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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2002
Commission file number 1-13692
Commission file number 33-92734-01
Commission file number 333-72986-02
Commission file number 333-72986-01
AMERIGAS PARTNERS, L.P.
AMERIGAS FINANCE CORP.
AMERIGAS EAGLE FINANCE CORP.
AP EAGLE FINANCE CORP.
(EXACT NAME OF REGISTRANTS AS SPECIFIED IN THEIR CHARTERS)
Delaware 23-2787918
Delaware 23-2800532
Delaware 23-3074434
Delaware 23-3077318
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
460 North Gulph Road, King of Prussia, PA 19406
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)(ZIP CODE)
(610) 337-7000
(REGISTRANTS' TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF CLASS ON WHICH REGISTERED
Common Units representing New York Stock Exchange, Inc.
limited partner interests
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None
INDICATE BY CHECK MARK WHETHER EACH 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 FILERS 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 BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. |X|
The aggregate market value of AmeriGas Partners, L.P. Common Units held by
nonaffiliates of AmeriGas Partners, L.P. on November 29, 2002 was approximately
$534,890,779. At November 29, 2002, there were outstanding 49,432,358 Common
Units representing limited partner interests.
DOCUMENTS INCORPORATED BY REFERENCE: Portions of the AmeriGas Partners, L.P.
Annual Report for the year ended September 30, 2002 are incorporated by
reference in Part II of this Form 10-K.
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes |X| No | |
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TABLE OF CONTENTS
PAGE
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PART I: BUSINESS..................................................................... 1
Items 1. Business..................................................................... 1
Item 2. Properties................................................................... 9
Item 3. Legal Proceedings............................................................ 10
Item 4. Submission of Matters to a Vote of Security Holders.......................... 10
PART II: SECURITIES AND FINANCIAL INFORMATION......................................... 11
Item 5. Market for Registrant's Common Units and Related Security Holder Matters..... 11
Item 6. Selected Financial Data...................................................... 13
Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations................................................................... 14
Item 7a. Quantitative and Qualitative Disclosures About Market Risk................... 26
Item 8. Financial Statements and Supplementary Data.................................. 26
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure................................................................... 26
PART III: MANAGEMENT AND SECURITY HOLDERS.............................................. 27
Item 10. Directors and Executive Officers of the General Partner...................... 27
Item 11. Executive Compensation....................................................... 31
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Security Holder Matters...................................................... 41
Item 13. Certain Relationships and Related Transactions............................... 45
(i)
Item 14. Controls and Procedures...................................................... 46
PART IV: ADDITIONAL EXHIBITS, SCHEDULES AND REPORTS................................... 47
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K............. 47
Signatures................................................................... 57
Certifications............................................................... 62
Index to Financial Statements and Financial Statement Schedules.............. F-2
(ii)
PART I: BUSINESS
ITEMS 1. BUSINESS
GENERAL
AmeriGas Partners, L.P. ("AmeriGas Partners" or the "Partnership") is a
publicly traded limited partnership formed under Delaware law on November 2,
1994. We became the largest retail propane distributor in the United States,
based on retail sales volume, upon completion of the acquisition of the Columbia
Propane businesses described below. We serve approximately 1.2 million
residential, commercial, industrial, agricultural and motor fuel customers from
approximately 650 district locations in 46 states.
We conduct our business principally through our subsidiary, AmeriGas
Propane, L.P. ("AmeriGas OLP") and its subsidiary, AmeriGas Eagle Propane, L.P.
("Eagle OLP" and together with AmeriGas OLP, the "Operating Partnership"), both
Delaware limited partnerships. Eagle OLP has a less-than-one percent minority
limited partner. Our common units ("Common Units"), which represent limited
partner interests, are traded on the New York Stock Exchange under the symbol
"APU." Our executive offices are located at 460 North Gulph Road, King of
Prussia, Pennsylvania 19406, and our telephone number is (610) 337-7000. In this
report, the terms "Partnership" and "AmeriGas Partners," as well as the terms
"our," "we," and "its," are used sometimes as abbreviated references to AmeriGas
Partners, L.P. itself or AmeriGas Partners, L.P. and its consolidated
subsidiaries, including the Operating Partnership.
AmeriGas Propane, Inc. is our general partner (the "General Partner"). The
General Partner is a wholly owned subsidiary of UGI Corporation ("UGI"), a
public company listed on the New York Stock Exchange and the Philadelphia Stock
Exchange. Through various subsidiaries, UGI has been in the propane distribution
business for over 40 years. The General Partner and its subsidiary Petrolane
Incorporated have a majority ownership interest in the Partnership. See Note 1
to the Partnership's Consolidated Financial Statements. The General Partner is
responsible for managing our operations.
We have three co-registrants: AmeriGas Finance Corp., formed on March 13,
1995; AmeriGas Eagle Finance Corp., formed on February 22, 2001; and AP Eagle
Finance Corp., formed on April 12, 2001 (each, a "Finance Corp." and together
the "Finance Corp."). Each Finance Corp. serves as co-obligor for one of our
series of senior notes. Each Finance Corp. has nominal assets and conducts no
business operations. Accordingly, this report contains no discussion of the
results of operations, liquidity or capital resources of any Finance Corp. The
Finance Corp. executive offices are located at 460 North Gulph Road, King of
Prussia, Pennsylvania 19406; telephone number (610) 337-7000.
-1-
BUSINESS STRATEGY
Our strategy is to increase market share through acquisitions and internal
growth, leverage our national and local economies of scale, and achieve
operating efficiencies through business process improvements. We regularly
consider and evaluate opportunities for growth through the acquisition of local,
regional and national propane distributors. Acquisitions are an important part
of our strategy, because the demand for propane is expected to remain relatively
constant for the foreseeable future, with year-to-year industry volumes being
affected primarily by weather patterns. We may choose to finance future
acquisitions with debt, equity, cash or a combination of the three. We compete
for acquisitions with others engaged in the propane distribution business.
Although we believe there are numerous potential acquisition candidates in the
industry, there can be no assurance that we will find attractive candidates in
the future, or that we will be able to acquire such candidates on economically
acceptable terms. Internal growth will be provided in part from expansion of our
PPX Prefilled Propane Xchange(R) and national accounts programs. In addition, we
believe opportunities exist to grow our business internally through sales and
marketing programs designed to attract and retain customers.
COLUMBIA PROPANE ACQUISITION
On August 21, 2001, AmeriGas Propane, L.P. acquired the propane
distribution businesses of Columbia Energy Group. These businesses were
conducted through Columbia Propane Corporation and its 99% owned subsidiary,
Columbia Propane, L.P. Prior to the acquisition, Columbia Propane, based in
Richmond, Virginia, was the seventh largest retail propane marketer in the
United States, selling approximately 308 million gallons annually from 186
locations in 29 states. Following the acquisition, Columbia Propane, L.P.
changed its name to AmeriGas Eagle Propane, L.P. and Columbia Propane
Corporation changed its name to AmeriGas Eagle Propane, Inc. Both entities do
business under the trade name AmeriGas(R). AmeriGas OLP and the General Partner
own more than 99% of Eagle OLP and an unaffiliated third party retains the
remaining interest. See Note 3 to the Partnership's Consolidated Financial
Statements.
GENERAL INDUSTRY INFORMATION
Propane is separated from crude oil during the refining process and also
extracted from natural gas or oil wellhead gas at processing plants. Propane is
normally transported and stored in a liquid state under moderate pressure or
refrigeration for economy and ease of handling in shipping and distribution.
When the pressure is released or the temperature is increased, it is usable as a
flammable gas. Propane is colorless and odorless; an odorant is added to allow
its detection. Propane is clean burning, producing negligible amounts of
pollutants when properly consumed.
The primary customers for propane are residential, commercial,
agricultural, motor fuel and industrial users to whom natural gas is not readily
available. Propane is typically more
-2-
expensive than natural gas, competitive with fuel oil when operating
efficiencies are taken into account and, in most areas, cheaper than electricity
on an equivalent energy basis.
PRODUCTS, SERVICES AND MARKETING
As of September 30, 2002, the Partnership distributed propane to
approximately 1.2 million customers from approximately 650 district locations in
46 states. The Partnership also sells, installs and services propane appliances,
including heating systems. In certain markets, the Partnership also installs and
services propane fuel systems for motor vehicles. Typically, district locations
are found in suburban and rural areas where natural gas is not available.
Districts generally consist of an office, appliance showroom, warehouse and
service facilities, with one or more 18,000 to 30,000 gallon storage tanks on
the premises. As part of its overall transportation and distribution
infrastructure, the Partnership operates as an interstate carrier in 48 states
throughout the United States. It is also licensed as a carrier in Canada.
The Partnership sells propane primarily to five markets: residential,
commercial/industrial, motor fuel, agricultural and wholesale. Approximately 79%
of the Partnership's fiscal year 2002 sales (based on gallons sold) were to
retail accounts and approximately 21% were to wholesale customers. Sales to
residential customers in fiscal 2002 represented approximately 41% of retail
gallons sold; industrial/commercial customers 38%; motor fuel customers 13%; and
agricultural customers 8%. Residential customers represented 52% of the
Partnership's total propane margin. No single customer accounts for 5% or more
of the Partnership's consolidated revenues.
In the residential market, which includes both conventional and
manufactured housing, propane is used primarily for home heating, water heating
and cooking purposes. Commercial users, which include motels, hotels,
restaurants and retail stores, generally use propane for the same purposes as
residential customers. The Partnership continues to expand its PPX(R) program.
At September 30, 2002, PPX(R) was available at approximately 15,600 retail
locations throughout the country. Industrial customers use propane to fire
furnaces, as a cutting gas and in other process applications. Other industrial
customers are large-scale heating accounts and local gas utility customers who
use propane as a supplemental fuel to meet peak load deliverability
requirements. As a motor fuel, propane is burned in internal combustion engines
that power over-the-road vehicles, forklifts and stationary engines.
Agricultural uses include tobacco curing, chicken brooding and crop drying. In
its wholesale operations, the Partnership principally sells propane to large
industrial end-users and other propane distributors.
The PPX Prefilled Propane Xchange program ("PPX(R)") enables consumers to
exchange their empty 20-pound propane grill cylinders for filled cylinders at
various retail locations such as home centers and grocery and convenience
stores. During fiscal year 2002, the Partnership introduced PPX(R) Plus. PPX(R)
Plus cylinders are equipped with a special overfill protection devIce ("OPD")
required by the National Fire Protection Association ("NFPA"). Sales of our
PPX(R) Plus grill cylinders to retailers are included in the
commercial/industrial market.
-3-
Retail deliveries of propane are usually made to customers by means of
bobtail and rack trucks. Propane is pumped from the bobtail truck, which
generally holds 2,400 to 3,000 gallons of propane, into a stationary storage
tank on the customer's premises. The Partnership owns most of these storage
tanks and leases them to its customers. The capacity of these tanks ranges from
approximately 100 gallons to approximately 1,200 gallons.
The Partnership also delivers propane to retail customers in portable
cylinders with capacities of 4 to 24 gallons. Some of these deliveries are made
to the customer's location, where empty cylinders are either picked up for
replenishment or filled in place.
PROPANE SUPPLY AND STORAGE
The Partnership has over 200 domestic and international sources of supply,
including the spot market. Supplies of propane from the Partnership's sources
historically have been readily available. During the year ended September 30,
2002, over 90% of the Partnership's propane supply was purchased under supply
agreements with terms of 1 to 3 years. Approximately 80% of the volume purchased
under those agreements was from 10 suppliers, including Dynegy Midstream
Services (approximately 21%); Enterprise Products Operating LP and its affiliate
Canadian Enterprises Gas Products Ltd. (approximately 20%); and BP Products
North America Inc. and its affiliate BP Marketing Inc. (approximately 15%). The
availability of propane supply is dependent upon, among other things, the
severity of winter weather and the price and availability of competing fuels
such as natural gas and crude oil. Although no assurance can be given that
supplies of propane will be readily available in the future, management
currently expects to be able to secure adequate supplies during fiscal year
2003. If supply from major sources were interrupted, however, the cost of
procuring replacement supplies and transporting those supplies from alternative
locations might be materially higher and, at least on a short-term basis,
margins could be affected. Aside from Dynegy, Enterprise Products and BP, no
single supplier provided more than 10% of the Partnership's total propane supply
in fiscal year 2002. In certain market areas, however, some suppliers provide
70% to 80% of the Partnership's requirements. Disruptions in supply in these
areas could also have an adverse impact on the Partnership's margins.
During fiscal year 2002, 90% of the Partnership's supply contracts
provided for pricing based upon posted prices at the time of delivery or index
formulas based on the current prices established at major storage points such as
Mont Belvieu, Texas, or Conway, Kansas. In addition, some agreements provided
maximum and minimum seasonal purchase volume guidelines. The percentage of
contract purchases, and the amount of supply contracted for at fixed prices,
will vary from year to year as determined by the General Partner. The
Partnership uses a number of interstate pipelines, as well as railroad tank
cars, delivery trucks and barges, to transport propane from suppliers to storage
and distribution facilities. The Partnership stores propane at facilities in
Arizona, Pennsylvania, Virginia and several other states.
-4-
Because the Partnership's profitability is sensitive to changes in
wholesale propane costs, the Partnership generally seeks to pass on increases in
the cost of propane to customers. There is no assurance, however, that the
Partnership will always be able to pass on product cost increases fully,
particularly when product costs rise rapidly. Product cost increases can be
triggered by periods of severe cold weather, supply interruptions, or other
unforeseen events. The General Partner has adopted supply acquisition and
product price risk management practices to reduce the effect of price volatility
on product costs. These practices currently include the use of summer storage,
forward purchases and derivative commodity instruments such as options and
propane price swaps. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Market Risk Disclosures."
The following graph shows the average prices of propane on the propane
spot market during the last six fiscal years at Mont Belvieu, Texas and Conway,
Kansas, two major storage areas.
AVERAGE PROPANE SPOT MARKET PRICES
Mont Belvieu Conway
Oct-96 51.57 51.53
Dec-96 61.04 84.29
Feb-97 38.71 39.02
Apr-97 34.88 35.26
Jun-97 34.43 35.86
Aug-97 37.03 36.53
Oct-97 39.83 37.32
Dec-97 33.57 31.36
Feb-98 29.79 28.32
Apr-98 29.06 29.47
Jun-98 24.42 24.84
Aug-98 24.12 23.87
Oct-98 25.72 24.57
Dec-98 20.89 18.72
Feb-99 22.43 20.58
Apr-99 28.26 27.58
Jun-99 30.95 28.68
Aug-99 40.51 37.56
Oct-99 45.46 43.39
Dec-99 42.83 35.10
Feb-00 59.72 47.26
Apr-00 46.88 43.64
Jun-00 55.47 56.22
Aug-00 58.54 63.52
Oct-00 61.82 64.05
Dec-00 77.63 79.75
Feb-01 59.39 63.03
Apr-01 54.37 60.26
Jun-01 43.17 47.70
Aug-01 41.54 45.71
Oct-01 39.48 44.19
Dec-01 30.43 30.34
Feb-02 31.20 27.92
Apr-02 41.52 40.07
Jun-02 37.51 35.25
Aug-02 41.49 41.53
COMPETITION
Propane competes with other sources of energy, some of which are less
costly for equivalent energy value. Propane distributors compete for customers
against suppliers of electricity, fuel oil and natural gas, principally on the
basis of price, service, availability and portability. Electricity is a major
competitor of propane, but propane generally enjoys a
-5-
competitive price advantage over electricity for space heating, water heating
and cooking. Fuel oil is also a major competitor of propane and is generally
less expensive than propane. Operating efficiencies and other factors such as
air quality and environmental advantages, however, generally make propane
competitive with fuel oil as a heating source. Furnaces and appliances that burn
propane will not operate on fuel oil, and vice versa, and, therefore, a
conversion from one fuel to the other requires the installation of new
equipment. Propane serves as an alternative to natural gas in rural and suburban
areas where natural gas is unavailable or portability of product is required.
Natural gas is generally a less expensive source of energy than propane,
although in areas where natural gas is available, propane is used for certain
industrial and commercial applications and as a standby fuel during
interruptions in natural gas service. The gradual expansion of the nation's
natural gas distribution systems has resulted in the availability of natural gas
in some areas that previously depended upon propane. However, natural gas
pipelines are not present in many regions of the country where propane is sold
for heating and cooking purposes.
The retail propane industry is mature, with only modest growth in total
demand for the product foreseen. Given this limited growth, we expect that
year-to-year industry volumes will be principally affected by weather patterns.
Therefore, the Partnership's ability to grow within the industry is dependent on
its ability to acquire other retail distributors and to achieve internal growth,
which includes expansion of the PPX(R) program (through which consumers can
exchange an empty propane grill cylinder for a filled one) and national accounts
program (through which the Partnership encourages large, multi-location propane
users to enter into a supply agreement with it rather than with many small
suppliers), as well as the success of its sales and marketing programs designed
to attract and retain customers. The failure of the Partnership to retain and
grow its customer base would have an adverse effect on its results.
The domestic propane retail distribution business is highly competitive.
The Partnership competes in this business with other large propane marketers,
including other full-service marketers, and thousands of small independent
operators. In recent years, some rural electric cooperatives and fuel oil
distributors have expanded their businesses to include propane distribution and
the Partnership competes with them as well. The ability to compete effectively
depends on providing customer service, maintaining competitive retail prices and
controlling operating expenses.
Based on the most recent annual survey by the American Petroleum
Institute, the 2001 domestic retail market for propane (annual sales for other
than chemical uses) was approximately 11.4 billion gallons and, based on LP-GAS
magazine rankings, 2001 sales volume of the ten largest propane companies
(including AmeriGas Partners) represented approximately 38% of domestic retail
sales. Management believes the Partnership's 2002 retail volume represents
approximately 10% of the domestic retail market.
In the motor fuel market, propane competes with gasoline and diesel fuel.
When gasoline prices are high relative to propane, propane competes effectively.
Wholesale propane distribution is a highly competitive, low margin business.
Propane sales to other retail distributors and large-
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volume, direct-shipment industrial end users are price sensitive and frequently
involve a competitive bidding process.
TRADE NAMES, TRADE AND SERVICE MARKS
The Partnership markets propane principally under the "AmeriGas(R),"
"America's Propane Company(R)" and "PPX Prefilled Propane Xchange(R)" trade
names and related service marks. UGI owns, directly or indirectly, all the
right, title and interest in the "AmeriGas" and related trade and service marks.
The General Partner owns all right, title and interest in the "America's Propane
Company" and "PPX Prefilled Propane Xchange" trade names and related service
marks. The Partnership has an exclusive (except for use by UGI, AmeriGas, Inc.
and the General Partner), royalty-free license to use these names and trade and
service marks. UGI and the General Partner each have the option to terminate its
respective license agreement (on 12 months prior notice in the case of UGI),
without penalty, if the General Partner is removed as general partner of the
Partnership other than for cause. If the General Partner ceases to serve as the
general partner of the Partnership for cause, the General Partner has the option
to terminate its license agreement upon payment of a fee equal to the fair
market value of the licensed trade names. UGI has a similar termination option,
however, UGI must provide 12 months prior notice in addition to paying the fee.
SEASONALITY
Because many customers use propane for heating purposes, the Partnership's
retail sales volume is seasonal, with approximately 57% of the Partnership's
fiscal year 2002 retail sales volume and approximately 78% of its earnings
before interest expense, income taxes, depreciation and amortization occurring
during the five-month peak heating season from November through March. As a
result of this seasonality, sales are concentrated in the Partnership's first
and second fiscal quarters (October 1 through March 31). Cash receipts are
greatest during the second and third fiscal quarters when customers pay for
propane purchased during the winter heating season.
