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AmeriGas Partners Reports Significant Increase in First Quarter Earnings

  AmeriGas Partners Reports Significant Increase in First Quarter Earnings

Business Wire

VALLEY FORGE, Pa. -- January 31, 2013

AmeriGas Propane, Inc., general partner of AmeriGas Partners, L.P. (NYSE:
APU), reported net income attributable to AmeriGas Partners for the first
quarter of fiscal 2013 ended December 31, 2012 of $96.7 million compared to
$42.5 million for the same period last year. Net income attributable to
AmeriGas Partners for the current-year period reflects increased earnings
associated with the operations of Heritage Propane, which was acquired in
January 2012. The Partnership’s adjusted earnings before interest expense,
income taxes, depreciation and amortization (Adjusted EBITDA) increased to
$193.3 million for the first quarter of 2013 compared to $87.4 million for the
same period last year reflecting the impact of the Heritage Propane
acquisition.

Retail volumes sold reflect incremental sales associated with the operations
of Heritage Propane partially offset by the impact of significantly warmer
than normal weather. For the three months ended December 31, 2012, retail
propane volumes sold were 350.7 million gallons compared with retail propane
volumes of 220.9 million gallons in the prior-year period. Weather for the
quarter was 9.0% warmer than normal, but 3.4% colder than in the prior-year
period, according to the National Oceanic and Atmospheric Administration
(“NOAA”). Weather for the month of December was 13.1% warmer than normal and
1.5% warmer than last year, according to NOAA.

Jerry E. Sheridan, chief executive officer of AmeriGas, said, “Despite
promising weather during much of October and into November, the peak heating
season got off to a slow start during December, when we experienced weather
that was significantly warmer than normal and even slightly warmer than
December 2011. Despite the short-term challenges brought about by these uneven
weather patterns, our management team remains focused on providing excellent
customer service and delivering the significant benefits of the Heritage
Propane acquisition. We are on track to recognize $60 million in synergies
when the integration is completed later this year and we are confident that,
given a return to more normal weather, we will more fully demonstrate the true
earnings power of the New AmeriGas. Given our results thus far and assuming
essentially normal weather for the remainder of the year, we now anticipate
Adjusted EBITDA for fiscal 2013 to be in the range of $620 million to $645
million.”

Revenues for the quarter increased to $876.6 million from $683.8 million in
the prior-year period, reflecting the higher retail volumes sold partially
offset by lower average selling prices. The average wholesale cost of propane
at Mont Belvieu, Texas, for the current quarter was approximately 38% lower
than the average cost in the same period last year. Total margin increased
$184.6 million due to higher volumes sold, higher average retail unit margins
and increased total margin related to ancillary sales and services.

Operating and administrative expenses increased $83.6 million primarily
reflecting incremental expenses associated with the operations of Heritage
Propane. Acquisition and transition expenses associated with Heritage Propane
were $5.5 million in the current-year period compared to $3.7 million in the
prior-year period. Operating income increased $79.8 million primarily
reflecting the higher total margin partially offset by the increased operating
expenses and greater depreciation and amortization expenses ($25.2 million)
principally associated with Heritage Propane.

EBITDA, Adjusted EBITDA, and total margin are non-GAAP financial measures.
Adjusted EBITDA is defined herein as earnings before interest expense, income
taxes, depreciation and amortization, and Heritage Propane acquisition and
transition expenses. Total margin represents total revenues less total cost of
sales. Management believes the presentation of these measures provides useful
information to investors to more effectively evaluate the year-over-year
results of operations of the Partnership. These measures are not comparable to
measures used by other entities and should only be considered in conjunction
with net income attributable to AmeriGas Partners, L.P. A reconciliation of
EBITDA and Adjusted EBITDA to the most comparable GAAP financial measure is
included on the last page of this press release.

About AmeriGas

AmeriGas is the nation’s largest retail propane marketer, serving over two
million customers in all 50 states from approximately 2,100 distribution
locations. UGI Corporation, through subsidiaries, is the sole General Partner
and owns 26% of the Partnership. An affiliate of Energy Transfer Partners,
L.P. owns 32% of the Partnership and the public owns the remaining 42%.

