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<SEC-DOCUMENT>0000950130-02-007463.txt : 20021104
<SEC-HEADER>0000950130-02-007463.hdr.sgml : 20021104
<ACCEPTANCE-DATETIME>20021104144224
ACCESSION NUMBER:		0000950130-02-007463
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20021004
ITEM INFORMATION:		Other events
ITEM INFORMATION:		Financial statements and exhibits
FILED AS OF DATE:		20021104

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			STAR GAS PARTNERS LP
		CENTRAL INDEX KEY:			0001002590
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-RETAIL STORES, NEC [5990]
		IRS NUMBER:				061437793
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-14129
		FILM NUMBER:		02808084

	BUSINESS ADDRESS:	
		STREET 1:		2187 ATLANTIC ST
		CITY:			STAMFORD
		STATE:			CT
		ZIP:			06902
		BUSINESS PHONE:		2033287300

	MAIL ADDRESS:	
		STREET 1:		2187 ATLANTIC STREET
		CITY:			STAMFORD
		STATE:			CT
		ZIP:			06902
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d8k.txt
<DESCRIPTION>FORM 8-K
<TEXT>
<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 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 4, 2002



                             Star Gas Partners, L.P.
- --------------------------------------------------------------------------------
               (Exact Name of Registrant as Specified in Charter)
<TABLE>
<S>                                        <C>                             <C>
             Delaware                                33-98490                  06-1437793
   -------------------------------         -----------------------------   -------------------
    (State or Other Jurisdiction             (Commission File Number)         (IRS Employer
  Of Incorporation or Organization)                                        Identification No.)

  2187 Atlantic Street, Stamford, CT                                              06902
  -----------------------------------                                         ---------------
(Address of Principal Executive Offices)                                        (Zip Code)
</TABLE>

Registrant's telephone number, including area code: 203-328-7300
                                                    ------------

<PAGE>

         Item 5.  Other Events.

                  In August, 2001, a subsidiary of Star Gas Partners, L.P., a
Delaware limited partnership (the "Partnership"), completed the purchase of
Meenan Oil Co., Inc., a Delaware corporation ("Meenan") and its affiliates for a
purchase price of approximately $131.8 million, payable in cash. The transaction
was originally reported by the Partnership pursuant to a Current Report on Form
8-K dated July 31, 2001. The purpose of this Form 8-K is to update the
previously filed historical and pro forma financial information relating to
Meenan as set forth in Item 7 hereof.

         Item 7.  Financial Statements, Pro Forma Financial Information and
Exhibits.

                  (a)      Financial Statements of Businesses Acquired:

                           (i)      audited annual historical financial
                                    statements of Meenan as of June 30, 2001
                                    and 2000, and for each of the years in the
                                    three-year period ended June 30, 2001;

                  (b)      Pro Forma Financial Information:

                           Statement of operations for the Partnership for the
                           fiscal year ended September 30, 2001.

                  (c)      Exhibits:

                           Exhibit
                           Number        Exhibit
                           -------       -------

                           23.1          Consent of KPMG LLP to Meenan financial
                                         statements.
                           99.1          Audited annual historical financial
                                         statements of Meenan as of June 30,
                                         2001 and 2000, and for each of the
                                         years in the three-year period ended
                                         June 30, 2001.
                           99.2          Pro forma statement of operations for
                                         the Partnership for the fiscal year
                                         ended September 30, 2001.

                                      -2-



<PAGE>

                                   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.

                                          STAR GAS PARTNERS, L.P.
                                          By: Star Gas, LLC, as General Partner



                                          By: /s/ James Bottiglieri
                                              ----------------------------------
                                              Name:   James Bottiglieri
                                              Title:  Vice President

Date: November 4, 2002

                                      -3-


<PAGE>

                                INDEX TO EXHIBITS


    Exhibit
    Number           Exhibit
    -------          -------
    23.1             Consent of KPMG LLP to Meenan financial statements
    99.1             Audited annual historical financial statements of Meenan
                     as of June 30, 2001 and 2000, and for each of the years in
                     the three-year period ended June 30, 2001
    99.2             Pro forma statement of operations for the Partnership for
                     the fiscal year ended September 30, 2001

                                      -4-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>3
<FILENAME>dex231.txt
<DESCRIPTION>CONSENT OF INDEPENDENT AUDITORS
<TEXT>
<PAGE>

                                                                    Exhibit 23.1



                         CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
Star Gas Partners, L.P.

We consent to the incorporation by reference in the registration statements Nos.
333-75701 and 333-57994 on Form S-3, No. 333-49751 on Form S-4 and Nos.
333-40138, 333-46714 and 333-53716 on Form S-8 of Star Gas Partners, L.P. of our
report dated August 27, 2001, with respect to the consolidated balance sheets of
Meenan Oil Co., L.P. and subsidiaries as of June 30, 2001 and 2000, and the
related consolidated statements of income and partners' equity (deficit),
comprehensive income, and cash flows for each of the years in the three-year
period ended June 30, 2001, which report appears in the Form 8-K of Star Gas
Partners, L.P. dated November 4, 2002.


