UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 2005
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-13692
AMERIGAS PARTNERS, L.P.
(Exact name of registrant as specified in its charters)
Delaware 23-2787918
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
460 North Gulph Road, King of Prussia, PA 19406
(Address of principal executive offices) (Zip Code)
(610) 337-7000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. Large
accelerated filer X Accelerated filer Non-accelerated filer
----- ----- -----
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes No X
----- -----
At January 31, 2006, there were 56,797,105 Common Units of AmeriGas
Partners, L.P. outstanding.
AMERIGAS PARTNERS, L.P.
TABLE OF CONTENTS
PAGES
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
December 31, 2005, September 30, 2005 and
December 31, 2004 1
Condensed Consolidated Statements of Operations
for the three months ended December 31, 2005 and 2004 2
Condensed Consolidated Statements of Cash Flows
for the three months ended December 31, 2005 and 2004 3
Condensed Consolidated Statement of Partners' Capital
for the three months ended December 31, 2005 4
Notes to Condensed Consolidated Financial Statements 5 - 13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14 - 19
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 19 - 20
Item 4. Controls and Procedures 21
PART II OTHER INFORMATION
Item 6. Exhibits 22
Signatures 23
-i-
AMERIGAS PARTNERS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(Thousands of dollars)
December 31, September 30, December 31,
2005 2005 2004
------------ ------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 33,070 $ 99,162 $ 7,218
Accounts receivable (less allowances for doubtful accounts
of $14,658, $13,143 and $13,285, respectively) 278,920 161,209 234,016
Accounts receivable - related parties 2,943 2,600 2,935
Inventories 112,907 90,748 104,253
Derivative financial instruments 15,543 50,788 657
Prepaid expenses and other current assets 13,403 13,233 9,771
---------- ---------- ----------
Total current assets 456,786 417,740 358,850
Property, plant and equipment (less accumulated depreciation and
amortization of $584,516, $569,822 and $535,322, respectively) 584,810 584,519 594,805
Goodwill and excess reorganization value 619,052 619,052 618,048
Intangible assets (less accumulated amortization of $21,871,
$20,756 and $17,324, respectively) 28,332 29,422 31,395
Other assets 13,819 12,342 17,997
---------- ---------- ----------
Total assets $1,702,799 $1,663,075 $1,621,095
========== ========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Current maturities of long-term debt $ 152,838 $ 118,087 $ 60,420
Bank loans -- -- 30,000
Accounts payable - trade 221,321 136,429 180,902
Accounts payable - related parties 7,822 2,993 5,418
Customer deposits and advances 72,067 92,427 64,537
Employee compensation and benefits accrued 22,153 31,410 21,053
Interest accrued 15,922 28,985 16,634
Other current liabilities 55,847 46,684 55,127
---------- ---------- ----------
Total current liabilities 547,970 457,015 434,091
Long-term debt 759,791 795,415 840,812
Other noncurrent liabilities 63,717 64,658 61,578
Commitments and contingencies (note 4)
Minority interests 8,404 8,570 7,574
Partners' capital 322,917 337,417 277,040
---------- ---------- ----------
Total liabilities and partners' capital $1,702,799 $1,663,075 $1,621,095
========== ========== ==========
See accompanying notes to condensed consolidated financial statements.
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AMERIGAS PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(Thousands of dollars, except per unit)
Three Months Ended
December 31,
-------------------
2005 2004
-------- --------
Revenues:
Propane $588,357 $517,451
Other 41,867 38,765
-------- --------
630,224 556,216
-------- --------
Costs and expenses:
Cost of sales - propane 391,974 335,309
Cost of sales - other 15,815 15,835
Operating and administrative expenses 133,438 130,619
Depreciation and amortization 18,253 19,318
Other income, net (3,921) (12,549)
-------- --------
555,559 488,532
-------- --------
Operating income 74,665 67,684
Interest expense (18,919) (20,503)
-------- --------
Income before income taxes and minority interests 55,746 47,181
Income tax expense (51) (2,315)
Minority interests (682) (575)
-------- --------
Net income $ 55,013 $ 44,291
======== ========
General partner's interest in net income $ 5,536 $ 2,493
======== ========
Limited partners' interest in net income $ 49,477 $ 41,798
======== ========
Net income per limited partner unit - basic and diluted: $ 0.87 $ 0.77
======== ========
Average limited partner units outstanding (thousands):
Basic 56,797 54,477
======== ========
Diluted 56,840 54,552
======== ========
See accompanying notes to condensed consolidated financial statements.
-2-
AMERIGAS PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(Thousands of dollars)
Three Months Ended
December 31,
--------------------
2005 2004
--------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 55,013 $ 44,291
Adjustments to reconcile net income to net
cash (used) provided by operating activities:
Depreciation and amortization 18,253 19,318
Gain on sale of Atlantic Energy -- (9,135)
Other, net 2,683 432
Net change in:
Accounts receivable (121,381) (93,081)
Inventories (22,159) (19,302)
Accounts payable 89,723 72,925
Other current assets and liabilities (38,605) (27,570)
--------- --------
Net cash used by operating activities (16,473) (12,122)
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property, plant and equipment (18,084) (21,136)
Proceeds from disposals of assets 2,217 6,096
Net proceeds from sale of Atlantic Energy -- 11,504
Acquisitions of businesses, net of cash acquired (551) (15,642)
--------- --------
Net cash used by investing activities (16,418) (19,178)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions (32,128) (30,265)
Minority interest activity (502) (485)
Increase in bank loans -- 30,000
Repayment of long-term debt (571) (1,315)
--------- --------
Net cash used by financing activities (33,201) (2,065)
--------- --------
Cash and cash equivalents decrease $ (66,092) $(33,365)
========= ========
CASH AND CASH EQUIVALENTS:
End of period $ 33,070 $ 7,218
Beginning of period 99,162 40,583
--------- --------
Decrease $ (66,092) $(33,365)
========= ========
See accompanying notes to condensed consolidated financial statements.