AmeriGas Partners, L.P. will hold a live Internet Audio Webcast of its
conference call to discuss first quarter earnings and other current activities
at 4:00 PM ET on Thursday, January 31, 2013. Interested parties may listen to
the audio webcast both live and in replay on the Internet at
http://investors.amerigas.com/investor-relations/events-presentations or at
the company website http://www.amerigas.com under Investor Relations. A
telephonic replay will be available from 7:00 PM ET on January 31 through 9:00
pm on February 5. The replay may be accessed at 1-877-344-7529, conference ID
10019731 and International access 1-412-317-0088, conference ID 10019731.

Comprehensive information about AmeriGas is available on the Internet at
http://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,
cost 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, political, economic and regulatory
conditions in the U.S. and abroad, and our ability to successfully integrate
Heritage Propane and achieve anticipated synergies. 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
                     December 31,                December 31,
                     2012          2011          2012            2011
Revenues:
Propane              $ 797,059     $ 637,283     $ 2,837,407     $ 2,343,910
Other                 79,588      46,529      277,044       177,641   
                      876,647     683,812     3,114,451     2,521,551 
                                                                 
Costs and
expenses:
Cost of sales -        429,563       429,980       1,642,241       1,555,441
propane
Cost of sales -        22,521        13,828        85,764          58,349
other
Operating and
administrative         243,517       159,910       972,300         624,058
expenses
Depreciation           38,323        20,931        151,617         83,836
Amortization           11,028        3,257         42,669          12,395
Other income, net     (8,171  )    (4,190  )    (30,502   )    (23,998   )
                      736,781     623,716     2,864,089     2,310,081 
Operating income       139,866       60,096        250,362         211,470
Loss on
extinguishments of     0             0             (13,349   )     (38,117   )
debt
Interest expense      (41,196 )    (16,533 )    (167,304  )    (64,676   )
Income before          98,670        43,563        69,709          108,677
income taxes
Income tax expense    (627    )    (450    )    (2,108    )    (421      )
Net income             98,043        43,113        67,601          108,256
Less: net income
attributable to       (1,378  )    (588    )    (2,436    )    (2,076    )
noncontrolling
interests
Net income
attributable to      $ 96,665     $ 42,525     $ 65,165       $ 106,180   
AmeriGas Partners,
L.P.
                                                                 
General partner's
interest in net
income               $ 5,219      $ 1,991      $ 16,347       $ 6,712     
attributable to
AmeriGas Partners,
L.P.
                                                                 
Limited partners'
interest in net
income               $ 91,446     $ 40,534     $ 48,818       $ 99,468    
attributable to
AmeriGas Partners,
L.P.
                                                                 
                                                                 
Income per limited
partner unit (a)
                                                                 
Basic                $ 0.93       $ 0.55       $ 0.53         $ 1.63      
                                                                 
Diluted              $ 0.93       $ 0.55       $ 0.53         $ 1.63      
                                                                 
Average limited
partner units
outstanding:
Basic                 92,820      57,133      90,403        57,128    
                                                                 
Diluted               92,902      57,193      90,466        57,180    
                                                                 
SUPPLEMENTAL
INFORMATION:
                                                                 
Retail gallons         350.7         220.9         1,147.3         838.7
sold (millions)
EBITDA (b)           $ 187,839     $ 83,696      $ 428,863       $ 267,508
Adjusted EBITDA      $ 193,327     $ 87,413      $ 490,170       $ 309,342
(b)
Expenditures for
property, plant
and equipment:
Maintenance
capital              $ 10,054      $ 11,790      $ 43,329        $ 39,600
expenditures
Transition capital
related to           $ 4,541       $ 0           $ 22,149        $ 0
Heritage
integration
Growth capital       $ 11,894      $ 9,813       $ 42,548        $ 37,925
expenditures
                                                                 

    
      Income per limited partner unit is computed in accordance with
      accounting guidance regarding the application of the two-class method
(a)   for determining earnings per share as it relates to master limited
      partnerships. Refer to Note 2 to the consolidated financial statements
      included in the AmeriGas Partners, L.P. Annual Report on Form 10-K for
      the fiscal year ended September 30, 2012.
      
