount of distributable cash flow we must generate to support the payment of the minimum quarterly distribution for four quarters on all of our common and subordinated units to be outstanding immediately after this offering is $ million (or an average of $ million per quarter). As a result, we would have had sufficient distributable cash flow on a pro forma basis to pay the aggregate minimum quarterly distribution on all of our common and subordinated units for the year ended December 31, 2014.

Our unaudited pro forma distributable cash flow for the year ended December 31, 2014 includes $2.0 million of estimated incremental general and administrative expenses that we expect to incur as a result of becoming a publicly traded partnership. Incremental general and administrative expenses related to being a publicly traded partnership include expenses associated with our SEC reporting requirements, tax return and Schedule K-1 preparation and distribution expenses, expenses associated with listing on the NYSE, fees of our independent registered public accounting firm, legal fees, investor relations expenses, transfer agent and registrar fees, director and officer liability insurance expenses and director compensation. Our incremental general and administrative expenses are not reflected in our predecessors’ audited historical consolidated financial statements or our unaudited pro forma condensed combined financial statements included elsewhere in this prospectus.

We based the pro forma adjustments upon currently available information and specific estimates and assumptions. The pro forma amounts below do not purport to present our results of operations had the transactions contemplated in this prospectus actually been completed as of the dates indicated. In addition, Adjusted EBITDA and distributable cash flow are primarily cash accounting concepts, while our unaudited pro forma condensed combined financial statements have been prepared on an accrual basis. Moreover, the pro forma adjustments made below contain adjustments in addition to or different from the adjustments made on our unaudited pro forma condensed combined financial statements appearing elsewhere in this prospectus. As a result, you should view the amounts of pro forma Adjusted EBITDA and distributable cash flow only as a general indication of the amount of Adjusted EBITDA and distributable cash flow that we might have generated had we been formed on January 1, 2014.

The following table illustrates, pro forma for the Recent Acquisitions and our other acquisitions completed in 2014, the amounts of Adjusted EBITDA and distributable cash flow that would have been generated, assuming in each case that this offering and the other transactions contemplated in this prospectus had been consummated on January 1, 2014.

Empire Petroleum Partners, LP Unaudited Pro Forma Distributable Cash Flow


	Year Ended December 31, 2014 (in thousands, except per unit data)
Revenue:
Motor fuel sales	$	2,614,591
Merchandise sales		51,799
Rental income and other		7,572

Total revenue		2,673,962
Gross profit (excluding depreciation, amortization and accretion expenses):
Motor fuel sales		64,630
Merchandise sales		14,980
Rental income and other		797

Total gross profit (excluding depreciation, amortization and accretion expenses)		80,407
Operating expenses:
Selling, general and administrative expenses		53,000
Depreciation, amortization and accretion expenses		28,031
Acquisition expenses		—
(Gain) on sale of assets		(860	)

Total operating expenses		80,171

Operating income		236
Interest expense, net⁽¹⁾		3,627
Other expense (income)		(318	)
Provision for income taxes		141

Net income (loss)	$	(3,214	)

Adjustments to reconcile net income to Adjusted EBITDA
Add:
Depreciation, amortization and accretion expenses		28,031
Acquisition expenses		—
(Gain) on sale of assets		(860	)
Other expense (income)		116
Selling, general and administrative expenses not acquired⁽²⁾		11,060
Interest expense, net⁽¹⁾		3,627
Provision for income taxes		141

Adjusted EBITDA⁽³⁾	$	38,901

Adjustments to reconcile Adjusted EBITDA to distributable cash flow
Less:
Incremental general and administrative expense⁽⁴⁾		2,000
Cash interest expense, net⁽¹⁾		2,798
Provision for income taxes		141
Maintenance capital expenditures⁽⁵⁾		2,547
Expansion capital expenditures⁽⁵⁾		148,364
Add:
Borrowings, cash on hand and equity contributions to fund expansion capital expenditures		148,364

Distributable cash flow	$	31,415

Annualized minimum quarterly distribution per unit
Distribution to common unitholders
Distribution to subordinated unitholders
Distribution to general partner

Total distribution to our unitholders

Excess (shortfall)	$

(1)	Interest expense reflects the pro forma borrowings outstanding following this offering, an interest rate of LIBOR plus 2.50% and actual amortization of deferred financing costs of $0.8 million incurred in 2014.

(2)

Reflects the elimination of $11.1 million of expenses contained in the carve-out financial statements of Atlas, CST and Mansfield that were included in our unaudited pro forma statement of operations but were not acquired by us in connection with the Recent Acquisitions. Please read our unaudited pro forma condensed combined financial statements included elsewhere in this prospectus.

(3)

For a definition of the non-GAAP financial measure of Adjusted EBITDA and a reconciliation to our most directly comparable financial measures calculated and presented in accordance with GAAP, please read “Summary—Summary Historical and Pro Forma Financial and Operating Data—Non-GAAP Financial Measures,” and for a discussion on how we use Adjusted EBITDA to evaluate our operating performance, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—How We Evaluate Our Operations.”

(4)

Includes the incurrence of estimated incremental general and administrative expenses associated with being a publicly traded partnership of approximately $2.0 million, including expenses associated with our SEC reporting requirements, tax return and Schedule K-1 preparation and distribution expenses, expenses associated with listing on the NYSE, fees of our independent registered public accounting firm, legal fees, investor relations expenses, transfer agent and registrar fees, director and officer liability insurance expenses and director compensation. The unaudited pro forma financial information provided elsewhere in this prospectus does not reflect this incremental expense.

(5)

Historically, our predecessors have not made a distinction between maintenance capital expenditures and expansion capital expenditures. Under our partnership agreement, maintenance capital expenditures are cash expenditures made to maintain, over the long term, our operating capacity or operating income and expansion capital expenditures are cash expenditures incurred for acquisitions or capital improvements that we expect will increase our operating capacity or operating income over the long term. Examples of maintenance capital expenditures are those made to maintain existing contract volumes, including payments to renew expiring supply agreements, or to maintain our real estate leased to third-party dealers in leasable condition, such as parking lot or roof replacement/renovation, or to replace equipment required to operate our existing business. We anticipate that maintenance capital expenditures will be funded with cash generated by our operations. In contrast, expansion capital expenditures are those made to acquire additional assets to grow our business, such as new supply agreements or sites. We anticipate that expansion capital expenditures will be funded with borrowings under our revolving credit facility or issuances of new debt or equity securities.

Estimated Adjusted EBITDA and Distributable Cash Flow for the Twelve Months Ending June 30, 2016

We forecast our estimated Adjusted EBITDA and distributable cash flow for the twelve months ending June 30, 2016 will be approximately $38.0 million and $31.5 million, respectively. This amount would exceed by $ million the amount needed to pay the aggregate annualized minimum quarterly distribution of $ million on all of our outstanding common and subordinated units for the twelve months ending June 30, 2016.

We have not historically made public projections as to future operations, earnings or other results. However, management has prepared the forecast of estimated Adjusted EBITDA and distributable cash flow for the twelve months ending June 30, 2016 and related assumptions set forth below to substantiate our belief that we will have sufficient Adjusted EBITDA and distributable cash flow to pay the aggregate annualized minimum quarterly distribution to all our unitholders for the twelve months ending June 30, 2016. Please read “Cash Distribution Policy and Restrictions on Distributions—Significant Forecast Assumptions” for further information as to the assumptions we have made for this forecast. This forecast is a forward-looking statement and should be read together with the audited historical consolidated financial statements and the unaudited pro forma condensed combined financial statements and the accompanying notes included elsewhere in this prospectus and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” This forecast was not prepared with a view toward complying with the published guidelines of the SEC or guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information, but, in the view of our management, was prepared on a reasonable basis, reflects the best currently available estimates and judgments, and presents, to the best of management’s knowledge and belief, the assumptions on which we base our belief that we can generate sufficient Adjusted EBITDA and distributable cash flow to pay the minimum quarterly distribution to all of our unitholders for the forecasted period. However, this information is not fact and should not be relied upon as being necessarily indicative of our future results, and readers of this prospectus are cautioned not to place undue reliance on the prospective financial information.

The prospective financial information included in this prospectus has been prepared by, and is the responsibility of, our management. None of Grant Thornton LLP, PricewaterhouseCoopers LLP or any other independent accountants have audited, reviewed, compiled or performed any procedures with respect to the accompanying prospective financial information, nor have they expressed any opinion or any other form of assurance with respect thereto. The reports of Grant Thornton LLP and PricewaterhouseCoopers LLP included in this prospectus relate to our historical financial information. They do not extend to the prospective financial information and should not be read to do so.

When considering our financial forecast, you should keep in mind the risk factors and other cautionary statements under “Risk Factors.” Any of the risks discussed in this prospectus, to the extent they are realized, could cause our actual results of operations to vary significantly from those that would enable us to generate our estimated Adjusted EBITDA and distributable cash flow.

The assumptions and estimates underlying the prospective financial information are inherently uncertain and, though considered reasonable by us as of the date of its preparation, are subject to a wide variety of significant business, economic, and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the prospective financial information. Please read “Forward-Looking Statements” and “Risk Factors” for a discussion of various factors that could materially affect our financial condition, results of operations, business, prospects and securities. Accordingly, there can be no assurance that the prospective results are indicative of our future performance or that actual results will not differ materially from those presented in the prospective financial information. Inclusion of the prospective financial information in this prospectus should not be regarded as a representation by any person that the results contained in the prospective financial information will be achieved.

We do not undertake any obligation to release publicly the results of any future revisions we may make to the forecast or to update this forecast to reflect events or circumstances after the date of this prospectus. Therefore, you are cautioned not to place undue reliance on this prospective financial information.

Additional information relating to the principal assumptions used in preparing the projections is set forth below.

In light of the above, the statement that we believe that we will have sufficient Adjusted EBITDA and distributable cash flow to allow us to pay the full minimum quarterly distribution on all our outstanding units for the twelve months ending June 30, 2016 should not be regarded as a representation by us or the underwriters or any other person that we will pay such distributions. Therefore, you are cautioned not to place undue reliance on this information.

The following table presents our forecasts of estimated Adjusted EBITDA and distributable cash flow for the twelve months ending June 30, 2016.

Empire Petroleum Partners, LP Estimated Distributable Cash Flow


	Twelve Months Ending June 30, 2016
	(in thousands, except per unit data)
Revenue:
Motor fuel sales	$	2,206,497
Merchandise sales		46,211
Rental income and other		10,023

Total revenue		2,262,731
Gross profit (excluding depreciation, amortization and accretion expenses):
Motor fuel sales		68,195
Merchandise sales		13,364
Rental income and other		4,431

Total gross profit (excluding depreciation, amortization and accretion expenses)		85,990
Operating expenses:
Selling, general and administrative expenses⁽¹⁾		47,975
Depreciation, amortization and accretion expenses		25,320
Acquisition expenses		—
(Gain) on sale of assets		—

Total operating expenses		73,295

Operating income	$	12,695
Interest expense, net		3,939
Other expense (income)		—
Provision for income taxes		129

Net income	$	8,627

Adjustments to reconcile net income to estimated Adjusted EBITDA:
Add:
Depreciation, amortization and accretion expenses		25,320
Acquisition expenses		—
(Gain) on sale of assets		—
Other expense (income)		—
Interest expense, net		3,939
Provision for income taxes		129

Estimated Adjusted EBITDA⁽²⁾	$	38,015

Adjustments to reconcile estimated Adjusted EBITDA to estimated distributable cash flow:
Less:
Cash interest expense, net		2,958
Provision for income taxes		129
Maintenance capital expenditures		3,432
Expansion capital expenditures		—

Estimated distributable cash flow	$	31,496

Annualized minimum quarterly distribution per unit
Distribution to common unitholders
Distribution to subordinated unitholders
Distribution to general partner

Total distribution to our unitholders

Excess (shortfall)	$

(1)

Includes the incurrence of estimated incremental general and administrative expenses associated with being a publicly traded partnership of approximately $2.0 million, including expenses associated with our SEC reporting requirements, tax return and Schedule K-1 preparation and distribution expenses, expenses associated with listing on the NYSE, fees of our independent registered public accounting firm, legal fees, investor relations activities, Sarbanes-Oxley Act compliance, stock exchange listing, transfer agent and registrar fees, incremental director and officer liability insurance and director compensation.