-3-
AMERIGAS PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
(unaudited)
(Thousands, except unit data)
Accumulated
Number of other Total
Common General comprehensive partners'
Units Common partner income (loss) capital
---------- -------- ------- ------------- ---------
BALANCE SEPTEMBER 30, 2005 56,792,605 $289,396 $2,920 $ 45,101 $337,417
Net income 49,477 5,536 55,013
Net losses on derivative instruments (27,238) (27,238)
Reclassification of net gains
on derivative instruments (10,294) (10,294)
-------- ------ -------- --------
Comprehensive income 49,477 5,536 (37,532) 17,481
Distributions (31,807) (321) (32,128)
Common Units issued in
connection with incentive
compensation plan 4,500 146 1 147
---------- -------- ------ -------- --------
BALANCE DECEMBER 31, 2005 56,797,105 $307,212 $8,136 $ 7,569 $322,917
========== ======== ====== ======== ========
See accompanying notes to condensed consolidated financial statements.
-4-
AMERIGAS PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Thousands of dollars, except per unit)
1. BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of
AmeriGas Partners, L.P. ("AmeriGas Partners") and its principal operating
subsidiaries AmeriGas Propane, L.P. ("AmeriGas OLP") and AmeriGas OLP's
subsidiary, AmeriGas Eagle Propane, L.P. ("Eagle OLP"). AmeriGas Partners,
AmeriGas OLP and Eagle OLP are Delaware limited partnerships. AmeriGas OLP
and Eagle OLP are collectively referred to herein as "the Operating
Partnerships," and AmeriGas Partners, the Operating Partnerships and all of
their subsidiaries are collectively referred to herein as "the Partnership"
or "we." We eliminate all significant intercompany accounts and
transactions when we consolidate. We account for AmeriGas Propane, Inc.'s
(the "General Partner's") 1.01% interest in AmeriGas OLP and an unrelated
third party's approximate 0.1% limited partner interest in Eagle OLP as
minority interests in the condensed consolidated financial statements. The
Partnership's 50% ownership interest in Atlantic Energy, Inc. ("Atlantic
Energy") was accounted for by the equity method. In November 2004, the
Partnership sold its interest in Atlantic Energy (also see Note 3).
AmeriGas Finance Corp., AmeriGas Eagle Finance Corp. and AP Eagle Finance
Corp. are wholly-owned finance subsidiaries of AmeriGas Partners. Their
sole purpose is to serve as co-obligors for debt securities issued by
AmeriGas Partners, L.P.
The accompanying condensed consolidated financial statements are unaudited
and have been prepared in accordance with the rules and regulations of the
U.S. Securities and Exchange Commission ("SEC"). They include all
adjustments which we consider necessary for a fair statement of the results
for the interim periods presented. Such adjustments consisted only of
normal recurring items unless otherwise disclosed. The September 30, 2005
condensed consolidated balance sheet data was derived from audited
financial statements, but does not include all disclosures required by
accounting principles generally accepted in the United States of America.
These financial statements should be read in conjunction with the financial
statements and related notes included in our Annual Report on Form 10-K for
the year ended September 30, 2005 ("2005 Annual Report"). Weather
significantly impacts demand for propane and profitability because many
customers use propane for heating purposes. Due to the seasonal nature of
the Partnership's propane business, the results of operations for interim
periods are not necessarily indicative of the results to be expected for a
full year.
NET INCOME PER UNIT. Net income per unit is computed by dividing net
income, after deducting the General Partner's interest in AmeriGas
Partners, by the weighted average number of limited partner units
outstanding.
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
-5-
AMERIGAS PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Thousands of dollars, except per unit)
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 to the General Partner and a dilution of the
earnings to the limited partners. Due to the seasonality of the propane
business, the dilutive effect of EITF 03-6 on net income per limited
partner unit will typically, but not necessarily, impact our first three
fiscal quarters. EITF 03-6 is not expected to impact net income per limited
partner unit for the fiscal year. 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.
Potentially dilutive Common Units included in the diluted limited partner
units outstanding computation reflect the effects of restricted Common Unit
awards granted under the General Partner's incentive compensation plans.
COMPREHENSIVE INCOME. The following table presents the components of
comprehensive income (loss) for the three months ended December 31, 2005
and 2004:
Three Months Ended
December 31,
-------------------
2005 2004
-------- --------
Net income $ 55,013 $ 44,291
Other comprehensive loss (37,532) (26,142)
-------- --------
Comprehensive income $ 17,481 $ 18,149
======== ========
Other comprehensive income (loss) is principally the result of changes in
the fair value of propane commodity derivative instruments and interest
rate protection agreements, net of reclassifications of net gains and
losses to net income.
UNIT-BASED COMPENSATION. Certain members of the General Partner's
management may be granted stock options for UGI Common Stock under UGI's
equity compensation plans. Such awards typically vest ratably over a period
of years (generally three years). There are certain change of control and
retirement eligibility conditions that, if met, generally result in an
acceleration of vesting. Stock options for UGI Common Stock generally can
be exercised no later than ten years from the grant date.
Under the AmeriGas Propane, Inc. 2000 Long-Term Incentive Plan ("2000
Propane Plan"), the General Partner may grant to key employees the rights
to receive a total of 500,000 AmeriGas Partners Common Units ("Units"), or
cash equivalent to the fair market value of such Units, or a combination of
both, upon the achievement of certain market performance goals. In
addition, the 2000 Propane Plan authorizes the crediting of Partnership
Common Unit distribution equivalents to participants' accounts. Any
distribution equivalents will be paid in cash. The actual number of Common
Units (or their cash equivalent) ultimately issued, and the actual amount
of distribution equivalents paid, is dependent upon the achievement of
market performance goals and employee service conditions. Generally, each
grant, unless paid, will terminate when the participant ceases to be
employed by the General Partner. There are certain change of control and
retirement eligibility conditions that, if met, generally result in the
acceleration of vesting. No awards were granted pursuant to the 2000
Propane Plan during the three months ended December 31, 2005 or 2004.