      Earnings before interest expense, income taxes, depreciation and
      amortization ("EBITDA") should not be considered as an alternative to
      net income attributable to AmeriGas Partners, L.P. (as an indicator of
      operating performance) and is not a measure of performance or financial
      condition under accounting principles generally accepted in the United
(b)   States ("GAAP"). Management believes EBITDA is a meaningful non-GAAP
      financial measure used by investors to (1) compare the Partnership's
      operating performance with that of other companies within the propane
      industry and (2) assess the Partnership's ability to meet loan
      covenants. The Partnership's definition of EBITDA may be different from
      those 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 attributable to AmeriGas Partners, L.P. 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 which is one of UGI
      Corporation's reportable segments. UGI Corporation discloses the
      Partnership's EBITDA in its disclosure about reportable segments as the
      profitability measure for its domestic propane segment. EBITDA in the
      three months ended December 31, 2012 and 2011 includes acquisition and
      transition expense of $5,488 and $3,717, respectively, associated with
      the Heritage Propane acquisition. EBITDA in the twelve months ended
      December 31, 2012 includes a pre-tax loss of $13,349 from
      extinguishments of debt and acquisition and transition expense of
      $47,958 associated with the Heritage Propane acquisition. EBITDA in the
      twelve months ended December 31, 2011 includes a pre-tax loss of $38,117
      from extinguishments of debt and acquisition-related expense of $3,717
      associated with the Heritage Propane acquisition.
      
The following table includes reconciliations of net income attributable to
AmeriGas Partners, L.P. to EBITDA and Adjusted EBITDA (1) for all periods
presented:

                                                      
                                  Three Months Ended     Twelve Months Ended
                                  December 31,           December 31,
                                  2012       2011       2012       2011
                                                                     
Net income attributable to        $ 96,665    $ 42,525   $ 65,165    $ 106,180
AmeriGas Partners, L.P.
Income tax expense                  627         450        2,108       421
Interest expense                    41,196      16,533     167,304     64,676
Depreciation                        38,323      20,931     151,617     83,836
Amortization                       11,028     3,257     42,669     12,395
EBITDA                            $ 187,839   $ 83,696   $ 428,863   $ 267,508
Heritage Propane acquisition        5,488       3,717      47,958      3,717
and transition expense
Loss on extinguishments of debt    -          -         13,349     38,117
Adjusted EBITDA (1)               $ 193,327   $ 87,413   $ 490,170   $ 309,342
                                                                     

The following table includes a reconciliation of forecasted net income
attributable to AmeriGas Partners, L.P. to forecasted EBITDA and Adjusted
EBITDA for the fiscal year ending September 30, 2013:

                                                              
                                                                Forecast
                                                                Fiscal
                                                                Year
                                                                Ending
                                                                September 30,
                                                                2013
Net income attributable to AmeriGas Partners, L.P. (estimate)   $   244,000
Interest expense (estimate)                                         166,000
Income tax expense (estimate)                                       2,500
Depreciation (estimate)                                             156,000
Amortization (estimate)                                            44,000
EBITDA                                                          $   612,500
Transition expenses (estimate)                                     20,000
Adjusted EBITDA (1)                                             $   632,500
                                                                    


(1) Adjusted EBITDA is a non-GAAP financial measure. Management believes the
presentation of this measure provides useful information to investors to more
effectively evaluate the year-over-year results of operations of the
Partnership. Management uses Adjusted EBITDA to exclude from AmeriGas
Partners' EBITDA gains and losses that competitors do not necessarily have to
provide additional insight into the comparison of year-over-year profitability
to that of other master limited partnerships. This measure is not comparable
to measures used by other entities and should only be considered in
conjunction with net income attributable to AmeriGas Partners, L.P. for the
relevant periods.

Contact:

AmeriGas Partners, L.P.
Hugh J. Gallagher, 610-337-7000 ext. 1029
Simon Bowman, 610-337-7000 ext. 3645
Shelly Oates, 610-337-7000 ext. 3202
 
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