Sales volume for the Partnership traditionally fluctuates from
year-to-year in response to variations in weather, prices, competition, customer
mix and other factors, such as conservation efforts and general economic
conditions. For historical information on national weather statistics, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
GOVERNMENT REGULATION
The Partnership is subject to various federal, state and local
environmental, safety and transportation laws and regulations governing the
storage, distribution and transportation of propane. These laws include, among
others, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA" or, the
"Superfund Law"), the Clean Air Act, the Occupational Safety and Health Act, the
Emergency Planning and Community Right to Know Act, the Clean Water Act and
comparable state statutes.
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CERCLA imposes joint and several liability on certain classes of persons
considered to have contributed to the release or threatened release of a
"hazardous substance" into the environment without regard to fault or the
legality of the original conduct. Propane is not a hazardous substance within
the meaning of federal and state environmental laws. However, the Partnership
owns and operates real property where such hazardous substances may exist. See
Notes 1 and 13 to the Company's Consolidated Financial Statements.
All states in which the Partnership operates have adopted fire safety
codes that regulate the storage and distribution of propane. In some states
these laws are administered by state agencies, and in others they are
administered on a municipal level. The Partnership conducts training programs to
help ensure that its operations are in compliance with applicable governmental
regulations. With respect to general operations, NFPA Pamphlets No. 54 and No.
58, which establish a set of rules and procedures governing the safe handling of
propane, or comparable regulations, have been adopted as the industry standard
in a majority of the states in which the Partnership operates. Effective April
1, 2002, NFPA Pamphlet No. 58 requires portable propane cylinders to be equipped
with OPD. Although NFPA 58 has not yet been adopted in all states, the
Partnership complies with the OPD requirements throughout the United States. The
Partnership maintains various permits under environmental laws that are
necessary to operate certain of its facilities, some of which may be material to
the operations of the Partnership. Management believes that the procedures
currently in effect at all of its facilities for the handling, storage and
distribution of propane are consistent with industry standards and are in
compliance in all material respects with applicable environmental, health and
safety laws.
With respect to the transportation of propane by truck, the Partnership is
subject to regulations promulgated under the Federal Motor Carrier Safety Act.
These regulations cover the transportation of hazardous materials and are
administered by the United States Department of Transportation ("DOT"). The
Natural Gas Safety Act of 1968 required the DOT to develop and enforce minimum
safety regulations for the transportation of gases by pipeline. The DOT's
pipeline safety code applies to, among other things, a propane gas system which
supplies 10 or more customers from a single source and a propane gas system any
portion of which is located in a public place. The code requires operators of
all gas systems to provide training and written instructions for employees,
establish written procedures to minimize the hazards resulting from gas pipeline
emergencies, and keep records of inspections and testing.
-8-
EMPLOYEES
The Partnership does not directly employ any persons responsible for
managing or operating the Partnership. The General Partner provides these
services and is reimbursed for its direct and indirect costs and expenses,
including all compensation and benefit costs. At September 30, 2002, the General
Partner had approximately 6,300 employees, including approximately 300 temporary
and part-time employees, working on behalf of the Partnership. UGI also performs
certain financial and administrative services for the General Partner on behalf
of the Partnership and is reimbursed by the Partnership for its direct and
indirect costs and expenses.
ITEM 2. PROPERTIES
As of September 30, 2002, the Partnership owned approximately 84% of its
district locations. In addition, the Partnership subleases three one-million
barrel underground storage caverns in Arizona to store propane and butane for
itself and third parties. The Partnership also owns a 600,000 barrel
refrigerated, above-ground storage facility located on leased property in
California, which could be used in connection with waterborne imports or exports
of propane or butane. The California facility, which the Partnership operates,
is currently leased to several refiners for the storage of butane. In Virginia,
the Partnership has a 50% indirect equity interest in a 476,000 barrel
refrigerated, above-ground import terminal.
The transportation of propane requires specialized equipment. The trucks
and railroad tank cars utilized for this purpose carry specialized steel tanks
that maintain the propane in a liquefied state. As of September 30, 2002, the
Partnership operated a transportation fleet with the following assets:
QUANTITY & EQUIPMENT TYPE % OWNED % LEASED
478 Trailers 70 30
162 Tractors 42 58
160 Railroad tank cars 0 100
3,192 Bobtail trucks 32 68
555 Rack trucks 33 67
2,505 Service and delivery trucks 34 66
Other assets owned at September 30, 2002 included approximately 1.3 million
stationary storage tanks with typical capacities of 100 to 1,000 gallons and
approximately 1.8 million portable propane cylinders with typical capacities of
4 to 100 gallons. The Partnership also owned approximately 8,800 large volume
tanks which are used for its own storage requirements.
-9-
AmeriGas OLP has debt secured by liens and mortgages on its real and personal
property. AmeriGas OLP owns approximately 67% of the Partnership's property,
plant and equipment.
ITEM 3. LEGAL PROCEEDINGS
There are no material legal proceedings pending involving the Partnership,
any of its subsidiaries or any of their properties, and no such proceedings are
known to be contemplated by governmental authorities other than claims arising
in the ordinary course of the Partnership's business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the last
fiscal quarter of the 2002 fiscal year.
-10-
PART II: SECURITIES AND FINANCIAL INFORMATION
ITEM 5. MARKET FOR REGISTRANT'S COMMON UNITS AND RELATED SECURITY HOLDER MATTERS
Each Common Unit represents a limited partner interest in the Partnership.
Common Units are listed on the New York Stock Exchange, which is the principal
trading market for such securities, under the symbol "APU." The following table
sets forth, for the periods indicated, the high and low sale prices per Common
Unit, as reported on the New York Stock Exchange ("NYSE") Composite Transactions
tape, and the amount of cash distributions paid per Common Unit.
PRICE RANGE CASH
2002 FISCAL YEAR HIGH LOW DISTRIBUTION
Fourth Quarter $23.7900 $17.1100 $0.55
Third Quarter 23.8500 21.3200 0.55
Second Quarter 22.7400 19.3600 0.55
First Quarter 25.3500 21.4000 0.55
PRICE RANGE CASH
2001 FISCAL YEAR HIGH LOW DISTRIBUTION
Fourth Quarter $24.7500 $18.0500 $0.55
Third Quarter 24.5000 20.0500 0.55
Second Quarter 21.0000 16.6250 0.55
First Quarter 19.5000 15.0625 0.55
As of November 29, 2002, there were 1,541 record holders of the
Partnership's Common Units. Effective November 18, 2002, the Partnership's
subordinated units, representing limited partner interests, were converted to
Common Units.
The Partnership makes quarterly distributions to its partners in an
aggregate amount equal to its Available Cash, as defined in the Amended and
Restated Agreement of Limited Partnership of AmeriGas Partners, L.P., which is
filed as an exhibit to this report. Available Cash generally means, with respect
to any fiscal quarter of the Partnership, all cash on hand at the end of such
quarter, plus all additional cash on hand as of the date of determination
resulting from borrowings subsequent to the end of such quarter, less the amount
of cash reserves established by the General Partner in its reasonable discretion
for future cash requirements. Certain reserves are maintained to provide for the
payment of principal and interest under the terms of the Partnership's debt
agreements and other reserves may be maintained to provide for the proper
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conduct of the Partnership's business, and to provide funds for distribution
during the next four fiscal quarters. The information concerning restrictions on
distributions required by Item 5 of this report is incorporated herein by
reference to Notes 5 and 6 to the Partnership's Consolidated Financial
Statements which are incorporated herein by reference. Prior to the termination
of the subordination period effective November 18, 2002, Distributions of
Available Cash to the General Partner on its subordinated units, representing
limited partner interests ("Subordinated Units") were subject to the prior
rights of holders of the Common Units to receive the Minimum Quarterly
Distribution ("MQD") for each quarter during the subordination period, and to
receive any arrearages in the distribution of the MQD on the Common Units for
prior quarters during the subordination period. In December 2002, the General
Partner determined that the cash-based performance and distribution requirements
for termination of the subordination period were achieved in respect of the
quarter ended September 30, 2002. As a result, effective November 18, 2002, the
subordinated units held by the General Partner were converted to Common Units.
See Note 17 to the Partnership's Consolidated Financial Statements and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
-12-
ITEM 6. SELECTED FINANCIAL DATA (a)
Year Ended
September 30,
-------------------------------------------------------------------------
2002 2001 2000 1999 1998
----------- ----------- ----------- ----------- -----------
(Thousands of dollars, except per unit)
FOR THE PERIOD:
INCOME STATEMENT DATA:
Revenues $ 1,307,880 $ 1,418,364 $ 1,120,056 $ 872,535 $ 914,378
Income before accounting changes $ 55,366 $ 53,015 $ 15,196 $ 25,635 $ 21,402
Cumulative effect of accounting changes (b) - 12,494 - - -
----------- ----------- ----------- ---------- ----------
Net income (c) (d) $ 55,366 $ 65,509 $ 15,196 $ 25,635 $ 21,402
=========== =========== =========== ========== ==========
Limited partners' interest
in net income $ 54,812 $ 64,854 $ 15,044 $ 25,379 $ 21,188
Income per limited partner
unit - basic and diluted:
Income before accounting changes $ 1.12 $ 1.18 $ 0.36 $ 0.61 $ 0.51
Cumulative effect of accounting changes - 0.28 - - -
----------- ----------- ----------- ---------- ----------
Net income (c) (d) $ 1.12 $ 1.46 $ 0.36 $ 0.61 $ 0.51
=========== =========== =========== ========== ==========
Cash distributions declared
per limited partner unit $ 2.20 $ 2.20 $ 2.20 $ 2.20 $ 2.20
AT PERIOD END:
BALANCE SHEET DATA:
Current assets $ 231,270 $ 230,260 $ 188,845 $ 140,569 $ 133,346
Total assets 1,472,618 1,496,422 1,258,220 1,196,461 1,217,216
Current liabilities (excluding debt) 237,426 238,512 172,501 148,513 144,229
Total debt 955,784 1,005,904 887,234 766,725 718,994
Minority interests 6,232 5,641 2,587 3,380 4,049
Partners' capital 228,366 203,505 155,971 234,041 299,875
OTHER DATA:
EBITDA (e) $ 210,356 $ 208,550 $ 157,588 $ 157,524 $ 151,143
Capital expenditures (including
capital leases) $ 53,472 $ 39,204 $ 30,427 $ 34,577 $ 31,577
Retail propane gallons sold (millions) 932.8 820.8 771.2 783.2 785.3
Degree days - % (warmer) colder
than normal (f) (10.0) 2.6 (13.7) (9.9) (8.7)
(a) Arthur Andersen LLP audited the Partnership's consolidated financial
statements for 2001, 2000, 1999 and 1998. See Item 15 - Notice Regarding
Arthur Andersen LLP.
(b) Includes cumulative effect of accounting changes associated with the
Partnership's changes in accounting for tank fee revenue and tank
installation costs and the adoption of Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" (see Notes 1 and 4 to Consolidated Financial Statements).
(c) Pro forma net income and net income per limited partner unit after
applying retroactively the changes in accounting for tank installation
costs and tank fee revenue are as follows: 2000 - $14,989 and $0.35; 1999
- $26,091 and $0.62; 1998 - $19,646 and $0.46, respectively.
(d) SFAS No. 142, "Goodwill and Other Intangible Assets," was adopted
effective October 1, 2001. Net income and net income per limited partner
unit adjusted to reflect the impact of SFAS No. 142 as if it had been
adopted at the beginning of the periods presented are as follows: 2001 -
$89,079 and $1.98; 2000 - $38,313 and $0.90; 1999 - $48,336 and $1.14;
1998 - $44,884 and $1.06, respectively.
(e) EBITDA (earnings before interest expense, income taxes, depreciation and
amortization, minority interests, equity investee income, and the
cumulative effect of accounting changes) 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) and is not a measure of performance or financial
condition under accounting principles generally accepted in the United
States. EBITDA is included to provided additional information for
evaluating (1) the Partnership's ability to declare and pay the Minimum
Quarterly Distribution and (2) its performance. The Partnership's
definition of EBITDA may be different from that used by other companies.
(f) Deviation from average heating degree days during the 30-year period from
1961 to 1990, based upon national weather statistics provided by the
National Oceanic and Atmospheric Administration (NOAA) for 335 airports in
the continental United States.
-13-
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
ANALYSIS OF RESULTS OF OPERATIONS
The following analysis compares the Partnership's results of operations
for (1) the year ended September 30, 2002 ("Fiscal 2002") with the year ended
September 30, 2001 ("Fiscal 2001") and (2) Fiscal 2001 with the year ended
September 30, 2000 ("Fiscal 2000").
The following table provides gallon, weather and certain financial
information for the Partnership:
(Dollars in millions)
Year Ended September 30,
---------------------------------
2002 2001 2000
-------- -------- --------
Gallons sold (millions):
Retail 932.8 820.8 771.2
Wholesale 250.0 292.8 258.0
-------- -------- --------
1,182.8 1,113.6 1,029.2
======== ======== ========
Revenues:
Retail propane $1,070.6 $1,108.4 $ 870.3
Wholesale propane 121.1 214.6 152.7
Other 116.2 95.4 97.1
-------- -------- --------
$1,307.9 $1,418.4 $1,120.1
======== ======== ========
Total margin (a) $ 675.8 $ 582.4 $ 491.8
EBITDA (b) $ 210.4 $ 208.6 $ 157.6
Operating income (c) $ 144.5 $ 133.8 $ 90.2
Degree days - % colder (warmer)
than normal (d) (10.0)% 2.6% (13.7)%
(a) Total margin represents total revenues less cost of sales.
(b) EBITDA (earnings before interest expense, income taxes, depreciation and
amortization, minority interests, equity investee income, and the
cumulative effect of accounting changes) 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) and is not a measure of performance or financial
condition under accounting principles generally accepted in the United
States. EBITDA is included to provide additional information for
evaluating (1) the Partnership's ability to declare and pay the Minimum
Quarterly Distribution ("MQD") and (2) its performance. The Partnership's
definition of EBITDA may be different from the definition used by other
companies.
-14-
(c) Results for Fiscal 2002 reflect the elimination of goodwill amortization
resulting from the adoption of Statement of Financial Accounting Standards
No. 142, "Goodwill and Other Intangible Assets." Pro forma operating
income for Fiscal 2001 and 2000 as if the adoption of SFAS 142 had
occurred as of October 1, 1999 is $157.6 million and $113.6 million,
respectively.
(d) Deviation from average heating degree days during the 30-year period from
1961 to 1990, based upon national weather statistics provided by the
National Oceanic and Atmospheric Administration ("NOAA") for 335 airports
in the continental United States.
FISCAL 2002 COMPARED WITH FISCAL 2001
The Partnership's Fiscal 2002 operating results were negatively impacted
by significantly warmer than normal heating-season weather. Fiscal 2002
temperatures based upon heating degree day data provided by NOAA were
approximately 10.0% warmer than normal and 12.3% warmer than Fiscal 2001.
Notwithstanding the impact of the warmer weather on heating-related sales and
the effects of a sluggish U.S. economy on commercial sales, retail gallons sold
increased 112.0 million gallons principally as a result of the full-year effect
of the Partnership's August 21, 2001, acquisition of Columbia Propane (see Note
3 to Consolidated Financial Statements) and, to a much lesser extent, greater
volumes from our PPX(R) grill cylinder exchange business. The increase in PPX(R)
sales principally reflects the effect on Fiscal 2002 grill cylinder exchanges
resulting from recently enacted National Fire Protection Association ("NFPA")
guidelines and, to a lesser extent, the full-year effects of Fiscal 2001
increases in the number of PPX(R) distribution outlets. The NFPA guidelines
require that propane grill cylinders refilled after April 1, 2002, be fitted
with overfill protection devices ("OPDs").
Retail propane revenues were $1,070.6 million in Fiscal 2002, a decrease
of $37.8 million from Fiscal 2001, reflecting a $189.0 million decrease as a
result of lower average selling prices partially offset by a $151.2 million
increase as a result of the greater retail volumes sold. Wholesale propane
revenues were $121.1 million in Fiscal 2002, a decrease of $93.5 million,
reflecting a $62.0 million decrease due to lower average selling prices and a
$31.5 million decrease as a result of lower wholesale volumes sold. The lower
Fiscal 2002 retail and wholesale selling prices resulted from lower Fiscal 2002
propane product costs. Revenues from other sales and services increased $20.8
million primarily due to the full-year impact of Columbia Propane. Total cost of
sales declined $203.9 million in Fiscal 2002 reflecting lower average propane
product costs and the lower wholesale sales partially offset by the higher
retail gallons sold.
Total margin increased $93.4 million reflecting the full-year volume
impact of the Columbia Propane acquisition and a $35.5 million increase in total
margin from PPX(R) reflecting higher volumes and unit margins. PPX(R) propane
unit margins in Fiscal 2002 were higher than
-15-
in Fiscal 2001 reflecting increases in sales prices to fund OPD valve
replacement capital expenditures on out-of-compliance grill cylinders. The
extent to which this greater level of PPX(R) margin is sustainable in the future
will depend upon a number of factors, including the continuing rate of OPD valve
replacement and competitive market conditions.
EBITDA (earnings before interest expense, income taxes, depreciation and
amortization, minority interests, equity investee income, and the cumulative
effect of accounting changes) increased $1.8 million in Fiscal 2002 as the
significant increase in total margin was substantially offset by an $88.8
million increase in Partnership operating and administrative expenses and a
decrease in other income. EBITDA of PPX(R) increased approximately $21 million
in Fiscal 2002 partially offsettinG the effects of the significantly warmer
winter weather on our heating-related volumes. Although EBITDA is not a measure
of performance or financial condition under accounting principles generally
accepted in the United States, it is included in this analysis to provide
additional information for evaluating the Partnership's ability to declare and
pay the Minimum Quarterly Distribution of $0.55 ("MQD") and for evaluating the
Partnership's performance. The Partnership's definition of EBITDA may be
different from the definition of EBITDA used by other companies. The greater
operating and administrative expenses in Fiscal 2002 resulted primarily from the
full-year impact of the Columbia Propane acquisition and higher volume-driven
PPX(R) expenses. During Fiscal 2002, the Partnership completed its planned
blending of 90 Columbia Propane distribution locations with existing Partnership
locations. As a result of these district consolidations and other cost reduction
activities, management believes that at September 30, 2002 it achieved its
anticipated $24 million reduction in annualized operating cost savings
subsequent to the acquisition of Columbia Propane. Operating income increased
$10.7 million, significantly more than the increase in EBITDA, principally due
to the cessation of goodwill amortization in Fiscal 2002 as a result of the
adoption of SFAS 142 (see Note 1 to Consolidated Financial Statements) partially
offset by higher depreciation and intangible asset amortization associated with
Columbia Propane and higher PPX(R) depreciation. Fiscal 2001 operating income
includes $23.8 million of goodwill amortization.
Interest expense increased $7.4 million principally reflecting higher
Partnership long-term debt outstanding resulting from the Columbia Propane
acquisition partially offset by lower Bank Credit Agreement borrowings and lower
short-term interest rates.
FISCAL 2001 COMPARED WITH FISCAL 2000
Retail propane gallons sold increased 49.6 million gallons (6.4%)
primarily due to the effects of colder weather and the impact of acquisitions,
including the August 21, 2001 acquisition of Columbia Propane. Temperatures
based upon heating degree days were 2.6% colder than normal in Fiscal 2001
compared to temperatures that were 13.7% warmer than normal in Fiscal 2000. The
greater acquisition and weather-related sales were reduced by customer
conservation resulting from higher product costs and a slowing U.S. economy. The
wholesale price of propane at Mont Belvieu, Texas, a major U.S. supply point,
reached a high of 95 cents per gallon in Fiscal 2001 compared to a high of 74
cents per gallon during Fiscal 2000.
