Exhibit 99.2
AMERIGAS PARTNERS, L.P.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Condensed Combined Financial Statements of
AmeriGas Partners, L.P. ("AmeriGas Partners") give effect to the October 1, 2003
acquisition by AmeriGas Propane, L.P. ("AmeriGas OLP", a 99%-owned subsidiary of
AmeriGas Partners) of Horizon Propane LLC ("Horizon"). Prior to its acquisition
by AmeriGas OLP, Horizon (formerly, the Integrated Propane Business of WHM
Emprises, Inc. "Horizon's Predecessor," a debtor-in-possession under federal
bankruptcy laws) comprised Level Propane Gases, Inc., Level Energy Distribution,
and EP Transport, all of which were wholly owned subsidiaries of Level Energy
Group, Inc., a wholly owned subsidiary of WHM Emprises, Inc. The pro forma
adjustments are based upon available information and assumptions that management
believes are reasonable. The Unaudited Pro Forma Condensed Combined Financial
Statements do not purport to represent what the results of operations or
financial position of AmeriGas Partners would have been if the purchase
transaction had occurred on the dates indicated below, nor do they purport to
project the results of operations or financial position of AmeriGas Partners for
any future period or as of any future date. Under Statement of Financial
Accounting Standards No. 141, "Business Combinations" ("SFAS 141"), tangible and
identifiable intangible assets acquired and liabilities assumed are recorded at
their estimated fair values. The estimated fair values and useful lives of
Horizon's identifiable assets acquired and liabilities assumed are based on a
preliminary valuation and are subject to final adjustments.
This Current Report includes an Unaudited Pro Forma Condensed Combined Balance
Sheet as of June 30, 2003 and an Unaudited Pro Forma Condensed Combined
Statement of Operations for the twelve months ended June 30, 2003. Pro forma
statements of operations for our fiscal year ended September 30, 2002 and nine
months ended June 30, 2003 are not presented because reliable historical
financial statements of Horizon's Predecessor for those periods are not
available. As disclosed in footnote 16 to the audited combined financial
statements of Horizon's Predecessor included in this Current Report, the
financial statements reflect a restatement of the accumulated deficit as of July
1, 2002 due to errors in prior years. The footnote states that the errors relate
to items inappropriately capitalized as property and equipment, inadequate
allowances for uncollectible accounts receivable, unrecorded liabilities and
inappropriate depreciation periods.
The presentation of a pro forma income statement for the twelve months ended
June 30, 2003 in lieu of pro forma income statements for AmeriGas Partners'
fiscal year ended September 30, 2002 and nine months ended June 30, 2003 will
provide sufficient, meaningful information to evaluate the effects of the
acquisition. Because AmeriGas Partners and Horizon's Predecessor are propane
distribution companies, their businesses are highly seasonal, with their
financial results being dependent on the weather during the winter months. Since
the weather during the months of July, August and September, the fourth quarter
of AmeriGas Partners' fiscal year, does not materially affect AmeriGas
Partners' results for its fiscal year, the presentation of a pro forma income
statement for the twelve months ended June 30, 2003 will provide meaningful
information to assess the impact of the acquisition on AmeriGas Partners.
We do not anticipate material annualized operating cost savings and synergies
during Fiscal 2004. However, in Fiscal 2005, we expect up to $7 million of cost
savings as we integrate Horizon and our existing business. We expect to achieve
these cost savings from operating synergies that permit the elimination of
redundant operations and facilities and productivity
1
AMERIGAS PARTNERS, L.P.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
improvements. Although we believe the 2005 estimated cost savings are
reasonable, these operating cost savings, operating synergies and productivity
improvements may not be achieved. We caution you that our actual results are
likely to be different from these estimates. The differences may be material,
depending on the circumstances, and may arise because actual facts may differ
from our assumptions. For example, we may not be able to achieve operating
synergies on a timely basis and actual costs associated with elimination of
redundant operations and facilities may exceed our estimates.
The Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2003 was
prepared by combining the historical consolidated balance sheets of AmeriGas
Partners and the combined balance sheet of Horizon's Predecessor at June 30,
2003, giving effect to the acquisition of Horizon as though it had been
completed on June 30, 2003. The Unaudited Pro Forma Condensed Combined Statement
of Operations for the twelve months ended June 30, 2003 was prepared by
combining AmeriGas Partners' unaudited condensed consolidated statement of
operations for the twelve months ended June 30, 2003, with Horizon's
Predecessor's audited combined statement of operations for the fiscal year ended
June 30, 2003, to give effect to the acquisition as though it had occurred on
July 1, 2002. The Unaudited Pro Forma Condensed Combined Statement of Operations
does not give effect to any potential cost savings and productivity improvements
that are expected to result from the integration of the operations of Horizon
with AmeriGas Partners.
2
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF JUNE 30, 2003
(THOUSANDS OF DOLLARS)
(2) (2)
Historical Historical Pro Pro
AmeriGas Horizon Reclass- Forma Forma
Partners Propane ifications (3) Adjustments Combined
-------- ------- -------------- ----------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 33,959 $ 163 $ -- $ (31,760)(4) $ 2,362
Accounts receivable 109,427 1,593 -- 273 (5) 111,293
Accounts receivable - related parties 875 -- -- -- 875
Inventories 59,420 1,751 -- 1,629 (6) 62,800
Prepaid expenses and other curent assets 24,414 2,821 -- (2,381)(7) 24,854
---------- ---------- ---------- ---------- ----------
Total current assets 228,095 6,328 -- (32,239) 202,184
Property, plant and equipment, net 607,225 15,043 -- 7,961 (8) 630,229
Goodwill and excess reorganization value 599,652 -- -- 2,340 (9) 601,992
Intangible assets 27,176 -- -- 3,100 (10) 30,276
Other assets 16,633 1,189 -- (1,189)(11) 16,633
---------- ---------- ---------- ---------- ----------
Total assets $1,478,781 $ 22,560 $ -- $ (20,027) $1,481,314
========== ========== ========== ========== ==========
LIABILITIES AND STOCKHOLDER'S
EQUITY/PARTNERS' CAPITAL
Current liabilities:
Current maturities of long-term debt $ 60,988 $ 1,632 $ -- $ (1,632)(12) $ 60,988
Bank loans -- 13,810 -- (13,810)(12) --
Accounts payable - trade 72,454 6,699 12,335 (18,982)(13) 72,506
Accounts payable - related parties 1,006 -- 2,794 (2,794)(14) 1,006
Customer deposits and advances 14,666 -- 898 971 (15) 16,535
Interest accrued 17,247 -- 1,016 (1,016)(16) 17,247
Other current liabilities 67,159 5,834 (1,914) (3,308)(16) 67,771
---------- ---------- ---------- ---------- ----------
Total current liabilities 233,520 27,975 15,129 (40,571) 236,053
Liabilities subject to compromise -- 96,041 (96,041) -- --
Long-term debt 868,832 -- 74,113 (74,113)(17) 868,832
Other noncurrent liabilities 52,727 -- 6,799 (6,799)(18) 52,727
Minority interests 7,576 -- -- -- 7,576
Common stockholder's equity -- (101,456) -- 101,456 (19) --
Partners' capital 316,126 -- -- -- 316,126
---------- ---------- ---------- ---------- ----------
Total liabilities and stockholder's
equity/partners' capital $1,478,781 $ 22,560 $ -- $ (20,027) $1,481,314
========== ========== ========== ========== ==========
See accompanying notes to unaudited pro forma condensed combined financial
statements.
