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, 2002
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
Commission file number 333-72986-02
Commission file number 333-72986-01
AMERIGAS PARTNERS, L.P.
AMERIGAS FINANCE CORP.
AMERIGAS EAGLE FINANCE CORP.
AP EAGLE FINANCE CORP.
(Exact name of registrants as specified in their charters)
Delaware 23-2787918
Delaware 23-2800532
Delaware 23-3074434
Delaware 23-3077318
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
460 North Gulph Road, King of Prussia, PA 19406
(Address of principal executive offices) (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, 2003, the registrants had units and shares of common stock
outstanding as follows:
AmeriGas Partners, L.P. - 49,432,358 Common Units
AmeriGas Finance Corp. - 100 shares
AmeriGas Eagle Finance Corp. - 100 shares
AP Eagle Finance Corp. - 100 shares
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, 2002,
September 30, 2002 and December 31, 2001 1
Condensed Consolidated Statements of Operations for the three
months ended December 31, 2002 and 2001 2
Condensed Consolidated Statements of Cash Flows for the three
months ended December 31, 2002 and 2001 3
Condensed Consolidated Statement of Partners' Capital for the
three months ended December 31, 2002 4
Notes to Condensed Consolidated Financial Statements 5 - 10
AmeriGas Finance Corp.
Balance Sheets as of December 31, 2002 and September 30, 2002 11
Note to Balance Sheets 12
AmeriGas Eagle Finance Corp.
Balance Sheets as of December 31, 2002 and September 30, 2002 13
Note to Balance Sheets 14
AP Eagle Finance Corp.
Balance Sheets as of December 31, 2002 and September 30, 2002 15
Note to Balance Sheets 16
-i-
AMERIGAS PARTNERS, L.P.
TABLE OF CONTENTS (CONTINUED)
PAGES
-----
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 17 - 21
Item 3. Quantitative and Qualitative Disclosures About Market Risk 21 - 22
Item 4. Controls and Procedures 23
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 24
Signatures 25 - 26
Certifications 27 - 28
-ii-
AMERIGAS PARTNERS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands of dollars)
December 31, September 30, December 31,
2002 2002 2001
------------ ------------- ------------
(unaudited) (unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 110,504 $ 47,400 $ 19,158
Accounts receivable (less allowances for doubtful accounts
of $8,851, $7,588 and $12,100, respectively) 165,802 83,274 134,668
Accounts receivable - related parties 4,245 6,862 6,774
Inventories 74,867 62,496 72,346
Prepaid expenses and other current assets 31,523 31,238 17,087
------------ ------------ ------------
Total current assets 386,941 231,270 250,033
Property, plant and equipment (less accumulated depreciation and
amortization of $424,981, $408,590 and $362,788, respectively) 609,533 611,550 625,329
Goodwill and excess reorganization value 591,116 589,923 589,878
Intangible assets (less accumulated amortization of $9,437,
$8,651 and $6,275, respectively) 22,202 22,586 25,959
Other assets 19,138 17,289 23,004
------------ ------------ ------------
Total assets $ 1,628,930 $ 1,472,618 $ 1,514,203
============ ============ ============
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Current maturities of long-term debt $ 60,576 $ 60,398 $ 66,534
Bank loans 37,000 10,000 8,000
Accounts payable - trade 133,257 81,891 108,042
Accounts payable - related parties 2,362 5,003 4,006
Customer deposits and advances 36,774 53,177 42,527
Other current liabilities 86,017 97,355 99,350
------------ ------------ ------------
Total current liabilities 355,986 307,824 328,459
Long-term debt 975,075 885,386 902,106
Other noncurrent liabilities 47,962 44,810 42,791
Commitments and contingencies (note 6)
Minority interests 6,405 6,232 5,876
Partners' capital 243,502 228,366 234,971
------------ ------------ ------------
Total liabilities and partners' capital $ 1,628,930 $ 1,472,618 $ 1,514,203
============ ============ ============
See accompanying notes to consolidated financial statements.