We also have a nonexecutive AmeriGas Propane, Inc. plan under which the
General Partner may grant key employees who do not participate in
-6-
AMERIGAS PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Thousands of dollars, except per unit)
the 2000 Propane Plan the rights to receive a total of 200,000 AmeriGas
Partners Common Units. Generally, awards under the nonexecutive plan vest
at the end of a three-year period and are paid in Units and cash. There are
certain change of control conditions that, if met, generally result in an
acceleration of vesting. Awards granted pursuant to the nonexecutive plan
during the three months ended December 31, 2005 and any associated
expense was not material to the Partnership's financial position, results
of operations or cash flows.
Effective October 1, 2005, the Partnership adopted Statement of Financial
Accounting Standards ("SFAS") No. 123 (revised 2004), "Share-Based Payment"
("SFAS 123R"). Prior to October 1, 2005, as permitted, we applied the
provisions of Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25"), in recording
compensation expense for grants of equity instruments to employees. Under
APB 25, the Partnership did not record any compensation expense for stock
options, but provided the required pro forma disclosures as if we had
determined compensation expense under the fair value method as prescribed
by the provisions of SFAS No. 123. Under SFAS 123R, all equity-based
compensation cost is measured on the grant date or at the end of each
period based on the fair value of that award and is recognized in the
income statement over the requisite service period.
As permitted by the standard, under the modified prospective approach,
effective October 1, 2005, we began recording compensation expense for
awards that were not vested as of that date. The Partnership used the
Black-Scholes option-pricing model to estimate the fair value of each
option prior to adoption of SFAS 123R and continues to use this model. The
adoption of SFAS 123R resulted in compensation expense associated with
stock options of $88 during the three months ended December 31, 2005 which
did not impact our reported basic and diluted earnings per limited partner
unit. As of December 31, 2005, there was $546 of unrecognized compensation
cost related to non-vested stock options that is expected to be recognized
over a weighted average period of 1.9 years. Assuming no significant change
in the level of future stock option grants to AmeriGas Propane, Inc.
employees, we do not believe that compensation cost associated with stock
options will have a material impact on the Partnership's financial
position, results of operations or cash flows.
Both prior to and after the adoption of SFAS 123R, we measured and recorded
compensation cost of Unit awards that can be settled in cash or at the
General Partner's option in cash or AmeriGas Partners Common Units, or a
combination of both, based upon their fair value as of the end of each
period. The fair value of Units are generally dependent upon AmeriGas
Partners Common Unit price and its performance in comparison to a group of
peer companies. The fair value of these awards is expensed over requisite
service periods.
-7-
AMERIGAS PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Thousands of dollars, except per unit)
The following table illustrates the effects on net income and basic and
diluted income per unit as if we had applied the provisions of SFAS 123R to
all of our equity-based compensation awards for the period prior to the
adoption of SFAS 123R.
For the three months ended December 31, 2004
Net income as reported $44,291
Add: Unit-based employee
compensation benefit
included in reported net income (495)
Deduct: Total stock and unit-based
employee compensation benefit
determined under the fair
value method for all awards 350
-------
Pro forma net income $44,146
=======
Basic income per limited partner unit:
As reported $ 0.77
Pro forma $ 0.77
Diluted income per limited partner unit:
As reported $ 0.77
Pro forma $ 0.76
The total equity-based compensation benefit recorded during the three
months ended December 31, 2005 was $750 which reflects both stock option
and Unit awards. Both of the three-month periods ended December 31, 2005
and 2004 reflect a net compensation benefit largely reflecting the effects
of certain market performance conditions not being met.
As of December 31, 2005, there was $1,414 of unrecognized compensation cost
associated with 86,967 Unit awards that is expected to be recognized over a
weighted average period of 1.7 years. Also, at December 31, 2005, a
liability of $1,426 is reflected in other noncurrent liabilities in the
Condensed Consolidated Balance Sheet. It is the Partnership's practice to
issue new AmeriGas Partners Common Units for the portion of any Unit award
paid out in AmeriGas Partners Common Units.
Number of Average Fair
Units Value (per Unit)
--------- ----------------
Non-vested Units - September 30, 2005(a) 112,967 $37.31
Non-vested Units - December 31, 2005(a) 86,967 $32.65
(a) The decrease in non-vested Unit awards from September 30, 2005 compared to
December 31, 2005 is a result of market performance conditions not being
met with respect to the 2000 Propane Plan. With respect to the nonexecutive
plan, awards representing 6,750 were paid out to employees, 4,500 of which
were settled through the issuance of new AmeriGas Partners Common Units.
Also, during the three months ended December 31, 2005, 6,750 new Unit
awards were granted to employees.
RECLASSIFICATIONS. We have reclassified certain prior-year balances to
conform to the current period presentation.
USE OF ESTIMATES. We make estimates and assumptions when preparing
financial statements in conformity with accounting principles generally
accepted in the United States of America. These estimates and assumptions
affect the reported amounts of
-8-
AMERIGAS PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Thousands of dollars, except per unit)
assets and liabilities, revenues and expenses, as well as the disclosure of
contingent assets and liabilities. Actual results could differ from these
estimates.
2. INTANGIBLE ASSETS
The Partnership's intangible assets comprise the following:
December 30, September 30,
2005 2005
------------ -------------
Subject to amortization:
Customer relationships and
noncompete agreements $ 50,203 $ 50,178
Accumulated amortization (21,871) (20,756)
-------- --------
$ 28,332 $ 29,422
-------- --------
Not subject to amortization:
Goodwill $525,732 $525,732
Excess reorganization value 93,320 93,320
-------- --------
$619,052 $619,052
-------- --------
Amortization expense of intangible assets was $1,115 and $1,166 for the
three months ended December 31, 2005 and 2004, respectively. Our expected
aggregate amortization expense of intangible assets for the next five
fiscal years is as follows: Fiscal 2006 - $4,377; Fiscal 2007 - $3,736;
Fiscal 2008 - $3,455; Fiscal 2009 - $3,127; Fiscal 2010 - $2,811.
