Blue Rhino 8-K/A Financial statements and exhibits

Exhibit 99.2

PRO FORMA FINANCIAL INFORMATION

(UNAUDITED)

INTRODUCTION TO PRO FORMA FINANCIAL INFORMATION

The following unaudited Pro Forma Financial Information is based on the financial statements of Blue Rhino Corporation and subsidiaries (“Blue Rhino”) and the combined financial statements of Platinum Propane Holding, L.L.C. and subsidiaries (“Platinum”) and Ark Holding Company LLC and subsidiaries (“Ark”). Platinum and Ark are related businesses under common management and have accordingly been presented on a combined basis for both the historical financial statements, included elsewhere in this filing, and for the following pro forma statements.

The following unaudited consolidated pro forma balance sheet as of October 31, 2002 has been prepared as if the acquisitions of Platinum and Ark had occurred on that date. The following unaudited consolidated pro forma statements of operations for the year ended July 31, 2002, and for the three months ended October 31, 2002, give effect to the acquisitions by Blue Rhino of Platinum and Ark as if such transactions had occurred at August 1, 2001.

The closing date for the acquisitions of Platinum Propane, L.L.C. and Ark Holding Company LLC and their respective subsidiaries by Blue Rhino was November 22, 2002. The aggregate purchase price for the two acquisitions was approximately $32 million. The consideration paid by Blue Rhino in the two acquisitions consisted of approximately 1.1 million restricted shares of common stock valued, based on the closing price of Blue Rhino’s common stock on the Nasdaq National Market on November 22, 2002, at approximately $19 million, $3.1 million in assumed debt satisfied at closing, $4.9 million in advances, and $5.0 million in liabilities assumed. The acquisition of Platinum and Ark will be accounted for under the purchase method of accounting in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141,Business Combinations,and No. 142,Goodwill and Other Intangible Assets.SFAS No. 142 requires that amortization of goodwill cease and the carrying value of goodwill be evaluated for impairment at least annually using a fair value test. SFAS No. 141 requires that the purchase method of accounting be used for all business combinations. Under the purchase method of accounting, the purchase price is allocated to the assets acquired and liabilities assumed based on their respective fair values. On a preliminary basis, approximately $28.2 million of the purchase price was allocated to goodwill, with the balance allocated to equipment, vehicles and other assets. The allocation of the aggregate purchase price to the assets and liabilities acquired is based upon their estimated fair values. The allocation of the aggregate purchase price reflected in the pro forma financial information is preliminary. The final allocation of the purchase price is not expected to differ materially from the preliminary allocation.

The pro forma financial information is based on the historical financial statements of Blue Rhino and the combined financial statements of Platinum and Ark and the assumptions and adjustments described in the accompanying notes. The unaudited pro forma statements of operations do not purport to represent what Blue Rhino’s results of operations actually would have been if the acquisitions had occurred as of the dates indicated or what results will be for any future periods. In the opinion of the management of Blue Rhino, all adjustments necessary to present fairly the pro forma balance sheet and statements of operations have been made based on the terms and structure of the transaction. The unaudited pro forma financial information is qualified by reference to, and should be read in conjunction with: (a) the historical financial statements of Blue Rhino Corporation included in its Annual Report on Form 10-K for the year ended July 31, 2002 and its Quarterly Report on Form 10-Q for the three months ended October 31, 2002; (b) the Current Report on Form 8-K of Blue Rhino Corporation filed November 27, 2002; and (c) the historical combined financial statements of Platinum and Ark for the year ended December 31, 2001 included in this filing.

