-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Rx1ewOEbLZOJat5QxwswK2EmG4AxWp8kW8fixoi5a0QlFxJS0++YbOP+NrO9fosE WTQfKDqeGchpmkZU23HVEA== 0000950136-05-007353.txt : 20051117 0000950136-05-007353.hdr.sgml : 20051117 20051117081825 ACCESSION NUMBER: 0000950136-05-007353 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051117 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051117 DATE AS OF CHANGE: 20051117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUBURBAN PROPANE PARTNERS LP CENTRAL INDEX KEY: 0001005210 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS RETAIL [5900] IRS NUMBER: 223410353 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14222 FILM NUMBER: 051211279 BUSINESS ADDRESS: STREET 1: P O BOX 206 STREET 2: 240 ROUTE 10 WEST CITY: WIPPANY STATE: NJ ZIP: 07981 BUSINESS PHONE: 9738875300 MAIL ADDRESS: STREET 1: ONE SUBURBAN PLZ STREET 2: 240 RTE 10 WEST CITY: WHIPPANY STATE: NJ ZIP: 07981 8-K 1 file001.htm FORM 8-K


                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 Current Report
                     Pursuant to Section 13 or 15 (d) of the
                         Securities Exchange Act of 1934

       Date of Report (Date of earliest event reported) November 17, 2005

                         Commission File Number: 1-14222

                         SUBURBAN PROPANE PARTNERS, L.P.
             (Exact name of registrant as specified in its charter)


  ---------------------------------                      ---------------------
               Delaware                                       22-3410353
     (State or other jurisdiction                          (I.R.S. Employer
  of incorporation or organization)                       Identification No.)

                                240 Route 10 West
                           Whippany, New Jersey 07981
                                 (973) 887-5300
          (Address, including zip code, and telephone number, including
             area code, of registrant's principal executive offices)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

- --------------------------------------------------------------------------------
  [ ]  Written communications pursuant to Rule 425 under the Securities Act
       (17 CFR 230.425)

- --------------------------------------------------------------------------------
  [ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act
       (17 CFR 240.14a-12)

- --------------------------------------------------------------------------------
  [ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the
       Exchange Act (17 CFR 240.14d-2(b))

- --------------------------------------------------------------------------------
  [ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the
       Exchange Act (17 CFR 240.13e-4(c))

================================================================================

ITEM 2.02.  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The following information, including the exhibit attached hereto, shall not be
deemed "filed" for purposes of Section 18 of the Securities Act of 1934, as
amended (the "Exchange Act"), or incorporated by reference in any filing under
the Securities Act of 1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing.





On November 17, 2005, Suburban Propane Partners, L.P. issued a press release
(the "Press Release") describing its Fiscal 2005 Fourth Quarter and Year End
Financial Results. A copy of the Press Release has been furnished as Exhibit
99.1 to this Current Report.

Within the Press Release, we reference earnings before interest, loss on debt
extinguishment, taxes, depreciation and amortization ("EBITDA"). Additionally,
we discuss EBITDA, net income and net income per Common Unit, excluding the
impact of unrealized (non-cash) gains and losses attributable to mark-to-market
activity on derivative instruments recorded in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 133 ("Accounting for Derivative
Instruments and Hedging Activities"), as amended by SFAS Nos. 137, 138 and 149.

We provide these non-GAAP financial measures because we believe that they assist
the investment community in properly assessing our liquidity on a year-over-year
basis. In addition, we believe that these non-GAAP financial measures provide
useful information to investors and industry analysts that facilitates the
comparison of cash flows between periods for purposes of evaluating our ability
to meet our debt service obligations and to pay quarterly distributions.
Moreover, our revolving credit agreement requires us to use EBITDA as a
component in calculating our leverage and interest coverage ratios. A
reconciliation of EBITDA to cash flow provided by operating activities (the most
comparable GAAP measure) is presented in the Press Release furnished as Exhibit
99.1 to this Current Report.

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS

(c) Exhibits.

    99.1   Press Release of Suburban Propane Partners, L.P. dated November 17,
           2005 describing the Fiscal 2005 Fourth Quarter and Year End Financial
           Results.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


November 17, 2005               SUBURBAN PROPANE PARTNERS, L.P.
                                By: /s/ Michael A. Stivala
                                --------------------------
                                Name: Michael A. Stivala
                                Title: Controller and Chief Accounting Officer



EXHIBITS

Exhibit No.  Exhibit
- -----------  -------
99.1         Press Release of Suburban Propane Partners, L.P. dated November 17,
             2005 describing the Fiscal 2005 Fourth Quarter and Year End
             Financial Results.



