Business Context and Reporting Period
Company: Suburban Propane Partners, L.P.
Filing Type: Form 8-K (Current Report)
Date of Report: May 10, 2007
Reporting Period: Fiscal 2007 Second Quarter
This filing serves as a current report to announce the issuance of a press release detailing the company's financial results for the second quarter of fiscal 2007. The company operates in the retail propane, fuel oil, natural gas, and electricity sectors.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. Instead, it outlines the methodology for reporting non-GAAP measures included in the attached press release (Exhibit 99.1):
- EBITDA: Defined as earnings before interest, income taxes, depreciation, and amortization. The company uses this to assess liquidity, debt service obligations, and distribution capabilities.
- Adjusted Net Income: Net income and net income per Common Unit excluding unrealized (non-cash) gains or losses from mark-to-market activity on derivative instruments (SFAS No. 133).
- Gross Margins: Computed as revenues less cost of products sold. This is used to evaluate the impact of commodity prices on profitability, as cost of products sold excludes depreciation and amortization.
Material Changes
The filing text does not contain specific data regarding material changes in financial performance compared to the prior comparable period. It references a press release (Exhibit 99.1) which contains the detailed results and year-over-year comparisons.
Guidance, Outlook, and Management Commentary
Management Commentary on Non-GAAP Measures:
Management states that non-GAAP measures (EBITDA and adjusted net income) are provided to assist the investment community in assessing liquidity on a year-over-year basis and to facilitate cash flow comparisons for evaluating debt service and distribution payments. Additionally, EBITDA is utilized as a performance target for executive incentive compensation plans and as a component in calculating leverage and interest coverage ratios under the company's revolving credit agreement.
Risks and Contingencies:
The filing notes that profitability in the company's core businesses is largely dependent on the difference between retail sales prices and product costs, highlighting the sensitivity to commodity price fluctuations.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release) for specific numerical values regarding revenue, EBITDA, and net income for the Fiscal 2007 Second Quarter.
- Verify the reconciliation of EBITDA to cash flow provided by operating activities as mentioned in the press release.
- Examine the impact of mark-to-market activity on derivative instruments on reported net income versus adjusted net income.
- Confirm the company's leverage and interest coverage ratios based on the EBITDA figures provided in the full press release.