-16-
Total revenues from retail propane sales increased $238.1 million
reflecting a $182.1 million increase as a result of higher average selling
prices and a $56.0 million increase as a result of the higher retail volumes
sold. Wholesale propane revenues increased $61.9 million principally reflecting
higher average prices and greater sales associated with product cost management
activities. Cost of sales increased $207.7 million as a result of higher per
unit propane product costs and the greater retail and wholesale volumes sold.
Total margin increased $90.6 million due to the impact of
higher-than-normal average retail unit margins and, to a lesser extent, the
greater retail propane volumes sold. Retail propane unit margins in Fiscal 2001
benefited from gains on derivative hedge instruments and favorably priced supply
arrangements.
The significant increase in EBITDA in Fiscal 2001 resulted from the
increase in margin partially offset by a $37.3 million increase in Partnership
operating and administrative expenses. Operating and administrative expenses of
the Partnership were $380.0 million in Fiscal 2001 compared to $342.7 million in
Fiscal 2000. Adjusting Fiscal 2000 expenses for the impact of the Partnership's
change in accounting for tank installation costs, operating and administrative
expenses of the Partnership increased $44.3 million. The higher Fiscal 2001
expenses reflect (1) higher employee-related costs, including greater overtime
and incentive compensation costs; (2) growth-related expenses, including the
impact of Columbia Propane and other acquisitions, and expenses associated with
our PPX(R) grill cylinder exchange business; and (3) higher distribution costs,
including vehicle fuel and lease expense. Depreciation and amortization expense
of the Partnership increased $7.4 million reflecting greater depreciation
associated with acquisitions and $4.4 million of depreciation expense resulting
from the change in accounting for tank installation costs.
The Partnership's interest expense increased $5.6 million principally as a
result of greater amounts of long-term debt outstanding.
FINANCIAL CONDITION AND LIQUIDITY
CAPITALIZATION AND LIQUIDITY
The Partnership's debt outstanding at September 30, 2002 totaled $955.8
million. Included in this amount is $10 million outstanding under AmeriGas OLP's
Revolving Credit Facility.
In December 2001, AmeriGas Partners issued 1,843,047 Common Units to the
public through an underwritten public offering. In January 2002, the
underwriters exercised a portion of their overallotment option in the amount of
585,000 shares. The net proceeds from these Common Unit offerings, an October
2001 sale of 350,000 Common Units to the General Partner, and related capital
contributions by the General Partner in order to maintain its general partner
interests in the
-17-
Partnership of $57.7 million were contributed to AmeriGas OLP and used to reduce
Bank Credit Agreement borrowings and for working capital.
The Partnership also completed a number of debt transactions during Fiscal
2002. In November 2001, AmeriGas Partners prepaid $15 million of 10.125% Senior
Notes at a redemption price of 103.375%. In April 2002, AmeriGas OLP repaid $60
million of maturing First Mortgage Notes from then-existing cash balances and
Revolving Credit Facility borrowings. In May 2002, AmeriGas Partners issued $40
million of Senior Notes due 2011 at an effective interest rate of 8.25%. The
proceeds were contributed to AmeriGas OLP and, along with related General
Partner capital contributions, used to reduce Revolving Credit Facility
borrowings and for working capital and general business purposes. On December 3,
2002, after the end of Fiscal 2002, AmeriGas Partners issued $88 million of
8.875% Senior Notes due 2011 at an effective interest rate of 8.30%. The net
proceeds will be used to redeem in January 2003 the remaining $85 million of
10.125% Senior Notes of AmeriGas Partners at a redemption price of 102.25%.
In August 2002, AmeriGas OLP amended and restated its Bank Credit
Agreement. AmeriGas OLP's Bank Credit Agreement expires October 1, 2003 and
consists of (1) a $100 million Revolving Credit Facility and (2) a $75 million
Acquisition Facility. The Revolving Credit Facility may be used for working
capital and general purposes of AmeriGas OLP. There was $10 million outstanding
under this facility at September 30, 2002. Issued and outstanding letters of
credit under the Revolving Credit Facility, which reduce the amount available
for borrowings, totaled $19.8 million at September 30, 2002. AmeriGas OLP's
short-term borrowing needs are seasonal and are typically greatest during the
fall and winter heating-season months due to the need to fund higher levels of
working capital. AmeriGas OLP may borrow under its Acquisition Facility to
finance the purchase of propane businesses or propane business assets. In
addition to the $100 million available under the Revolving Credit Facility, the
Bank Credit Agreement allows up to $30 million of the Acquisition Facility to be
used for working capital purposes. There were no loans outstanding under the
Acquisition Facility at September 30, 2002. AmeriGas OLP could borrow up to
$67.7 million under the Acquisition Facility based upon eligible propane
business and asset expenditures made through September 30, 2002.
AmeriGas OLP also has a credit agreement with the General Partner to
borrow up to $20 million on an unsecured, subordinated basis, for working
capital and general purposes. UGI has agreed to contribute up to $20 million to
the General Partner to fund such borrowings.
AmeriGas Partners also has debt and equity shelf registration statements
with the U.S. Securities and Exchange Commission ("SEC").
The Partnership must maintain certain financial ratios in order to borrow
under the Bank Credit Agreement including a minimum interest coverage ratio and
a maximum debt to EBITDA ratio. The Partnership's ratios calculated as of
September 30, 2002 permit it to borrow up to the maximum amount available. For a
more detailed discussion of the Partnership's credit facilities, see Note 6 to
Consolidated Financial Statements. Based upon existing cash balances, cash
expected to be generated from operations, borrowings available under its Bank
Credit
-18-
Agreement, and the expected refinancing of its maturing long-term debt, the
Partnership's management believes that the Partnership will be able to meet its
anticipated contractual commitments and projected cash needs in Fiscal 2003.
PARTNERSHIP DISTRIBUTIONS
Since its formation in 1995, the Partnership has paid the MQD on all
limited partner units outstanding. The amount of Available Cash needed annually
to pay the MQD on all units and the general partner interests in Fiscal 2002,
2001 and 2000 was approximately $109 million, $99 million and $94 million,
respectively. Based upon the number of Partnership units outstanding on
September 30, 2002, the amount of Available Cash needed annually to pay the MQD
on all units and the general partner interests is approximately $111 million. A
reasonable proxy for the amount of cash available for distribution that is
generated by the Partnership can be calculated by subtracting from the
Partnership's EBITDA (1) cash interest expense and (2) capital expenditures
needed to maintain operating capacity. Partnership distributable cash flow as
calculated under this method for Fiscal 2002, 2001 and 2000 is as follows:
Year Ended September 30, 2002 2001 2000
- ------------------------ ---- ---- ----
(Millions of dollars)
EBITDA $ 210.4 $ 208.6 $ 157.6
Cash interest expense (a) (88.5) (82.0) (76.7)
Maintenance capital expenditures (20.7) (17.8) (11.6)
------- ------- -------
Distributable cash flow $ 101.2 $ 108.8 $ 69.3
------- ------- -------
(a) Interest expense adjusted for noncash items.
Although distributable cash flow is a reasonable estimate of the amount of
cash generated by the Partnership, it does not reflect, among other things, the
impact of changes in working capital, which can significantly affect cash
available for distribution, and is not a measure of performance or financial
condition under accounting principles generally accepted in the United States
but provides additional information for evaluating the Partnership's ability to
declare and pay the MQD. The Partnership's definition of distributable cash flow
may be different from the definition used by other companies. Although the
levels of distributable cash flow in Fiscal 2002 and 2000 were less than the
full MQD, other sources of cash, including cash from equity offerings and
borrowings, was more than sufficient to permit the Partnership to pay the full
MQD. The ability of the Partnership to pay the MQD on all units depends upon a
number of factors. These factors include (1) the level of Partnership earnings;
(2) the cash needs of the Partnership's operations (including cash needed for
maintaining and increasing operating capacity); (3) changes in operating working
capital; and (4) the Partnership's ability to borrow under its Bank Credit
Agreement, to refinance maturing debt and to increase its long-term debt. Some
of these factors are affected by conditions beyond our control including
weather, competition in markets we serve, the cost of propane and changes in
capital market conditions.
-19-
CONVERSION OF SUBORDINATED UNITS
Pursuant to the Agreement of Limited Partnership of AmeriGas Partners, the
9.9 million AmeriGas Partners Subordinated Units held by the General Partner as
of September 30, 2002 were eligible to convert to Common Units on the first day
after the record date for any quarter ending on or after March 31, 2000 in
respect of which certain cash-based performance and distribution requirements
were met. In December 2002, the General Partner determined that the cash-based
performance and distribution requirements in respect of the quarter ended
September 30, 2002 had been met and, as a result, the remaining 9.9 million
Subordinated Units held by the General Partner were converted to Common Units
effective November 18, 2002. The conversion of the Subordinated Units did not
result in an increase in the number of AmeriGas Partners limited partner units
outstanding.
CONTRACTUAL CASH OBLIGATIONS AND COMMITMENTS
The following table presents significant contractual cash obligations
under agreements existing as of September 30, 2002 (in millions).
Fiscal Fiscal
2003 & 2004 2005 & 2006 Thereafter Total
----------- ----------- ---------- --------
Long-term debt $ 112.6 $ 168.1 $ 665.1 $ 945.8
Operating leases 67.4 49.2 60.0 176.6
-------- -------- -------- --------
Total $ 180.0 $ 217.3 $ 725.1 $1,122.4
======== ======== ======== ========
CASH FLOWS
OPERATING ACTIVITIES. Cash provided by operating activities totaled $159.5
million in Fiscal 2002 compared with $153.0 million in Fiscal 2001. Changes in
operating working capital during Fiscal 2002 provided $30.3 million of operating
cash flow compared to $22.3 million of such cash flow in Fiscal 2001.
INVESTING ACTIVITIES. We spent $53.5 million for property, plant and equipment
(including maintenance capital expenditures of $20.7 million) during Fiscal 2002
compared with $37.9 million (including maintenance capital expenditures of $17.8
million) during Fiscal 2001. The increase in capital expenditures reflects
higher expenditures for PPX(R), principally grill cylinder OPDs to comply with
NFPA guidelines, and expenditures associated with the addition of the Columbia
Propane Businesses. Proceeds from asset sales were higher in Fiscal 2002
reflecting, in part, disposals of Columbia Propane excess assets.
FINANCING ACTIVITIES. During Fiscal 2002 and 2001, we declared and paid the MQD
on all Common and Subordinated units and the general partner interests. During
Fiscal 2002, we sold 350,000 Common Units to the General Partner, and 2,428,047
Common Units to the public in conjunction with an underwritten public offering.
The combined net proceeds of these sales and related capital contributions from
the General Partner of $57.7 million were contributed to
-20-
AmeriGas OLP and used to reduce Bank Credit Agreement borrowings and for working
capital. During Fiscal 2002, AmeriGas Partners redeemed $15 million of its
10.125% Senior Notes and AmeriGas OLP repaid $20 million of borrowings
outstanding under its Acquisition Facility and $60 million of maturing First
Mortgage Notes. Also during Fiscal 2002, AmeriGas Partners issued $40 million of
8.875% Senior Notes and contributed the proceeds to AmeriGas OLP to reduce
indebtedness under its Revolving Credit Facility and for working capital and
general business purposes.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
In response to the SEC's Release No. 33-8040, "Cautionary Advice Regarding
Disclosure About Critical Accounting Policies," the Partnership has identified
the following critical accounting policies that are most important to the
portrayal of the Partnership's financial condition and results of operations.
The following policies require management's most subjective or complex
judgments, as a result of the need to make estimates regarding matters that are
inherently uncertain.
LITIGATION ACCRUALS. The Partnership is involved in litigation regarding pending
claims and legal actions that arise in the normal course of its business. In
accordance with accounting principles generally accepted in the United States,
the Partnership establishes reserves for pending claims and legal actions when
it is probable that a liability exists and the amount or range of amounts can be
reasonably estimated. Reasonable estimates involve management judgments based on
a broad range of information and prior experience. These judgments are reviewed
quarterly as more information is received and the amounts reserved are updated
as necessary. Such estimated reserves may differ materially from the actual
liability, and such reserves may change materially as more information becomes
available and estimated reserves are adjusted.
DEPRECIATION AND AMORTIZATION OF LONG-LIVED ASSETS. We compute depreciation on
property, plant and equipment on a straight-line basis over estimated useful
lives generally ranging from two to 40 years. We also use amortization methods
and determine asset values of intangible assets other than goodwill using
reasonable assumptions and projections. Changes in the estimated useful lives of
property, plant and equipment and changes in intangible asset amortization
methods or values could have a material effect on our results of operations.
-21-
MARKET RISK DISCLOSURES
Our primary financial market risks include commodity prices for propane
and interest rates on borrowings.
The risk associated with fluctuations in the prices the Partnership pays
for propane are principally a result of market forces reflecting changes in
supply and demand for propane and other energy commodities. The Partnership's
profitability is sensitive to changes in propane supply costs, and the
Partnership generally attempts to pass on increases in such costs to customers.
The Partnership may not, however, always be able to pass through product cost
increases fully, particularly when product costs rise rapidly. In order to
reduce the volatility of the Partnership's propane market price risk, we use
contracts for the forward purchase or sale of propane, propane fixed-price
supply agreements, and over-the-counter derivative commodity instruments
including price swap and option contracts. Over-the-counter derivative commodity
instruments utilized by the Partnership to hedge forecasted purchases of propane
are generally settled at expiration of the contract. In order to minimize credit
risk associated with derivative commodity contracts, we carefully monitor
established credit limits with the contract counterparties. Although we use
derivative financial and commodity instruments to reduce market price risk
associated with forecasted transactions, we do not use derivative financial and
commodity instruments for speculative or trading purposes.
The Partnership has both fixed-rate and variable-rate debt. Changes in
interest rates impact the cash flows of variable-rate debt but generally do not
impact its fair value. Conversely, changes in interest rates impact the fair
value of fixed-rate debt but do not impact their cash flows.
Our variable rate debt includes borrowings under AmeriGas OLP's Bank
Credit Agreement. These debt agreements have interest rates that are generally
indexed to short-term market interest rates. At September 30, 2002 and 2001,
combined borrowings outstanding under these agreements totaled $10 million and
$20 million, respectively. Based upon weighted average borrowings outstanding
under these agreements during Fiscal 2002 and Fiscal 2001, an increase in
short-term interest rates of 100 basis points (1%) would have increased our
interest expense by $0.1 million and $0.9 million, respectively.
The remainder of our debt outstanding is subject to fixed rates of
interest. A 100 basis point increase in market interest rates would result in
decreases in the fair value of this fixed rate
-22-
debt of $41.2 million and $47.5 million at September 30, 2002 and 2001,
respectively. A 100 basis point decrease in market interest rates would result
in increases in the fair market value of this debt of $44.1 million and $51.2
million at September 30, 2002 and 2001, respectively.
Our long-term debt is typically issued at fixed rates of interest based
upon market rates for debt having similar terms and credit ratings. As these
long-term debt issues mature, we may refinance such debt with new debt having
interest rates reflecting then-current market conditions. This debt may have an
interest rate that is more or less than the refinanced debt. In order to reduce
interest rate risk associated with near-term forecasted issuances of fixed-rate
debt, from time to time we enter into interest rate protection agreements.
The following table summarizes the fair values of unsettled market risk
sensitive derivative instruments held at September 30, 2002 and 2001. It also
includes the changes in fair value that would result if there were an adverse
change in (1) the market price of propane of 10 cents per gallon and (2)
interest rates on ten-year U.S. treasury notes of 100 basis points:
Change in
Fair Value Fair Value
---------- ----------
(Millions of dollars)
September 30, 2002
Propane commodity price risk $ 9.8 $(10.9)
Interest rate risk (2.8) (4.4)
September 30, 2001
Propane commodity price risk $(10.5) $(18.8)
Interest rate risk (3.0) (4.2)
Because the Partnership's derivative instruments generally qualify as
hedges under SFAS 133, we expect that changes in the fair value of derivative
instruments used to manage propane price or interest rate risk would be
substantially offset by gains or losses on the associated underlying
transactions.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board ("FASB") recently issued SFAS No.
143, "Accounting for Asset Retirement Obligations" ("SFAS 143"); SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144");
SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of
FASB Statement No. 13, and Technical Corrections" ("SFAS 145"); and SFAS No.
146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS
146").
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SFAS 143 addresses financial accounting and reporting for legal
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. SFAS 143 requires that the fair value of a
liability for an asset retirement obligation be recognized in the period in
which it is incurred with a corresponding increase in the carrying value of the
related asset. Entities shall subsequently charge the retirement cost to expense
using a systematic and rational method over the related asset's useful life and
adjust the fair value of the liability resulting from the passage of time
through charges to operating expense. We adopted SFAS 143 effective October 1,
2002. The adoption of SFAS 143 did not have a material effect on our financial
position or results of operations.
SFAS 144 supersedes SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("SFAS 121"), and
the accounting and reporting provisions of APB Opinion No. 30, "Reporting the
Results of Operations - Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions," as it relates to the disposal of a segment of a business. SFAS
144 establishes a single accounting model for long-lived assets to be disposed
of based upon the framework of SFAS 121, and resolves significant implementation
issues of SFAS 121. We adopted SFAS 144 effective October 1, 2002. The adoption
of SFAS 144 did not affect our financial position or results of operations.
SFAS 145 rescinded SFAS No. 4, "Reporting Gains and Losses from
Extinguishment of Debt" (an amendment of APB Opinion No. 30) ("SFAS 4"),
effective May 15, 2002. SFAS 4 had required that material gains and losses on
extinguishment of debt be classified as an extraordinary item. Under SFAS 145,
it is less likely that a gain or loss on extinguishment of debt would be
classified as an extraordinary item in our Consolidated Statement of Income.
Among other things, SFAS 145 also amends SFAS No. 13, "Accounting for Leases,"
to require that certain lease modifications that have economic effects similar
to sale-leaseback transactions be accounted for in the same manner as
sale-leaseback transactions. The provisions of SFAS 145 relating to leases
became effective for transactions occurring after May 15, 2002. The adoption of
SFAS 145 did not affect our financial position or results of operations.
SFAS 146 addresses accounting for costs associated with exit or disposal
activities and nullifies Emerging Issues Task Force ("EITF") No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity." Generally, SFAS 146 requires that a liability for costs
associated with an exit or disposal activity, including contract termination
costs, employee termination benefits and other associated costs, be recognized
when the liability is incurred. Under EITF No. 94-3, a liability was recognized
at the date of an entity's commitment to an exit plan. SFAS 146 will be
effective for disposal activities initiated after December 31, 2002.
FORWARD-LOOKING STATEMENTS
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Information contained above in this Management's Discussion and Analysis
of Financial Condition and Results of Operations and elsewhere in this Report on
Form 10-K may contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Such statements use forward-looking words such as "believe," "plan,"
"anticipate," "continue," "estimate," "expect," "may," "will," or other similar
words. These statements discuss plans, strategies, events or developments that
we expect or anticipate will or may occur in the future.
