(AMERIGAS PARTNERS, L.P. LOGO) NEWS
P.O. Box 965, Valley Forge, PA 19482 (610) 337-7000
Contact: 610-337-1000 For Immediate Release:
Robert W. Krick, ext. 3645 April 26, 2006
Brenda A. Blake, ext. 3202
AMERIGAS PARTNERS REPORTS SECOND QUARTER RESULTS, SETS TARGET OF 3% INCREASES IN
DISTRIBUTIONS, REVISES 2006 GUIDANCE
VALLEY FORGE, Pa., April 26 - AmeriGas Propane, Inc., general partner of
AmeriGas Partners, L.P. (NYSE: APU), reported adjusted net income for the second
fiscal quarter ended March 31, 2006 of $95.9 million, excluding a loss on the
early extinguishment of debt resulting from the previously-announced refinancing
of long-term debt, compared to net income of $96.2 million for the same period
last year. Including the loss on the early extinguishment of debt of $17.1
million, the second quarter net income was $78.8 million. 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 and loss on the early extinguishment of debt (adjusted EBITDA)
were $133.2 million for the second fiscal quarter of 2006 compared to EBITDA of
$135.2 million a year ago. EBITDA including the loss on the early extinguishment
of debt was $116.2 million. For the three months ended March 31, 2006, retail
volumes sold declined to 341.4 million gallons from 378.8 million gallons sold
in the prior-year period. Weather was 12.1% warmer than normal during the recent
quarter compared to weather that was 4.9% warmer than normal in the prior-year
period, according to the National Oceanic and Atmospheric Administration (NOAA).
Eugene V. N. Bissell, chief executive officer of AmeriGas, said, "I am pleased
to announce that we have established a target of increasing the distribution on
common units at a rate of 3% per year. This objective is a direct result of the
efforts we have made over the last several years to invest for growth while
maintaining a strong balance sheet. Yesterday we announced an increase in our
distribution from $0.56 to $0.58 per quarter as a first step in implementing
that objective. Given the extraordinarily warm winter we experienced thus far
this year, we now expect to earn adjusted EBITDA in the range of $245 million to
$255 million, for the fiscal year ending September 30, 2006."
-MORE-
AMERIGAS PARTNERS REPORTS SECOND QUARTER RESULTS, SETS TARGET OF 3% INCREASES IN
DISTRIBUTIONS, REVISES 2006 GUIDANCE
PAGE 2
Revenues for the quarter were $718.1 million versus $698.3 million a year ago
due to higher retail selling prices partially offset by lower sales volumes.
Operating and administrative expenses increased $4.5 million during the quarter
due to higher vehicle fuel costs, higher employee compensation and benefits
expenses and increased bad debt expense partially offset by a favorable net
adjustment in reserves for general insurance, litigation and medical claims of
$3.4 million, mainly reflecting an improvement in claims history.
"Although we were very successful in managing margins and controlling our
expenses this year, it was difficult to overcome lower overall sales volumes as
a result of extremely warm weather and customer conservation during the
quarter," concluded Bissell.
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 second quarter FY 2006 earnings
conference call on Wednesday, April 26, 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 3047237 (International replay 719-457-0820, passcode
3047237) through midnight Friday, April 28, 2006.
The financial table appended to this news release can be viewed directly at
HTTP://WWW.SHAREHOLDER.COM/UGI/APU/2Q06FINANCIALTABLE.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-09 ### 4/26/06
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,
---------------------------- ---------------------------- ----------------------------
2006 2005 2006 2005 (a) 2006 2005 (a)
------------ ------------ ------------ ------------ ------------ ------------
Revenues:
Propane $ 678,417 $ 663,677 $ 1,266,774 $ 1,181,128 $ 1,905,305 $ 1,743,425
Other 39,713 34,591 81,580 73,356 151,821 139,051
------------ ------------ ------------ ------------ ------------ ------------
718,130 698,268 1,348,354 1,254,484 2,057,126 1,882,476
------------ ------------ ------------ ------------ ------------ ------------
Costs and expenses:
Cost of sales - propane 433,845 416,741 825,819 752,050 1,235,577 1,092,933
Cost of sales - other 13,467 13,017 29,282 28,852 58,628 57,509
Operating and administrative
expenses 141,595 137,094 275,033 267,713 525,447 505,628
Depreciation 16,805 17,013 33,756 34,935 66,929 73,510
Amortization 1,111 1,417 2,413 2,813 5,117 5,379
