1
                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                For the quarterly period ended December 31, 1998

                                       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
                       Commission file number 33-92734-01

                             AMERIGAS PARTNERS, L.P.
                             AMERIGAS FINANCE CORP.
           (Exact name of registrants as specified in their charters)

           Delaware                                      23-2787918
           Delaware                                      23-2800532
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                       Identification No.)

                    460 North Gulph Road, King of Prussia, PA
                    (Address of principal executive offices)
                                      19406
                                   (Zip Code)
                                 (610) 337-7000
              (Registrants' 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
                                              ---    ---
       At January 31, 1999, the registrants had units and shares of common stock
outstanding as follows:

         AmeriGas Partners, L.P. - 22,105,993 Common Units
                                   19,782,146 Subordinated Units

         AmeriGas Finance Corp. -  100 shares

   2
                             AMERIGAS PARTNERS, L.P.

                                TABLE OF CONTENTS



                                                                                                   PAGES

                                                                                              
PART I  FINANCIAL INFORMATION

    Item 1.  Financial Statements

             AmeriGas Partners, L.P.

                Condensed Consolidated Balance Sheets as of December 31, 1998,
                  September 30, 1998 and December 31, 1997                                           1

                Condensed Consolidated Statements of Operations for the three
                  and twelve months ended December 31, 1998 and 1997                                 2

                Condensed Consolidated Statements of Cash Flows for the three
                  and twelve months ended December 31, 1998 and 1997                                 3

                Condensed Consolidated Statement of Partners' Capital for the
                  three months ended December 31, 1998                                               4

                Notes to Condensed Consolidated Financial Statements                               5 - 7

             AmeriGas Finance Corp.

                Balance Sheets as of December 31, 1998 and September 30, 1998                        8

                Note to Balance Sheets                                                               9

    Item 2.  Management's Discussion and Analysis of Financial Condition and
               Results of Operations                                                              10 - 16

    Item 3.  Quantitative and Qualitative Disclosures About Market Risk                           16 - 17

PART II  OTHER INFORMATION

    Item 6.  Exhibits and Reports on Form 8-K                                                       17

    Signatures                                                                                      18




                                     -i-




   3
                             AMERIGAS PARTNERS, L.P.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
                             (Thousands of dollars)



                                                                             December 31,        September 30,       December 31,
                                                                                 1998                1998                1997
                                                                           ----------------     ---------------    ----------------
ASSETS
Current assets:

                                                                                                          
     Cash and cash equivalents                                             $        14,070      $        8,873     $        24,375
     Accounts receivable (less allowances for doubtful accounts
        of $6,599, $6,432, and $8,072, respectively)                                86,857              58,778             118,331
     Inventories                                                                    43,250              49,394              78,746
     Prepaid expenses and other current assets                                      15,032              16,301              11,721
                                                                           ----------------     ---------------    ----------------
        Total current assets                                                       159,209             133,346             233,173

Property, plant and equipment (less accumulated depreciation and
     amortization of $214,526, $205,083, and $175,832, respectively)               440,391             442,042             444,727
Intangible assets (less accumulated amortization of $147,450,
     $141,382, and $122,831, respectively)                                         625,180             629,355             672,123
Other assets                                                                        13,048              12,473              13,740
                                                                           ----------------     ---------------    ----------------
        Total assets                                                       $     1,237,828      $    1,217,216     $     1,363,763
                                                                           ================     ===============    ================


LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
     Current maturities of long-term debt                                  $         6,194      $        6,068     $         6,544
     Bank loans                                                                     62,000              10,000              75,000
     Accounts payable - trade                                                       44,018              34,075              53,544
     Accounts payable - related parties                                              2,206               6,799               3,396
     Other current liabilities                                                      82,514             103,355              70,177
                                                                           ----------------     ---------------    ----------------
        Total current liabilities                                                  196,932             160,297             208,661

Long-term debt                                                                     693,634             702,926             696,263
Other noncurrent liabilities                                                        48,985              50,069              51,784

Commitments and contingencies

Minority interest                                                                    4,019               4,049               5,115


Partners' capital                                                                  294,258             299,875             401,940
                                                                           ----------------     ---------------    ----------------
        Total liabilities and partners' capital                            $     1,237,828      $    1,217,216     $     1,363,763
                                                                           ================     ===============    ================




The accompanying notes are an integral part of these financial statements.



