Business Context and Reporting Period
Company: Suburban Propane Partners, L.P.
Filing Type: Form 8-K (Current Report)
Date of Report: August 3, 2006
Reporting Period: Fiscal 2006 Third Quarter
This filing serves as a notification that the Company issued a press release on August 3, 2006, detailing its Fiscal 2006 Third Quarter financial results. The full financial data is contained within the attached press release (Exhibit 99.1) and is not explicitly detailed in the body of this 8-K form.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. It references the following non-GAAP financial measures discussed in the attached press release:
- EBITDA: Earnings before interest, income taxes, depreciation, and amortization.
- Adjusted EBITDA: EBITDA excluding loss on debt extinguishment.
- Net Income Adjustments: 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: Defined as revenues less cost of products sold (excluding depreciation and amortization).
Material Changes and Comparisons
The filing text does not provide specific data regarding material changes versus the prior comparable period. It states that the Company provides non-GAAP measures to assist the investment community in assessing liquidity on a year-over-year basis and to facilitate the comparison of cash flows between periods.
Management Commentary, Risks, and Unusual Items
Management Commentary on Non-GAAP Measures:
Management utilizes EBITDA and Adjusted EBITDA to evaluate the ability to meet debt service obligations and pay quarterly distributions. These metrics are also used as performance targets for executive incentive compensation plans and are required components for calculating leverage and interest coverage ratios under the Company's revolving credit agreement.
Business Context and Risks:
The filing notes that profitability in the retail propane, fuel oil, natural gas, and electricity businesses is largely dependent on the difference between retail sales prices and product costs. Consequently, gross margins are highlighted to demonstrate the impact of commodity prices on profitability.
Unusual Items:
The Company references the exclusion of unrealized (non-cash) gains or losses attributable to mark-to-market activity on derivative instruments when discussing net income.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release) for specific numerical values regarding revenue, net income, and cash flow for the Fiscal 2006 Third Quarter.
- Verify the reconciliation of EBITDA and Adjusted EBITDA to cash flow used in operating activities as presented in the press release.
- Assess the impact of commodity price fluctuations on gross margins as described in the management commentary.
- Confirm the Company's compliance with leverage and interest coverage ratios under its revolving credit agreement using the reported EBITDA figures.