A forward-looking statement may include a statement of the assumptions or
bases underlying the forward-looking statement. We believe that we have chosen
these assumptions or bases in good faith and that they are reasonable. However,
we caution you that actual results almost always vary from assumed facts or
bases, and the differences between actual results and assumed facts or bases can
be material, depending on the circumstances. When considering forward-looking
statements, you should keep in mind the following important factors which could
affect our future results and could cause those results to differ materially
from those expressed in our forward-looking statements: (1) adverse weather
conditions resulting in reduced demand; (2) price volatility and availability of
propane, and the capacity to transport to market areas; (3) changes in laws and
regulations, including safety, tax and accounting matters; (4) large supplier,
counterparty or customer defaults, (5) competitive pressures from the same and
alternative energy sources; (6) failure to acquire new customers thereby
reducing or limiting any increase in revenues; (7) liability for environmental
claims; (8) customer conservation measures and improvements in energy efficiency
and technology resulting in reduced demand; (9) adverse labor relations; (10)
inability to make business acquisitions on economically acceptable terms
resulting in failure to acquire new customers thereby limiting any increase in
revenues; (11) liability for personal injury and property damage arising from
explosions and other catastrophic events, including acts of terrorism, resulting
from operating hazards and risks incidental to transporting, storing and
distributing propane, butane and ammonia, including liability in excess of
insurance coverage; (12) political, regulatory and economic conditions in the
United States and in foreign countries; and (13) interest rate fluctuations and
other capital market conditions.
These factors are not necessarily all of the important factors that could
cause actual results to differ materially from those expressed in any of our
forward-looking statements. Other unknown or unpredictable factors could also
have material adverse effects on future results. We undertake no obligation to
update publicly any forward-looking statement whether as a result of new
information or future events.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
"Quantitative and Qualitative Disclosures About Market Risk" are contained
in Management's Discussion and Analysis of Financial Condition and Results of
Operations under the caption "Market Risk Disclosures" and are incorporated here
by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and financial statement schedules referred to in
the index contained on pages F-2 and F-3 of this report are incorporated herein
by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
During fiscal year 2002, the registrants engaged a new independent
auditor, PricewaterhouseCoopers LLP. The information required by Item 9 is
incorporated in this Report by reference to the registrants' Current Report on
Form 8-K dated May 21, 2002, which report was amended on July 2, 2002.
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PART III: MANAGEMENT AND SECURITY HOLDERS
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER
We do not directly employ any persons responsible for managing or
operating the Partnership. The General Partner and UGI provide such services and
are reimbursed for direct and indirect costs and expenses including all
compensation and benefit costs. See "Certain Relationships and Related
Transactions" and Note 12 to the Partnership's Consolidated Financial
Statements.
The Board of Directors of the General Partner established a committee (the
"Audit Committee") consisting of three individuals, currently, Messrs. Marrazzo,
Van Dyck and Vincent, who are neither officers nor employees of the General
Partner or any affiliate of the General Partner and who the Board considers to
be independent as defined by the current NYSE listing standards. The Audit
Committee has the authority to review, at the request of the General Partner,
specific matters as to which the General Partner believes there may be a
conflict of interest, in order to determine if the resolution of such conflict
is fair and reasonable to the Partnership. In addition, the Audit Committee acts
on behalf of the Board of Directors in fulfilling its responsibility to:
- oversee the financial reporting process and the adequacy of controls
relative to financial and business risk;
- monitor the independence of the Partnership's independent
accountants and the performance of the independent accountants and
internal audit staff;
- provide a means for open communication among the independent
accountants, management, internal audit staff and the Board of
Directors; and
- recommend to the Board of Directors the engagement of the
independent accountants to conduct the annual audit of the
Partnership's consolidated financial statements.
DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER
The following table sets forth certain information with respect to the
directors and executive officers of the General Partner. Directors are elected
annually by AmeriGas, Inc. as the sole shareholder of the General Partner.
AmeriGas, Inc. is a wholly owned subsidiary of UGI. Executive officers are
elected for one-year terms. There are no family relationships between any of the
directors or any of the executive officers or between any of the executive
officers and any of the directors.
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NAME AGE POSITION WITH THE GENERAL PARTNER
Lon R. Greenberg 52 Chairman, Director
Eugene V. N. Bissell 49 President, Chief Executive Officer
and Director
Thomas F. Donovan 69 Director
Richard C. Gozon 64 Director
William J. Marrazzo 53 Director
James W. Stratton 66 Director
Stephen A. Van Dyck 59 Director
Roger B. Vincent 57 Director
Martha B. Lindsay 50 Vice President - Finance and
Chief Financial Officer
Brendan P. Bovaird 54 Vice President and General Counsel
Richard R. Eynon 55 Controller and Chief Accounting Officer
R. Paul Grady 49 Senior Vice President - Operations and
Chief Operating Officer
William D. Katz 49 Vice President - Human Resources
Robert H. Knauss 49 Vice President - Law,
Associate General Counsel and
Corporate Secretary
David L. Lugar 45 Vice President - Supply and Logistics
Carey M. Monaghan 51 Vice President - Business Transformation
and Marketing
Mr. Greenberg is a director (since 1994) and Chairman of the General
Partner. He previously served as President and Chief Executive Officer of the
General Partner (1996 to
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2000). He is also a director (since 1994) and Chairman (since 1996), Chief
Executive Officer (since 1995), and President (since 1994) of UGI, having been
Senior Vice President - Legal and Corporate Development of UGI (1989 to 1994).
Mr. Greenberg previously served as Vice President and General Counsel of
AmeriGas, Inc. (1984 to 1994). He also serves as a director of UGI Utilities,
Inc.
Mr. Bissell is President, Chief Executive Officer and a director of the
General Partner (since July 2000). He previously served as Senior Vice President
- - Sales and Marketing of the General Partner (1999 to 2000), having served as
Vice President - Sales and Operations (1995 to 1999). Previously, he was Vice
President - Distributors and Fabrication, BOC Gases (industrial gases) (1995),
having been Vice President - National Sales (1993 to 1995) and Regional Vice
President Southern Region for Distributor and Cylinder Gases Division, BOC Gases
(1989 to 1993). From 1981 to 1987, Mr. Bissell held various positions with UGI
and its subsidiaries, including Director, Corporate Development. Mr. Bissell is
currently Chairman and a member of the Board of Directors of the National
Propane Gas Association, the national trade association of the propane industry.
Mr. Donovan was elected a director of the General Partner on April 25,
1995. He retired as Vice Chairman of Mellon Bank on January 31, 1997, a position
he had held since 1988. He also serves as a director of UGI Corporation, UGI
Utilities, Inc., and Nuclear Electric Insurance Ltd.
Mr. Gozon was elected a director of the General Partner on February 24,
1998. He retired in April of 2002 as Executive Vice President of Weyerhaeuser
Company (an integrated forest products company) and Chairman of Norpac (North
Pacific Paper Company, a joint venture with Nippon Paper Industries headquarters
in Tokyo, Japan) positions he had held since 1994. Mr. Gozon was formerly
Director (1984 to 1993), President and Chief Operating Officer of Alco Standard
Corporation (a provider of paper and office products) (1988 to 1993); Executive
Vice President and Chief Operating Officer (1987); Vice President (1982 to
1988); and President (1979 to 1987) of Paper Corporation of America. He also
serves as a director of UGI Corporation, UGI Utilities, Inc., AmeriSource Bergen
Corp., and Triumph Group, Inc.
Mr. Marrazzo was elected a director of the General Partner on April 23,
2001. He is Chief Executive Officer and President of WHYY, Inc., a public
television and radio company in the nation's fourth largest market (since 1997).
Previously, he was Chief Executive Officer and President of Roy F. Weston, Inc.
(an environmental and redevelopment firm) (1988-1997); Water Commissioner for
the Philadelphia Water Department (1971-1988) and Managing Director for the City
of Philadelphia (1983). He also serves as a director of Tenet Health
Corp.-Hahnemann University Hospital.
Mr. Stratton was elected a director of the General Partner on April 25,
1995. He has been the Chairman, Chief Executive Officer and a director of
Stratton Management Company (investment advisory and financial consulting firm)
since 1972. Mr. Stratton serves as a director of UGI Corporation; UGI Utilities,
Inc.; AmeriGas Propane, Inc.; Stratton Growth Fund, Inc.;
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Stratton Monthly Dividend REIT Shares, Inc.; Stratton Small-Cap Value Fund;
Teleflex, Inc.; and BE&K, Inc.
Mr. Van Dyck was elected a director of the General Partner on June 15,
1995. He is Chairman of the Board and Chief Executive Officer of Maritrans Inc.
(since 1987), the nation's largest independent marine transporter of petroleum.
He also serves as Chairman of the Board of West of England Mutual Insurance
Association.
Mr. Vincent was elected a director of the General Partner on January 8,
1998. He is President of Springwell Corporation, a corporate finance advisory
firm (since 1989). Mr. Vincent also serves as a director of the ING Funds.
Ms. Lindsay was elected Vice President - Finance and Chief Financial
Officer of the General Partner on January 5, 1998. She previously served as Vice
President and Treasurer (1994 to 1997) and as Treasurer (1994) of Tambrands
Inc., a manufacturer of personal products. Prior to 1994, Ms. Lindsay held the
positions of Director of Business Development (1987 to 1989) and Assistant
Treasurer (1990 to 1993) at Tambrands Inc.
Mr. Bovaird is Vice President and General Counsel of the General Partner
(since 1995). He is also Vice President and General Counsel of UGI Corporation,
UGI Utilities, Inc. and AmeriGas, Inc. (since 1995). Mr. Bovaird previously
served as Division Counsel and Member of the Executive and Operations Committees
of Wyeth-Ayerst International Inc. (1992 to 1995) and Senior Vice President,
General Counsel and Secretary of Orion Pictures Corporation (1990 to 1991).
Mr. Eynon was elected Controller and Chief Accounting Officer of the
General Partner on January 5, 1998. Prior to his election, Mr. Eynon was
Controller of the General Partner (March 1997 to January 1998) and Assistant
Controller of UGI Corporation (1985 to 1997). Previously, he was a Senior
Manager with Price Waterhouse (now known as PricewaterhouseCoopers).
Mr. Grady is Senior Vice President - Operations of the General Partner
(since October 1999) and Chief Operating Officer (since July 2000), having
served as Vice President - Sales and Operations (1995 to 1999). Previously, he
was Vice President - Corporate Development of UGI (1994 to 1995), and Director,
Corporate Development of UGI (1990 to 1994). Mr. Grady was Director, Corporate
Development Services of Campbell Soup Company (1985 to 1990). Mr. Grady is
currently Vice Chairman - Marketers of the Propane Education Research Council,
which promotes propane as a preferred energy source.
Mr. Katz is Vice President - Human Resources of the General Partner (since
December 1999), having served as Vice President - Corporate Development (1996 to
1999). Previously, he was Vice President - Corporate Development of UGI (1995 to
1996). Prior to joining UGI, Mr. Katz was Director of Corporate Development with
Campbell Soup Company for over five years.
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He also practiced law for approximately 10 years, first with the firm of Jones,
Day Reavis & Pogue, and later in the Legal Department at Campbell Soup Company.
Mr. Knauss is Vice President - Law and Associate General Counsel of the
General Partner (since 1996), having served as Corporate Secretary (since 1994)
and Group Counsel - Propane (1989 to 1996) of UGI. He joined UGI as Associate
Counsel in 1985. Before joining UGI, Mr. Knauss was an associate at the firm of
Ballard, Spahr, Andrews & Ingersoll in Philadelphia.
Mr. Lugar is Vice President - Supply and Logistics of the General Partner
(since September 2000). Previously, he served as Director - NGL Marketing for
Conoco, Inc., where he spent 20 years in increasingly responsible positions in
propane marketing, operations, and supply.
Mr. Monaghan is Vice President - Business Transformation and Marketing of
the General Partner (since May 2000). Prior to joining AmeriGas Partners, he was
Vice President-General Manager, Dry Soup for Campbell Soup Company (since 1997),
where he also served as a Business Director and General Manager of a number of
Campbell Soup Divisions for the 10 prior years.
SECTION 16(a) - BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
directors and certain officers of the General Partner and any 10% beneficial
owners of the Partnership to send reports of their beneficial ownership of
Common Units and changes in beneficial ownership to the Securities and Exchange
Commission. Based on our records, we believe that during Fiscal 2002 all of such
reporting persons complied with all Section 16(a) filing requirements applicable
to them.
ITEM 11. EXECUTIVE COMPENSATION
The following table shows cash and other compensation paid or accrued to
the General Partner's Chief Executive Officer and each of its four other most
highly compensated executive officers, (collectively, the "Named Executives")
for the last three fiscal years.
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SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------- -------------------------------------
AWARDS PAYOUTS
-------------------------- --------
OTHER
ANNUAL SECURITIES
COMPEN- RESTRICTED UNDERLYING ALL OTHER
NAME AND PRINCIPAL FISCAL -SATION STOCK OPTIONS / LTIP COMPENSATION
POSITION YEAR SALARY BONUS (1) (2) AWARDS (3) SARS PAYOUTS (4)
- -------------------- ---- -------- --------- ------- ------------ ----------- -------- ------------
Eugene V.N. Bissell, 2002 $352,656 $109,941 $585 $223,700 35,000 $0 $42,717
President and Chief 2001 $329,415 $236,313 $300 $28,263 0 $0 $55,648
Executive Officer $99,725
2000 $245,366 $59,253 $4,772 $0 28,000 $0 $31,886
12,750
Lon R. Greenberg, 2002 $705,015 $521,092 $15,342 $785,200 120,000 $0 $28,033
Chairman (5) $785,200
$785,200
2001 $667,799 $595,010 $14,849 $323,438 0 $0 $20,939
$1,000,875
2000 $640,662 $262,836 $13,092 $0 225,000 $0 $20,417
R. Paul Grady, 2002 $246,088 $54,825 $4,041 $123,035 18,000 $0 $25,544
Senior Vice 2001 $223,850 $120,313 $3,845 $21,196 0 $0 $34,426
President - $77,315
Operations and Chief 2000 $222,480 $50,404 $4,491 $0 28,000 $0 $30,149
Operating Officer
Brendan P. Bovaird, 2002 $232,683 $95,459 $ 5,449 $90,600 14,500 $0 $7,411
Vice President and $90,600
General Counsel (5) $90,600
2001 $222,283 $96,708 $5,012 $38,813 0 $0 $6,112
$120,105
2000 $210,392 $49,349 $7,264 $0 28,000 $0 $5,927
Robert H. Knauss, 2002 $196,172 $34,935 $1,612 $44,740 8,000 $0 $19,117
Vice President - Law 2001 $186,819 $78,115 $1,793 $14,131 0 $0 $26,659
Associate General $123,255
Counsel and 2000 $184,314 $39,896 $0 $0 15,000 $0 $23,190
Corporate Secretary
(1) Messrs. Greenberg and Bovaird participate in the UGI Annual Bonus Plan.
All other Named Executives participate in the AmeriGas Propane, Inc.
Annual Bonus Plan. Awards under both Plans are for the year reported,
regardless of the year paid. Awards under both Plans are based on the
achievement of pre-determined business and/or financial performance
objectives which support business plans and goals. Bonus opportunities
vary by position and currently range from 0 to 133% of base salary for Mr.
Bissell, 0 to 184% of base salary for Mr. Greenberg, 0 to 104% of base
salary for Mr. Bovaird, 0 to 76% of base salary for Mr. Knauss, and 0 to
95% of base salary for Mr. Grady.
(2) Amounts represent tax payment reimbursements for certain benefits and, for
Mr. Bovaird, above-market interest on deferred compensation.
(3) Effective January 1, 2002, the Board of Directors of AmeriGas Propane,
Inc. approved phantom performance-contingent restricted Common Unit awards
("Restricted Units") to the Named Executives, other than Messrs. Greenberg
and Bovaird, under the 2000 AmeriGas Propane, Inc. Long-Term Incentive
Plan. Distribution equivalents will accumulate on the Restricted Units
awarded. These distributions will also be leveraged based on performance
described below and paid out when the restriction period on the Restricted
Units ends on December 31, 2004. The performance requirement is evidence
of AmeriGas' meaningful progress toward the achievement of its strategic
objectives during 2002 including the Partnership's acquisition
integration, productivity improvement, internal growth, and cash
generation goals. The actual
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amount of the award may be higher or lower than the original grant, or
even zero, based on AmeriGas' achievement of its objectives, with a
maximum payout potential of 125% of the original award.
Effective January 1, 2002, the Board of Directors of UGI Corporation
approved three phantom performance-contingent restricted stock awards
("Restricted Shares") to the Messrs. Greenberg and Bovaird under the UGI
Corporation 2000 Stock Incentive Plan. Dividend equivalents will
accumulate on the phantom shares awarded. These dividends will also be
leveraged based on TSR performance described below and distributed when
the restriction period on the phantom shares ends on December 31, 2004.
Each award has a separate performance period as follows: January 1, 2002
through December 31, 2002, January 1, 2002 through December 31, 2003, and
January 1, 2002 through December 31, 2004. The restriction period for all
three awards will end on December 31, 2004. The performance requirement is
that the Company's Total Shareholder Return (TSR) during the relevant
performance period equals the median of a peer group. The peer group is
the group of companies that comprises the S&P Utilities Index. The share
price used for determining the stock price at the beginning and the end of
each performance period will be the average price for the 90-day period
preceding each December 31st. The actual amount of the award may be higher
or lower than the original grant, or even zero, based on the Company's TSR
percentile rank relative to the companies in the S&P Utilities Index. The
maximum payout potential is 200% of the original award. At the Company's
discretion, awards of phantom performance-contingent restrictive stock may
be paid out in stock, cash or a combination of stock and cash. Awards of
dividend equivalents will be paid in cash.
The dollar values shown in the restricted stock awards column of the table
above for all years represent the aggregate value of each award on the
date of grant, determined by multiplying the number of Common Units
awarded by the closing price of AmeriGas Partners Common Units, or in the
case of Messrs. Greenberg and Bovaird, the closing price of UGI Common
Stock on the New York Stock Exchange on the effective dates of the
respective grants.
Based on the closing unit price of Common Units of AmeriGas Partners, L.P.
on the New York Stock Exchange on September 30, 2002, Mr. Bissell's 16,150
Restricted Units had a market value of $374,034; Mr. Grady's 10,225
Restricted Units had a market value of $236,811; and Mr. Knauss' 8,350
Restricted Units had a market value of $193,386. Based on the closing
stock price of UGI Common Stock on the New York Stock Exchange on
September 30, 2002, Mr. Greenberg's 128,000 Restricted Shares had a market
value of $4,652,800; and Mr. Bovaird's 15,000 Restricted Shares had a
market value of $545,250.
(4) The amounts represent contributions by the General Partner or UGI in
accordance with the provisions of the AmeriGas Propane, Inc. Employee
Savings Plan (the "AmeriGas Employee Savings Plan"), the UGI Utilities,
Inc. Employee Savings Plan (the "UGI Employee Savings Plan"), allocations
under the UGI Corporation Senior Executive Retirement Plan (the "UGI
Executive Retirement Plan"), and/or allocations under the AmeriGas
Propane, Inc. Supplemental Executive Retirement Plan (the "AmeriGas
Executive Retirement Plan"). During fiscal years 2002, 2001 and 2000, the
following contributions were made to the Named Executives: (i) under the
AmeriGas Employee Savings Plan: Mr. Bissell $4,957, $7,576, and $9,424;
Mr. Grady, $3,953, $8,509, and $10,861; Mr. Knauss, $4,506, $8,666, and
$8,769; (ii) under the UGI Employee Savings Plan: Mr. Greenberg, $3,825,
$3,825, and $3,600; and Mr. Bovaird, $3,825, $3,825, and $3,509; (iii)
under the UGI Executive Retirement Plan: Mr. Greenberg, $24,208, $17,114,
and $16,592; and Mr. Bovaird, $3,586, $2,287, and $2,102; (iv) under the
AmeriGas Executive Retirement Plan: Mr. Bissell, $37,760, $48,072, and
$22,462; Mr. Grady, $21,591, $25,916, and $19,288; and Mr. Knauss,
$14,611, $17,993, and $14,421.