BLUE RHINO CORPORATION

UNAUDITED PRO FORMA BALANCE SHEET
AS OF OCTOBER 31, 2002
(in thousands)

					Blue			Combined Ark			Pro Forma				Pro Forma
					Rhino			and Platinum			Adjustments				Blue Rhino
				ASSETS
Current assets:
	Cash and cash equivalents				$	1,706		$	285						$	1,991
	Accounts receivable, net					18,935			1,676		$	(1,265	)	e		19,346
	Inventories					15,365			1,512							16,877
	Prepaid expenses and other current assets					4,454			581			(1,374	)	e,f		3,661
			Total current assets			40,460			4,054			(2,639	)			41,875
Cylinders held under operating lease agreements, net						35,132										35,132
Property, plant and equipment, net						31,313			1,544			(321	)	c		32,536
Intangibles, net						31,921						28,213		a		60,134
Other assets						5,035						(3,836	)	e		1,199
			Total assets		$	143,861		$	5,598		$	21,417			$	170,876
				LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable				$	13,830		$	8,522		$	(6,101	)	e	$	16,251
	Current portion of long-term debt and capital lease obligations					1,504			3,572			(3,110	)	d		1,966
	Accrued liabilities					3,464			1,022			1,191		a		5,677
			Total current liabilities			18,798			13,116			(8,020	)			23,894
Long-term debt and capital lease obligations, less current maturities						42,016			258			3,110		d		45,384
			Total liabilities			60,814			13,374			(4,910	)			69,278
Stockholders’ equity:
		Common stock, $0.001 par value, 100,000,000 shares authorized, 14,505,965 shares issued and outstanding actual, 15,610,161 shares issued and outstanding pro forma				15						1		b		16
	Capital in excess of par					93,090			9,870			8,680		b		111,640
	Common stock warrants					5,366										5,366
	Accumulated deficit					(16,339	)		(17,659	)		17,659		b		(16,339	)
	Accumulated other comprehensive loss					915			13			(13	)	b		915
			Total stockholders’ equity			83,047			(7,776	)		26,327				101,598
			Total liabilities and stockholders’ equity		$	143,861		$	5,598		$	21,417			$	170,876

The accompanying notes are an integral part of this unaudited pro forma balance sheet.

BLUE RHINO CORPORATION

NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
(amounts in thousands)

The historical balance sheet for Blue Rhino as of October 31, 2002 is derived from the unaudited financial statements as filed in Blue Rhino’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2002. The historical combined balance sheet for Platinum and Ark is derived from the unaudited internal balance sheets of the respective companies as of October 31, 2002.

(a)  Reflects the preliminary allocation of the purchase price for the acquisitions. Blue Rhino has not yet determined the final allocation of the purchase price. The final allocation of the purchase price is not expected to differ materially from the preliminary allocation.

The preliminary pro forma allocation of the purchase price is as follows:
	Issuance of common stock		$	18,551
	Liabilities assumed			12,447
	Acquisition liabilities			1,191
		Total consideration	$	32,189
Allocation of purchase price based on preliminary estimated values:
	Goodwill		$	28,213
	Current assets			2,753
	Property, plant, and equipment			1,223
			$	32,189

(b)  The adjustment to stockholders equity consists of:

Issuance of Blue Rhino common stock	$	18,551
Elimination of the combined members’ deficit of Platinum and Ark		7,776
	$	26,327

(c)  Reflects adjustment of book value of property, plant, and equipment ($1,544) to estimated fair value ($1,223).

(d)  Reflects $3,110 of proceeds from Blue Rhino’s bank credit facility used to payoff assumed debt balances.

(e)  Reflects the elimination of intercompany balances between Blue Rhino and Platinum and Ark.

(f)  Eliminate Blue Rhino common stock and options held by Platinum and Ark ($374).

