STAR GROUP, L.P. — Annual Report 1997

Apr 8, 1997

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K/A-1 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal year ended September 30, 1996 ------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required] For the transition period from _ to _ Commission File Number: 33-98490 --------- STAR GAS PARTNERS, L.P. ------------------------ (Exact name of registrant as specified in its charter) Delaware 06-1437793 - -------------------------------- ----------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2187 Atlantic Street, Stamford, Connecticut 06902 - -------------------------------------------------------------------------------- (Address of principal executive office) (Zip Code) (203) 328-7300 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Units -------------------------------------------- (Title of class) 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 past 90 days. Yes X No --- --- Indicate by check mark if disclosure of delinquent filer pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated be reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ] The aggregate market value of Star Gas Partners, L.P. Common Units held by non- affiliates of Star Gas Partners, L.P. on November 13, 1996 was approximately $64,328,000. At November 13, 1996 there were outstanding 2,875,000 Common Units and 2,396,078 Subordinated Units, each representing limited partner interests. Documents Incorporated by Reference: None ITEM 6. SELECTED HISTORICAL AND PRO FORMA FINANCIAL AND OPERATING DATA The following table sets forth selected historical and pro forma and other data of the Partnership and the Star Gas Group and should be read in conjunction with the more detailed financial statements included elsewhere in this report. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. The Selected Pro Forma Financial Data is derived from the pro forma financial information of the Partnership and should be read in conjunction therewith. See Item 14, Note 14 - of Notes to Consolidated Financial Statements.

(a) Reflects the results of operations of the Predecessor company for the period October 1, 1995 through December 20, 1995 and the results of Star Gas Partners, L.P. from December 20, 1995 through September 30, 1996. The operating results for the year September 30, 1996 were combined to facilitate an analysis of the fundamental operating data. For the actual results of the Partnership from December 20, 1995 through September 30, 1996, see Item 14, Page F-4. (b) For a description of the assumptions used in preparing the Summary Selected Pro Forma Financial and Operating Data, see Item 14, Note 14 - of Notes to Consolidated Financial Statements. (c) The decline in operating income, net income and EBITDA during the fiscal year 1995 was primarily due to the significantly warmer than normal weather conditions during the 1995 heating season. See Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations. (d) Includes a loss of approximately $33.0 million in respect of a charge for the impairment of long-lived assets. (e) Net income per Unit is computed by dividing the limited partners' interest in net income by the limited partners' weighted average number of units outstanding. (f) EBITDA is defined as operating income plus depreciation, amortization, less net gain (loss) on sale of businesses and other non-cash charges (including the impairment of long-lived assets). EBITDA should not be considered as an alternative to net income (as an indicator of operating performance) or as an alternative to cash flow (as a measure of liquidity or ability to service debt obligations), but provides additional information for evaluating the Partnership's ability to make the Minimum Quarterly Distribution. (g) Represents net income per unit and cash distributions paid per unit for the period December 20, 1995 through September 30, 1996. 13 STAR GAS PARTNERS, L.P. AND SUBSIDIARY CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL/PREDECESSOR EQUITY (in thousands) Partners' Capital For the period ended December 20, 1995 through September 30, 1996

Predecessor's Equity Years ended September 30, 1994 and 1995 and the period October 1, 1995 through December 20, 1995

See accompanying notes to consolidated financial statements F-5 12) Unit Option Plan On December 20, 1995, the General Partner adopted the 1995 Star Gas Corporation Unit Option Plan (the "Unit Option Plan"), which currently authorizes the issuance of options (the "Unit Options") and Unit Appreciation Rights ("UARS") covering up to 300,000 Subordinated Units to certain officers and employees of the General Partner. A total of 40,000 options were granted to key executives in December 1995. The Unit Options have the following characteristics: 1) an exercise price of $22 per unit, which is an estimate of the fair market value of the Subordinated Units at the time of grant, 2) vest over a five year period, 3) are exercisable after January 1, 2001, assuming the subordination period has elapsed, and 4) expire on the tenth anniversary of the date of grant. Upon conversion of the Subordinated Units held by the General Partner and its affiliates, the Unit Options granted will convert to Common Unit Options. No UARS have been granted pursuant to the plan. F-15 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf of the undersigned thereunto duly authorized: Star Gas Partners, L.P. By: Star Gas Corporation (General Partner)