<PAGE>
<PAGE>
CONFORMED COPY
________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q/A
(AMENDMENT NO. 1)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 1-11867
NATIONAL PROPANE PARTNERS, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 42-1453040
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
200 FIRST STREET S.E., IES TOWER, SUITE 1700,
CEDAR RAPIDS, IA 52401-1409
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(319) 365-1550
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST REPORT)
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the last 90 days. Yes __X__ No _______
There were 6,301,550 Common Units and 4,533,638 Subordinated Units
outstanding as of October 31, 1996.
________________________________________________________________________________
<PAGE>
<PAGE>
This Form 10-Q/A of National Propane Partners, L.P. (the 'Registrant')
constitutes Amendment No. 1, ('Amendment No. 1') to the Registrant's Form 10-Q
for the quarterly period ended September 30, 1996 and amends Part I -- Financial
Information, Item 1 -- Financial Statements and Item 2 -- Management's
Discussion and Analysis of Financial Condition and Results of Operations and
Part II -- Other Information, Item 5 -- Other Events and Item 6 -- Exhibits and
Reports on Form 8-K. This Amendment No. 1 is being filed in order to present the
results of operations of the Registrant as one continuing entity which reflects
the operations of both (i) the Predecessor Company prior to the Registrant's
transfer of substantially all of its assets to the Partnership Entities on July
2, 1996 and (ii) the Partnership Entities subsequent thereto. As such, the
condensed consolidated statements of operations for the three and nine-month
periods ended September 30, 1996 have been adjusted to include an extraordinary
charge relating to the Managing General Partner for the early extinguishment of
its debt concurrent with the Partnership Conveyance. (See Notes 1 and 2 to the
condensed consolidated financial statements in this Amendment No. 1 for the
descriptions of the Predecessor Company, the Partnership Entities and the
revised basis of financial statement presentation discussed above.)
<PAGE>
<PAGE>
NATIONAL PROPANE PARTNERS, L.P.
INDEX TO FORM 10-Q/A
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Part I -- Financial Information
Item 1 -- Financial Statements -- National Propane Partners, L.P. (Successor to National Propane
Corporation and Subsidiaries):
Condensed Consolidated Balance Sheets -- December 31, 1995 and September 30, 1996................ 3
Condensed Consolidated Statements of Operations -- Three months ended September 30, 1995 and 1996
and nine months ended September 30, 1995 and 1996................................................ 4
Condensed Consolidated Statements of Cash Flows -- Nine months ended September 30, 1995 and
1996............................................................................................. 5
Notes to Condensed Consolidated Financial Statements............................................. 6
Item 2 -- Management's Discussion and Analysis of Financial Condition and Results of Operations....... 13
Part II -- Other Information
Item 5 -- Other Events................................................................................ 17
Item 6 -- Exhibits and Reports on Form 8-K............................................................ 17
Signature............................................................................................. 18
</TABLE>
2
<PAGE>
<PAGE>
NATIONAL PROPANE PARTNERS, L.P.
(SUCCESSOR TO NATIONAL PROPANE CORPORATION
AND SUBSIDIARIES)
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1995(A) 1996
------------ -------------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents..................................................... $ 2,825 $ 4,671
Receivables, net.............................................................. 16,391 10,258
Finished goods inventories.................................................... 10,543 14,197
Interest receivable from Triarc Companies, Inc................................ -- 1,370
Other current assets.......................................................... 4,340 1,526
------------ -------------
Total current assets..................................................... 34,099 32,022
Due from Triarc Companies, Inc. ................................................... -- 40,700
Properties, net.................................................................... 83,214 81,178
Unamortized costs in excess of net assets of acquired companies.................... 15,161 14,760
Other assets....................................................................... 6,638 7,015
------------ -------------
$139,112 $ 175,675
------------ -------------
------------ -------------
LIABILITIES AND PARTNERS' CAPITAL/STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt............................................. $ 11,278 $ 315
Accounts payable.............................................................. 7,836 6,986
Due to Triarc Companies, Inc. and another affiliate........................... 9,972 --
Accrued expenses.............................................................. 9,370 12,838
------------ -------------
Total current liabilities................................................ 38,456 20,139
Long-term debt..................................................................... 124,266 126,968
Deferred income taxes.............................................................. 22,878 --
Customer deposits.................................................................. 2,112 2,026
Commitments and contingencies......................................................
Partners' capital/Stockholders' deficit:
Stockholders' deficit......................................................... (48,600) --
Common unitholders' capital................................................... -- 14,816
General partners' capital -- including subordinated units..................... -- 11,726
------------ -------------
Total Partners' capital/Stockholders' deficit............................ (48,600) 26,542
------------ -------------
$139,112 $ 175,675
------------ -------------
------------ -------------
</TABLE>
- ------------
(A) Derived from the audited consolidated financial statements as of December
31, 1995
See accompanying notes to condensed consolidated financial statements
3
<PAGE>
<PAGE>
NATIONAL PROPANE PARTNERS, L.P.
(SUCCESSOR TO NATIONAL PROPANE CORPORATION
AND SUBSIDIARIES)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- -----------------------------
1995 1996 1995 1996
------------- ---------- ------------- -------------
(IN THOUSANDS, EXCEPT UNIT AMOUNTS)
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues.................................................. $25,736 $ 27,720 $ 102,461 $ 116,018
------------- ---------- ------------- -------------
Cost of sales:
Cost of product -- propane and appliances............ 10,961 13,253 43,814 55,066
Other operating expenses applicable to revenues...... 10,419 11,578 33,727 34,031
------------- ---------- ------------- -------------
Gross profit.................................... 4,356 2,889 24,920 26,921
Selling, general and administrative....................... 5,626 4,756 15,506 17,009
Management fees........................................... 750 -- 2,250 1,500
------------- ---------- ------------- -------------
Operating income (loss)......................... (2,020) (1,867) 7,164 8,412
------------- ---------- ------------- -------------
Other income (expense):
Interest expense..................................... (2,906) (2,825) (8,731) (9,067)
Interest income from Triarc Companies, Inc. ......... -- 1,370 -- 1,370
Other income, net.................................... 209 152 698 662
------------- ---------- ------------- -------------
(2,697) (1,303) (8,033) (7,035)
------------- ---------- ------------- -------------
Income (loss) before income taxes and
extraordinary charge.......................... (4,717) (3,170) (869) 1,377
Provision for (benefit from) income taxes................. (1,839) -- (264) 1,922
------------- ---------- ------------- -------------
Loss before extraordinary charge................ (2,878) (3,170) (605) (545)
Extraordinary charge...................................... -- (2,631) -- (2,631)
------------- ---------- ------------- -------------
Net loss........................................ $(2,878) $ (5,801) $ (605) $ (3,176)
------------- ---------- ------------- -------------
------------- ---------- ------------- -------------
General partners' interest in:
Loss before extraordinary charge..................... $ (127)
Extraordinary charge................................. (2,631)
----------
Net loss........................................ $ (2,758)
----------
----------
Unitholders' interest in net loss......................... $ (3,043)
----------
----------
Net loss per unit......................................... $ (0.28)
----------
----------
Weighted average number of units outstanding.............. 10,809,834
----------
----------
</TABLE>
See accompanying notes to condensed consolidated financial statements
4
<PAGE>
<PAGE>
NATIONAL PROPANE PARTNERS, L.P.