(2)

Significant Forecast Assumptions

In this section, we present the basis for our belief that we will be able to fully fund our minimum quarterly distribution of $ per unit for the twelve months ending June 30, 2016 with the significant assumptions upon which this forecast is based.

The forecast has been prepared by and is the responsibility of our management. Our forecast reflects our judgment as of the date of this prospectus of conditions we expect to exist, and the course of action we expect to take, during the twelve months ending June 30, 2016. While the assumptions disclosed in this prospectus are not all-inclusive, the assumptions listed below are those that we believe are material to our forecasted results of operations and any assumptions not discussed below were not deemed to be material. We believe we have a reasonable, objective basis for these assumptions. We believe our actual results of operations will approximate those reflected in our forecast, but we can give no assurance that our forecasted results will be achieved. There likely will be differences between our forecast and the actual results, and those differences could be material. If our forecasted results are not achieved, we may not be able to pay cash distributions on our common units at the minimum quarterly distribution rate or at all. Financial and operational data for the year ended December 31, 2014 provided below on a pro forma basis gives pro forma effect to this offering, the other transactions contemplated in this prospectus and the Recent Acquisitions.

Revenue and Gross Profit

We generate revenue and gross profit from the sales of motor fuel to dealers at dealer-operated sites, sales of motor fuel to consumers at consignment and company-operated sites, sales of merchandise and ancillary products and services at company-operated sites, and rental income from dealers and consignment agents at sites that we own or lease. We forecast that our total revenue and gross profit for the twelve months ending June 30, 2016 will be $2,262.7 million and $86.0 million, respectively, as compared to $2,674.0 million and $80.4 million, respectively, for the year ended December 31, 2014, on a pro forma basis, giving effect to this offering, the other transactions contemplated in this prospectus and the Recent Acquisitions. We anticipate that revenue will decrease primarily due to lower motor fuel prices while gross profit will increase primarily due to stable gross margin on increased volumes of motor fuel distributed. We estimate that we will distribute 958.5 million gallons of motor fuel during the twelve months ending June 30, 2016 as compared to 918.9 million gallons during the year ended December 31, 2014, on a pro forma basis. We anticipate that the gross margin per gallon of motor fuel we distribute and our retail merchandise sales margin will be similar during the twelve months ending June 30, 2016 to the margins we would have earned during the year ended December 31, 2014, on a pro forma basis.

Our forecast of revenue and gross profit is based primarily on the following assumptions:

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Revenue and Gross Profit from Motor Fuel Sales to Dealers. We forecast revenue and gross profit from motor fuel sales to dealers at dealer-operated sites of $1,569.7 million and $32.2 million, respectively, for the twelve months ending June 30, 2016 as compared to $1,975.7 million and $31.2 million, respectively, for the year ended December 31, 2014, on a pro forma basis. Our estimate is based on the following assumptions:

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Volume. We estimate that we will distribute 723.3 million gallons of motor fuel to dealers during the twelve months ending June 30, 2016 as compared to 695.2 million gallons during the year ended December 31, 2014, on a pro forma basis. This volume estimate is based on (1) the average historical volume distributed per site and our assumption that there will be a slight decline in the volume of motor fuel distributed to each site in our distribution network during the twelve months ending June 30, 2016 as compared to the volume of motor fuel distributed during the year ended December 31, 2014, on a pro forma basis, which is consistent with historical trends and (2) additional volume we expect to deliver to newly contracted sites that we have added to our distribution network in 2015.

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Gross Margin per Gallon. We estimate that the gross margin per gallon we will receive on motor fuel distributed to dealers will not differ substantially for the twelve months ending June 30, 2016 as compared to the year ended December 31, 2014, on a pro forma basis. We have assumed that the average gross margin per gallon we will receive on motor fuel distributed to dealers during the twelve months ending June 30, 2016 will be 4.4 cents per gallon, which includes fixed, volume-based margins, rebates and incentive payments.

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Revenue and Gross Profit from Motor Fuel Sales to Consumers. We forecast revenue and gross profit from motor fuel sales to consumers at consignment and company-operated sites of $636.8 million and $36.0 million, respectively, for the twelve months ending June 30, 2016 as compared to $638.9 million and $33.5 million, respectively, for the year ended December 31, 2014, on a pro forma basis. Our estimate is based on the following assumptions:

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Volume. We estimate that we will sell, through Empire Services, 235.2 million gallons of motor fuel to consumers at consignment and company-operated sites during the twelve months ending June 30, 2016 as compared to the 223.7 million gallons we sold during the year ended December 31, 2014, on a pro forma basis. This volume estimate is primarily based on the average historical volume sold at our consignment and company-operated sites, and reflects the full year impact of acquisitions that we completed in 2014 and 2015.

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Gross Margin per Gallon. We estimate that the gross margin per gallon we receive for motor fuel sold to consumers at consignment and company-operated sites will not differ substantially for the twelve months ending June 30, 2016 as compared to the year ended December 31, 2014, on a pro forma basis. We estimate the average gross margin per gallon on fuel distributed to consignment and company-operated sites for the twelve months ending June 30, 2016 will be 15.3 cents per gallon. The gross margin per gallon is calculated as the sales price of the fuel to consumer less our costs to purchase the fuel, including transportation costs, taxes and, in the case of consignment sites, commissions to consignment agents.

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Impact of Empire Supply Agreement. Pursuant to the Empire Supply Agreement, we will distribute, on a wholesale basis, motor fuel to Empire Services. We will receive a fixed margin of 5.0 cents per gallon for motor fuel distributed to Empire Services. Empire Services, in turn, will earn the retail margin on motor fuel sales directly to consumers at our consignment and company-operated sites. While the Empire Supply Agreement will have no impact on our consolidated financial results, we forecast that it will result in a reallocation of $11.8 million of gross profit from our retail segment to our wholesale segment for the twelve months ending June 30, 2016.

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Revenue and Gross Profit from Sales of Merchandise. We forecast revenue and gross profit from sales of merchandise and other ancillary products and services at our company-operated sites of $46.2 million and $13.4 million, respectively, for the twelve months ending June 30, 2016 as compared to $51.8 million and $15.0 million, respectively, for the year ended December 31, 2014, on a pro forma basis. This forecast is based primarily on the expectation that 57 sites will be company-operated during the twelve months ending June 30, 2016 as compared to the 66 sites that were company-operated during the year ended December 31, 2014, on a pro forma basis. This change reflects our plan to “dealerize” sites, a process in which we will enter into a contract with a dealer or consignment agent to lease and operate an existing company-operated site and collect rental income and wholesale or consignment fuel distribution revenue from the site instead of operating the site ourselves. Our forecast assumes a consistent average merchandise gross margin as compared to the average merchandise gross margin for the year ended December 31, 2014, on a pro forma basis, because historically these margins have not fluctuated materially from period to period.

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Revenue and Gross Profit from Rental Income and Other. We forecast revenue and gross profit from rental income from sites that we own or lease and then lease or sublease to dealers or consignment agents, in addition to other income from our sites will be $10.0 million and $4.4 million, respectively, for the twelve months ending June 30, 2016 as compared to $7.6 million and $0.8 million, respectively, for the year ended December 31, 2014, on a pro forma basis. Our forecast includes $7.8 million of gross rental income from our tenants and $5.6 million in rental expense which we are obligated to pay on sites that we lease from others. This forecast is based primarily on the expectation that we will lease or sublease 124 sites during the twelve months ending June 30, 2016 as compared to the 97 sites that we leased and subleased during the year ended December 31, 2014, on a pro forma basis. The increase in the number of sites on which we expect to collect rent is based on certain company-operated sites that we expect to “dealerize” into dealer-operated sites or consignment sites and the acquisition of additional sites during the quarter ended March 31, 2015. The rent per month per site that we receive is contractually fixed based on the lease agreements with our lessees. In situations where we expect to dealerize sites and begin collecting rent during the twelve months ending June 30, 2016, the expected average rent per month per site is based on market rates as well as our recent history of implementing new lease agreements at comparable sites. We forecast gross profit from other income, which includes car wash and other operating income, will be $2.2 million for the twelve months ending June 30, 2016.

Selling, General and Administrative Expenses

We forecast that our selling, general and administrative expenses will be $48.0 million for the twelve months ending June 30, 2016 as compared to $43.9 million for the year ended December 31, 2014. The forecasted selling, general and administrative expenses reflect all the indirect costs of running our business, including payroll and employee benefits, credit card processing fees, repairs and maintenance, professional fees, insurance, property taxes, office rent, utilities and other miscellaneous expenses. For the twelve months ending June 30, 2016, we have included $2.0 million of other general and administrative expenses associated with being a public company, including expenses associated with our SEC reporting requirements, tax return and Schedule K-1 preparation and distribution expenses, expenses associated with listing on the NYSE, fees of our independent registered public accounting firm, legal fees, investor relations expenses, transfer agent and registrar fees, director and officer liability insurance expenses and director compensation. Our selling, general and administrative expenses of $43.9 million for the year ended December 31, 2014 give effect to the elimination of $11.1 million in direct and allocated selling, general and administrative expenses associated with the Recent Acquisitions that were not acquired by us and the inclusion of $2.0 million of other general and administrative expenses associated with being a public company. Please read our unaudited pro forma condensed combined financial statements included elsewhere in this prospectus.

Depreciation, Amortization and Accretion Expenses

We forecast that our depreciation, amortization and accretion expenses will be $25.3 million for the twelve months ending June 30, 2016 as compared to $28.0 million for the year ended December 31, 2014, on a pro forma basis. Our forecast of depreciation expenses is based primarily on our average depreciable asset lives and depreciation methodologies for tangible assets, taking into account the forecasted capital expenditures described below. We have assumed that the average depreciable asset lives are from 3 to 40 years. Our forecast of amortization expenses is based primarily on our average amortizable asset lives and amortization methodologies for intangible assets, taking into account the forecasted capital expenditures described below. We have assumed that the average amortizable asset lives are 1 to 25 years for intangible assets, including motor fuel supply agreements.

Interest

We forecast that our interest expense will be $3.9 million for the twelve months ending June 30, 2016 as compared to $3.6 million for the year ended December 31, 2014, on a pro forma basis. Our interest expense for the twelve months ending June 30, 2016 is based on the following assumptions:

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our outstanding indebtedness will be reduced to $77.0 million after application of a portion of the net proceeds from this offering, and we forecast our average outstanding borrowings on our revolving credit facility will be $74.4 million for the forecast period; and

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we have assumed an average cash interest rate of 3.97% for the twelve months ending June 30, 2016 as compared to an average cash interest rate of 3.63% for the year ended December 31, 2014, on a pro forma basis. Based on our anticipated level of outstanding borrowings following this offering, our revolving credit facility will bear interest at a rate of LIBOR plus 2.50%. Our interest rate forecast incorporates the impact of rising interest rates beginning in the second half of 2015 and the first half of 2016; and

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amortization of deferred financing costs, which are included in total interest expense but excluded from cash interest expense, will be $1.0 million.

