ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS

Year Ended December 31,

2012 2011 2010

(In thousands, except per share data)

Revenues .................................................. $3,380,964 $3,044,988 $2,083,781

Net earnings ................................................ 27,791 22,931 8,631

Cash ...................................................... 47,239 37,066 29,032

Working capital ............................................. 58,474 48,871 39,978

Total assets ................................................ 419,501 378,840 301,305

Long-term debt ............................................ .———

Earnings per common share ................................... $ 6.59 $ 5.44 $ 2.05

Dividends per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .62 $ .57 $ .54

ABOUT THE COMPANY

Adams Resources & Energy, Inc. is engaged in

the business of marketing crude oil and natural gas;

tank and truck transportation of liquid chemicals; and

oil and gas exploration and production.

CONTENTS

Financial Highlights ...................... 1

Letter to Shareholders ..................... 2

Operations Summary ...................... 5

Selected Financial Data .................... 7

Management’s Discussion and Analysis ....... 8

Consolidated Financial Statements . . . . . . . . . . . 14

Notes to Financial Statements . . . . . . . . . . . . . . . 18

Report of Independent Registered Public

Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . 38

Corporate Information . . . . . . . . . . . . . . . . . . . . . 39

Executive Officers and Directors . . . . . . . . . . . . 41
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

LETTER TO SHAREHOLDERS

To our Fellow Shareholders:

Net earnings for 2012 totaled $27,791,000 or $6.59 per share on revenues of $3,380,964,000. This compared

to earnings of $22,931,000 for 2011. Cash flow remained strong in 2012 with net cash provided by operating

activities totaling $54,494,000 in 2012 following $55,815,000 in 2011. We continue to operate without bank debt

or other forms of debenture obligations and cash balances at December 31, 2012 stood at $47,239,000. We also

increased our annual cash dividend by 8.8% to $.62 per common share.

Summary of Results

2012 2011 2010

Operating earnings (loss):

Marketing .............................. $ 47,166,000 $ 51,384,000 $16,603,000

Transportation ........................... 10,253,000 8,521,000 6,623,000

Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,601,000) (13,871,000) (1,757,000)

Administrative expenses ................... (9,769,000) (9,713,000) (9,044,000)

44,049,000 36,321,000 12,425,000

Other income (expense):

Interest income .......................... 190,000 237,000 191,000

Interest expense ......................... (10,000) (8,000) (36,000)

Earnings before income taxes ................. 44,229,000 36,550,000 12,580,000

Income tax (provision) ...................... (16,697,000) (13,107,000) (4,028,000)

Discontinued operations, net of taxes ........... 259,000 (512,000) 79,000

Net earnings .............................. $ 27,791,000 $ 22,931,000 $ 8,631,000

In our 2011 Annual Report, we set the following major objectives for 2012:

— Maintain marketing operating earnings at the $28 million level exclusive of inventory valuation gains or

losses.

— Maintain transportation operating earnings at the $6 million level excluding gains from the sale of used

equipment.

— Return oil and gas operating activities to the $2 million level and replace 2012 production with current

reserve additions.

For our marketing and transportation businesses, we exceeded our operational goals for the year 2012 aided

by continued strong demand for our services. Within the oil and gas operation, losses resulted when persistent

low natural gas prices led to a $5.5 million non-cash valuation charge against capitalized property costs. We did,

however, replace 101 percent of our 2012 oil and natural gas production on an equivalent barrel basis.

Marketing

Marketing segment earnings benefited from volume gains and sustained unit margins when crude oil supply

costs lagged end market pricing. Driving this trend is new production by a number of our suppliers in the Eagle

Ford shale formation of South Texas. Our ability to capture these gains was enhanced by our Texas Gulf Coast

storage and barge loading facilities.

Transportation

Customer demand for our petrochemical delivery services remained strong in 2012 improving both revenues

and operating earnings. Contributing to this situation was low natural gas prices that benefit our customer base

through reduced feedstock costs. Trucking industry capacity constraints also bolstered earnings by allowing rate

increases as customers competed for service.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

LETTER TO SHAREHOLDERS — (Continued)

Oil and Gas

With $5.8 million in exploration expense and property impairment charges, oil and gas operations sustained

a $3,601,000 loss in 2012. During 2012, we participated in the drilling of 109 wells with no dry holes.

Additionally, 34 wells were in process on December 31, 2012 with ultimate evaluation anticipated during 2013.

Converting natural gas volumes to equate with crude oil volumes at a ratio of six to one, production volumes and

proved reserve changes summarize as follows, on an equivalent barrel (Eq. Bbls) basis:

2012 2011 2010

(Eq. Bbls.) (Eq. Bbls.) (Eq. Bbls.)

Proved reserves — beginning of year .................... 1,907,000 1,566,000 1,450,000

Estimated reserve additions ....................... 537,000 1,209,000 536,000

Production volumes ............................. (533,000) (377,000) (282,000)

Producing properties sold ......................... (71,000) (385,000) —

Revisions of previous estimates .................... (61,000) (106,000) (138,000)

Proved reserves — end of year ......................... 1,779,000 1,907,000 1,566,000

Given the present low natural gas price environment, exploration and development activity during 2013 will

be substantially reduced. The Company’s current drilling and exploration efforts are primarily focused as

follows:

East Texas Project

In 2005, the Company joined with its partners in acquiring acreage in Nacogdoches and Shelby

Counties, Texas. This was subsequently expanded to include acreage in Angelina County, due south of

Nacogdoches County. This investment holds potential for development in the Haynesville/Bossier shale

formations. A total of 97 wells have been drilled with 94 wells placed on production as of December 31,

2012. The Company’s interest in this project varies with an average 2.7 percent ownership in the properties

and wells. Production is dry gas and due to low prices only those wells required to hold acreage by

production will be drilled. The Company’s interest covers 154,000 gross acres. Approximately 64,000 is

being held by production, another 65,000 acres is held by the production from non-owned shallow wells.

The remaining acreage is either undeveloped or being held by contracts that delay termination of lease

rights.

West Texas Project

In 2008 the Company participated with an approximate 7.5% working interest in the acquisition of

49,015 gross acres located in Irion and Crockett Counties, Texas for the purpose of developing the

Wolfcamp Shale. In 2011 the Company sold a portion of its interest in anticipation of an aggressive

horizontal drilling program on the acreage. A total of 135 wells have been drilled through December 31,

2012 with 102 wells on production and 33 wells being completed. Drilling is expected to continue but at a

reduced rate in 2013 with 37 wells scheduled for drilling. Production from the Wolfcamp in this area is oilrich with large amounts of gas and natural gas liquids.

South Texas Project

The goal of this investment is to extend the productive area of the Eagle Ford trend north in Fayette and

Lavaca Counties, Texas. The first core well was productive with petrochemical data showing the project is

on the gas-condensate window. Plans call for up to four additional horizontal wells being initiated during

2013. The Company holds a five percent working interest in this project which includes approximately

38,000 acres currently under lease.

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ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

LETTER TO SHAREHOLDERS — (Continued)

Outlook

The short-term outlook indicates continued volume growth and relative margin strength within our crude oil

marketing operation. However, industry competitors and Company suppliers are aware of the present market

opportunity and seek to capture such advantage which would reduce unit margins. Transportation operations

continue to experience strong demand, in part due to low natural gas prices. The oil and gas segment should

experience improved results for 2013 with stabilized prices and production from new well additions while

depreciation, depletion and impairment charges reduce with less activity planned for 2013.

The Company has the following major objectives for 2013:

— Maintain marketing operating earnings at the $35 million level exclusive of inventory valuation gains or

losses.

— Maintain transportation operating earnings at the $7 million level.

— Restore oil and gas operating earnings to the $2 million level.

Sincerely,

F. T. Webster

President, Chief Executive Officer and

Chief Operating Officer

March 15, 2013

4
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

OPERATIONS SUMMARY

Business Activities

Adams Resources & Energy, Inc. (“ARE”), a Delaware corporation organized in 1973, and its subsidiaries

(collectively, the “Company”), are engaged in the business of marketing crude oil and natural gas, as well as tank

truck transportation of liquid chemicals, and oil and gas exploration and production.

Crude Oil and Natural Gas Marketing

Gulfmark Energy, Inc. (“Gulfmark”), a subsidiary of ARE, purchases crude oil and arranges sales and

deliveries to refiners and other customers. Activity is concentrated primarily onshore in Texas and Louisiana

with additional operations in Michigan and North Dakota. Gulfmark operates 176 tractor-trailer rigs and

maintains over 55 pipeline inventory locations or injection stations. Gulfmark has the ability to barge oil from

three oil storage facilities along the intercoastal waterway of Texas and Louisiana and maintains 230,000 barrels

of storage capacity at the dock facilities in order to access waterborne markets for its products. Gulfmark delivers

physical supplies to refiner customers or enters into exchange transactions with third parties when the cost of the

exchange is less than the alternate cost incurred in transporting or storing the crude oil.

Adams Resources Marketing, Ltd. (“ARM”), a subsidiary of ARE, operates as a wholesale purchaser,

distributor and marketer of natural gas. ARM’s focus is on the purchase of natural gas at the producer level.

ARM’s business is concentrated among approximately fifty independent producers with the primary production

areas being the Louisiana and Texas Gulf Coast and the offshore Gulf of Mexico region. ARM provides value

added services to its customers by providing access to common carrier pipelines while handling daily volume

balancing requirements and risk management services.

Tank Truck Transportation

Service Transport Company (“STC”), a subsidiary of ARE, transports liquid chemicals on a “for hire” basis

throughout the continental United States and Canada. Transportation service is provided to over 400 customers

under multiple load contracts in addition to loads covered under STC’s standard price list. Pursuant to regulatory

requirements, STC holds a Hazardous Materials Certificate of Registration issued by the United States

Department of Transportation (“DOT”). STC operates 300 truck tractors of which 15 are independent owneroperator units and owns 462 tank trailers. In addition, STC operates truck terminals in Houston, Corpus Christi,

and Nederland, Texas as well as Baton Rouge (St. Gabriel), Louisiana and Mobile (Saraland), Alabama.

Transportation operations are headquartered at a terminal facility situated on 22 Company-owned acres in

Houston, Texas. This property includes maintenance facilities, an office building, tank wash rack facilities and a

water treatment system. The St. Gabriel, Louisiana terminal is situated on 11.5 Company-owned acres and

includes an office building, maintenance bays and tank cleaning facilities.

Oil and Gas Exploration and Production

Adams Resources Exploration Corporation (“AREC”), a subsidiary of ARE, is actively engaged in the

exploration and development of domestic oil and natural gas properties primarily in Texas and the south central

region of the United States. AREC’s offices are maintained in Houston and the Company holds an interest in 484

wells of which 38 are Company operated.

5
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

OPERATIONS SUMMARY

Producing Wells and Acreage — The following table sets forth the Company’s gross and net productive

wells and acreage as of December 31, 2012. Gross wells and acreage are the total number of wells or acreage in

which the Company has an interest, while net wells and gross acreage are the sum of the fractional interests

owned.

Total Wells Developed Acreage Undeveloped Acreage

Gross Net Gross Net Gross Net

Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . 345 22.36 130,541 10,908 200,232 16,436

Kansas . . . . . . . . . . . . . . . . . . . . . . . . . . — — 150 8 17,772 888

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 8.97 8,281 1,086 1,701 674

484 31.33 138,972 12,002 219,705 17,998

Drilling Activity — The following table sets forth the Company’s drilling activity for each of the three years

ended December 31, 2012. All drilling activity was onshore in Texas, Louisiana, Arkansas and Kansas.