(SUCCESSOR TO NATIONAL PROPANE CORPORATION
AND SUBSIDIARIES)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------
1995 1996
------- ---------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net loss............................................................................. $ (605) $ (3,176)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization of properties..................................... 6,070 7,489
Amortization of costs in excess of net assets of acquired companies............. 373 540
Amortization of deferred financing costs........................................ 958 710
Other amortization.............................................................. 245 270
Write-off of deferred financing costs........................................... -- 4,126
Provision for doubtful accounts................................................. 577 947
Deferred income tax benefit..................................................... (1,222) (2,520)
Gain on sales of properties..................................................... (135) (39)
Other, net...................................................................... (568) (73)
Changes in operating assets and liabilities:
Decrease in receivables.................................................... 7,271 5,187
Increase in inventories.................................................... (3,938) (3,636)
Decrease in prepaid expenses and other current assets...................... 611 104
Increase (decrease) in accounts payable and accrued expenses............... (2,171) 3,154
------- ---------
Net cash provided by operating activities....................................... 7,466 13,229
------- ---------
Cash flows from investing activities:
Capital expenditures................................................................. (6,615) (4,997)
Business acquisitions................................................................ (290) (1,030)
Proceeds from sales of properties.................................................... 426 237
------- ---------
Net cash used in investing activities........................................... (6,479) (5,790)
------- ---------
Cash flows from financing activities:
Repayments of long-term debt......................................................... (13,157) (137,302)
Proceeds of First Mortgage Notes..................................................... -- 125,000
Proceeds from other long-term debt................................................... 8,500 3,800
Payment of dividend to Triarc Companies, Inc......................................... -- (59,300)
Net proceeds of initial public offering.............................................. -- 117,933
(Increase) decrease in due to/from Triarc Companies, Inc. and another affilate....... 1,244 (50,611)
Deferred financing costs............................................................. (812) (5,087)
Other................................................................................ -- (26)
------- ---------
Net cash used in financing activities........................................... (4,225) (5,593)
------- ---------
Net increase (decrease) in cash........................................................... (3,238) 1,846
Cash and cash equivalents at beginning of period.......................................... 3,983 2,825
------- ---------
Cash and cash equivalents at end of period................................................ $ 745 $ 4,671
------- ---------
------- ---------
</TABLE>
See accompanying notes to condensed consolidated financial statements
5
<PAGE>
<PAGE>
NATIONAL PROPANE PARTNERS, L.P.
(SUCCESSOR TO NATIONAL PROPANE CORPORATION
AND SUBSIDIARIES)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 -- ORGANIZATION
National Propane Partners, L.P. (the 'Partnership') was formed on March 13,
1996 as a Delaware limited partnership. The Partnership and its subsidiary
partnership National Propane, L.P (the 'Operating Partnership') were formed to
acquire, own and operate the propane business and substantially all the assets
and liabilities (principally all assets and liabilities other than amounts due
from a parent, deferred financing costs and income tax liabilities) of National
Propane Corporation and subsidiaries ('National Propane', and referred to
subsequent to the initial public offering (described below) as the 'Managing
General Partner'), a wholly-owned subsidiary of Triarc Companies, Inc.
('Triarc'). In addition, National Sales & Service, Inc. ('NSSI'), a subsidiary
of the Operating Partnership, was formed to acquire and operate the service work
and appliance and parts sales business of National Propane. The Partnership, the
Operating Partnership and NSSI are collectively referred to hereinafter as the
'Partnership Entities'. The Partnership Entities consummated in July, 1996, an
initial public offering, (the 'Offering'), of 6,301,550 common units
representing limited partner interests in the Partnership (the 'Common Units')
for an offering price of $21.00 per Common Unit aggregating $132,333,000 before
$14,400,000 of underwriting discounts and commissions and other expenses related
to the Offering. On July 2, 1996 the Managing General Partner issued in a
private placement $125,000,000 of 8.54% First Mortgage Notes due June 30, 2010
(the 'First Mortgage Notes'). The Operating Partnership assumed the Managing
General Partner's obligation under the First Mortgage Notes in connection with
the conveyance on July 2, 1996 (the 'Partnership Conveyance') by the Managing
General Partner and National Propane SGP Inc., a subsidiary of the Managing
General Partner (the 'Special General Partner' and, together with the Managing
General Partner, referred to as the 'General Partners'), of substantially all of
their assets and liabilities (which did not include an existing $81,392,000
intercompany note from Triarc, $59,300,000 of the net proceeds from the issuance
of the First Mortgage Notes which was used to pay a dividend to Triarc and
certain net liabilities of the General Partners). On November 6, 1996 the
Partnership sold an additional 400,000 Common Units through a private placement
at a price of $21.00 per Common Unit aggregating $8,400,000 before fees and
estimated expenses of $1,033,000, resulting in net proceeds to the Partnership
of $7,367,000.
The General Partners own general partner interests representing an
aggregate 4% unsubordinated general partner interest in the Partnership and the
Operating Partnership on a combined basis. In addition, the Managing General
Partner owns 4,533,638 subordinated units (the 'Subordinated Units')
representing a 40.2% (38.7% after the November 6, 1996 sale of 400,000 Common
Units) subordinated general partner interest in the Partnership Entities. The
Common Units and the Subordinated Units together represent the limited partners'
interest (the 'Limited Partners' Interest').