3
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED JUNE 30, 2003
(THOUSANDS OF DOLLARS, EXCEPT PER UNIT)
(2) (2)
Historical Historical Pro Pro
AmeriGas Horizon Reclass- Forma Forma
Partners Propane ifications (20) Adjustments Combined
-------- ------- --------------- ----------- --------
Revenues:
Propane $ 1,456,746 $ 51,963 $ -- $ -- $ 1,508,709
Other 122,871 -- -- -- 122,871
----------- ----------- ----------- ----------- -----------
1,579,617 51,963 -- -- 1,631,580
----------- ----------- ----------- ----------- -----------
Costs and expenses:
Cost of sales - propane 822,830 48,852 (15,751) -- 855,931
Cost of sales - other 50,397 -- -- -- 50,397
Operating and administrative expenses 483,484 4,438 15,751 -- 503,673
Depreciation and amortization 71,611 5,991 -- (4,762)(21) 72,840
Equity investee loss 663 -- -- -- 663
Other income, net (9,009) -- -- -- (9,009)
----------- ----------- ----------- ----------- -----------
1,419,976 59,281 -- (4,762) 1,474,495
----------- ----------- ----------- ----------- -----------
Operating income (loss) 159,641 (7,318) -- 4,762 157,085
Loss on extinguishment of debt (3,023) -- -- -- (3,023)
----------- ----------- ----------- ----------- -----------
Income (loss) before interest expense,
minority interests and income taxes 156,618 (7,318) -- 4,762 154,062
Interest expense (87,349) (1,630) -- 1,630 (22) (87,349)
----------- ----------- ----------- ----------- -----------
Income (loss) before income taxes 69,269 (8,948) -- 6,392 66,713
Reorganization expenses -- (7,288) 7,288 (23) --
Income tax benefit 213 -- -- -- 213
Minority interests (1,183) -- -- (138)(24) (1,321)
----------- ----------- ----------- ----------- -----------
Income (loss) from continuing operations $ 68,299 $ (16,236) $ -- $ 13,542 $ 65,605
=========== =========== =========== =========== ===========
General Partner's interest in income
from continuing operations $ 683 $ 656
=========== ===========
Limited partners' interest in income
from continuing operations $ 67,616 $ 64,949
=========== ===========
Income per limited partner unit - basic $ 1.38 $ 1.33
=========== ===========
Income per limited partner unit - diluted $ 1.38 $ 1.33
=========== ===========
Average limited partner units outstanding:
Basic 48,949 48,949
=========== ===========
Diluted 49,003 49,003
=========== ===========
See accompanying notes to unaudited pro forma condensed combined financial
statements.
4
AMERIGAS PARTNERS, L.P.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The unaudited historical consolidated statement of operations of AmeriGas
Partners for the twelve months ended June 30, 2003 is derived from the audited
consolidated statement of operations for the year ended September 30, 2002
included in the Form 10-K filed with the SEC by AmeriGas Partners on December
24, 2002 and the unaudited condensed consolidated statements of operations for
the nine months ended June 30, 2003 and 2002 included in the Form 10-Q filed
with the SEC by AmeriGas Partners on August 14, 2003. The historical
consolidated statement of operations for AmeriGas Partners' twelve months ended
June 30, 2003 can also be derived by combining the statements of operations for
the nine months ended June 30, 2003 and the three months ended September 30,
2002 as follows:
Nine Three Twelve
Months Months Months
Ended Ended Ended
June 30, September 30, June 30,
2003 2002 2003
----------- ----------- -----------
Revenues:
Propane $ 1,263,423 $ 193,323 $ 1,456,746
Other 94,290 28,581 122,871
----------- ----------- -----------
1,357,713 221,904 1,579,617
----------- ----------- -----------
Costs and expenses:
Cost of sales - propane 723,258 99,572 822,830
Cost of sales - other 38,716 11,681 50,397
Operating and administrative expenses 374,005 109,479 483,484
Depreciation and amortization 54,813 16,798 71,611
Equity investee loss 493 170 663
Other income, net (7,066) (1,943) (9,009)
----------- ----------- -----------
1,184,219 235,757 1,419,976
----------- ----------- -----------
Operating income (loss) 173,494 (13,853) 159,641
Loss on extinguishment of debt (3,023) -- (3,023)
----------- ----------- -----------
Income (loss) before interest expense,
minority interests and income taxes 170,471 (13,853) 156,618
Interest expense (66,051) (21,298) (87,349)
----------- ----------- -----------
Income (loss) before income taxes 104,420 (35,151) 69,269
Reorganization expenses -- -- --
Income tax benefit (expense) 405 (192) 213
Minority interests (1,451) 268 (1,183)
----------- ----------- -----------
Income (loss) from continuing operations $ 103,374 $ (35,075) $ 68,299
=========== =========== ===========
The historical condensed consolidated balance sheet of AmeriGas Partners as of
June 30, 2003, is derived from the condensed consolidated balance sheet included
in the Form 10-Q filed by AmeriGas Partners on August 14, 2003, with the SEC.
