Acquisition of Inergy Propane

9 Months Ended

Jun. 29, 2013

Acquisition of Inergy Propane [Abstract]

Acquisition of Inergy Propane

3. Acquisition of Inergy Propane

As described in Note 1, the Partnership completed the acquisition of Inergy Propane on August 1, 2012. The acquisition of Inergy Propane was consummated pursuant to a definitive agreement dated April 25, 2012 with Inergy, Inergy GP, LLC and Inergy Sales and Service, Inc., as amended. See Note 3, “Acquisition of Inergy Propane,” included within the Notes to Consolidated Financial Statements section of our Annual Report on Form 10-K for the fiscal year ended September 29, 2012.

The Inergy Propane acquisition is consistent with key elements of the Partnership’s strategy for operational growth, which is to focus on acquiring businesses with a relatively steady cash flow that will extend the Partnership’s presence in strategically attractive markets and complement its existing business segments.

During the third quarter of fiscal 2013, the Partnership finalized the third party valuations of the Acquisition Date fair value of certain assets acquired, principally property, plant and equipment, and intangible assets. The condensed consolidated balance sheets as of June 29, 2013 and September 29, 2012 reflect the final allocation of the purchase price to the assets acquired and liabilities assumed in this business combination.

The table provides the final purchase price allocation:

Cash and cash equivalents	$	7,964
Accounts receivable		36,076
Inventories		30,457
Other current assets		2,067
Current assets acquired		76,564
Property, plant & equipment		617,854
Customer relationships		445,500
Non-compete agreements		23,059
Other intangible assets		1,983
Goodwill		809,778
Other assets		2,151
Total assets acquired	$	1,976,889
Liabilities assumed:
Accounts payable	$	16
Accrued employment and benefit costs		2,149
Customer deposits and advances		48,469
Other current liabilities		18,613
Other noncurrent liabilities		16,727
Total liabilities assumed		85,974
Total	$	1,890,915

The final purchase price allocation resulted in the following adjustments to the provisional fair value estimates: property, plant and equipment decreased $33,302, intangible assets (principally customer relationships) increased $39,583, other current assets decreased $765 and other noncurrent liabilities increased $646. The net effect of these adjustments resulted in a $4,870 decrease to goodwill as of the Acquisition Date. Prior period results of operations have been revised for any increase or decrease to certain components of net income as indicated in the table below.

	Increase (decrease)
	Fiscal 2012			Fiscal 2013
	Three months ended			Three months ended			Three months ended
	September 29, 2012			December 29, 2012			March 30, 2013
Depreciation expense	$	(205	)	$	(305	)	$	(340	)
Amortization expense		1,449			2,473			2,008
Total depreciation & amortization expense	$	1,244		$	2,168		$	1,668

The following presents a comparison of the actual results for the three and nine months ended June 29, 2013 with the unaudited pro forma combined financial information for the three and nine months ended June 23, 2012 as if the Inergy Propane acquisition had occurred on September 26, 2010, the first day of the Partnership’s 2011 fiscal year. The unaudited pro forma combined financial information is not necessarily indicative of the results that would have occurred had the Inergy Propane acquisition occurred on the date indicated, nor is it necessarily indicative of future operating results.

	Three Months Ended						Nine Months Ended
	June 29, 2013			June 23, 2012			June 29, 2013		June 23, 2012
Revenues	$	290,805		$	307,679		$	1,459,934	$	1,582,831
Net (loss) income	$	(45,188	)	$	(37,312	)	$	141,917	$	66,615
(Loss) income per Common Unit
Basic	$	(0.77	)	$	(0.66	)	$	2.46	$	1.19
Diluted	$	(0.77	)	$	(0.66	)	$	2.45	$	1.18