NOTE 2 -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
presented herein reflect the effects of the Partnership Conveyance and the
Offering, in which the Partnership Entities became the successor to the
businesses of National Propane. Because the Partnership Conveyance was a
transfer of assets and liabilities in exchange for partnership interests among a
controlled group of companies, it has been accounted for in a manner similar to
a pooling of interests, resulting in the presentation of the Partnership
Entities as the successor to the continuing businesses of National Propane. The
entity representative of both the operations of (i) National Propane prior to
the Partnership Conveyance, the Offering and related transactions which occurred
on July 2, 1996 and (ii) the Partnership Entities subsequent to such
transactions, is referred to herein as 'National'. Those assets and liabilities
not conveyed to the Partnership were retained by the Managing General Partner.
Such condensed consolidated financial statements have been prepared in
accordance with Rule 10-01 of Regulation S-X promulgated by the Securities and
Exchange Commission and, therefore, do not include
6
<PAGE>
<PAGE>
NATIONAL PROPANE PARTNERS, L.P.
(SUCCESSOR TO NATIONAL PROPANE CORPORATION
AND SUBSIDIARIES)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
all information and footnotes necessary for a fair presentation of financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles. In the opinion of National, however, the
accompanying condensed consolidated financial statements contain all
adjustments, consisting only of normal recurring adjustments, necessary to
present fairly National's financial position, results of operations and cash
flows.
The condensed consolidated financial statements including the nine months
ended September 30, 1995 reflect the effects of the June 1995 merger (the
'Merger') of Public Gas Company with and into National. Prior thereto Public Gas
was an indirect wholly-owned subsidiary of Triarc. Because the Merger was a
transfer of assets and liabilities in exchange for shares among a controlled
group of companies, it has been accounted for in a manner similar to a pooling
of interests and, accordingly, the aforementioned 1995 period has been restated
to reflect the Merger.
NOTE 3 -- PROPERTIES
The following is a summary of the components of properties, net:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1995 1996
------------ -------------
(IN THOUSANDS)
<S> <C> <C>
Properties, at cost............................................ $165,216 $ 170,441
Less accumulated depreciation.................................. 82,002 89,263
------------ -------------
$ 83,214 $ 81,178
------------ -------------
------------ -------------
</TABLE>
NOTE 4 -- LONG TERM DEBT AND EXTRAORDINARY CHARGE
First Mortgage Notes -- National issued $125,000,000 of First Mortgage
Notes in a private placement, and prepaid $128,469,000 of existing indebtedness,
resulting in an extraordinary charge, net of income taxes, of $2,631,000
relating primarily to the write-off of $4,126,000 of deferred financing costs
applicable to such early extinguishment of debt. The First Mortgage Notes bear
interest at a fixed annual rate of 8.54% payable semi-annually in arrears and
amortize in eight equal annual installments of $15,625,000 beginning June 30,
2003 through June 30, 2010.
Bank Credit Facility -- Concurrent with the Offering, National entered into
a $55 million bank credit facility (the 'Bank Credit Facility') with a group of
banks. The Bank Credit Facility includes a $15 million working capital facility
(the 'Working Capital Facility') and a $40 million acquisition facility (the
'Acquisition Facility'), the use of which is restricted to business acquisitions
and capital expenditures for growth. The Bank Credit Facility bears interest, at
National's option, at either (i) the 30, 60, 90 or 180-day London Interbank
Offered Rate plus a margin generally ranging from 1% to 1.75% or (ii) the higher
of (a) the prime rate and (b) the Federal funds rate plus 0.5%, in either case,
plus a margin of up to 0.25%. The Working Capital Facility matures in full in
July 1999. However, National must reduce the borrowings under the Working
Capital Facility to zero for a period of at least 30 consecutive days in each
year between March 1 and August 31. The Acquisition Facility converts to a term
loan in July 1998 and amortizes thereafter in equal quarterly installments
through July 2001.
National's Bank Credit Facility and the First Mortgage Notes contain
certain restrictive covenants which, among other items, (i) require meeting
certain financial amount and ratio tests, (ii) limit the incurrence of certain
other additional indebtedness and certain investments, asset dispositions and
transactions with affiliates other than in the normal course of business and
(iii) restrict the payment of distributions by the Operating Partnership if
certain other covenants are not met.
7
<PAGE>
<PAGE>
NATIONAL PROPANE PARTNERS, L.P.
(SUCCESSOR TO NATIONAL PROPANE CORPORATION
AND SUBSIDIARIES)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
National's obligations under both the First Mortgage Notes and the Bank
Credit Facility are secured on an equal and ratable basis by substantially all
of the assets of the Operating Partnership and are guaranteed by the Managing
General Partner.
NOTE 5 -- INCOME TAXES
National's provision for (benefit from) income taxes for each of the
periods presented varies from the Federal statutory income tax rate of 35%
principally due to (i) state income taxes, (ii) the effect of goodwill
amortization and, (iii) since July 2, 1996, the change in legal/tax status of
National to a partnership. For federal and state income tax purposes, the
earnings attributed to the Partnership and Operating Partnership are included in
the tax returns of the individual partners. As a result, no recognition of
income tax expense has been reflected in National's consolidated financial
statements relating to the earnings of the Partnership and Operating
Partnership. The earnings attributed to NSSI are subject to federal and state
income taxes. Accordingly, National's consolidated financial statements will
reflect income tax expense related to NSSI's earnings, if any. There was no
income tax provision or benefit relating to NSSI in the three months ended
September 30, 1996 since any provision or benefit would be immaterial to NSSI or
National for this three month period. In connection with the Partnership
Conveyance, all income tax liabilities were retained by the Managing General
Partner.
NOTE 6 -- ACQUISITIONS
During 1996 National acquired the assets of four unaffiliated propane
distributors for aggregate cash consideration of $1,030,000.