/s/ KPMG LLP

Melville, New York
October 30, 2002


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>4
<FILENAME>dex991.txt
<DESCRIPTION>CONSOLIDATED FINANCIAL STATEMENT
<TEXT>
<PAGE>

                                                                    Exhibit 99.1

                      MEENAN OIL CO., L.P. AND SUBSIDIARIES

                        Consolidated Financial Statements

                             June 30, 2001 and 2000

                   (With Independent Auditors' Report Thereon)

<PAGE>

                          Independent Auditors' Report

The Executive Committee
Meenan Oil Co., L.P. and Subsidiaries:


We have audited the accompanying consolidated balance sheets of Meenan Oil Co.,
L.P. and subsidiaries as of June 30, 2001 and 2000 and the related consolidated
statements of income and partners' equity (deficit), comprehensive income, and
cash flows for each of the years in the three-year period ended June 30, 2001.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Meenan
Oil Co., L.P. and subsidiaries as of June 30, 2001 and 2000 and the consolidated
results of their operations and their cash flows for each of the years in the
three-year period ended June 30, 2001 in conformity with accounting principles
generally accepted in the United States of America.
As discussed in note 1 to the consolidated financial statements, the Company
adopted Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities, on July 1, 2000.

                                  /s/ KPMG LLP

Melville, NY
August 27, 2001

                                       2

<PAGE>

                      MEENAN OIL CO., L.P. AND SUBSIDIARIES

                           Consolidated Balance Sheets

                             June 30, 2001 and 2000

<TABLE>
<CAPTION>
                                    Assets                            2001             2000
                                                                  ------------     ------------
<S>                                                               <C>              <C>
Current assets:
     Cash                                                         $  3,239,634          605,511
     Accounts receivable - trade, less allowance for doubtful
        accounts of $575,000 in 2001 and $475,000 in 2000           21,140,971       17,498,629
     Inventories                                                     7,130,302        7,713,418
     Prepaid expenses and other current assets                      12,452,389        1,391,522
                                                                  ------------     ------------
                 Total current assets                               43,963,296       27,209,080
                                                                  ------------     ------------
Property, plant, and equipment, net                                 13,212,344       13,153,623
                                                                  ------------     ------------
Customer lists and other intangible assets, net                     21,780,153       22,054,161
Other, net                                                           1,125,845        1,290,162
                                                                  ------------     ------------
                                                                    22,905,998       23,344,323
                                                                  ------------     ------------
                 Total assets                                     $ 80,081,638       63,707,026
                                                                  ============     ============
                        Liabilities and Partners' Deficit

Current liabilities:
     Current maturities of long-term debt                         $  5,102,069          144,275
     Accounts payable                                                3,943,419        4,217,850
     Customers' credit balances and deposits                         4,598,200        4,283,004
     Accrued expenses:
        Payroll                                                      2,094,114        1,707,010
        Other                                                       18,727,024        6,316,312
     Unearned service contract revenues                              5,875,244        5,932,320
                                                                  ------------     ------------
                 Total current liabilities                          40,340,070       22,600,771
                                                                  ------------     ------------
Long-term debt, less current maturities                             31,175,000       36,245,000
                                                                  ------------     ------------
Other long-term liabilities                                          5,995,472        5,973,606
                                                                  ------------     ------------
Partners' equity (deficit):
     Partners' equity (deficit)                                      3,066,511       (1,112,351)
     Accumulated other comprehensive loss                             (495,415)              --
                                                                  ------------     ------------
                 Total partners' equity (deficit)                    2,571,096       (1,112,351)
                                                                  ------------     ------------
                                                                  $ 80,081,638       63,707,026
                                                                  ============     ============
</TABLE>

See accompanying notes to consolidated financial statements

                                       3

<PAGE>

                      MEENAN OIL CO., L.P. AND SUBSIDIARIES

        Consolidated Statements of Income and Partners' Equity (Deficit)

                    Years ended June 30, 2001, 2000 and 1999

<TABLE>
<CAPTION>
                                                                2001          2000           1999
                                                           -------------  -------------  -------------
<S>                                                        <C>            <C>            <C>

Sales                                                      $ 254,836,010    211,384,496    139,060,199
Cost of sales                                                192,975,780    157,215,537     95,449,602
                                                           -------------  -------------  -------------
                 Gross profit                                 61,860,230     54,168,959     43,610,597
                                                           -------------  -------------  -------------
Selling, general, and administrative expense                  42,489,448     38,294,451     32,501,990
Amortization of intangible assets                              2,011,318      2,068,178      1,787,469
Depreciation and amortization                                  1,526,412      1,374,286      1,337,779
Bad debt expenses                                              1,401,262        496,311        112,295
                                                           -------------  -------------  -------------
                                                              47,428,440     42,233,226     35,739,533
                                                           -------------  -------------  -------------
                 Operating income                             14,431,790     11,935,733      7,871,064
                                                           -------------  -------------  -------------
Other expense (income):
     Interest expense                                          4,585,880      3,942,629      3,070,099
     Interest income                                            (393,925)      (322,498)      (304,660)
     Sundry                                                     (759,794)      (707,204)      (663,114)
                                                           -------------  -------------  -------------
                                                               3,432,161      2,912,927      2,102,325
                                                           -------------  -------------  -------------
                 Income before cumulative effect
                    of change in accounting principle         10,999,629      9,022,806      5,768,739
Cumulative effect of change in accounting
     principle for adoption of SFAS No. 133                       57,653             --             --
                                                           -------------  -------------  -------------
                 Net income                                   11,057,282      9,022,806      5,768,739
Partners' deficit, beginning of year                          (1,112,351)    (6,460,204)    (2,091,563)
Distribution to partners                                      (6,878,420)    (3,674,953)    (8,677,733)
Purchase of limited partnership interests                             --             --     (8,359,647)
Sale of limited partnership interests                                 --             --      6,900,000
                                                           -------------  -------------  -------------
Partners' equity (deficit), end of year                    $   3,066,511     (1,112,351)    (6,460,204)
                                                           =============  =============  =============
</TABLE>