Taxes

Empire Services, our subsidiary that has elected to be treated as a corporation for U.S. federal income tax purposes, will be subject to federal income tax on retail fuel margin income and merchandise income. However, we believe that the estimated income for the twelve months ending June 30, 2016 will be significantly offset by depreciation and interest deductions, resulting in no net federal tax expense for the twelve months ending June 30, 2016. Our forecast of $0.1 million of income tax expense is related to the Texas state franchise tax, which is based on taxable margin generated by our operations in Texas.

Capital Expenditures

We forecast that our capital expenditures will be $3.4 million for the twelve months ending June 30, 2016 as compared to $150.9 million for the year ended December 31, 2014, on a pro forma basis. We forecast that our maintenance capital expenditures will be $3.4 million for the twelve months ending June 30, 2016 as compared to $2.5 million for the year ended December 31, 2014, on a pro forma basis. Excluding the impact of future acquisitions, we expect our maintenance capital expenditures going forward to remain consistent with our forecasted estimate. We anticipate that maintenance capital expenditures will be funded with cash generated by our operations. We forecast that we will make no expansion capital expenditures during the twelve months ending June 30, 2016 as compared to $148.4 million for the year ended December 31, 2014, on a pro forma basis, which included the Recent Acquisitions and our other acquisitions completed in 2014.

We plan to grow through acquisitions, which would increase our expansion capital expenditures, but our forecast does not include any specific acquisition activity because we do not currently have any acquisitions that are subject to a signed purchase agreement.

Regulatory, Industry and Economic Factors

We forecast our results of operations for the twelve months ending June 30, 2016 based on the following assumptions related to regulatory, industry and economic factors:

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no material nonperformance or credit-related defaults by suppliers, dealers, lessees or sub-wholesalers;

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no new federal, state or local regulation of the portions of the motor fuel industry in which we operate or any interpretation of existing regulation that in either case will be materially adverse to our business;

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no material adverse effects to our business or industry on account of natural disasters;

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no rapid commodity price changes;

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no major adverse change resulting from supply disruptions or reduced demand for motor fuel; and

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no material changes to market, regulatory and overall economic conditions.

Actual results could vary significantly from the foregoing assumptions if there are substantial changes in the demand for motor fuel, including, but not limited to, decreases in demand for motor fuel resulting from increases in the price of motor fuel, if a number of our dealers are unable to satisfy their contractual obligations, if we divest some of our properties or fail to acquire new properties, if the margins we receive on motor fuel we distribute change substantially, if we are unable to enter into new or amend our current supply agreements in order to meet any increased demand for motor fuel and service any newly acquired sites. Please read “Risk Factors—Risks Inherent in Our Business—The assumptions underlying our forecast of Adjusted EBITDA and distributable cash flow that we include in “Cash Distribution Policy and Restrictions on Distributions” are inherently uncertain and subject to significant business, economic, financial, regulatory and competitive risks and uncertainties that could cause our actual distributable cash flow to differ materially from our forecast.”

PROVISIONS OF OUR PARTNERSHIP AGREEMENT RELATING TO CASH DISTRIBUTIONS

Set forth below is a summary of the significant provisions of our partnership agreement that relate to cash distributions.

Distributions of Available Cash

General

Our partnership agreement requires that, within 60 days after the end of each quarter, beginning with the quarter ending , 2015 we distribute all of our available cash to our unitholders of record on the applicable record date. We will prorate the amount of our first distribution for the period from the date of the closing of this offering through , 2015 based on the actual length of the period.

Definition of Available Cash

Available cash generally means, for any quarter, all cash and cash equivalents on hand at the end of that quarter:

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less, the amount of any cash reserves established by our general partner to:

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provide for the proper conduct of our business (including cash reserves for our future capital expenditures, future acquisitions and anticipated future debt service requirements);

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comply with applicable law or any loan agreement, security agreement, mortgage, debt instrument or other agreement or obligation to which we or any of our subsidiaries is a party or by which we or such subsidiary is bound or which our or such subsidiary’s assets are subject; or

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provide funds for distributions to our unitholders and to our general partner for any one or more of the next four quarters (provided that our general partner may not establish cash reserves for distributions pursuant to this bullet point if the effect of such reserves will prevent us from distributing the minimum quarterly distribution on all common units and any cumulative arrearages on such common units for the current quarter).

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plus, if our general partner so determines, all or any portion of the additional cash and cash equivalents (A) on hand on the date of determination of available cash with respect to such quarter resulting from working capital borrowings made subsequent to the end of such quarter or (B) available to be borrowed as working capital borrowings as of the date of determination of available cash with respect to such quarter.

The purpose and effect of the last bullet point above is to allow our general partner, if it so decides, to use cash from working capital borrowings made after the end of the quarter to pay distributions to our unitholders. Under our partnership agreement, working capital borrowings are generally borrowings incurred under a credit facility, commercial paper facility or similar financing arrangement that are used solely for working capital purposes or to pay distributions to our partners and with the intent of the borrower to repay such borrowings within twelve months with funds other than from additional working capital borrowings.

Intent to Distribute the Minimum Quarterly Distribution

Under our current cash distribution policy, we intend to pay a minimum quarterly distribution to our unitholders of $ per unit, or $ per unit on an annualized basis, to the extent we have sufficient available cash after the establishment of cash reserves and the payment of costs and expenses, including reimbursements of costs and expenses to our general partner and its affiliates incurred on our behalf. However, there is no guarantee

that we will pay the minimum quarterly distribution on our units in any quarter. The amount of distributions paid under our cash distribution policy and the decision to pay any distribution will be determined by our general partner, taking into consideration the terms of our partnership agreement. Please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Revolving Credit Facility” for a discussion of the restrictions that we expect will be included in our revolving credit facility that may restrict our ability to pay distributions.

General Partner Interest and Incentive Distribution Rights

Our general partner owns a non-economic general partner interest in us, which will not entitle it to receive cash distributions. Our general partner will also initially own all of our incentive distribution rights, which will entitle it to receive increasing percentages, up to a maximum of 50%, of the available cash we distribute from operating surplus (as defined below) in excess of $ per unit per quarter. The maximum distribution of 50% does not include any distributions that our general partner or its affiliates may receive on common or subordinated units that they own. Please read “Our Partnership Agreement.”

Operating Surplus and Capital Surplus

General

All cash distributed to our unitholders will be characterized as either being paid from “operating surplus” or “capital surplus.” We treat distributions of available cash from operating surplus differently than distributions of available cash from capital surplus.

Operating Surplus

We define operating surplus as:

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$ million (as described below); plus

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all of our cash receipts after the closing of this offering, excluding cash from interim capital transactions (as defined below) and the termination of hedge contracts, provided that cash receipts from the termination of a hedge contract prior to its scheduled settlement or termination date shall be included in operating surplus in equal quarterly installments over the remaining scheduled life of such hedge contract; plus

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working capital borrowings made after the end of a quarter but on or before the date of determination of operating surplus for that quarter; plus

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cash distributions (including incremental distributions on incentive distribution rights) paid in respect of equity issued, other than equity issued in this offering, to finance all or a portion of expansion capital expenditures in respect of the period from such financing until the earlier to occur of the date the capital asset commences commercial service and the date that it is abandoned or disposed of; less

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all of our operating expenditures (as defined below) after the closing of this offering; less

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the amount of cash reserves established by our general partner to provide funds for future operating expenditures; less

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all working capital borrowings not repaid within twelve months after having been incurred, or repaid within such twelve-month period with the proceeds of additional working capital borrowings.

As described above, operating surplus does not reflect actual cash on hand that is available for distribution to our unitholders and is not limited to cash generated by operations. For example, our definition of operating surplus includes a provision that will enable us, if we choose, to distribute as operating surplus up to $ million of cash we receive in the future from non-operating sources such as asset sales, issuances of securities and long-term borrowings that would otherwise be distributed as capital surplus. In addition, the effect

of including, as described above, certain cash distributions on equity interests in operating surplus will be to increase operating surplus by the amount of any such cash distributions. As a result, we may also distribute as operating surplus up to the amount of any such cash that we receive from non-operating sources.

The proceeds of working capital borrowings increase operating surplus and repayments of working capital borrowings are generally operating expenditures (as described below) and thus reduce operating surplus when repayments are made. However, if working capital borrowings, which increase operating surplus, are not repaid during the twelve-month period following the borrowing, they will be deemed repaid at the end of such period, thus decreasing operating surplus at such time. When such working capital borrowings are in fact repaid, they will not be treated as a further reduction in operating surplus because operating surplus will have been previously reduced by the deemed repayment.

We define interim capital transactions as (1) borrowings, refinancings or refundings of indebtedness (other than working capital borrowings and items purchased on open account or for a deferred purchase price in the ordinary course of business) and sales of debt securities, (2) issuances of equity interests, (3) sales or other dispositions of assets, other than sales or other dispositions of inventory, accounts receivable and other assets in the ordinary course of business and sales or other dispositions of assets as part of normal asset retirements or replacements and (4) capital contributions received by us.

We define operating expenditures as all of our cash expenditures, including taxes, reimbursements of costs and expenses of our general partner and its affiliates, officer, director and employee compensation, cash interest expense, payments made in the ordinary course of business under any hedge contracts (provided that payments made in connection with the termination of any hedge contract prior to the expiration of its scheduled settlement or termination date will be included in operating expenditures in equal quarterly installments over the remaining scheduled life of such hedge contract and amounts paid in connection with the initial purchase of a hedge contract will be amortized over the life of such hedge contract), maintenance capital expenditures (as discussed in further detail below), and repayment of working capital borrowings; provided, however, that operating expenditures will not include:

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repayments of working capital borrowings where such borrowings have previously been deemed to have been repaid (as described above);

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payments (including prepayments and prepayment penalties) of principal of and premium on indebtedness other than working capital borrowings;

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expansion capital expenditures;

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payment of transaction expenses (including taxes) relating to interim capital transactions;

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distributions to our partners;

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repurchases of partnership interests (excluding repurchases we make to satisfy obligations under employee benefit plans); or

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any other expenditures or payments using the proceeds of this offering that are described in “Use of Proceeds.”

Capital Surplus

Capital surplus is defined in our partnership agreement as any distribution of available cash in excess of our cumulative operating surplus. Accordingly, except as described above, capital surplus would generally be generated by:

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borrowings other than working capital borrowings;

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sales of our equity and debt securities;

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sales or other dispositions of assets, other than inventory, accounts receivable and other assets sold in the ordinary course of business or as part of ordinary course retirement or replacement of assets; and

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capital contributions received.

Characterization of Cash Distributions

All available cash distributed by us on any date from any source will be treated as distributed from operating surplus until the sum of all available cash distributed by us since the closing of this offering equals the operating surplus from the closing of this offering through the end of the quarter immediately preceding that distribution. We anticipate that distributions from operating surplus generally will not represent a return of capital. However, operating surplus, as defined in our partnership agreement, includes certain components, including a $ million cash basket, that represent non-operating sources of cash. Consequently, it is possible that all or a portion of specific distributions from operating surplus may represent a return of capital. Any available cash distributed by us in excess of our cumulative operating surplus will be deemed to be capital surplus under our partnership agreement. Our partnership agreement treats a distribution of capital surplus as the repayment of the initial unit price from this initial public offering and as a return of capital. We do not anticipate that we will pay any distributions from capital surplus.

Capital Expenditures

Maintenance capital expenditures are cash expenditures made to maintain, over the long term, our operating capacity or operating income. Examples of maintenance capital expenditures are those made to maintain existing contract volumes or renew existing supply agreements or maintain our real estate leased to dealers and consignment agents in leasable condition.