NOTE 7 -- CONTINGENCIES
In May 1994, National Propane was informed of coal tar contamination which
was discovered at one of its properties in Wisconsin. National Propane purchased
the property from a company which had purchased the assets of a utility which
had previously owned the property. National Propane believes that the
contamination occurred during the use of the property as a coal gasification
plant by such utility. In order to assess the extent of the problem National
Propane engaged environmental consultants who began work in August 1994. In
February 1996, National Propane's environmental consultants provided a report
which presented the two most likely remediation methods and estimates of the
costs of such methods. The range of estimated costs for the first method, which
involves treatment of groundwater and excavation, treatment and disposal of
contaminated soil, is from $1,600,000 to $3,300,000. The range for the second
method, which involves only treatment of groundwater and the building of a soil
containment wall, is from $432,000 to $750,000. Based on discussion with
National Propane's environmental consultants both methods are acceptable
remediation plans. National Propane, however, will have to agree on a final plan
with the State of Wisconsin. Since receiving notice of the contamination,
National Propane has engaged in discussions of a general nature concerning
remediation with the State of Wisconsin. The discussions are ongoing and there
is no indication as yet of the time frame for a decision by the State of
Wisconsin on the method of remediation. Accordingly, it is unknown which
remediation method will be used. National Propane is also engaged in ongoing
discussions of a general nature with such successor to the utility that operated
a coal gasification plant on the property. There is as yet no indication that
the prior owner will share the costs of remediation. National Propane, if found
liable for any such costs, would attempt to recover such costs from the prior
owner. In connection with the Partnership Conveyance, the Wisconsin property was
retained by the Managing General Partner. Pursuant to a lease with the Managing
General Partner relating to this facility National has agreed to be liable for
any costs of remediation in excess of amounts
8
<PAGE>
<PAGE>
NATIONAL PROPANE PARTNERS, L.P.
(SUCCESSOR TO NATIONAL PROPANE CORPORATION
AND SUBSIDIARIES)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
recovered from such prior owner or from insurance. Since no amount within the
ranges can be determined to be a better estimate, National has accrued $432,000
at December 31, 1995 and September 30, 1996 in order to provide for the minimum
costs estimated for the second remediation method and incurred legal fees and
other professional costs. The ultimate outcome of this matter cannot presently
be determined and, depending on the cost of remediation required, may have a
material adverse effect on National's consolidated financial position, results
of operations or ability to make the Minimum Quarterly Distribution to all
Unitholders (see Note 12).
National is involved in ordinary claims, litigation and administrative
proceedings and investigations of various types in several jurisdictions
incidental to its business. In the opinion of management, the outcome of any
such matter, or all of them combined, will not have a material adverse effect on
National's consolidated financial condition or results of operations.
NOTE 8 -- UNAUDITED PRO FORMA SUMMARIZED OPERATING RESULTS
The following unaudited supplemental pro forma information sets forth the
operating results of National for the nine months ended September 30, 1996 and
has been adjusted as if the Partnership had been formed as of January 1, 1996 to
give effect to (i) the elimination of management fees paid to Triarc, (ii) the
addition of the estimated stand-alone general and administrative costs
associated with National's operation as a partnership, (iii) a net decrease to
interest expense to reflect the interest expense associated with the First
Mortgage Notes and to eliminate interest expense on the refinanced debt and (iv)
the elimination of the provision for income taxes, as income taxes will be borne
by the partners and not the Partnership or the Operating Partnership, except for
corporate income taxes relative to NSSI. Such following pro forma supplemental
financial information does not purport to be indicative of the actual results of
operations that would have resulted had the Partnership been formed on January
1, 1996 or of the future results of operations of National.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1996
--------------------------------------
(IN THOUSANDS, EXCEPT PER UNIT AMOUNT)
<S> <C>
Revenues................................................ $116,018
Operating income........................................ 9,162
Income before income taxes and extraordinary charge..... 5,450
Income before extraordinary charge...................... 5,300
General partners' interest in income
before extraordinary charge........................... 212
Unitholders' interest in income before extraordinary
charge................................................ 5,088
Unitholders' income before extraordinary charge per
unit.................................................. 0.47
Weighted average number of units outstanding(a)......... 10,809,834
------------
(a) Such weighted average number of units outstanding do not reflect the
November 6, 1996 sale of 400,000 common units as discussed in Note 13.
</TABLE>
NOTE 9 -- UNIT OPTION PLAN
Effective July 2, 1996, the Managing General Partner adopted the National
Propane Corporation 1996 Unit Option Plan (the 'Option Plan'), which permits the
grant of options to purchase Common Units and Subordinated Units and the grant
of Unit appreciation rights ('UARs') covering up to an aggregate of 1,250,000
Common Units and Subordinated Units (subject to adjustment in certain
circumstances) plus an additional number of Units equal to 1% of the number of
Units outstanding as of each December 31 following the Option Plan's effective
date which will be added to the total number of units that may be issued
thereafter. No options or UARS have been granted under the Option Plan
9
<PAGE>
<PAGE>
NATIONAL PROPANE PARTNERS, L.P.
(SUCCESSOR TO NATIONAL PROPANE CORPORATION
AND SUBSIDIARIES)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
as of September 30, 1996. Any expenses recognized relating to the Unit Option
Plan will be allocated to the Partnership in accordance with an agreement
between the Managing General Partner and the Partnership.
NOTE 10 -- RELATED PARTY TRANSACTIONS
Concurrent with the closing of the Offering, National made a $40,700,000
loan to Triarc. The loan bears interest at 13.5% per annum, amortizes $5,087,500
per year commencing 2003 and is secured by a pledge by Triarc of all the shares
of capital stock of the Managing General Partner that are owned by Triarc.
Interest is payable semi-annually in arrears on each June 30 and December 30.
NOTE 11 -- STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)/PARTNERS' CAPITAL
The changes in National's Stockholders' equity (deficit)/Partner's capital
for the nine months ended September 30, 1996 were as follows (in thousands):
<TABLE>
<CAPTION>
STOCKHOLDERS'
EQUITY/
GENERAL
NOTE RECEIVABLE PARTNERS' LIMITED PARTNERS'
FROM TRIARC CAPITAL CAPITAL TOTAL
--------------- ---------------- ----------------- --------
<S> <C> <C> <C> <C>
Balance at December 31, 1995................... $ (81,392) $ 32,792 $-- $(48,600)
Assets/(liabilities) retained by the Managing
General Partner(a)........................... 81,392 (61,683) -- 19,709
Cash dividend to Triarc........................ -- (59,300) -- (59,300)
Cash dividend to Triarc for NPC Leasing
Corp......................................... -- (24) -- (24)
Net proceeds of Offering....................... -- 101,348 16,585 117,933
Net income for the period January 1, 1996 to
June 30, 1996................................ -- 2,625 -- 2,625
Net loss for the period July 1, 1996 to
September 30, 1996:
Loss before extraordinary charge.......... -- (1,401) (1,769) (3,170)
Extraordinary charge...................... -- (2,631) -- (2,631)
--------------- ---------------- ----------------- --------
Balance at September 30, 1996.................. $ -- $ 11,726 $14,816 $ 26,542
--------------- ---------------- ----------------- --------
--------------- ---------------- ----------------- --------
</TABLE>
- ------------
(a) In connection with the Partnership Conveyance, the Managing General Partner
retained the $81,392,000 receivable from Triarc and net liabilities
totaling $19,709,000 which consist primarily of net deferred income taxes
payable. In addition, in accordance with the Partnership Conveyance, the
extraordinary charge for the early extinguishment of debt, net of income
taxes, was allocated entirely to the General Partners.