See accompanying notes to consolidated financial statements

                                       4

<PAGE>

                      MEENAN OIL CO., L.P. AND SUBSIDIARIES

                 Consolidated Statements of Comprehensive Income

                    Years ended June 30, 2001, 2000 and 1999

<TABLE>
<CAPTION>
                                                          2001           2000           1999
                                                      ------------   ------------   ------------
<S>                                                   <C>            <C>            <C>
Net income                                            $ 11,057,282      9,022,806      5,768,739
Other comprehensive income:
     Unrealized loss on derivative instruments            (495,415)            --             --
                                                      ------------   ------------   ------------
Comprehensive income                                  $ 10,561,867      9,022,806      5,768,739
                                                      ============   ============   ============
           Reconciliation of accumulated other
               comprehensive income (loss)

Balance, beginning of year                            $         --             --             --
     Cumulative effect of the adoption
        of SFAS No.133                                     444,028             --             --
     Current period reclassification to earnings          (444,028)            --             --
     Current period other comprehensive loss              (495,415)            --             --
                                                      ------------   ------------   ------------
Balance, end of year                                  $   (495,415)            --             --
                                                      ============   ============   ============
</TABLE>

See accompanying notes to consolidated financial statements

                                        5

<PAGE>

                      MEENAN OIL CO., L.P. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

                    Years ended June 30, 2001, 2000 and 1999

<TABLE>
<CAPTION>
                                                                     2001           2000           1999
                                                                 ------------   ------------   ------------
<S>                                                              <C>            <C>            <C>
Cash flows from operating activities:
     Net income                                                  $ 11,057,282      9,022,806      5,768,739
     Adjustments to reconcile net income to net
        cash provided by operating activities:
           Change in provision for doubtful accounts                  100,000        150,000             --
           Depreciation and amortization                            3,537,730      3,442,464      3,125,248
           Loss (gain) on sale of equipment
              and other assets                                         52,790        (16,288)        20,718
           Cumulative effect of a change in
              accounting principle for the adoption
              of SFAS No. 133                                         (57,653)            --             --
           Changes in operating assets and liabilities,
              net of acquisitions:
                 Accounts receivable                               (3,742,342)    (7,982,688)       415,329
                 Inventories                                          583,116       (662,570)     5,362,543
                 Prepaid expenses and other                       (11,003,214)      (156,706)       (51,200)
                 Other assets                                         164,317        (53,649)       151,475
                 Accounts payable and accrued
                     expenses                                      12,306,163      1,391,750       (746,185)
                 Customer credit balances and deposits                315,196     (3,236,536)       877,250
                 Other liabilities                                    (35,210)     1,283,972        524,901
                                                                 ------------   ------------   ------------
                         Net cash provided by operating
                           activities                              13,278,175      3,182,555     15,448,818
                                                                 ------------   ------------   ------------
Cash flows from investing activities:
     Proceeds from sale of equipment and other assets                 293,550         32,998         60,784
     Capital expenditures                                          (1,295,217)    (1,328,891)      (799,843)
     Payments for purchase of heating oil companies                (2,651,759)   (10,924,186)    (1,000,999)
                                                                 ------------   ------------   ------------
                        Net cash used in investing activities      (3,653,426)   (12,220,079)    (1,740,058)
                                                                 ------------   ------------   ------------
Cash flows from financing activities:
     Proceeds from long-term debt                                      52,662     11,000,000             --
     Principal payments on long-term debt                            (164,868)      (226,369)    (2,281,250)
     Distributions to partners                                     (6,878,420)    (3,674,953)    (8,677,733)
     Purchase of limited partnership interests                             --             --     (8,359,647)
     Sale of limited partnership interests                                 --             --      6,900,000
                                                                 ------------   ------------   ------------
                        Net cash provided by (used in)
                           financing activities                    (6,990,626)     7,098,678    (12,418,630)
                                                                 ------------   ------------   ------------
                        Net increase (decrease) in cash             2,634,123     (1,938,846)     1,290,130
Cash at beginning of year                                             605,511      2,544,357      1,254,227
                                                                 ------------   ------------   ------------
Cash at end of year                                              $  3,239,634        605,511      2,544,357
                                                                 ============   ============   ============
</TABLE>

See accompanying notes to consolidated financial statements

                                        6

<PAGE>

                      MEENAN OIL CO., L.P. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                             June 30, 2001 and 2000



(1)    Summary of Significant Accounting Policies and Practices

       (a)    Description of Business

              Meenan Oil Co., L.P.(the Company) engages primarily in the retail
              and wholesale distribution of home heating oil. In January 1992,
              the Company was formed through the contribution by Meenan Oil Co.,
              Inc. (Meenan Inc.) of substantially all of its assets in exchange
              for a general partnership interest in the Company. The Company is
              a limited partnership consisting of various limited partners with
              Meenan Inc. as the sole general partner. During fiscal 1999, the
              Company repurchased a 21.17% interest in the Company from one of
              its limited partners for a purchase price of $8,359,647.
              Concurrently the Company sold an 18.66% interest in the Company to
              a group of limited partners for $6,900,000. In fiscal 2000, the
              Company admitted 4 employees as Class B limited partners to the
              partnership. These partners were not required to make a capital
              contribution. As of June 30, 2001, Meenan Inc. owned a 75.07%
              interest in the Company.

       (b)    Principles of Consolidation

              The consolidated financial statements include the accounts of the
              Company and its subsidiaries. Significant intercompany accounts
              and transactions have been eliminated in consolidation.

       (c)    Inventories

              Inventories are valued at the lower of cost (first-in, first-out
              basis) or market.