Other (income), net (5,018) (4,907) (8,939) (17,456) (17,264) (21,262)
------------ ------------ ------------ ------------ ------------ ------------
601,805 580,375 1,157,364 1,068,907 1,874,434 1,713,697
------------ ------------ ------------ ------------ ------------ ------------
Operating income 116,325 117,893 190,990 185,577 182,692 168,779
Loss on extinguishment of debt (17,079) -- (17,079) -- (50,681) --
Interest expense (19,428) (20,733) (38,347) (41,236) (77,011) (82,109)
------------ ------------ ------------ ------------ ------------ ------------
Income before income taxes 79,818 97,160 135,564 144,341 55,000 86,670
Income tax (expense) benefit (56) 182 (107) (2,133) 512 (1,774)
Minority interests (1,003) (1,120) (1,685) (1,695) (1,408) (1,328)
------------ ------------ ------------ ------------ ------------ ------------
Net income $ 78,759 $ 96,222 $ 133,772 $ 140,513 $ 54,104 $ 83,568
============ ============ ============ ============ ============ ============
General partner's interest in net
income (b) $ 17,287 $ 15,076 $ 22,823 $ 17,568 $ 541 $ 836
============ ============ ============ ============ ============ ============
Limited partners' interest in net
income (b) $ 61,472 $ 81,146 $ 110,949 $ 122,945 $ 53,563 $ 82,732
============ ============ ============ ============ ============ ============
Net income per limited partner
unit (b)
Basic $ 1.08 $ 1.49 $ 1.95 $ 2.26 $ 0.96 $ 1.53
============ ============ ============ ============ ============ ============
Diluted $ 1.08 $ 1.49 $ 1.95 $ 2.25 $ 0.96 $ 1.53
============ ============ ============ ============ ============ ============
Average limited partner units
outstanding:
Basic 56,797 54,493 56,797 54,485 55,755 54,158
============ ============ ============ ============ ============ ============
Diluted 56,827 54,533 56,833 54,542 55,797 54,224
============ ============ ============ ============ ============ ============
SUPPLEMENTAL INFORMATION:
Retail gallons sold (millions) 341.4 378.8 633.3 675.6 992.6 1,026.3
EBITDA (c) (d) $ 116,159 $ 135,203 $ 208,395 $ 221,630 $ 202,649 $ 246,340
Distributable cash (c) 106,698 109,444 174,590 168,849 156,066 141,708
Capital expenditures:
Maintenance capital
expenditures 7,112 5,026 12,537 11,545 20,253 22,523
Growth capital expenditures 10,404 8,907 23,064 23,524 42,896 42,593
(a) Net income for the six and twelve months ended March 31, 2005 includes a
gain of $7,107 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 $(0.29) and $(0.38) for the three and six months
ended March 31, 2006, respectively, and $(0.26) and $(0.30) for the three
and six months ended March 31, 2005, respectively. Because EITF 03-6 does
not currently impact the calculation of Partnership net income per limited
partner unit on an annual basis, annual net income per limited partner unit
is not equal to the sum of net income per limited partner unit for each of
the Partnership's quarterly periods.
(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.
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 Six Months Ended Twelve Months Ended
March 31, March 31, March 31,
------------------------ ------------------------ ------------------------
2006 2005 2006 2005 2006 2005
---------- ---------- ---------- ---------- ---------- ----------
Net income $ 78,759 $ 96,222 $ 133,772 $ 140,513 $ 54,104 $ 83,568
Income tax expense (benefit) 56 (182) 107 2,133 (512) 1,774
Interest expense 19,428 20,733 38,347 41,236 77,011 82,109
Depreciation 16,805 17,013 33,756 34,935 66,929 73,510
Amortization 1,111 1,417 2,413 2,813 5,117 5,379
---------- ---------- ---------- ---------- ---------- ----------
EBITDA 116,159 135,203 208,395 221,630 202,649 246,340
Interest expense (19,428) (20,733) (38,347) (41,236) (77,011) (82,109)
Maintenance capital expenditures (7,112) (5,026) (12,537) (11,545) (20,253) (22,523)
Loss on extinguishment of debt 17,079 -- 17,079 -- 50,681 --
---------- ---------- ---------- ---------- ---------- ----------
Distributable cash $ 106,698 $ 109,444 $ 174,590 $ 168,849 $ 156,066 $ 141,708
========== ========== ========== ========== ========== ==========
(d) The following table includes a reconciliation of forecasted net income to
forecasted adjusted EBITDA for the fiscal year ending September 30, 2006:
Forecast
Fiscal
Year
Ending
September 30,
2006
--------------
Net income (estimate) $ 86,000
Interest expense (estimate) 74,000
Depreciation (estimate) 68,000
Amortization (estimate) 5,000
Loss on early extinguishment of debt (estimate) 17,000
--------------
Adjusted EBITDA (estimate) $ 250,000
==============