Business Context and Reporting Period
Company: Suburban Propane Partners, L.P.
Filing Type: Form 8-K (Current Report)
Date of Report: May 6, 2010
Reporting Period: Fiscal 2010 Second Quarter
This filing serves as a notification that the Company issued a press release detailing its financial results for the second quarter of fiscal 2010. The report focuses on the disclosure of non-GAAP financial measures used to assess liquidity and operational performance.
Key Financial Metrics
The filing text itself does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. Instead, it defines the non-GAAP metrics referenced in the attached press release (Exhibit 99.1):
- EBITDA: Earnings before interest, income taxes, depreciation, and amortization.
- Adjusted EBITDA: EBITDA, net income, and net income per Common Unit, excluding unrealized (non-cash) gains/losses from mark-to-market activity on derivative instruments and loss on debt extinguishment.
- Gross Margins: Computed as revenues less cost of products sold (excluding depreciation and amortization).
These metrics are utilized to evaluate the Company's ability to meet debt service obligations, pay quarterly distributions, and assess the impact of commodity prices on profitability.
Material Changes
The filing text does not contain specific data regarding material changes in financial position or results of operations compared to the prior comparable period. It states that a reconciliation of Adjusted EBITDA to net cash provided by operating activities is presented in the attached press release, but the specific figures are not included in this 8-K document.
Guidance, Outlook, and Management Commentary
Management Commentary:
- Management believes Adjusted EBITDA assists the investment community in assessing liquidity on a year-over-year basis.
- Adjusted EBITDA is used as a performance target for certain executive incentive compensation plans.
- The Company's revolving credit agreement requires the use of Adjusted EBITDA to calculate leverage and interest coverage ratios.
- Gross margins are discussed to help investors understand the impact of the difference between retail sales prices and product costs in the retail propane, fuel oil, natural gas, and electricity businesses.
Guidance and Risks:
- The filing does not contain specific forward-looking guidance, risk factors, or contingencies beyond the general reliance on commodity price differentials for profitability.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release dated May 6, 2010) for specific numerical values regarding revenue, net income, and Adjusted EBITDA for the Fiscal 2010 Second Quarter.
- Verify the reconciliation of Adjusted EBITDA to net cash provided by operating activities in the press release.
- Confirm the specific impact of mark-to-market activity on derivative instruments and debt extinguishment losses on the reported earnings.
- Check the Company's leverage and interest coverage ratios as calculated under the revolving credit agreement.