       (d)    Property, Plant, and Equipment

              Property, plant, and equipment are stated at cost and are
              depreciated using the straight-line method over the estimated
              useful lives of the related assets as follows:

                   Building and improvements                     20 - 31.5 years
                   Automotive equipment                            5 - 7 years
                   Furniture, fixtures, and equipment              5 -10 years
                   Leasehold improvements                         Term of leases


       (e)    Derivative Instruments and Hedging Activities

              In June 1998, the Financial Accounting Standards Board (FASB)
              issued Statement of Financial Accounting Standard No. 133,
              Accounting for Derivative Instruments and Hedging Activities,
              (SFAS No. 133) as amended by SFAS No. 137 and No. 138. SFAS No.
              133 establishes accounting and reporting standards for derivative
              instruments, including certain derivative instruments, including
              certain derivative instruments embedded in other contracts, and
              hedging activities. It requires the recognition of all derivative
              instruments as assets or liabilities in the Company's balance
              sheet and measurement of those instruments at fair value and
              requires that a company formally document, designate, and assess
              the effectiveness of transactions that receive hedge accounting.


                                       7                             (Continued)

<PAGE>

                      MEENAN OIL CO., L.P. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                             June 30, 2001 and 2000



              The accounting treatment of changes in fair value is dependent
              upon whether or not a derivative instrument is designated as a
              hedge, and if so, the type of hedge. For derivates designated as
              Cash Flow Hedges, changes in fair value are recognized in other
              comprehensive income until the hedged item is recognized in
              earnings. For derivatives recognized as Fair Value Hedges, changes
              in fair value are recognized in the income statement and are
              offset by related changes in the fair value of the item hedged.
              Changes in the fair value of derivative instruments which are not
              designated as hedges or which do not qualify for hedge accounting
              are recognized currently in earnings.

              The Company purchases and sells futures contracts on the New York
              Mercantile Exchange as a hedge against oil prices. The purpose of
              the hedges is to provide a measure of stability in the volatile
              market of oil (fair value hedges) and to manage its exposure to
              commodity price risk under certain existing sales commitments
              (cash flow hedges). Futures contracts open as of June 30, 2001
              have expiration dates through June 2002. The Company adopted SFAS
              No. 133 on July 1, 2000, and records its derivatives at fair
              market value. As a result of adopting the Standard, the Company
              recognized current assets of $501,681, a $57,653 increase in net
              income and a $444,028 increase in additional other comprehensive
              income, which were recorded as cumulative effect of a change in
              accounting principle. The fair value of these outstanding
              contracts is recorded in the Company's balance sheet. For the year
              ended June 30, 2001, the Company recorded a net decrease of
              $495,415 to other comprehensive income for the net change in value
              of derivative instruments designated as cash flow hedges, and
              recorded a net gain of $444,028 representing the net change in the
              fair value of all the derivative contracts which are no longer
              outstanding at June 30, 2001. The estimated net amount of existing
              losses currently within other comprehensive income are expected to
              be reclassified into earnings within the next twelve months. In
              accordance with SFAS No. 133, the Company has recorded a
              derivative asset of approximately $11,039,000, which is included
              in prepaid expenses and other current assets and a derivative
              liability of approximately $11,590,000, which is included in
              accrued expenses - other.

       (f)    Customer Lists and Other Intangible Assets

              The costs of customer lists and covenants not to compete are
              amortized over a five to fifteen-year period on a straight-line
              basis. Goodwill is amortized on a straight-line basis over a
              forty-year period.

              The Company assesses the recoverability of these intangible assets
              by determining whether the amortization of the respective balance
              over its remaining life can be recovered through undiscounted
              future operating cash flows.

       (g)    Revenue Recognition

              Sales of heating oil and heating oil equipment are recognized at
              the time of delivery of the product to the customer or
              installation. Revenue from repairs and maintenance service is
              recognized upon completion of the service. Payments received from
              customers for burner service contracts are deferred and amortized
              into income over the term of the respective contracts.

       (h)    Income Taxes

              The Company is a limited partnership and the partners are taxed on
              their proportionate share of the income generated by the
              partnership.

                                       8                             (Continued)

<PAGE>

                      MEENAN OIL CO., L.P. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                             June 30, 2001 and 2000



       (i)    Use of Estimates

              The preparation of financial statements in conformity with
              accounting principles generally accepted in the United States of
              America requires management to make estimates and assumptions that
              affect the reported amounts of assets and liabilities and the
              disclosure of contingent assets and liabilities at the date of the
              financial statements and the reported amounts of revenues and
              expenses during the reported period. Actual results could differ
              from those estimates.

       (j)    Long-Lived Assets

              The Company's accounting policies relating to the recording of
              long-lived assets including property and equipment and intangibles
              are discussed above. The Company accounts for long-lived assets in
              accordance with the provisions of SFAS No. 121, Accounting for the
              Impairment of Long-Lived Assets and for Long-Lived Assets to Be
              Disposed Of. SFAS No. 121 requires, among other things, that
              long-lived assets held and used by an entity be reviewed for
              impairment whenever events or changes in circumstances indicate
              the carrying amount of an asset may not be recoverable.
              Recoverability of assets to be held and used is measured by a
              comparison of the carrying amount of an asset to future net cash
              flows expected to be generated by the asset. If such assets are
              considered to be impaired, the impairment to be recognized is
              measured by the amount by which the carrying amount of the assets
              exceeds the fair values of the assets. Assets to be disposed of or
              sold are reported at the lower of the carrying amount or fair
              value less costs to sell.

       (k)    Pension and Other Postretirement Plans

              On July 1, 1999, the Company adopted SFAS No. 132, Employers'
              Disclosures About Pension and Other Postretirement Benefits. SFAS
              No. 132 revises employers' disclosures about pension and other
              postretirement benefit plans. SFAS No. 132 does not change the
              method of accounting for such plans.