The historical consolidated financial statements of AmeriGas Partners include
all adjustments that are considered necessary for a fair presentation of the
results for the year presented. Such adjustments consisted only of normal
recurring items unless otherwise disclosed. The historical combined financial
statements of Horizon as of and for the year ended June 30, 2003 are derived
from Horizon's Predecessor's audited financial statements included in this
Current Report.
5
AMERIGAS PARTNERS, L.P.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
You should read the Unaudited Pro Forma Condensed Combined Financial Statements
along with AmeriGas Partners' consolidated financial statements and accompanying
notes included in its prior SEC filings and with Horizon's Predecessor's audited
financial statements and accompanying notes included in this Current Report.
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NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
(Thousands of dollars)
1. On October 1, 2003, AmeriGas Partners, through its subsidiary AmeriGas
OLP, acquired substantially all of the retail propane distribution assets
and business of Horizon Propane, LLC ("Horizon") for $31,044 in cash,
pursuant to the terms of the Asset Purchase Agreement. In addition,
AmeriGas OLP agreed to pay Horizon for the amount of working capital, as
defined, in excess of $2,600.
The purchase price for Horizon and its allocation to assets acquired and
liabilities assumed in the Unaudited Combined Pro Forma Balance Sheet at
June 30, 2003, are as follows:
Purchase price:
Cash payment to Horizon pursuant to the Asset Purchase Agreement $(31,044)
Payment for estimated net working capital in excess of $2,600 (625)
--------
Total purchase price $(31,669)
========
The preliminary allocation of the purchase price based upon estimated fair
values is as follows:
Working capital $ 3,225
Property, plant and equipment 23,004
Goodwill 2,340
Customer relationships 3,100
-------
$31,669
=======
The Unaudited Pro Forma Condensed Combined Financial Statements do not
give effect to any potential cost savings from operational synergies and
productivity improvements expected to result from the acquisition. The
Unaudited Pro Forma Condensed Combined Financial Statements are not
necessarily indicative of the operating results or financial position that
would have occurred had the acquisition been completed as of the dates
indicated, nor are they necessarily indicative of future operating results
or financial position. The purchase accounting adjustments made in
connection with the Pro Forma Condensed Combined Financial Statements are
preliminary and have been made solely for purposes of developing the pro
forma financial information.
2. These columns represent the historical financial position and results
of operations of AmeriGas Partners and Horizon's predecessor, the
Integrated Propane Business of WHM Emprises, Inc., a
debtor-in-possession ("Horizon's Predecessor"). AmeriGas Partners'
unaudited balance sheet was derived from the unaudited condensed
consolidated balance sheet included in AmeriGas Partners' Report on
Form 10-Q for the quarterly period ended June 30, 2003, filed with the
SEC on August 14, 2003. Horizon's Predecessor's combined balance sheet
was derived from the audited combined financial statements as of and
for the year ended June 30, 2003 included in this Current Report. The
unaudited historical consolidated statement of operations of AmeriGas
Partners for the twelve
7
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
(Thousands of dollars)
months ended June 30, 2003 is derived from the audited consolidated
statement of operations for the year ended September 30, 2002 included in
the Form 10-K filed with the SEC by AmeriGas Partners on December 24, 2002
and the unaudited consolidated statements of operations for the nine
months ended June 30, 2003 and 2002 included in the Form 10-Q filed with
the SEC by AmeriGas Partners on August 14, 2003. Horizon's Predecessor's
combined statement of operations was derived from the audited combined
financial statements included in this Current Report.