                                     - 1 -
   4



                             AMERIGAS PARTNERS, L.P.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)
                     (Thousands of dollars, except per unit)



                                                                    Three Months Ended                   Twelve Months Ended
                                                                       December 31,                         December 31,
                                                            --------------------------------     --------------------------------
                                                                 1998              1997              1998              1997
                                                            ----------------    ------------     -------------    ---------------

                                                                                                      
Revenues:
     Propane                                                $       212,145     $   277,523      $    769,249     $      939,829
     Other                                                           25,639          25,400            79,990             80,803
                                                            ----------------    ------------     -------------    ---------------
                                                                    237,784         302,923           849,239          1,020,632
                                                            ----------------    ------------     -------------    ---------------

Costs and expenses:
     Cost of sales - propane                                         93,434         151,633           352,514            523,667
     Cost of sales - other                                           11,094          11,527            32,614             35,157
     Operating and administrative expenses                           83,590          80,867           322,943            313,652
     Depreciation and amortization                                   15,578          15,582            63,221             62,086
     Other income, net                                                 (704)           (723)             (726)           (10,641)
                                                            ----------------    ------------     -------------    ---------------
                                                                    202,992         258,886           770,566            923,921
                                                            ----------------    ------------     -------------    ---------------

Operating income                                                     34,792          44,037            78,673             96,711
Interest expense                                                    (16,664)        (16,950)          (65,903)           (65,902)
                                                            ----------------    ------------     -------------    ---------------
Income before income taxes                                           18,128          27,087            12,770             30,809
Income tax (expense) benefit                                           (266)           (340)               71                 88
Minority interest                                                      (207)           (296)             (235)              (417)
                                                            ----------------    ------------     -------------    ---------------
Net income                                                  $        17,655     $    26,451      $     12,606     $       30,480
                                                            ================    ============     =============    ===============


General partner's interest in net income                    $           177     $       265      $        126     $          305
                                                            ================    ============     =============    ===============

Limited partners' interest in net income                    $        17,478     $    26,186      $     12,480     $       30,175
                                                            ================    ============     =============    ===============


Income per limited partner unit                             $          0.42     $      0.63      $       0.30     $         0.72
                                                            ================    ============     =============    ===============



Average limited partner units outstanding (thousands)                41,888          41,881            41,888             41,836
                                                            ================    ============     =============    ===============






The accompanying notes are an integral part of these financial statements.


                                     - 2 -
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                            AMERIGAS PARTNERS, L.P.

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (unaudited)
                             (Thousands of dollars)



                                                                      Three Months Ended                Twelve Months Ended
                                                                         December 31,                       December 31,
                                                               --------------------------------    -------------------------------
                                                                   1998               1997            1998               1997
                                                               -------------      -------------    ------------      -------------

                                                                                                         
CASH  FLOWS  FROM  OPERATING  ACTIVITIES:
     Net income                                                $     17,655       $     26,451     $    12,606       $     30,480
     Adjustments to reconcile net income to net
        cash provided (used) by operating activities:
            Depreciation and amortization                            15,578             15,582          63,221             62,086
            Other, net                                                 (117)             1,687          (4,629)             4,056
                                                               -------------      -------------    ------------      -------------
                                                                     33,116             43,720          71,198             96,622
            Net change in:
                Accounts receivable                                 (29,025)           (41,131)         28,010             28,123
                Inventories and prepaid propane purchases             7,220              8,064          35,930             15,547
                Accounts payable                                      5,529              1,846         (10,504)           (26,398)
                Other current assets and liabilities                (21,596)           (19,349)         10,378             (1,012)
                                                               -------------      -------------    ------------      -------------
        Net cash provided (used) by operating activities             (4,756)            (6,850)        135,012            112,882
                                                               -------------      -------------    ------------      -------------

CASH  FLOWS  FROM  INVESTING  ACTIVITIES:
     Expenditures for property, plant and equipment                  (7,228)            (6,987)        (31,818)           (24,904)
     Proceeds from disposals of assets                                  935                667           5,421             10,537
     Acquisitions of businesses, net of cash acquired                (2,367)            (1,388)         (9,055)           (12,096)
                                                               -------------      -------------    ------------      -------------
        Net cash used by investing activities                        (8,660)            (7,708)        (35,452)           (26,463)
                                                               -------------      -------------    ------------      -------------

CASH  FLOWS  FROM  FINANCING  ACTIVITIES:
     Distributions                                                  (23,272)           (23,246)        (93,085)           (92,923)
     Minority interest activity                                        (237)              (237)         (1,040)            (1,024)
     Increase (decrease) in bank loans                               52,000             47,000         (13,000)            (2,000)
     Issuance of long-term debt                                           -             13,000          10,000             14,131
     Repayment of long-term debt                                     (9,878)            (1,653)        (12,752)            (3,943)
     Capital contribution from General Partner                            -                  -              12                 26
                                                               -------------      -------------    ------------      -------------
        Net cash provided (used) by financing activities             18,613             34,864        (109,865)           (85,733)
                                                               -------------      -------------    ------------      -------------


