[AMERIGAS PARTNERS, L.P. LOGO] NEWS
PARTNERS, L.P.
BOX 965, VALLEY FORGE, PA 19482 (610) 337-7000
Contact: 610-337-1000 For Immediate Release:
Robert W. Krick, ext. 3645 July 26, 2006
Brenda A. Blake, ext. 3202
AMERIGAS PARTNERS REPORTS THIRD QUARTER RESULTS, AFFIRMS 2006 GUIDANCE
VALLEY FORGE, Pa., July 26 - AmeriGas Propane, Inc., general partner of AmeriGas
Partners, L.P. (NYSE: APU), reported a seasonal net loss for the third fiscal
quarter ended June 30, 2006 of $14.8 million compared to a loss of $17.7
million, excluding a loss on the early extinguishment of debt, in the same
period last year. Including the loss on the early extinguishment of debt of
$33.6 million, the prior year third quarter net loss was $51.3 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 (EBITDA) were $20.7 million for the third fiscal quarter of
2006 compared to EBITDA of $19.9 million, excluding the loss on extinguishment
of debt of $33.6 million (adjusted EBITDA), a year ago. EBITDA in the 2005
fiscal third quarter, including the loss on extinguishment of debt, was a loss
of $13.7 million.
Eugene V. N. Bissell, chief executive officer of AmeriGas, said, "Our retail
volumes declined 10.8 million gallons to 171.1 million gallons this quarter due
to warmer weather and price-induced customer conservation. Weather for the
quarter was 21.9% warmer than normal compared to weather that was 4.9% warmer
than normal in the prior-year period, according to the National Oceanic and
Atmospheric Administration (NOAA). Despite the lower volumes, we continue to
expect to earn adjusted EBITDA in the range of $245 million to $255 million for
the fiscal year ending September 30, 2006."
Revenues for the quarter were $379.1 million versus $349.5 million a year ago
due to higher retail selling prices partially offset by lower sales volumes due
to warmer weather and customer conservation. Operating and administrative
expenses increased $3.8 million during the quarter due to higher vehicle fuel
and lease costs, higher employee compensation and benefits expense and increased
bad debt expense partially offset by a favorable net adjustment in reserves for
general insurance, mainly reflecting continued improvement in claims history.
-MORE-
AMERIGAS PARTNERS REPORTS THIRD QUARTER RESULTS, PAGE 2
AFFIRMS 2006 GUIDANCE
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 third quarter FY 2006 earnings conference
call on Wednesday, July 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 4258637 (International replay 719-457-0820, passcode
4258637) through midnight Friday, July 28, 2006.
The financial table appended to this news release can be viewed directly at
HTTP://WWW.SHAREHOLDER.COM/UGI/APU/3Q06FINANCIALTABLE.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-10 ### 7/26/06
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,
------------------------- ------------------------- -------------------------
2006 2005 2006 2005 (a) 2006 2005 (a)
----------- ----------- ----------- ----------- ----------- -----------
Revenues:
Propane $ 338,047 $ 315,992 $ 1,604,821 $ 1,497,120 $ 1,927,360 $ 1,776,907
Other 41,062 33,477 122,642 106,833 159,406 139,931
----------- ----------- ----------- ----------- ----------- -----------
379,109 349,469 1,727,463 1,603,953 2,086,766 1,916,838
----------- ----------- ----------- ----------- ----------- -----------
Costs and expenses:
Cost of sales - propane 215,900 194,744 1,041,719 946,794 1,256,733 1,118,582
Cost of sales - other 18,456 14,231 47,738 43,083 62,853 56,817
Operating and administrative expenses 128,469 124,698 403,502 392,411 529,218 512,201
Depreciation 16,729 16,889 50,485 51,824 66,769 71,729
Amortization 1,111 1,332 3,524 4,145 4,896 5,413
Other (income), net (4,429) (4,070) (13,368) (21,526) (17,623) (22,321)
----------- ----------- ----------- ----------- ----------- -----------
376,236 347,824 1,533,600 1,416,731 1,902,846 1,742,421
----------- ----------- ----------- ----------- ----------- -----------