-1-
AMERIGAS PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(Thousands of dollars, except per unit)
Three Months Ended
December 31,
--------------------------
2002 2001
---------- ----------
Revenues:
Propane $ 410,580 $ 339,148
Other 34,451 32,237
---------- ----------
445,031 371,385
---------- ----------
Costs and expenses:
Cost of sales - propane 228,294 185,639
Cost of sales - other 15,072 13,548
Operating and administrative expenses 120,946 113,116
Depreciation and amortization 17,491 16,186
Equity investee (income) (250) (230)
Other (income) expense, net (936) 1,146
---------- ----------
380,617 329,405
---------- ----------
Operating income 64,414 41,980
Interest expense (22,699) (22,746)
---------- ----------
Income before income taxes 41,715 19,234
Income tax expense (258) (538)
Minority interests (545) (299)
---------- ----------
Net income $ 40,912 $ 18,397
========== ==========
General partner's interest in net income $ 409 $ 184
========== ==========
Limited partners' interest in net income $ 40,503 $ 18,213
========== ==========
Net income per limited partner unit - basic and diluted $ 0.82 $ 0.38
========== ==========
Average limited partner units outstanding:
Basic 49,432 47,408
========== ==========
Diluted 49,475 47,482
========== ==========
See accompanying notes to consolidated financial statements.
-2-
AMERIGAS PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(Thousands of dollars)
Three Months Ended
December 31,
--------------------------
2002 2001
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 40,912 $ 18,397
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 17,491 16,186
Other, net 3,693 (1,491)
Net change in:
Accounts receivable (83,016) (36,372)
Inventories (12,347) 726
Accounts payable 48,726 34,036
Other current assets and liabilities (24,067) (23,039)
---------- ----------
Net cash (used) provided by operating activities (8,608) 8,443
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property, plant and equipment (15,561) (14,569)
Proceeds from disposals of assets 2,038 2,415
Acquisition of business, net of cash acquired (2,175) --
---------- ----------
Net cash used by investing activities (15,698) (12,154)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions (27,463) (26,112)
Minority interest activity (388) (15)
Increase in bank loans 27,000 8,000
Issuance of long-term debt 89,100 --
Repayment of long-term debt (839) (36,417)
Proceeds from issuance of Common Units -- 44,475
Capital contributions from General Partner -- 449
---------- ----------
Net cash provided (used) by financing activities 87,410 (9,620)
---------- ----------
Cash and cash equivalents increase (decrease) $ 63,104 $ (13,331)
========== ==========
CASH AND CASH EQUIVALENTS:
End of period $ 110,504 $ 19,158
Beginning of period 47,400 32,489
---------- ----------
Increase (decrease) $ 63,104 $ (13,331)
========== ==========
See accompanying notes to consolidated financial statements.
-3-
AMERIGAS PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
(unaudited)
(Thousands, except unit data)
Accumulated
Number of units other Total
------------------------- General comprehensive partners'
Common Subordinated Common Subordinated partner income capital
---------- ------------ --------- ------------- -------- ------------- ---------
BALANCE SEPTEMBER 30, 2002 39,541,286 9,891,072 $ 201,660 $ 17,846 $ 2,214 $ 6,646 $ 228,366
Net income 39,124 1,379 409 40,912
Net gains on derivative instruments 7,963 7,963
Reclassification of net gains
on derivative instruments (6,276) (6,276)
------- ---------
Comprehensive income 1,687 42,599
Distributions (21,748) (5,440) (275) (27,463)
Conversion of Subordinated Units
to Common Units 9,891,072 (9,891,072) 13,785 (13,785) --
---------- ------------ --------- ------------- -------- ------- ---------
BALANCE DECEMBER 31, 2002 49,432,358 -- $ 232,821 $ -- $ 2,348 $ 8,333 $ 243,502
========== ============ ========= ============= ======== ======= =========
See accompanying notes to consolidated financial statements.
-4-
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") and its principal operating
subsidiaries AmeriGas Propane, L.P. ("AmeriGas OLP") and AmeriGas OLP's
subsidiary, AmeriGas Eagle Propane, L.P. ("Eagle OLP"). AmeriGas Partners,
AmeriGas OLP and Eagle OLP are Delaware limited partnerships. AmeriGas OLP
and Eagle OLP are collectively referred to herein as "the Operating
Partnerships," and AmeriGas Partners, the Operating Partnerships and all
of their subsidiaries are collectively referred to herein 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 AmeriGas OLP and an
unrelated third party's 0.1% limited partner interest in Eagle OLP as
minority interests in the condensed consolidated financial statements.