EX-99.1 2 file002.htm PRESS RELEASE



                                                                    NEWS RELEASE
[SUBURBAN PROPANE LOGO]                                Contact: robert M. Plante
[GRAPHIC OMITTED]                       Vice President & Chief Financial Officer
                                           P.O. Box 206, Whippany, NJ 07981-0206
                                                             Phone: 973-503-9252

- --------------------------------------------------------------------------------

FOR IMMEDIATE RELEASE


                    SUBURBAN PROPANE PARTNERS, L.P. ANNOUNCES
                FISCAL 2005 FOURTH QUARTER AND FULL YEAR RESULTS

WHIPPANY, NEW JERSEY, NOVEMBER 17, 2005 -- Suburban Propane Partners, L.P. (the
"Partnership") (NYSE: SPH), a nationwide marketer of propane gas, fuel oil and
related products and services, today announced its results for the three and
twelve months ended September 24, 2005.


FOURTH QUARTER 2005 RESULTS

Consistent with the seasonal nature of the propane and fuel oil businesses, the
Partnership typically experiences a net loss in its fiscal fourth quarter. For
the fourth quarter of fiscal 2005, the Partnership's net loss was $38.5 million,
or $1.23 per Common Unit, compared to a net loss of $34.0 million, or $1.09 per
Common Unit for the fourth quarter of fiscal 2004. Earnings before interest,
loss on debt extinguishment, taxes, depreciation and amortization ("EBITDA")
amounted to a loss of $17.7 million for the fiscal 2005 fourth quarter, compared
to a loss of $13.0 million for the prior year quarter.

EBITDA and net loss for the fiscal 2005 fourth quarter were negatively impacted
by the net result of certain significant items, mainly relating to (i) a $2.2
million restructuring charge attributable to the realignment of our field
operations, which is expected to generate further efficiencies and realize
synergies at the field operating level; (ii) a $0.7 million charge attributable
to impairment of goodwill associated with our heating, ventilation and air
conditioning ("HVAC") segment; (iii) a $0.8 million charge included within
amortization expense attributable to the impairment of other intangible assets
in our HVAC segment; and (iv) an asset impairment charge of $0.4 million
included within depreciation expense related to assets impacted by the field
realignment. These items had a net negative impact of $2.9 million and $4.1
million on the fiscal 2005 fourth quarter EBITDA and net loss, respectively.

The prior year fourth quarter EBITDA and net loss were favorably impacted $5.6
million and $4.6 million, respectively, by the following significant items: (i)
an $11.5 million gain from the sale of 13 customer service centers considered to
be non-strategic; (ii) a non-cash pension charge of $5.3 million related to
accelerated recognition of actuarial losses in the Partnership's defined benefit
pension plan; (iii) a $0.6 million restructuring charge related to the
integration of certain field and back office functions in the northeast related
to the Agway Energy acquisition; and (iv) a non-cash charge of $1.0 million
related to the write-down of assets to be disposed of as a result of the
Partnership's integration efforts in its northeast operations.




The unprecedented high commodity prices for propane and fuel oil experienced
throughout the fiscal 2005 heating season continued during the fiscal 2005
fourth quarter, thus continuing to negatively impact volumes as a result of
customer conservation. Average posted prices of propane and fuel oil during the
fourth quarter of fiscal 2005 increased 19% and 54%, respectively, compared to
the average posted prices in the prior year quarter. Retail propane gallons sold
in the fourth quarter of fiscal 2005 decreased 8.9 million gallons, or 10.3%, to
77.1 million gallons compared to 86.0 million gallons in the prior year quarter.
Sales of fuel oil and other refined fuels decreased 10.7 million gallons, or
22.3%, to 37.3 million gallons during the fourth quarter of fiscal 2005 compared
to 48.0 million gallons in the prior year quarter, primarily as a result of a
decision in the fourth quarter of fiscal 2004 to exit certain lower margin low
sulfur diesel and gasoline business combined with the impact of high prices on
fuel oil volumes.