3. RELATED PARTY TRANSACTIONS
Pursuant to the Partnership Agreement and a Management Services Agreement
among AmeriGas Eagle Holdings, Inc., the general partner of Eagle OLP, and
the General Partner, the General Partner is entitled to reimbursement for
all direct and indirect expenses incurred or payments it makes on behalf of
the Partnership. These costs, which totaled $78,652 and $78,694 during the
three months ended December 31, 2005 and 2004, respectively, include
employee compensation and benefit expenses of employees of the General
Partner and general and administrative expenses.
UGI provides certain financial and administrative services to the General
Partner. UGI bills the General Partner for all direct and indirect
corporate expenses incurred in connection with providing these services and
the General Partner is reimbursed by the Partnership for these expenses.
Such corporate expenses totaled $787 and $3,234 during the three months
ended December 31, 2005 and 2004, respectively. In addition, UGI and
certain of its subsidiaries (excluding Atlantic Energy which is discussed
separately) provide office space and automobile liability insurance and
sell propane to the
-9-
AMERIGAS PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Thousands of dollars, except per unit)
Partnership. These costs totaled $864 and $997 during the three months
ended December 31, 2005 and 2004, respectively.
AmeriGas OLP purchases propane from Atlantic Energy, now owned by an
affiliate of UGI. Purchases of propane by AmeriGas OLP from Atlantic Energy
during the three months ended December 31, 2005 and 2004 totaled $12,256
and $8,506, respectively. Amounts due to Atlantic Energy totaled $7,822,
$2,505 and $3,986 at December 31, 2005, September 30, 2005 and December 31,
2004, respectively, and are reflected in accounts payable - related parties
in the Condensed Consolidated Balance Sheets. Prior to the November 2004
sale of our 50% ownership interest in Atlantic Energy, we purchased propane
on behalf of Atlantic Energy. Atlantic Energy reimbursed AmeriGas OLP for
its purchases plus interest as Atlantic Energy sold such propane to third
parties or to AmeriGas OLP itself. The total dollar value of propane
purchased on behalf of Atlantic Energy was $2,420 during the three months
ended December 31, 2004 all of which occurred prior to the sale of our
ownership interests.
In November 2004, in conjunction with the sale of our 50% ownership
interest in Atlantic Energy, UGI Asset Management, Inc. and AmeriGas OLP
entered into a Product Sales Agreement whereby UGI Asset Management, Inc.
has agreed to sell and AmeriGas OLP has agreed to purchase a specified
amount of propane annually at the Atlantic Energy terminal in Chesapeake,
Virginia. The Product Sales Agreement took effect on April 1, 2005 and will
continue for a primary term of five years with an option to extend the
agreement for up to an additional five years. The price to be paid for
product purchased under the agreement will be determined annually using a
contractual formula that takes into account published index prices and the
locational value of deliveries at the Atlantic Energy terminal.
Prior to the sale of Atlantic Energy, the General Partner also provided it
with other services including accounting, insurance and other
administrative services and was reimbursed for the related costs. Such
costs were not material during the three months ended December 31, 2004. In
addition, AmeriGas OLP entered into product cost hedging contracts on
behalf of Atlantic Energy. When these contracts were settled, AmeriGas OLP
was reimbursed the cost of any losses by, or distributed the proceeds of
any gains to, Atlantic Energy. No amounts were due from Atlantic Energy at
December 31, 2005. Amounts due from Atlantic Energy at December 31, 2004
totaled $376 which is included in accounts receivable - related parties
in the Condensed Consolidated Balance Sheet.
-10-
AMERIGAS PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Thousands of dollars, except per unit)
4. COMMITMENTS AND CONTINGENCIES
The Partnership has succeeded to certain lease guarantee obligations of
Petrolane relating to Petrolane's divestiture of nonpropane operations
before its 1989 acquisition by QFB Partners. Future lease payments under
these leases total approximately $9,000 at December 31, 2005. The leases
expire through 2010 and some of them are currently in default. The
Partnership has succeeded to the indemnity agreement of Petrolane by which
Texas Eastern Corporation ("Texas Eastern"), a prior owner of Petrolane,
agreed to indemnify Petrolane against any liabilities arising out of the
conduct of businesses that do not relate to, and are not a part of, the
propane business, including lease guarantees. In December 1999, Texas
Eastern filed for dissolution under the Delaware General Corporation Law.
PanEnergy Corporation ("PanEnergy"), Texas Eastern's sole stockholder,
subsequently assumed all of Texas Eastern's liabilities as of December 20,
2002, to the extent of the value of Texas Eastern's assets transferred to
PanEnergy as of that date (which was estimated to exceed $94,000), and to
the extent that such liabilities arise within ten years from Texas
Eastern's date of dissolution. Notwithstanding the dissolution proceeding,
and based on Texas Eastern previously having satisfied directly defaulted
lease obligations without the Partnership's having to honor its guarantee,
we believe that the probability that the Partnership will be required to
directly satisfy the lease obligations subject to the indemnification
agreement is remote.
On August 21, 2001, AmeriGas Partners, through AmeriGas OLP, acquired the
propane distribution businesses of Columbia Energy Group (the "2001
Acquisition") pursuant to the terms of a purchase agreement (the "2001
Acquisition Agreement") by and among Columbia Energy Group ("CEG"),
Columbia Propane Corporation ("Columbia Propane"), Columbia Propane, L.P.
("CPLP"), CP Holdings, Inc. ("CPH," and together with Columbia Propane and
CPLP, the "Company Parties"), AmeriGas Partners, AmeriGas OLP and the
General Partner (together with AmeriGas Partners and AmeriGas OLP, the
"Buyer Parties"). As a result of the 2001 Acquisition, AmeriGas OLP
acquired all of the stock of Columbia Propane and CPH and substantially all
of the partnership interests of CPLP. Under the terms of an earlier
acquisition agreement (the "1999 Acquisition Agreement"), the Company
Parties agreed to indemnify the former general partners of National Propane
Partners, L.P. (a predecessor company of the Columbia Propane businesses)
and an affiliate (collectively, "National General Partners") against
certain income tax and other losses that they may sustain as a result of
the 1999 acquisition by CPLP of National Propane Partners, L.P. (the "1999
Acquisition") or the operation of the business after the 1999 Acquisition
("National Claims"). At December 31, 2005, the potential amount payable
under this indemnity by the Company Parties was approximately $58,000.