Expansion capital expenditures are cash expenditures incurred for acquisitions or capital improvements that we expect will increase our operating capacity or operating income over the long term. Examples of expansion capital expenditures include the acquisition of additional motor fuel supply agreements, consignment sites and company-operated sites, to the extent such acquisitions are expected to expand our long-term operating capacity or operating income. Expansion capital expenditures include interest payments (and related fees) on debt incurred and distributions in respect of equity issued (including incremental distributions on incentive distribution rights) to finance all or a portion of expansion capital expenditures in respect of the period from the date that we enter into a binding obligation to commence the construction, development, replacement, improvement or expansion of a capital asset and ending on the earlier to occur of the date that such capital improvement commences commercial service and the date that such capital improvement is abandoned or disposed of.

Capital expenditures that are made in part for maintenance capital purposes and in part for expansion capital purposes will be allocated between maintenance capital expenditures and expansion capital expenditures as determined by our general partner.

Subordinated Units and Subordination Period

General

Our partnership agreement provides that, during the subordination period (as defined below), the common units will have the right to receive distributions of available cash from operating surplus each quarter in an amount equal to $ per unit, which amount is defined in our partnership agreement as the minimum quarterly distribution, plus any arrearages in the payment of the minimum quarterly distribution on the common units from prior quarters, before any distributions of available cash from operating surplus may be made on the subordinated units. Subordinated units are deemed “subordinated” because for a period of time, referred to as the

“subordination period,” the subordinated units will not be entitled to receive any distributions from operating surplus until the common units have received the minimum quarterly distribution from operating surplus plus any arrearages in the payment of the minimum quarterly distribution from operating surplus on the common units from prior quarters. Furthermore, no arrearages will accrue or be payable on the subordinated units. The practical effect of the subordinated units is to increase the likelihood that, during the subordination period, there will be available cash to be distributed on the common units.

Subordination Period

Except as described below, the subordination period will begin on the closing date of this offering and will extend until the first business day following the distribution of available cash in respect of any quarter, beginning with the quarter ending , 2018, that each of the following tests are met:

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distributions of available cash from operating surplus on each of the outstanding common units and subordinated units equaled or exceeded $ (the annualized minimum quarterly distribution), for each of the three consecutive, non-overlapping four-quarter periods immediately preceding that date;

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the adjusted operating surplus (as defined below) generated during each of the three consecutive, non-overlapping four-quarter periods immediately preceding that date equaled or exceeded the sum of $ (the annualized minimum quarterly distribution) on all of the outstanding common units and subordinated units during those periods on a fully diluted basis; and

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there are no arrearages in payment of the minimum quarterly distribution on the common units.

Early Termination of the Subordination Period

Notwithstanding the foregoing, the subordination period will automatically terminate on the first business day following the distribution of available cash in respect of any quarter, beginning with the quarter ending , 2016, that each of the following tests are met:

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distributions of available cash from operating surplus on each of the outstanding common units and subordinated units equaled or exceeded $ (150% of the annualized minimum quarterly distribution), plus the related distributions on the incentive distribution rights, for the four-quarter period immediately preceding that date;

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the adjusted operating surplus (as defined below) generated during the four-quarter period immediately preceding that date equaled or exceeded the sum of (1) $ (150% of the annualized minimum quarterly distribution) on all of the outstanding common units and subordinated units during that period on a fully diluted basis and (2) the corresponding distributions on the incentive distribution rights; and

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there are no arrearages in payment of the minimum quarterly distributions on the common units.

Expiration of the Subordination Period

When the subordination period ends, each outstanding subordinated unit will convert into one common unit and will thereafter participate pro rata with the other common units in distributions of available cash.

Adjusted Operating Surplus

Adjusted operating surplus is intended to reflect the cash generated from operations during a particular period and therefore excludes net increases in working capital borrowings and net drawdowns of reserves of cash established in prior periods. Adjusted operating surplus for a period consists of:

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operating surplus generated with respect to that period (excluding any amounts attributable to the item described in the first bullet under the caption “—Operating Surplus and Capital Surplus—Operating Surplus” above); less

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any net increase in working capital borrowings with respect to that period; less

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any net decrease in cash reserves for operating expenditures with respect to that period not relating to an operating expenditure made with respect to that period; plus

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any net decrease in working capital borrowings with respect to that period; plus

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any net decrease made in subsequent periods to cash reserves for operating expenditures initially established with respect to that period to the extent such decrease results in a reduction in adjusted operating surplus in subsequent periods; plus

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any net increase in cash reserves for operating expenditures with respect to that period required by any debt instrument for the repayment of principal, interest or premium.

Distributions of Available Cash From Operating Surplus During the Subordination Period

We will pay distributions of available cash from operating surplus for any quarter during the subordination period in the following manner:

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first, to the common unitholders, pro rata, until we distribute for each outstanding common unit an amount equal to the minimum quarterly distribution for that quarter;

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second, to the common unitholders, pro rata, until we distribute for each outstanding common unit an amount equal to any arrearages in payment of the minimum quarterly distribution on the common units for any prior quarters during the subordination period;

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third, to the subordinated unitholders, pro rata, until we distribute for each outstanding subordinated unit an amount equal to the minimum quarterly distribution for that quarter; and

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thereafter, in the manner described in “—General Partner Interest and Incentive Distribution Rights” below.

The preceding discussion is based on the assumption that we do not issue additional classes of partnership interests.

Distributions of Available Cash From Operating Surplus After the Subordination Period

We will pay distributions of available cash from operating surplus for any quarter after the subordination period in the following manner:

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first, to all unitholders, pro rata, until we distribute for each outstanding unit an amount equal to the minimum quarterly distribution for that quarter; and

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thereafter, in the manner described in “—General Partner Interest and Incentive Distribution Rights” below.

The preceding discussion is based on the assumption that we do not issue additional classes of partnership interests.

General Partner Interest and Incentive Distribution Rights

Our general partner owns a non-economic general partner interest in us, which will not entitle it to receive cash distributions. Our general partner will also initially own all of our incentive distribution rights. Incentive distribution rights represent the right to receive an increasing percentage (15%, 25% and 50%) of quarterly distributions of available cash from operating surplus after the minimum quarterly distribution and the target distribution levels have been achieved. Our general partner currently holds the incentive distribution rights, but may transfer these rights separately from its general partner interest.

The following discussion assumes that our general partner continues to own the incentive distribution rights and that we do not issue additional classes of partnership interests.

If for any quarter:

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we have distributed available cash from operating surplus to the common unitholders and subordinated unitholders in an amount equal to the minimum quarterly distribution; and

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we have distributed available cash from operating surplus on outstanding common units in an amount necessary to eliminate any cumulative arrearages in payment of the minimum quarterly distribution;

then, we will distribute any additional available cash from operating surplus for that quarter among the unitholders and our general partner in the following manner:

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first, to all unitholders, pro rata, until each unitholder receives a total of $ per unit for that quarter (the “first target distribution”);

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second, 85% to all unitholders, pro rata, and 15% to our general partner, until each unitholder receives a total of $ per unit for that quarter (the “second target distribution”);

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third, 75% to all unitholders, pro rata, and 25% to our general partner, until each unitholder receives a total of $ per unit for that quarter (the “third target distribution”); and

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thereafter, 50% to all unitholders, pro rata, and 50% to our general partner.

Percentage Allocations of Available Cash from Operating Surplus

The following table illustrates the percentage allocations of available cash from operating surplus between our unitholders and our general partner, as the initial holder of our incentive distribution rights, based on the specified target distribution levels. The amounts set forth under “Marginal Percentage Interest In Distributions” are the percentage interests of our general partner and our unitholders in any available cash from operating surplus we distribute up to and including the corresponding amount in the column “Total Quarterly Distribution Per Unit Target Amount.” The percentage interests shown for our unitholders and our general partner for the minimum quarterly distribution are also applicable to quarterly distribution amounts that are less than the minimum quarterly distribution. The following table assumes that our general partner has not transferred its incentive distribution rights, that there are no arrearages on common units and that we have not issued additional classes of partnership interests.


	Total Quarterly Distribution		Marginal Percentage Interest in Distributions
	Per Unit Target Amount		Our Unitholders			General Partner
Minimum Quarterly Distribution	$			100	%		0	%
First Target Distribution	above $	up to $		100	%		0	%
Second Target Distribution	above $	up to $		85	%		15	%
Third Target Distribution	above $	up to $		75	%		25	%
Thereafter	above $			50	%		50	%

Right to Reset Incentive Distribution Levels

Our general partner, as the initial holder of the incentive distribution rights, has the right under our partnership agreement, subject to certain conditions, to elect to relinquish the right to receive incentive distribution payments based on the initial target distribution levels and to reset, at higher levels, the minimum quarterly distribution amount and target distribution levels upon which the incentive distribution payments to our general partner would be set. If our general partner transfers all or a portion of the incentive distribution rights in

the future, then the holder or holders of a majority of the incentive distribution rights will be entitled to exercise this right. The following discussion assumes that our general partner holds all of the incentive distribution rights at the time that a reset election is made. The right of the holder of the incentive distribution rights to reset the minimum quarterly distribution amount and the target distribution levels upon which the incentive distributions payable to the holder of the incentive distribution rights are based may be exercised, without approval of our unitholders or the conflicts committee, at any time when there are no subordinated units outstanding, we have made cash distributions to the holders of the incentive distribution rights at the highest level of incentive distributions for each of the four consecutive fiscal quarters immediately preceding such time and the amount of each such distribution did not exceed adjusted operating surplus for such quarter. If our general partner and its affiliates are not the holders of a majority of the incentive distribution rights at the time an election is made to reset the minimum quarterly distribution amount and the target distribution levels, then the proposed reset will be subject to the prior written concurrence of our general partner that the conditions described above have been satisfied. The reset minimum quarterly distribution amount and target distribution levels will be higher than the minimum quarterly distribution amount and the target distribution levels prior to the reset such that the holder of the incentive distribution rights will not receive any incentive distributions under the reset target distribution levels until cash distributions per unit following this event increase as described below. We anticipate that our general partner would exercise this reset right in order to facilitate acquisitions or internal growth projects that would otherwise not be sufficiently accretive to cash distributions per common unit, taking into account the existing levels of incentive distribution payments being made to our general partner.

In connection with the resetting of the minimum quarterly distribution amount and the target distribution levels and the corresponding relinquishment by our general partner of incentive distribution payments based on the target distributions prior to the reset, our general partner will be entitled to receive a number of newly issued common units based on a predetermined formula described below that takes into account the “cash parity” value of the average cash distributions related to the incentive distribution rights received by our general partner for the two quarters immediately preceding the reset event as compared to the average cash distributions per common unit during that two-quarter period.

The number of common units that our general partner (or the then-holder of the incentive distribution rights, if other than our general partner) would be entitled to receive from us in connection with a resetting of the minimum quarterly distribution amount and the target distribution levels then in effect would be equal to the quotient determined by dividing (x) the average aggregate amount of cash distributions received by our general partner in respect of its incentive distribution rights during the two consecutive fiscal quarters ended immediately prior to the date of such reset election by (y) the average of the aggregate amount of cash distributed per common unit during each of these two quarters.

Following a reset election, the minimum quarterly distribution amount will be reset to an amount equal to the average cash distribution amount per common unit for the two fiscal quarters immediately preceding the reset election (which amount we refer to as the “reset minimum quarterly distribution”) and the target distribution levels will be reset to be correspondingly higher such that we would distribute all of our available cash from operating surplus for each quarter thereafter as follows:

•

first, to all unitholders, pro rata, until each unitholder receives an amount equal to 115% of the reset minimum quarterly distribution for that quarter;

•

second, 85% to all unitholders, pro rata, and 15% to our general partner, until each unitholder receives an amount per unit equal to 125% of the reset minimum quarterly distribution for the quarter;

•

third, 75% to all unitholders, pro rata, and 25% to our general partner, until each unitholder receives an amount per unit equal to 150% of the reset minimum quarterly distribution for the quarter; and

•

thereafter, 50% to all unitholders, pro rata, and 50% to our general partner.