Revenues from the distribution of propane and related activities of $155.7
million in the fourth quarter of fiscal 2005 increased $12.0 million, or 8.4%,
compared to $143.7 million in the prior year quarter, primarily due to higher
average selling prices in line with the aforementioned significantly higher
product costs, partially offset by the impact of lower volumes. Revenues of
$78.5 million from distribution of fuel oil and other refined fuels increased
$16.4 million, or 26.4%, from $62.1 million in the prior year quarter, primarily
as the result of higher commodity prices. Revenues in our natural gas and
electricity marketing segment increased $7.4 million, or 54.8%, to $20.9 million
in the fourth quarter of fiscal 2005 compared to $13.5 million in the prior year
quarter, primarily from a rise in natural gas volumes and price. Revenues in our
HVAC segment increased 4.3% to $24.1 million from $23.1 million in the prior
year quarter.

Combined operating and general and administrative expenses of $105.4 million
decreased $0.5 million, or 0.5%, compared to the prior year quarter of $105.9
million. Combined operating and general and administrative expenses declined
despite a $1.3 million increase in professional services as a result of our
first-time compliance with the requirements of Section 404 of the Sarbanes-Oxley
Act and a $0.8 million increase in fuel costs to operate our fleet, as lower
insurance and lower compensation and benefit related expenses more than offset
these negative factors. Operating expenses in the fiscal 2005 fourth quarter
include a $4.4 million unrealized (non-cash) loss attributable to the
mark-to-market on derivative instruments ("FAS 133"), compared to a $4.0 million
unrealized (non-cash) loss in the prior year quarter attributable to FAS 133.


FISCAL YEAR 2005 RESULTS

The Partnership reported a net loss for the fiscal year ended September 24, 2005
of $8.1 million, or $0.26 per Common Unit, compared to net income of $54.3
million, or $1.79 per Common Unit, in fiscal 2004. Fiscal 2005 EBITDA amounted
to $107.1 million, compared to $131.9 million for fiscal 2004.

EBITDA and net loss for fiscal 2005 were unfavorably impacted by $3.5 million
and $40.9 million, respectively, as a result of certain significant items
relating mainly to (i) a $36.2 million loss on debt extinguishment recorded in
the third quarter associated with our debt refinancing; (ii) a $2.8 million
restructuring charge attributable primarily to severance associated with the





realignment of our field operations; (iii) a $0.7 million charge attributable to
impairment of goodwill associated with our HVAC segment; (iv) a $0.8 million
charge included within amortization expense attributable to the impairment of
other intangible assets in our HVAC segment; and (v) $0.4 million included
within depreciation expense attributable to impairment of assets affected by the
field realignment. Fiscal 2005 results reflect a full year of Agway Energy
operations compared to approximately nine months of activity during fiscal 2004,
following the acquisition of Agway Energy on December 23, 2003 ("Agway
Acquisition").

By comparison, EBITDA and net income for fiscal 2004 included the net favorable
impact of $8.6 million and $7.6 million, respectively, from certain significant
items mainly related to (i) a $26.3 million gain from the sale of 24 customer
service centers in the northern and southern central regions of the United
States considered to be non-strategic; (ii) a non-cash charge of $6.3 million
included within cost of products sold related to the settlement of futures
contracts which were marked-to-market under purchase accounting for the Agway
Acquisition; (iii) a non-cash pension settlement charge of $5.3 million related
to accelerated recognition of actuarial losses in the Partnership's defined
benefit pension plan; (iv) a non-cash charge of $3.2 million attributable to
impairment of goodwill related to a small business acquired in 1999; (v) a $2.9
million restructuring charge related to integrating certain field management and
back office functions in the northeast; and (vi) a non-cash charge of $1.0
million included within depreciation expense attributable to the write-down of
assets to be disposed of as a result of the Partnership's efforts to integrate
certain northeast operations.

Fiscal 2005 presented a very challenging operating environment resulting from
the combination of an erratic weather pattern and highly volatile commodity
prices. While nationwide average temperatures, as reported by the National
Oceanic and Atmospheric Administration, were 7% warmer than normal for fiscal
2005 compared to 7% warmer than normal in fiscal 2004, significantly warmer than
normal temperatures during the critical months of November 2004 through February
2005 had a significant negative impact on both propane and fuel oil volumes.
Average temperatures during these critical months were 9% warmer than normal. In
addition to the impact that warmer weather typically has on volumes, the
combination of warm weather and high energy prices has led to increased customer
conservation efforts.