2012 2011 2010

Gross Net Gross Net Gross Net

Exploratory wells drilled

— Productive ........................... — — — — — —

— Dry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 8 .87 12 .67

Development wells drilled

— Productive . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 2.40 75 2.10 41 1.77

— Dry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 3 .18 — —

109 2.40 86 3.15 53 2.44

Employees

At December 31, 2012, the Company employed 925 persons, 15 of whom were employed in the exploration

and production of oil and gas, 441 in the marketing of crude oil and natural gas and, 448 in transportation

operations, and 21 in administrative capacities. None of the Company’s employees are represented by a union.

Management believes its employee relations are satisfactory.

6
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

SELECTED FINANCIAL DATA

Years Ended December 31,

2012 2011 2010 2009 2008

(In thousands, except per share data)

Revenues:

Marketing ......................... $3,297,827 $2,967,427 $2,015,893 $1,784,832 $3,861,117

Transportation ...................... 67,183 63,501 56,867 44,895 67,747

Oil and natural gas ................... 15,954 14,060 11,021 8,650 17,248

$3,380,964 $3,044,988 $2,083,781 $1,838,377 $3,946,112

Operating earnings (loss):

Marketing ......................... $ 47,166 $ 51,384 $ 16,603 $ 18,153 $ (2,298)

Transportation ...................... 10,253 8,521 6,623 2,128 4,245

Oil and gas operations ................ (5,804) (16,794) (1,757) (3,625) (3,348)

Oil and gas property sale .............. 2,203 2,923———

General and administrative ............ (9,769) (9,713) (9,044) (9,589) (9,667)

44,049 36,321 12,425 7,067 (11,068)

Other income (expense):

Interest income . . . . . . . . . . . . . . . . . . . . . 190 237 191 125 1,103

Interest expense ..................... (10) (8) (36) (25) (187)

Earnings (loss) from continuing operations

before income taxes .................. 44,229 36,550 12,580 7,167 (10,152)

Income tax (provision) benefit ........... (16,697) (13,107) (4,028) (2,585) 4,844

Earnings (loss) from continuing

operations ....................... 27,532 23,443 8,552 4,582 (5,308)

Earnings (loss) from discontinued

operations, net of taxes . . . . . . . . . . . . . . . 259 (512) 79 (433) (264)

Net earnings (loss) ..................... $ 27,791 $ 22,931 $ 8,631 $ 4,149 $ (5,572)

Earnings (Loss) Per Share

From continuing operations ......... 6.53 5.56 2.03 1.08 (1.26)

From discontinued operations . . . . . . . . .06 (.12) .02 (.10) (.06)

Basic and diluted earnings (loss) per

share ............................. $ 6.59 $ 5.44 $ 2.05 $ .98 $ (1.32)

Dividends per common share . . . . . . . . . . . $ .62 $ .57 $ .54 $ .50 $ .50

Financial Position

Cash .............................. $ 47,239 $ 37,066 $ 29,032 $ 16,806 $ 18,208

Net working capital .................. 58,474 48,871 39,978 38,372 41,559

Total assets ........................ 419,501 378,840 301,305 249,401 210,926

Long-term debt .................... .—————

Shareholders’ equity ................. 135,858 110,682 90,155 83,801 81,761

Dividends on common shares .......... 2,615 2,404 2,277 2,109 2,109

Notes:

– In 2012 and 2011, certain oil and natural gas producing properties were sold for $3.6 million and $6.6 million producing net gains of $2.2

million and $2.9 million, respectively.

– The 2012 and 2011 oil and gas operating losses primarily resulted from property impairments totaling $4.7 million and $14.8 million,

respectively, recorded as a result of declining natural gas prices.

7
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Results of Operations

— Marketing

Marketing revenues, operating earnings, depreciation and certain costs are as follows (in thousands):

2012 2011 2010

Revenues

Crude oil ..................................... $3,292,948 $2,961,176 $2,005,301

Natural gas .................................... 4,879 6,251 10,592

Total ...................................... $3,297,827 $2,967,427 $2,015,893

Operating Earnings (loss)

Crude oil ..................................... $ 46,145 $ 49,237 $ 13,530

Natural gas .................................... 1,021 2,147 3,073

Total ...................................... $ 47,166 $ 51,384 $ 16,603

Depreciation

Crude oil ..................................... $ 5,945 $ 3,724 $ 2,320

Natural gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 3 44

Total ...................................... $ 5,976 $ 3,727 $ 2,364

Fleet diesel fuel costs ............................. $ 11,617 $ 9,982 $ 6,001

Supplemental volume and price information is:

2012 2011 2010

Field Level Purchases per day (1)

Crude Oil — barrels ................................. 89,200 81,600 69,000

Natural Gas — mmbtu’s ............................. 123,000 208,000 258,000

Average Purchase Price

Crude Oil — per barrel ............................... $ 99.66 $ 96.77 $ 77.20

Natural Gas — per mmbtu ............................ $ 2.58 $ 3.93 $ 4.28

(1) Reflects the volume purchased from third parties at the oil and natural gas field level and pipeline pooling points.

Crude oil revenues increased in 2012 relative to 2011 and in 2011 relative to 2010 because of increased field

level purchase volumes and generally higher average crude oil prices as shown in the table above. Volume

increases primarily resulted from new well production established by the Company’s customer base in the Eagle

Ford shale trend of South Texas beginning in 2011, while prices fluctuated upwards with general market

conditions.

— Crude Oil – Field Level Operating Earnings (Non GAAP Measure)

Two significant factors affecting comparative crude oil segment operating earnings are inventory valuations

and forward commodity contract (derivatives or mark-to-market) valuations. As a purchaser and shipper of crude

oil, the Company holds inventory in storage tanks and third-party pipelines. Inventory sales turnover occurs

approximately every three days, but the quantity held in stock at the end of a given period is reasonably

consistent. As a result, during periods of increasing crude oil prices, the Company recognizes inventory

8
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS — (Continued)

liquidation gains while during periods of falling prices, the Company recognizes inventory liquidation and

valuation losses. Over time, these gains and losses tend to offset and have limited impact on cash flow. While

crude oil prices fluctuated during 2012, the net impact yielded inventory liquidation losses totaling $1,596,000 as

prices trended down from $98 per barrel in the beginning of the year to average $95 per barrel at year-end. In

contrast, crude oil prices were as generally rising during 2011 and 2010 producing inventory valuation gains of

$3,021,000 and $2,272,000, respectively. As of December 31, 2012, the Company held 245,623 barrels of crude

oil inventory at an average price of $95.35 per barrel.

Crude oil marketing operating earnings are also affected by the valuations of the Company’s forward month

commodity contracts (derivative instruments) as of the various report dates. Such non-cash valuations are

calculated and recorded at each period end based on the underlying data existing as of such date. The Company

generally enters into these derivative contracts as part of a pricing strategy based on crude oil purchases at the

wellhead (field level). Only those contracts qualifying as derivative instruments are accorded fair value treatment

while the companion contracts to purchase crude oil at the wellhead (field level) are not accorded fair value

treatment. The valuation of derivative instruments at period end requires the recognition of “mark-to-market”

gains and losses. The impact on crude oil segment operating earnings of inventory liquidations and derivative

valuations is summarized as follows (in thousands):

2012 2011 2010

As reported segment operating earnings ...................... $46,145 $49,237 $13,530

Add (less) —

Inventory liquidation (gains) losses .......................... 1,596 (3,021) (2,272)

Derivative valuation (gains) losses .......................... 2,001 149 (1,049)

Field level operating earnings(1) ............................. $49,742 $46,365 $10,209

(1) Such designation is unique to the Company and is not comparable to any similar measures developed by industry participants.

Field level operating earnings and field level purchase volumes (see earlier table) depict the Company’s

day-to-day operation of acquiring crude oil at the wellhead, transporting the material, and delivering it to market

at the sales point. Comparative crude oil field level operating earnings increased in 2012 relative to 2011 and in

2011 relative to 2010 with the noted volume additions and overall improved unit margins for the comparative

periods. Unit margins first began to widen during the third quarter of 2011 when South Texas sourced production

started selling at a discount to world crude oil prices due to its relative abundance in relation to the infrastructure

available to deliver such oil to market. The initial burst in unit margins was most prevalent during the third

quarter of 2011 with favorable unit margins continuing into 2012, although they diminished as competition and

additional industry infrastructure development progressed in the region.

— Natural Gas Marketing

Natural gas sales are reported net of underlying natural gas purchase costs and thus reflect gross margin. As

shown in the table above, gross margins were reduced during 2011 and again in 2012 as average field level

purchase volumes were off over 50 percent during the periods presented. The Company’s primary source of

natural gas supply is the non-shale areas of Texas, Louisiana and the Gulf of Mexico and these volumes declined

because the Company’s suppliers curtailed drilling activity due to suppressed natural gas prices. In addition,

development of the nation’s natural gas infrastructure including more diverse areas of production, expanded

pipeline and storage capacity, and increased price transparency with the development of the Intercontinental

Exchange (ICE) have reduced purchase opportunities and per unit margins.

9
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS — (Continued)

— Transportation

The transportation segment revenues and operating earnings were as follows (in thousands):

2012 2011 2010

Amount Change(1) Amount Change(1) Amount Change(1)

Revenues .................. $67,183 6% $63,501 12% $56,867 27%

Operating earnings .......... $10,253 20% $ 8,521 29% $ 6,623 211%

Depreciation ............... $ 5,921 51% $ 3,912 (9)% $ 4,288 8%

(1) Represents the percentage increase (decrease) from the prior year.

Revenues and operating results improved for the transportation segment in both 2012 and 2011 due to

increased customer demand. The Company also benefitted in 2012 and 2011 from $2.6 million and $1.2 million

in gains, respectively, from the sale of used equipment following the purchase of new truck replacements. The

Company’s customers predominately consist of the domestic petrochemical industry and demand for their

products has substantially recovered from the slow-down occurring in 2009. Serving to improve customer

demand was a recovering United States economy, low natural gas prices (a basic feedstock cost for the

petrochemical industry) and improved export demand for petrochemicals. In addition, during the previous

economic downturn, the trucking industry reduced capacity by retiring older units without replacement. With

demand improvement, industry capacity has been strained allowing rate increases and improved overall

profitability. However, an industry wide shortage of qualified drivers has affected the Company by suppressing

current year revenues and results of operations. As transportation revenues increase or decrease, operating

earnings will typically increase or decrease at an accelerated rate. This trend exists because the fixed cost

components of the Company’s operation do not vary with changing revenues. As currently configured, operating

earnings project at break-even levels when annual revenues average approximately $54 million. Above that level,

operating earnings will grow and below that level, losses result.

Transportation segment depreciation increased for 2012 as older fully depreciated tractor units were

replaced with new model year vehicles. During 2012, the Company replaced 125 truck tractors and one trailer.

During 2011 the Company replaced 115 older model truck- tractor units and added 10 new units to the fleet. In

addition, 25 trailers were added to the fleet during 2011. For 2011 relative to 2010, increased depreciation

expense on new tractor models was offset by certain in-service trailers becoming fully depreciated during the

period.

— Oil and Gas

Oil and gas segment revenues and operating earnings are primarily a function of crude oil and natural gas

production volumes and prices. Comparative amounts for revenues, operating earnings and depreciation and

depletion were as follows (in thousands):

2012 2011 2010

Amount Change(1) Amount Change(1) Amount Change(1)

Revenues ................. $15,954 13% $ 14,060 28% $11,021 27%

Operating earnings (loss)(2) . . . (3,601) (74)% (13,871) 689% (1,757) 51%

Depreciation and depletion . . . 8,817 7% 8,246 77% 4,662 28%

Producing property

impairments ............. 4,699 (34)% 7,105 651% 946 (30)%

(1) Represents the percentage increase (decrease) from the prior year.

(2) Includes gains from property sales of $2.2 million and $2.9 million in 2012 and 2011, respectively.

10
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS — (Continued)

Improved oil and gas segment revenues during 2012 and 2011 resulted from crude oil and natural gas

volumes increases as shown in the table below with such volume changes resulting from recent drilling efforts.