BLUE RHINO CORPORATION

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JULY 31, 2002
(in thousands, except for per share amounts)

				Blue			Combined Ark			Pro Forma				Pro Forma
				Rhino			and Platinum			Adjustments				Blue Rhino
Net revenues				$	205,585		$	28,993		$	(32,954	)	a	$	201,624
Operating costs and expenses:
	Cost of sales				159,440			29,115			(32,607	)	a		155,948
	Selling, general, and administrative				21,886										21,886
	Depreciation and amortization				7,888			493			(188	)	b		8,193
			Total operating costs and expenses		189,214			29,608			(32,795	)			186,027
			Income (loss) from operations		16,371			(615	)		(159	)			15,597
Interest and other expenses (income):
	Interest expense				6,217			557			(380	)	c,d,e		6,394
	Loss on investee				714										714
	Other, net				(422	)		14			303		e		(105	)
			Income (loss) before income taxes		9,862			(1,186	)		(82	)			8,594
Income taxes					47										47
			Net income (loss)		9,815			(1,186	)		(82	)			8,547
Preferred dividends					1,789										1,789
		Income (loss) available to common stockholders		$	8,026		$	(1,186	)	$	(82	)		$	6,758
Earnings (loss) per common share:
	Basic			$	0.63									$	0.49
	Diluted			$	0.55									$	0.43
Shares used in per share calculations:
	Basic				12,658						1,104		g		13,762
	Diluted				14,701						1,103		g		15,804

The accompanying notes are an integral part of this unaudited pro forma statement of operations.

BLUE RHINO CORPORATION

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2002
(in thousands, except for per share amounts)

				Blue			Combined Ark			Pro Forma				Pro Forma
				Rhino			and Platinum			Adjustments				Blue Rhino
Net revenues				$	54,815		$	9,237		$	(11,564	)	a	$	52,488
Operating costs and expenses:
	Cost of sales				41,351			12,055			(11,471	)	a		41,935
	Selling, general, and administrative				8,393										8,393
	Depreciation and amortization				2,157			89			(44	)	b		2,202
			Total operating costs and expenses		51,901			12,144			(11,515	)			52,530
			Income (loss) from operations		2,914			(2,907	)		(49	)			(42	)
Interest and other expenses (income):
	Interest expense				1,256			191			(152	)	c,d,e		1,295
	Loss on investee				455										455
	Other, net				(71	)		(294	)		449		e,f		84
			Income (loss) before income taxes		1,274			(2,804	)		(346	)			(1,876	)
Income taxes					15										15
			Net income (loss)		1,259			(2,804	)		(346	)			(1,891	)
Preferred dividends					71										71
		Income (loss) available to common stockholders		$	1,188		$	(2,804	)	$	(346	)		$	(1,962	)
Earnings (loss) per common share:
	Basic			$	0.08									$	(0.13	)
	Diluted			$	0.07									$	(0.13	)
Shares used in per share calculations:
	Basic				14,121						1,104		g		15,225
	Diluted				17,701						(2,476	)	g,h		15,225

The accompanying notes are an integral part of this unaudited pro forma statement of operations.

BLUE RHINO CORPORATION

NOTES TO UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
(amounts in thousands)

Historical balances for Blue Rhino for the year ended July 31, 2002, are derived from audited financial statements as filed in Blue Rhino’s Annual Report on Form 10-K for the year ended July 31, 2002. The historical balances for Blue Rhino for the three months ended October 31, 2002, are derived from unaudited financial statements as filed in Blue Rhino’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2002. The historical combined balances for Platinum and Ark are derived from unaudited monthly internal records of the respective companies for the corresponding periods.

(a)  Eliminate intercompany sales and cost of sales and leasing income and leasing cost between Platinum, Ark and Blue Rhino

(b)  Adjust depreciation expense based on estimated fair values.

(c)  Reflects interest expense (at an assumed rate of 4.75%) associated with the borrowings under Blue Rhino’s bank credit facility to payoff Platinum and Ark debt.

(d)  Eliminate interest expense incurred by Platinum and Ark associated with debt repaid at the closing date of the acquisition.

(e)  Eliminate intercompany interest charges between Platinum, Ark, and Blue Rhino.

(f)  Eliminate income recognized by Platinum and Ark on Blue Rhino stock options vesting during the period.

(g)  Reflects the issuance of Blue Rhino common stock in connection with the acquisitions.

(h)  Reflects the exclusion of common stock options and warrants as the effect is anti-dilutive.