In the commodities markets, the average posted prices of propane and fuel oil
began a precipitous rise in September 2004, which continued to unprecedented
levels during the heating season and through the end of the fiscal year. Average
posted prices of propane and fuel oil during fiscal 2005 increased 26% and 54%,
respectively, compared to average posted prices in fiscal 2004. As a result,
retail propane gallons sold in fiscal 2005 decreased 21.3 million gallons, or
4.0%, to 516.0 million gallons from 537.3 million gallons in fiscal 2004. Sales
of fuel oil and other refined fuels increased 24.0 million gallons, or 10.9%, to
244.5 million gallons, compared to 220.5 million gallons in the prior fiscal
year. The negative impact of warm weather and high energy prices on volumes was
partially offset by a full twelve months of Agway Energy operations in fiscal
2005 compared to nine months in fiscal 2004.

Revenues from the distribution of propane and related activities of $969.9
million in fiscal 2005 increased $113.8 million, or 13.3%, compared to $856.1
million in fiscal 2004, primarily due to higher average selling prices in line
with the aforementioned higher product costs, offset to an





extent by the impact of 4.0% lower volumes. During fiscal 2005, fuel oil prices
experienced unprecedented high levels and extreme volatility. Revenues from the
distribution of fuel oil and other refined fuels increased $149.5 million, or
53.1%, to $431.2 million from $281.7 million in fiscal 2004. However, as
reported for our second and third fiscal quarters, margin opportunities and
therefore profitability in our refined fuels segment were severely restricted
during the fiscal 2005 heating season. We were unable in the prevailing high
price environment to pass on fully the rise in fuel oil prices due to the
restrictions of our fuel oil cap program, which pre-established a maximum price
per gallon, coupled with our decision not to hedge this pricing program for the
February through April deliveries when confronted with unprecedented costs to
properly hedge the program during that period. The lost margin opportunity from
this fuel oil cap program had the most significant negative impact on our
financial results for fiscal 2005 accounting for an estimated impact of $21.5
million on the year-over-year comparison of operating margins in the fuel oil
and refined fuels segment. After evaluating the costs to adequately hedge this
program in the current price environment, management decided to discontinue
offering the fuel oil cap program.

Revenues in our natural gas and electricity marketing segment increased $34.3
million, or 50.1%, to $102.8 million in fiscal 2005 primarily from the
combination of higher average prices and the impact of a full year of operations
in fiscal 2005 compared to nine months in fiscal 2004. Revenues in our HVAC
segment increased 15.2%, to $106.1 million from $92.1 million in fiscal 2004.

Combined operating and general and administrative expenses of $443.4 million
increased $33.2 million, or 8.1%, from $410.2 million in fiscal 2004. The impact
on expenses from a full year of the Agway Energy operations was offset to an
extent by expense savings attributable to synergies achieved in our northeast
operations and continued management of costs within our control. Lower
compensation and benefit related expenses attributable to lower variable
compensation in line with lower earnings, as well as lower insurance costs and
savings in other variable expenses, were offset somewhat by higher bad debt
expenses associated with higher revenues, increased professional services
expenses associated with the first-time compliance requirements of Section 404
of the Sarbanes-Oxley Act and higher fuel and maintenance costs to operate the
Partnership's fleet. Operating expenses for fiscal 2005 included a $2.5 million
unrealized (non-cash) loss attributable to the mark-to-market on derivative
instruments under FAS 133, compared to a $4.5 million unrealized (non-cash) loss
in the prior year attributable to FAS 133.

Depreciation and amortization expense increased $1.1 million, or 3.0%, to $37.8
million primarily as a result of a full year of depreciation and amortization on
the tangible and intangible assets acquired in the Agway Acquisition.
Depreciation and amortization expense in fiscal 2005 included a $0.4 million
asset impairment charge associated with steps taken in the fourth quarter to
realign our field operations, compared to a $1.0 million asset impairment charge
in the prior year. In addition, fiscal 2005 included a $0.8 million impairment
charge associated with certain intangible assets related to our HVAC segment.
Net interest expense decreased $0.4 million, or 1.0%, to $40.4 million in fiscal
2005. The prior year interest expense included a one-time fee of $1.9 million
related to financing commitments for the Agway Acquisition. In addition to the
impact of the fiscal 2004 financing commitment fee, interest expense increased
$1.5 million as a result of the net effect of a full year of interest on debt
used to finance the December 2003





Agway Acquisition and lower average interest rates achieved through the March
31, 2005 refinancing.