The following table illustrates the percentage allocations of available cash from operating surplus between our unitholders and our general partner at various cash distribution levels (1) pursuant to the cash distribution provisions of our partnership agreement in effect at the completion of this offering, as well as (2) following a hypothetical reset of the minimum quarterly distribution and target distribution levels based on the assumption that the average quarterly cash distribution amount per common unit during the two fiscal quarters immediately preceding the reset election was $ .


				Marginal Percentage Interest in Distributions
	Quarterly Distribution Per Unit Prior to Reset			Common Unitholders			Incentive Distribution Rights			Quarterly Distribution Per Unit Following Hypothetical Reset
Minimum Quarterly Distribution	$				100	%		—		$
First Target Distribution	above $		up to $		100	%		—		above $		up to $	⁽¹⁾
Second Target Distribution	above $		up to $		85	%		15	%	above $		up to $	⁽²⁾
Third Target Distribution	above $		up to $		75	%		25	%	above $		up to $	⁽³⁾
Thereafter		above $			50	%		50	%	above $	⁽³⁾

(1)	This amount is 115% of the hypothetical reset minimum quarterly distribution.

(2)	This amount is 125% of the hypothetical reset minimum quarterly distribution.

(3)	This amount is 150% of the hypothetical reset minimum quarterly distribution.

The following table illustrates the total amount of available cash from operating surplus that would be distributed to our unitholders and our general partner, including in respect of incentive distribution rights, based on an average of the amounts distributed for the two quarters immediately prior to the reset. The table assumes that immediately prior to the reset there would be common units outstanding and the average distribution to each common unit would be $ per quarter for the two consecutive non-overlapping quarters prior to the reset.

Cash
Distributions
to Common
Unitholders
Prior to Reset

Cash Distribution to General
Partner Prior to Reset

Quarterly
Distribution Per
Unit Prior to Reset

Common
Units

Incentive
Distribution
Rights

Total

Total
Distributions

Minimum Quarterly Distribution

First Target Distribution

above $

up to $

Second Target Distribution

above $

up to $

Third Target Distribution

above $

up to $

Thereafter

above $

The following table illustrates the total amount of available cash from operating surplus that would be distributed to our unitholders and our general partner, including in respect of incentive distribution rights, with respect to the quarter after the reset occurs. The table reflects that, as a result of the reset, there would be common units outstanding and that the average distribution to each common unit would be $ . The number of common units issued as a result of the reset was calculated by dividing (x) $ as the average of the amounts received by our general partner in respect of its incentive distribution rights for the two consecutive non-overlapping quarters prior to the reset as shown in the table above, by (y) the average of the cash distributions made on each common unit per quarter for the two consecutive non-overlapping quarters prior to the reset as shown in the table above, or $ .

Cash
Distributions
to Common
Unitholders
After Reset

Cash Distribution to General
Partner After Reset

Quarterly
Distribution Per
Unit After Reset

Common
Units

Incentive
Distribution
Rights

Total

Total
Distributions

Minimum Quarterly Distribution

—

First Target Distribution

above $

up to $

—

Second Target Distribution

above $

up to $

—

Third Target Distribution

above $

up to $

—

Thereafter

above $

—

Our general partner will be entitled to cause the minimum quarterly distribution amount and the target distribution levels to be reset on more than one occasion, provided that it may not make a reset election except at a time when it has received incentive distributions for the immediately preceding four consecutive fiscal quarters based on the highest level of incentive distributions that it is entitled to receive under our partnership agreement.

Distributions from Capital Surplus

How Distributions from Capital Surplus Will be Made

We will pay distributions of available cash from capital surplus, if any, in the following manner:

•

first, to all unitholders, pro rata, until the minimum quarterly distribution is reduced to zero, as described below;

•

second, to the common unitholders, pro rata, until we distribute for each common unit an amount of available cash from capital surplus equal to any unpaid arrearages in payment of the minimum quarterly distribution on the outstanding common units; and

•

thereafter, as if they were from operating surplus.

The preceding discussion is based on the assumption that we do not issue additional classes of partnership interests.

Effect of a Distribution from Capital Surplus

Our partnership agreement treats a distribution of capital surplus as the repayment of the initial unit price from this initial public offering, which is a return of capital. The initial public offering price less any distributions of capital surplus per unit is referred to as the “unrecovered initial unit price.” Each time a distribution of capital surplus is made, the minimum quarterly distribution and the target distribution levels will be reduced in the same proportion as the corresponding reduction in the unrecovered initial unit price. Because distributions of capital surplus will reduce the minimum quarterly distribution after any of these distributions are made, the effects of distributions of capital surplus may make it easier for our general partner to receive incentive distributions and for the subordinated units to convert into common units. However, any distribution of capital surplus before the unrecovered initial unit price is reduced to zero cannot be applied to the payment of the minimum quarterly distribution or any arrearages.

Once we distribute capital surplus on a unit issued in this offering in an amount equal to the initial unit price, we will reduce the minimum quarterly distribution and the target distribution levels to zero. Then, after distributing an amount of capital surplus for each common unit equal to any unpaid arrearages of the minimum quarterly distributions on outstanding common units, we will then pay all future distributions from operating surplus, with 50% being paid to our unitholders, pro rata, and 50% to the holder of the incentive distribution rights.

Adjustment of the Minimum Quarterly Distribution and Target Distribution Levels

In addition to adjusting the minimum quarterly distribution and target distribution levels to reflect a distribution of capital surplus, if we combine our units into fewer units (commonly referred to as a “reverse split”) or subdivide our units into a greater number of units (commonly referred to as a “split”), we will proportionately adjust:

•

the minimum quarterly distribution;

•

target distribution levels;

•

the unrecovered initial unit price; and

•

the arrearages per common unit in payment of the minimum quarterly distribution on the common units.

For example, if a two-for-one split of the common units should occur, the minimum quarterly distribution, the target distribution levels and the unrecovered initial unit price would each be reduced to 50% of its initial level, and each subordinated unit would be split into two subordinated units. We will not make any adjustment by reason of the issuance of additional partnership interests for cash or property (including additional common units issued under any compensation or benefit plans).

In addition, if legislation is enacted or if the official interpretation of existing law is modified by a governmental authority, so that we become taxable as a corporation or otherwise subject to taxation as an entity for federal, state or local income tax purposes, our partnership agreement specifies that the minimum quarterly distribution and the target distribution levels for each quarter may be reduced by multiplying each distribution level by a fraction, the numerator of which is available cash for that quarter (reduced by the amount of the estimated tax liability for such quarter payable by reason of such legislation or interpretation) and the denominator of which is the sum of available cash for that quarter (reduced by the amount of the estimated tax liability for such quarter payable by reason of such legislation or interpretation) plus our general partner’s estimate of our aggregate liability for the quarter for such income taxes payable by reason of such legislation or interpretation. To the extent that the actual tax liability differs from the estimated tax liability for any quarter, the difference may be accounted for in subsequent quarters.

Distributions of Cash Upon Liquidation

General

If we dissolve in accordance with our partnership agreement, we will sell or otherwise dispose of our assets in a process called liquidation. We will first apply the proceeds of liquidation to the payment of our creditors. We will distribute any remaining proceeds to our unitholders and our general partner, in accordance with their capital account balances, as adjusted to reflect any gain or loss upon the sale or other disposition of our assets in liquidation (as described below).

The allocations of gain and loss upon our liquidation are intended, to the extent possible, to entitle the holders of outstanding common units to a liquidation preference over the holders of outstanding subordinated units, to the extent required to permit common unitholders to receive their unrecovered initial unit price plus the minimum quarterly distribution for the quarter during which liquidation occurs plus any unpaid arrearages in payment of the minimum quarterly distribution on the common units plus, along with the subordinated units, a portion of any remaining funds, as described below. However, there may not be sufficient gain upon our liquidation to enable the holders of common units to fully recover all of these amounts, even though there may be cash available for distribution to the holders of subordinated units. Any further net gain recognized upon liquidation will be allocated in a manner that takes into account the incentive distribution rights of our general partner.

Manner of Adjustments for Gain

The manner of the adjustment for gain is set forth in our partnership agreement. If our liquidation occurs before the end of the subordination period, we will allocate any gain to our partners in the following manner:

•

first, to our general partner to the extent of any negative balance in its capital account;

•

second, to the common unitholders, pro rata, until the capital account for each common unit is equal to the sum of:

(1)

the unrecovered initial unit price;

(2)

the amount of the minimum quarterly distribution for the quarter during which our liquidation occurs; and

(3)

any unpaid arrearages in payment of the minimum quarterly distribution;

•

third, to the subordinated unitholders, pro rata, until the capital account for each subordinated unit is equal to the sum of:

(1)

the unrecovered initial unit price; and

(2)

the amount of the minimum quarterly distribution for the quarter during which our liquidation occurs;

•

fourth, to all unitholders, pro rata, until we allocate under this paragraph an amount per unit equal to:

(1)

the sum of the excess of the first target distribution per unit over the minimum quarterly distribution per unit for each quarter of our existence; less

(2)

the cumulative amount per unit of any distributions of available cash from operating surplus in excess of the minimum quarterly distribution per unit that we distributed to the unitholders, pro rata, for each quarter of our existence;

•

fifth, 85% to all unitholders, pro rata, and 15% to our general partner, until we allocate under this paragraph an amount per unit equal to:

(1)

the sum of the excess of the second target distribution per unit over the first target distribution per unit for each quarter of our existence; less

(2)

the cumulative amount per unit of any distributions of available cash from operating surplus in excess of the first target distribution per unit that we distributed 85% to the unitholders, pro rata, and 15% to our general partner for each quarter of our existence;

•

sixth, 75% to all unitholders, pro rata, and 25% to our general partner, until we allocate under this paragraph an amount per unit equal to:

(1)

the sum of the excess of the third target distribution per unit over the second target distribution per unit for each quarter of our existence; less

(2)

the cumulative amount per unit of any distributions of available cash from operating surplus in excess of the second target distribution per unit that we distributed 75% to the unitholders, pro rata, and 25% to our general partner for each quarter of our existence; and

•

thereafter, 50% to all unitholders, pro rata, and 50% to our general partner.

The percentages and order set forth above are based on the assumptions that our general partner has not transferred its incentive distribution rights and that we do not issue additional classes of partnership interests.

If the liquidation occurs after the end of the subordination period, the distinction between common units and subordinated units will disappear, so that clause (3) of the second bullet point above and all of the third bullet point above will no longer be applicable.

Manner of Adjustments for Losses

If the liquidation occurs before the end of the subordination period, after making allocations of loss to the unitholders in a manner intended to offset in reverse order the allocations of gains that have previously been allocated, we will generally allocate any loss to our unitholders in the following manner:

•

first, to the subordinated unitholders in proportion to the positive balances in their capital accounts, until the capital accounts of the subordinated unitholders have been reduced to zero; and

•

thereafter, 100% to the common unitholders in accordance with their percentage interest in us.

If the liquidation occurs after the end of the subordination period, the distinction between common units and subordinated units will disappear, so that all of the first bullet point above will no longer be applicable.