These indemnity obligations will expire on the date that CPH acquires the
remaining outstanding partnership interest of CPLP, which is expected to
occur on or after July 19, 2009.
Under the terms of the 2001 Acquisition Agreement, CEG agreed to indemnify
the Buyer Parties and the Company Parties against any losses that they
sustain under the 1999
-11-
AMERIGAS PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Thousands of dollars, except per unit)
Acquisition Agreement and related agreements ("Losses"), including National
Claims, to the extent such claims are based on acts or omissions of CEG or
the Company Parties prior to the 2001 Acquisition. The Buyer Parties agreed
to indemnify CEG against Losses, including National Claims, to the extent
such claims are based on acts or omissions of the Buyer Parties or the
Company Parties after the 2001 Acquisition. CEG and the Buyer Parties have
agreed to apportion certain losses resulting from National Claims to the
extent such losses result from the 2001 Acquisition itself.
Samuel and Brenda Swiger and their son (the "Swigers") sustained personal
injuries and property damage as a result of a fire that occurred when
propane that leaked from an underground line ignited. In July 1998, the
Swigers filed a class action lawsuit against AmeriGas Propane, L.P. (named
incorrectly as "UGI/AmeriGas, Inc."), in the Circuit Court of Monongalia
County, West Virginia, in which they sought to recover an unspecified
amount of compensatory and punitive damages and attorney's fees, for
themselves and on behalf of persons in West Virginia for whom the
defendants had installed propane gas lines, allegedly resulting from the
defendants' failure to install underground propane lines at depths required
by applicable safety standards. In 2003, we settled the individual personal
injury and property damage claims of the Swigers. In 2004, the court
granted the plaintiffs' motion to include customers acquired from Columbia
Propane in August 2001 as additional potential class members and the
plaintiffs amended their complaint to name additional parties pursuant to
such ruling. Subsequently, in March 2005, we filed a cross-claim against
CEG, former owner of Columbia Propane, seeking indemnification for conduct
undertaken by Columbia Propane prior to our acquisition. Class counsel has
indicated that the class is seeking compensatory damages in excess of
$12,000 plus punitive damages, civil penalties and attorneys' fees. We
believe we have good defenses to the claims of the class members and intend
to defend against the remaining claims in this lawsuit.
We also have other contingent liabilities, pending claims and legal actions
arising in the normal course of our business. We cannot predict with
certainty the final results of these and the aforementioned matters.
However, it is reasonably possible that some of them could be resolved
unfavorably to us and result in losses in excess of recorded amounts. We
are unable to estimate any possible losses in excess of recorded amounts.
Although management currently believes, after consultation with counsel,
that damages or settlements, if any, recovered by the plaintiffs in such
claims or actions will not have a material adverse effect on our financial
position, damages or settlements could be material to our operating results
or cash flows in future periods depending on the nature and timing of
future developments with respect to these matters and the amounts of future
operating results and cash flows.
-12-
AMERIGAS PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Thousands of dollars, except per unit)
5. SUBSEQUENT EVENT - LONG-TERM DEBT REFINANCING
In January 2006, the Partnership and AP Eagle Finance Corp. issued $350,000
of 7.125% Senior Notes due 2016. The proceeds of this registered public
debt offering were used to refinance $59,500 of the Partnership's $60,000
10% Senior Notes due 2006 pursuant to a tender offer, plus a premium, and
AmeriGas OLP's $35,000 term loan due October 1, 2006. On January 27, 2006,
AmeriGas OLP notified the holders of its $160,000 Series A and $68,800
Series C First Mortgage Notes of its intention to redeem the notes,
including a make-whole premium, on February 16, 2006. The Partnership
expects to incur a loss on extinguishment of debt associated with these
refinancings of approximately $16,000 that will be recorded during the
three months ending March 31, 2006.
-13-
AMERIGAS PARTNERS, L.P.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Information contained in this Management's Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this Quarterly Report may
contain forward-looking statements. Such statements use forward-looking words
such as "believe," "plan," "anticipate," "continue," "estimate," "expect,"
"may," "will," or other similar words. These statements discuss plans,
strategies, events or developments that we expect or anticipate will or may
occur in the future.
A forward-looking statement may include a statement of the assumptions or bases
underlying the forward-looking statement. We believe that we have chosen these
assumptions or bases in good faith and that they are reasonable. However, we
caution you that actual results almost always vary from assumed facts or bases,
and the differences between actual results and assumed facts or bases can be
material, depending on the circumstances. When considering forward-looking
statements, you should keep in mind the following important factors which could
affect our future results and could cause those results to differ materially
from those expressed in our forward-looking statements: (1) adverse weather
conditions resulting in reduced demand; (2) cost volatility and availability of
propane, and the capacity to transport propane to our market areas; (3) changes
in laws and regulations, including safety, tax and accounting matters; (4)
competitive pressures from the same and alternative energy sources; (5) failure
to acquire new customers thereby reducing or limiting any increase in revenues;
(6) liability for environmental claims; (7) increased customer conservation
measures due to high energy prices and improvements in energy efficiency and
technology resulting in reduced demand; (8) adverse labor relations; (9) large
customer, counterparty or supplier defaults; (10) liability in excess of
insurance coverage for personal injury and property damage arising from
explosions and other catastrophic events, including acts of terrorism, resulting
from operating hazards and risks incidental to transporting, storing and
distributing propane, butane and ammonia; (11) political, regulatory and
economic conditions in the United States and foreign countries; and (12) reduced
access to capital markets and interest rate fluctuations.
These factors are not necessarily all of the important factors that could cause
actual results to differ materially from those expressed in any of our
forward-looking statements. Other unknown or unpredictable factors could also
have material adverse effects on future results. We undertake no obligation to
update publicly any forward-looking statement whether as a result of new
information or future events except as required by the federal securities laws.
-14-
AMERIGAS PARTNERS, L.P.
