(AMERIGAS PARTNERS LETTERHEAD)
Contact: 610-337-1000 For Immediate Release:
Robert W. Krick, ext. 3141 February 1, 2006
Brenda A. Blake, ext. 3202
AMERIGAS PARTNERS REPORTS HIGHER FIRST QUARTER RESULTS, AFFIRMS GUIDANCE
VALLEY FORGE, Pa., February 1 - AmeriGas Propane, Inc., general partner of
AmeriGas Partners, L.P. (NYSE: APU), reported net income of $55.0 million, or
$0.87 per limited partner unit, for the fiscal quarter ended December 31, 2005,
compared to adjusted net income of $37.2 million, or $0.67 per limited partner
unit, for the same period last year, excluding the $7.1 million, or $0.10 per
limited partner unit, gain on the sale of AmeriGas' 50% interest in a propane
import terminal in the prior year's quarter. Net income for last year's first
quarter including the gain was $44.3 million, or $0.77 per limited partner unit.
Average diluted units outstanding were 4.2% higher for the recent quarter
principally as a result of a common unit offering in September 2005.
The Partnership's earnings before interest expense, income taxes, depreciation
and amortization (EBITDA) were $92.2 million for the first fiscal quarter of
2006 compared to adjusted EBITDA of $77.3 million a year ago, excluding the $9.1
million pre-tax gain on the sale of the terminal. EBITDA for the prior year
quarter including the gain was $86.4 million. For the three months ended
December 31, 2005, retail volumes sold declined modestly to 291.9 million
gallons from 296.8 million gallons sold in the prior-year period. Weather was
4.1% warmer than normal during the recent quarter compared to weather that was
8.0% 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, "We are pleased
to be reporting improved earnings for the quarter, especially considering the
warmer than normal weather, and continuing issue of record high energy prices.
Although weather was colder than last year, volumes sold to agricultural
customers were down due to a weak grain drying season, and we continue to
experience customer conservation due to higher propane prices. Higher energy
prices also affected vehicle fuel expense and bad debt expense, which accounted
for most of the year-on-year increase in expenses. We were able to offset the
effects of the lower volumes and higher vehicle fuel and bad debt expense
through operating expense control and effective margin management while
maintaining competitive prices. While January was extraordinarily warm, assuming
normal weather for the remainder of the fiscal year, we continue to expect
adjusted EBITDA in the range of $255 million to $265 million, excluding the loss
on early extinguishment of debt of approximately $16 million that we expect to
incur in the second fiscal quarter resulting from the previously-announced
refinancing of long term debt at lower interest rates."
-MORE-
AMERIGAS PARTNERS REPORTS HIGHER FIRST QUARTER RESULTS, AFFIRMS GUIDANCE PAGE 2
Revenues for the quarter were $630.2 million versus $556.2 million a year ago,
principally reflecting higher propane product prices. Operating and
administrative expenses rose modestly during the quarter mainly reflecting the
impact of higher vehicle costs associated with increased fuel prices and lease
expenses and higher bad debt expense partially offset by lower long term
compensation expense.
AmeriGas Partners is the nation's largest retail propane marketer, serving
nearly 1.3 million customers from approximately 650 locations in 46 states. UGI
Corporation (NYSE:UGI), through subsidiaries, owns 44% of the Partnership and
individual unitholders own the remaining 56%.
AmeriGas Partners, L. P. will host its first quarter FY 2006 earnings conference
call on Wednesday, February 1, 2006, 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 4192011 (International replay 719-457-0820, passcode
4192011) through midnight Friday, February 3, 2006.