(2)    Property and Equipment

       Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                                                  2001                   2000
                                                                           --------------------   --------------------
<S>                                                                        <C>                    <C>
      Land                                                                 $      2,586,820              2,586,820
      Building and improvements                                                  10,952,340             10,700,376
      Automotive equipment                                                       13,126,478             13,407,877
      Furniture, fixtures, and equipment                                          5,479,055              5,644,129
      Leasehold improvements                                                        820,317                831,684
                                                                           --------------------   --------------------

                                                                                 32,965,010             33,170,886

      Less accumulated depreciation and amortization                             19,752,666             20,017,263
                                                                           --------------------   --------------------

                                                                           $     13,212,344             13,153,623
                                                                           ====================   ====================
</TABLE>

                                       9                             (Continued)

<PAGE>

                     MEENAN OIL CO., L.P. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                             June 30, 2001 and 2000


(3)    Supplemental Cash Flow Information

       The following is supplemental information relating to the statements of
cash flows:

<TABLE>
<CAPTION>
                                                            2001          2000        1999
                                                        ------------   ---------   ---------
      <S>                                               <C>            <C>         <C>
      Cash paid during the year for:
          Interest                                      $  4,546,711   3,788,780   2,993,477

       Noncash financing activities:
          Issuance of notes payable for purchase of
            heating oil companies                       $         --          --     134,877
</TABLE>

(4)    Customer Lists and Other Intangible Assets

       Customer lists and other intangible assets at June 30, 2001 and 2000
consists of:

                                              2001              2000
                                         --------------    --------------
      Customer lists                     $   33,744,755        32,257,635
      Covenants not to compete                6,995,509         6,745,359
      Goodwill                                4,938,692         4,938,692
      Other                                     105,343           105,343
                                         --------------    --------------
                                             45,784,299        44,047,029

      Less accumulated amortization          24,004,146        21,992,868
                                         --------------    --------------
                                         $   21,780,153        22,054,161
                                         ==============    ==============

(5)    Long-Term Debt

       Long-term debt, less current maturities, at June 30, 2001 and 2000
consists of:

<TABLE>
<CAPTION>
                                                                            2001             2000
                                                                       --------------   --------------
      <S>                                                              <C>              <C>
      Senior secured notes with interest at 9.34% per annum (a)        $   25,000,000       25,000,000
      Revolving credit agreement (b)                                       11,000,000       11,000,000
      Other notes payable with interest at 7.0% to 8.5% per annum,
          maturing at various dates to August 2004                            277,069          389,275
                                                                       --------------   --------------
                                                                           36,277,069       36,389,275

      Less current maturities                                               5,102,069          144,275
                                                                       --------------   --------------
                                                                       $   31,175,000       36,245,000
                                                                       ==============   ==============
</TABLE>

                                       10                            (Continued)

<PAGE>

                    MEENAN OIL CO., L.P. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                             June 30, 2001 and 2000


       (a)    During 1996, the Company issued senior secured notes due November
              1, 2007 in the amount of $25,000,000 with a fixed rate of 9.34%.
              Interest only is due in semiannual payments through May 1, 2003.
              Principal is to be paid as follows:

                       Year ending June 30:
                          2004                              $    5,000,000
                          2005                                   5,000,000
                          2006                                   5,000,000
                          2007                                   5,000,000
                          2008                                   5,000,000

              The notes are collateralized by the shares of common stock of
              Meenan Inc., the general partnership interests owned by Meenan
              Inc. and the accounts receivable, equipment, general intangible
              assets, inventory and goods of the Company. In connection with
              these notes, the Company is required to maintain certain levels of
              working capital and earnings, is restricted in other investments
              it may make and transactions it may enter into and must maintain
              certain financial ratios (see note 13, subsequent event).

       (b)    The Company has an amended revolving credit agreement with two
              banks. The agreement is comprised of two commitments of
              $11,250,000 and $25,000,000, totaling $36,250,000. The amount
              outstanding under the first commitment at June 30, 2001 was
              $11,000,000. The amount available under the first commitment is
              reduced automatically and permanently each year as defined in the
              amended agreement. At June 30, 2001, the total available under the
              first commitment, which expires on July 1, 2003, was $11,250,000,
              which will be reduced as follows:

                       Year ending June 30:
                          2002                              $     5,000,000
                          2003                                    5,000,000
                          2004                                    1,250,000
                                                            ---------------

                                                            $    11,250,000
                                                            ===============

              In addition, the first commitment may be automatically and
              permanently reduced annually through September 28, 2002. The
              reduction at September 28, 2001 is based on the amount by which
              June 30, 2001 gross operating cash generated exceeds amounts
              specified in the agreement. No such reduction was made on
              September 28, 2000 (see note 13, subsequent event).

              The second commitment, which expires on July 1, 2003, totals
              $25,000,000, of which approximately $8,368,000 was utilized for
              open letters of credit at June 30, 2001.

              Under both commitments, the interest rate options consist of:

                    1.65% over the greatest of three defined rates, including
                    prime.

                    2.50% over a defined adjusted Certificate of Deposit (CD)
                    rate.

                                       11                           (Continued)

<PAGE>

                     MEENAN OIL CO., L.P. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                             June 30, 2001 and 2000


                    1.50% to 3.0% over a defined adjusted LIBOR rate.

              .  2.50% over the Agent bank's Acceptance Draft discount rate, as
                 defined.