Cash and cash equivalents increase (decrease)                  $      5,197       $     20,306     $   (10,305)      $        686
                                                               =============      =============    ============      =============

CASH  AND  CASH  EQUIVALENTS:
     End of period                                             $     14,070       $     24,375     $    14,070       $     24,375
     Beginning of period                                              8,873              4,069          24,375             23,689
                                                               -------------      -------------    ------------      -------------
        Increase (decrease)                                    $      5,197       $     20,306     $   (10,305)      $        686
                                                               =============      =============    ============      =============


The accompanying notes are an integral part of these financial statements.


                                      -3-
   6



                             AMERIGAS PARTNERS, L.P.

              CONDENSED CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
                                   (unaudited)
                          (Thousands, except unit data)




                                            Number of units                                                               Total
                                 ----------------------------------                                       General        partners'
                                     Common          Subordinated       Common        Subordinated        partner         capital
                                 ---------------    ---------------    -----------   ---------------    ------------    ------------

                                                                                                      
BALANCE SEPTEMBER 30, 1998           22,105,993         19,782,146     $  157,866     $     139,012     $     2,997     $   299,875

   Net income                                                               9,224             8,254             177          17,655

   Distributions                                                          (12,159)          (10,880)           (233)        (23,272)
                                 ---------------    ---------------    -----------   ---------------    ------------    ------------
BALANCE DECEMBER 31, 1998            22,105,993         19,782,146     $  154,931     $     136,386     $     2,941     $   294,258
                                 ===============    ===============    ===========   ===============    ============    ============


The accompanying notes are an integral part of these financial statements.

                                      -4-




   7
                             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), its subsidiary AmeriGas
         Propane, L.P. (the "Operating Partnership"), and their corporate
         subsidiaries, together referred to in this report 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 the Operating
         Partnership as a minority interest in the condensed consolidated
         financial statements. Certain prior-period balances have been
         reclassified to conform with the current period presentation.

         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. 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. 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, 1998. 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.

         Management makes estimates and assumptions when preparing financial
         statements in conformity with generally accepted accounting principles.
         These estimates and assumptions affect the reported amounts of assets
         and liabilities, revenues and expenses, as well as the disclosure of
         contingent assets and liabilities. Actual results could differ from
         these estimates.

         During the quarter ended December 31, 1998, we adopted Statement of
         Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive
         Income" (SFAS 130). SFAS 130 establishes standards for reporting and
         displaying comprehensive income and its components in financial
         statements. Comprehensive income includes net income and all other
         nonowner changes in equity. The Partnership's comprehensive income was
         the same as its net income for all periods presented.




                                       -5-
   8
                             AMERIGAS PARTNERS, L.P.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (unaudited)
                     (Thousands of dollars, except per unit)


         During the quarter ended December 31, 1998, we adopted SFAS No. 131,
         "Disclosures about Segments of an Enterprise and Related Information"
         (SFAS 131). SFAS 131 establishes standards for reporting information
         about operating segments as well as related disclosures about products
         and services, geographic areas, and major customers. In determining our
         reportable segments under the provisions of SFAS 131, we examined the
         way we organize our business internally for making operating decisions
         and assessing business performance. Based on this examination, we have
         determined that we have a single reportable operating segment which
         engages in the distribution of propane and related equipment and
         supplies.

         No single customer represents 1% or more of consolidated revenues. In
         addition, virtually all of the Partnership's revenues are derived from
         sources within the U.S., and virtually all of its long-lived assets are
         located in the U.S.

2.       RELATED PARTY TRANSACTIONS

         In accordance with the Amended and Restated Agreement of Limited
         Partnership of AmeriGas Partners, the General Partner is entitled to
         reimbursement of all direct and indirect expenses incurred or payments
         it makes on behalf of the Partnership, and all other necessary or
         appropriate expenses allocable to the Partnership or otherwise
         reasonably incurred by the General Partner in connection with the
         Partnership's business. These costs totaled $49,761 and $48,408 during
         the three months ended December 31, 1998 and 1997, respectively. During
         the twelve months ended December 31, 1998 and 1997, such expenses
         totaled $186,270 and $179,798, respectively. In addition, UGI
         Corporation (UGI) provides certain financial and administrative
         services to the General Partner. UGI bills the General Partner for
         these direct and indirect corporate expenses, and the General Partner
         is reimbursed by the Partnership for these expenses. During the three
         months ended December 31, 1998 and 1997, such corporate expenses
         totaled $1,348 and $1,452, respectively. During the twelve months ended
         December 31, 1998 and 1997, such corporate expenses totaled $5,831 and
         $6,528, respectively.