ANALYSIS OF RESULTS OF OPERATIONS
The following analysis compares the Partnership's results of operations for the
three months ended December 31, 2005 ("2005 three-month period") with the three
months ended December 31, 2004 ("2004 three-month period").
EXECUTIVE OVERVIEW
The Partnership's results are largely seasonal and dependent upon weather
conditions, particularly during the peak-heating season, which occurs in the
first half of our fiscal year. As a result, our net income is generally higher
in our first and second fiscal quarters whereas lower net income or net losses
occur in our third and fourth fiscal quarters. Weather during the 2005
three-month period was 4.1% warmer than normal compared to 8.0% warmer than
normal in the prior-year period. In addition to the weather conditions, our
volumes reflect the effects of customer conservation due to a continuing trend
of high propane prices.
The Partnership reported net income of $55.0 million during the 2005 three-month
period, an increase of $10.7 million compared to the prior-year period. The 2004
three-month period included an after-tax gain of $7.1 million in connection with
the November 2004 sale of Atlantic Energy, Inc. ("Atlantic Energy"). The
Partnership's retail gallons sold during the 2005 three-month period reflect the
negative effects of customer conservation resulting from higher propane costs
and selling prices and reduced volumes sold to agricultural customers reflecting
a weak crop-drying season. Although the Partnership experienced reduced volumes,
we were able to effectively manage product costs and customer pricing, while
remaining competitive in the marketplace.
-15-
AMERIGAS PARTNERS, L.P.
2005 THREE-MONTH PERIOD COMPARED WITH 2004 THREE-MONTH PERIOD
Increase
Three Months Ended December 31, 2005 2004 (Decrease)
- ------------------------------- ------ ------ --------------
(millions of dollars)
Gallons sold (millions):
Retail 291.9 296.8 (4.9) (1.7)%
Wholesale 38.2 44.4 (6.2) (14.0)%
------ ------ ------
330.1 341.2 (11.1) (3.3)%
====== ====== ======
Revenues:
Retail propane $543.2 $475.5 $ 67.7 14.2%
Wholesale propane 45.2 42.0 3.2 7.6%
Other 41.8 38.7 3.1 8.0%
------ ------ ------
$630.2 $556.2 $ 74.0 13.3%
====== ====== ======
Total margin(a) $222.4 $205.1 $ 17.3 8.4%
EBITDA(b) $ 92.2 $ 86.4 $ 5.8 6.7%
Operating income $ 74.7 $ 67.7 $ 7.0 10.3%
Net income $ 55.0 $ 44.3 $ 10.7 24.2%
Heating degree days - % warmer than normal(c) (4.1) (8.0) -- --
(a) Total margin represents total revenues less cost of sales - propane and
cost of sales - other.
(b) 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 of America ("GAAP").
Management believes EBITDA is a meaningful non-GAAP financial measure used
by investors to compare the Partnership's operating performance with that
of other companies within the propane industry and to evaluate the
Partnership's ability to meet loan covenants. The Partnership's definition
of EBITDA may be different from that used by other companies. Weather
significantly impacts demand for propane and profitability because many
customers use propane for heating purposes. Due to the seasonal nature of
the Partnership's propane business, EBITDA for interim periods is not
necessarily indicative of amounts to be expected for a full year.
The following table includes reconciliations of net income to EBITDA for
the periods presented:
Three Months Ended
December 31,
------------------
2005 2004
----- -----
Net income $55.0 $44.3
Income tax expense 0.1 2.3
Interest expense 18.9 20.5
Depreciation 16.9 17.9
Amortization 1.3 1.4
----- -----
EBITDA $92.2 $86.4
===== =====
(c) Deviation from average heating degree days based upon national weather
statistics provided by the National Oceanic and Atmospheric Administration
("NOAA") for 335 airports in the United States, excluding Alaska.
-16-
AMERIGAS PARTNERS, L.P.
Based upon heating degree-day data, temperatures were 4.1% warmer than normal
during the 2005 three-month period compared to temperatures that were 8.0%
warmer than normal during the 2004 three-month period. Notwithstanding the
colder weather, retail propane volumes sold decreased 1.7% compared to the
prior-year three-month period reflecting, in part, the previously mentioned
decrease in volumes sold to agricultural customers. High propane selling prices
continued to cause price-induced customer conservation. In the 2005 three-month
period, our average retail propane product cost per retail gallon sold was
approximately 20% higher than in the 2004 three-month period, which resulted in
higher year-over-year prices to our customers. Low-margin wholesale propane
volumes sold decreased during the 2005 three-month period reflecting lower
volumes sold in connection with product cost management activities.
Retail propane revenues increased $67.7 million reflecting a $75.6 million
increase due to higher average selling prices partially offset by a $7.9 million
decrease due to the lower retail volumes sold. Wholesale propane revenues
increased $3.2 million reflecting a $9.1 million increase resulting from higher
average selling prices partially offset by a $5.9 million decrease due to lower
volumes sold. The higher average retail and wholesale selling prices per gallon
reflect the continuance of significantly higher propane product costs compared
to the prior year. The average wholesale cost per gallon of propane at Mont
Belvieu, one of the major propane supply points in the United States, was
approximately 25% greater than the average cost per gallon during the 2004
three-month period. Total cost of sales increased to $407.8 million in the 2005
three-month period from $351.1 million in the 2004 three-month period largely
reflecting the increase in propane product costs partially offset by the
decreased volumes sold.
Total margin increased $17.3 million compared to the 2004 three-month period
principally reflecting higher average margin per retail gallon which is largely
attributable to our product cost and customer pricing management efforts.
EBITDA during the 2005 three-month period was $92.2 million compared to $86.4
million during the 2004 three-month period. The $5.8 million increase in EBITDA
reflects the increase in total margin partially offset by (1) an $8.6 million
decrease in other income primarily reflecting the absence of the gain on the
sale of Atlantic Energy in November 2004 and (2) a $2.8 million increase in
operating and administrative expenses. Operating and administrative expenses
increased principally reflecting higher vehicle fuel costs and vehicle lease
expense. Operating income increased $7.0 million reflecting the previously
mentioned increase in EBITDA and lower depreciation and amortization expense.
