Business Context and Reporting Period
Company: Suburban Propane Partners, L.P.
Filing Type: Form 8-K (Current Report)
Date: November 11, 2010
Subject: Announcement of Fiscal 2010 Fourth Quarter Financial Results.
Key Financial Metrics
This filing serves as a notification of the release of financial results and does not contain specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. The document references the following metrics as discussed in the attached press release (Exhibit 99.1):
- EBITDA: Earnings before interest, income taxes, depreciation, and amortization (Non-GAAP).
- Adjusted EBITDA: EBITDA excluding unrealized gains/losses on derivatives, loss on debt extinguishment, and pension settlement charges.
- Gross Margins: Defined as revenues less cost of products sold (Non-GAAP).
- Net Income and Net Income per Common Unit: Referenced in the context of Adjusted EBITDA calculations.
Note: The filing text does not provide clear values for these metrics; they are contained within the referenced Exhibit 99.1.
Material Changes and Comparisons
The filing does not detail specific material changes or year-over-year comparisons. It states that the non-GAAP measures (Adjusted EBITDA and Gross Margins) are provided to assist investors in assessing liquidity and profitability on a year-over-year basis and to evaluate the impact of commodity prices.
Management Commentary and Non-GAAP Measures
Management utilizes specific non-GAAP financial measures for the following reasons:
- Liquidity Assessment: To assist the investment community in assessing liquidity on a year-over-year basis.
- Debt Service and Distributions: To facilitate comparison of cash flows for evaluating the ability to meet debt service obligations and pay quarterly distributions.
- Compensation: Adjusted EBITDA is used as a performance target for executive and employee incentive compensation plans.
- Credit Agreement Compliance: The revolving credit agreement requires Adjusted EBITDA for calculating leverage and interest coverage ratios.
- Commodity Impact: Gross margins are highlighted to demonstrate the impact of the difference between retail sales prices and product costs on profitability.
A reconciliation of Adjusted EBITDA to net cash provided by operating activities is presented in the attached press release.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release dated November 11, 2010) for specific numerical values regarding Q4 2010 revenue, net income, and Adjusted EBITDA.
- Verify the reconciliation of Adjusted EBITDA to net cash provided by operating activities in the press release.
- Assess the impact of unrealized gains/losses on derivative instruments and pension settlement charges on reported earnings.
- Confirm the company's leverage and interest coverage ratios as calculated under the revolving credit agreement.