3.       COMMITMENTS AND CONTINGENCIES

         The Partnership has succeeded to certain lease guarantee obligations of
         Petrolane Incorporated (Petrolane), a predecessor company of the
         Partnership, relating to Petrolane's divestiture of nonpropane
         operations before its 1989 acquisition by QFB Partners. Lease payments
         under these leases total approximately $51,000 at December 31, 1998.
         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 




                                      -6-
   9

                             AMERIGAS PARTNERS, L.P.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (unaudited)
                     (Thousands of dollars, except per unit)


         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. To date, Texas Eastern has
         directly satisfied defaulted lease obligations without the Partnership
         having to honor its guarantee. The Partnership believes the probability
         that it will be required to directly satisfy such lease obligations is
         remote.

         In addition, the Partnership has succeeded to Petrolane's agreement to
         indemnify Shell Petroleum N.V. (Shell) for various scheduled claims
         that were pending against Tropigas de Puerto Rico (Tropigas). Petrolane
         had entered into this indemnification agreement in conjunction with its
         sale of the international operations of Tropigas to Shell in 1989. The
         Partnership also succeeded to Petrolane's right to seek indemnity on
         these claims first from International Controls Corp., which sold
         Tropigas to Petrolane, and then from Texas Eastern. To date, neither
         the Partnership nor Petrolane has paid any sums under this indemnity,
         but several claims by Shell, including claims related to certain
         antitrust actions aggregating at least $68,000, remain pending.

         In addition to these matters, there are other pending claims and legal
         actions arising in the normal course of our business. We cannot predict
         with certainty the final results of these matters. However, it is
         reasonably possible that some of them could be resolved unfavorably to
         us. Management 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 but 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.




                                      -7-

   10
                             AMERIGAS FINANCE CORP.
             (a wholly owned subsidiary of AmeriGas Partners, L.P.)

                                 BALANCE SHEETS
                                  (unaudited)



                                                                  December 31,        September 30,
                                                                      1998                1998
                                                                  ------------        -------------

                                                                                
ASSETS

      Cash                                                            $ 1,000              $ 1,000
                                                                  ------------        -------------
           Total assets                                               $ 1,000              $ 1,000
                                                                  ============        =============

STOCKHOLDER'S  EQUITY

      Common stock, $.01 par value; 100 shares authorized,
           issued and outstanding                                     $     1              $     1
      Additional paid-in capital                                          999                  999
                                                                  ------------        -------------
           Total stockholder's equity                                 $ 1,000              $ 1,000
                                                                  ============        =============











The accompanying note is an integral part of these financial statements.



                                      - 8 -
   11
                             AMERIGAS FINANCE CORP.
             (A WHOLLY OWNED SUBSIDIARY OF AMERIGAS PARTNERS, L.P.)

                             NOTE TO BALANCE SHEETS

AmeriGas Finance Corp. (AmeriGas Finance), a Delaware corporation, was formed on
March 13, 1995 and is a wholly owned subsidiary of AmeriGas Partners, L.P.
(AmeriGas Partners).

On April 19, 1995, AmeriGas Partners issued $100,000,000 face value of 10.125%
Senior Notes due April 2007. AmeriGas Finance serves as a co-obligor of these
notes.

AmeriGas Partners owns all 100 shares of AmeriGas Finance Common Stock
outstanding.














                                      -9-
   12
                             AMERIGAS PARTNERS, L.P.

ITEM 2.              MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                        ANALYSIS OF RESULTS OF OPERATIONS

The following analyses compare the Partnership's results of operations for (1)
the three months ended December 31, 1998 (1998 three-month period) with the
three months ended December 31, 1997 (1997 three-month period) and (2) the
twelve months ended December 31, 1998 (1998 twelve-month period) with the twelve
months ended December 31, 1997 (1997 twelve-month period). AmeriGas Finance
Corp. has nominal assets and does not conduct any operations. Accordingly, a
discussion of the results of operations and financial condition and liquidity of
AmeriGas Finance Corp. is not presented.

