AmeriGas Partners Reports Fiscal 2009 Results

November 11, 2009 9:13 AM EST

VALLEY FORGE, Pa.--(BUSINESS WIRE)-- AmeriGas Propane, Inc., general partner of AmeriGas Partners, L.P. (NYSE: APU), reported net income for the Partnership for the fiscal year ended September 30, 2009 of $224.6 million, or $3.59 per limited partner unit, compared to net income of $158.0 million, or $2.70 per limited partner unit for the fiscal year ended September 30, 2008. As previously reported, net income for fiscal 2009 includes a gain of $39.5 million on the sale of the Partnership's California propane storage terminal.

The Partnership's earnings before interest expense, income taxes, depreciation and amortization (EBITDA) was $381.4 million in fiscal 2009 compared to EBITDA of $313.0 million in the prior year. EBITDA in fiscal 2009 also includes the aforementioned gain on the terminal sale.

Eugene V. N. Bissell, chief executive officer of AmeriGas, said, "Earnings in fiscal 2009 significantly benefited from higher unit margins resulting from a rapid decline in wholesale product costs, a benefit that was somewhat offset by the effects of the recession on volumes sold. We were pleased to increase our distribution by 5% again this year, in line with our previously stated distribution growth goal." AmeriGas previously reported that it expects earnings in the range of $181 million to $191 million and EBITDA in the range of $335 million to $345 million in fiscal 2010, assuming normal weather.

For the twelve months ended September 30, 2009, retail propane volumes sold decreased 6.5% from the prior year to 928 million gallons as the benefits of acquisitions completed in fiscal 2009 were more than offset by the adverse effects of the significant deterioration in general economic activity which has occurred over the last year and continued customer conservation. Nationally, weather was 2.5% warmer than normal in fiscal 2009, virtually the same as the prior year, according to the National Oceanic and Atmospheric Administration. Revenues decreased to $2.26 billion in fiscal 2009 from $2.82 billion in fiscal 2008 primarily due to lower retail selling prices associated with significantly lower commodity prices and lower volumes sold.

Total margin increased $36.7 million mainly due to higher average retail propane unit margins resulting from a rapid decline in wholesale propane product costs that occurred primarily as the Partnership entered the critical winter heating season during the first quarter of fiscal 2009. Operating income was $300.5 million in fiscal 2009 compared to $234.9 million in fiscal 2008, reflecting the higher EBITDA partially offset by slightly higher depreciation and amortization expenses associated with acquisitions and capital expenditures.

For the fourth quarter of fiscal 2009, the Partnership recorded a seasonal net loss of $33.6 million, or $0.64 per limited partner unit, compared to a net loss of $20.4 million, or $0.36 per limited partner unit, for the prior-year period. Retail volumes sold in the quarter were 147.1 million gallons compared with 164.9 million gallons sold in the prior-year quarter. EBITDA for the period was $4.6 million compared to $18.5 million for same period in 2008. Revenue for the quarter totaled $337.0 million versus $525.2 million in the fiscal 2008 quarter, principally due to lower selling prices resulting from significantly lower wholesale propane product costs.

AmeriGas Partners is the nation's largest retail propane marketer, serving approximately 1.3 million customers from nearly 600 locations in 46 states. UGI Corporation (NYSE: UGI), through subsidiaries, owns 44% of the Partnership and the public owns the remaining 56%.

AmeriGas Partners will hold a live Internet Audio Webcast of its conference call to discuss fourth quarter earnings and fiscal 2010 activities at 4:00 PM ET on Wednesday, November 11, 2009. Interested parties may listen to the audio webcast both live and in replay on the Internet at http://investor.shareholder.com/ugi/apu/events.cfm or at the company website; http://www.amerigas.com and click on Investor Relations. A telephonic replay will be available from 7:00 PM ET on November 11 through midnight Friday, November 13. The replay may be accessed at 1-888-203-1112, passcode 2496390 and International access 1-719-457-0820, passcode 2496390.

Comprehensive information about AmeriGas is available on the Internet at www.amerigas.com.

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, the impact of pending and future legal proceedings, 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.

AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES

REPORT OF EARNINGS

(Thousands, except per unit and where otherwise indicated)

(Unaudited)

                          Three Months Ended        Twelve Months Ended

                          September 30,             September 30,

                          2009         2008         2009           2008

Revenues:

Propane                   $ 299,927    $ 476,214    $ 2,091,890    $ 2,624,672

Other                       37,050       49,022       168,205        190,517

                            336,977      525,236      2,260,095      2,815,189

Costs and expenses:

Cost of sales - propane     172,468      344,212      1,254,332      1,836,917

Cost of sales - other       14,234       18,811       62,172         71,396

Operating and               149,255      146,660      615,152        610,465
administrative expenses

Depreciation                19,808       19,194       78,528         75,679

Amortization                1,303        1,204        5,260          4,723

Gain on sale of
California storage          -            -            (39,887   )    -
facility

