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TheStreet Open House

Inergy Reports Third Quarter Results

Stocks in this article: NRGY

Inergy, L.P. (NYSE:NRGY) (“Inergy”) today reported results of operations for the quarter ended June 30, 2012, the third quarter of fiscal 2012. These results of operations are presented on a consolidated basis including the results of Inergy Midstream, L.P.

As discussed below, on August 1, 2012, Inergy closed on its definitive agreement to contribute its retail propane operations to Suburban Propane Partners, L.P. (NYSE:SPH) (“SPH”).

Inergy reported Adjusted EBITDA of $54.4 million for the quarter ended June 30, 2012, an increase of $12.0 million, or approximately 28%, from $42.4 million for the quarter ended June 30, 2011. Included in Adjusted EBITDA is a one-time business interruption insurance recovery amount of approximately $3.6 million received this quarter from an occurrence in our midstream operations in December 2010. Net loss was $17.7 million for the quarter ended June 30, 2012, and $35.5 million in the same quarter of last year.

For the nine-month period ended June 30, 2012, Adjusted EBITDA decreased approximately 17% to $279.1 million from $335.5 million for the same prior-year period. Net income was $22.7 million for the nine months ended June 30, 2012, and $39.6 million in the same prior-year period.

“Today’s announcement of the closing of the contribution of our retail propane operations to Suburban Propane is a major milestone for the partnership,” said John Sherman, President and CEO of Inergy. “Our investors participate in propane industry consolidation through the transaction, and Inergy’s balance sheet is strengthened considerably. From a position of financial strength and flexibility, we look forward to executing on our midstream growth strategy on behalf of our unitholders.”

Quarterly Results

In the quarter ended June 30, 2012, retail propane gallon sales were 38.9 million gallons compared to 45.7 million gallons sold in the same quarter of the prior year. Retail propane gallon sales in the current period were negatively impacted by the above-average temperatures experienced in our areas of operations as well as customer conservation. Retail propane gross profit, excluding certain items as discussed below, was $48.3 million for the quarter ended June 30, 2012, compared to $49.0 million for the quarter ended June 30, 2011. Items excluded from retail propane gross profit are certain non-cash charges of $0.5 million and $0.1 million, respectively, and depreciation and amortization. Gross profit (excluding depreciation and amortization) from other propane operations, including wholesale, appliances, service, transportation, distillates, and other was $25.3 million in the quarter ended June 30, 2012, compared to $23.3 million for the same quarter in the prior year.

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