(5) Mr. Greenberg was President and Chief Executive Officer of AmeriGas
Propane, Inc. from July 1996 to July 2000. Compensation reported for
Messrs. Greenberg and Bovaird is attributable to their respective
positions of Chairman, President and Chief Executive Officer, and Vice
President and General Counsel of UGI Corporation. Compensation for these
individuals is also reported in the UGI Proxy Statement for the 2003
Annual Meeting of Shareholders and is not additive. The General Partner
does not compensate Mr. Greenberg or Mr. Bovaird.
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OPTIONS EXERCISES IN LAST FISCAL YEAR
The following table shows information on UGI stock option exercises in the last
fiscal year for each of the Named Executives.
UGI STOCK OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
FISCAL YEAR END (#) AT FISCAL YEAR END (2)
--------------------------- ----------------------------
SHARES
ACQUIRED
ON
EXERCISE VALUE
NAME (#) REALIZED (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------- -------- ------------ ----------- ------------- ----------- -------------
Eugene V.N. Bissell 12,500 $191,951 19,667 48,583 $299,701 $410,061
Lon R. Greenberg 123,959 $1,661,893 468,750 251,250 $7,113,281 $2,767,969
R. Paul Grady 17,000 $170,255 18,667 27,333 $293,539 $250,261
Brendan P. Bovaird 0 $0 48,667 14,500 $705,289 $83,375
Robert H. Knauss 0 $0 10,000 13,000 $157,250 $124,625
(1) Value realized is calculated on the difference between the option exercise
price and the closing market price of UGI's Common Stock on the date of
exercise multiplied by the number of shares to which the exercise relates.
(2) The closing price of UGI's Common Stock as reported on the New York Stock
Exchange Composite tape on September 30, 2002 was $36.35 and is used in
calculating the value of unexercised options.
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OPTION GRANTS IN LAST FISCAL YEAR
The following table shows information on grants of UGI stock options
during fiscal year 2002 to each of the Named Executives.
OPTION GRANTS IN LAST FISCAL YEAR
GRANT DATE
INDIVIDUAL GRANTS VALUE
--------------------------------------------------------------------- ------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED GRANT DATE
OPTIONS TO EMPLOYEES IN EXERCISE PRESENT
NAME GRANTED FISCAL YEAR (1) OR BASE PRICE EXPIRATION DATE VALUE (2)
- --------------------- ------------- --------------- ------------- --------------- ------------
Eugene V.N. Bissell 35,000 7.81% $30.600 12/31/2011 $179,070
Lon R. Greenberg 120,000 26.77% $30.600 12/31/2011 $613,953
R. Paul Grady 18,000 4.02% $30.600 12/31/2011 $92,093
Brendan P. Bovaird 14,500 3.23% $30.600 12/31/2011 $74,186
Robert H. Knauss 8,000 1.78% $30.600 12/31/2011 $40,930
(1) A total of 448,250 options were granted to employees and executive
officers of UGI and its subsidiaries, including the General Partner,
during fiscal year 2002 under the UGI 1992 Non-Qualified Stock Option
Plan, the UGI 2000 Stock Incentive Plan and the UGI 2002 Non-Qualified
Stock Option Plan. Under each Plan, the option exercise price is not less
than 100% of the fair market value of UGI's Common Stock on the date of
grant. All options will vest at the rate of 33% per year on the
anniversary of the grant date. Options are nontransferable and generally
exercisable only while the optionee is employed by UGI or an affiliate.
Options are subject to adjustment in the event of recapitalizations, stock
splits, mergers, and other similar corporate transactions affecting UGI's
Common Stock.
(2) Based on the Black-Scholes options pricing model. The assumptions used in
calculating the grant date present value are as follows:
- - Three years of closing monthly stock price and dividend
observations were used to calculate the stock volatility and
dividend yield assumptions.
- - Stock volatility 29.10%
- - Stock's dividend yield 6.70%
- - Length of option term 10 years
- - Annualized risk-free interest rate 5.54%
- - Discount of risk of forfeiture 0% per year
All options were granted at fair market value. The actual value, if any,
the executive may realize will depend on the excess of the stock price on the
date the option is exercised over the exercise price. There is no assurance that
the value realized by the executive will be at or near the value estimated by
the Black-Scholes model.
-35-
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information as of the end of the
Partnership's 2002 fiscal year with respect to compensation plans under which
equity securities of the Partnership are authorized for issuance.
NUMBER OF SECURITIES
NUMBER OF SECURITIES TO BE WEIGHTED AVERAGE EXERCISE REMAINING AVAILABLE
ISSUED UPON EXERCISE PRICE OF OUTSTANDING FOR FUTURE ISSUANCE
OF OUTSTANDING OPTIONS, OPTIONS, WARRANTS AND UNDER EQUITY COMPENSATION
WARRANTS AND RIGHTS RIGHTS PLANS (EXCLUDING SECURITIES
PLAN CATEGORY (A) (B) REFLECTED IN COLUMN (A)) (C)
- -------------------------- -------------------------- ------------------------- -----------------------------
Equity compensation plans 105,825 0 592,175
approved by security
holders (1)
Equity compensation plans
not approved by security
holders 0 0 0
------- - -------
TOTAL 105,825 0 592,175
========================= ========================= ==============================
(1) These plans include the AmeriGas Propane, Inc. 2000 Long-Term Incentive
Plan and the AmeriGas Propane, Inc. Discretionary Long-Term Incentive Plan
for Non-Executive Key Employees.
RETIREMENT BENEFITS
The following Pension Plan Benefits Table shows the annual benefits
payable upon retirement to Messrs. Greenberg and Bovaird under the Retirement
Income Plan for Employees of UGI Utilities, Inc. (the "Retirement Plan") and the
UGI Corporation Supplemental Executive Retirement Plan. The amounts shown assume
the executive retires in 2002 at age 65, and that the aggregate benefits are not
subject to statutory maximums. Messrs. Greenberg and Bovaird had, respectively,
22 years and 7 years of credited service under these Plans at September 30,
2002. Messrs Bissell, Knauss and Grady previously accumulated more than 6, 12
and 5 years of credited service with UGI and its subsidiaries before joining
AmeriGas Propane, Inc. They do not currently participate in the Retirement Plan.
-36-
PENSION PLAN BENEFITS TABLE
ANNUAL PLAN BENEFIT FOR YEARS CREDITED SERVICE SHOWN (2)
FINAL 5-YEAR
AVERAGE ANNUAL 5 10 15 20 25 30 35 40
EARNINGS (1) YEARS YEARS YEARS YEARS YEARS YEARS YEARS YEARS
------------ ----- ----- ----- ----- ----- ----- ----- -----
$ 200,000 $ 19,000 $ 38,000 $ 57,000 $ 76,000 $ 95,000 $ 114,000 $ 133,000 $ 136,800 (3)
$ 400,000 $ 38,000 $ 76,000 $114,000 $152,000 $190,000 $ 228,000 $ 266,000 $ 273,600 (3)
$ 600,000 $ 57,000 $114,000 $171,000 $228,000 $285,000 $ 342,000 $ 399,000 $ 410,400 (3)
$ 800,000 $ 76,000 $152,000 $228,000 $304,000 $380,000 $ 456,000 $ 532,000 $ 547,200 (3)
$1,000,000 $ 95,000 $190,000 $285,000 $380,000 $475,000 $ 570,000 $ 665,000 $ 684,000 (3)
$1,200,000 $114,000 $228,000 $342,000 $456,000 $570,000 $ 684,000 $ 798,000 $ 820,800 (3)
$1,400,000 $133,000 $266,000 $399,000 $532,000 $665,000 $ 798,000 $ 931,000 $ 957,600 (3)
$1,600,000 $152,000 $304,000 $456,000 $608,000 $760,000 $ 912,000 $1,064,000 $1,094,400 (3)
$1,800,000 $171,000 $342,000 $513,000 $684,000 $855,000 $1,026,000 $1,197,000 $1,231,200 (3)
$2,000,000 $190,000 $380,000 $570,000 $760,000 $950,000 $1,140,000 $1,330,000 $1,368,000 (3)
(1) Consists of (i) base salary, commissions and cash payments under the
Annual Bonus Plan, and (ii) deferrals thereof permitted under the Internal
Revenue Code.
(2) Annual benefits are computed on the basis of straight life annuity
amounts. These amounts include pension benefits, if any, to which a
participant may be entitled as a result of participation in a pension plan
of a subsidiary during previous periods of employment. The amounts shown
do not take into account exclusion of up to 35% of the estimated primary
Social Security benefit. The Retirement Plan provides a minimum benefit
equal to 25% of a participant's final 12-months' earnings, reduced
proportionately for less than 15 years of credited service at retirement.
The minimum Retirement Plan benefit is not subject to Social Security
offset.
(3) The maximum benefit under the Retirement Plan and the UGI Supplemental
Executive Retirement Plan is equal to 60% of a participant's highest
consecutive 12 months' earnings during the last 120 months.
SEVERANCE PAY PLAN FOR SENIOR EXECUTIVE EMPLOYEES
Named Executives Employed by UGI Corporation. The UGI Corporation Senior
Executive Employee Severance Pay Plan (the "UGI Severance Plan") assists certain
senior level employees of UGI, including Messrs. Greenberg and Bovaird, in the
event their employment is terminated without fault on their part. Benefits are
payable to a senior executive covered by the UGI Severance Plan if the senior
executive's employment is involuntarily terminated for any reason other than for
cause or as a result of the senior executive's death or disability.
The UGI Severance Plan provides for cash payments equal to a participant's
compensation for a period of time ranging from 3 months to 15 months (30 months
in the case of
-37-
Mr. Greenberg), depending on length of service. In addition, a participant
receives the cash equivalent of his or her target bonus under the Annual Bonus
Plan, pro-rated for the number of months served in the fiscal year. However, if
the termination occurs in the last two months of the fiscal year, the Chief
Executive Officer has the discretion to determine whether the participant will
receive a pro-rated target bonus, or the actual annual bonus which would have
been paid after the end of the fiscal year, assuming that the participant's
entire bonus was contingent on meeting the applicable financial performance
goal. Certain employee benefits are continued under the Plan for a period of up
to 15 months (30 months in the case of Mr. Greenberg). UGI has the option to pay
a participant the cash equivalent of those employee benefits.
In order to receive benefits under the UGI Severance Plan, a senior
executive is required to execute a release which discharges UGI and its
subsidiaries from liability for any claims the senior executive may have against
any of them, other than claims for amounts or benefits due to the executive
under any plan, program or contract provided by or entered into with UGI or its
subsidiaries. The senior executive is also required to cooperate in attending to
matters pending at the time of his or her termination of employment.
Named Executives Employed by AmeriGas Propane. The AmeriGas Propane, Inc.
Executive Employee Severance Pay Plan (the "AmeriGas Severance Plan") assists
certain senior level employees of the General Partner including Messrs. Bissell,
Grady and Knauss in the event their employment is terminated without fault on
their part. Specified benefits are payable to a senior executive covered by the
AmeriGas Severance Plan if the senior executive's employment is involuntarily
terminated for any reason other than for cause or as a result of the senior
executive's death or disability.
The AmeriGas Severance Plan provides for cash payments equal to a
participant's compensation for three months (6 months in the case of the Chief
Executive Officer). In addition, a participant receives the cash equivalent of
his or her target bonus under the Annual Bonus Plan, pro-rated for the number of
months served in the fiscal year. However, if the termination occurs in the last
two months of the fiscal year, the Chief Executive Officer has the discretion to
determine whether the participant will receive a pro-rated target bonus, or the
actual annual bonus which would have been paid after the end of the fiscal year,
assuming that the participant's entire bonus was contingent on meeting the
applicable financial performance goal. The Plan also provides for separation pay
equal to one day's pay per month of service, not to exceed 12 months'
compensation. Minimum separation pay ranges from six to twelve months' base
salary, depending on the executive's employment grade. Certain employee benefits
are continued under the Plan for a period not exceeding 15 months (18 months in
the case of the Chief Executive Officer). This period is called the "Employee
Benefit Period." The General Partner has the option to pay a participant the
cash equivalent of those employee benefits.
In order to receive benefits under the AmeriGas Severance Plan, a senior
executive is required to execute a release which discharges the General Partner
and its affiliates from liability for any claims the senior executive may have
against any of them, other than claims for amounts or benefits due to the
executive under any plan, program or contract provided by or entered into
-38-
with the General Partner or its affiliates. The senior executive is also
required to cooperate in attending to matters pending at the time of his or her
termination of employment.
CHANGE OF CONTROL ARRANGEMENTS
Named Executives Employed By UGI Corporation. Messrs. Greenberg and
Bovaird each have an agreement with UGI Corporation (the "Agreement") which
provides certain benefits in the event of a change of control. The Agreements
operate independently of the UGI Severance Plan, continue through July 2004, and
are automatically extended in one-year increments thereafter unless, prior to a
change of control, UGI terminates an Agreement. In the absence of a change of
control, each Agreement will terminate when, for any reason, the executive
terminates his or her employment with UGI or its subsidiaries.
A change of control is generally deemed to occur if: (i) any person (other
than the executive, his or her affiliates and associates, UGI or any of its
subsidiaries, any employee benefit plan of UGI or any of its subsidiaries, or
any person or entity organized, appointed, or established by UGI or its
subsidiaries for or pursuant to the terms of any such employee benefit plan),
together with all affiliates and associates of such person, acquires securities
representing 20% or more of either (x) the then outstanding shares of common
stock of UGI or (y) the combined voting power of UGI's then outstanding voting
securities; (ii) individuals who at the beginning of any 24-month period
constitute the Board of Directors (the "Incumbent Board") and any new director
whose election by the Board, or nomination for election by UGI's shareholders,
was approved by a vote of at least a majority of the Incumbent Board, cease for
any reason to constitute a majority thereof; (iii) UGI is reorganized, merged or
consolidated with or into, or sells all or substantially all of its assets to,
another corporation in a transaction in which former shareholders of UGI do not
own more than 50% of the outstanding common stock and the combined voting power,
respectively, of the then outstanding voting securities of the surviving or
acquiring corporation after the transaction; or (iv) UGI is liquidated or
dissolved.
Severance benefits are payable under the Agreements if there is a
termination of the executive's employment without cause at any time within three
years after a change of control. In addition, following a change of control, the
executive may elect to terminate his or her employment without loss of severance
benefits in certain specified contingencies, including termination of officer
status; a significant adverse change in authority, duties, responsibilities or
compensation; the failure of UGI to comply with and satisfy any of the terms of
the Agreement; or a substantial relocation or excessive travel requirements.
An executive who is terminated with rights to severance compensation under
an Agreement will be entitled to receive an amount equal to 1.0 or 1.5 (2.5 in
the case of Mr. Greenberg) times his or her average total cash remuneration for
the preceding five calendar years. If the severance compensation payable under
the Agreement, either alone or together with other payments to an executive,
would constitute "excess parachute payments," as defined in Section
-39-
280G of the Internal Revenue Code of 1986, as amended (the "Code"), the
executive will also receive an amount to satisfy the executive's additional tax
burden.
Named Executives Employed by the General Partner. Messrs. Bissell, Grady
and Knauss each have an agreement with the General Partner (the "Agreement")
which provides certain benefits in the event of a change of control. The
Agreements operate independently of the AmeriGas Severance Plan, continue
through July 2004, and are automatically extended in one-year increments
thereafter unless, prior to a change of control, the General Partner terminates
an Agreement. In the absence of a change of control, each Agreement will
terminate when, for any reason, the executive terminates his or her employment
with the General Partner or any of its subsidiaries.
A change of control is generally deemed to occur if: (i) a change of
control of UGI, as defined above, occurs, (ii) the General Partner, AmeriGas
Partners or the Operating Partnership is reorganized, merged or consolidated
with or into, or sells all or substantially all of its assets to, another
corporation or partnership in a transaction in which the former shareholders of
the General Partner, or former limited partners, as the case may be, do not own
more than 50% of the outstanding common stock and combined voting power, or the
outstanding common units of such partnership, after the transaction, (iii) the
General Partner, AmeriGas Partners or the Operating Partnership is liquidated or
dissolved, (iv) UGI and its subsidiaries fail to own more than fifty percent of
the general partnership interests of AmeriGas Partners or the Operating
Partnership, (v) UGI and its subsidiaries fail to own more than fifty percent of
the combined voting power of the General Partner's then outstanding voting
securities, or (vi) AmeriGas Propane, Inc. is removed as the general partner of
AmeriGas Partners by vote of the limited partners, or AmeriGas Propane, Inc. is
removed as the general partner of AmeriGas Partners or the Operating Partnership
as a result of judicial or administrative proceedings.
Severance benefits are payable under the Agreements if there is a
termination of the executive's employment without cause at any time within three
years after a change of control. In addition, following a change of control, the
executive may elect to terminate his or her employment without loss of severance
benefits in certain specified contingencies, including termination of officer
status; a significant adverse change in authority, duties, responsibilities or
compensation; the failure of the General Partner to comply with and satisfy any
of the terms of the Agreement; or a substantial relocation or excessive travel
requirements.
An executive who is terminated with rights to severance compensation under
an Agreement will be entitled to receive an amount equal to 1.0 (1.5 in the case
of Mr. Bissell) times his or her average total cash remuneration for the
preceding five calendar years. If the severance compensation payable under the
Agreement, either alone or together with other payments to an executive, would
constitute "excess parachute payments," as defined in Section 280G of the Code,
the executive will also receive an amount to satisfy the executive's additional
tax burden.
-40-
BOARD OF DIRECTORS
Officers of the General Partner receive no additional compensation for
service on the Board of Directors or on any Committee of the Board. The General
Partner pays an annual retainer of $22,000 to all other directors and an
attendance fee of $1,000 for each Board meeting. For service on Committees, the
General Partner pays an annual retainer of (1) $5,000 to members of the Audit
Committee and (2) $2,000 to each Committee Chairman. Directors are paid an
attendance fee of $1,000 for each Committee meeting. In addition, a fee of
$1,000 is paid to non-employee directors for special service related to Board
business rendered at the request of the Chairman of the Board. The General
Partner reimburses directors for expenses incurred by them (such as travel
expenses) in serving on the Board and Committees. The General Partner determines
all expenses allocable to the Partnership, including expenses allocable to the
services of directors.
COMPENSATION/PENSION COMMITTEE
The members of the General Partner's Compensation/Pension Committee are
Richard C. Gozon (Chairman) and Thomas F. Donovan.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED SECURITY HOLDER MATTERS
OWNERSHIP OF LIMITED PARTNERSHIP UNITS BY CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding each person
known by the Partnership to have been the beneficial owner of more than 5% of
the Partnership's voting securities representing limited partner interests as of
December 1, 2002. AmeriGas Propane, Inc. is the sole general partner of the
Partnership.
AMOUNT AND
NATURE OF
BENEFICIAL
NAME AND ADDRESS (1) OWNERSHIP OF PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER PARTNERSHIP UNITS OF CLASS
-------------- ------------------- ----------------- --------
Common Units UGI Corporation 24,525,004 (2) 50.0%
AmeriGas, Inc. 24,525,004 (3) 50.0%
AmeriGas Propane, Inc. 24,525,004 (4) 50.0%
Petrolane Incorporated 7,839,911 (4) 16.0%
(1) The address of each of UGI, AmeriGas, Inc., AmeriGas Propane, Inc. and
Petrolane Incorporated is 460 North Gulph Road, King of Prussia, PA 19406.
-41-
(2) Based on the number of units held by its indirect, wholly-owned
subsidiaries, Petrolane Incorporated ("Petrolane") and AmeriGas Propane,
Inc.
(3) Based on the number of units held by its direct and indirect, wholly-owned
subsidiaries, AmeriGas Propane, Inc. and Petrolane.