Active drilling, however, also served to increase depreciation and depletion expenses as well as property

impairment charges during 2012 and 2011. Operating earnings were markedly reduced in 2011 due to increased

charges for depreciation, depletion and producing property impairments as well as increased exploration and

prospect impairment expenses as shown in the second table below. Producing and non-producing property

impairments increased significantly in 2011 following a December 2011 decline in the current and forward price

for natural gas. Natural gas prices remained at relatively low levels during 2012 resulting in additional

impairment charges for the year.

Comparative volumes and prices were as follows:

2012 2011 2010

Production Volumes

— Crude oil ......................... 98,100 bbls 61,500 bbls 54,000 bbls

— Natural gas ....................... 2,608,000 mcf 1,895,000 Mcf 1,365,000 mcf

Average Price

— Crude oil(1) ........................ $84.39 bbls $93.23 bbls $77.09 bbls

— Natural gas ....................... $2.94 mcf $4.39 Mcf $5.02 mcf

(1) Crude oil prices and volumes include the sale of associated natural gas liquids production.

Comparative exploration and prospect impairment costs were as follows (in thousands):

2012 2011 2010

Dry hole expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 43 $1,212 $1,894

Prospect impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 856 7,644 1,277

Seismic and geological . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 310 62

Total ................................................... $1,151 $9,166 $3,233

— Oil and gas property sales

In August 2012, the Company sold to a third party fifty percent of its interest in certain Kansas oil and gas

properties. The properties contained one producing well with insignificant production history. The sale was

consummated to spur further development on the properties. Total proceeds from the sale were $578,000 and the

Company recorded a $475,000 pre-tax gain on sale. The Company will continue to participate in the

development of these Kansas properties. In October and December 2012, the Company sold, to third parties, its

interest in two separate oil and gas producing properties. One of the properties was located on-shore Texas with

the second property located in Federal waters offshore Louisiana. Proceeds from these two sales totaled

$3,049,000 and the Company recorded a $1,728,000 pre-tax gain. Both properties had depleted substantially

from their initial productive period, so the sales were consummated before the properties lost further value.

In January 2011, the Company completed the sale of its interest in certain producing oil and gas properties

located in the on-shore Gulf Coast region of Texas. Proceeds from the sale totaled $6.2 million and the pre-tax

gain from this transaction totaled $2,708,000. Sales negotiations were conducted by the third party operator of

the properties and the transaction was completed with a separate third party investment entity. The Company’s

proportionate interest in the transaction was approximately five percent and the Company elected to participate in

the sale due to attractive pricing. Also during the first quarter of 2011, the Company sold a portion of its interest

in certain non-producing oil and gas properties located in West Texas. Total proceeds from the sale were

$329,000 and the Company recorded a $125,000 gain from this transaction. Proceeds from the sales were used

for general working capital purposes and the Company is continuing with oil and gas exploration operations

11
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS — (Continued)

in the vicinity of the properties sold. In October 2011, the Company sold an interest in certain non-producing

properties for $90,000 in proceeds and gain.

— General and administrative, interest income and income tax

General and administrative expenses were generally consistent during the periods presented with elevated

costs in 2012 and 2011 due to employee bonuses, consistent with increased corporate earnings. Interest income

declined after 2008 as interest rates on overnight deposits dropped to near zero following the significant turmoil

that occurred in the financial markets during that period. The provision for income taxes is based on Federal and

State tax rates and variations are consistent with taxable income in the respective accounting periods.

Liquidity and Capital Resources

The Company’s liquidity primarily derives from net cash provided from operating activities, which was

$54,494,000, $55,815,000 and $36,928,000 for each of 2012, 2011 and 2010, respectively. As of December 31,

2012 and 2011, the Company had no bank debt or other forms of debenture obligations. Cash and cash

equivalents totaled $47,239,000 as of December 31, 2012, and such balances are maintained in order to meet the

timing of day-to-day cash needs. Working capital, the excess of current assets over current liabilities, totaled

$57,799,000 as of December 31, 2012. The Company heavily relies on its ability to obtain open-line trade credit

from its suppliers especially with respect to its crude oil marketing operation. In this regard, the Company

generally maintains substantial cash balances and avoids debt obligations.

Capital expenditures during 2012 included $27,929,000 for marketing and transportation equipment

additions, primarily consisting of truck-tractors, and $23,083,000 in property additions associated with oil and

gas exploration and production activities. For 2013, the Company anticipates expending an additional

approximately $12 million on oil and gas development and exploration projects. In addition, approximately $3

million will be expended during 2013 for the purchase of 35 trailers for the transportation segment and

approximately $15 million will be expended by the crude oil marketing operation for the purchase of 46 trucktractors, 60 trailers and the construction of a barge loading facility. These units will serve to replace older units

and to increase the marketing fleet by 30 units. Funding for these 2013 projects will be from operating cash flow

and available working capital. Within certain constraints, the proposed projects can be delayed or cancelled

should funding become unavailable.

At various times during each month, the Company makes cash prepayments and/or early payments in

advance of the normal due date to certain suppliers of crude oil within the marketing operations. Crude oil supply

prepayments totaled $5,000,000 as of December 31, 2012 and such amounts will be recouped and advanced from

month to month as the suppliers deliver product to the Company. The Company also requires certain

counterparties to post cash collateral with the Company in order to support their purchase from the Company.

Such cash collateral held by the Company totaled $7,456,000 as of December 31, 2012. The Company also

maintains a stand-by letter of credit facility with Wells Fargo Bank to provide for the issuance of up to $60

million in stand-by letters of credit to suppliers of crude oil and natural gas (see Note (1) to Consolidated

Financial Statements). The issuance of stand-by letters of credit enables the Company to avoid posting cash

collateral when procuring crude oil and natural gas supply. As of December 31, 2012, letters of credit

outstanding totaled $21.9 million. The issued stand-by letters of credit are cancelled as the underlying purchase

obligations are satisfied by cash payment when due. Management believes current cash balances, together with

expected cash generated from future operations, and the ease of financing truck and trailer additions through

leasing arrangements (should the need arise) will be sufficient to meet short-term and long-term liquidity needs.

The Company utilizes cash from operations to make discretionary investments in its marketing,

transportation and exploration businesses, which comprise substantially all of the Company’s investing cash

outflows for each of the periods in this filing. The Company does not look to proceeds from property sales to

fund its cash flow needs. Except for an approximate $9.9 million commitment for storage tank terminal

arrangements and office lease space, the Company’s future commitments and planned investments can be readily

curtailed if operating cash flows contract.

12
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS — (Continued)

Historically, the Company pays an annual dividend in the fourth quarter of each year, and the Company paid

a $.62 per common share dividend or $2,615,000 to shareholders of record as of December 3, 2012. The most

significant item affecting future increases or decreases in liquidity is earnings from operations and such earnings

are dependent on the success of future operations

Insurance

From time to time, the marketplace for all forms of insurance enters into periods of severe cost increases. In

the past, during such cyclical periods, the Company has seen costs escalate to the point where desired levels of

insurance were either unavailable or unaffordable. The Company’s primary insurance needs are workers’

compensation, automobile and umbrella coverage for its trucking fleet and medical insurance for employees.

During each of 2012, 2011 and 2010, insurance costs were consistent with activity and totaled $11.9 million,

$11.2 million and $10 million, respectively. Insurance cost may experience rate increases during 2013 subject to

market conditions. Since the Company is generally unable to pass on such cost increases, any increase will need

to be absorbed by existing operations.

Competition

In all phases of its operations, the Company encounters strong competition from a number of entities. Many

of these entities possess financial resources substantially in excess of those of the Company. The Company faces

competition principally in establishing trade credit, pricing of available materials and quality of service as well as

for the acquisition of mineral properties. The Company’s marketing division competes with major oil companies

and other large industrial concerns that own or control significant refining and marketing facilities. These major

oil companies may offer their products to others on more favorable terms than those available to the Company.

From time to time in recent years, there have been supply imbalances for crude oil and natural gas in the

marketplace. This in turn has led to significant fluctuations in prices for crude oil and natural gas. As a result,

there is a high degree of uncertainty regarding both the future market price for crude oil and natural gas and the

available margin spread between wholesale acquisition costs and sales realization.

Forward-Looking Statements — Safe Harbor Provisions

This annual report for the year ended December 31, 2012 contains certain forward-looking statements

covered by the safe harbors provided under Federal securities law and regulations. To the extent such statements

are not recitations of historical fact, forward-looking statements involve risks and uncertainties. In particular,

statements under the captions (a) Production and Reserve Information, (b) Regulatory Status and Potential

Environmental Liability, (c) Management’s Discussion and Analysis of Financial Condition and Results of

Operations, (d) Critical Accounting Policies and Use of Estimates, (e) Quantitative and Qualitative Disclosures

about Market Risk, (f) Income Taxes, (g) Concentration of Credit Risk, (h) Price Risk Management Activities,

and (i) Commitments and Contingencies, among others, contain forward-looking statements. Where the

Company expresses an expectation or belief regarding future results or events, such expression is made in good

faith and believed to have a reasonable basis in fact. However, there can be no assurance that such expectation or

belief will actually result or be achieved.

With the uncertainties of forward looking statements in mind, the reader should consider the risks discussed

elsewhere in this report and other documents filed by the Company with the Securities and Exchange

Commission the “SEC” from time to time and the important factors described in the Company’s annual report on

Form 10-K under Item 1A. Risk Factors” that could cause actual results to differ materially from those expressed

in any forward-looking statement made by or on behalf of the Company.

13
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31,

2012 2011

(In thousands)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents ............................................... $ 47,239 $ 37,066

Accounts receivable, net of allowance for doubtful accounts of $206 and $357,

respectively ......................................................... 239,319 225,393

Inventories ........................................................... 28,222 18,464

Fair value contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418 2,064

Income tax receivable ................................................... 1,199 480

Prepayments .......................................................... 8,092 10,651

Current assets of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 10,847

Total current assets ............................................... 324,556 304,965

PROPERTY AND EQUIPMENT:

Marketing ............................................................ 46,177 33,004

Transportation ......................................................... 59,101 54,359

Oil and gas (successful efforts method) ..................................... 90,431 81,668

Other ................................................................ 1,406 2,772

197,115 171,803

Less — Accumulated depreciation, depletion and amortization .................. (106,403) (102,946)

90,712 68,857

OTHER ASSETS:

Deferred income tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 473

Cash deposits and other ................................................. 4,199 4,167

Long-term assets of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 378

$ 419,501 $ 378,840

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable ...................................................... $ 258,310 $ 243,615

Accounts payable — related party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 58

Fair value contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412 681

Accrued and other liabilities .............................................. 7,078 6,095

Current deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240 505

Current liabilities of discontinued operations ................................. — 5,140

Total current liabilities ............................................ 266,082 256,094

LONG-TERM DEBT ..................................................... — —

OTHER LIABILITIES:

Asset retirement obligations ............................................ 1,886 1,568

Deferred taxes and other liabilities ....................................... 15,675 10,496

283,643 268,158

COMMITMENTS AND CONTINGENCIES (NOTE 6)

SHAREHOLDERS’ EQUITY:

Preferred stock, $1.00 par value, 960,000 shares authorized, none outstanding ...... — —

Common stock, $.10 par value, 7,500,000 shares authorized, 4,217,596 issued and

outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 422

Contributed capital ..................................................... 11,693 11,693

Retained earnings ...................................................... 123,743 98,567

Total shareholders’ equity ......................................... 135,858 110,682

$ 419,501 $ 378,840

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

14
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31,

2012 2011 2010

(In thousands, except per share data)

REVENUES:

Marketing ........................................... $3,297,827 $2,967,427 $2,015,893

Transportation ........................................ 67,183 63,501 56,867

Oil and natural gas ..................................... 15,954 14,060 11,021

3,380,964 3,044,988 2,083,781

COSTS AND EXPENSES:

Marketing ........................................... 3,244,685 2,912,316 1,996,926