In announcing these results, Chief Executive Officer Mark A. Alexander said,
"The combination of unfavorable weather, an extremely volatile commodity
environment and increased customer conservation led to a challenging year in
2005, with the most significant negative financial impact resulting from a
pricing program that is specific to our fuel oil operations. Nevertheless, the
fundamentals of our business remain sound and continue to improve. In the second
half of the year, we took positive steps to add financial flexibility and drive
further efficiencies through our operations, highlighted by the successful
completion of our debt refinancing and, more recently, the reorganization of our
field operations intended to streamline our operating footprint and leverage our
system infrastructure. With the continued integration of the Agway Energy
operations, the operating efficiencies expected from our internal reorganization
and the steps already taken to eliminate the fuel oil cap program, we are well
positioned for significant earnings growth in fiscal 2006 and expect to be back
on track with our historical trend relative to profitability and improving
distribution policy."

Suburban Propane Partners, L.P. is a publicly traded Master Limited Partnership
listed on the New York Stock Exchange. Headquartered in Whippany, New Jersey,
Suburban has been in the customer service business since 1928. The Partnership
serves the energy needs of approximately 1,000,000 residential, commercial,
industrial and agricultural customers through more than 370 customer service
centers in 30 states.
                                      # # #





                SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
          FOR THE THREE AND TWELVE MONTHS ENDED SEPTEMBER 24, 2005 AND
           SEPTEMBER 25, 2004 (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
                                   (UNAUDITED)


                                                                          THREE MONTHS ENDED              TWELVE MONTHS ENDED
                                                                     SEPTEMBER 24,   SEPTEMBER 25,   SEPTEMBER 24,   SEPTEMBER 25,
                                                                         2005            2004            2005            2004
                                                                     -------------   -------------   -------------   -------------

Revenues
  Propane                                                              $ 155,668       $ 143,694       $ 969,943      $  856,109
  Fuel oil and refined fuels                                              78,515          62,063         431,223         281,682
  Natural gas and electricity                                             20,872          13,478         102,803          68,452
  HVAC                                                                    24,114          23,080         106,115          92,072
  All other                                                                2,470           2,349          10,150           8,939
                                                                       ---------       ---------       ---------      ----------
                                                                         281,639         244,664       1,620,234       1,307,254

Costs and expenses
  Cost of products sold                                                  191,106         156,413       1,067,248         779,029
  Operating                                                               93,084          92,022         396,235         356,359
  General and administrative                                              12,361          13,872          47,191          53,888
  Restructuring costs                                                      2,150             560           2,775           2,942
  Pension settlement charge                                                    -           5,337               -           5,337
  Impairment of goodwill                                                     656               -             656           3,177
  Depreciation and amortization                                           10,249          11,114          37,762          36,743
                                                                       ---------       ---------       ---------      ----------
                                                                         309,606         279,318       1,551,867       1,237,475

(Loss) income before interest expense, loss on debt
  extinguishment and provision for income taxes                          (27,967)        (34,654)         68,367          69,779
Loss on debt extinguishment                                                    -               -          36,242               -
Interest expense, net                                                     10,088           9,804          40,374          40,832
                                                                       ---------       ---------       ---------      ----------

(Loss) income before provision for income taxes                          (38,055)        (44,458)         (8,249)         28,947
Provision for income taxes                                                   467             120             803               3
                                                                       ---------       ---------       ---------      ----------
(Loss) income from continuing operations                                 (38,522)        (44,578)         (9,052)         28,944
Discontinued operations:
  Gain on sale of customer service centers                                     -          11,508             976          26,332
  (Loss) from discontinued customer service centers                            -            (940)              -            (972)
                                                                       ---------       ---------       ---------      ----------

Net (loss) income                                                      $ (38,522)      $ (34,010)       $ (8,076)     $   54,304
                                                                       =========       =========        ========      ==========
General Partner's interest in net (loss) income                        $  (1,197)       $ (1,057)         $ (251)     $    1,310
                                                                       ---------       ---------       ---------      ----------
Limited Partners' interest in net (loss) income                        $ (37,325)      $ (32,953)       $ (7,825)     $   52,994
                                                                       =========       =========        ========      ==========

