Contact: 610-337-1000 For Release: July 27, 2005
Robert W. Krick, ext. 3141 Immediate
Brenda A. Blake, ext. 3202
AMERIGAS PARTNERS REPORTS THIRD QUARTER RESULTS, AFFIRMS GUIDANCE
VALLEY FORGE, Pa., July 27 - AmeriGas Propane, Inc., general partner of AmeriGas
Partners, L.P. (NYSE: APU), reported a seasonal loss for the Partnership's third
fiscal quarter ended June 30, 2005 of $17.7 million, or $0.31 per limited
partner unit, excluding a loss on the early extinguishment of debt resulting
from the previously-announced refinancing of long-term debt, compared to a loss
of $24.1 million or $0.45 per limited partner unit, in the same period last
year. Including the loss on the early extinguishment of debt of $33.6 million,
or $0.62 per limited partner unit, the third quarter net loss was $51.3 million,
or $0.93 per limited partner unit.
For the three months ended June 30, 2005, retail volumes sold increased to 181.9
million gallons from 175.2 million gallons sold in the prior-year period on
colder weather and as a result of acquisitions and internal growth. Nationally,
weather was 4.9% warmer than normal in the 2005 period compared to weather that
was 8.0% warmer than 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 $19.9 million, excluding the
loss on extinguishment of debt of $33.6 million, in the fiscal 2005 period
compared to $16.1 million a year ago. EBITDA including the loss on the early
extinguishment of debt was a loss of $13.7 million.
Eugene V. N. Bissell, chief executive officer of AmeriGas, said, "Although we
were pleased to see our growth initiatives improve sales volumes this quarter,
it was another difficult quarter for our customers who continued to experience
record high prices resulting from record high propane product costs. As in all
energy markets, we continue to feel the effects of price-induced customer
conservation."
Revenues for the quarter were $349.5 million versus $315.1 million a year ago,
principally reflecting higher propane product costs resulting from, among other
things, higher crude oil and natural gas prices. Total margin increased
principally as a result of higher retail volumes sold at higher average unit
margins. The increase in operating expenses in the most recent quarter was due
to higher vehicle fuel costs, higher general insurance costs and increased
performance-based compensation expense.
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AMERIGAS PARTNERS REPORTS THIRD QUARTER RESULTS, AFFIRMS 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 the
loss of $33.6 million on the early extinguishment of debt resulting from the
refinancing. The refinancing of a portion of the debt has lowered annual
interest expense meaningfully and extended the maturity of the debt by several
years. The forecasted EBITDA includes a $9.1 million pre-tax gain on the sale of
Atlantic Energy as previously reported.
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%.
AmeriGas Partners, L. P. will host its third quarter FY 2005 earnings conference
call on Wednesday, July 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 5244555 (International replay 719-457-0820, passcode
5244555) through July 31, 2005.
The financial tables appended to this news release can be viewed directly at
HTTP://WWW.SHAREHOLDER.COM/UGI/APU/3Q05FINANCIALTABLE.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-13 ### 7/27/05
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,
-------- -------- --------
2005 2004 2005 (a) 2004 2005 (a) 2004
---- ---- -------- ---- -------- ----
Revenues:
Propane $ 315,992 $ 282,510 $ 1,497,120 $ 1,359,913 $ 1,776,907 $ 1,599,054
Other 33,477 32,597 106,833 103,102 139,931 134,672
----------- ----------- ----------- ----------- ----------- -----------
349,469 315,107 1,603,953 1,463,015 1,916,838 1,733,726
----------- ----------- ----------- ----------- ----------- -----------
Costs and expenses:
Cost of sales - propane 194,744 169,095 946,794 800,514 1,118,582 934,139
Cost of sales - other 14,231 14,923 43,083 43,203 56,817 57,939
Operating and administrative
expenses (b) 124,698 118,125 392,411 381,283 512,201 495,712
Depreciation 16,889 18,670 51,824 55,563 71,729 74,160
Amortization 1,332 1,298 4,145 3,876 5,413 5,091