1998 THREE-MONTH PERIOD COMPARED WITH 1997 THREE-MONTH PERIOD



- -----------------------------------------------------------------------------------------------------------------
                                                                                               Increase
Three Months Ended December 31,                       1998                1997                (Decrease)
- -----------------------------------------------------------------------------------------------------------------
                                                                                          
(Millions of dollars)

Gallons sold (millions):

      Retail                                         220.7              248.6             (27.9)       (11.2)%
      Wholesale                                       48.1               82.7             (34.6)       (41.8)%
                                                    ------             ------             -----
                                                     268.8              331.3             (62.5)       (18.9)%
                                                    ======             ======             =====

Revenues:

      Retail propane                                $193.7             $240.2            $(46.5)       (19.4)%
      Wholesale propane                               18.4               37.3             (18.9)       (50.7)%
      Other                                           25.7               25.4                .3          1.2%
                                                    ------             ------            ------
                                                    $237.8             $302.9            $(65.1)       (21.5)%
                                                    ======             ======            ======
                                                                              
Total margin                                        $133.3             $139.8            $ (6.5)        (4.6)%
EBITDA (a)                                          $ 50.4             $ 59.6            $ (9.2)       (15.4)%
Operating income                                    $ 34.8             $ 44.0            $ (9.2)       (20.9)%
- -----------------------------------------------------------------------------------------------------------------


(a)    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
       generally accepted accounting principles.

Retail volumes sold during the 1998 three-month period were lower than the
prior-year period due primarily to significantly warmer weather. Based upon
degree day information obtained from




                                      -10-
   13
                             AMERIGAS PARTNERS, L.P.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


the National Oceanic and Atmospheric Administration (NOAA) for 335 airports in
the continental U.S., weather during the three months ended December 31, 1998
was 11.0% warmer than normal and 12.2% warmer than the same period last year.
Although weather-sensitive heating volumes declined the most, agricultural
volumes were also down as a result of the warmer than normal weather and a dry
autumn which reduced demand for crop drying. Wholesale volumes of propane sold
were lower in the 1998 three-month period due to reduced low margin sales of
storage inventories and, to a lesser extent, the effects of the warmer weather.

Total revenues from retail propane sales decreased $46.5 million during the 1998
three-month period reflecting (1) a $27.0 million decrease as a result of the
lower volumes sold and (2) a $19.5 million decrease from a reduction in average
selling prices. Wholesale revenues declined $18.9 million during the 1998
three-month period due to (1) a $15.6 million reduction from the lower volumes
sold and (2) a $3.3 million decrease from lower average selling prices. The
lower average retail and wholesale selling prices were due to significantly
lower propane product costs.

Total margin decreased $6.5 million in the 1998 three-month period as a result
of the lower retail volumes sold. The decline in total margin resulting from the
lower sales was partially offset by higher average retail unit margins. The
higher average retail unit margins reflect lower propane product costs during
the three months ended December 31, 1998.

The decrease in EBITDA and operating income in the 1998 three-month period
primarily reflects (1) the decline in total margin and (2) modestly higher
operating expenses. Operating expenses were $83.6 million during the three
months ended December 31, 1998 compared with $80.9 million in the same period
last year. The increase in operating expenses principally resulted from (1)
higher compensation and benefit expenses and (2) higher vehicle repair and lease
expense.



                                      -11-
   14
                             AMERIGAS PARTNERS, L.P.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


1998 TWELVE-MONTH PERIOD COMPARED WITH 1997 TWELVE-MONTH PERIOD



- -----------------------------------------------------------------------------------------------------------------
                                                                                              Increase
Twelve Months Ended December 31,                     1998               1997                 (Decrease)
- -----------------------------------------------------------------------------------------------------------------
                                                                                         
(Millions of dollars)

Gallons sold (millions):

     Retail                                          757.4              804.3            (46.9)        (5.8)%
     Wholesale                                       170.5              232.7            (62.2)       (26.7)%
                                                   -------           --------          -------
                                                     927.9            1,037.0           (109.1)       (10.5)%
                                                   =======           ========          =======

Revenues:
     Retail propane                                $ 699.6          $   822.5          $(122.9)       (14.9)%
     Wholesale propane                                69.6              117.3            (47.7)       (40.7)%
     Other                                            80.0               80.8              (.8)        (1.0)%
                                                   -------          ---------          -------
                                                   $ 849.2          $ 1,020.6          $(171.4)       (16.8)%
                                                   =======          =========          =======

Total margin                                       $ 464.1          $   461.8          $   2.3           .5%
EBITDA                                             $ 141.9          $   158.8          $ (16.9)       (10.6)%
Operating income                                   $  78.7          $    96.7          $ (18.0)       (18.6)%
- -----------------------------------------------------------------------------------------------------------------


We sold fewer retail gallons of propane in the 1998 twelve-month period due to
significantly warmer temperatures during the peak heating-season months
(comprising January through March and November through December). Based upon
degree day information provided by NOAA for 335 airports in the continental
U.S., temperatures during these peak heating-season months in the 1998
twelve-month period were 13.1% warmer than normal and 9.4% warmer than the same
period last year. Wholesale volumes of propane sold were lower in the 1998
twelve-month period due to reduced sales of storage inventories.