(Loss) income from continuing operations per Common Unit - basic       $   (1.23)        $ (1.43)       $  (0.29)     $     0.96
Discontinued Operations                                                $       -          $ 0.34        $   0.03      $     0.83
                                                                       =========       =========        ========      ==========
Net (loss) income per Common Unit - basic                              $   (1.23)        $ (1.09)       $  (0.26)     $     1.79
                                                                       =========       =========        ========      ==========
Weighted average number of Common Units outstanding - basic               30,278          30,257          30,276          29,599
                                                                       ---------       ---------       ---------      ----------

(Loss) income from continuing operations per Common Unit - diluted     $   (1.23)        $ (1.43)       $  (0.29)     $     0.96
Discontinued Operations                                                $       -          $ 0.34        $   0.03      $     0.82
                                                                       =========       =========        ========      ==========
Net (loss) income per Common Unit - diluted                            $   (1.23)        $ (1.09)       $  (0.26)     $     1.78
                                                                       =========       =========        ========      ==========
Weighted average number of Common Units outstanding - diluted             30,278          30,257          30,276          29,705
                                                                       ---------       ---------       ---------      ----------


Supplemental Information:
EBITDA (a)                                                             $ (17,718)      $ (12,972)       $107,105      $  131,882
Retail gallons sold:
      Propane                                                             77,128          85,976         516,040         537,330
      Refined fuels                                                       37,276          47,956         244,536         220,469





                                     (more)



(a)   EBITDA represents net income (loss) before deducting interest expense,
      loss on debt extinguishment, income taxes, depreciation and amortization.
      Our management uses EBITDA as a measure of liquidity and we are including
      it because we believe that it provides our investors and industry analysts
      with additional information to evaluate our ability to meet our debt
      service obligations and to pay our quarterly distributions to holders of
      our Common Units. Moreover, our revolving credit agreement requires us to
      use EBITDA as a component in calculating our leverage and interest
      coverage ratios. EBITDA is not a recognized term under generally accepted
      accounting principles ("GAAP") and should not be considered as an
      alternative to net income or net cash provided by operating activities
      determined in accordance with GAAP. Because EBITDA, as determined by us,
      excludes some, but not all, items that affect net income, it may not be
      comparable to EBITDA or similarly titled measures used by other companies.
      The following table sets forth (i) our calculation of EBITDA and (ii) a
      reconciliation of EBITDA, as so calculated, to our net cash provided by
      operating activities:



                                                                    THREE MONTHS ENDED                 TWELVE MONTHS ENDED
                                                             SEPTEMBER 24,     SEPTEMBER 25,     SEPTEMBER 24,     SEPTEMBER 25,
                                                                 2005              2004              2005              2004
                                                             -------------     -------------     -------------     -------------

Net (loss) / income                                           $ (38,522)        $ (34,010)         $  (8,076)        $  54,304
Add:
  Provision for income taxes                                        467               120                803                 3
  Loss on debt extinguishment                                         -                 -             36,242                 -
  Interest expense, net                                          10,088             9,804             40,374            40,832
  Depreciation and amortization                                  10,249            11,114             37,762            36,743
                                                              ---------         ---------          ---------         ---------
EBITDA                                                          (17,718)          (12,972)           107,105           131,882
                                                              ---------         ---------          ---------         ---------
Add / (subtract):
  Provision for income taxes                                       (467)             (120)              (803)               (3)
  Loss on debt extinguishment                                         -                 -            (36,242)                -
  Interest expense, net                                         (10,088)           (9,804)           (40,374)          (40,832)
  Gain on disposal of property, plant and equipment, net           (155)             (562)            (2,043)             (715)
  Gain on sale of customer service centers                            -           (11,508)              (976)          (26,332)
  Changes in working capital and other assets
    and liabilities                                              45,146            26,795             12,338            29,065
                                                              ---------         ---------          ---------         ---------
Net cash provided by / (used in) operating activities         $  16,718         $  (8,171)         $  39,005         $  93,065
                                                              =========         =========          =========         =========
Net cash (used in) / provided by investing activities         $  (5,505)        $   7,547          $ (24,631)        $(196,557)
                                                              =========         =========          =========         =========
Net cash (used in) / provided by financing activities         $  (8,010)        $ (61,666)         $ (53,444)        $ 141,208
                                                              =========         =========          =========         =========





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