Transportation ........................................ 51,009 51,068 45,956

Oil and natural gas operations ............................ 12,941 22,608 8,116

Oil and natural gas property sale (gain) .................... (2,203) (2,923) —

General and administrative .............................. 9,769 9,713 9,044

Depreciation, depletion and amortization ................... 20,714 15,885 11,314

3,336,915 3,008,667 2,071,356

Operating Earnings .......................................... 44,049 36,321 12,425

Other Income (Expense):

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 237 191

Interest expense ....................................... (10) (8) (36)

Earnings from continuing operations before income taxes ............ 44,229 36,550 12,580

Income Tax (Provision) Benefit:

Current .............................................. (11,319) (5,523) (371)

Deferred ............................................. (5,378) (7,584) (3,657)

(16,697) (13,107) (4,028)

Earnings from continuing operations ............................ 27,532 23,443 8,552

Earnings from discontinued operations net of tax (provision) benefit of

($139), $276 and $(42), respectively . . . . . . . . . . . . . . . . . . . . . . . . . . 259 (512) 79

Net Earnings ............................................... $ 27,791 $ 22,931 $ 8,631

EARNINGS PER SHARE:

From continuing operations ............................... 6.53 5.55 2.03

From discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .06 (.11) .02

Basic and diluted net earnings per share .......................... $ 6.59 $ 5.44 $ 2.05

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

15
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Common

Stock

Contributed

Capital

Retained

Earnings

Total

Shareholders’

Equity

(In thousands)

BALANCE, January 1, 2010 ............................ $422 $11,693 $ 71,686 $ 83,801

Net earnings ....................................... — — 8,631 8,631

Dividends paid on common stock ...................... — — (2,277) (2,277)

BALANCE, December 31, 2010 ......................... $422 $11,693 $ 78,040 $ 90,155

Net earnings ....................................... — — 22,931 22,931

Dividends paid on common stock ...................... — — (2,404) (2,404)

BALANCE, December 31, 2011 ......................... $422 $11,693 $ 98,567 $110,682

Net earnings ....................................... — — 27,791 27,791

Dividends paid on common stock ...................... — — (2,615) (2,615)

BALANCE, December 31, 2012 ......................... $422 $11,693 $123,743 $135,858

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

16
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31,

2012 2011 2010

(In thousands)

CASH PROVIDED BY OPERATIONS:

Net earnings ................................................... $ 27,791 $ 22,931 $ 8,631

Adjustments to reconcile net earnings to net cash from operating

activities —

Depreciation, depletion and amortization ........................ 20,714 16,260 11,817

Property sale (gains) losses ................................... (6,298) (4,394) 94

Dry hole costs incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 1,212 1,894

Impairment of oil and natural gas properties ...................... 5,555 14,749 2,224

Provision for doubtful accounts ................................ (51) 1,141 29

Deferred income taxes ....................................... 5,378 7,308 3,699

Net change in fair value contracts .............................. 1,377 (97) (1,036)

Decrease (increase) in accounts receivable ............................. (4,820) (45,487) (34,257)

Decrease (increase) in inventories .................................... (9,579) (5,598) 669

Decrease (increase) in income tax receivable ........................... (719) 1,836 (145)

Decrease (increase) in prepayments ................................... 2,559 (2,547) 2,700

Increase (decrease) in accounts payable ............................... 10,474 47,662 40,521

Increase (decrease) in accrued and other liabilities ....................... 1,227 1,378 (406)

Other changes, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 843 (539) 494

Net cash provided by operating activities ...................... 54,494 55,815 36,928

INVESTING ACTIVITIES:

Property and equipment additions .................................. (51,012) (53,276) (22,421)

Insurance and state collateral (deposits) refunds ....................... (582) (495) (151)

Proceeds from property sales ...................................... 6,342 8,394 147

Proceeds from the sale of discontinued operations ..................... 3,546 — —

Redemption of short-term investments .............................. — 11,098 —

Investment in short-term investments ............................... — (11,098) —

Net cash (used in) investing activities ......................... (41,706) (45,377) (22,425)

FINANCING ACTIVITIES:

Dividend payments .............................................. (2,615) (2,404) (2,277)

Net cash (used in) financing activities ......................... (2,615) (2,404) (2,277)

Increase (decrease) in cash and cash equivalents ......................... 10,173 8,034 12,226

Cash and cash equivalents at beginning of year .......................... 37,066 29,032 16,806

Cash and cash equivalents at end of year ............................... $ 47,239 $ 37,066 $ 29,032

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

17
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Adams Resources & Energy,

Inc., a Delaware corporation, and its wholly owned subsidiaries (the “Company”) after elimination of all

intercompany accounts and transactions. The impact on the accompanying financial statements of events

occurring after December 31, 2012 were evaluated through the date of issuance of these financial statements.

Nature of Operations

The Company is engaged in the business of crude oil and natural gas marketing, as well as tank truck

transportation of liquid chemicals, and oil and gas exploration and production. Its primary area of operation is

within a 1,000 mile radius of Houston, Texas.

Cash and Cash Equivalents

Cash and cash equivalents include any Treasury bill, commercial paper, money market fund or federal funds

with maturity of 90 days or less. Depending on cash availability and market conditions, investments in corporate

and municipal bonds, which are classified as investments in marketable securities, may also be made from time

to time. Cash and cash equivalents are maintained with major financial institutions and such deposits may exceed

the amount of federally backed insurance provided. While the Company regularly monitors the financial stability

of such institutions, cash and cash equivalents ultimately remain at risk subject to the financial viability of such

institutions.

Marketable Securities

From time to time, the Company may invest in marketable securities consisting of investment grade

corporate bonds traded in liquid markets. Such bonds are held for the purpose of investing in liquid funds and are

not generally intended to be retained on a long term basis. Marketable securities are initially recognized at

acquisition costs inclusive of transaction costs and are classified as trading securities. In subsequent periods,

marketable securities are valued at fair value. Changes in these fair values are recognized as gains or losses in the

accompanying statement of operations under the caption “Costs and Expenses – Marketing”. Interest on

marketable securities is recognized directly in the statement of operations during the period earned.

Allowance for Doubtful Accounts

Accounts receivable result from sales of crude oil, natural gas and refined products as well as from trucking

services. Marketing business wholesale level sales of crude oil and natural gas comprise in excess of 90 percent

of accounts receivable and under industry practices, such items are “settled” and paid in cash within 25 days of

the month following the transaction date. For such receivables, an allowance for doubtful accounts is determined

based on specific account identification. The balance of accounts receivable results primarily from sales of

trucking services. For this component of receivables, the allowance for doubtful accounts is determined based on

a review of specific accounts combined with a review of the general status of the aging of all accounts.

Inventories

Inventory consists of crude oil held in storage tanks and at third-party pipelines as part of the Company’s

crude oil marketing operations. Crude oil inventory is carried at the lower of average cost or market.

18
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Prepayments

The components of prepayments and other are as follows (in thousands):

December 31,

2012 2011

Cash collateral deposits for commodity purchases ......................... $5,000 $ 6,521

Insurance premiums ................................................ 1,872 2,033

Commodity imbalances and futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 353 1,452

Rents, license and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 867 645

$8,092 $10,651

Property and Equipment

Expenditures for major renewals and betterments are capitalized, and expenditures for maintenance and

repairs are expensed as incurred. Interest costs incurred in connection with major capital expenditures are

capitalized and amortized over the lives of the related assets. When properties are retired or sold, the related cost

and accumulated depreciation, depletion and amortization is removed from the accounts and any gain or loss is

reflected in earnings.

Oil and gas exploration and development expenditures are accounted for in accordance with the successful

efforts method of accounting. Direct costs of acquiring developed or undeveloped leasehold acreage, including

lease bonus, brokerage and other fees, are capitalized. Exploratory drilling costs are initially capitalized until the

properties are evaluated and determined to be either productive or nonproductive. Such evaluations are made on a

quarterly basis. If an exploratory well is determined to be nonproductive, the costs of drilling the well are

charged to expense. Costs incurred to drill and complete development wells, including dry holes, are capitalized.

As of December 31, 2012, the Company had no unevaluated or suspended exploratory drilling costs.

Depreciation, depletion and amortization of the cost of proved oil and gas properties is calculated using the

unit-of-production method. The reserve base used to calculate depreciation, depletion and amortization for

leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and

proved undeveloped reserves. For lease and well equipment, development costs and successful exploration

drilling costs, the reserve base includes only proved developed reserves. All other property and equipment is

depreciated using the straight-line method over the estimated average useful lives of three to twenty years.

The Company reviews its long-lived assets for impairment whenever undiscounted cash flow models

indicate that the carrying value of such assets may not be recoverable. Any impairment recognized is permanent

and may not be restored. Producing oil and gas properties are reviewed on a field-by-field basis. The fair value of

each oil and gas property is estimated based on an internal discounted cash flow model. Cash flows are

developed based on estimated future production and prices and then discounted using a market based rate of

return consistent with that used by the Company in evaluating cash flows for other assets of a similar nature. For

the years ended December 31, 2012, 2011 and 2010, there were $4,699,000, $7,105,000 and $946,000,

respectively, of impairment provisions on producing oil and gas properties.

19
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Fair value measurements for producing oil and gas properties that were subject to fair value impairment for

the years ended December 31, 2012 and 2011 summarized as follows (in thousands):

Producing Properties

Subject to Fair

Value Impairment

2012 2011

Net book value at January 1 ......................................... $11,073 $ 8,704

Property additions ............................................... 13,083 16,465

Depletion taken ................................................. (6,371) (6,633)

Impairment valuation loss ......................................... (4,699) (7,105)

Net book at December 31 ........................................... $13,086 $11,431

Fair value measurements for producing oil and gas properties are based on Level 3 — Significant

Unobservable Inputs — (see “Fair Value Measurements” below).

On a quarterly basis, management evaluates the carrying value of non-producing oil and gas leasehold

properties and may deem them impaired based on remaining lease term, area drilling activity and the Company’s

plans for the property. This fair value measure depends highly on management’s assessment of the likelihood of

continued exploration efforts in a given area and, as such, data inputs are categorized as “unobservable or

Level 3” inputs. Importantly, this fair value measure only applies to the write-down of capitalized costs and will

never result in an increase to reported earnings. Accordingly, impairment provisions on non-producing properties

totaling $856,000, $7,644,000 and $1,277,000 were recorded for the years ending December 31, 2012, 2011 and

2010, respectively. Capitalized costs for non-producing oil and gas leasehold interests currently represent

approximately four percent of total oil and gas property costs and are categorized as follows (in thousands):

December 31,

2012 2011

South Texas Project acreage ........................................... $3,263 $2,212

West Texas Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180 288

Napoleonville Louisiana acreage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323 320

Other acreage areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329 475

Total Non-producing Leasehold Costs ............................... $4,095 $3,295

The South Texas, West Texas and Napoleonville acreage areas have active or scheduled drilling operations

underway and holding the underlying acreage is essential to the ongoing exploration effort. The “Other Acreage

Areas” category consists of smaller onshore interests dispersed over a wide geographical area. Since the

Company is generally not the operator of its oil and gas property interests, it does not maintain underlying detail

acreage data and is dependent on the operator when determining which specific acreage will ultimately be

drilled. The capitalized cost detail on a property-by-property basis is reviewed by management and deemed

impaired, if development is not anticipated prior to lease expiration. Onshore leasehold periods are normally

three years and may contain renewal options. Capitalized cost activity on the “Other Acreage Areas” was as

follows (in thousands):

Leasehold

Costs

Balance December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 475

Property additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 810

Property sale .............................................................. (100)

Impairments ............................................................... (856)

Balance December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 329

20
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During 2012, the Company sold half of its interest in certain non-producing Kansas oil and gas properties.