Total revenues from retail propane sales declined $122.9 million in the twelve
months ended December 31, 1998. The decrease reflects (1) a $74.9 million
decrease as a result of lower average retail propane selling prices and (2) a
$48.0 million reduction as a result of the lower volumes sold. Wholesale
revenues were $47.7 million lower than those in the prior-year period due to (1)
a $31.4 million decrease resulting from the lower volumes sold and (2) a $16.3
million decline from lower average selling prices. The lower average retail and
wholesale selling prices reflect significantly lower propane product costs.

Total margin increased $2.3 million in the 1998 twelve-month period,
notwithstanding the decline in retail volumes, primarily due to higher average
retail unit margins. Average retail unit margins 



                                      -12-
   15
                             AMERIGAS PARTNERS, L.P.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


were greater during the 1998 twelve-month period principally as a result of the
lower propane product costs.

Although total margin during the 1998 twelve-month period was greater than the
prior-year period, EBITDA and operating income declined primarily due to (1)
lower other income and (2) higher operating and administrative expenses. Other
income in the 1998 twelve-month period includes a $4.0 million loss from two
interest rate protection agreements. We entered into these agreements to reduce
interest rate exposure associated with an anticipated refinancing of the
Operating Partnership's Acquisition Facility in late fiscal 1998. When we
postponed the refinancing due to volatility in the corporate debt markets in the
fourth quarter of fiscal 1998, we recorded a loss on the interest rate
protection agreements because they no longer qualified for hedge accounting
treatment. Other income in the 1997 twelve-month period includes (1) $4.7
million of income from the sale of the Partnership's 50% interest in Atlantic
Energy, Inc., (2) higher customer finance charges and (3) higher interest
income. Operating and administrative expenses were $322.9 million in the 1998
twelve-month period compared with $313.7 million in the same period last year.
The increase in operating expenses is primarily due to (1) incremental expenses
associated with acquisitions and new business activities (including start-up
locations and our PPX Prefilled Propane Xchange(R) program) and (2) higher
compensation and benefit expenses.


                        FINANCIAL CONDITION AND LIQUIDITY

FINANCIAL CONDITION

The Partnership's debt outstanding at December 31, 1998 totaled $761.8 million
compared with $719.0 million at September 30, 1998. The increase in debt
principally reflects a $43 million seasonal increase in net borrowings under the
Operating Partnership's Bank Credit Agreement.

During the three months ended December 31, 1998, the Partnership declared and
paid the minimum quarterly distribution of $.55 (the "MQD") on all units for
the quarter ended September 30, 1998. The MQD for the quarter ended December
31, 1998 will be paid on February 18, 1999 to holders of record on February 10,
1999 of all Common and Subordinated units. The ability of the Partnership to
pay the MQD on all units 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 growing
operating capacity), (3) changes in operating working capital, and (4) the
Partnership's ability to borrow. Some of these factors are affected by
conditions beyond our control including weather, competition in markets we
serve, and the cost of propane.                  




                                      -13-
   16

                             AMERIGAS PARTNERS, L.P.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


CONVERSION OF SUBORDINATED UNITS

The subordination period applicable to the Subordinated Units will extend until
the first day of any quarter beginning on or after April 1, 2000, provided that
certain cash performance and distribution requirements are met. However,
4,945,537 Subordinated Units may convert into Common Units on the first day
after the record date for distributions based upon any quarter ending on or
after March 31, 1998, and an additional 4,945,537 may convert on the first day
after the record date for distributions based upon any quarter ending on or
after March 31, 1999, if certain cash performance and distribution requirements
are met. The cash performance requirements for conversion have not been met to
date. They are dependent upon many factors including highly seasonal operating
results, changes in working capital, asset sales and debt refinancings.
Management believes, however, that it is reasonably possible that 9,891,074
Subordinated Units will convert into Common Units during fiscal 1999.