NOTE 12 -- QUARTERLY DISTRIBUTIONS OF AVAILABLE CASH
Subsequent to the Offering National will distribute to its partners, on a
quarterly basis, all of its 'Available Cash' which generally means, with respect
to any fiscal quarter of National, all cash on hand at the end of such quarter
less the amount of cash reserves that is necessary or appropriate in the
discretion of the Managing General Partner to (i) provide for the proper conduct
of National's business, (ii) comply with applicable law or any Partnership debt
instrument or other agreement, or (iii) provide funds for distributions to
Unitholders and the General Partners in respect of any one or more of the next
four quarters.
10
<PAGE>
<PAGE>
NATIONAL PROPANE PARTNERS, L.P.
(SUCCESSOR TO NATIONAL PROPANE CORPORATION
AND SUBSIDIARIES)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
Available Cash will generally be distributed 96% to the Unitholders
(including the Managing General Partner as the holder of Subordinated Units) and
4% to the General Partners, pro rata, except that if distributions of Available
Cash exceed Target Distribution Levels above the Minimum Quarterly Distribution,
the General Partners will receive an additional percentage of such excess
distributions that will increase to up to 50% of the distributions above the
highest Target Distribution Level.
With respect to each quarter during the Subordination Period, to the extent
there is sufficient Available Cash, the holders of Common Units will have the
right to receive the Minimum Quarterly Distribution ($0.525 per Unit), plus any
Common Unit Arrearages, prior to any distribution of Available Cash to the
holders of Subordinated Units. Subordinated Units will not accrue any arrearages
with respect to distributions for any quarter.
The Subordination Period will generally extend until the first day of any
quarter beginning after June 30, 2001 in respect of which (i) distributions of
Available Cash from Operating Surplus on the Common Units and the Subordinated
Units with respect to each of the three consecutive four-quarter periods
immediately preceding such date equaled or exceeded the sum of the Minimum
Quarterly Distribution on all of the outstanding Common Units and Subordinated
Units during such periods, (ii) the Adjusted Operating Surplus generated during
each of the three consecutive four-quarter periods immediately preceding such
date equaled or exceeded the sum of the Minimum Quarterly Distribution on all of
the outstanding Common Units and Subordinated Units and the related distribution
on the General Partner Interests during such periods and (iii) there are no
outstanding Common Unit Arrearages.
Prior to the end of the Subordination Period, a portion of the Subordinated
Units will convert into Common Units on a one-for-one basis on the first day
after the record date established for the distribution in respect of any quarter
ending on or after (a) June 30, 1999 (with respect to 1,133,410 Subordinated
Units, subject to adjustment as discussed below), and (b) June 30, 2000 (with
respect to 1,133,410 Subordinated Units, subject to adjustments as discussed
below) in respect of which (i) distributions of Available Cash from Operating
Surplus on the Common Units and the Subordinated Units with respect to each of
the three consecutive four-quarter periods immediately preceding such date
equaled or exceeded the sum of the Minimum Quarterly Distribution on all of the
outstanding Common Units and Subordinated Units during such periods, (ii) the
Adjusted Operating Surplus generated during each of the two consecutive
four-quarter periods immediately preceding such date equaled or exceeded the sum
of the Minimum Quarterly Distribution on all of the outstanding Common Units and
Subordinated Units and the related distribution on the General Partner Interests
during such periods, and (iii) there are no outstanding Common Unit Arrearages;
provided, however, that the early conversion of the second tranche of
Subordinated Units may not occur until at least one year following the early
conversion of the first tranche of Subordinated Units. Such number of units
eligible for early conversion on June 30, 1999 and June 30, 2000 shall be
subject to increase in each case by a number of Subordinated Units equal to 25%
of the total Units issued upon conversion of the Special General Partner's 2%
General Partner Interest.
Upon expiration of the Subordination Period, all remaining Subordinated
Units will convert into Common Units on a one-for-one basis and will thereafter
participate, pro rata, with the other Common Units in distributions of Available
Cash. In addition, if the Managing General Partner is removed as a general
partner of the Partnership other than for Cause (i) the Subordination Period
will end and all outstanding Subordinated Units will immediately convert into
Common Units on a one-for-one basis, (ii) any existing Common Unit Arrearages
will be extinguished and (iii) the General Partners will have the right to
convert their remaining General Partner Interests (and the right to receive
Incentive Distributions) into Common Units or to receive cash in exchange for
such interests.
11
<PAGE>
<PAGE>
NATIONAL PROPANE PARTNERS, L.P.
(SUCCESSOR TO NATIONAL PROPANE CORPORATION
AND SUBSIDIARIES)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
On November 14, 1996 National paid its initial quarterly distribution of
$0.525 per Common and Subordinated Unit to Unitholders of record on November 1,
1996, with a proportionate amount for the 4% unsubordinated general partner
interest, or an aggregate of $5,924,000, including $2,616,000 paid to the
General Partners related to the Subordinated Units and the unsubordinated
general partner interest.
NOTE 13 -- SUBSEQUENT EVENT
On November 6, 1996, National sold 400,000 Common Units through a private
placement at a price of $21.00 per Common Unit aggregating $8,400,000 before the
estimated fees and expenses of $1,033,000 resulting in estimated net proceeds to
National of $7,367,000.
12
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain statements under this caption may constitute 'forward-looking
statements' under the Private Securities Litigation Reform Act of 1995. See
'Part II. Other Information.'
INTRODUCTION
National is primarily engaged in (i) the retail marketing of propane to
residential customers, commercial and industrial customers, agricultural
customers and to dealers (located primarily in the Northeast) that resell
propane to residential and commercial customers, and (ii) the retail marketing
of propane-related supplies and equipment, including home and commercial
appliances. National believes it is the sixth largest retail marketer of propane
in terms of retail volume in the United States, supplying approximately 250,000
retail and wholesale customers in 25 states through its 166 service centers.