Other (income), net (4,070) (3,011) (21,526) (10,949) (22,321) (13,336)
----------- ----------- ----------- ----------- ----------- -----------
347,824 319,100 1,416,731 1,273,490 1,742,421 1,553,705
----------- ----------- ----------- ----------- ----------- -----------
Operating income (loss) 1,645 (3,993) 187,222 189,525 174,417 180,021
Loss on extinguishment of debt (33,602) -- (33,602) -- (33,602) --
Interest expense (19,722) (20,516) (60,958) (62,818) (81,315) (83,962)
----------- ----------- ----------- ----------- ----------- -----------
Income (loss) before income taxes (51,679) (24,509) 92,662 126,707 59,500 96,059
Income tax benefit (expense) 324 237 (1,809) (391) (1,687) (1,382)
Minority interests 79 140 (1,616) (1,649) (1,389) (1,426)
----------- ----------- ----------- ----------- ----------- -----------
Net income (loss) $ (51,276) $ (24,132) $ 89,237 $ 124,667 $ 56,424 $ 93,251
=========== =========== =========== =========== =========== ===========
General partner's interest in net income
(loss) (c) $ (513) $ (241) $ 892 $ 6,448 $ 564 $ 933
=========== =========== =========== =========== =========== ===========
Limited partners' interest in net income
(loss) (c) $ (50,763) $ (23,891) $ 88,345 $ 118,219 $ 55,860 $ 92,318
=========== =========== =========== =========== =========== ===========
Net income per limited partner unit (c):
Basic $ (0.93) $ (0.45) $ 1.62 $ 2.25 $ 1.03 $ 1.76
=========== =========== =========== =========== =========== ===========
Diluted $ (0.93) $ (0.45) $ 1.62 $ 2.24 $ 1.02 $ 1.75
=========== =========== =========== =========== =========== ===========
Average limited partner units outstanding:
Basic 54,493 53,188 54,487 52,635 54,484 52,559
=========== =========== =========== =========== =========== ===========
Diluted 54,493 53,188 54,541 52,708 54,544 52,639
=========== =========== =========== =========== =========== ===========
SUPPLEMENTAL INFORMATION:
Retail gallons sold (millions) 181.9 175.2 857.5 883.6 1,033.0 1,058.5
EBITDA (d) (e) $ (13,657) $ 16,115 $ 207,973 $ 247,315 $ 216,568 $ 257,846
Distributable cash (d) (3,751) (7,400) 165,098 169,371 145,357 153,346
Capital expenditures:
Maintenance capital expenditures 3,974 2,999 15,519 15,126 23,498 20,538
Growth capital expenditures 11,095 10,004 34,619 29,486 43,684 33,695
(a) Net income and net income per limited partner unit for the nine- and
twelve-month periods ended June 30, 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 June 30, 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 $(0.10) for the nine months ended June 30,
2004.
(continued)
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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,
maintenance capital expenditures and losses on extinguishments of debt
in connection with a refinancing. 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,
-------- -------- --------
2005 2004 2005 2004 2005 2004
---- ---- ---- ---- ---- ----
Net income (loss) $ (51,276) $ (24,132) $ 89,237 $ 124,667 $ 56,424 $ 93,251
Interest expense 19,722 20,516 60,958 62,818 81,315 83,962
Income tax (benefit) expense (324) (237) 1,809 391 1,687 1,382
Depreciation 16,889 18,670 51,824 55,563 71,729 74,160
Amortization 1,332 1,298 4,145 3,876 5,413 5,091
--------- --------- --------- --------- --------- ---------
EBITDA (13,657) 16,115 207,973 247,315 216,568 257,846
Interest expense (19,722) (20,516) (60,958) (62,818) (81,315) (83,962)
Maintenance capital expenditures (3,974) (2,999) (15,519) (15,126) (23,498) (20,538)
Loss on extinguishment of debt 33,602 -- 33,602 -- 33,602 --
--------- --------- --------- --------- --------- ---------
Distributable cash $ (3,751) $ (7,400) $ 165,098 $ 169,371 $ 145,357 $ 153,346
========= ========= ========= ========= ========= =========
(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) $ 60,000*
Interest expense (estimate) 80,000
Income taxes (estimate) 2,000
Depreciation (estimate) 69,000
Amortization (estimate) 5,000
--------
EBITDA (estimate) $216,000
========
* 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 includes the loss of $33,602 resulting from the loss on
extinguishment of debt as a result of the previously announced
refinancing of long-term debt.
2