3. Reflects reclassifications of amounts included in Horizon's Predecessor's
balance sheet to conform to AmeriGas Partners' balance sheet presentation.
Amounts included in Liabilities subject to compromise on Horizon's
Predecessor's balance sheet were reclassified as follows:
Accounts payable - trade $12,335
Accounts payable - related parties 2,794
Long-term debt 74,113
Other noncurrent liabilities 6,799
-------
$96,041
=======
Amounts included in other current liabilities on Horizon's Predecessor's
balance sheet for customer deposits and accrued interest of $898 and
$1,016, respectively, were reclassified to conform to AmeriGas Partners'
balance sheet presentation.
4. Reflects pro forma adjustments to cash and cash equivalents as follows:
Cash retained by Horizon $ (91)
Cash payment to Horizon pursuant to the Asset Purchase Agreement (31,044)
Payment for estimated net working capital in excess of $2,600 (625)
--------
$(31,760)
========
5. Reflects pro forma adjustment to record accounts receivable acquired at
fair value.
6. Reflects pro forma adjustments to record inventories acquired at fair
value.
7. Reflects pro forma adjustment to eliminate prepaid expenses and other
current assets of Horizon not acquired.
8. Reflects pro forma adjustments to record property, plant and equipment
acquired at fair value as follows:
To record fair value of Horizon's property, plant and equipment $ 23,004
Eliminate historical cost of net property, plant and equipment of Horizon (15,043)
--------
$ 7,961
========
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NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
(Thousands of dollars)
9. Reflects pro forma adjustment to record goodwill for the excess of the
purchase price over the fair value of net assets acquired.
10. Reflects pro forma adjustment to record the allocation of a portion of the
purchase price to the fair value of intangible customer relationships
acquired (estimated useful life of 15 years).
11. Reflects pro forma adjustment to eliminate other assets not acquired in
the acquisition.
12. Reflects pro forma adjustment to eliminate debt not assumed in the
acquisition.
13. Reflects pro forma adjustments to eliminate liabilities not assumed and
to record the fair value of liabilities assumed as follows:
To eliminate accounts payable not assumed $ (6,699)
To eliminate accounts payable subject to compromise (12,335)
To record fair value of accounts payable assumed 52
--------
$(18,982)
========
14. Reflects pro forma adjustment to eliminate liabilities not assumed.
15. Reflects pro forma adjustment to record customer deposits assumed in
the acquisition.
16. Reflects pro forma adjustment to eliminate liabilities not assumed in
the acquisition.
17. Reflects pro forma adjustment to eliminate long-term debt not assumed
in the acquisition.
18. Reflects pro forma adjustment to eliminate other noncurrent liabilities
not assumed in the acquisition.
19. To eliminate stockholder's equity of Horizon.
20. Reflects reclassifications of amounts included on Horizon's Predecessor's
statement of operations to conform to AmeriGas Partners' income statement
presentation.
21. Reflects pro forma adjustment to depreciation and amortization expense
as follows:
Eliminate historical depreciation expense of Horizon $(5,991)
Depreciation expense reflecting preliminary allocation of purchase price:
Depreciation expense on allocated property, plant and equipment 1,022
Amortization expense on customer relationship intangible asset (15 year useful life) 207
-------
$(4,762)
=======
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NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
(Thousands of dollars)
22. Reflects pro forma adjustment to eliminate interest expense on
Horizon's debt not assumed.
23. Reflects pro forma adjustment to eliminate reorganization expenses
incurred by Horizon's Predecessor as a direct result of the bankruptcy
filing.
24. To adjust minority interest to reflect the impact of the pro forma
adjustments on minority unitholders' equity in results of operations.
10