National's operations are concentrated in the Midwest, Northeast, Southeast and
Southwest regions of the United States.
National's residential and commercial customers use propane primarily for
space heating, water heating, clothes drying and cooking. In the industrial
market propane is used as a motor fuel for over-the-road vehicles, forklifts and
stationary engines, to fire furnaces, as a cutting gas and in other process
applications. Agriculture customers use propane for tobacco curing, crop drying,
poultry brooding and weed control. Dealers re-market propane in small
quantities, primarily in cylinders, for residential and commercial uses.
The retail propane sales volumes are very dependent on weather conditions.
National sells approximately 66% of its retail volume during the first and
fourth quarters, which are the winter heating season. As a result, cash flow is
greatest during the first and fourth quarters as customers pay for their
purchases. Propane sales are also dependent on climatic conditions which may
affect agricultural regions. National believes that its exposure to regional
weather patterns is lessened because of the geographic diversity of its areas of
operations and through sales to commercial and industrial markets, which are not
as sensitive to variations in weather conditions.
Gross profit margins are not only affected by weather patterns but also by
changes in customer mix. In addition, gross profit margins vary by geographical
region. Accordingly, profit margins could vary significantly from year to year
in a period of identical sales volumes.
National reports on a calendar year basis; accordingly its results are
affected by two different winter heating seasons: the end of the first year's
heating season, National's first fiscal quarter, and the beginning of the second
heating season, National's fourth fiscal quarter.
Profitability is also affected by the price and availability of propane.
Worldwide availability of both gas liquids and oil affects the supply of propane
in domestic markets. National does not believe it is overly dependent on any one
supplier. National primarily buys propane on both one year contracts and the
spot market and does not enter into any fixed price take-or-pay contracts.
Furthermore, National purchases propane from a wide variety of sources. In 1995
and in the first three quarters of 1996, no provider supplied over 15% of
National's propane needs.
Based on demand and weather conditions the price of propane can change
quickly over a short period of time; in most cases the increased cost of propane
is passed on to the customer. However, in cases where increases cannot be passed
on or when the price of propane escalates faster than National's ability to
raise customer prices, margins will be negatively affected.
The propane industry is very competitive. National competes against other
major propane companies as well as local marketers in most of its markets, with
the most competition in the Midwest United States. Propane also competes against
other energy sources, primarily natural gas, oil and electricity.
The following discussion compares the results of operations for the nine
months ended September 30, 1996 with the nine months ended September 30, 1995,
and the three months ended September 30, 1996 with the three months ended
September 30, 1995. The 1995 periods reflect the effects of the June 1995 merger
(the 'Merger') of Public Gas Company with and into National Propane Corporation.
Prior thereto Public Gas was an indirect wholly-owned subsidiary of Triarc
Companies,
13
<PAGE>
<PAGE>
Inc., ('Triarc'), the parent company of National Propane Corporation. Because
the Merger was a transfer of assets and liabilities in exchange for shares among
a controlled group of companies, it has been accounted for in a manner similar
to a pooling of interests and, accordingly, the nine month period ended
September 30, 1995 has been restated to reflect the Merger.
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH
NINE MONTHS ENDED SEPTEMBER 30, 1995
Revenues increased $13.6 million, or 13.2%, to $116.0 million in the nine
months ended September 30, 1996 as compared to $102.5 million for the nine
months ended September 30, 1995 with propane revenues increasing $13.9 million,
or 14.9% to $107.8 million in 1996 compared with $93.9 million in 1995. The
increase is principally due to increased propane sales volume as retail gallons
sold for 1996 increased 8.8 million, or 8.7%, to 110.6 million in 1996 compared
to 101.8 million in 1995. Based on Degree Days data (the 'Degree Days Data'),
published by the National Climatic Data Center, as applied to the geographical
regions of National's operations, the nine month period ended September 30, 1996
was 8.7% colder than the nine months ended September 30, 1995. The $14.0 million
increased propane revenue is due to volume increases ($8.1 million) and
increased selling price due to increased costs ($7.7 million), partially offset
by a decrease due to a shift in customer mix toward lower-priced commercial
accounts ($1.8 million). National's other lines of revenue, primarily appliance
sales and tank and equipment rental income, did not change significantly from
period to period.
Gross profit increased $2.0 million, or 8.0%, to $26.9 million in 1996
compared with $24.9 million in 1995 due principally to higher propane sales
volume ($4.5 million) in 1996 compared with 1995 offset by lower margins due to
(i) increased product costs which could not be fully passed on to certain
customers in the form of higher selling prices and (ii) a shift in the customer
mix toward lower-margin commercial accounts ($1.8 million), slightly higher
operating expenses included in cost of sales ($0.3 million) and lower margins on
other product lines ($0.4 million). The increase in operating expenses is due to
the Partnership beginning operations at five new propane plants during the last
quarter of 1995 and the first half of 1996. These plants have not yet achieved
sales volumes to make a positive contribution to gross profit.
Selling, general and administrative expenses increased $1.5 million or 9.7%
to $17.0 million in 1996 compared with $15.5 million in 1995 due principally to
increases in bad debt expense, insurance costs, rent expense and business taxes,
as well as stand-alone costs associated with the Partnership Entities effective
July 2, 1996.
Management fees decreased $0.8 million to $1.5 million in 1996 compared to
$2.3 million in 1995 due to management fees being eliminated with the beginning
of the operations of the Partnership Entities.
Interest expense increased $0.3 million, or 3.9%, to $9.0 million in 1996
compared to $8.7 million in 1995. This increase was due to higher average
borrowings partially offset by lower average interest rates.
Interest income from Triarc in 1996 is due to interest on the July 2, 1996
$40.7 million partnership loan to Triarc.
Other income, net remained constant in 1996 and 1995.
The provision for income taxes in 1996 and 1995 is related to National's
operations prior to the Partnership Conveyance. The Partnership and the
Operating Partnership are not tax paying entities except for NSSI, the
wholly-owned corporate subsidiary. As such, the 1996 period does not include a
tax benefit for the third quarter loss, a seasonally weak quarter.
The extraordinary charge of $2.6 million in 1996 is a result of the early
extinguishment of $128.5 million of existing indebtedness and consists primarily
of the write-off of deferred financing costs of $4.1 million, net of income tax
benefit of $1.7 million.