(4) AmeriGas Propane, Inc.'s beneficial ownership includes 7,839,911 Common
Units held by its subsidiary, Petrolane. Beneficial ownership of those
Common Units is shared with UGI Corporation and AmeriGas, Inc.
OWNERSHIP OF PARTNERSHIP COMMON UNITS BY THE DIRECTORS AND EXECUTIVE OFFICERS OF
THE GENERAL PARTNER
The table below sets forth as of October 31, 2002 the beneficial ownership
of Partnership Common Units by each director and each of the Named Executives
currently serving the General Partner, as well as by the directors and all of
the executive officers of the General Partner as a group. No director, Named
Executive or executive officer beneficially owns more than 1% of the
Partnership's Common Units. The total number of Common Units beneficially owned
by the directors and executive officers of the General Partner as a group
represents less than 1% of the Partnership's outstanding Common Units.
-42-
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNERSHIP OF
BENEFICIAL OWNER PARTNERSHIP COMMON UNITS (1)
------------------------------------------------- ------------------------------
Lon R. Greenberg 6,500 (2)
Thomas F. Donovan 1,000
Richard C. Gozon 5,000
James W. Stratton 1,000 (3)
Stephen A. Van Dyck 1,000
Roger B. Vincent 6,000
William J. Marrazzo 0
Eugene V.N. Bissell 12,750 (4)
Brendan P. Bovaird 1,500 (5)
R. Paul Grady 15,550
Robert H. Knauss 7,875
Directors and executive officers as a group (16
persons) 74,913
(1) Sole voting and investment power unless otherwise specified.
(2) Of the Units shown, 4,500 are held by Mr. Greenberg's adult
children.
(3) Mr. Stratton's Units are held jointly with his spouse.
(4) Mr. Bissell's Units are held jointly with his spouse.
(5) Mr. Bovaird's Units are held jointly with his spouse.
The General Partner is a wholly owned subsidiary of AmeriGas, Inc. which
is a wholly owned subsidiary of UGI. The table below sets forth, as of October
31, 2002, the beneficial ownership of UGI Common Stock by each director and each
of the Named Executives, as well as by the directors and the executive officers
of the General Partner as a group. Including the number of shares of stock
underlying exercisable options, Mr. Greenberg is the beneficial owner of
approximately 2% of UGI's Common Stock. All other directors, Named Executives
and executive officers own less than 1% of UGI's outstanding shares. The total
number of shares
-43-
beneficially owned by the directors and executive officers as a group (including
642,984 shares subject to exercisable options), represents approximately 3% of
UGI's outstanding shares.
NUMBER OF UGI SHARES
AND NATURE OF
BENEFICIAL OWNERSHIP NUMBER OF
NAME OF EXCLUDING EXERCISABLE UGI
BENEFICIAL OWNER UGI STOCK OPTIONS (1)(2) STOCK OPTIONS TOTAL
- ----------------------------------------- ------------------------ ---------------- --------------
Lon R. Greenberg 112,040 (3) 468,750 580,790
Thomas F. Donovan 5,629 (2) 12,800 18,429
Richard C. Gozon 25,964 (2) 16,800 42,764
James W. Stratton 16,427 (2)(4) 16,800 33,227
Stephen A. Van Dyck 0 0 0
Roger B. Vincent 0 0 0
William J. Marrazzo 0 0 0
Eugene V.N. Bissell 37,460 (5) 19,667 57,127
Brendan P. Bovaird 22,965 (6) 48,667 71,632
R. Paul Grady 24,989 (7) 18,667 43,656
Robert H. Knauss 4,504 10,000 14,504
Directors and executive officers as a
group (16 persons) 279,311 642,984 922,295
(1) Sole voting and investment power unless otherwise specified.
(2) Included in the number of shares shown are Deferred Units ("Units")
acquired through the UGI Corporation 1997 Directors' Equity Compensation
Plan. Units are neither actual shares nor other securities, but each Unit
will be converted to one share of UGI common stock and paid out to
directors upon their retirement or termination of service. The number of
Units included for the directors is as follows: Messrs. Donovan (3,546),
Gozon (18,853), and Stratton (13,316).
(3) Mr. Greenberg holds 88,220 shares jointly with his spouse and 6,105 shares
represented by units held in the UGI Stock Fund of the 401(k) Employee
Savings Plan.
(4) Mr. Stratton holds 3,111 shares jointly with his spouse.
(5) Mr. Bissell holds these shares jointly with his spouse.
-44-
(6) Mr. Bovaird holds 19,993 shares jointly with his spouse and 2,972 shares
represented by units held in the UGI Stock Fund of the 401(k) Employee
Savings Plan.
(7) Mr. Grady's ownership includes 8,096 shares represented by units held in
the UGI Stock Fund of the 401(k) Employee Savings Plan.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner employs persons responsible for managing and operating
the Partnership. The Partnership reimburses the General Partner for the direct
and indirect costs of providing these services, including all compensation and
benefit costs. For fiscal year 2002, these costs totaled approximately $262.0
million.
The Operating Partnership has a revolving line of credit up to a maximum
of $20 million from the General Partner available until October 1, 2003, the
termination date of the Revolving Credit Facility. Any loans under this
agreement will be unsecured and subordinated to all senior debt of the Operating
Partnership. The commitment fees for this line of credit are computed on the
same basis as the facility fees under the Revolving Credit Facility, and totaled
$70,972 in fiscal year 2002. Interest rates are based on one-month offshore
interbank borrowing rates. The interest rate for a recent Credit Facility
borrowing from October 24, 2002 to October 25, 2002 was 4.75%. See Note 6 to the
Partnership's Consolidated Financial Statements, which are filed as an exhibit
to this report.
The Partnership and the General Partner also have extensive, ongoing
relationships with UGI and its affiliates. UGI performs certain financial and
administrative services for the General Partner on behalf of the Partnership.
UGI does not receive a fee for such services, but is reimbursed for all direct
and indirect expenses incurred in connection with providing these services,
including all compensation and benefit costs. A wholly owned subsidiary of UGI
provides the Partnership with excess automobile liability insurance with limits
of $500,000 per occurrence and in the aggregate excess of $500,000 per
occurrence. Another wholly owned subsidiary of UGI leases office space to the
General Partner for its headquarters staff. In addition, a UGI master policy
provides accidental death and business travel and accident insurance coverage
for employees of the General Partner. The General Partner is billed directly by
the insurer for this coverage. As discussed under "Business--Trade Names; Trade
and Service Marks," UGI and the General Partner have licensed the trade names
"AmeriGas" and "America's Propane Company" and the related service marks and
trademark to the Partnership on a royalty-free basis. Finally, the Partnership
obtains management information services from the General Partner, and reimburses
the General Partner for its direct and indirect expenses related to those
services. The rental payments and insurance premiums charged to the Partnership
by UGI
-45-
and its affiliates are comparable to amounts charged by unaffiliated parties. In
fiscal year 2002, the Partnership paid UGI and its affiliates, including the
General Partner, approximately $7.8 million for the services and expense
reimbursements referred to in this paragraph.
Subsequent to the Columbia Propane acquisition, the Partnership purchases
propane on behalf of Atlantic Energy, Inc. ("Atlantic Energy"), a 50% owned
joint venture with Conoco, Inc. Atlantic Energy reimburses AmeriGas OLP for its
purchases plus interest at the rate of 8% as Atlantic Energy sells such propane
to third parties or to the Partnership itself. The total dollar value of propane
purchased on behalf of Atlantic Energy was $11,370,000 and $1,875,000 in fiscal
year 2002 and 2001, respectively. Purchases of propane by AmeriGas OLP from
Atlantic Energy during fiscal year 2002 and 2001 totaled $12,131,000 and
$1,132,000 respectively.
AmeriGas OLP also provides other services to Atlantic Energy including
marketing, billing, accounting, insurance and other administrative services and
is reimbursed for the related costs. In addition, AmeriGas OLP enters into
product cost hedging contracts on behalf of Atlantic Energy. When these
contracts are settled, AmeriGas OLP is reimbursed the cost of any losses by, or
distributes the proceeds of any gains to, Atlantic Energy. Conoco Inc. has
agreed to indemnify AmeriGas OLP for one-half of any losses arising from its
hedging activities on behalf of Atlantic Energy to the extent that AmeriGas OLP
is not indemnified for such losses by Atlantic Energy.
The highest amounts due from Atlantic Energy during fiscal year 2002 and
at November 30, 2002 were $9,227,000 and $6,697,985 respectively.
ITEM 14. CONTROLS AND PROCEDURES
An evaluation of the effectiveness of the design and operation of the
Partnership's disclosure controls and procedures as of December 20, 2002 was
carried out by the General Partner under the supervision and with the
participation of the General Partner's management, including the Chief Executive
Officer and Chief Financial Officer. Based on that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the Partnership's
disclosure controls and procedures have been designed and are being operated in
a manner that provides reasonable assurance that the information required to be
disclosed by the Partnership in reports filed under the Securities Exchange Act
of 1934 is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms. A controls system, no matter how well
designed and operated, cannot provide absolute assurance that the objectives of
the controls system are met, and no evaluation of controls can provide absolute
assurance that all control issues and instances of fraud, if any, within an
entity have been detected. Subsequent to the date of the most recent evaluation
of the Partnership's internal controls, there were no significant changes in the
Partnership's internal controls or in other factors that could significantly
affect the internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses.
-46-
PART IV: ADDITIONAL EXHIBITS, SCHEDULES AND REPORTS
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(A) DOCUMENTS FILED AS PART OF THIS REPORT:
(1) AND (2) FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The financial statements and financial statement schedules
incorporated by reference or included in this report are listed in
the accompanying Index to Financial Statements and Financial
Statement Schedules set forth on pages F-2 and F-3 of this report,
which is incorporated herein by reference.
NOTICE REGARDING ARTHUR ANDERSEN LLP
Arthur Andersen LLP audited our consolidated financial statements
for the three years in the period ended September 30, 2001, and
issued a report thereon dated November 16, 2001. Arthur Andersen LLP
has not reissued its report or consented to the incorporation by
reference of such report into the Partnership's prospectuses for the
offer and sale of Common Units and debt securities. On June 15,
2002, Arthur Andersen LLP was convicted of obstruction of justice by
a federal jury in Houston, Texas in connection with Arthur Andersen
LLP's work for Enron Corp. On September 15, 2002, a federal judge
upheld this conviction. Arthur Andersen LLP ceased its audit
practice before the SEC on August 31, 2002. Effective May 21, 2002,
we terminated the engagement of Arthur Andersen LLP as our
independent accountants and engaged PricewaterhouseCoopers LLP to
serve as our independent accountants for the fiscal year ending
September 30, 2002. Because of the circumstances currently affecting
Arthur Andersen LLP, as a practical matter it may not be able to
satisfy any claims arising from the provision of auditing services
to us, including claims available to security holders under federal
and state securities laws.
-47-
(3) LIST OF EXHIBITS:
The exhibits filed as part of this report are as follows (exhibits
incorporated by reference are set forth with the name of the
registrant, the type of report and registration number or last date
of the period for which it was filed, and the exhibit number in such
filing):
INCORPORATION BY REFERENCE
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
----------- ------- ---------- ------ -------
2.1 Merger and Contribution Agreement among AmeriGas Registration 10.21
AmeriGas Partners, L.P., AmeriGas Propane, Partners, L.P. Statement on
L.P., New AmeriGas Propane, Inc., AmeriGas Form S-4 (No.
Propane, Inc., AmeriGas Propane-2, Inc., Cal 33-92734)
Gas Corporation of America, Propane Transport,
Inc. and NORCO Transportation Company
2.2 Conveyance and Contribution Agreement among AmeriGas Registration 10.22
AmeriGas Partners, L.P., AmeriGas Propane, Partners, L.P. Statement on
L.P. and Petrolane Incorporated Form S-4 (No.
33-92734)
3.1 Second Amended and Restated Agreement of AmeriGas Form 8-K 1
Limited Partnership of AmeriGas Partners, L.P. Partners, L.P. (9/30/00)
dated as of September 30, 2000
3.2 Certificate of Incorporation of AmeriGas AmeriGas Registration 3.3
Finance Corp. Partners, L.P. Statement on
Form S-4 (No.
33-92734)
3.3 Certificate of Incorporation of AmeriGas Eagle AmeriGas Registration 3.2
Finance Corp. Partners, L.P. Statement on
Form S-4 (No.
333-72986)
3.4 Certificate of Incorporation of AP Eagle AmeriGas Registration 3.3
Finance Corp. Partners, L.P. Statement on
Form S-4 (No.
333-72986)
3.5 Bylaws of AmeriGas Finance Corp. AmeriGas Registration 3.4
Partners, L.P. Statement on
Form S-4 (No.
33-92734)
-48-
INCORPORATION BY REFERENCE
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
----------- ------- ---------- ------ -------
3.6 By-Laws of AmeriGas Eagle Finance Corp. AmeriGas Registration 3.4
Partners, L.P. Statement on
Form S-3 (No.
333-72986)
3.7 By-Laws of AP Eagle Finance Corp. AmeriGas Registration 3.5
Partners, L.P. Statement on
Form S-3 (No.
333-72986)
3.8 Amended and Restated Agreement of Limited AmeriGas Form 10-K 3.8
Partnership of AmeriGas Eagle Propane, L.P. Partner, L.P. (9/30/01)
dated July 19, 1999
3.9 Amended and Restated Agreement of Limited AmeriGas Form 10-K 3.9
Partnership of AmeriGas Propane, L.P. dated as Partners, L.P. (9/30/01)
of April 12, 1995
4 Instruments defining the rights of security
holders, including indentures. (The
Partnership agrees to furnish to the
Commission upon request a copy of any
instrument defining the rights of holders of
long-term debt not required to be filed
pursuant to Item 601(b)(4) of Regulation S-K)
4.1 Indenture dated as of April 19, 1995 among AmeriGas Form 10-Q 4.1
AmeriGas Partners, L.P., AmeriGas Finance Partners, L.P. 3/31/95
Corp., and First Union National Bank
(formerly, First Fidelity Bank, National
Association) as Trustee
4.2 Registration Rights Agreement dated as of AmeriGas Form 10-Q 4.3
April 19, 1995 among Donaldson, Lufkin & Partners, L.P. (3/31/95)
Jenrette Securities Corporation, Smith Barney,
Inc., AmeriGas Partners, L.P. and AmeriGas
Finance Corp.
4.3 Note Agreement dated as of April 12, 1995 AmeriGas Form 10-Q 10.8
among The Prudential Insurance Company of Partners, L.P. (3/31/95)
America, Metropolitan Life Insurance Company,
and certain other institutional investors and
AmeriGas Propane, L.P., New AmeriGas Propane,
Inc. and Petrolane Incorporated
-49-
INCORPORATION BY REFERENCE
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
----------- ------- ---------- ------ -------
4.4 First Amendment dated as of September 12, 1997 AmeriGas Form 10-Q 4.5
to Note Agreement dated as of April 12, 1995 Partners, L.P. (9/30/97)
4.5 Second Amendment dated as of September 15, AmeriGas Form 10-K 4.6
1998 to Note Agreement dated as of April 12, Partners, L.P. (9/30/98)
1995
4.6 Third Amendment dated as of March 23, 1999 to AmeriGas Form 10-Q 10.2
Note Agreement dated as of April 12, 1995 Partners, L.P. (3/31/99)
4.7 Fourth Amendment dated as of March 16, 2000 to AmeriGas Form 10-Q 10.2
Note Agreement dated as of April 12, 1995 Partners, L.P. (6/30/00)
4.8 Fifth Amendment dated as of August 1, 2001 to AmeriGas Form 10-K 4.8
Note Agreement dated as of April 12, 1995 Partners, L.P. (9/30/01)
4.9 Indenture dated April 4, 2001 among AmeriGas AmeriGas Form 10-Q 4
Partners, L.P., AmeriGas Eagle Finance Corp., Partners, L.P. (6/30/01)
and First Union National Bank, as Trustee
4.10 Indenture dated August 21, 2001 among AmeriGas AmeriGas Registration 4.2
Partners, L.P., AP Eagle Finance Corp. and Partners, L.P. Statement on
First Union National Bank as trustee Form S-4 (No.
333-72986)
4.11 Registration Rights Agreement dated as of AmeriGas Registration 4.5
April 4, 2001 among AmeriGas Partners, L.P., Partners, L.P. Statement on
AmeriGas Eagle Finance Corp., AmeriGas Form S-4 (No.
Propane, L.P., AmeriGas Propane, Inc., Credit 333-72986)
Suisse First Boston Corporation and Banc of
America Securities, LLC
4.12 Registration Rights Agreement dated as of AmeriGas Registration 4.6
August 21, 2001 among AmeriGas Partners, L.P. Partners, L.P. Statement on
AP Eagle Finance Corp., AmeriGas Propane, Form S-4 (No.
L.P., AmeriGas Propane, Inc., Credit Suisse 333-72986)
First Boston Corporation and Salomon Smith
Barney, Inc.
-50-
INCORPORATION BY REFERENCE
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
----------- ------- ---------- ------ -------
*10.1 Second Amended and Restated Credit Agreement
dated as of August 22, 2002 among AmeriGas
Propane, L.P., AmeriGas Propane, Inc.,
Petrolane Incorporated, Bank of America, N.A.,
as Issuing Bank and Swingline Bank, and
certain banks
*10.2** AmeriGas Propane, Inc. Discretionary
Long-Term Incentive Plan for Non-Executive
Key Employees
10.3 [Intentionally omitted]
10.4 [Intentionally omitted]
10.5 [Intentionally omitted]
10.6 [Intentionally omitted]
10.7 Intercreditor and Agency Agreement dated as AmeriGas Form 10-Q 10.2
of April 19, 1995 among AmeriGas Propane, Partners, L.P. (3/31/95)
Inc., Petrolane Incorporated, AmeriGas
Propane, L.P., Bank of America National Trust
and Savings Association ("Bank of America")
as Agent, Mellon Bank, N.A. as Cash
Collateral Sub-Agent, Bank of America as
Collateral Agent and certain creditors of
AmeriGas Propane, L.P.
10.8 First Amendment dated as of July 31, 2001 to AmeriGas Form 10-K 10.8
Intercreditor and Agency Agreement dated as Partners, L.P. (9/30/01)
of April 19, 1995
10.9 General Security Agreement dated as of April AmeriGas Form 10-Q 10.3
19, 1995 among AmeriGas Propane, L.P., Bank Partners, L.P. (3/31/95)
of America National Trust and Savings
Association and Mellon Bank, N.A.
10.10 First Amendment dated as of July 31, 2001 to AmeriGas Form 10-K 10.10
General Security Agreement dated as of April Partners, L.P. (9/30/01)
19, 1995
-51-
INCORPORATION BY REFERENCE
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
----------- ------- ---------- ------ -------
10.11 Subsidiary Security Agreement dated as of AmeriGas Form 10-Q 10.4
April 19, 1995 among AmeriGas Propane, L.P., Partners, L.P. (3/31/95)
Bank of America National Trust and Savings
Association as Collateral Agent and Mellon
Bank, N.A. as Cash Collateral Agent
10.12 First Amendment dated as of July 31, 2001 to AmeriGas Form 10-K 10.12
Subsidiary Security Agreement dated as of Partners, L.P. (9/30/01)
April 19, 1995
10.13 Restricted Subsidiary Guarantee dated as of AmeriGas Form 10-Q 10.5
April 19, 1995 by AmeriGas Propane, L.P. for Partners, L.P. (3/31/95)
the benefit of Bank of America National Trust
and Savings Association, as Collateral Agent
10.14 Trademark License Agreement dated April 19, AmeriGas Form 10-Q 10.6
1995 among UGI Corporation, AmeriGas, Inc., Partners, L.P. (3/31/95)
AmeriGas Propane, Inc., AmeriGas Partners,
L.P. and AmeriGas Propane, L.P.