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 ("SEC"). 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, 2002 ("2002 Annual Report"). 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.
NET INCOME PER UNIT. Net income per unit is computed by dividing net
income, after deducting the General Partner's 1% interest, by the weighted
average number of Common and Subordinated units outstanding. Potentially
dilutive Common Units included in the diluted net income per unit
calculations result from Common Unit awards issued under AmeriGas Propane,
Inc. incentive compensation plans.
COMPREHENSIVE INCOME. The following table presents the components of
comprehensive income for the three months ended December 31, 2002 and
2001:
Three Months Ended
December 31,
---------------------
2002 2001
-------- -------
Net income $ 40,912 $18,397
Other comprehensive income (loss) 1,687 (5,743)
-------- -------
Comprehensive income $ 42,599 $12,654
======== =======
-5-
AMERIGAS PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(unaudited)
(Thousands of dollars, except per unit)
Other comprehensive income (loss) is principally the result of changes in
the fair value of propane commodity derivative instruments and interest
rate protection agreements, net of reclassifications of net gains and
losses to net income.
UNIT-BASED COMPENSATION. As permitted by Statement of Financial Accounting
Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation"
("SFAS 123"), we apply the provisions of Accounting Principles Board
("APB") Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB
25"), in recording compensation expense for grants of equity instruments
to employees. We recorded stock-based compensation expense of $330 and
$119 during the three months ended December 31, 2002 and 2001,
respectively. Our stock-based compensation expense under the provisions of
APB 25 for all periods presented was not materially different from amounts
determined under the provisions of SFAS 123.
USE OF ESTIMATES. We make estimates and assumptions when preparing
financial statements in conformity with accounting principles generally
accepted in the United States. 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.
RECLASSIFICATIONS. In order to more appropriately classify direct costs
associated with the Partnership's Prefilled Propane Xchange ("PPX(R)")
program, for the three months ended December 31, 2002 certain costs
previously reflected in operating and administrative expenses have been
included in cost of sales. We have reclassified $2,752 of such costs
incurred in the prior-year period to conform to the current-period
presentation.
2. INTANGIBLE ASSETS
The Partnership's intangible assets comprise the following:
December 31, September 30,
2002 2002
------------ -------------
Subject to amortization:
Customer relationships and
noncompete agreements $ 31,639 $ 31,237
Accumulated amortization (9,437) (8,651)
------------ ------------
$ 22,202 $ 22,586
============ ============
Not subject to amortization:
Goodwill $ 497,796 $ 496,603
Excess reorganization value 93,320 93,320
------------ ------------
$ 591,116 $ 589,923
============ ============
-6-
AMERIGAS PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(unaudited)
(Thousands of dollars, except per unit)
The increases in intangible assets during the three months ended December
31, 2002 were the result of a Partnership business acquisition.
Amortization expense of intangible assets for the three months ended
December 31, 2002 and 2001 was $787 and $911, respectively. Our expected
aggregate amortization expense of intangible assets for the next five
fiscal years is as follows: Fiscal 2003 - $2,932; Fiscal 2004 - $2,765;
Fiscal 2005 - $2,527; Fiscal 2006 - $2,120; Fiscal 2007 - $1,489.
3. CONVERSION OF SUBORDINATED UNITS
In December 2002, the General Partner determined that the cash-based
performance and distribution requirements for the conversion of the
remaining 9,891,072 Subordinated Units, all of which were held by the
General Partner, had been met in respect of the quarter ended September
30, 2002. As a result, these Subordinated Units were converted to a like
number of Common Units effective November 18, 2002. The conversion of the
Subordinated Units did not result in an increase in the total number of
AmeriGas Partners limited partner units outstanding.