14
<PAGE>
<PAGE>
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH
THREE MONTHS ENDED SEPTEMBER 30, 1995
Revenues increased $2.0 million, or 7.7%, to $27.7 million in the three
months ended September 30, 1996 as compared to $25.7 million for the three
months ended September 30, 1995 with propane revenues increasing $2.2 million,
or 9.4% to $25.1 for the three months ended September 30, 1996 compared with
$22.9 million in 1995. Propane retail gallons sold increased 1.1 million, or
4.3%, to 26.8 million gallons in 1996, compared to 25.7 million gallons in 1995
as a result of niche business acquisitions. The $2.2 million increase in propane
revenue is due to volume increases ($1.0 million) as a result of niche business
acquisitions and increased selling prices due to increased product costs ($1.7
million), offset by a decrease due to a shift toward lower-margin commercial
accounts ($0.6 million).
Gross profit decreased $1.5 million, or 33.7%, to $2.9 million for the
three months ended September 30, 1996 compared with $4.4 million in 1995 as
increased gross profit attributable to volumes ($0.5 million) was more than
offset by the impact of lower average margins per gallon ($0.6 million), lower
margins on other revenue lines ($0.2 million) and higher operating costs
included in cost of sales ($1.2 million). The lower average propane margins were
due to increased product costs which could not be fully passed on to certain
customers and a shift in the customer mix toward lower-priced commercial
accounts.
Selling, general and administrative expenses decreased $0.9 million or 15%
to $4.7 million for the three months ended September 30, 1996 as compared to
$5.6 million for the three months ended September 30, 1995 despite the
incurrence of stand-alone costs associated with the Partnership Entities in the
1996 period. This decrease was attributable primarily to reduced payroll expense
and reduced advertising expense.
Management fees have been eliminated effective with the beginning of the
operations of the Partnership Entities.
Interest expense decreased $0.1 million, or 2.8%, to $2.8 million in 1996
compared to $2.9 million in 1995. This decrease was due to lower average
interest rates and lower amortization of deferred financing costs partially
offset by higher average borrowings.
Interest income from Triarc in the three months ended September 30, 1996 is
due to interest on the July 2, 1996 $40.7 million loan to Triarc.
Other income, net remained constant in 1996 and 1995.
The provision for income taxes in 1995 is related to the Predecessor
Company. There is no provision in 1996 since the Partnership and the Operating
Partnership are not tax paying entities except for NSSI, the wholly-owned
corporate subsidiary.
The extraordinary charge of $2.6 million in 1996 is a result of the early
extinguishment of $128.5 million of existing indebtedness and consists primarily
of the write-off of deferred financing costs of $4.1 million, net of income tax
benefit of $1.7 million.
LIQUIDITY AND CAPITAL RESOURCES
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------------
1996 1995
---------- -------------
<S> <C> <C>
Net cash provided by operating activities......................... $ 13,229 $ 7,466
Net cash used in investing activities............................. (5,790) (6,479)
Net cash used in financing activities............................. (5,593) (4,225)
---------- -------------
Net increase (decrease) in cash and cash equivalents......... $ 1,846 $(3,238)
---------- -------------
---------- -------------
</TABLE>
National's cash balances increased $1.8 million during the nine month
period ended September 30, 1996. This increase reflected cash provided by
operating activities of $13.2 million offset by cash used in financing
activities of $5.6 million and cash used in investing activities of $5.8
million.
The cash flows from operating activities of $13.2 million in the 1996
period consisted of a net loss of $3.2 million offset by non cash charges of
$11.7 million, principally depreciation and amortization and
15
<PAGE>
<PAGE>
write-off of deferred financing costs, and a $4.7 million decrease in working
capital. The change in working capital is primarily made up of a seasonal
decrease in receivables ($5.2 million) offset by a seasonal increase in
inventories ($3.6 million) and an increase in accounts payable and accrued
expenses ($3.1 million). The increase in accounts payable and accrued expenses
is primarily due to accrued interest on the First Mortgage Notes and an increase
in accrued casualty insurance reserves.
Cash used in investing activities during the nine month period ended
September 30, 1996 included capital expenditures of $5.0 million and
acquisitions of $1.0 million, (excluding capital leases) aggregating $6.0
million. Of the capital expenditure amount for 1996, $2.3 million was for
recurring maintenance and $2.7 million was to support growth of operations.
National has budgeted maintenance capital expenditures and growth capital
expenditures for the remainder of 1996 of approximately $1.0 million and $0.8
million, respectively, subject to the availability of cash and other financing
sources. National has outstanding commitments amounting to $1.2 million for such
capital expenditures as of September 30, 1996, which consists of $0.6 million
for growth capital expenditures and $0.6 million for maintenance capital
expenditures.
Cash used by financing activities of $5.6 million during the nine month
period ended September 30, 1996 primarily reflects the Offering and the private
placement of First Mortgage Notes offset by the repayment of the previous debt
facilities and the payment of a dividend and intercompany balances to Triarc.
In July 1996, National issued through a private placement and conveyed to
National Propane, L.P. $125 million of 8.54% First Mortgage Notes due June 30,
2010. A portion of the proceeds were used by National to pay a $59.3 million
dividend to Triarc with the remainder being conveyed to National Propane, L.P.
Also, in July 1996, National Propane Partners, L.P. issued 6,301,550 Common
Units at $21.00 per unit which provided net cash of $117.9 million after
deducting the underwriting discounts, commissions and other expenses. These
proceeds were used (i) to repay $64.4 million under the Predecessor Company's
existing credit facility, (ii) to loan Triarc $40.7 million and (iii) to pay
$12.8 million of intercompany indebtedness consisting principally of accrued
management fees and tax sharing payments due to Triarc. On November 6, 1996 the
Partnership sold 400,000 Common Units through a private placement at a price of
$21.00 per Common Unit aggregating $8.4 million before estimated fees and
expenses of $1.0 million.
In July 1996, the Operating Partnership entered into a new $55 million Bank
Credit Facility which includes a $15 million Working Capital Facility to be used
for working capital and other general partnership purposes and a $40 million
Acquisition Facility the use of which is restricted to acquisitions and capital
expenditures for growth.
Total partners' capital at September 30, 1996 was $26.5 million as compared
to a total stockholders' deficit of $48.6 million at December 31, 1995. The
increase of $75.1 million reflects the $117.9 million net proceeds of the
Offering and the retention of $19.7 million of net liabilities by the Managing
General Partner offset by a $59.3 million dividend to Triarc at the time of the
Offering and the net loss of $3.2 million for the nine months period ended
September 30, 1996.