Operating income 2,873 1,645 193,863 187,222 183,920 174,417
Loss on extinguishment of debt -- (33,602) (17,079) (33,602) (17,079) (33,602)
Interest expense (17,820) (19,722) (56,167) (60,958) (75,109) (81,315)
----------- ----------- ----------- ----------- ----------- -----------
Income (loss) before income taxes (14,947) (51,679) 120,617 92,662 91,732 59,500
Income tax benefit (expense) 105 324 (2) (1,809) 293 (1,687)
Minority interests 5 79 (1,680) (1,616) (1,482) (1,389)
----------- ----------- ----------- ----------- ----------- -----------
Net income (loss) $ (14,837) $ (51,276) $ 118,935 $ 89,237 $ 90,543 $ 56,424
=========== =========== =========== =========== =========== ===========
General partner's interest in net income
(loss) (b) $ (148) $ (513) $ 3,134 $ 892 $ 905 $ 564
=========== =========== =========== =========== =========== ===========
Limited partners' interest in net income
(loss) (b) $ (14,689) $ (50,763) $ 115,801 $ 88,345 $ 89,638 $ 55,860
=========== =========== =========== =========== =========== ===========
Net income (loss) per limited partner unit (b)
Basic $ (0.26) $ (0.93) $ 2.04 $ 1.62 $ 1.59 $ 1.03
=========== =========== =========== =========== =========== ===========
Diluted $ (0.26) $ (0.93) $ 2.04 $ 1.62 $ 1.59 $ 1.02
=========== =========== =========== =========== =========== ===========
Average limited partner units outstanding:
Basic 56,797 54,493 56,797 54,487 56,330 54,484
=========== =========== =========== =========== =========== ===========
Diluted 56,797 54,493 56,833 54,541 56,370 54,544
=========== =========== =========== =========== =========== ===========
SUPPLEMENTAL INFORMATION:
Retail gallons sold (millions) 171.1 181.9 804.4 857.5 981.8 1,033.0
EBITDA (c) (d) $ 20,718 $ (13,657) $ 229,113 $ 207,973 $ 237,024 $ 216,568
Distributable cash (c) (1,529) (3,751) 173,061 165,098 158,288 145,357
Capital expenditures:
Maintenance capital expenditures 4,427 3,974 16,964 15,519 20,706 23,498
Growth capital expenditures 11,642 11,095 34,706 34,619 43,443 43,684
(a) Net income for the nine and twelve months ended June 30, 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 $(0.03) for the nine months ended June
30, 2006. There was no dilutive effect of EITF 03-6 for the three months
ended June 30, 2006 or for the three or nine months ended June 30, 2005.
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.
(continued)
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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 Nine Months Ended Twelve Months Ended
June 30, June 30, June 30,
------------------------ ------------------------ ------------------------
2006 2005 2006 2005 2006 2005
--------- --------- --------- --------- --------- ---------
Net income $ (14,837) $ (51,276) $ 118,935 $ 89,237 $ 90,543 $ 56,424
Income tax (benefit) expense (105) (324) 2 1,809 (293) 1,687
Interest expense 17,820 19,722 56,167 60,958 75,109 81,315
Depreciation 16,729 16,889 50,485 51,824 66,769 71,729
Amortization 1,111 1,332 3,524 4,145 4,896 5,413
--------- --------- --------- --------- --------- ---------
EBITDA 20,718 (13,657) 229,113 207,973 237,024 216,568
Interest expense (17,820) (19,722) (56,167) (60,958) (75,109) (81,315)
Maintenance capital expenditures (4,427) (3,974) (16,964) (15,519) (20,706) (23,498)
Loss on extinguishment of debt -- 33,602 17,079 33,602 17,079 33,602
--------- --------- --------- --------- --------- ---------
Distributable cash $ (1,529) $ (3,751) $ 173,061 $ 165,098 $ 158,288 $ 145,357
========= ========= ========= ========= ========= =========
(d) The following table includes a reconciliation of forecasted net income to
forecasted adjusted EBITDA (EBITDA excluding the loss on extinguishment of
debt) for the fiscal year ending September 30, 2006:
Forecast
Fiscal
Year
Ending
September 30,
2006
-------------
Net income (estimate) $ 86,000
Income Tax expense (estimate) --
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
========
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