10.15 Trademark License Agreement dated April 19, AmeriGas Form 10-Q 10.7
1995 among AmeriGas Propane, Inc., AmeriGas Partners, L.P. (3/31/95)
Partners, L.P. and AmeriGas Propane, L.P.
10.16 Stock Purchase Agreement dated May 27, 1989, Petrolane Registration on 10.16(a)
as amended and restated July 31, 1989, between Incorporated/ Form S-1 (No.
Texas Eastern Corporation and QFB Partners AmeriGas, Inc. 33-69450)
10.17 Amended and Restated Sublease Agreement dated UGI Form 10-K 10.35
April 1, 1988, between Southwest Salt Co. and Corporation (9/30/94)
AP Propane, Inc. (the "Southwest Salt Co.
Agreement")
10.18 Letter dated July 8, 1998 pursuant to Article UGI Form 10-K 10.5
1, Section 1.2 of the Southwest Salt Co. Corporation (9/30/99)
Agreement re: option to renew for period of
June 1, 2000 to May 31, 2005
10.19 Financing Agreement dated as of November 5, AmeriGas Form 10-K 10.12
1997 between AmeriGas Propane, Inc. and Partners, L.P. (9/30/97)
AmeriGas Propane, L.P.
-52-
INCORPORATION BY REFERENCE
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
----------- ------- ---------- ------ -------
10.20 Agreement by Petrolane Incorporated and Petrolane Form 10-K 10.13
certain of its subsidiaries parties thereto Incorporated (9/23/94)
("Subsidiaries") for the Sale of the
Subsidiaries' Inventory and Assets to the
Goodyear Tire & Rubber Company and D.C.H.,
Inc., as Purchaser, dated as of December 18,
1985
10.21** UGI Corporation 1992 Stock Option and Dividend UGI Form 10-Q 10(ee.)
Equivalent Plan, as amended May 19, 1992 Corporation (6/30/92)
10.22** UGI Corporation Annual Bonus Plan dated March UGI Form 10-Q 10.4
8, 1996 Corporation (6/30/96)
10.23** AmeriGas Propane, Inc. Annual Bonus Plan AmeriGas Form 10-K 10.17
effective October 1, 1998 Partners, L.P. (9/30/99)
10.24** 1997 Stock Purchase Loan Plan UGI Form 10-K 10.16
Corporation (9/30/97)
10.25** UGI Corporation Senior Executive Employee UGI Form 10-K 10.12
Severance Pay Plan effective January 1, 1997 Corporation (9/30/97)
10.26** AmeriGas Propane, Inc. Executive Employee AmeriGas Form 10-Q 10.1
Severance Pay Plan effective January 1, 1997 Partners, L.P. (12/31/96)
10.27** Amendment No. 1 to AmeriGas Propane, Inc. AmeriGas Form 10-Q 10
Executive Employee Severance Pay Plan Partners, L.P. (6/30/98)
10.28** UGI Corporation 1992 Non-Qualified Stock UGI Form 10-K 10.39
Option Plan, as Amended Corporation (9/30/00)
10.29** Form of AmeriGas Propane, Inc. 2000 Long-Term AmeriGas Form 10-K 10.29
Incentive Plan Partners, L.P. (9/30/01)
10.30** UGI Corporation 2000 Stock Incentive Plan UGI Form 10-Q 10.1
Corporation (6/30/99)
10.31** AmeriGas Propane, Inc. Supplemental Executive AmeriGas Form 10-K 10.27
Retirement Plan effective October 1, 1996 Partners, L.P. (9/30/97)
10.32** UGI Corporation 1997 Stock Option and Dividend UGI Form 10-Q 10.2
Equivalent Plan Corporation (3/31/97)
-53-
INCORPORATION BY REFERENCE
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
----------- ------- ---------- ------ -------
10.33** UGI Corporation Supplemental Executive UGI Form 10-Q 10
Retirement Plan Amended and Restated effective Corporation (6/30/98)
October 1, 1996
10.34** Description of Change of Control arrangements UGI Form 10-K 10.33
for Messrs. Greenberg and Bovaird Corporation (9/30/99)
10.35** Description of Change of Control arrangements AmeriGas Form 10-K 10.31
for Messrs. Bissell, Grady and Knauss Partners, L. (9/30/99)
P.
10.36 Purchase Agreement by and among Columbia AmeriGas Form 8-K 10.1
Energy Group, Columbia Propane Corporation, CP Partners, L.P. (8/8/01)
Holdings, Inc., Columbia Propane, L.P.,
AmeriGas Propane, L.P., AmeriGas Partners,
L.P. and AmeriGas Propane, Inc. dated as of
January 30, 2001 and amended and restated
August 7, 2001
10.37 Purchase Agreement by and among Columbia National Form 8-K 10.5
Propane, L.P., CP Holdings, Inc., Columbia Propane (4/19/99)
Propane Corporation, National Propane Partners, L.P.
Partners, L.P., National Propane Corporation,
National Propane SPG, Inc., and Triarc
Companies, Inc. dated as of April 5, 1999
10.38 Capital Contribution Agreement dated as of AmeriGas Form 8-K 10.2
August 21, 2001 by and between Columbia Partners, L.P. (8/21/01)
Propane, L.P. and AmeriGas Propane, L.P.
acknowledged and agreed to by CP Holdings, Inc.
10.39 Promissory Note by National Propane L.P., a AmeriGas Form 10-K 10.39
Delaware limited partnership in favor of Partners, L.P. (9/30/01)
Columbia Propane Corporation dated July 19,
1999
10.40 Loan Agreement dated July 19, 1999, between AmeriGas Form 10-K 10.40
National Propane, L.P. and Columbia Propane Partners, L.P. (9/30/01)
Corporation
10.41 First Amendment dated August 21, 2001 to Loan AmeriGas Form 10-K 10.41
Agreement dated July 19, 1999 between National Partners, L.P. (9/30/01)
Propane, L.P. and Columbia Propane Corporation
-54-
INCORPORATION BY REFERENCE
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
----------- ------- ---------- ------ -------
10.42 Columbia Energy Group Payment Guaranty dated AmeriGas Form 10-K 10.42
April 5, 1999 Partners, L.P. (9/30/01)
10.43 Ground Lease dated August 13, 2001 by and AmeriGas Form 10-K 10.43
between Reading Terminals Corporation and Partners, L.P. (9/30/01)
Columbia Propane Corporation
10.44 Master Lease dated August 20, 2001 between AmeriGas Form 10-K 10.44
AmeriGas Propane, L.P. and Columbia Propane, Partners, L.P. (9/30/01)
L.P.
10.45 Master Sublease dated August 20, 2001 between AmeriGas Form 10-K 10.45
AmeriGas Propane, L.P. and Columbia Propane, Partners, L.P. (9/30/01)
L.P.
10.46 Keep Well Agreement by and between AmeriGas AmeriGas Form 10-K 10.46
Propane, L.P. and Columbia Propane Corporation Partners, L.P. (9/30/01)
dated August 21, 2001
10.47 Management Services Agreement effective as of AmeriGas Form 10-K 10.47
August 21, 2001 between AmeriGas Propane, Inc. Partners, L.P. (9/30/01)
and AmeriGas Eagle Holdings, Inc., the general
partner of AmeriGas Eagle Propane, L.P.
*13 Pages 10 through 27 of the AmeriGas Partners,
L.P. Annual Report for the year ended
September 30, 2002
18 Letter of Arthur Andersen LLP regarding change AmeriGas Form 10-Q 18
in accounting principles Partners L.P. (12/31/00)
*21 Subsidiaries of AmeriGas Partners, L.P.
*23 Consent of PricewaterhouseCoopers LLP
*99 Certification by the Chief Executive Officer
and the Chief Financial Officer relating to
the Registrant's Report on Form 10-K for the
fiscal year ended September 30, 2002
* Filed herewith.
** As required by Item 14(a)(3), this exhibit is identified as a compensatory
plan or arrangement.
-55-
(b) Reports on Form 8-K.
The Company filed the following Current Reports on Form 8-K during the
fourth quarter of fiscal year 2002:
DATE ITEM NUMBER(S) CONTENT
7/02/02 4,7 Changes in Registrant's Certifying Accountant
Letter of Arthur Andersen LLP dated June 28, 2002 regarding
Changes in Registrant's Certifying Accountant
News Release dated May 22, 2002 Announcing the Appointment of
PricewaterhouseCoopers as the Company's Independent Auditor
for the Fiscal Year Ended September 30, 2002
-56-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
AMERIGAS PARTNERS, L.P.
Date: December 16, 2002 By: AmeriGas Propane, Inc.
its General Partner
By: Martha B. Lindsay
----------------------------------
Martha B. Lindsay
Vice President - Finance
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below on December 16, 2002 by the following persons on
behalf of the Registrant and in the capacities with AmeriGas Propane, Inc.,
General Partner, indicated.
SIGNATURE TITLE
--------- -----
Eugene V.N. Bissell President, and Chief
- -------------------------------- Executive Officer
Eugene V.N. Bissell (Principal Executive Officer)
and Director
Lon R. Greenberg Chairman and Director
- --------------------------------
Lon R. Greenberg
Martha B. Lindsay Vice President - Finance
- -------------------------------- and Chief Financial Officer
Martha B. Lindsay (Principal Financial Officer)
Richard R. Eynon Controller and
- -------------------------------- Chief Accounting Officer
Richard R. Eynon (Principal Accounting Officer)
-57-
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below on December 16, 2002 by the following persons on
behalf of the Registrant and in the capacities with AmeriGas Propane, Inc.,
General Partner, indicated.
SIGNATURE TITLE
--------- -----
Thomas F. Donovan Director
- ------------------------------
Thomas F. Donovan
Richard C. Gozon Director
- ------------------------------
Richard C. Gozon
Director
- ------------------------------
William J. Marrazzo
James W. Stratton Director
- ------------------------------
James W. Stratton
Stephen A. Van Dyck Director
- ------------------------------
Stephen A. Van Dyck
Roger B. Vincent Director
- ------------------------------
Roger B. Vincent
-58-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
AMERIGAS FINANCE CORP.
Date: December 16, 2002 By: Martha B. Lindsay
-------------------------------
Martha B. Lindsay
Vice President - Finance
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below on December 16, 2002 by the following persons on
behalf of the Registrant and in the capacities indicated.
SIGNATURE TITLE
--------- -----
Eugene V.N. Bissell President (Principal Executive
- ------------------------------- Officer) and Director
Eugene V.N. Bissell
Martha B. Lindsay Vice President - Finance
- ------------------------------- and Chief Financial Officer
Martha B. Lindsay (Principal Financial Officer)
and Director
Richard R. Eynon Controller and Chief Accounting Officer
- ------------------------------ (Principal Accounting Officer)
Richard R. Eynon
Brendan P. Bovaird Director
- ------------------------------
Brendan P. Bovaird
-59-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
AMERIGAS EAGLE FINANCE CORP.
Date: December 16, 2002 By: Martha B. Lindsay
-------------------------------
Martha B. Lindsay
Vice President - Finance
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below on December 16, 2002 by the following persons on
behalf of the Registrant and in the capacities indicated.
SIGNATURE TITLE
--------- -----
Eugene V.N. Bissell President (Principal Executive
- --------------------------------------- Officer) and Director
Eugene V.N. Bissell
Martha B. Lindsay Vice President - Finance
- --------------------------------------- and Chief Financial Officer
Martha B. Lindsay (Principal Financial Officer)
and Director
Richard R. Eynon Controller and Chief Accounting Officer
- --------------------------------------- (Principal Accounting Officer)
Richard R. Eynon
Brendan P. Bovaird Director
- --------------------------------------
Brendan P. Bovaird
-60-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
AP EAGLE FINANCE CORP.
Date: December 16, 2002 By: Martha B. Lindsay
-------------------------------
Martha B. Lindsay
Vice President - Finance
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below on December 16, 2002 by the following persons on
behalf of the Registrant and in the capacities indicated.
SIGNATURE TITLE
--------- -----
Eugene V.N. Bissell President (Principal Executive
- --------------------------------------- Officer) and Director
Eugene V.N. Bissell
Martha B. Lindsay Vice President - Finance
- --------------------------------------- and Chief Financial Officer
Martha B. Lindsay (Principal Financial Officer)
and Director
Richard R. Eynon Controller and Chief Accounting Officer
- --------------------------------------- (Principal Accounting Officer)
Richard R. Eynon
Brendan P. Bovaird Director
- --------------------------------------
Brendan P. Bovaird
-61-
CERTIFICATIONS
I, Eugene V. N. Bissell, certify that:
1. I have reviewed this annual report on Form 10-K of AmeriGas Partners,
L.P., AmeriGas Finance Corp., AmeriGas Eagle Finance Corp. and AP Eagle
Finance Corp.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrants as of, and for, the periods presented in this annual
report;
4. The registrants' other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrants and
we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrants, including their
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this annual
report is being prepared;
(b) evaluated the effectiveness of the registrants' disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrants' other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants' auditors and the audit
committee of each registrant's board of directors:
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants' ability to
record, process, summarize and report financial data and have
identified for the registrants' auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants'
internal controls; and
-62-
6. The registrants' other certifying officer and I have indicated in this
annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 20, 2002
Eugene V. N. Bissell
-----------------------------------------
Eugene V. N. Bissell
President and Chief Executive Officer
AmeriGas Propane, Inc.
AmeriGas Finance Corp.
AmeriGas Eagle Finance Corp.
AP Eagle Finance Corp.
-63-
I, Martha B. Lindsay, certify that:
1. I have reviewed this annual report on Form 10-K of AmeriGas Partners,
L.P., AmeriGas Finance Corp., AmeriGas Eagle Finance Corp. and AP Eagle
Finance Corp.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrants as of, and for, the periods presented in this annual
report;
4. The registrants' other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrants and
we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrants, including their
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this annual
report is being prepared;
(b) evaluated the effectiveness of the registrants' disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrants' other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants' auditors and the audit
committee of each registrant's board of directors:
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants' ability to
record, process, summarize and report financial data and have
identified for the registrants' auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants'
internal controls; and
-64-
6. The registrants' other certifying officer and I have indicated in this
annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 20, 2002
Martha B. Lindsay
-----------------------------------------
Martha B. Lindsay
Vice President - Finance and Chief Financial Officer
AmeriGas Propane, Inc.
AmeriGas Finance Corp.
AmeriGas Eagle Finance Corp.
AP Eagle Finance Corp.
-65-
AMERIGAS PARTNERS, L.P.
AMERIGAS FINANCE CORP.
AMERIGAS EAGLE FINANCE CORP.
AP EAGLE FINANCE CORP.
FINANCIAL INFORMATION
FOR INCLUSION IN ANNUAL REPORT ON
FORM 10-K FOR THE FISCAL
YEAR ENDED SEPTEMBER 30, 2002
F-1
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The consolidated financial statements of AmeriGas Partners, L.P. and
subsidiaries, together with the reports thereon of PricewaterhouseCoopers LLP
dated November 15, 2002 (except for Note 17 as to which the date is December
16, 2002) and Arthur Andersen LLP dated November 16, 2001, listed in the
following index, are included in AmeriGas Partners' 2002 Annual Report to
Unitholders and are incorporated herein by reference. With the exception of the
pages listed in this index and information incorporated in Items 5 and 8, the
2002 Annual Report to Unitholders is not to be deemed filed as part of this
Report.
Annual Report
Form 10-K to Unitholders
(page) (page)
------ ------
AmeriGas Partners L.P. and Subsidiaries
Financial Statements:
Reports of Independent Accountants Exhibit 13 26
Consolidated Balance Sheets as of September 30,
2002 and 2001 Exhibit 13 10
Consolidated Statements of Operations for the years
ended September 30, 2002, 2001 and 2000 Exhibit 13 11
Consolidated Statements of Cash Flows for the years
ended September 30, 2002, 2001 and 2000 Exhibit 13 12
Consolidated Statements of Partners' Capital for the
years ended September 30, 2002, 2001 and 2000 Exhibit 13 13
Notes to Consolidated Financial Statements Exhibit 13 14 to 25
Supplementary Data (unaudited):
Quarterly Data for the years ended
September 30, 2002 and 2001 Exhibit 13 25
Financial Statements Schedules:
I- Condensed Financial Information of Registrant
(Parent Company) S-1 to S-3
II- Valuation and Qualifying Accounts S-4 to S-5
Reports of Independent Accountants on Financial
Statement Schedules S-6 to S-7
F-2
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES (continued)
Form 10-K
(page)
---------
AmeriGas Finance Corp.
Reports of Independent Accountants F-5 to F-6
Balance Sheets as of September 30, 2002 and 2001 F-7
Statements of Stockholder's Equity for the years
ended September 30, 2002, 2001 and 2000 F-8
Note to Financial Statements F-9
AmeriGas Eagle Finance Corp.
Reports of Independent Accountants F-11 to F-12
Balance Sheets as of September 30, 2002 and 2001 F-13
Statements of Stockholder's Equity for the year
ended September 30, 2002 and for the period from
February 22, 2001 (inception) through
September 30, 2001 F-14
Note to Financial Statements F-15
AP Eagle Finance Corp.
Reports of Independent Accountants F-17 to F-18
Balance Sheets as of September 30, 2002 and 2001 F-19
Statements of Stockholder's Equity for the year
ended September 30, 2002 and for the period
from April 12, 2001 (inception) through
September 30, 2001 F-20
Note to Financial Statements F-21
We have omitted all other financial statement schedules because the required
information is either (1) not present; (2) not present in amounts sufficient to
require submission of the schedule; or (3) the information required is included
elsewhere in the financial statements or related notes.
F-3
AMERIGAS FINANCE CORP.
FINANCIAL STATEMENTS
for the years ended September 30, 2002, 2001 and 2000
F-4
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of AmeriGas Propane, Inc.:
In our opinion, the accompanying balance sheet and the related statement of
stockholder's equity, present fairly, in all material respects, the financial
position of AmeriGas Finance Corp. at September 30, 2002 in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the management of AmeriGas
Propane, Inc.; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these statements in
accordance with auditing standards generally accepted in the United States of
America, which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion. The financial statements of
AmeriGas Finance Corp. as of September 30, 2001, and for each of the two years
in the period ended September 30, 2001, were audited by other independent
accountants who have ceased operations. Those independent accountants expressed
an unqualified opinion on those financial statements in their report dated
November 16, 2001.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
November 15, 2002
F-5
THIS REPORT IS A COPY OF THE PREVIOUSLY ISSUED ACCOUNTANT'S
REPORT OF ARTHUR ANDERSEN LLP AND HAS NOT BEEN REISSUED BY
ARTHUR ANDERSEN LLP.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To AmeriGas Finance Corp.:
We have audited the accompanying balance sheet of AmeriGas Finance Corp. (a
Delaware corporation and a wholly owned subsidiary of AmeriGas Partners, L.P.)
as of September 30, 2001 and 2000, and the related statements of stockholder's
equity for each of the three years in the period ended September 30, 2001.
These financial statements are the responsibility of the management of AmeriGas
Propane, Inc. Our responsibility is to express an opinion on these financial
statements based upon our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. 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 our audit provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AmeriGas Finance Corp. as of
September 30, 2001 and 2000, in conformity with accounting principles generally
accepted in the United States.
ARTHUR ANDERSEN LLP
Philadelphia, Pennsylvania
November 16, 2001
F-6
AMERIGAS FINANCE CORP.
(A WHOLLY OWNED SUBSIDIARY OF AMERIGAS PARTNERS, L.P.)