Proceeds from the sale totaled $578,000 and the Company recorded a $475,000 pre-tax gain from this sale. Also

during 2012, the Company sold its interest in two oil and gas producing property units for total proceeds of

$3,049,000. The Company realized a $1,728,000 pre-tax gain from these two sales. In January 2011, the

Company completed the sale of its interest in certain producing oil and gas properties located in the on-shore

Gulf Coast region of Texas. Proceeds from the 2011 sale totaled $6.2 million and the pre-tax gain totaled

$2,708,000. Also during 2011, the Company sold a portion of its interest in certain non-producing oil and gas

properties located in West Texas for $329,000 with a $125,000 pre-tax gain from this transaction.

During 2012 and 2011, the Company sold certain used trucks and equipment from its transportation segment

and recorded pre-tax gains totaling $2,617,000 and $1,024,000, respectively. There were no transportation

equipment sales during 2010.

Cash Deposits and Other Assets

The Company has established certain deposits to support participation in its liability insurance program and

remittance of state crude oil severance taxes and other state collateral deposits. Insurance collateral deposits are

invested at the discretion of the Company’s insurance carrier and such investments primarily consist of

intermediate term federal government bonds and bonds backed by federal agencies. Components of cash deposits

and other assets are as follows (in thousands):

December 31,

2012 2011

Insurance collateral deposits ........................................... $3,413 $3,331

State collateral deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 168

Materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616 668

$4,199 $4,167

Revenue Recognition

Commodity purchase and sale contracts utilized by the Company’s marketing businesses qualify as

derivative instruments. Further, all natural gas contracts, as well as certain specifically identified crude oil

contracts, are designated as trading activities. From the time of contract origination, such trading activity

contracts are marked-to-market and recorded on a net revenue basis in the accompanying financial statements.

Most all crude oil purchase and sale contracts qualify and are designated as non-trading activities and the

Company considers such contracts as normal purchases and sales activity. For normal purchases and sales the

Company’s customers are invoiced monthly based upon contractually agreed upon terms with revenue

recognized in the month in which the physical product is delivered to the customer. Such sales are recorded gross

in the financial statements because the Company takes title, has risk of loss for the products, is the primary

obligor for the purchase, establishes the sale price independently with a third party, and maintains credit risk

associated with the sale of the product.

Certain crude oil contracts may be with a single counterparty to provide for similar quantities of crude oil to

be bought and sold at different locations. These contracts are entered into for a variety of reasons, including

effecting the transportation of the commodity, to minimize credit exposure, and/or to meet the competitive

demands of the customer. Such buy/sell arrangements are reflected on a net revenue basis in the accompanying

financial statements. Reporting such crude oil contracts on a gross revenue basis would increase the Company’s

reported revenues by $1,381,352,000, $1,812,561,000 and $1,415,844,000 for the years ended December 31,

2012, 2011 and 2010, respectively.

Transportation segment customers are invoiced, and the related revenue is recognized, as the service is

provided. Oil and gas revenue from the Company’s interests in producing wells is recognized as title and

physical possession of the oil and gas passes to the purchaser.

21
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Letter of Credit Facility

The Company maintains a Credit and Security Agreement with Wells Fargo Bank to provide a $60 million

stand-by letter of credit facility that is used to support the Company’s crude oil and natural gas purchases within

the marketing segment. This facility is collateralized by the eligible accounts receivable within those operations

and certain marketing and transportation equipment. Stand-by letters of credit issued totaled $21.9 million and

$38.9 million as of December 31, 2012 and 2011, respectively. The issued stand-by letters of credit are cancelled

as the underlying purchase obligations are satisfied by cash payment when due. The letter of credit facility places

certain restrictions on the Company’s Gulfmark Energy, Inc. and Adams Resources Marketing, Ltd. subsidiaries.

Such restrictions included the maintenance of a combined 1.1 to 1.0 current ratio and the maintenance of positive

net earnings excluding inventory valuation changes, as defined, among other restrictions. The Company is

currently in compliance with all such financial covenants.

Statement of Cash Flows

Interest paid totaled $10,000, $8,000 and $36,000 during the years ended December 31, 2012, 2011 and

2010, respectively. Income taxes paid during these same periods totaled $12,650,000, $5,597,000, and $532,000,

respectively. In addition, State and Federal income tax refunds totaled $10,000 and $2,743,000 in 2012 and 2011,

respectively. There were no tax refunds during 2010. Non-cash investing activities for property and equipment

items included in accounts payable as of period end were $2,419,000, $4,070,000 and $2,868,000 as of

December 31, 2012, 2011 and 2010, respectively. There were no significant non-cash financing activities in any

of the periods reported.

Earnings per Share

Earnings per share are based on the weighted average number of shares of common stock and potentially

dilutive common stock shares outstanding during the period. The weighted average number of shares outstanding

was 4,217,596 for 2012, 2011 and 2010. There were no potentially dilutive securities during those periods.

Share-Based Payments

During the periods presented herein, the Company had no stock-based employee compensation plans, nor

any other share-based payment arrangements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the

United States requires management to make estimates and assumptions that affect the reported amounts of assets

and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during

the reporting period. Actual results could differ from those estimates. Examples of significant estimates used in

the accompanying consolidated financial statements include the oil and gas reserve volumes that form the

foundation for calculating depreciation, depletion and amortization and estimating cash flows to assess

impairment triggers and estimated values associated with oil and gas properties. Other examples include revenue

accruals, the provision for bad debts, insurance related accruals, income tax permanent and timing differences,

contingencies, and valuation of fair value contracts.

Income Taxes

Income taxes are accounted for using the asset and liability method. Under this approach, deferred tax assets

and liabilities are recognized based on anticipated future tax consequences attributable to differences between

financial statement carrying amounts of assets and liabilities and their respective tax basis (see Note 2).

22
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Use of Derivative Instruments

The Company’s marketing segment is involved in the purchase and sale of crude oil and natural gas. The

Company seeks to make a profit by procuring these commodities as they are produced and then delivering these

materials to end users or the intermediate use marketplace. As is typical for the industry, such transactions are

made pursuant to the terms of forward month commodity purchase and/or sale contracts. Certain of these

contracts meet the definition of a derivative instrument and therefore, the Company accounts for such contracts at

fair value, unless the normal purchase and sale exception is applicable. Such underlying contracts are standard

for the industry and are the governing document for the Company’s crude oil and natural gas wholesale

distribution businesses. The accounting methodology utilized by the Company for its commodity contracts is

further discussed below under the caption “Fair Value Measurements”.

None of the Company’s derivative instruments have been designated as hedging instruments and the

estimated fair value of forward month commodity contracts (derivatives) is reflected in the accompanying

Consolidated Balance Sheet as of December 31, 2012 as follows (in thousands):

Balance Sheet Location and Amount

Current Other Current Other

Assets Assets Liabilities Liabilities

Asset Derivatives

— Fair Value Commodity

Contracts at Gross Valuation . . . . . . . . . . . . . . . . $ 688 $— $ — $—

Liability Derivatives

— Fair Value Commodity

Contracts at Gross Valuation . . . . . . . . . . . . . . . . — — 682 —

Less Counterparty Offsets .......................... (270) — (270) —

As Reported Fair Value Contracts . . . . . . . . . . . . . . . . . . . . $ 418 $— $ 412 $—

As of December 31, 2012, twenty-four commodity purchase and sales contracts comprise all of the

Company’s derivative valuations. Such contracts encompass the purchase and sale of approximately 900 barrels

of crude oil per day and 172,000 mmbtu of natural gas per day during January 2013 with crude oil volumes

continuing at the rate of 200 barrels per day through June 2013 together with natural gas volumes of 1,000

mmbtu and 41,000 mmbtu per day in February 2013 and March 2013, respectively.

Forward month commodity contracts (derivatives) are reflected in the accompanying Consolidated Balance

Sheet as of December 31, 2011 as follows (in thousands):

Balance Sheet Location and Amount

Current Other Current Other

Assets Assets Liabilities Liabilities

Asset Derivatives

— Fair Value Commodity

Contracts at Gross Valuation ............... $ 3,500 $— $ — $—

Liability Derivatives

— Fair Value Commodity

Contracts at Gross Valuation ............... — — 2,117 —

Less Counterparty Offsets .......................... (1,436) — (1,436) —

As Reported Fair Value Contracts ................... $ 2,064 $— $ 681 $—

23
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2011, thirteen commodity purchase and sales contracts comprised substantially all of

the Company’s derivative valuations. Such contracts encompassed the purchase and sale of approximately 2,800,

6,100, 5,800, 5,700 and 1,800 barrels of crude oil per day in each of January, February, March, April and May

2012, respectively, and continuing at 1,800 barrels per day for June 2012 through December 2012.

The Company only enters into commodity contracts with creditworthy counterparties or obtains collateral

support for such activities. As of December 31, 2012 and 2011, the Company was not holding nor had it posted

any collateral to support its forward month fair value derivative activity. The Company is not subject to any

credit-risk related trigger events.

Forward month commodity contracts (derivatives) are reflected in the accompanying Consolidated

Statement of Operations for the years ended December 31, 2012, 2011 and 2010 as follows (in thousands):

Gain (Loss)

Location 2012 2011 2010

Revenues – marketing ......................................... $(1,377) $97 $1,036

Fair Value Measurements

The carrying amount reported in the balance sheet for cash and cash equivalents, accounts receivable and

accounts payable approximates fair value because of the immediate or short-term maturity of these financial

instruments. Marketable securities are recorded at fair value based on market quotations from actively traded

liquid markets.

Fair value contracts consist of derivative financial instruments and are recorded as either an asset or liability

measured at fair value. Changes in fair value are recognized immediately in earnings unless the derivatives

qualify for, and the Company elects, cash flow hedge accounting. The Company had no contracts designated for

hedge accounting during any reporting periods.

Fair value estimates are based on assumptions that market participants would use when pricing an asset or

liability and the Company uses a fair value hierarchy of three levels that prioritizes the information used to

develop those assumptions. Currently, for all items presented herein, the Company utilizes a market approach to

valuing its contracts. On a contract by contract, forward month by forward month basis, the Company obtains

observable market data for valuing its contracts. The fair value hierarchy gives the highest priority to quoted

prices in active markets and the lowest priority to unobservable data. The fair value hierarchy is summarized as

follows:

Level 1 — quoted prices in active markets for identical assets or liabilities that may be accessed at the

measurement date. Active markets are those in which transactions for the asset or liability occur

in sufficient frequency and volume to provide pricing information on an ongoing basis. For

Level 1 valuation of marketable securities, the Company utilizes market quotations provided by

its primary financial institution and for the valuations of derivative financial instruments, the

Company utilizes the New York Mercantile Exchange “NYMEX” for such valuations.

Level 2 — (a) quoted prices for similar assets or liabilities in active markets, (b) quoted prices for identical

assets or liabilities but in markets that are not actively traded or in which little information is

released to the public, (c) observable inputs other than quoted prices, and (d) inputs derived

from observable market data. Source data for Level 2 inputs include information provided by

the NYMEX, the Intercontinental Exchange “ICE”, published price data and indices, third party

price survey data and broker provided forward price statistics.

Level 3 — Unobservable market data inputs for assets or liabilities.