Net income in the 2005 three-month period increased $10.7 million reflecting the
increase in operating income, lower income tax expense and $1.6 million in lower
interest expense. The reduction in income taxes is attributable to the income
tax expense on the gain on the Partnership's sale of Atlantic Energy included in
the 2004 three-month period.
FINANCIAL CONDITION AND LIQUIDITY
FINANCIAL CONDITION
The Partnership's long-term debt outstanding at December 31, 2005 totaled $912.6
million (including current maturities of $152.8 million) compared to $913.5
million (including current maturities of $118.1 million) at September 30, 2005.
AmeriGas OLP's Credit Agreement expires on October 15, 2008 and consists of (1)
a $100 million Revolving Credit Facility and (2) a $75 million Acquisition
Facility. The Revolving
-17-
AMERIGAS PARTNERS, L.P.
Credit Facility may be used for working capital and general purposes of AmeriGas
OLP. The Acquisition Facility provides AmeriGas OLP with the ability to borrow
up to $75 million to finance the purchase of propane businesses or propane
business assets or, to the extent it is not so used, for working capital and
general purposes, subject to restrictions in the AmeriGas Partners Senior Notes
indentures. At December 31, 2005, there were no borrowings outstanding under the
Credit Agreement. AmeriGas OLP's short-term borrowing needs are seasonal and are
typically greatest during the fall and winter heating-season months due to the
need to fund higher levels of working capital. Issued and outstanding letters of
credit under the Revolving Credit Facility, which reduce the amount of available
borrowing capacity, totaled $58.9 million at December 31, 2005. Largely due to
the issuance of 2.3 million Common Units in September 2005, during the 2005
three-month period the Partnership did not need to use its revolving credit
facility to fund its operations. The average daily borrowings outstanding under
the Credit Agreement during the three months ended December 31, 2004 were $20.2
million. The peak borrowings outstanding under the Credit Agreement during the
2004 three-month period were $51.0 million.
In January 2006, the Partnership and AP Eagle Finance Corp. issued $350 million
of 7.125% Senior Notes due 2016. The proceeds of this registered public debt
offering were used to refinance $59.5 million of the Partnership's $60 million
10% Senior Notes due 2006 pursuant to a tender offer, plus a premium, and
AmeriGas OLP's $35 million term loan due October 1, 2006. On January 27, 2006,
AmeriGas OLP notified the holders of its $160 million Series A and $68.8 million
Series C First Mortgage Notes of its intention to redeem the notes, including a
make-whole premium, on February 16, 2006. The Partnership expects to incur a
loss on extinguishment of debt associated with these refinancings of
approximately $16 million that will be recorded during the three months ending
March 31, 2006.
AmeriGas Partners periodically issues debt and equity securities and expects to
continue issuing securities in the future. It has issued debt securities in
underwritten public offerings or private offerings and Common Units in
underwritten public offerings in each of the last three fiscal years. Most
recently, it issued debt securities in January 2006 and Common Units in
September 2005 in underwritten public offerings. Proceeds from these offerings
are generally used to reduce or refinance indebtedness and for general
Partnership purposes, including funding acquisitions. The Partnership has an
effective debt and equity shelf registration statement with the Securities and
Exchange Commission under which it may issue Common Units or Senior Notes due
2016 in underwritten public offerings.
The quarterly distribution of $0.56 for the quarter ended December 31, 2005 will
be paid on February 18, 2006 to holders of record on February 10, 2006. During
the three months ended December 31, 2005, the Partnership declared and paid the
quarterly distributions on all limited partner units for the quarter ended
September 30, 2005. The ability of the Partnership to declare and pay the
quarterly distribution on its Common Units in the future depends upon a number
of factors. These factors include (1) the level of Partnership earnings; (2) the
cash needs of the Partnership's operations (including cash needed for
maintaining and increasing operating capacity); (3) changes in operating working
capital; and (4) the Partnership's ability to borrow under its Credit Agreement,
refinance maturing debt, and increase its long-term debt. Some of these factors
are affected by conditions beyond the Partnership's control including weather,
competition in markets we serve, the cost of propane and changes in capital
market conditions.
-18-
AMERIGAS PARTNERS, L.P.
CASH FLOWS
OPERATING ACTIVITIES. The Partnership had cash and cash equivalents totaling
$33.1 million at December 31, 2005 compared to $99.2 million at September 30,
2005. Due to the seasonal nature of the propane business, cash flows from
operating activities are generally strongest during the second and third fiscal
quarters when customers pay for propane purchased during the heating season
months. Conversely, operating cash flows are generally at their lowest levels
during the first and fourth fiscal quarters when the Partnership's investment in
working capital, principally accounts receivable and inventories, is generally
greatest. Accordingly, cash flows from operating activities during the three
months ended December 31, 2005 are not necessarily indicative of cash flows to
be expected for a full year. The Partnership generally uses its Credit Agreement
to satisfy its seasonal cash flow needs. Cash flow used by operating activities
was $16.5 million during the 2005 three-month period compared to $12.1 million
during the 2004 three-month period. Cash flow from operating activities before
changes in working capital was $75.9 million in the 2005 three-month period
compared to $54.9 million in the prior-year three-month period. Cash required to
fund changes in operating working capital during the 2005 three-month period
totaled $92.4 million compared to the $67.0 million required in the prior-year
three-month period largely reflecting the changes in accounts receivables. Our
increased need for cash to fund working capital reflects, in large part, the
effects of higher propane commodity prices.
INVESTING ACTIVITIES. We spent $18.1 million for property, plant and equipment
(including maintenance capital expenditures of $5.4 million and growth capital
expenditures of $12.7 million) during the three months ended December 31, 2005
compared to $21.1 million (including maintenance capital expenditures of $6.5
million and growth capital expenditures of $14.6 million) during the prior-year
three-month period. Expenditures for property, plant and equipment declined in
the 2005 three-month period compared to the prior-year period reflecting more
prudent use of existing cylinder capital. The decrease in proceeds received from
disposals of assets reflects the higher number of district locations sold during
the 2004 three-month period compared to the current-year period.