Other income, net           (3,424  )    (2,879  )    (16,005   )    (18,855   )

                            353,644      527,202      1,959,552      2,580,325

Operating (loss) income     (16,667 )    (1,966  )    300,543        234,864

Interest expense            (16,639 )    (17,824 )    (70,340   )    (72,886   )

(Loss) income before
income taxes and            (33,306 )    (19,790 )    230,203        161,978
minority interests

Income tax expense          (512    )    (719    )    (2,593    )    (1,672    )

Minority interests          188          61           (2,967    )    (2,287    )

Net (loss) income         $ (33,630 )  $ (20,448 )  $ 224,643      $ 158,019

General partner's
interest in net (loss)    $ 2,977      $ 101        $ 6,737        $ 2,278
income

Limited partners'
interest in net (loss)    $ (36,607 )  $ (20,549 )  $ 217,906      $ 155,741
income

Income (loss) per
limited partner unit (a)

Basic                     $ (0.64   )  $ (0.36   )  $ 3.59         $ 2.70

Diluted                   $ (0.64   )  $ (0.36   )  $ 3.59         $ 2.70

Average limited partner
units outstanding:

Basic                       57,046       57,010       57,038         57,005

Diluted                     57,046       57,010       57,082         57,044

SUPPLEMENTAL
INFORMATION:

Retail gallons sold         147.1        164.9        928.2          993.2
(millions)

EBITDA (b)                $ 4,632      $ 18,493     $ 381,364      $ 312,979

Expenditures for
property, plant and
equipment:

Maintenance capital       $ 11,632     $ 8,141      $ 37,512       $ 29,064
expenditures

Growth capital            $ 9,686      $ 6,447      $ 41,227       $ 33,692
expenditures

     In accordance with accounting guidance regarding the application of the
     two-class method for determining earnings per share as it relates to master
     limited partnerships, the Partnership calculates income per limited partner
(a)  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 to the General Partner.

     Theoretical distributions of net income in accordance with the two-class
     method for the twelve months ended September 30, 2009 resulted in an
     increased allocation of net income to the General Partner which had the
     effect of decreasing diluted earnings per limited partner unit by $0.23.
     Theoretical distributions of net income in accordance with the two-class
     method for the twelve months ended September 30, 2008 resulted in an
     increased allocation of net income to the General Partner which had the
     effect of decreasing diluted earnings per limited partner unit by $0.03.
     The two-class method did not impact loss per limited partner unit for the
     three months ended September 30, 2009 or 2008.

     Earnings before interest expense, income taxes, depreciation and
     amortization ("EBITDA") should not be considered as an alternative to net
     income (as an indicator of operating performance) and is not a measure of
     performance or financial condition under accounting principles generally
     accepted in the United States ("GAAP"). Management believes EBITDA is a
     meaningful non-GAAP financial measure used by investors to (1) compare the
     Partnership's operating performance with other companies within the propane
     industry and (2) assess its ability to meet loan covenants. The
(b)  Partnership's definition of EBITDA may be different from that used by other
     companies. Management uses EBITDA to compare year-over-year profitability
     of the business without regard to capital structure as well as to compare
     the relative performance of the Partnership to that of other master limited
     partnerships without regard to their financing methods, capital structure,
     income taxes or historical cost basis. In view of the omission of interest,
     income taxes, depreciation and amortization from EBITDA, management also
     assesses the profitability of the business by comparing net income for the
     relevant years.

     Management also uses EBITDA to assess the Partnership's profitability
     because its parent, UGI Corporation, uses the Partnership's EBITDA to
     assess the profitability of the Partnership. UGI Corporation discloses the
     Partnership's EBITDA as the profitability measure to comply with the GAAP
     requirement to provide profitability information about its domestic propane
     segment. EBITDA in Fiscal 2009 includes a $39,887 pre-tax gain from the
     sale of the Partnership's California storage facility.

The following table includes reconciliations of net income to EBITDA for all
periods presented:

                               Three Months Ended          Twelve Months Ended

                               September 30,               September 30,

                               2009           2008         2009       2008

Net (loss) income              $ (33,630 )    $ (20,448 )  $ 224,643  $ 158,019

Income taxes                     512            719          2,593      1,672

Interest expense                 16,639         17,824       70,340     72,886

Depreciation                     19,808         19,194       78,528     75,679

Amortization                     1,303          1,204        5,260      4,723

EBITDA                         $ 4,632        $ 18,493     $ 381,364  $ 312,979

The following table includes a reconciliation of forecasted net income to
forecasted EBITDA for the fiscal year ending September 30, 2010:

                               Forecast

                               Fiscal

                               Year

                               Ending

                               September 30,

                               2010

Net income (estimate)          $ 185,000

Interest expense (estimate)      66,000

Income tax expense (estimate)    3,000

Depreciation (estimate)          80,000

Amortization (estimate)          6,000

EBITDA                         $ 340,000

    Source: AmeriGas Partners, L.P.

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