Adjustments to Capital Accounts

Our partnership agreement requires that we make adjustments to capital accounts upon the issuance of additional partnership interests. In this regard, our partnership agreement specifies that we allocate any unrealized and, for tax purposes, unrecognized gain resulting from the adjustments to our unitholders and the general partner in the same manner as we allocate gain upon liquidation. In the event that we make positive adjustments to the capital accounts upon the issuance of additional partnership interests, our partnership agreement requires that we generally allocate any later negative adjustments to the capital accounts resulting from the issuance of additional partnership interests or upon our liquidation in a manner that results, to the extent possible, in the partners’ capital account balances equaling the amount that they would have been if no earlier positive adjustments to the capital accounts had been made. In contrast to the allocations of gain, and except as provided above, we generally will allocate any unrealized and unrecognized loss resulting from the adjustments to capital accounts upon the issuance of additional partnership interests to our unitholders based on their percentage ownership of us. In this manner, prior to the end of the subordination period, we generally will allocate any such loss equally with respect to our common and subordinated units. If we make negative adjustments to the capital accounts as a result of such loss, future positive adjustments resulting from the issuance of additional partnership interests will be allocated in a manner designed to reverse the prior negative adjustments, and special allocations will be made upon liquidation in a manner that results, to the extent possible, in our unitholders’ capital account balances equaling the amounts they would have been if no earlier adjustments for loss had been made.

SELECTED HISTORICAL AND PRO FORMA FINANCIAL AND OPERATING DATA

The following table shows selected historical financial and operating data of our predecessors, and unaudited pro forma financial and operating data of Empire Petroleum Partners, LP for the periods and as of the dates indicated. The selected historical financial data of our predecessor as of and for the year ended December 31, 2010 and as of July 6, 2011 and for the period from January 1, 2011 through July 6, 2011, are derived from the audited and unaudited consolidated financial statements of Empire Petroleum Holdings, LLC, our accounting predecessor for such periods, which are not included in this prospectus. The selected historical financial and operating data as of December 31, 2011 and for the period from July 7, 2011 through December 31, 2011 are derived from the audited consolidated financial statements of Empire, our accounting predecessor for such periods, which are not included in this prospectus. On July 7, 2011, Empire acquired substantially all of the assets and liabilities of Empire Petroleum Holdings, LLC. The selected historical financial and operating data of our predecessor as of and for the years ended December 31, 2014, 2013 and 2012 are derived from the audited historical consolidated financial statements of Empire, our accounting predecessor for such years, appearing elsewhere in this prospectus. The following table should be read together with, and is qualified in its entirety by reference to, the audited historical consolidated financial statements and the unaudited pro forma condensed combined financial statements and the accompanying notes included elsewhere in this prospectus. The table should also be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The selected unaudited pro forma financial and operating data presented in the following table as of, and for the year ended December 31, 2014, are derived from the unaudited pro forma condensed combined financial statements included elsewhere in this prospectus. The unaudited pro forma balance sheet gives effect to the acquisition of assets from Atlas and assumes the offering and the related transactions occurred as of December 31, 2014, and the unaudited pro forma statement of income for the year ended December 31, 2014 gives effect to the Recent Acquisitions and assumes the offering and the related transactions occurred as of January 1, 2014. These transactions include, and the unaudited pro forma condensed combined financial statements give effect to, the following:

•

the contribution by Empire of substantially all of its assets and liabilities to us;

•

our issuance to Empire of common units and subordinated units;

•

our issuance of all of the incentive distribution rights to our general partner, which will also retain a non-economic general partner interest in us;

•

our issuance of common units to the public in this offering, representing a % limited partner interest in us;

•

the amendment and restatement of our revolving credit facility;

•

the application of the net proceeds from this offering as described in “Use of Proceeds”;

•

our entry into the Empire Supply Agreement with Empire Services; and

•

our entry into an omnibus agreement with Empire and our general partner.


	Predecessor Historical																		Partnership Pro Forma
	Empire Petroleum Partners, LLC												Empire Petroleum Holdings, LLC
	Year Ended December 31,									Period from July 7, 2011 through December 31, 2011			Period from January 1, 2011 through July 6, 2011			Year Ended December 31, 2010			Year Ended December 31, 2014
	2014			2013			2012			Period from July 7, 2011 through December 31, 2011			Period from January 1, 2011 through July 6, 2011			Year Ended December 31, 2010			Year Ended December 31, 2014
													(unaudited)						(unaudited)
	(in thousands, except per unit data)
Statement of Income Data:
Revenue:
Motor fuel sales	$	1,466,605		$	1,210,188		$	1,051,904		$	254,724		$	226,692		$	183,051		$	2,614,591
Merchandise sales		25,871			22,909			24,424			3,132			960			1,304			51,799
Rental income and other		6,120			8,063			11,077			6,560			3,077			169			7,572

Total revenue		1,498,596			1,241,160			1,087,405			264,416			230,729			184,524			2,673,962
Cost of sales (excluding depreciation, amortization and accretion expenses):
Motor fuel sales		1,422,017			1,174,859			1,023,994			248,385			221,139			178,194			2,549,961
Merchandise sales		18,855			16,238			17,879			2,201			692			1,030			36,819
Rental income and other		6,775			7,420			10,483			6,909			2,909			—			6,775

Total cost of sales (excluding depreciation, amortization and accretion expenses)		1,447,647			1,198,517			1,052,356			257,495			224,740			179,224			2,593,555

Total gross profit (excluding depreciation, amortization and accretion expenses)		50,949			42,643			35,049			6,921			5,989			5,300			80,407

Operating expenses:
Selling, general and administrative expenses		30,057			28,874			27,012			5,775			3,737			3,919			53,000
Depreciation, amortization and accretion expenses		13,526			8,445			6,549			1,409			1,339			1,086			28,031
Acquisition expenses		2,586			809			2,938			10,091			887			267			—
(Gain) on sale of assets		(860	)		(158	)		—			—			—			—			(860	)

Total operating expenses		45,309			37,970			36,499			17,275			5,963			5,272			80,171

Operating income (loss)		5,640			4,673			(1,450	)		(10,354	)		26			28			236

Other expense:
Interest expense, net		3,607			2,752			2,001			582			256			143			3,627
Other expense (income)		—			—			—			—			—			6			(318	)

Total other expense		3,607			2,752			2,001			582			256			149			3,309

Income (loss) from continuing operations before income taxes		2,033			1,921			(3,451	)		(10,936	)		(230	)		(121	)		(3,073	)
Provision for income taxes		141			159			14			—			—			(209	)		141

Income (loss) from continuing operations		1,892			1,762			(3,465	)		(10,936	)		(230	)		88			(3,214	)
Income (loss) from discontinued operations		—			5,263			(196	)		—			—			—			—

Net income (loss)	$	1,892		$	7,025		$	(3,661	)	$	(10,936	)	$	(230	)	$	88		$	(3,214	)

Earnings (loss) per unit—basic and diluted (unaudited):
Income (loss) from continuing operations	$	0.32		$	0.32		$	(0.71	)
Income (loss) from discontinued operations		—			0.94			(0.04	)

Net income (loss)	$	0.32		$	1.26		$	(0.75	)

Weighted-average units outstanding – basic and diluted		5,844,042			5,587,284			4,890,850
Other Financial Data (unaudited):
Adjusted EBITDA⁽¹⁾	$	21,892		$	14,502		$	8,317		$	1,221		$	2,629		$	1,681		$	38,901
Capital expenditures, including acquisitions	$	99,746		$	5,763		$	35,506		$	5,954		$	995		$	9,782
Cash Flow Data:
Net cash provided by (used in):
Operating activities	$	18,557		$	7,228		$	2,253		$	(17,650	)	$	342		$	1,774
Investing activities	$	(96,185	)	$	29,577		$	(34,940	)	$	(2,426	)	$	995		$	(8,418	)
Financing activities	$	90,582		$	(38,626	)	$	29,740		$	27,348		$	(577	)	$	7,359

(1)


	Predecessor Historical																Partnership Pro Forma
	Empire Petroleum Partners, LLC												Empire Petroleum Holdings, LLC
	Year Ended December 31,									Period from July 7, 2011 through December 31, 2011			Period from January 1, 2011 through July 6, 2011		Year Ended December 31, 2010		Year Ended December 31, 2014
	2014			2013			2012			Period from July 7, 2011 through December 31, 2011			Period from January 1, 2011 through July 6, 2011		Year Ended December 31, 2010		Year Ended December 31, 2014
													(unaudited)				(unaudited)
	(in thousands, except operating data)
Balance sheet data (at period end):
Cash	$	15,458		$	2,504		$	4,325		$	7,272		$	3,987	$	2,000	$
Property and equipment, net		97,702			53,255			81,741			79,162			5,610		5,012
Total assets		282,358			153,152			181,156			155,199			35,259		31,786
Long-term debt		88,774			39,104			58,480			38,000			7,969		7,108		77,000
Total liabilities		146,724			72,108			95,376			79,899			24,890		21,009
Members’ equity		135,634			81,044			85,780			75,300			10,369		10,777
Total liabilities and members’ equity		282,358			153,152			181,156			155,199			35,259		31,786
Operating Data:
Motor fuel gallons distributed (millions)
Dealer-operated sites		453			326			277			137	⁽¹⁾						695
Consignment sites		50			51			32			17	⁽¹⁾						144
Company-operated sites		45			37			39			11	⁽¹⁾						80

Total gallons distributed		548			414			348			165	⁽¹⁾						919

Fuel gross margin (cents per gallon)		8.1	¢		8.5	¢		8.0	¢									7.0	¢
Number of sites (period end)		1,062			698			663										1,311

(1)	Operating data reflects a full year of operations in 2011.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

The following discussion analyzes the historical financial condition and results of operations of Empire Petroleum Partners, LLC, our predecessor for accounting purposes for the dates indicated, without giving effect to the pro forma adjustments related to our formation transactions, the amendment and restatement of our revolving credit facility, our entry into the Empire Supply Agreement, the completion of this offering and the application of proceeds from this offering. You should read the following discussion of the historical financial condition and results of operations of our predecessor in conjunction with the audited historical consolidated financial statements and accompanying notes of our predecessor and the unaudited pro forma condensed combined financial statements and accompanying notes of Empire Petroleum Partners, LP included elsewhere in this prospectus. This discussion includes forward-looking statements that are subject to risks and uncertainties that may result in actual results differing from statements we make. Please read “Forward-Looking Statements.” Factors that could cause actual results to differ include those risks and uncertainties that are discussed in “Risk Factors.” Unless otherwise noted, all operational data herein reflects our business operations as of February 28, 2015.

Overview

We distribute motor fuel to 1,060 dealer-operated sites, 190 consignment sites and 61 company-operated sites. We distribute motor fuel to independent dealer-operated sites pursuant to long-term, fixed-margin supply agreements. In addition, following the closing of this offering, we will distribute motor fuel to our consignment sites and company-operated sites pursuant to the Empire Supply Agreement that we will enter into with Empire Services.

Under our supply agreements with dealers, we typically receive a fixed margin, expressed in cents per gallon, in addition to the posted purchase price at the motor fuel supply terminal, plus transportation costs and taxes. Due to the large volume of motor fuel that we purchase, we typically benefit from volume rebates and prompt payment incentives from most major oil companies with whom we do business, some of which may not be available to smaller wholesale distributors. Our supply agreements with dealers generally have an initial term of 10 years and, as of February 28, 2015, had an average remaining term of approximately 8.7 years. These agreements obligate dealers to purchase motor fuel exclusively from us and typically contain minimum volume commitments. When distributing motor fuel to dealer-operated sites, we have no commodity price exposure because we are able to pass on the cost of motor fuel to the dealers. We typically purchase motor fuel only after receiving a dealer order and we hold title to the fuel only for the intraday period required for delivery. Please read “Business—Our Business and Properties—Wholesale Motor Fuel Distribution.”