              The weighted average interest rate on this debt at June 30, 2001
              was 5.80%

              In connection with this revolving credit agreement, the Company is
              required to pay a commitment fee of 1/2 of 1% of the unused
              portion of the line of credit. In addition, the Company incurred
              financing costs in connection with this credit agreement and the
              amendments thereto amounting to approximately $1,440,000, which
              amount is included, net of amortization, in other assets on the
              consolidated balance sheet. Deferred financing costs are being
              amortized on a straight-line basis over the term of the related
              debt.

              Borrowings under the revolving credit agreement are collateralized
              by the shares of common stock of Meenan Inc., all of the general
              partnership interests owned by Meenan Inc., the stock of all of
              the subsidiaries of the company and all of the personal property
              of the Company and its subsidiaries, including accounts
              receivable, inventory, equipment, fixtures, general intangible
              assets, and customer lists.

              In connection with this revolving credit agreement, the Company is
              required to maintain certain levels of working capital and
              tangible net worth, is restricted in the amount of fixed assets it
              may acquire and other investments it may make and must maintain
              certain financial ratios.

              Maturities of all long-term debt are as follows:

                        Year ending June 30:
                           2002                       $      5,102,069
                           2003                              5,070,000
                           2004                              6,070,000
                           2005                              5,035,000
                           2006                              5,000,000
                           2007 and thereafter              10,000,000
                                                      ----------------

                                                      $     36,277,069
                                                      ================

(6)    Leases

       The Company is obligated under several noncancelable leases covering
       office, storage and other facilities, as well as transportation equipment
       for remaining periods of one to thirteen years. The Company also leases
       certain telephone equipment.

                                       12                            (Continued)

<PAGE>

                    MEENAN OIL CO., L.P. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                             June 30, 2001 and 2000


       Future minimum lease payments for operating leases with initial or
       remaining terms in excess of one year are as follows:

                                                                Operating
                                                                  leases
                                                              -------------
              Year ending June 30:
                  2002                                        $   668,890
                  2003                                            586,574
                  2004                                            555,130
                  2005                                            485,354
                  2006                                            271,862
                  Later years                                   1,146,159
                                                              -----------

                            Total minimum lease payments      $ 3,713,969
                                                              ===========

       Total rent expense for all operating leases for the years ended June 30,
       2001, 2000 and 1999 totaled approximately $2,336,000, $2,445,000, and
       $2,316,000, respectively.

(7)    Income Taxes

       The Company is a limited partnership and as such, Federal and state taxes
       payable on its income are the responsibility of the individual partners
       and are not reflected in the financial statements of the Company.

(8)    Employee Benefit Plans

       (a)    Pension Benefits

              The Company has a noncontributory defined benefit pension plan
              which provides benefits to all eligible employees. Certain other
              employees are covered by union retirement plans to which the
              Company contributes. Pension expense for these plans aggregated
              approximately $1,087,000 for 2001, $968,000 for 2000, and $822,000
              for 1999.

                                       13                            (Continued)

<PAGE>

                    MEENAN OIL CO., L.P. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                             June 30, 2001 and 2000


          The following table set forth the defined benefit plan's benefit
          obligations, fair value of plan assets, and funded status at June 30,
          2001, 2000 and 1999.

<TABLE>
<CAPTION>
                                                                              Pension benefits
                                                               ---------------------------------------------
                                                                   2001            2000            1999
                                                               ------------    ------------    -------------
          <S>                                                  <C>             <C>             <C>
          Change in projected benefit obligation:
                Projected benefit obligation at
                  beginning of year                            $ 29,398,185      29,341,414       27,193,823
                Service cost                                      1,195,079       1,275,696        1,262,960
                Interest cost                                     2,212,009       2,074,519        1,931,732
                Actuarial (gain) loss                               453,050      (2,106,796)          39,146
                Benefit paid                                     (1,414,333)     (1,186,648)      (1,086,247)
                                                               ------------    ------------     ------------
                Projected benefit obligation at
                  end of year                                  $ 31,843,990      29,398,185       29,341,414
                                                               ============    ============     ============

          Change in plan assets:
              Fair value of plan assets at
                beginning of year                              $ 31,772,529      31,558,390       29,389,382
              Actual return on plan assets                       (1,158,474)      1,400,787        3,255,255
              Benefits paid                                      (1,414,333)     (1,186,648)      (1,086,247)
                                                               ------------    ------------     ------------

              Fair value of plan assets at end
                of year                                        $ 29,199,722      31,772,529       31,558,390
                                                               ============    ============     ============

          Funded status                                        $ (2,644,268)      2,374,344        2,216,976
          Unrecognized transition asset                            (186,449)       (329,873)        (473,297)
          Unrecognized prior service cost                            (7,319)         (8,411)          (9,503)
          Unrecognized net actuarial gain                        (2,842,741)     (7,403,004)      (6,788,379)
                                                               ------------    ------------     ------------

                        Accrued in balance sheet
                          (other long-term
                          liabilities)                         $ (5,680,777)     (5,366,944)      (5,054,203)
                                                               ============    ============     ============
</TABLE>

                                       14                            (Continued)

<PAGE>

                    MEENAN OIL CO., L.P. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                             June 30, 2001 and 2000

<TABLE>
<CAPTION>

                                                                              Pension benefits
                                                           --------------------------------------------------
                                                                2001              2000              1999
                                                           --------------   ---------------    --------------
<S>                                                        <C>              <C>                <C>
             Weighted average assumptions as of June 30:
                   Discount rate                                     7.50%             7.75%             7.25%
                   Rate of compensation increase                     4.00%             4.00%             4.00%
                   Expected return on plan assets                    8.50%             8.50%             8.50%