24
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2012, the Company’s fair value assets and liabilities are summarized and categorized as

follows (in thousands):

Market Data Inputs

Gross Level 1

Quoted Prices

Gross Level 2

Observable

Gross Level 3

Unobservable

Counterparty

Offsets Total

Derivatives

— Current assets ......... $299 $ 389 $— $(270) $ 418

— Current liabilities ....... — (682) — 270 (412)

Net Value ......... $299 $(293) $— $ — $ 6

As of December 31, 2011, the Company’s fair value assets and liabilities are summarized and categorized as

follows (in thousands):

Market Data Inputs

Gross Level 1

Quoted Prices

Gross Level 2

Observable

Gross Level 3

Unobservable

Counterparty

Offsets Total

Derivatives

— Current assets ......... $1,455 $ 2,045 $— $(1,436) $2,064

— Current liabilities ...... (675) (1,442) — 1,436 (681)

Net Value . . . . . . . . $ 780 $ 603 $— $ — $1,383

When determining fair value measurements, the Company makes credit valuation adjustments to reflect

both its own nonperformance risk and its counterparty’s nonperformance risk. When adjusting the fair value of

derivative contracts for the effect of nonperformance risk, the impact of netting and applicable credit

enhancements, such as collateral postings, thresholds, and guarantees are considered. Credit valuation

adjustments utilize Level 3 inputs, such as credit scores to evaluate the likelihood of default by the Company or

its counterparties. As of December 31, 2012 and 2011, credit valuation adjustments were not significant to the

overall valuation of the Company’s fair value contracts. As a result, fair value assets and liabilities are included

in their entirety in the fair value hierarchy.

The following table illustrates the factors impacting the change in the net value of the Company’s fair value

contracts for the year ended December 31, 2012 (in thousands):

Level 1

Quoted Prices

Level 2

Observable Total

Net Fair Value January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 780 $ 603 $ 1,383

— Net realized (gains) losses ........................ (780) (603) (1,383)

— Net unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . 299 (293) 6

Net Fair Value December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . $ 299 $(293) $ 6

The following table illustrates the factors impacting the change in the net value of the Company’s fair value

contracts for the year ended December 31, 2011 (in thousands):

Level 1

Quoted Prices

Level 2

Observable Total

Net Fair Value January 1, ............................. $(118) $ 1,404 $ 1,286

— Net realized (gains) losses . . . . . . . . . . . . . . . . . . . . . . . . 118 (1,404) (1,286)

— Net unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . 780 603 1,383

Net Fair Value December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . $ 780 $ 603 $ 1,383

25
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Asset Retirement Obligations

The Company records a liability for the estimated retirement costs associated with certain tangible longlived assets. The estimated fair value of asset retirement obligations are recorded in the period in which they are

incurred and the corresponding cost capitalized by increasing the carrying amount of the related long-lived asset.

The liability is accreted to its then present value each period, and the capitalized cost is depreciated over the

useful life or the units of production associated with the related asset. If the liability is settled for an amount other

than the recorded amount, a gain or loss is recognized. A summary of the Company’s asset retirement obligations

is presented as follows (in thousands):

2012 2011

Balance on January 1, ................................................ $1,568 $1,390

— Liabilities incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358 164

— Accretion of discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 82

— Liabilities settled ............................................. (103) (68)

— Revisions to estimates ......................................... — —

Balance on December 31, ............................................. $1,886 $1,568

In addition to an accrual for asset retirement obligations, the Company maintains $75,000 in escrow cash,

which is legally restricted for the potential purpose of settling asset retirement costs in accordance with certain

state regulations. Such cash deposits are included in other assets in the accompanying balance sheet.

Recent Accounts Pronouncement

In May 2011, the Financial Accounting Standards Board (“FASB”) issued FASB Accounting Standards

Update (ASU) No. 2011-04, which further amends the Fair Value Measurements and Disclosures topic of the

Accounting Standards Codification. Among other provisions, ASU 2011-04 expands and modifies certain

principles and requirements for measuring fair value and disclosing fair value measurement information. The

Company adopted ASU 2011-04 effective January 1, 2012 and the adoption of ASU 2011-04 did not have a

material impact on the Company’s consolidated financial statements, but additional disclosures regarding fair

value measurements resulted.

In December 2011, the FASB issued ASU 2011-11. This update requires additional disclosures about an

entity’s right of setoff and related arrangements associated with its financial and derivative instruments. The

ASU requires a tabular presentation that reflects the gross, net and setoff amounts associated with such assets and

liabilities among other requirements. The expanded disclosure requirements are effective for the annual reporting

periods beginning on January 1, 2013. The Company’s adoption of ASU 2011-11 is not expected to result in

significant additional disclosures.

Management believes the impact of other recently issued standards and updates, which are not yet effective,

will not have a material impact on the Company’s consolidated financial position, results of operations or cash

flows upon adoption.

26
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(2) Income Taxes

The following table shows the components of the Company’s income tax (provision) benefit

(in thousands):

Years ended December 31,

2012 2011 2010

Current:

Federal ............................................. $(10,282) $ (4,336) $ 350

State ............................................... (1,176) (1,187) (721)

(11,458) (5,523) (371)

Deferred:

Federal ............................................. (4,940) (7,407) (3,688)

State ............................................... (438) 99 (11)

(5,378) (7,308) (3,699)

$(16,836) $(12,831) $(4,070)

The following table summarizes the components of the income tax (provision) benefit (in thousands):

Years ended December 31,

2012 2011 2010

From continuing operations ............................... $(16,697) $(13,107) $(4,028)

From discontinued operations ............................. (139) 276 (42)

$(16,836) $(12,831) $(4,070)

Taxes computed at the corporate federal income tax rate reconcile to the reported income tax (provision) as

follows (in thousands):

Years ended December 31,

2012 2011 2010

Statutory federal income tax (provision) benefit ............... $(15,619) $(12,517) $(4,445)

State income tax (provision) benefit ........................ (1,049) (707) (476)

Federal statutory depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 393 534

Foreign investment write-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 201

Other ................................................. (204) — 116

$(16,836) $(12,831) $(4,070)

27
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Deferred income taxes reflect the net difference between the financial statement carrying amounts and the

underlying income tax basis in such items. The components of the federal deferred tax asset (liability) are as

follows (in thousands):

Years Ended

December 31,

2012 2011

Current deferred tax asset (liability)

Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 581 $ 772

Prepaid insurance .............................................. (815) (793)

Fair value contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) (484)

Net current deferred liability ................................... (240) (505)

Long-term deferred tax asset (liability)

Property ..................................................... (15,957) (10,579)

Uniform capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 552 471

Other ........................................................ (221) 160

Net long-term deferred tax liability ................................ (15,626) (9,948)

Net deferred tax liability ........................................... $(15,866) $(10,453)

Financial statement recognition and measurement of positions taken, or expected to be taken, by an entity in

its income tax returns must consider the uncertainty and judgment involved in the determination and filing of

income taxes. Tax positions taken in an income tax return that are recognized in the financial statements must

satisfy a more-likely-than-not recognition threshold, assuming that the tax position will be examined by taxing

authorities with full knowledge of all relevant information. The Company has no significant unrecognized tax

benefits. Interest and penalties associated with income tax liabilities are classified as income tax expense.

The earliest tax years remaining open for audit for Federal and major states of operations are as follows:

Earliest Open

Tax Year

Federal ................................................................ 2009

Texas ................................................................. 2008

Louisiana .............................................................. 2009

Michigan ............................................................... 2009

(3) Concentration of Credit Risk

Credit risk represents the amount of loss the Company would absorb if its customers failed to perform

pursuant to contractual terms. Management of credit risk involves a number of considerations, such as the

financial profile of the customer, the value of collateral held, if any, specific terms and duration of the contractual

agreement, and the customer’s sensitivity to economic developments. The Company has established various

procedures to manage credit exposure, including initial credit approval, credit limits, and rights of offset. Letters

of credit and guarantees are also utilized to limit credit risk. Accounts receivable associated with crude oil and

natural gas marketing activities comprise approximately 95 percent of the Company’s total receivables and

industry practice requires payment for such sales to occur within 25 days of the end of the month following a

transaction. The Company’s customer makeup, credit policies and the relatively short duration of receivables

mitigate the uncertainty typically associated with receivables management.

28
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company’s largest customers consist of large multinational integrated oil companies and utilities. In

addition, the Company transacts business with independent oil producers, major chemical concerns, crude oil and

natural gas trading companies and a variety of commercial energy users. Within this group of customers, the

Company generally derives approximately 50 percent of its revenues from two to three large crude oil refining

concerns. While the Company has ongoing established relationships with certain domestic refiners of crude oil,

alternative markets are readily available since the Company supplies less than one percent of U. S. domestic

refiner demand. As a fungible commodity delivered to major Gulf Coast supply points, the Company’s crude oil

sales can be readily delivered to alternative end markets. Management believes that a loss of any of those

customers where the Company currently derives more than 10 percent of its revenues would not have a material

adverse effect on the Company’s operations.

The Company had accounts receivable from three customers that comprised 22.1 percent, 21.4 percent and

11.4 percent, respectively of total accounts receivables at December 31, 2012. Three customers comprised 20.2

percent, 17.9 percent and 16.8 percent, respectively, of total revenues during 2012. The Company had accounts

receivable from two customers that comprised 24.5 percent and 21.5 percent, respectively, of total accounts

receivable at December 31, 2011. Four customers comprised 18.2 percent, 15.4 percent, 13.4 percent, and 11.3

percent, respectively, of total revenues during 2011. The Company had accounts receivable from four customers

that comprised 22.4 percent, 16.2 percent, 13.7 percent and 10.6 percent, respectively, of total accounts

receivable at December 31, 2010. Five customers comprised 35.8 percent, 20.2 percent, 17.9 percent, 13 percent

and 11 percent, respectively, of total revenues during 2010.

An allowance for doubtful accounts is provided where appropriate and accounts receivable presented herein

are net of allowances for doubtful accounts of $206,000 and $357,000 at December 31, 2012 and 2011,

respectively. As reflected in the table below, during 2011 the Company’s provision for bad debt was elevated as

a result of deteriorating collectability primarily attributable to diesel fuel sales to the construction industry.

An analysis of the changes in the allowance for doubtful accounts is presented as follows (in thousands):

2012 2011 2010

Balance, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 357 $180 $ 347

Provisions for bad debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 276 28

Less: Write-offs and recoveries ................................. (151) (99) (195)

Balance, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 206 $357 $ 180

(4) Employee Benefits

The Company maintains a 401(k) savings plan for the benefit of its employees. The Company’s contributory

expenses for the plan were $645,000, $597,000 and $565,000 in 2012, 2011 and 2010, respectively. No other

pension or retirement plans are maintained by the Company.

(5) Transactions with Affiliates

Mr. K. S. Adams, Jr., Chairman and certain of his family partnerships and affiliates have participated as

working interest owners with the Company’s subsidiary, Adams Resources Exploration Corporation. Mr. Adams

and such affiliates participate on terms similar to those afforded other non-affiliated working interest owners. In

recent years, such related party transactions generally result after the Company has first identified oil and gas

prospects of interest. Typically the available dollar commitment to participate in such transactions is greater than

the amount management is comfortable putting at risk. In such event, the Company first determines the

percentage of the transaction it wants to obtain, which allows a related party to participate in the investment to

the extent there is excess available. In those instances where there was no excess availability there has been no

related party participation. Similarly, related parties are not required to participate, nor is the Company obligated

to offer any such participation to a related or other party. When such related party transactions occur, they are

29
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

individually reviewed and approved by the Audit Committee comprised of the independent directors on the

Company’s Board of Directors. During 2012 and 2011, the Company’s investment commitments totaled

approximately $22.7 million and $24.6 million, respectively, in those oil and gas projects where a related party

was also participating in such investments. As of December 31, 2012 and 2011, the Company owed a combined

net total of $42,000 and $58,000, respectively, to these related parties. In connection with the operation of certain

oil and gas properties, the Company also charges such related parties for administrative overhead primarily as

prescribed by the Council of Petroleum Accountants Society Bulletin 5. Such overhead recoveries totaled

$152,000, $145,000 and $160,000 for the years ended December 31, 2012, 2011, and 2010, respectively.

The Company also enters into certain transactions in the normal course of business with other affiliated

entities including direct cost reimbursement for shared phone and secretarial services. For the years ended

December 31, 2012, 2011 and 2010, the affiliated entities charged the Company $64,000, $42,000 and $43,000,

respectively, of expense reimbursement and the Company charged the affiliates $98,000, $118,000 and $117,000,

respectively, for such expense reimbursements. In January 2012, the company relocated its primary office lease

space to a building operated by an affiliated entity. Estimated annual rental expense, including pro-rata building

operating expense are $480,000 per year under a seven year lease term. The lease rental rate was determined by

an independent appraisal. Rental expense paid to the related party for 2012 totaled $442,000.

