Contact: 610-337-1000 For Release: July 28, 2004
Robert W. Krick, ext. 3141 Immediate
Brenda A. Blake, ext. 3202
AMERIGAS PARTNERS REPORTS IMPROVED RESULTS
VALLEY FORGE, Pa., July 28 - AmeriGas Propane, Inc., general partner of AmeriGas
Partners, L.P. (NYSE: APU), reported a seasonal net loss for the Partnership's
third quarter of fiscal 2004 ended June 30, 2004 of $24.1 million, or $0.45 per
limited partner unit, compared to a loss of $27.4 million or $0.54 per limited
partner unit, in the same period last year. Results for the June 2003 quarter
include $3.0 million, or $0.06 per limited partner unit, of costs associated
with the previously-announced realignment of our regional management structure.
Average units outstanding were approximately 6.7% higher for the recent quarter.
For the three months ended June 30, 2004, retail volumes sold were 175.2 million
gallons compared to 182.4 million gallons sold in the prior-year period.
Nationally, weather was 8% warmer than normal in the 2004 period compared to
weather that was essentially normal in the prior-year period according to the
National Oceanic and Atmospheric Administration. Earnings before interest
expense, income taxes, depreciation and amortization (EBITDA) were $16.1 million
in the fiscal 2004 period compared to $12.6 million a year ago.
Eugene V. N. Bissell, chief executive officer of AmeriGas, said, "We are pleased
to report an increase in EBITDA despite warmer than normal weather and customer
conservation triggered by record high retail propane prices. We are on track to
achieve approximately $250 million in EBITDA for the fiscal year ending
September 30, 2004, in line with our projection at the end of the second
quarter." Net income is expected to be approximately $88 million.
Revenues for the quarter were $315.1 million versus $287.1 million a year ago,
principally reflecting unusually high propane product costs resulting from,
among other things, higher crude oil and natural gas prices. Total margin
increased principally as a result of higher average retail propane unit margins
partially offset by lower volumes sold. The decline in operating expenses in the
most recent quarter was due to the absence of $3.0 million of expense related to
the aforementioned management realignment. "It has been a year since we
announced our management realignment and we are pleased that it has achieved our
objectives of streamlining our business processes, eliminating duplication and
reducing overhead expenses," added Bissell.
-- MORE --
AMERIGAS PARTNERS REPORTS IMPROVED RESULTS PAGE 2
AmeriGas Partners is the nation's largest retail propane marketer, serving
nearly 1.3 million customers from over 700 locations in 46 states. UGI
Corporation (NYSE:UGI), through subsidiaries, owns 46% of the Partnership and
individual unitholders own the remaining 54%.
AmeriGas Partners invites interested parties to listen to the live audio webcast
of management's teleconference with the financial community about third quarter
fiscal year 2004 results on Wednesday, July 28, 2004, at 4:00 PM Eastern time.
The audio teleconference is available online at
http://www.shareholder.com/ugi/medialist.cfm. A telephonic replay of the call
can be accessed approximately two hours after the completion of the call at
1-888/203-1112, (International replay 719/457-0820) passcode 216131, until
midnight ET August 1, 2004.
The financial tables appended to this news release can be viewed directly at
HTTP://WWW.SHAREHOLDER.COM/UGI/APU/3Q04FINANCIALTABLE.PDF.
This press release contains certain forward-looking statements which management
believes to be reasonable as of today's date only. Actual results may differ
significantly because of risks and uncertainties that are difficult to predict
and many of which are beyond management's control. You should read the
Partnership's Annual Report on Form 10-K for a more extensive list of factors
that could affect results. Among them are adverse weather conditions, price
volatility and availability of propane, the capacity to transport propane to our
market areas and political, economic and regulatory conditions in the U. S. and
abroad. The Partnership undertakes no obligation to release revisions to its
forward-looking statements to reflect events or circumstances occurring after
today.
Comprehensive information about AmeriGas is available on the Internet at
WWW.AMERIGAS.COM.
AP-09 ### 7/28/04
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
REPORT OF EARNINGS
(Thousands, except per unit and where otherwise indicated)
(Unaudited)
Three Months Ended Nine Months Ended Twelve Months Ended
June 30, June 30, June 30,
------------------------ -------------------------- ---------------------------
2004 2003 2004 2003 2004 2003
---------- ------------ ------------ ------------ ------------ ------------
Revenues:
Propane $ 282,510 $ 257,705 $ 1,359,913 $ 1,263,423 $ 1,599,054 $ 1,456,746
Other 32,597 29,431 103,102 94,290 134,672 122,871
--------- ----------- ----------- ----------- ----------- -----------
315,107 287,136 1,463,015 1,357,713 1,733,726 1,579,617
--------- ----------- ----------- ----------- ----------- -----------
Costs and expenses:
Cost of sales - propane 169,095 145,637 800,514 723,258 934,139 822,830
Cost of sales - other 14,923 12,310 43,203 38,716 57,939 50,397
Operating and administrative
expenses (a) 118,125 119,136 381,283 374,005 495,712 483,484
Depreciation 18,670 17,917 55,563 51,826 74,160 67,844
Amortization 1,298 974 3,876 2,987 5,091 3,767
Other (income), net (3,011) (2,371) (10,949) (6,573) (13,336) (8,346)
--------- ----------- ----------- ----------- ----------- -----------
319,100 293,603 1,273,490 1,184,219 1,553,705 1,419,976
--------- ----------- ----------- ----------- ----------- -----------