In addition to income from our wholesale distribution of motor fuel, Empire Services will receive income from retail sales of motor fuel to consumers at consignment sites and company-operated sites and income from sales of convenience store merchandise at company-operated sites. We will also receive rental income from 99 sites that we lease or sublease to dealers or consignment agents.

We believe that our long-term, fixed-margin fuel supply agreements with independent dealers provide us with stable and predictable cash flow that will support consistent distributions to our unitholders. We intend to grow our business primarily through acquisitions of wholesale fuel supply agreements, which we believe will add to the scale, stability and diversification of our motor fuel distribution network. Since 2011, we have successfully

completed 12 acquisitions, increasing our annual volume of distributed motor fuel at a compound annual growth rate of 77% from 165 million gallons in 2011 to 919 million gallons in 2014, pro forma for the Recent Acquisitions.

Segment Information

We have two reportable segments based on the products and services provided by each segment, as follows:

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Wholesale—Our wholesale segment generates revenue primarily from the distribution of branded and unbranded motor fuel to dealer-operated sites under long-term, fixed-margin fuel supply agreements. This segment also earns rental income on properties that we lease or sublease to dealers.

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Retail—Our retail segment generates revenue primarily from retail sales of motor fuel to consumers at consignment sites and company-operated sites. This segment also generates revenue from sales of convenience store merchandise and other ancillary products and services at company-operated sites and earns rental income on sites that we lease or sublease to consignment agents.

Our reportable segments are strategic business units that experience different operating income margins due to the different products sold, services provided and customers served. These segments are managed separately as each segment requires unique marketing strategies and operating capabilities. Corporate information is included to reconcile segment data to the consolidated financial statements and includes assets and expenses related to our corporate headquarters and other administrative costs.

We evaluate the performance of our segments based on gross profit and income from continuing operations. There has historically been no intersegment revenue. However, following the closing of this offering, intersegment revenue will be recognized as we distribute fuel to consignment sites and company-operated sites pursuant to the Empire Supply Agreement. Each segment bears the direct operating expenses associated with its operations, and certain general and administrative expenses are allocated to each segment to reflect the indirect overhead cost of operating each segment. General and administrative expenses that are not included in either of the two reportable segments are included in the corporate category.

Recent Trends and Outlook

Certain trends and general economic or industry-specific factors may affect our financial performance and results of operations in the future, both in the short term and in the long term. Our results of operations and financial condition depend, in part, upon the factors described below. Please read “Risk Factors” for additional information about the risks associated with purchasing our common units.

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Industry Consolidation and Acquisition Environment. The wholesale motor fuel distribution industry is highly fragmented and is characterized by thousands of wholesale distributors competing for the supply of branded and unbranded fuel. As a result, we believe there is considerable opportunity for consolidation in our industry. In addition, in recent years, major oil companies have been increasing the minimum volume, scale and credit requirements for their motor fuel distribution partners. As a result, we believe there is a large number of independent motor fuel distributors with limited scale that may consider selling their businesses. As one of the largest independent wholesale motor fuel distributors in the United States, we believe these trends benefit us and position us to be a potential acquirer of smaller wholesale motor fuel distributors. Consistent with our business strategies, we are continuously engaged in discussions with potential acquisition targets. However, there is no certainty that we will be able to complete and successfully integrate any acquisitions or that we will be able to increase our distribution per unit by making accretive acquisitions. Despite our successful acquisition track record and experienced acquisition team, we can give no assurance that our acquisition efforts will be successful or that any particular acquisition will be completed on terms that are favorable to us.

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Long-Term Demand Patterns. Further advancements in energy efficiency, new technology and alternative fuels could reduce demand for motor fuels. Increased conservation and technological advances, including the development of improved gas mileage vehicles and the increased usage of electrically powered vehicles, have adversely affected the demand for motor fuel. Government mandated fuel efficiency standards for vehicles could exacerbate this reduction. While the Energy Information Administration forecasts only a gradual decline in motor fuel demand through 2040, any increased conservation measures or unexpected technological advances in fuel efficiency might further reduce motor fuel demand and adversely affect our operating results.

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Fuel Price Volatility. Crude oil and domestic wholesale motor fuel prices are inherently volatile due to the complex interactions of global energy supply and demand combined with geopolitical instability in major oil producing and consuming countries. In 2014, a rapid fall in the price of oil led to lower refined petroleum products prices, ending a multi-year period of elevated prices. Our business is directly affected by such changes in crude oil prices which, in turn, impact wholesale motor fuel prices. Generally, as motor fuel prices increase, the margins we realize in our retail segment decrease and as motor fuel prices decrease, the margins we realize in our retail segment increase, in each case as a result of the delay with which retail prices respond to wholesale price changes. These trends are partially offset by the impact of changes in motor fuel prices on our prompt payment incentives in our wholesale segment, which are generally calculated as a percentage of the total purchase price of the motor fuel we distribute. To the extent that future motor fuel prices are significantly different from, or are significantly more volatile than, our expectations, our results of operations may be materially impacted.

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Seasonal Demand Patterns. Our business exhibits some seasonality due to increased demand for motor fuel during the late spring and summer months as compared to the fall and winter months. Travel, recreation and construction activities typically increase in the late spring and summer months in the geographic areas in which we operate, increasing the demand for motor fuel. Therefore, the volume of motor fuel that we distribute is typically somewhat higher in the second and third quarters of the year. In addition, the price of motor fuel can vary throughout the year and is typically higher in the late spring and summer months in accordance with the higher demand for fuel. While we believe our results of operations are generally insulated from changes in fuel prices, the seasonal variations in prices may vary, either positively or negatively, the magnitude of our prompt payment incentives as well as the margins realized at our consignment sites and company-operated sites.

Results of Operations

How We Evaluate Our Operations

Our management relies on financial and operational metrics designed to track the key elements that contribute to our operating performance. Key measures that we use to evaluate and assess our business include:

Volume of Motor Fuel Distributed. Volume of motor fuel distributed represents the gallons of motor fuel we distribute to all the sites in our distribution network. We use motor fuel volume, both in the aggregate and on a per site basis, to assess the effectiveness of our pricing strategies, the performance of a site as compared to other sites in our distribution network and the overall success of our acquisition growth strategy. Our goal is to consistently increase the volume of motor fuel that we distribute.

Gross Margin per Gallon. Gross margin per gallon reflects the gross profit on motor fuel divided by the number of gallons distributed. Under our fuel supply agreements, we typically receive a fixed margin, expressed in cents per gallon, in addition to the posted purchase price at the motor fuel supply terminal, plus transportation costs and taxes. Due to the large volume of motor fuel that we purchase, we also generally receive volume rebates and earn prompt payment incentives from major oil companies. Pursuant to the Empire Supply Agreement, we will receive a fixed margin of 5.0 cents per gallon, in addition to the cost of purchasing and delivering the motor fuel, for each gallon of motor fuel that we distribute to our consignment sites and company-

operated sites. In addition, through Empire Services, we will receive the retail selling price for each gallon of fuel sold to consumers at our consignment sites and company-operated sites, which will typically enhance the overall margin we receive on gallons distributed in our retail segment.

Adjusted EBITDA. Adjusted EBITDA represents net income before interest expense, income tax expense, and depreciation, amortization and accretion expenses, as further adjusted to exclude certain non-recurring items, such as the gain or loss on sale of assets, acquisition expenses and non-cash items.

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our operating performance as compared to other publicly traded limited partnerships, without regard to financing methods;

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the ability of our business to generate sufficient cash to support our decision to make distributions to our unitholders;

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our ability to incur and service debt and fund capital expenditures; and

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the viability of acquisitions and the returns on investment of various investment opportunities.

We believe that the presentation of Adjusted EBITDA in this prospectus provides information useful to investors in assessing our financial condition and results of operations. Adjusted EBITDA is not calculated or presented in accordance with GAAP. The GAAP measure most directly comparable to Adjusted EBITDA is net income. Adjusted EBITDA should not be considered as an alternative to GAAP net income; it has important limitations as an analytical tool because it excludes some, but not all, items that affect net income. You should not consider Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA may be defined differently by other companies in our industry, our definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. For a reconciliation of Adjusted EBITDA to net income, its most directly comparable financial measure calculated and presented in accordance with GAAP, please read “Summary—Summary Historical And Pro Forma Financial and Operating Data—Non-GAAP Financial Measures.”

Items Impacting the Comparability of Our Financial Results

For the reasons described below, our future results of operations may not be comparable to the historical results of operations for the periods presented below for Empire Petroleum Partners.

Acquisitions. Since 2011, we have pursued an acquisition growth strategy and have successfully completed 12 acquisitions, increasing our annual volume of distributed motor fuel at a compound annual growth rate of 77% from 165 million gallons in 2011 to 919 million gallons in 2014, pro forma for the Recent Acquisitions. Our significant historical acquisition activity, as well as our expected future acquisition activity, impacts the period to period comparability of our results of operations. Since January 1, 2015 we have completed the following transactions:

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Atlas Acquisition. On January 12, 2015, we acquired fuel supply agreements and related assets and 18 sites from Atlas for total consideration of $81.6 million. The assets acquired from Atlas are concentrated in the Great Lakes region of the United States and added approximately 211 million annual gallons to our motor fuel distribution network. Please read “Business—Recent Acquisitions—Acquisition of Atlas Assets.” On March 31, 2015, we purchased an additional six sites from Atlas for approximately $3.6 million in cash.

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Besche Option Exercise. On March 20, 2015, we exercised a purchase option associated with our previous acquisition of certain assets from The Besche Oil Company, Inc. Pursuant to our purchase option, we acquired the real estate and related leases associated with eight consignment sites in exchange for approximately $3.7 million in cash, including closing costs.

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Raceway Acquisition. In March 2015, we acquired six sites from RaceTrac of Georgia, Inc. for $7.2 million in cash, including fees, transaction costs and working capital. The acquired properties are all consignment sites.

Publicly Traded Partnership Expenses. Following this offering, our general and administrative expenses will include certain costs and expenses resulting from becoming a publicly traded partnership. These general and administrative expenses will include legal and accounting costs, as well as other costs associated with being a public company, such as expenses associated with our SEC reporting requirements, tax return and Schedule K-1 preparation and distribution expenses, expenses associated with listing on the NYSE, fees of our independent registered public accounting firm, legal fees, investor relations expenses, transfer agent and registrar fees, director and officer liability insurance expenses and director compensation. We currently expect these costs to be approximately $2.0 million annually. Our financial statements following this offering will reflect the impact of these costs and expenses, which will affect the comparability of our financial statements with periods prior to the closing of this offering. In addition, following this offering, the advisory services fee historically paid by Empire to American Infrastructure MLP Management, L.L.C., an affiliate of AIM, will be terminated.

Empire Supply Agreement. Following this offering, we will sell motor fuel directly to consumers at our consignment sites and company-operated sites through Empire Services. Pursuant to the Empire Supply Agreement we will distribute, on a wholesale basis, all of the motor fuel required by Empire Services for direct sale to consumers at our consignment sites and company-operated sites. We will earn a fixed margin of 5.0 cents per gallon for motor fuel distributed to Empire Services and Empire Services will earn the retail margin on motor fuel sales. While the Empire Supply Agreement will have no impact on the comparability of our consolidated financial results, it will result in a reallocation of a portion of our gross profit from our retail segment to our wholesale segment, and thus will impact the comparability of our future segment results to our historical segment results.

Consolidated Results of Operations—Year ended December 31, 2014 compared to the year ended December 31, 2013

The following table sets forth our results of operations for the periods indicated.