National's principal cash requirements are maintenance capital expenditures
(currently budgeted at $3.5 million for the year ending December 31, 1997), and
funds for growth and business acquisitions, if any. There were no scheduled
principal repayments in 1996 under the Bank Credit Facility or the First
Mortgage Notes. The Working Capital Facility requires that for a period of at
least 30 consecutive days in each year between March 1 and August 31, the
principal amount outstanding be reduced to zero. There are no scheduled
principal repayments in 1997 with respect to the First Mortgage Notes.
CONTINGENCIES
National has a contingent liability in connection with an environmental
matter described in Note 7 to the accompanying condensed consolidated financial
statements. The ultimate outcome of this matter cannot presently be determined
and, depending on the cost of remediation required, may have a material adverse
effect on National's consolidated financial position, results of operations or
ability to make the Minimum Quarterly Distributions to all Unitholders. National
Propane is also involved in
16
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<PAGE>
ordinary claims, litigation and administrative proceedings and investigations of
various types in several jurisdictions incidental to its business. In the
opinion of management, the outcome of any such matter, or all of them combined,
will not have a material adverse effect on National Propane's consolidated
financial position or results of operations.
PART II. OTHER INFORMATION
The statements in this Quarterly Report on Form 10-Q (this 'Form 10-Q')
that are not historical facts constitute 'forward-looking statements' within the
meaning of the Private Securities Litigation Reform Act of 1995 (the 'Reform
Act'), that involve risks, uncertainties and other factors which may cause the
actual results, performance or achievements of National and its related entities
to be materially different from any future results, performance or achievements
express or implied by such forward-looking statements. Such factors include, but
are not limited to, the following: general economic and business conditions;
competition; success of operating initiatives; operating costs; advertising and
promotional efforts; the existence or absence of adverse publicity; availability
and locations and terms of opportunities for business growth and development;
changes in business strategy or development plans; quality of management;
availability, terms and deployment of capital; business abilities and judgment
of personnel; availability of qualified personnel; labor and employee benefit
costs; availability and cost of raw materials and supplies; changes in, or
failure to comply with, government regulations; regional weather conditions; and
other risks and uncertainties detailed in the Partnership's Registration
Statement on Form S-1 (No. 333-2768) and in the Partnership's other current and
periodic filings with the Securities and Exchange Commission.
ITEM 5. OTHER EVENTS
On November 7, 1996, the Partnership sold 400,000 of its common units
(representing approximately 6% of the Partnership's common units) to an
institutional accredited investor through a private placement pursuant to
Section 4(2) of the Securities Act of 1933, as amended. The units were sold at a
price of $21.00 each, before deducting fees, resulting in estimated net proceeds
to the Partnership of approximately $7.4 million. The Partnership completed its
initial public offering on July 2, 1996. As a result of the initial public
offering and after taking into account the shares issued in the private
placement, National Propane Corporation, the Partnership's managing general
partner, holds approximately 43% of the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
<C> <S>
3.1 -- Amendment No. 1 to the amended and Restated Agreement of Limited Partnership of National Propane, L.P.,
dated November 1, 1996 incorporated herein by reference to Exhibit 3.1 to the Partnership's report on
Form 8-K dated November 14, 1996.
10.1 -- Purchase Agreement, dated November 7, 1996 incorporated herein by reference to Exhibit 10.1 to the
Partnership's report on Form 8-K dated November 14, 1996.
10.2 -- Registration Agreement, dated November 7, 1996 incorporated herein by reference to Exhibit 10.2 to the
Partnership report on Form 8-K dated November 14, 1996.
27. -- Financial Data Schedule for the nine month period ended September 30, 1996, submitted to the Securities
and Exchange Commission in electronic format.
99.1 -- National Propane Partners, L.P. Press Release, dated October 22, 1996, regarding quarterly distribution
incorporated herein by reference to Exhibit 99.1 to the Partnership's report on Form 8-K dated November
14, 1996.
99.2 -- National Propane Partners, L.P. Press Release, dated November 7, 1996 regarding sale of 400,000 common
units incorporated herein by reference to Exhibit 99.2 to the Partnership's report on Form 8-K dated
November 14, 1996.
</TABLE>
(b) Reports on Form 8-K.
The Partnership filed a Form 8-K on November 14, 1996 pursuant to which the
Partnership filed certain exhibits required to be filed in connection with its
quarterly report on Form 10-Q for the quarter ended September 30, 1996.
17
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<PAGE>
NATIONAL PROPANE PARTNERS, L.P. AND SUBSIDIARIES
SIGNATURE
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 thereunto duly authorized.
NATIONAL PROPANE PARTNERS, L.P.
By: NATIONAL PROPANE CORPORATION
as Managing General Partner
By /s/ RONALD R. ROMINIECKI
...................................
RONALD R. ROMINIECKI
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
Date: January 10, 1997
18
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<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
National Propane Partners, L.P. condensed consolidated Balance Sheet
as of September 30, 1996 and the condensed consolidated Statement of
Operations for the interim period January 1, 1996 through September 30, 1996
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> SEP-30-1996
<CASH> 4,671
<SECURITIES> 0
<RECEIVABLES> 10,258
<ALLOWANCES> 0
<INVENTORY> 14,197
<CURRENT-ASSETS> 32,022
<PP&E> 170,441
<DEPRECIATION> 89,263
<TOTAL-ASSETS> 175,675
<CURRENT-LIABILITIES> 20,139
<BONDS> 126,968
<COMMON> 0
0
0
<OTHER-SE> 26,542
<TOTAL-LIABILITY-AND-EQUITY> 175,675
<SALES> 116,018
<TOTAL-REVENUES> 116,018
<CGS> 89,097
<TOTAL-COSTS> 89,097
<OTHER-EXPENSES> 17,009
<LOSS-PROVISION> 947
<INTEREST-EXPENSE> 9,067
<INCOME-PRETAX> 1,377
<INCOME-TAX> 1,922
<INCOME-CONTINUING> (545)
<DISCONTINUED> 0
<EXTRAORDINARY> (2,631)
<CHANGES> 0
<NET-INCOME> (3,176)
<EPS-PRIMARY> (.28)
<EPS-DILUTED> (.28)
<FN>
Allowances - Receivables are shown net of an allowance of $1,180.
Total receivable balance is $11,438.
</FN>
</TABLE>