4. RELATED PARTY TRANSACTIONS
Pursuant to the Second Amended and Restated Agreement of Limited
Partnership of AmeriGas Partners and a Management Services Agreement
between AmeriGas Eagle Holdings, Inc., the general partner of Eagle OLP,
and the General Partner, the General Partner is entitled to reimbursement
for all direct and indirect expenses incurred or payments it makes on
behalf of the Partnership. These costs totaled $71,892 and $68,771 during
the three months ended December 31, 2002 and 2001, respectively.
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. Such corporate expenses
totaled $1,617 and $1,254 during the three months ended December 31, 2002
and 2001, respectively. UGI and certain of its subsidiaries also provide
office space, and during the three months ended December 31, 2002,
automobile liability insurance, to the Partnership. These expenses totaled
$431 and $354 during the three months ended December 31, 2002 and 2001,
respectively.
The Partnership purchases propane on behalf of Atlantic Energy. Atlantic
Energy reimburses AmeriGas OLP for its purchases plus interest as Atlantic
Energy sells such propane to third parties or to the Partnership itself.
The total dollar value of propane purchased on behalf of Atlantic Energy
was $2,784 and $3,142 during the three months ended December 31, 2002 and
2001, respectively. Purchases of propane by AmeriGas
-7-
AMERIGAS PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(unaudited)
(Thousands of dollars, except per unit)
OLP from Atlantic Energy during the three months ended December 31, 2002
and 2001 totaled $5,761 and $3,971, respectively.
The General Partner also provides other services to Atlantic Energy
including accounting, insurance and other administrative services and is
reimbursed for the related costs. Such costs were not material during the
three months ended December 31, 2002 or 2001. In addition, AmeriGas OLP
enters into product cost hedging contracts on behalf of Atlantic Energy.
When these contracts are settled, AmeriGas OLP is reimbursed the cost of
any losses, or distributes the proceeds of any gains, to Atlantic Energy.
Amounts due from Atlantic Energy at December 31, 2002, September 30, 2002
and December 31, 2001 totaled $2,826, $5,243 and $6,198, respectively,
which amounts are included in accounts receivable - related parties in the
Condensed Consolidated Balance Sheets.
5. LONG-TERM DEBT
On December 3, 2002, AmeriGas Partners issued $88,000 face amount of
8.875% Senior Notes due 2011 at an effective interest rate of 8.30%. The
proceeds, net of underwriters' fees, of approximately $89,100 were used on
January 6, 2003, subsequent to the end of the quarter, to redeem prior to
maturity AmeriGas Partners' $85,000 face amount of 10.125% Senior Notes
due 2007 at a redemption price of 102.25%, plus accrued interest. The
Partnership will recognize a loss of approximately $3,000 in the quarter
ending March 31, 2003 related to the redemption premium and other
associated costs and expenses.
6. COMMITMENTS AND CONTINGENCIES
The Partnership has succeeded to certain lease guarantee obligations of
Petrolane relating to Petrolane's divestiture of nonpropane operations
before its 1989 acquisition by QFB Partners. Future lease payments under
these leases total approximately $19,000 at December 31, 2002. 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 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. In December 1999, Texas
Eastern filed for dissolution under the Delaware General Corporation Law.
In May 2001, Petrolane filed a declaratory judgment action in the Delaware
Chancery Court seeking confirmation of Texas Eastern's indemnification
obligations and judicial supervision of Texas Eastern's dissolution to
ensure that its indemnification obligations to Petrolane are paid or
adequately provided for in accordance with law. Those proceedings are
pending. In a Liquidation and Winding Up Agreement dated September 17,
2002, PanEnergy Corporation ("PanEnergy"), Texas Eastern's sole
stockholder, agreed to assume all of Texas Eastern's liabilities as of
-8-
AMERIGAS PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(unaudited)
(Thousands of dollars, except per unit)
December 20, 2002, to the extent of the value of Texas Eastern's assets
transferred to PanEnergy as of that date (which is expected to exceed
$94,000), and to the extent that such liabilities arise within ten years
from Texas Eastern's date of dissolution. Notwithstanding the dissolution
proceeding, and based on Texas Eastern previously having satisfied
directly defaulted lease obligations without the Partnership's having to
honor its guarantee, we believe that the probability that the Partnership
will be required to directly satisfy the lease obligations subject to the
indemnification agreement is remote.