Operating (loss) income (3,993) (6,467) 189,525 173,494 180,021 159,641
Loss on extinguishment of debt
-- -- -- (3,023) -- (3,023)
Interest expense (20,516) (21,468) (62,818) (66,051) (83,962) (87,349)
--------- ----------- ----------- ----------- ----------- -----------
(Loss) income before income taxes (24,509) (27,935) 126,707 104,420 96,059 69,269
Income tax benefit (expense) 237 343 (391) 405 (1,382) 213
Minority interests 140 178 (1,649) (1,451) (1,426) (1,183)
--------- ----------- ----------- ----------- ----------- -----------
Net (loss) income $ (24,132) $ (27,414) $ 124,667 $ 103,374 $ 93,251 $ 68,299
========= =========== =========== =========== =========== ===========
General partner's interest in net
(loss) income (b) $ (241) $ (274) $ 6,448 $ 2,708 $ 933 $ 683
========= =========== =========== =========== =========== ===========
Limited partners' interest in net
(loss) income (b) $ (23,891) $ (27,140) $ 118,219 $ 100,666 $ 92,318 $ 67,616
========= =========== =========== =========== =========== ===========
Net (loss) income per limited partner
unit (b):
Basic $ (0.45) $ (0.54) $ 2.25 $ 2.03 $ 1.76 $ 1.38
========= =========== =========== =========== =========== ===========
Diluted $ (0.45) $ (0.54) $ 2.24 $ 2.03 $ 1.75 $ 1.38
========= =========== =========== =========== =========== ===========
Average limited partner units outstanding:
Basic 53,188 49,847 52,635 49,571 52,559 48,949
========= =========== =========== =========== =========== ===========
Diluted 53,188 49,847 52,708 49,631 52,639 49,003
========= =========== =========== =========== =========== ===========
SUPPLEMENTAL INFORMATION:
Retail gallons sold (millions) 175.2 182.4 883.6 900.0 1,058.5 1,061.3
EBITDA (c) (d) $ 16,115 $ 12,602 $ 247,315 $ 223,833 $ 257,846 $ 227,046
Distributable cash (c) (7,400) (13,603) 169,371 141,210 153,346 117,597
Capital expenditures:
Maintenance capital expenditures 2,999 4,737 15,126 16,572 20,538 22,100
Growth capital expenditures 10,004 5,803 29,486 27,236 33,695 36,594
</Table>
(a) Included in operating and administrative expenses during the three, nine
and twelve months ended June 30, 2003 are $3,022 of costs associated with
the management realignment announced in June 2003.
(b) Effective April 2004, the Partnership adopted Emerging Issues Task Force
Issue No. 03-6, "Participating Securities and the Two-Class Method under
FASB Statement No. 128" ("EITF 03-6") which results in the calculation of
net (loss) income per limited partner unit for each period according to
distributions declared and participation rights in undistributed earnings,
as if all of the earnings for the period had been distributed. In periods
with undistributed earnings above certain levels, the calculation
according to the two-class method results in an increased allocation of
undistributed earnings per unit to the general partner and a dilution of
the earnings per unit for the limited partners. The dilutive effect of
EITF 03-6 on net income per limited partner unit was $(0.10) and $(0.03)
for the nine months ended June 30, 2004 and 2003, respectively.
(c) EBITDA (earnings before interest expense, income taxes, depreciation and
amortization) 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. Management believes
EBITDA is a meaningful non-GAAP financial measure used by investors to
compare the Partnership's operating performance with other companies
within the propane industry and to evaluate our ability to meet loan
covenants.
(continued)
1
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
REPORT OF EARNINGS
(Thousands, except per unit and where otherwise indicated)
(Unaudited)
(continued)
Management defines distributable cash as EBITDA less interest expense and
maintenance capital expenditures. Maintenance capital expenditures are
defined in the Partnership Agreement as expenditures made to maintain the
operating capacity of the Partnership's existing capital assets.
Management believes distributable cash is a meaningful non-GAAP measure
for evaluating the Partnership's ability to declare and pay the Minimum
Quarterly Distribution pursuant to the terms of the Partnership Agreement.
The Partnership's definition of distributable cash may be different from
that used by other entities.
The following table includes reconciliations of net income to EBITDA and
distributable cash for all periods presented:
Three Months Ended Nine Months Ended Twelve Months Ended
June 30, June 30, June 30,
------------------------- ------------------------- -------------------------
2004 2003 2004 2003 2004 2003
---------- ---------- ---------- ---------- ---------- ----------
Net (loss) income $ (24,132) $ (27,414) $ 124,667 $ 103,374 $ 93,251 $ 68,299
Income tax (benefit) expense (237) (343) 391 (405) 1,382 (213)
Interest expense 20,516 21,468 62,818 66,051 83,962 87,349
Depreciation 18,670 17,917 55,563 51,826 74,160 67,844
Amortization 1,298 974 3,876 2,987 5,091 3,767
--------- --------- --------- --------- --------- ---------
EBITDA (c) 16,115 12,602 247,315 223,833 257,846 227,046
Interest expense (20,516) (21,468) (62,818) (66,051) (83,962) (87,349)
Maintenance capital expenditures (2,999) (4,737) (15,126) (16,572) (20,538) (22,100)
--------- --------- --------- --------- --------- ---------
Distributable cash $ (7,400) $ (13,603) $ 169,371 $ 141,210 $ 153,346 $ 117,597
========= ========= ========= ========= ========= =========
(d) The following table includes a reconciliation of forecasted net income to
forecasted EBITDA for the fiscal year ending September 30, 2004:
Forecast
Fiscal
Year
Ending
September 30,
2004
-------------
Net income (estimate) $ 88,000
Interest expense (estimate) 82,000
Depreciation (estimate) 75,000
Amortization (estimate) 5,000
-------------
EBITDA (estimate) $250,000
=============
2