Contact: 610-337-1000 For Release: April 26, 2005
Robert W. Krick, Ext. 3141 Immediate
Brenda Blake, Ext. 3202
AMERIGAS PARTNERS REPORTS SECOND QUARTER RESULTS; AFFIRMS FISCAL YEAR GUIDANCE
VALLEY FORGE, Pa., April 26 - AmeriGas Propane, Inc., general partner of
AmeriGas Partners, L.P. (NYSE: APU), reported net income for the Partnership's
second fiscal quarter ended March 31, 2005 of $96.2 million or $1.49 per diluted
limited partner unit, compared to $105.7 million, or $1.68 per diluted limited
partner unit, in the same period last year. Average diluted units outstanding
were 4% higher for the recent quarter.
Earnings before interest expense, income taxes, depreciation and amortization
(EBITDA) were $135.2 million in the second fiscal quarter of 2005 compared to
$146.6 million a year ago. For the three months ended March 31, 2005, retail
volumes sold declined to 378.8 million gallons from 403.9 million gallons sold
in the prior-year period. Weather was approximately 5% warmer than normal during
the recent quarter compared to weather that was 1.5% warmer than normal in the
prior-year period, according to the National Oceanic and Atmospheric
Administration.
Eugene V. N. Bissell, chief executive officer of AmeriGas, said, "The lower
retail sales volumes we experienced this quarter reflect warmer than normal
winter weather and price-induced customer conservation resulting from higher
retail selling prices driven by historically high propane product costs. The
average wholesale propane cost per gallon at Mt. Belvieu, Texas, a major supply
point, during the quarter rose 17% over the prior year."
Revenues for the quarter were $698.3 million versus $687.7 million a year ago,
principally reflecting higher propane selling prices caused by higher propane
product costs. Operating and administrative expenses declined by $2.3 million
from $139.4 million to $137.1 million during the quarter mainly reflecting the
implementation of warm weather action plans that will continue for the remainder
of the fiscal year. Lower personnel and vehicle repair expenses were partially
offset by the impact of higher vehicle fuel and lease expenses.
AmeriGas Partners is the nation's largest retail propane marketer, serving
nearly 1.3 million customers from over 650 locations in 46 states. UGI
Corporation (NYSE: UGI), through subsidiaries, owns 46% of the Partnership and
individual unitholders own the remaining 54%.
-- MORE --
AMERIGAS PARTNERS REPORTS SECOND QUARTER RESULTS;
AFFIRMS FISCAL YEAR GUIDANCE PAGE 2
AmeriGas expects to report EBITDA for its fiscal year ending September 30, 2005
within the range of $245 million to $255 million for the year, excluding a loss
of up to $35 million on the expected early extinguishment of debt resulting from
a previously-announced proposed refinancing. The refinancing of a portion of the
debt should lower annual interest expense meaningfully and extend the maturity
of the debt by several years. The refinancing is expected to be completed by May
3. The forecasted EBITDA includes a $9.1 million pre-tax gain on the sale of
Atlantic Energy as previously reported.
AmeriGas Partners, L. P. will host its second quarter FY 2005 earnings
conference call on Wednesday, April 27, 2005, at 4:00 PM ET. Interested parties
may listen to a live audio broadcast of the conference call at
http://www.shareholder.com/ugi/medialist.cfm. A telephonic replay of the call
can be accessed approximately one hour after the completion of the call at
1-888-203-1112, passcode 9551284 (International replay 719-457-0820, passcode
9551284) through May 3, 2005.
The financial tables appended to this news release can be viewed directly at
HTTP://WWW.SHAREHOLDER.COM/UGI/APU/2Q05/FINANCIALTABLE.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. Among them are adverse
weather conditions, product cost volatility and availability of propane, the
capacity to transport propane to our market areas, regional economic conditions
and the completion of a refinancing of debt. You should read the Partnership's
Annual Report on Form 10-K for a more extensive list of factors that could
affect results. 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.