FINANCING ACTIVITIES. Cash flow used by financing activities was $33.2 million
in the 2005 three-month period compared to $2.1 million in the prior-year
period. The Partnership's financing activities are typically the result of
repayments and issuances of long-term debt, borrowings under our Credit
Agreement, issuances of Common Units and distributions on partnership interests.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our primary financial market risks include commodity prices for propane and
interest rates on borrowings.
The risk associated with fluctuations in the prices the Partnership pays for
propane is principally a result of market forces reflecting changes in supply
and demand for propane and other energy commodities. The Partnership's
profitability is sensitive to changes in propane supply costs, and the
Partnership generally attempts to pass on increases in such costs to customers.
The Partnership may not, however, always be able to pass through product cost
increases fully, particularly when product costs rise rapidly. In order to
reduce volatility of the Partnership's propane market price risk, we use
contracts for the forward purchase or sale of propane, propane
-19-
AMERIGAS PARTNERS, L.P.
fixed-price supply agreements, and over-the-counter derivative commodity
instruments including price swap and option contracts. Over-the-counter
derivative commodity instruments utilized by the Partnership are generally
settled at expiration of the contract. In order to minimize credit risk
associated with derivative commodity contracts, we monitor established credit
limits with the contract counterparties. Although we use derivative financial
and commodity instruments to reduce market price risk associated with forecasted
transactions, we do not use derivative financial and commodity instruments for
speculative or trading purposes.
The Partnership has both fixed-rate and variable-rate debt. Changes in interest
rates impact the cash flows of variable-rate debt but generally do not impact
its fair value. Conversely, changes in interest rates impact the fair value of
fixed-rate debt but do not impact its cash flows.
Our variable rate debt includes borrowings under AmeriGas OLP's Credit Agreement
and the AmeriGas OLP Term Loan. These agreements have interest rates that are
generally indexed to short-term market interest rates. Our long-term debt is
typically issued at fixed rates of interest based upon market rates for debt
having similar terms and credit ratings. As these long-term debt issues mature,
we may refinance such debt with new debt having interest rates reflecting
then-current market conditions. This debt may have an interest rate that is more
or less than the refinanced debt. In order to reduce interest rate risk
associated with near-term forecasted issuances of fixed-rate debt, from time to
time we enter into interest rate protection agreements.
The following table summarizes the fair values of unsettled market risk
sensitive derivative instruments held at December 31, 2005. Fair values reflect
the estimated amounts that we would receive or (pay) to terminate the contracts
at the reporting date based upon quoted market prices of comparable contracts at
December 31, 2005. The table also includes the changes in fair value that would
result if there were an adverse change of ten percent in (1) the market price of
propane and (2) interest rates on ten-year U.S. treasury notes:
Fair Change in
Value Fair Value
----- ----------
(Millions of dollars)
December 31, 2005:
Propane commodity price risk $15.5 $(12.6)
Interest rate risk (7.3) (16.6)
Because the Partnership's derivative instruments generally qualify as hedges
under Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities," we expect that changes in the
fair value of derivative instruments used to manage propane price or interest
rate risk would be substantially offset by gains or losses on the associated
underlying transactions.
-20-
AMERIGAS PARTNERS, L.P.
ITEM 4. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
The Partnership's management, with the participation of the Partnership's
Chief Executive Officer and Chief Financial Officer, evaluated the
effectiveness of the Partnership's disclosure controls and procedures as of
the end of the period covered by this report. Based on that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that the
Partnership's disclosure controls and procedures as of the end of the
period covered by this report were designed and functioning effectively to
provide reasonable assurance that the information required to be disclosed
by the Partnership in reports filed under the Securities Exchange Act of
1934, as amended, is (i) recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange
Commission's rules and forms, and (ii) accumulated and communicated to our
management, including the Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding disclosure.
(b) Change in Internal Control over Financial Reporting
No change in the Partnership's internal control over financial reporting
occurred during the Partnership's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the
Partnership's internal control over financial reporting.
-21-
AMERIGAS PARTNERS, L.P.
PART II OTHER INFORMATION
ITEM 6. EXHIBITS
The exhibits filed as part of this report are as follows (exhibits incorporated
by reference are set forth with the name of the registrant, the type of report
and registration number or last date of the period for which it was filed, and
the exhibit number in such filing):
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
- ----------- ------------------------------------------- ---------- --------- -------
4.1 Indenture, dated January 26, 2006, by and AmeriGas Form 8-K 4.1
among AmeriGas Partners, L.P., a Delaware Partners, (1/26/06)
limited partnership, AP Eagle Finance L.P.
Corp., a Delaware corporation, and U.S.
Bank National Association, as trustee.
31.1 Certification by the Chief Executive
Officer relating to the Registrant's Report
on Form 10-Q for the quarter ended December
31, 2005, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Certification by the Chief Financial
Officer relating to the Registrant's Report
on Form 10-Q for the quarter ended December
31, 2005, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32 Certification by the Chief Executive
Officer and the Chief Financial Officer
relating to the Registrant's Report on Form
10-Q for the quarter ended December 31,
2005, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
-22-
AMERIGAS PARTNERS, L.P.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AmeriGas Partners, L.P.
(Registrant)
By: AmeriGas Propane, Inc.,
as General Partner
Date: February 9, 2006 By: /s/ Jerry E. Sheridan
------------------------------------
Jerry E. Sheridan
Vice President - Finance
and Chief Financial Officer
Date: February 9, 2006 By: /s/ William J. Stanczak
-----------------------------------
William J. Stanczak
Controller and
Chief Accounting Officer
-23-
AMERIGAS PARTNERS, L.P.
EXHIBIT INDEX
31.1 Certification by the Chief Executive Officer relating to the Registrant's
Report on Form 10-Q for the quarter ended December 31, 2005, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification by the Chief Financial Officer relating to the Registrant's
Report on Form 10-Q for the quarter ended December 31, 2005, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32 Certification by the Chief Executive Officer and the Chief Financial
Officer relating to the Registrant's Report on Form 10-Q for the quarter
ended December 31, 2005, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.