On August 21, 2001, AmeriGas Partners, through AmeriGas OLP, acquired the
propane distribution businesses of Columbia Energy Group (the "2001
Acquisition") pursuant to the terms of a purchase agreement (the "2001
Acquisition Agreement") by and among Columbia Energy Group ("CEG"),
Columbia Propane Corporation ("CPC"), Columbia Propane, L.P. ("CPLP"), CP
Holdings, Inc. ("CPH," and together with CPC and CPLP, the "Company
Parties"), AmeriGas Partners, AmeriGas OLP and the General Partner
(together with AmeriGas Partners and AmeriGas OLP, the "Buyer Parties").
As a result of the 2001 Acquisition, AmeriGas OLP acquired all of the
stock of CPC and CPH and substantially all of the partnership interests of
CPLP. Under the terms of an earlier acquisition agreement (the "1999
Acquisition Agreement"), the Company Parties agreed to indemnify the
former general partners of National Propane Partners, L.P. (a predecessor
company of the Columbia Propane businesses) and an affiliate
(collectively, "National General Partners") against certain income tax and
other losses that they may sustain as a result of the 1999 acquisition by
CPLP of National Propane Partners, L.P. (the "1999 Acquisition") or the
operation of the business after the 1999 Acquisition ("National Claims").
At December 31, 2002, the potential amount payable under this indemnity by
the Company Parties was approximately $71,000. These indemnity obligations
will expire on the date that CPH acquires the remaining outstanding
partnership interest of CPLP, which is expected to occur on or after July
19, 2009.
Under the terms of the 2001 Acquisition Agreement, CEG agreed to indemnify
the Buyer Parties and the Company Parties against any losses that they
sustain under the 1999 Acquisition Agreement and related agreements
("Losses"), including National Claims, to the extent such claims are based
on acts or omissions of CEG or the Company Parties prior to the 2001
Acquisition. The Buyer Parties agreed to indemnify CEG against Losses,
including National Claims, to the extent such claims are based on acts or
omissions of the Buyer Parties or the Company Parties after the 2001
Acquisition. CEG and the Buyer Parties have agreed to apportion certain
losses resulting from National Claims to the extent such losses result
from the 2001 Acquisition itself.
We also have other contingent liabilities, 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
-9-
AMERIGAS PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(unaudited)
(Thousands of dollars, except per unit)
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.
-10-
AMERIGAS FINANCE CORP.
(a wholly owned subsidiary of AmeriGas Partners, L.P.)
BALANCE SHEETS
December 31, September 30,
2002 2002
------------ -------------
(unaudited)
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
============ ============
See accompanying note to balance sheets.
-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 and AmeriGas Finance jointly and severally
issued $100,000,000 face value of 10.125% Senior Notes due April 2007 (Notes).
In November 2001, AmeriGas Partners redeemed prior to maturity $15,000,000 face
value of the Notes at a redemption price of 103.375%. In January 2003, AmeriGas
Partners redeemed prior to maturity, the remaining $85,000,000 face value of the
Notes at a redemption price of 102.25%.
AmeriGas Partners owns all 100 shares of AmeriGas Finance common stock
outstanding.
-12-
AMERIGAS EAGLE FINANCE CORP.
(a wholly owned subsidiary of AmeriGas Partners, L.P.)
BALANCE SHEETS
December 31, September 30,
2002 2002
------------ -------------
(unaudited)
ASSETS
Cash $ 1,000 $ 1,000
------------ ------------
Total assets $ 1,000 $ 1,000
============ ============
STOCKHOLDER'S EQUITY
Common stock, without par value; 100 shares authorized,
issued and outstanding $ -- $ --
Additional paid-in capital 1,000 1,000
------------ ------------
Total stockholder's equity $ 1,000 $ 1,000
============ ============
See accompanying note to balance sheets.
-13-
AMERIGAS EAGLE FINANCE CORP.
(A WHOLLY OWNED SUBSIDIARY OF AMERIGAS PARTNERS, L.P.)