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
REPORT OF EARNINGS
(Thousands, except per unit and where otherwise indicated)
(Unaudited)
Three Months Ended Six Months Ended Twelve Months Ended
March 31, March 31, March 31,
----------------------- ------------------------- -------------------------
2005 2004 2005 (a) 2004 2005 (a) 2004
--------- ----------- ----------- ----------- ----------- -----------
Revenues:
Propane $ 663,677 $ 654,142 $ 1,181,128 $ 1,077,403 $ 1,743,425 $ 1,574,249
Other 34,591 33,568 73,356 70,505 139,051 131,506
--------- ----------- ----------- ----------- ----------- -----------
698,268 687,710 1,254,484 1,147,908 1,882,476 1,705,755
--------- ----------- ----------- ----------- ----------- -----------
Costs and expenses:
Cost of sales - propane 416,741 392,297 752,050 631,419 1,092,933 910,681
Cost of sales - other 13,017 12,899 28,852 28,280 57,509 55,326
Operating and administrative expenses (b) 137,094 139,395 267,713 263,158 505,628 496,723
Depreciation 17,013 18,556 34,935 36,893 73,510 73,407
Amortization 1,417 1,260 2,813 2,578 5,379 4,767
Other (income), net (4,907) (4,656) (17,456) (7,938) (21,262) (12,696)
--------- ----------- ----------- ----------- ----------- -----------
580,375 559,751 1,068,907 954,390 1,713,697 1,528,208
--------- ----------- ----------- ----------- ----------- -----------
Operating income 117,893 127,959 185,577 193,518 168,779 177,547
Interest expense (20,733) (21,167) (41,236) (42,302) (82,109) (84,914)
--------- ----------- ----------- ----------- ----------- -----------
Income before income taxes 97,160 106,792 144,341 151,216 86,670 92,633
Income tax benefit (expense) 182 79 (2,133) (628) (1,774) (1,276)
Minority interests (1,120) (1,221) (1,695) (1,789) (1,328) (1,388)
--------- ----------- ----------- ----------- ----------- -----------
Net income $ 96,222 $ 105,650 $ 140,513 $ 148,799 $ 83,568 $ 89,969
========= =========== =========== =========== =========== ===========
General partner's interest in net income (c) $ 15,076 $ 17,681 $ 17,568 $ 20,219 $ 836 $ 900
========= =========== =========== =========== =========== ===========
Limited partners' interest in net income (c) $ 81,146 $ 87,969 $ 122,945 $ 128,580 $ 82,732 $ 89,069
========= =========== =========== =========== =========== ===========
Net income per limited partner unit (c):
Basic $ 1.49 $ 1.68 $ 2.26 $ 2.46 $ 1.53 $ 1.72
========= =========== =========== =========== =========== ===========
Diluted $ 1.49 $ 1.68 $ 2.25 $ 2.45 $ 1.53 $ 1.72
========= =========== =========== =========== =========== ===========
Average limited partner units outstanding:
Basic 54,493 52,373 54,485 52,360 54,158 51,729
========= =========== =========== =========== =========== ===========
Diluted 54,533 52,431 54,542 52,436 54,224 51,811
========= =========== =========== =========== =========== ===========
SUPPLEMENTAL INFORMATION:
Retail gallons sold (millions) 378.8 403.9 675.6 708.4 1,026.3 1,065.7
EBITDA (d) (e) $ 135,203 $ 146,554 $ 221,630 $ 231,200 $ 246,340 $ 254,333
Distributable cash (d) 109,444 119,382 168,849 176,771 141,708 147,143
Capital expenditures:
Maintenance capital expenditures 5,026 6,005 11,545 12,127 22,523 22,276
Growth capital expenditures 8,907 11,191 23,524 19,482 42,593 29,494
(a) Net income and net income per limited partner unit for the six- and
twelve-month periods ended March 31, 2005 include a gain of $7,107 and
$0.13, respectively, recognized in connection with the Partnership's sale
of its 50% ownership interest in Atlantic Energy, Inc.
(b) Included in operating and administrative expenses during the twelve-month
period ended March 31, 2004 are $3,756 of costs associated with the
management realignment announced in June 2003.
(c) 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 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 diluted limited partner unit was $(0.26) and
$(0.30) for the three and six months ended March 31, 2005, respectively,
and $(0.31) and $(0.36) for the three and six months ended March 31, 2004,
respectively.
(continued)
1
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
REPORT OF EARNINGS
(Thousands, except per unit and where otherwise indicated)
(Unaudited)
(continued)
(d) 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 ("GAAP").
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.
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 Six Months Ended Twelve Months Ended
March 31, March 31, March 31,
----------------------- ----------------------- -----------------------
2005 2004 2005 2004 2005 2004
--------- --------- --------- --------- --------- ---------
Net income $ 96,222 $ 105,650 $ 140,513 $ 148,799 $ 83,568 $ 89,969
Interest expense 20,733 21,167 41,236 42,302 82,109 84,914
Income tax (benefit) expense (182) (79) 2,133 628 1,774 1,276
Depreciation 17,013 18,556 34,935 36,893 73,510 73,407
Amortization 1,417 1,260 2,813 2,578 5,379 4,767
--------- --------- --------- --------- --------- ---------
EBITDA 135,203 146,554 221,630 231,200 246,340 254,333
Interest expense (20,733) (21,167) (41,236) (42,302) (82,109) (84,914)
Maintenance capital expenditures (5,026) (6,005) (11,545) (12,127) (22,523) (22,276)
--------- --------- --------- --------- --------- ---------
Distributable cash $ 109,444 $ 119,382 $ 168,849 $ 176,771 $ 141,708 $ 147,143
========= ========= ========= ========= ========= =========
(e) The following table includes a reconciliation of forecasted net income to
forecasted EBITDA for the fiscal year ending September 30, 2005:
Forecast
Fiscal
Year
Ending
September 30,
2005
------------
(in thousands)
Net income (estimate) $ 91,000 *
Interest expense (estimate) 81,000
Income taxes (estimate) 2,000
Depreciation (estimate) 71,000
Amortization (estimate) 5,000
---------
EBITDA (estimate) $ 250,000
=========
* Forecasted net income includes a pre-tax gain of $9,135 on the previously
reported sale of AmeriGas' 50% interest in Atlantic Energy, Inc. and
excludes the expected loss of up to $35,000 resulting from the loss on
extinguishment of debt expected as a result of the previously announced
proposed refinancing of long-term debt.
2