             Components of net periodic benefit cost:
                   Service cost                            $    1,195,079         1,275,696         1,262,960
                   Interest cost                                2,212,009         2,074,519         1,931,732
                   Expected return on plan assets              (2,635,547)       (2,627,828)       (2,448,085)
                   Amortization of unrecognized
                     transition (asset) obligation               (143,424)         (143,424)         (143,424)
                   Amortization of prior service
                     cost                                          (1,092)           (1,092)           (1,092)
                   Recognized net actuarial gain                 (313,192)         (265,130)         (228,570)
                                                           --------------   ---------------    --------------

                           Net periodic benefit cost       $      313,833           312,741           373,521
                                                           ==============   ===============    ==============
</TABLE>

       (b)    Executive Committee Bonus Plan

              The Company's Executive Committee has adopted a bonus plan, which
              provides for cash bonuses to eligible employees based upon the
              operating performance of the Company. Expense under the plan
              totaled approximately $740,000 for 2001, $654,000 for 2000, and
              $436,000 for 1999. The plan for any fiscal year may be modified or
              terminated at any time prior to the end of such year by the
              Company's Executive Committee.

(9)    Acquisitions

       During 2001, the Company acquired the assets of five retail fuel oil
       businesses. The total purchase price for these acquisitions totaled
       approximately $2,374,000, of which $519,000 represented the fair value of
       property and equipment. The balance of $1,855,000 was allocated to
       customer lists and other intangibles. During 2000, the Company acquired
       the assets of six retail fuel oil businesses, an environmental consulting
       business and a retail security alarm business. The total purchase price
       for these acquisitions totaled approximately $10,924,000, of which
       $3,015,000 represented the fair value of property and equipment.

                                       15                           (Continued)

<PAGE>

                      MEENAN OIL CO., L.P. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                             June 30, 2001 and 2000


       The balance of $7,909,000 was allocated to customer lists and other
       intangibles. In addition, certain of the acquisitions contain contingent
       payout provisions based on the attainment of sales volume, for which the
       Company has accrued approximately $582,000 as of June 30, 2001. These
       acquisitions have been accounted for using the purchase method of
       accounting, and their operating results which are not material to the
       Company, are included in the consolidated statements of income from their
       respective dates of acquisition.

(10)   Distributions

       In fiscal 2001, 2000 and 1999 the Executive Committee of the Company
       approved distributions to the partners of $6,878,420, $3,674,953, and
       $8,677,733, respectively.

(11)   Business and Credit Concentration

       All of the Company's customers are located in New York, New Jersey, and
       Pennsylvania. No single customer accounted for more than 5% of the
       Company's sales in 2001, 2000, or 1999.

(12)   Commitments and Contingencies

       (a)    The Company is a defendant in certain legal actions the outcome of
              which, in the opinion of management based in part on the opinion
              of counsel, is not expected to have a materially adverse impact on
              the Company's financial position or results of operations.

       (b)    The Company has elected to either self-insure or maintain high
              deductibles on its workers' compensation, auto and general
              liability insurance coverages. A liability of approximately
              $4,900,000 and $4,700,000 is included in accrued expenses - other
              for unpaid claims and an estimate for claims incurred but not
              reported as of June 30, 2001 and 2000. The Company has coverage to
              prevent catastrophic losses resulting from claims.

(13)   Subsequent Event

       On July 31, 2001, the Company entered into an equity purchase agreement
       with Petro, Inc. for the sale of stock of Meenan Oil Co., Inc. and
       subsidiaries and the limited partnership interests of Meenan Oil Co.,
       L.P. and the stock of its subsidiary.

       On August 13, 2001, in connection with the closing of the equity purchase
       agreement, amounts outstanding under the senior secured notes and the
       revolving credit agreement were repaid from the proceeds of the equity
       purchase, and included a prepayment fee of $4.0 million with respect to
       the senior secured notes. Under the terms of the agreement, a portion of
       the proceeds was held in escrow.

                                       16                           (Continued)

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>5
<FILENAME>dex992.txt
<DESCRIPTION>NOTES TO CONSOLIDATED FINANCIAL STATEMENT
<TEXT>
<PAGE>

                                                                    Exhibit 99.2

                          UNAUDITED PRO FORMA CONDENSED

                       CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated statement of operations
for the year ended September 30, 2001 gives effect to the acquisition of Meenan
Oil Co. L.P. ("Meenan") completed on August 12, 2001 by Star Gas Partners, L.P.
("Star Gas"). The information presented is derived from, should be read in
conjunction with, and is qualified in its entirety by reference to the
historical financial statements and related notes of Star Gas and Meenan.

The unaudited pro forma condensed consolidated statement of operations for the
twelve months ended September 30, 2001 was prepared as if the transaction had
occurred on October 1, 2000.

The pro forma adjustments are based upon currently available information and
certain estimates and assumptions described below, and therefore, the actual
adjustments may differ from the unaudited pro forma adjustments. However,
management believes that the assumptions provide a reasonable basis for
representing the significant effects of the transaction and that the unaudited
pro forma adjustments give appropriate effect to those assumptions and are
properly applied in the unaudited pro forma condensed consolidated financial
information. The unaudited pro forma condensed consolidated statement of
operations for the year ended September 30, 2001 is not necessarily indicative
of the results of operations of Star Gas if the transaction had actually
occurred on the dates indicated above. Likewise, the unaudited pro forma
condensed consolidated statement of operations is not necessarily indicative of
future financial results of combined operations of Star Gas.