	Year Ended December 31, 2014			Year Ended December 31, 2013		Increase (Decrease)			% Increase (Decrease)
	(in thousands, except percentages)
Consolidated Statement of Operations Data:
Volume distributed:
Motor fuel distributed (gallons)		548,388			413,563		134,825			32.6	%
Revenue:
Motor fuel sales	$	1,466,605		$	1,210,188	$	256,417			21.2	%
Merchandise sales		25,871			22,909		2,962			12.9	%
Rental income and other		6,120			8,063		(1,943	)		(24.1	)%

Total revenue		1,498,596			1,241,160		257,436			20.7	%
Cost of sales (excluding depreciation, amortization and accretion expenses):
Motor fuel sales		1,422,017			1,174,859		247,158			21.0	%
Merchandise sales		18,855			16,238		2,617			16.1	%
Rental income and other		6,775			7,420		(645	)		(8.7	)%

Total cost of sales (excluding depreciation, amortization and accretion expenses)		1,447,647			1,198,517		249,130			20.8	%
Gross profit (excluding depreciation, amortization and accretion expenses):
Motor fuel sales		44,588			35,329		9,259			26.2	%
Merchandise sales		7,016			6,671		345			5.2	%
Rental income and other		(655	)		643		(1,298	)		—

Total gross profit (excluding depreciation, amortization and accretion expenses)		50,949			42,643		8,306			19.5	%


	Year Ended December 31, 2014			Year Ended December 31, 2013			Increase (Decrease)			% Increase (Decrease)
	(in thousands, except percentages)
Operating expenses:
Selling, general and administrative expenses		30,057			28,874			1,183			4.1	%
Depreciation, amortization and accretion expenses		13,526			8,445			5,081			60.2	%
Acquisition expenses		2,586			809			1,777			219.7	%
(Gain) on sale of assets		(860	)		(158	)		(702	)		—

Total operating expenses		45,309			37,970			7,339			19.3	%

Operating income		5,640			4,673			967			20.7	%
Interest expense, net		3,607			2,752			855			31.1	%

Income from continuing operations before income taxes		2,033			1,921			112			5.8	%
Provision for income taxes		141			159			(18	)		(11.3	)%

Income from continuing operations		1,892			1,762			130			7.4	%
Income from discontinued operations		—			5,263			(5,263	)		—

Net income	$	1,892		$	7,025		$	(5,133	)		(73.1	)%

Revenue and Gross Profit from Motor Fuel Sales

Our revenue and gross profit from motor fuel sales are principally derived from the purchase and sale of motor fuel. Changes in revenue and gross profit from motor fuel sales are driven by the volume of motor fuel distributed and market prices for motor fuel, which are generally passed through to dealers.

Our revenue from motor fuel sales was $1,466.6 million for the year ended December 31, 2014, an increase of $256.4 million, or 21.2%, as compared to $1,210.2 million for the year ended December 31, 2013. The increase in revenue from motor fuel sales resulted from a net increase in volume of motor fuel distributed, partially offset by a lower average selling price per gallon for the year ended December 31, 2014. The volume of motor fuel distributed during the year ended December 31, 2014 was 548.4 million gallons, an increase of 134.8 million gallons, or 32.6%, compared to 413.6 million gallons of motor fuel distributed during the year ended December 31, 2013. The increase in volume of motor fuel distributed was primarily due to volumes attributable to acquisitions consummated during the year ended December 31, 2014 and a full year of operations associated with the acquisition consummated during the year ended December 31, 2013. For the year ended December 31, 2014, the average selling price per gallon was $2.67, a decrease of 26.0 cents, or 8.9%, compared to the average selling price of $2.93 for the year ended December 31, 2013.

Our gross profit from motor fuel sales was $44.6 million for the year ended December 31, 2014, an increase of $9.3 million, or 26.2%, as compared to $35.3 million in the year ended December 31, 2013. The increase in gross profit was principally driven by an increase in the volume of motor fuel distributed, partially offset by a lower average gross margin of 8.1 cents per gallon for the year ended December 31, 2014 as compared to the average gross margin of 8.5 cents per gallon for the year ended December 31, 2013.

Revenue and Gross Profit from Sales of Convenience Store Merchandise and Rental Income and Other

Our revenue from sales of convenience store merchandise and rental income and other is principally derived from our sales of convenience store merchandise and other ancillary products and services at company-operated sites and rental income received from dealers and consignment agents to whom we lease or sublease our owned or leased sites. Changes in revenue are generally attributable to changes in consumer preferences for convenience store merchandise and fluctuations in market rates for site leases and subleases.

Our revenue from convenience store merchandise sales was $25.9 million for the year ended December 31, 2014, an increase of $3.0 million, or 12.9%, as compared to $22.9 million for the year ended December 31, 2013. The increase in revenue from convenience store merchandise sales was primarily related to increased consumer traffic at our company-operated sites and the conversion of two consignment sites to company-operated sites.

Our gross profit from convenience store merchandise sales was $7.0 million for the year ended December 31, 2014, an increase of $0.3 million, or 5.2%, as compared to $6.7 million for the year ended December 31, 2013. The increase in gross profit was principally driven by an increase in merchandise sales, partially offset by a lower merchandise margin of 27.1% for the year ended December 31, 2014 as compared to the merchandise margin of 29.1% for the year ended December 31, 2013.

Our revenue from rental income and other was $6.1 million for the year ended December 31, 2014, a decrease of $1.9 million, or 24.1%, as compared to $8.1 million for the year ended December 31, 2013. The decrease was primarily due to the sale of 19 leased sites during the year ended December 31, 2013. We continue to supply motor fuel to these sites, and their sale enabled us to reduce outstanding borrowings.

Our gross profit from rental income and other was a loss of $0.7 million for the year ended December 31, 2014, a decrease of $1.3 million, as compared to gross profit of $0.6 million for the year ended December 31, 2013. The decrease in gross profit from rental income and other was principally driven by the termination of certain leases during 2013 totaling approximately $0.9 million and property tax increases of approximately $0.4 million on certain of the sites that we own or lease.

Operating Expenses

Operating expenses increased $7.3 million, or 19.3%, to $45.3 million for the year ended December 31, 2014 from $38.0 million for the year ended December 31, 2013. Operating expenses consist of selling, general and administrative expenses, depreciation, amortization and accretion expenses, acquisition expenses and net gain on sale of assets. The $7.3 million increase in our operating expenses for the year ended December 31, 2014 related primarily to increases in depreciation, amortization and accretion expenses and acquisition expenses, partially offset by the increase in gain on sale of assets.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the year ended December 31, 2014 were $30.1 million compared to $28.9 million for the year ended December 31, 2013. The increase of $1.2 million, or 4.1%, was primarily due to $0.9 million in increased payroll expenses relating to the acquisitions consummated during the year ended December 31, 2014 as well as incremental non-recurring and recurring expenses related to preparation for our initial public offering and becoming a publicly traded partnership.

Depreciation, Amortization and Accretion Expenses

Depreciation, amortization and accretion expenses for the year ended December 31, 2014 were $13.5 million compared to $8.5 million for the year ended December 31, 2013. The increase of $5.1 million, or 60.2%, was primarily due to the depreciation, amortization and accretion expenses attributable to acquisitions completed during the year ended December 31, 2014.

Acquisition Expenses

Acquisition expenses consist of legal and accounting due diligence expenses, real estate appraisal and survey expenses, broker-dealer fees and environmental studies. Acquisition expenses for the year ended December 31, 2014 were $2.6 million as compared to $0.8 million for the year ended December 31, 2013. The increase of $1.8 million was primarily due to the successful completion of four acquisitions during the year ended December 31, 2014 as compared to the successful completion of one acquisition during the year ended December 31, 2013.

Gain on Sale of Assets

Gain on sale of assets was $0.9 million for the year ended December 31, 2014 compared to $0.2 million for the year ended December 31, 2013, excluding our $5.3 million gain on the sale of 19 leased sites during the year ended December 31, 2013. Please read “Note 17—Discontinued Operations” in the audited historical consolidated financial statements included elsewhere in this prospectus.

Interest Expense

Interest expense was $3.6 million for the year ended December 31, 2014 compared to $2.8 million, which excludes $0.7 million of interest expense reflected in our discontinued operations for the year ended December 31, 2013. This increase was primarily attributable to a higher average drawn balance on our revolving credit facility during the year ended December 31, 2014, as compared to the year ended December 31, 2013, related to acquisitions consummated during the year ended December 31, 2014. Interest expense associated with this higher average drawn balance on our revolving credit facility was partially offset by the favorable impact of nonrecurring deferred financing costs accelerated during the year ended December 31, 2013 due to the replacement of our previous credit facility and the termination of an interest rate swap which increased our effective interest rate prior to its termination in October 2013.

Income from Discontinued Operations

No income from discontinued operations was reported for the year ended December 31, 2014, while $5.3 million was reported for the year ended December 31, 2013. The amount reported for the year ended December 31, 2013 related to the gain on the sale of 19 leased sites during the year ended December 31, 2013 and the related results of operations of the leased sites for the period prior to disposal. Please read “Note 17—Discontinued Operations” in the audited historical consolidated financial statements included elsewhere in this prospectus.

Segment Results of Operations—Year ended December 31, 2014 compared to the year ended December 31, 2013

The following table sets forth our results of operations for our wholesale and retail segments, as well as unallocated amounts associated with our corporate function, for the periods indicated.


	Year Ended December 31, 2014			Year Ended December 31, 2013			Increase (decrease)			% Increase (decrease)
	(in thousands, except percentages)
Revenue:
Wholesale	$	1,211,724		$	953,910		$	257,814			27.0	%
Retail		286,872			287,250			(378	)		(0.1	)%

Total Revenue		1,498,596			1,241,160			257,436			20.7	%
Gross profit (excluding depreciation, amortization and accretion expenses):
Wholesale		24,749			20,867			3,882			18.6	%
Retail		26,200			21,776			4,424			20.3	%

Total gross profit (excluding depreciation, amortization and accretion expenses)	$	50,949		$	42,643		$	8,306			19.5	%
Income (loss) from continuing operations:
Wholesale		7,110			11,155			(4,045	)		(36.3	)%
Retail		9,125			4,649			4,476			96.2	%
Corporate		(14,343	)		(14,042	)		(301	)		—

Total	$	1,892		$	1,762		$	130			7.4	%

Wholesale Segment

The following table sets forth our results of operations for our wholesale segment for the periods indicated.


	Year Ended December 31, 2014			Year Ended December 31, 2013		Increase (Decrease)			% Increase (Decrease)
	(in thousands, except percentages)
Wholesale segment:
Volume distributed:
Motor fuel distributed (gallons)		453,426			325,733		127,693			39.2	%
Revenue:
Motor fuel sales	$	1,205,579		$	945,996	$	259,583			27.4	%
Rental income and other		6,145			7,914		(1,769	)		(22.3	)%

Total revenue		1,211,724			953,910		257,814			27.0	%
Cost of sales (excluding depreciation, amortization and accretion expenses):
Motor fuel sales		1,182,381			927,971		254,410			27.4	%
Rental income and other		4,594			5,072		(478	)		(9.4	)%

Total cost of sales (excluding depreciation, amortization and accretion expenses)		1,186,975			933,043		253,932			27.2	%
Gross profit (excluding depreciation, amortization and accretion expenses):
Motor fuel sales		23,198			18,025		5,173			28.7	%
Rental income and other		1,551			2,842		(1,291	)		(45.4	)%

Total gross profit (excluding depreciation, amortization and accretion expenses)		24,749			20,867		3,882			18.6	%
Operating expenses:
Selling, general and administrative expenses		2,743			2,130		613			28.8	%
Depreciation, amortization and accretion expenses		10,683			5,537		5,146			92.9	%
Acquisition expenses		2,014			411		1,603			390.0	%
Gain on sale of assets		(23	)		—

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Empire Petroleum Partners, LP S-1