The financial tables appended to this news release can be viewed directly at
HTTP://WWW.SHAREHOLDER.COM/UGI/APU/1Q06FINANCIALTABLE.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, increased customer conservation
measures, 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-05 ### 2/1/06
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
REPORT OF EARNINGS
(Thousands, except per unit and where otherwise indicated)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------------- --------------------------------
2005 2004(a) 2005 2004(a)
----------- ----------- ----------- -----------
Revenues:
Propane $ 588,357 $ 517,451 $ 1,890,565 $ 1,733,890
Other 41,867 38,765 146,699 138,028
----------- ----------- ----------- -----------
630,224 556,216 2,037,264 1,871,918
----------- ----------- ----------- -----------
Costs and expenses:
Cost of sales - propane 391,974 335,309 1,218,473 1,068,489
Cost of sales - other 15,815 15,835 58,178 57,391
Operating and administrative expenses 133,438 130,619 520,946 507,929
Depreciation 16,951 17,922 67,137 75,053
Amortization 1,302 1,396 5,423 5,222
Other (income), net (3,921) (12,549) (17,153) (21,011)
----------- ----------- ----------- -----------
555,559 488,532 1,853,004 1,693,073
----------- ----------- ----------- -----------
Operating income 74,665 67,684 184,260 178,845
Loss on extinguishment of debt -- -- (33,602) --
Interest expense (18,919) (20,503) (78,316) (82,543)
----------- ----------- ----------- -----------
Income before income taxes 55,746 47,181 72,342 96,302
Income tax expense (51) (2,315) 750 (1,877)
Minority interests (682) (575) (1,525) (1,429)
----------- ----------- ----------- -----------
Net income $ 55,013 $ 44,291 $ 71,567 $ 92,996
=========== =========== =========== ===========
General partner's interest in net income (b) $ 5,536 $ 2,493 $ 716 $ 930
=========== =========== =========== ===========
Limited partners' interest in net income (b) $ 49,477 $ 41,798 $ 70,851 $ 92,066
=========== =========== =========== ===========
Net income per limited partner unit (b)
Basic $ 0.87 $ 0.77 $ 1.28 $ 1.72
=========== =========== =========== ===========
Diluted $ 0.87 $ 0.77 $ 1.28 $ 1.71
=========== =========== =========== ===========
Average limited partner units outstanding:
Basic 56,797 54,477 55,187 53,632
=========== =========== =========== ===========
Diluted 56,840 54,552 55,231 53,702
=========== =========== =========== ===========
SUPPLEMENTAL INFORMATION:
Retail gallons sold (millions) 291.9 296.8 1,030.0 1,051.4
EBITDA (c) (d) $ 92,236 $ 86,427 $ 221,693 $ 257,691
Distributable cash (c) 67,892 59,405 158,812 151,647
Capital expenditures:
Maintenance capital expenditures 5,425 6,519 18,167 23,501
Growth capital expenditures 12,660 14,617 41,399 44,877
(a) Net income and net income per limited partner unit for the three and twelve
months ended December 31, 2004 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) In accordance with Emerging Issues Task Force Issue No. 03-6,
"Participating Securities and the Two-Class Method under FASB Statement No.
128" ("EITF 03-6") the Partnership calculates 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 $(0.09) and $(0.03) for the three months ended
December 31, 2005 and 2004, 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.
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(continued)
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 and excluding 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 quarterly distributions. 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 Twelve Months Ended
December 31, December 31,
------------------------- -------------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Net income $ 55,013 $ 44,291 $ 71,567 $ 92,996
Income tax (benefit) expense 51 2,315 (750) 1,877
Interest expense 18,919 20,503 78,316 82,543
Depreciation 16,951 17,922 67,137 75,053
Amortization 1,302 1,396 5,423 5,222
--------- --------- --------- ---------
EBITDA 92,236 86,427 221,693 257,691
Interest expense (18,919) (20,503) (78,316) (82,543)
Maintenance capital expenditures (5,425) (6,519) (18,167) (23,501)
Loss on extinguishment of debt -- -- 33,602 --
--------- --------- --------- ---------
Distributable cash $ 67,892 $ 59,405 $ 158,812 $ 151,647
========= ========= ========= =========
(d) The following table includes a reconciliation of forecasted net income to
forecasted EBITDA for the fiscal year ending September 30, 2006:
Forecast
Fiscal
Year
Ending
September 30,
2006
-------------
Net income (estimate) $ 98,000
Interest expense (estimate) 73,000
Depreciation (estimate) 68,000
Amortization (estimate) 5,000
Loss on early extinguishment of debt (estimate) 16,000
--------
EBITDA (estimate) $260,000
========
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