CASH FLOWS

Cash and cash equivalents totaled $14.1 million at December 31, 1998 compared
with $8.9 million at September 30, 1998. Due to the seasonal nature of the
propane business, cash flows from operating activities are generally strongest
during the second and third fiscal quarters of the Partnership when customers
pay for propane purchased during the heating season and are typically at their
lowest levels during the first and fourth fiscal quarters. Accordingly, cash
flows from operations during the three months ended December 31, 1998 are not
necessarily indicative of cash flows to be expected for a full year.

OPERATING ACTIVITIES. Cash used by operating activities was $(4.8) million
during the three months ended December 31, 1998 compared with $(6.9) million
during the prior-year period. The decrease in cash used for operating activities
reflects the warmer weather's impact on cash needed to fund operating working
capital. Changes in operating working capital during the three months ended
December 31, 1998 required $37.9 million of operating cash flow while changes in
operating working capital during the three months ended December 31, 1997
required $50.6 million of operating cash flow. Cash flow from operating
activities before changes in working capital was $33.1 million in the three
months ended December 31, 1998 compared with $43.7 million during the three
months ended December 31, 1997 reflecting the decrease in the Partnership's
operating results.

INVESTING ACTIVITIES. We spent $7.2 million for property, plant and equipment
(including maintenance capital expenditures of $2.5 million) during the three
months ended December 31, 1998 compared with $7.0 million (including maintenance
capital expenditures of $2.4 million) in the prior-year period. During the three
months ended December 31, 1998, we acquired several propane businesses for an




                                      -14-
   17

                             AMERIGAS PARTNERS, L.P.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


aggregate $2.4 million in cash. During the three months ended December 31, 1997,
we made acquisition-related cash payments of $1.4 million.

FINANCING ACTIVITIES. During the three-month periods ended December 31, 1998 and
1997, we declared and paid the MQD on all Common and Subordinated units and the
general partner interests. During the three months ended December 31, 1998, we
made $9.9 million of long-term debt repayments principally reflecting
prepayments of the Operating Partnership's Acquisition Facility. The Operating
Partnership borrowed $52 million under its Revolving Credit Facility during the
1998 three-month period principally to meet seasonal working capital needs and
to fund the Partnership's distribution payments. During the 1997 three-month
period, the Operating Partnership borrowed $47 million under the Revolving
Credit Facility and $13 million under the Acquisition Facility.

YEAR 2000 MATTERS

The Year 2000 ("Y2K") issue is a result of computer programs being written using
two digits (rather than four) to identify and process a year in a date field.
Computer programs, computer-controlled systems and equipment with embedded
software may recognize date fields using "00" as the year 1900 rather than the
year 2000. If uncorrected, miscalculations and possible computer-based system
failures could result which might disrupt business operations. We are
designating the following information as our "Year 2000 Readiness Disclosure."

Recognizing the potential business consequences of the Y2K issue, we are using
internal and external resources to conduct a detailed assessment of critical,
date sensitive computer-based systems and to identify and modify systems which
are not Y2K compliant. The scope of such efforts includes (1) our information
technology ("IT") systems such as computer hardware and software we use in the
operation of our business; (2) non-IT systems that contain embedded computer
technology such as micro-controllers contained in various equipment, facilities
and vehicles; and (3) the readiness of third parties, including our suppliers
and key vendors, and certain of our customers. We have directed our Y2K
compliance efforts toward ensuring that we will be able to continue to perform
three critical operating functions: (1) obtain products to sell; (2) provide
service to our customers; and (3) bill customers and pay our vendors and
employees. We have completed the assessment of our IT and non-IT systems.

We have successfully modified or replaced all of our critical IT systems,
including the installation of our integrated financial system software. These
systems include our customer information and data systems and our financial
systems including payroll and the fuel accounting supply and transportation
system. We currently anticipate that any required modification to our critical
non-IT systems will be completed by March 31, 1999.



                                      -15-
   18
                             AMERIGAS PARTNERS, L.P.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


In addition to internal Y2K remediation activities, we are in the process of
assessing the readiness of our key suppliers and third-party providers. Although
none of our products or services are directly date sensitive, as a company with
operations throughout the United States we are dependent upon other companies
whose IT and non-IT systems may not be Y2K compliant. We rely on these companies
for the supply and transportation of propane. Additionally, we depend on other
companies to supply us with propane tanks and cylinders, fuel for our vehicles,
as well as other products and services we need to operate our businesses. If key
third parties cannot provide products or services because of their own Y2K
problems, it could have a material adverse impact on our operations. The extent
of such impact would depend upon the duration of disruption and our costs to
find alternative sources of products and services, among others. We expect to
complete our evaluation of key supplier and third-party provider Y2K readiness
by March 31, 1999.