                                                                     (Continued)

<PAGE>

                    STAR GAS PARTNERS, L.P. AND SUBSIDIARIES
      PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
                         Year Ended September 30, 2001
                    (in thousands, except per unit amounts)

<TABLE>
<CAPTION>
                                                                                                                      Star Gas
                                                                                                                   Partners, L.P.
                                                                   Star Gas                       Pro Forma          Pro Forma
                                                                Partners, L.P.     Meenan (a)    Adjustments          Combined
                                                                --------------   -------------   -----------       --------------
<S>                                                             <C>              <C>             <C>               <C>
Sales                                                           $   1,085,973    $    237,003              -       $  1,322,976
Cost and expenses
 Cost of sales                                                        771,317         175,875              -            947,192
 Operating expenses                                                   235,830          41,960        ($1,530)(b)        276,260
 Depreciation and amortization                                         44,396           3,084          2,895 (c)         50,375
 TG &E customer acquisition expense                                     1,868               -              -              1,868
 Unit compensation expense                                              3,315               -              -              3,315
                                                                -------------    ------------    -----------       ------------
    Operating income                                                   29,247          16,084         (1,365)            43,966
Interest expense, net                                                  33,727           7,376         (1,709)(d)         39,394
Amortization of debt issuance costs                                       737               -            100 (e)            837
                                                                -------------    ------------    -----------       ------------
    Income (loss) before income taxes and cumulative
    effect of change in accounting principle                           (5,217)          8,708            244              3,735
Income tax expense                                                      1,498             635              -              2,133
                                                                -------------    ------------    -----------       ------------
    Income (loss) before cumulative effect of change
    in accounting principle                                            (6,715)          8,073            244              1,602
Cumulative effect of change in accounting principle
for adoption of SFAS No. 133, net of income taxes                       1,466               -              -              1,466
                                                                -------------    ------------    -----------       ------------
    Net income (loss)                                                 ($5,249)   $      8,073    $       244       $      3,068
                                                                =============    ============    ===========       ============

 General Partner's interest in net income (loss)                          (75)            110              3                 38
                                                                -------------    ------------    -----------       ------------

 Limited Partners' interest in net income (loss)                      ($5,174)   $      7,963    $       241       $      3,030
                                                                =============    ============    ===========       ============

Net income (loss) per Limited Partner unit:
 Basic                                                                 ($0.23)                                     $       0.12
                                                                =============                                      ============
 Diluted                                                               ($0.23)                                     $       0.12
                                                                =============                                      ============

Weighted average number of Limited Partner units outstanding
Basic                                                                  22,439                          3,250 (f)         25,689
                                                                =============                    ===========       ============
Diluted                                                                22,439                          3,250 (f)         25,992 (g)
                                                                =============                    ===========       ============
</TABLE>

                                        2

<PAGE>


                    Star Gas Partners, L.P. and Subsidiaries
        Notes to Pro Forma Condensed Consolidated Financial Information
                                Tables in (000s)


          (a) Represents the results of operations of Meenan from October 1,
2000 to August 12, 2001, the date of acquisition by Star Gas. Subsequent to
August 12, 2001, the results of operations of Meenan were included in the
results of operations of Star Gas.

          (b) Reflects the elimination of the salaries and related expenses for
two of the executives and principal owners of Meenan that will not be employed
by the Partnership as well as for other deal related expenses as follows:


                                                     October 1, 2000 to
                                                        August 12, 2001
                                                     ------------------

         Salaries and Related Costs                            $  850
         Other                                                    680
                  Total                                        -------
                                                               $1,530
                                                               =======


          (c) Reflects the net adjustment for the period from October 1, 2000 to
August 12, 2001 to depreciation and amortization expense of $2.9 million
attributable to the acquisition of Meenan.

          (d) Reflects the net reduction to interest expense of $1.7 million for
the period from October 1, 2000 to August 12, 2001. This amount reflects $4.40
million of additional interest expense on $61.0 million in principal amount of
the senior secured notes issued at an interest rate of 8.25%. These notes were
issued to fund the acquisition of Meenan. This amount also reflects a reduction
in interest expense of $2.0 million due to the repayment by the sellers of $25.0
million of debt with a weighted average interest rate of 9.34% and the
elimination from the pro forma financial statements of $4.0 million associated
with a prepayment penalty incurred at Meenan for the early termination for these
notes.

         The following table summarizes the effect on interest expense of the
acquisition of Meenan and offerings from October 1, 2000 to August 12, 2001:


                                                                     (Continued)

                                       3

<PAGE>

<TABLE>
<CAPTION>
                                                                                        Interest     Interest
                                                                           Amount         Rate       Expense
                                                                           ------       --------     --------
<S>                                                                        <C>          <C>          <C>
Debt Repaid
         Meenan Notes .................................................    $25,000       9.34%       $(2,021)
         Elimination of Prepayment Penalty ............................                               (4,045)
                                                                                                      ------
         Total Reductions to Interest Expense .........................                              $(6,066)
                                                                                                     -------

New Debt Issued
         8.25% Senior Secured Notes ..........................             $61,000       8.25%       $ 4,357
                                                                                      -------
         Net Reduction to Interest Expense ...................                        $(1,709)
                                                                                      =======
</TABLE>

          (e) Reflects the net adjustment for the period from October 1, 2000 to
August 12, 2001 to amortization of debt issuance costs of $0.10 million
attributable to the debt offering and the acquisition of Meenan.

          (f) Reflects the additional common units sold by Star Gas used to
complete the Meenan acquisition.

          (g) Reflects the effect of units which were deemed anti-dilutive to
actual net income (loss) per unit of Star Gas as reported September 30, 2001 and
became dilutive to net income per unit as adjusted for the Meenan transaction.

                                       4

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