(6) Commitments and Contingencies

The Company maintains certain operating lease arrangements with independent truck owner-operators for

use of their equipment and driver services on a month-to-month basis. In addition, the Company has entered into

certain lease and terminal access contracts in order to provide tank storage and dock access for its crude oil

marketing business. All operating lease commitments qualify for off-balance sheet treatment. Such contracts

require certain minimum monthly payments for the term of the contracts. Rental expense for the years ended

December 31, 2012, 2011, and 2010 was $8,110,000, $7,621,000 and $5,870,000, respectively. At December 31,

2012, commitments under long-term non-cancelable operating leases and terminal arrangements for the next five

years and thereafter are payable as follows: 2013 — $3,404,000; 2014 — $1,718,000; 2015 — $1,450,000; 2016

— $1,431,000; 2017 $1,210,000; and $724,000 thereafter.

Under the Company’s automobile and workers’ compensation insurance policies, the Company can either

receive a return of premium paid or be assessed for additional premiums up to pre-established limits.

Additionally in certain instances the risk of insured losses is shared with a group of similarly situated entities.

The Company has appropriately recognized estimated expenses and liabilities related to these policies for losses

incurred but not reported to the Company or its insurance carrier of $1,545,000 and $1,285,000 as of

December 31, 2012 and 2011, respectively.

Effective January 1, 2012, the Company began a self-insurance program for managing employee medical

claims. On a monthly basis, the Company establishes a liability for expected claims incurred. As claims are paid,

the liability is relieved. As of December 31, 2012, accrued medical claims totaled $506,000 and the Company has

purchased third party insurance stop-loss coverage for annual individual medical claims exceeding $100,000. In

addition, the Company maintains $1 million of umbrella insurance coverage for aggregate medical claims

exceeding approximately $4.5 million for the calendar year 2012 and $2 million of umbrella coverage for 2013.

From time to time as incidental to its operations, the Company may become involved in various lawsuits

and/or disputes. Primarily as an operator of an extensive trucking fleet, the Company is a party to motor vehicle

accidents, worker compensation claims and other items of general liability as would be typical for the industry.

Management of the Company is presently unaware of any claims against the Company that are either outside the

scope of insurance coverage, or that may exceed the level of insurance coverage and, therefore could potentially

represent a material adverse effect on the Company’s financial position or results of operations.

30
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(7) Guarantees

Pursuant to arranging operating lease financing for certain tank trailers, individual subsidiaries of the

Company may guarantee the lessor a minimum residual equipment sales value upon the expiration of a lease and

sale of the underlying equipment. The Company believes performance under these guarantees to be remote.

Aggregate guaranteed residual values under operating leases as of December 31, 2012 are as follows (in

thousands):

2013 2014 2015 Thereafter Total

Equipment residual values ......................... $216 $— $— $— $216

In connection with certain contracts for the purchase and resale of branded motor fuels within the

Company’s discontinued refined products marketing business (See Note (9), the Company received certain price

discounts from its suppliers toward the purchase of gasoline and diesel fuel. Such discounts were passed through

to the Company’s customers as an incentive to offset a portion of the costs associated with offering branded

motor fuels for sale to the general public. Under the terms of the supply contracts, the Company and its

customers are not obligated to return the price discounts, provided the gasoline service station offering such

product for sale remains as a branded station for periods ranging from three to ten years. The Company had a

number of customers and stations operating under such arrangements, and the former customers are contractually

obligated to remain a branded dealer for the required periods of time. Should the customer seek to void such

contracts, the Company would be obligated to return a portion of discounts received to its suppliers. As of

December 31, 2012, the maximum potential obligation is approximately $1,385,000. Management of the

Company believes such customers will adhere to their branding obligations and no such refunds will result. In

addition, this branding obligation was assumed by the purchaser of the Company’s refined products contracts.

Presently, neither Adams Resources & Energy, Inc. (“ARE”) nor any of its subsidiaries has any other types

of guarantees outstanding that require liability recognition.

ARE frequently issues parent guarantees of commitments resulting from the ongoing activities of its

subsidiary companies. The guarantees generally result from subsidiary commodity purchase obligations,

subsidiary operating lease commitments and subsidiary banking transactions. The nature of such items is to

guarantee the performance of the subsidiary companies in meeting their respective underlying obligations.

Except for operating lease commitments and letters of credit, all such underlying obligations are recorded on the

books of the subsidiary companies and are included in the consolidated financial statements included herein.

Therefore, no such obligation is recorded again on the books of the parent. The parent would only be called upon

to perform under the guarantee in the event of a payment default by the applicable subsidiary company. In

satisfying such obligations, the parent would first look to the assets of the defaulting subsidiary company.

As of December 31, 2012, parental guaranteed obligations are approximately as follows (in thousands):

2013 2014 2015 2016 Thereafter Total

Lease payments . . . . . . . . . . . . . . . . . . . . . . $ 47 $— $— — — 47

Equipment residual values . . . . . . . . . . . . . 216 — — — — 216

Commodity purchases ................. 61,942 — — — — 61,942

Letters of credit ...................... 21,996 — — — — 21,996

$84,201 $— $— $— $— $84,201

31
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(8) Segment Reporting

The Company is engaged in the business of crude oil and natural gas marketing as well as tank truck

transportation of liquid chemicals, and oil and gas exploration and production. Information concerning the

Company’s various business activities is summarized as follows (in thousands):

Revenues

Segment

Operating

Earnings (loss)

Depreciation

Depletion

and

Amortization

Property

and

Equipment

Additions

Year ended December 31, 2012 —

Marketing

— Crude oil ....................... $3,292,948 $ 46,145 $ 5,945 $12,391

— Natural gas ..................... 4,879 1,021 31 —

Marketing Total .................... 3,297,827 47,166 5,976 12,391

Transportation ..................... 67,183 10,253 5,921 15,538

Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . 15,954 (3,601)(1) 8,817 23,083

$3,380,964 $ 53,818 $20,714 $51,012

Year ended December 31, 2011 —

Marketing

— Crude oil ....................... $2,961,176 $ 49,237 $ 3,724 $13,554

— Natural gas ..................... 6,251 2,147 3 64

Marketing Total .................... 2,967,427 51,384 3,727 13,618

Transportation ..................... 63,501 8,521 3,912 14,118

Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . 14,060 (13,871)(1) 8,246 24,580

$3,044,988 $ 46,034 $15,885 $52,316

Year ended December 31, 2010 —

Marketing

— Crude oil ....................... $2,005,301 $ 13,530 $ 2,320 $ 6,051

— Natural gas ..................... 10,592 3,073 44 115

Marketing Total .................... 2,015,893 16,603 2,364 6,166

Transportation ..................... 56,867 6,623 4,288 4,410

Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . 11,021 (1,757) 4,662 11,699

$2,083,781 $ 21,469 $11,314 $22,275

(1) Oil and gas segment operating earnings include gains on property sales totaling $2,203,000 and $2,923,000 during 2012 and 2011,

respectively.

32
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Segment operating earnings reflect revenues net of operating costs and depreciation, depletion and

amortization and are reconciled to earnings from continuing operations before income taxes, as follows (in

thousands):

Years Ended December 31,

2012 2011 2010

Segment operating earnings ................................ $53,818 $46,034 $21,469

— General and administrative expenses ...................... (9,769) (9,713) (9,044)

Operating earnings ....................................... 44,049 36,321 12,425

— Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 237 191

— Interest expense ....................................... (10) (8) (36)

Earnings from continuing operations before income taxes and

discontinued operations ................................. $44,229 $36,550 $12,580

Identifiable assets by industry segment are as follows (in thousands):

Years Ended December 31,

2012 2011 2010

Marketing

— Crude oil ......................................... $277,920 $253,817 $184,299

— Natural gas ........................................ 11,764 12,246 19,948

Marketing Total ...................................... 289,684 266,063 204,247

Transportation ....................................... 38,940 27,221 17,378

Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,788 29,105 32,563

Other ............................................... 55,089 56,451 47,117

$419,501 $378,840 $301,305

Intersegment sales are insignificant and all sales occurred in the United States. Other identifiable assets are

primarily corporate cash, corporate accounts receivable, and properties not identified with any specific segment

of the Company’s business. Accounting policies for transactions between reportable segments are consistent with

applicable accounting policies as disclosed herein.

(9) Discontinued Operations

On February 27, 2012, the Company completed the sale of contracts, inventory and certain equipment

associated with the refined products segment of its marketing business. Revenues from this segment included in

net earnings from discontinued operations totaled $25,717,000, $169,412,000 and $128,189,000 for the years

ended December 31, 2012, 2011, and 2010, respectively. This business experienced marginal results in recent

years including an operating loss of $788,000 for the year 2011. The Company received $2 million in cash

proceeds plus a cash payment of $1,546,000 for the agreed value of refined product inventories on the date of

sale. The net gain recognized upon this sale totaled $1,622,000. The Company is conducting an orderly winddown of the operation which primarily consists of collecting outstanding accounts receivable and satisfying all

existing obligations. The Company’s fee interest in certain parcels of real estate was retained and the estimated

fair value of such properties exceeded the Company’s cost basis in the properties. Therefore, an impairment

assessment of long-lived assets was not necessary. The proceeds secured from this transaction exceeded the sum

of carrying costs of the assets sold plus severance and other wind-down costs and, as a result, pre-tax earnings

from this former segment totaled $398,000 for the year ended December 31, 2012. Retained accounts receivable

and payable obligations were substantially collected or satisfied as of the date of this report.

33
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(10) Quarterly Financial Data (Unaudited) -

Selected quarterly financial data and earnings per share of the Company are presented below for the years

ended December 31, 2012 and 2011 (in thousands, except per share data):

Earnings from

Continuing Operations Net Earnings Dividends

Revenues Amount

Per

Share Amount

Per

Share Amount

Per

Share

2012 —

March 31 ............. $ 877,489 $ 6,050 $1.43 $ 6,575 $1.56 $ — $ —

June 30 ............... 831,474 5,497 1.31 5,386 1.28 — —

September 30 .......... 795,525 8,337 1.98 8,263 1.96 — —

December 31 .......... 876,476 7,648 1.81 7,567 1.79 2,615 .62

Total .............. $3,380,964 $27,532 $6.53 $27,791 $6.59 $2,615 $.62

2011 —

March 31 ............. $ 663,846 $ 5,778 $1.37 $ 5,583 $1.32 $ — $ —

June 30 ............... 777,538 3,355 .79 3,589 .85 — —

September 30 .......... 755,995 9,266 2.20 9,026 2.14 — —

December 31 .......... 847,609 5,044 1.19 4,733 1.13 2,404 .57

Total .............. $3,044,988 $23,443 $5.55 $22,931 $5.44 $2,404 $.57

The above unaudited interim financial data reflect all adjustments that are in the opinion of management

necessary to a fair statement of the results for the period presented. All such adjustments are of a normal

recurring nature.

(11) Oil and Gas Producing Activities (Unaudited)

The Company’s oil and gas exploration and production activities are conducted in Texas and the south

central region of the United States, primarily along the Gulf Coast of Texas and Louisiana.