BALANCE SHEETS
September 30,
---------------------------
2002 2001
---------- ----------
ASSETS
Cash $ 1,000 $ 1,000
---------- ----------
Total assets $ 1,000 $ 1,000
========== ==========
STOCKHOLDER'S EQUITY
Common stock, without par value; 100 shares authorized,
issued and outstanding $ - $ -
Additional paid-in capital 1,000 1,000
---------- ----------
Total stockholder's equity $ 1,000 $ 1,000
========== ==========
See accompanying note to financial statements.
F-7
AMERIGAS FINANCE CORP.
(A WHOLLY OWNED SUBSIDIARY OF AMERIGAS PARTNERS, L.P.)
STATEMENTS OF STOCKHOLDER'S EQUITY
Additional
Common Paid-in Retained
Stock Capital Earnings
-------------- ------------- -------------
BALANCE SEPTEMBER 30, 2000 $ - $ 1,000 $ -
-------- --------- --------
BALANCE SEPTEMBER 30, 2001 - 1,000 -
-------- --------- --------
BALANCE SEPTEMBER 30, 2002 $ - $ 1,000 $ -
======== ========= ========
See accompanying note to financial statements.
F-8
AMERIGAS FINANCE CORP.
(A WHOLLY OWNED SUBSIDIARY OF AMERIGAS PARTNERS, L.P.)
NOTE TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001
AmeriGas Finance Corp. (AmeriGas Finance), a Delaware corporation, was formed on
March 13, 1995 and is a wholly owned subsidiary of AmeriGas Partners, L.P.
(AmeriGas Partners).
On April 19, 1995, AmeriGas Partners and AmeriGas Finance jointly and severally
issued $100,000,000 face value of 10.125% Senior Notes due April 2007 (Notes).
In November 2001, AmeriGas Partners redeemed prior to maturity $15,000,000 face
value of the Notes at a redemption price of 103.375%.
AmeriGas Partners owns all 100 shares of AmeriGas Finance common stock
outstanding.
F-9
AMERIGAS EAGLE FINANCE CORP.
FINANCIAL STATEMENTS
for the year ended September 30, 2002 and
for the period from February 22, 2001 (inception)
through September 30, 2001
F-10
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of AmeriGas Propane, Inc.:
In our opinion, the accompanying balance sheet and the related statement of
stockholder's equity, present fairly, in all material respects, the financial
position of AmeriGas Eagle Finance Corp. at September 30, 2002 in conformity
with accounting principles generally accepted in the United States of America.
These financial statements are the responsibility of the management of AmeriGas
Propane, Inc.; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these statements in
accordance with auditing standards generally accepted in the United States of
America, which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion. The financial statements of
AmeriGas Eagle Finance Corp. as of and for the period ended September 30, 2001,
were audited by other independent accountants who have ceased operations. Those
independent accountants expressed an unqualified opinion on those financial
statements in their report dated November 16, 2001.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
November 15, 2002
F-11
THIS REPORT IS A COPY OF THE PREVIOUSLY ISSUED ACCOUNTANT'S
REPORT OF ARTHUR ANDERSEN LLP AND HAS NOT BEEN REISSUED
BY ARTHUR ANDERSEN LLP.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To AmeriGas Eagle Finance Corp.:
We have audited the accompanying balance sheet of AmeriGas Eagle Finance Corp.
(a Delaware corporation and a wholly owned subsidiary of AmeriGas Partners,
L.P.) as of September 30, 2001, and the related statements of stockholder's
equity for the period from February 22, 2001 (inception) through September 30,
2001. These financial statements are the responsibility of the management of
AmeriGas Propane, Inc. Our responsibility is to express an opinion on these
financial statements based upon our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. 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 our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AmeriGas Eagle Finance Corp. as
of September 30, 2001, in conformity with accounting principles generally
accepted in the United States.
ARTHUR ANDERSEN LLP
Philadelphia, Pennsylvania
November 16, 2001
F-12
AMERIGAS EAGLE FINANCE CORP.
(A WHOLLY OWNED SUBSIDIARY OF AMERIGAS PARTNERS, L.P.)
BALANCE SHEETS
September 30,
------------------------
2002 2001
-------- --------
ASSETS
Cash $ 1,000 $ 1,000
-------- --------
Total assets $ 1,000 $ 1,000
======== ========
STOCKHOLDER'S EQUITY
Common stock, without par value; 100 shares
authorized, issued and outstanding $ - $ -
Additional paid-in capital 1,000 1,000
-------- --------
Total stockholder's equity $ 1,000 $ 1,000
======== ========
See accompanying note to financial statements.
F-13
AMERIGAS EAGLE FINANCE CORP.
(A WHOLLY OWNED SUBSIDIARY OF AMERIGAS PARTNERS, L.P.)
STATEMENTS OF STOCKHOLDER'S EQUITY
Additional
Common Paid-in Retained
Stock Capital Earnings
------------ ------------- ------------
BALANCE FEBRUARY 22, 2001 $ - $ - $ -
Issuance of AmeriGas Eagle Finance Corp.
Common Stock - 1,000 -
--------- ---------- ---------
BALANCE SEPTEMBER 30, 2001 - 1,000 -
--------- ---------- ---------
BALANCE SEPTEMBER 30, 2002 $ - $ 1,000 $ -
========= ========== =========
See accompanying note to financial statements.
F-14
AMERIGAS EAGLE FINANCE CORP.
(A WHOLLY OWNED SUBSIDIARY OF AMERIGAS PARTNERS, L.P.)
NOTE TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001
AmeriGas Eagle Finance Corp. (Eagle Finance), a Delaware corporation, was formed
on February 22, 2001 and is a wholly owned subsidiary of AmeriGas Partners, L.P.
(AmeriGas Partners).
On April 4, 2001, AmeriGas Partners and Eagle Finance jointly and severally
issued $60,000,000 face value of 10% Senior Notes due April 2006.
AmeriGas Partners owns all 100 shares of Eagle Finance common stock outstanding.
F-15
AP EAGLE FINANCE CORP.
FINANCIAL STATEMENTS
for the year ended September 30, 2002 and
for the period from April 12, 2001 (inception)
through September 30, 2001
F-16
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of AmeriGas Propane, Inc.:
In our opinion, the accompanying balance sheet and the related statement of
stockholder's equity, present fairly, in all material respects, the financial
position of AP Eagle Finance Corp. at September 30, 2002 in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the management of AmeriGas
Propane, Inc.; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these statements in
accordance with auditing standards generally accepted in the United States of
America, which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion. The financial statements of
AP Eagle Finance Corp. as of and for the period ended September 30, 2001, were
audited by other independent accountants who have ceased operations. Those
independent accountants expressed an unqualified opinion on those financial
statements in their report dated November 16, 2001.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
November 15, 2002
F-17
THIS REPORT IS A COPY OF THE PREVIOUSLY ISSUED ACCOUNTANT'S
REPORT OF ARTHUR ANDERSEN LLP AND HAS NOT BEEN REISSUED BY
ARTHUR ANDERSEN LLP.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To AP Eagle Finance Corp.:
We have audited the accompanying balance sheet of AP Eagle Finance Corp. (a
Delaware corporation and a wholly owned subsidiary of AmeriGas Partners, L.P.)
as of September 30, 2001, and the related statements of stockholder's equity for
the period from April 12, 2001 (inception) through September 30, 2001. These
financial statements are the responsibility of the management of AmeriGas
Propane, Inc. Our responsibility is to express an opinion on these financial
statements based upon our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. 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 our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AP Eagle Finance Corp. as of
September 30, 2001, in conformity with accounting principles generally accepted
in the United States.
ARTHUR ANDERSEN LLP
Philadelphia, Pennsylvania
November 16, 2001
F-18
AP EAGLE FINANCE CORP.
(A WHOLLY OWNED SUBSIDIARY OF AMERIGAS PARTNERS, L.P.)
BALANCE SHEETS
September 30,
---------------------------
2002 2001
---------- ----------
ASSETS
Cash $ 1,000 $ 1,000
---------- ----------
Total assets $ 1,000 $ 1,000
========== ==========
STOCKHOLDER'S EQUITY
Common stock, without par value; 100 shares authorized,
issued and outstanding $ - $ -
Additional paid-in capital 1,000 1,000
---------- ----------
Total stockholder's equity $ 1,000 $ 1,000
========== ==========
See accompanying note to financial statements.
F-19
AP EAGLE FINANCE CORP.
(A WHOLLY OWNED SUBSIDIARY OF AMERIGAS PARTNERS, L.P.)
STATEMENTS OF STOCKHOLDER'S EQUITY
Additional
Common Paid-in Retained
Stock Capital Earnings
------------- -------------- -------------
BALANCE APRIL 12, 2001 $ - $ - $ -
Issuance of AP Eagle Finance Corp.
Common Stock - 1,000 -
--------- ---------- ---------
BALANCE SEPTEMBER 30, 2001 - 1,000 -
--------- ---------- ---------
BALANCE SEPTEMBER 30, 2002 $ - $ 1,000 $ -
========= ========== =========
See accompanying note to financial statements.
F-20
AP EAGLE FINANCE CORP.
(A WHOLLY OWNED SUBSIDIARY OF AMERIGAS PARTNERS, L.P.)
NOTE TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001
AP Eagle Finance Corp. (AP Finance), a Delaware corporation, was formed on April
12, 2001 and is a wholly owned subsidiary of AmeriGas Partners, L.P. (AmeriGas
Partners).
On August 21, 2001, AmeriGas Partners and AP Finance jointly and severally
issued $200,000,000 face value of 8.875% Series A Senior Notes due May 2011. On
December 20, 2001, AmeriGas Partners and AP Finance exchanged $199,985,000 face
value of 8.875% Series A Senior Notes due May 2011 for a like amount of AmeriGas
Partners and AP Finance 8.875% Series B Senior Notes due May 2011 pursuant to a
registered exchange offer. On May 3, 2002, AmeriGas Partners and AP Finance
jointly and severally issued $40,000,000 face value of 8.875% Series B Senior
Notes due May 2011.
AmeriGas Partners owns all 100 shares of AP Finance common stock outstanding.
F-21
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
BALANCE SHEETS
(Thousands of dollars)
September 30,
------------------------------
2002 2001
------------ ------------
ASSETS
Cash $ 593 $ 2
Accounts receivable 7,303 8,246
Investment in AmeriGas Propane, L.P. 615,067 557,122
Deferred charges 7,792 11,511
------------ ------------
Total assets $ 630,755 $ 576,881
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable 1,534 3,985
Accrued interest 14,528 9,662
------------ ------------
Total current liabilities 16,062 13,647
Long-term debt 386,327 359,729
Partners' capital:
Common unitholders 201,656 187,001
Subordinated unitholders 17,846 28,513
General partner 2,218 2,174
Accumulated other comprehensive income (loss) 6,646 (14,183)
------------ ------------
Total partners' capital 228,366 203,505
------------ ------------
Total liabilities and partners' capital $ 630,755 $ 576,881
============ ============
S-1
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
STATEMENTS OF OPERATIONS
(Thousands of dollars)
Year
Ended
September 30,
-----------------------------------------------
2002 2001 2000
------------- ------------- -------------
Operating expenses $ (801) $ (4) $ (53)
Interest expense (35,171) (15,722) (10,430)
------------- ------------- -------------
Loss before income taxes (35,972) (15,726) (10,483)
Income tax expense 88 - -
------------- ------------- -------------
Loss before equity in income of AmeriGas Propane, L.P. (36,060) (15,726) (10,483)
Equity in income before accounting changes
of AmeriGas Propane, L.P. 91,426 68,741 25,679
------------- ------------- -------------
Income before equity in accounting changes
of unconsolidated subsidiaries 55,366 53,015 15,196
Equity in accounting changes of AmeriGas Propane, L.P. - 12,494 -
------------- ------------- -------------
Net income $ 55,366 $ 65,509 $ 15,196
============= ============= =============
General partner's interest in net income $ 554 $ 655 $ 152
============= ============= =============
Limited partners' interest in net income $ 54,812 $ 64,854 $ 15,044
============= ============= =============
Income per limited partner unit - basic and diluted:
Income before accounting changes $ 1.12 $ 1.18 $ 0.36
Cumulative effect of accounting changes, net - 0.28 -
------------- ------------- -------------
Net income $ 1.12 $ 1.46 $ 0.36
============= ============= =============
Average limited partner units outstanding - basic (thousands) 48,909 44,453 41,969
============= ============= =============
Average limited partner units outstanding - diluted (thousands) 48,932 44,453 41,969
============= ============= =============
S-2
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
STATEMENTS OF CASH FLOWS
(Thousands of dollars)
Year
Ended
September 30,
------------------------------------------
2002 2001 2000
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 55,366 $ 65,509 $ 15,196
Reconciliation of net income to net cash from operating activities:
Equity in income of AmeriGas Propane, L.P. (91,426) (81,235) (25,679)
Other, net 3,716 (2,617) 306
Increase (decrease) in accounts receivable 943 (3,183) -
Increase in current liabilities 2,415 8,951 53
----------- ----------- -----------
Net cash used by operating activities (28,986) (12,575) (10,124)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Contributions to AmeriGas Propane, L.P. (97,693) (294,357) -
Distributions from AmeriGas Propane, L.P. 152,004 111,744 103,390
----------- ----------- -----------
Net cash provided (used) by investing activities 54,311 (182,613) 103,390
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions (108,504) (98,435) (93,266)
Issuance of long-term debt 41,600 252,833 -
Repayments of long-term debt (15,000) - -
Proceeds from issuance of Common Units 56,599 39,836 -
Capital contribution from General Partner 571 956 -
----------- ----------- -----------
Net cash provided (used) by financing activities (24,734) 195,190 (93,266)
----------- ----------- -----------
Change in cash and cash equivalents $ 591 $ 2 $ -
=========== =========== ===========
CASH AND CASH EQUIVALENTS:
End of period $ 593 $ 2 $ -
Beginning of period 2 - -
----------- ----------- -----------
Change $ 591 $ 2 $ -
=========== =========== ===========
S-3
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(Thousands of dollars)
Charged
Balance at (credited) Balance at
beginning to costs and end of
of year expenses Other year
------------ ------------ ----------------- -----------
YEAR ENDED SEPTEMBER 30, 2002
Reserves deducted from assets in
the consolidated balance sheet:
Allowance for doubtful accounts $ 10,792 $ 7,171 $ (10,375)(1) $ 7,588
============ ===========
Allowance for amortization of deferred
financing costs $ 10,859 $ 2,722 $ - $ 13,581
============ ===========
Other reserves:
Self-insured property and casualty liability $ 31,668 $ 16,739 $ (11,012)(2) $ 37,395
============ ===========
Insured property and casualty liability $ 1,466 $ - $ 2,034 (3) $ 3,500
============ ===========
Environmental, litigation and other $ 10,629 $ 3,468 $ (2,387)(2) $ 12,999
============ ===========
1,289 (3)
YEAR ENDED SEPTEMBER 30, 2001
Reserves deducted from assets in
the consolidated balance sheet:
Allowance for doubtful accounts $ 6,529 $ 7,497 $ (3,234)(1) $ 10,792
============ ===========
Allowance for amortization of deferred
financing costs $ 8,835 $ 2,024 $ - $ 10,859
============ ===========
Other reserves:
Self-insured property and casualty liability $ 32,036 $ 12,837 $ (13,205)(2) $ 31,668
============ ===========
Insured property and casualty liability $ 2,068 $ (602) $ - $ 1,466
============ ===========
Environmental, litigation and other $ 11,366 $ 1,389 $ (2,126)(2) $ 10,629
============ ===========
S-4
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (CONTINUED)
(Thousands of dollars)
Charged
Balance at (credited) Balance at
beginning to costs and end of
of year expenses Other year
------------ ------------ ----------------- -----------
YEAR ENDED SEPTEMBER 30, 2000
Reserves deducted from assets in
the consolidated balance sheet:
Allowance for doubtful accounts $ 5,998 $ 5,476 $ (4,945)(1) $ 6,529
============ ===========
Allowance for amortization of other
deferred costs $ 1,371 $ 99 $ (1,470)(3) $ -
============ ===========
Allowance for amortization of deferred
financing costs $ 7,063 $ 1,772 $ - $ 8,835
============ ===========
Other reserves:
Self-insured property and casualty liability $ 33,445 $ 11,377 $ (12,786)(2) $ 32,036
============ ===========
Insured property and casualty liability $ 5,068 $ (3,000) $ - $ 2,068
============ ===========
Environmental, litigation and other $ 13,327 $ 261 $ (2,262)(2) $ 11,366
============ ===========
40 (3)
(1) Uncollectible accounts written off, net of recoveries.
(2) Payments, net of any refunds
(3) Other adjustments.
S-5
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of AmeriGas Partners, L.P. and the
Board of Directors of AmeriGas Propane, Inc.:
In our opinion, the consolidated financial statements, as of and for the period
ended September 30, 2002, listed in the index appearing under Item 15a(1) and
(2) present fairly, in all material respects, the financial position of AmeriGas
Partners, L.P. and its subsidiaries at September 30, 2002, and the results of
their operations and their cash flows for the period ended September 30, 2002 in
conformity with accounting principles generally accepted in the United States of
America. In addition, in our opinion, the financial statement schedules listed,
as of and for the year ended September 30, 2002, in the index appearing under
Item 15a(1) and (2) present fairly, in all material respects, the information
set forth therein when read in conjunction with the related consolidated
financial statements. These financial statements and financial statement
schedules are the responsibility of the management of AmeriGas Propane, Inc.;
our responsibility is to express an opinion on these financial statements and
financial statement schedules based on our audit. We conducted our audit of
these statements in accordance with auditing standards generally accepted in the
United States of America, which 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, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion. The consolidated financial
statements of AmeriGas Partners, L.P. and its subsidiaries as of September 30,
2001, and for each of the two years in the period ended September 30, 2001, were
audited by other independent accountants who have ceased operations. Those
independent accountants expressed an unqualified opinion on those financial
statements in their report dated November 16, 2001.
As discussed in Note 2 to the consolidated financial statements, the Partnership
adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets, in fiscal 2002.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
November 15, 2002, except for Note 17 as to which the date is December 16, 2002
S-6
THIS REPORT IS A COPY OF THE PREVIOUSLY ISSUED ACCOUNTANT'S REPORT OF
ARTHUR ANDERSEN LLP AND HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of AmeriGas Partners, L.P. and the
Board of Directors of AmeriGas Propane, Inc.:
We have audited, in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements included in the AmeriGas
Partners, L.P. annual report to unitholders for the year ended September 30,
2001, incorporated by reference in this Form 10-K, and have issued our report
thereon dated November 16, 2001. Our report on the financial statements includes
an explanatory paragraph with respect to the changes in the method of accounting
for tank installation costs and nonrefundable tank fees and the adoption of the
provisions of SFAS No. 133 as discussed in Notes 2 and 4 to the financial
statements. Our audits were made for the purpose of forming an opinion on those
basic consolidated financial statements taken as a whole. The schedules listed
in the index on pages F-2 and F-3 are the responsibility of the management of
AmeriGas Propane, Inc. and are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required to be
set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Philadelphia, Pennsylvania
November 16, 2001
S-7
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
10.1 Second Amended and Restated Credit Agreement dated as of
August 22, 2002 among AmeriGas Propane, L.P., AmeriGas
Propane, Inc., Petrolane Incorporated, Bank of America,
N.A., as Issuing Bank and Swingline Bank, and certain
banks
10.2 AmeriGas Propane, Inc. Discretionary Long-Term Incentive
Plan for Non-Executive Key Employees
13 Pages 10 to 27 of the AmeriGas Partners, L.P. 2002
Annual Report for year ended September 30, 2002
21 Subsidiaries of AmeriGas Partners, L.P.
23 Consent of PricewaterhouseCoopers LLP
99 Certifications of Chief Executive Officer and Chief
Financial Officer