We are in the process of developing contingency plans to address, to the extent
reasonably possible, disruptions arising from Y2K related failures of key
suppliers and third-party providers. We anticipate the major elements of these
contingency plans will be based upon the use of manual back-up systems,
alternative supply sources, higher critical inventory levels, and additional
staffing. These contingency plans attempt to mitigate the impact of third-party
Y2K noncompliance. However, they cannot assure that business disruptions caused
by key suppliers or third-party providers will not have a material adverse
impact on our operations. We anticipate the business contingency plans will be
completed by June 30, 1999. In addition to the business risks noted above, there
are other Y2K risks which are beyond our control, any of which could have a
material adverse impact on our operations. Such risks include the failure of
utility and telecommunications companies to provide service and the failure of
financial institutions to process transactions.

Incremental costs associated with our Y2K efforts have not had a material effect
on our results of operations. Estimated future costs to modify existing IT and
non-IT systems are expected to be less than $0.5 million and will be financed
through internally generated funds. We expense Y2K costs as incurred. Costs
associated with information system improvement initiatives are expensed or
capitalized in accordance with our accounting policy for software development
costs.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary market risk exposures are market prices for propane and changes in
long-term interest rates.




                                      -16-
   19

                             AMERIGAS PARTNERS, L.P.

Price risk associated with fluctuations in the prices we pay for propane is
principally a result of market forces reflecting changes in supply and demand.
The Partnership's profitability is sensitive to changes in propane supply costs
and the Partnership generally seeks to pass on increases in such costs to
customers. There is no assurance, however, that the Partnership will be able to
do so. In order to manage propane market price risk, we use contracts for the
forward purchase of propane, propane fixed-price supply agreements, and
derivative commodity instruments such as price swap and option contracts.
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 trading purposes.

We use long-term debt as a primary source of capital. These debt instruments are
typically issued at fixed interest rates. When these debt instruments mature, we
refinance such debt at then-existing market interest rates which may be more or
less than the interest rates on the maturing debt. In addition, we may attempt
to reduce interest rate risk associated with a forecasted issuance of new debt.
In order to reduce interest rate risk associated with these transactions, we
occasionally enter into interest rate protection agreements.

At December 31, 1998, the impact on the fair value of the Partnership's market
risk sensitive instruments resulting from (1) a 5 cent a gallon decline in the
market price of propane and (2) a 50 basis point decline in interest rates on
U.S. treasury notes, would not be materially different than that reported in the
Partnership's 1998 Annual Report on Form 10-K.

We expect that any losses from market risk sensitive instruments used to manage
propane price or interest rate market risk would be substantially offset by
gains on the associated underlying transactions.

                            PART II OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)      List of Exhibits

              27.1  Financial Data Schedule of AmeriGas Partners, L.P.

              27.2  Financial Data Schedule of AmeriGas Finance Corp.

     (b)      No Current Report on Form 8-K was filed by either AmeriGas
              Partners, L.P. or AmeriGas Finance Corp. during the fiscal quarter
              ended December 31, 1998.




                                      -17-


   20
                                   SIGNATURES

       Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.

                                                AmeriGas Partners, L.P.
                                        ---------------------------------------
                                                    (Registrant)
                                        By:      AmeriGas Propane, Inc.,
                                                 as General Partner


Date:  February 11, 1999                By:      Martha B. Lindsay
- ------------------------                ---------------------------------------
                                        Martha B. Lindsay
                                        Vice President - Finance
                                        and Chief Financial Officer



                                        By:      Richard R. Eynon
                                        ---------------------------------------
                                        Richard R. Eynon
                                        Controller and Chief Accounting Officer


                                                AmeriGas Finance Corp.
                                        ---------------------------------------
                                                    (Registrant)


Date:  February 11, 1999                By:      Martha B. Lindsay
- ------------------------                ---------------------------------------
                                        Martha B. Lindsay
                                        Vice President - Finance
                                        and Chief Financial Officer


                                        By:      Richard R. Eynon
                                        ---------------------------------------
                                        Richard R. Eynon
                                        Controller and Chief Accounting Officer


                                      -18-

   21
                             AMERIGAS PARTNERS, L.P.

                                  EXHIBIT INDEX

27.1     Financial Data Schedule of AmeriGas Partners, L.P.

27.2     Financial Data Schedule of AmeriGas Finance Corp.