Oil and Gas Producing Activities -

Total costs incurred in oil and gas exploration and development activities, all incurred within the United

States, were as follows (in thousands):

Years Ended December 31,

2012 2011 2010

Property acquisition costs

Unproved ..................................................... $ 1,965 $ 3,591 $ 2,295

Proved ....................................................... .———

Exploration costs

Expensed ..................................................... 1,151 9,166 3,233

Capitalized ................................................... .———

Development costs .................................................. 20,219 12,133 6,233

Total costs incurred ................................................. $23,335 $24,890 $11,761

34
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The aggregate capitalized costs relative to oil and gas producing activities are as follows (in thousands):

December 31,

2012 2011

Unproved oil and gas properties ..................................... $ 8,349 $ 7,291

Proved oil and gas properties ....................................... 82,083 74,376

90,432 81,667

Accumulated depreciation, depletion and amortization ................... (57,833) (55,061)

Net capitalized cost ....................................... $ 32,599 $ 26,606

Estimated Oil and Natural Gas Reserves -

The following information regarding estimates of the Company’s proved oil and gas reserves, all located in

Texas and the south central region of the United States, is based on reports prepared on behalf of the Company

by its independent petroleum engineers. Because oil and gas reserve estimates are inherently imprecise and

require extensive judgments of reservoir engineering data, they are generally less precise than estimates made in

conjunction with financial disclosures. The revisions of previous estimates as reflected in the table below result

from changes in commodity pricing assumptions and from more precise engineering calculations based upon

additional production histories and price changes.

Proved developed and undeveloped reserves are presented as follows (in thousands):

Years Ended December 31,

2012 2011 2010

Natural Natural Natural

Gas Oil Gas Oil Gas Oil

(Mcf’s) (Bbls.) (Mcf’s) (Bbls.) (Mcf’s) (Bbls.)

Total proved reserves —

Beginning of year ................... 9,661 292 7,794 267 7,248 242

Revisions of previous estimates ........ (507) 29 (520) (24) (832) —

Oil and gas reserves sold ............. (104) (54) (2,148) (26) — —

Extensions, discoveries and other reserve

additions ........................ 2,395 138 6,430 137 2,743 79

Production ........................ (2,608) (98) (1,895) (62) (1,365) (54)

End of year ...................... 8,837 307 9,661 292 7,794 267

The components of proved oil and gas reserves for the three years ended December 31, 2012 is presented

below. All reserves are in the United States (in thousands):

Years Ended December 31,

2012 2011 2010

Natural Natural Natural

Gas Oil Gas Oil Gas Oil

(Mcf’s) (Bbls.) (Mcf’s) (Bbls.) (Mcf’s) (Bbls.)

Proved developed reserves .............. 8,708 306 9,433 277 7,134 240

Proved undeveloped reserves . . . . . . . . . . . . 129 1 228 15 660 27

Total proved reserves .............. 8,837 307 9,661 292 7,794 267

35
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company has developed internal policies and controls for estimating and recording oil and gas reserve

data. The estimation and recording of proved reserves is required to be in compliance with SEC definitions and

guidance. The Company assigns responsibility for compliance in reserve bookings to the office of President of

the Company’s AREC subsidiary. No portion of this individual’s compensation is directly dependent on the

quantity of reserves booked. Reserve estimates are required to be made by qualified reserve estimators, as

defined by Society of Petroleum Engineers’ Standards.

The Company employs third party petroleum consultant, Ryder Scott Company, to prepare its oil and gas

reserve data estimates as of December 31, 2012, 2011 and 2010. The firm of Ryder Scott is well recognized

within the industry for more than 50 years. As prescribed by the SEC, such proved reserves were estimated using

12-month average oil and gas prices, based on the first-day-of-the-month price for each month in the period, and

year-end production and development costs for each of the years presented, all without escalation.

The process of estimating oil and gas reserves is complex and requires significant judgment. Uncertainties

are inherent in estimating quantities of proved reserves, including many factors beyond the estimator’s control.

Reserve engineering is a subjective process of estimating subsurface accumulations of oil and gas that cannot be

measured in an exact manner, and the accuracy of any reserve estimate is a function of the quality of available

data and the interpretation thereof. As a result, assessments by different engineers often vary, sometimes

significantly. In addition, physical factors such as the results of drilling, testing and production subsequent to the

date of an estimate, as well as economic factors such as changes in product prices, may justify revision of such

estimates. Accordingly, oil and gas quantities ultimately recovered will vary from reserve estimates.

Standardized Measure of Discounted Future Net Cash Flows from Oil and Gas Operations and Changes

Therein —

The standardized measure of discounted future net cash flows was determined based on the economic

conditions in effect at the end of the years presented, except in those instances where fixed and determinable gas

price escalations are included in contracts. The disclosures below do not purport to present the fair market value

of the Company’s oil and gas reserves. An estimate of the fair market value would also take into account, among

other things, the recovery of reserves in excess of proved reserves, anticipated future changes in prices and costs,

a discount factor more representative of the time value of money and risks inherent in reserve estimates. The

standardized measure of discounted future net cash flows is presented as follows (in thousands):

Years Ended December 31,

2012 2011 2010

Future gross revenues ................................... $ 59,793 $ 73,626 $ 61,311

Future costs —

Lease operating expenses ............................ (16,357) (19,788) (17,288)

Development costs ................................. (299) (2,198) (1,596)

Future net cash flows before income taxes .................. 43,137 51,640 42,427

Discount at 10% per annum .............................. (17,976) (19,439) (16,777)

Discounted future net cash flows before income taxes ......... 25,161 32,201 25,650

Future income taxes, net of discount at 10% per annum ........ (8,806) (11,270) (8,978)

Standardized measure of discountedfuture net cash flows ...... $ 16,355 $ 20,931 $ 16,672

36
ADAMS RESOURCES & ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The reserve estimates provided at December 31, 2012, 2011 and 2010 are based on aggregate prices of

$93.85, $95.85 and $76.14 per barrel for crude oil and $3.51, $4.69 and $5.26 per mcf for natural gas,

respectively. Such prices were based on the unweighted arithmetic average of the prices in effect on the first day

of the month for each month of the respective twelve month periods as required by SEC regulations. The price

reported in the reserve disclosure for natural gas for 2012 includes the value of associated natural gas liquids.

The effect of income taxes and discounting on the standardized measure of discounted future net cash flows is

presented as follows (in thousands):

Years ended December 31,

2012 2011 2010

Future net cash flows before income taxes .................. $ 43,137 $ 51,640 $ 42,427

Future income taxes .................................... (15,098) (18,074) (14,849)

Future net cash flows ................................... 28,039 33,566 27,578

Discount at 10% per annum .............................. (11,684) (12,635) (10,906)

Standardized measure of discounted future net cash flows ...... $ 16,355 $ 20,931 $ 16,672

The principal sources of changes in the standardized measure of discounted future net flows are as follows

(in thousands):

Years Ended December 31,

2012 2011 2010

Beginning of year ........................................ $20,931 $16,672 $ 9,305

Sale of oil and gas reserves ............................ (3,802) (7,429) —

Net change in prices and production costs ................. (5,313) 791 9,435

New field discoveries and extensions, net of future production

costs ............................................ 9,513 18,769 9,068

Sales of oil and gas produced, net of production costs ....... (8,953) (7,723) (7,084)

Net change due to revisions in quantity estimates ........... (940) (1,739) (1,369)

Accretion of discount ................................. 1,944 1,678 1,072

Production rate changes and other . . . . . . . . . . . . . . . . . . . . . . . 511 2,204 213

Net change in income taxes ............................ 2,464 (2,292) (3,968)

End of year ............................................. $16,355 $20,931 $16,672

Results of Operations for Oil and Gas Producing Activities—

The results of oil and gas producing activities, excluding corporate overhead and interest costs, are as

follows (in thousands):

Years Ended December 31,

2012 2011 2010

Revenues .............................................. $15,954 $ 14,060 $11,021

Costs and expenses —

Production ........................................... (7,091) (6,337) (3,937)

Producing property impairment .......................... (4,699) (7,105) (946)

Exploration .......................................... (1,151) (9,166) (3,233)

Oil and natural gas property sale gain ..................... 2,203 2,923 —

Depreciation, depletion and amortization ................... (8,817) (8,246) (4,662)

Operating income (loss) before income taxes .................. (3,601) (13,871) (1,757)

Income tax (expense) benefit .............................. 1,060 4,854 615

Operating income (loss) .................................. $ (2,541) $ (9,017) $ (1,142)

37
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Adams Resources & Energy, Inc.

Houston, Texas

We have audited the accompanying consolidated balance sheets of Adams Resources & Energy, Inc. and

subsidiaries (the “Company”) as of December 31, 2012 and 2011, and the related consolidated statements of

operations, shareholders’ equity, and cash flows for each of the three years in the period ended December 31,

2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to

express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight

Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free of material misstatement. An audit includes examining, on a test

basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes

assessing the accounting principles used and significant estimates made by management, as well as evaluating

the overall financial statement presentation. We believe that our audits provide a reasonable basis for our

opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial

position of Adams Resources & Energy, Inc. and subsidiaries at December 31, 2012 and 2011, and the results of

their operations and their cash flows for each of the three years in the period ended December 31, 2012, in

conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board

(United States), the Company’s internal control over financial reporting as of December 31, 2012, based on the

criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring

Organizations of the Treadway Commission and our report dated March 15, 2013, expressed an unqualified

opinion on the Company’s internal control over financial reporting.

/s/ Deloitte & Touche LLP

Houston, Texas

March 15, 2013

38
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

MARKET FOR THE REGISTRANT’S COMMON STOCK,

RELATED SECURITY HOLDER MATTERS AND

ISSUER REPURCHASE OF EQUITY SECURITIES

The Company’s common stock is traded on the NYSE MKT under the ticker symbol “AE”. The following

table sets forth the high and low sales prices of the common stock as reported by the NYSE MKT for each

calendar quarter since January 1, 2011.

American Stock

Exchange

High Low

2012

First Quarter ..................................................... $75.13 $29.20

Second Quarter ................................................... 74.73 27.85

Third Quarter ..................................................... 47.33 30.00

Fourth Quarter .................................................... 36.20 28.10

2011

First Quarter ..................................................... $31.30 $22.46

Second Quarter ................................................... 30.50 22.51

Third Quarter ..................................................... 29.07 18.73

Fourth Quarter .................................................... 29.50 18.90

At March 1, 2013 there were approximately 219 shareholders of record of the Company’s common stock

and the closing stock price was $39.92 per share. The Company has no securities authorized for issuance under

equity compensation plans. The Company made no repurchases of its stock during 2012 and 2011.

On December 17, 2012, the Company paid an annual cash dividend of $.62 per common share to common

stockholders of record on December 3, 2012. On December 15, 2011, the Company paid an annual cash dividend

of $.57 per common share to common stockholders of record on December 1, 2011. Such dividends totaled

$2,614,954 and $2,404,000 for 2012 and 2011, respectively.

39
ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

PERFORMANCE GRAPH

The performance graph shown below was prepared under the applicable rules of the SEC based on data

supplied by Research Data Group. The purpose of the graph is to show comparative total stockholder returns for

the Company versus other investment options for a specified period of time. The graph was prepared based upon

the following assumptions:

1. $100.00 was invested on December 31, 2007 in the Company’s common stock, the S&P 500 Index, and

the S&P 500 Integrated Oil and Gas Index.

2. Dividends are reinvested on the ex-dividend dates.

Note: The stock price performance shown on the graph below is not necessarily indicative of future price

performance.

ADAMS RESOURCES & ENERGY, INC.

S&P 500

S&P INTEGRATED OIL & GAS

Comparison of Five Year Cumulative Total Return

Among Adams Resources & Energy, Inc., S&P 500 Index + S&P 500 Integrated Oil & Gas Index

Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12

$60

$80

$100

$120

$160

$140

$40

*$100 Invested on 12/31/07 in stock or index, including reinvestment of dividends.

Fiscal year ending December 31.

12/07 12/08 12/09 12/10 12/11 12/12

Adams Resources & Energy, Inc. 100.00 68.35 90.70 102.34 125.26 153.78

S&P 500 100.00 63.00 79.67 91.67 93.61 108.59

S&P Integrated Oil & Gas 100.00 78.21 77.20 91.75 105.30 107.63

40