NOTE TO BALANCE SHEETS
AmeriGas Eagle Finance Corp. (Eagle Finance), a Delaware corporation, was formed
on February 22, 2001 and is a wholly owned subsidiary of AmeriGas Partners, L.P.
(AmeriGas Partners).
On April 4, 2001, AmeriGas Partners and Eagle Finance jointly and severally
issued $60,000,000 face value of 10% Senior Notes due April 2006.
AmeriGas Partners owns all 100 shares of Eagle Finance common stock outstanding.
-14-
AP EAGLE FINANCE CORP.
(a wholly owned subsidiary of AmeriGas Partners, L.P.)
BALANCE SHEETS
December 31, September 30,
2002 2002
------------ -------------
(unaudited)
ASSETS
Cash $ 1,000 $ 1,000
------------ ------------
Total assets $ 1,000 $ 1,000
============ ============
STOCKHOLDER'S EQUITY
Common stock, without par value; 100 shares authorized,
issued and outstanding $ -- $ --
Additional paid-in capital 1,000 1,000
------------ ------------
Total stockholder's equity $ 1,000 $ 1,000
============ ============
See accompanying note to balance sheets.
-15-
AP EAGLE FINANCE CORP.
(A WHOLLY OWNED SUBSIDIARY OF AMERIGAS PARTNERS, L.P.)
NOTE TO BALANCE SHEETS
AP Eagle Finance Corp. (AP Eagle Finance), a Delaware corporation, was formed on
April 12, 2001 and is a wholly owned subsidiary of AmeriGas Partners, L.P.
(AmeriGas Partners).
On August 21, 2001, AmeriGas Partners and AP Eagle Finance jointly and severally
issued $200,000,000 face value of 8.875% Series A Senior Notes due May 2011. On
December 20, 2001, AmeriGas Partners and AP Eagle Finance exchanged $199,985,000
face value of 8.875% Series A Senior Notes due May 2011 for a like amount of
AmeriGas Partners and AP Eagle Finance 8.875% Series B Senior Notes due May 2011
pursuant to a registered exchange offer. On May 3, 2002, AmeriGas Partners and
AP Eagle Finance jointly and severally issued an additional $40,000,000 face
value of 8.875% Senior Notes due May 2011. On December 3, 2002, AmeriGas
Partners and AP Eagle Finance jointly and severally issued an additional
$88,000,000 face value of 8.875% Senior Notes due May 2011.
AmeriGas Partners owns all 100 shares of AP Eagle Finance common stock
outstanding.
-16-
AMERIGAS PARTNERS, L.P.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following analyses compare the Partnership's results of operations for the
three months ended December 31, 2002 ("2002 three-month period") with the three
months ended December 31, 2001 ("2001 three-month period"). AmeriGas Finance
Corp., AmeriGas Eagle Finance Corp., and AP Eagle Finance Corp. have nominal
assets and do not conduct any operations. Accordingly, discussions of the
results of operations and financial condition and liquidity of these entities
are not presented.
2002 THREE-MONTH PERIOD COMPARED WITH 2001 THREE-MONTH PERIOD
Three Months Ended December 31, 2002 2001 Increase
-------- -------- ---------------------
(Dollars in millions)
Gallons sold (millions):
Retail 306.6 265.6 41.0 15.4%
Wholesale 89.3 83.2 6.1 7.3%
-------- -------- --------
395.9 348.8 47.1 13.5%
======== ======== ========
Revenues:
Retail propane $ 361.8 $ 298.8 $ 63.0 21.1%
Wholesale propane 48.8 40.4 8.4 20.8%
Other 34.4 32.2 2.2 6.8%
-------- -------- --------
$ 445.0 $ 371.4 $ 73.6 19.8%
======== ======== ========
Total margin (a) $ 201.7 $ 172.2 $ 29.5 17.1%
EBITDA (b) $ 81.7 $ 57.9 $ 23.8 41.1%
Operating income $ 64.4 $ 42.0 $ 22.4 53.3%
Heating degree days - % colder (warmer)
than normal (c) 1.1 (15.3) -- --
(a) Total margin represents total revenues less cost of sales.
(b) EBITDA (earnings before interest expense, income taxes, depreciation and
amortization, equity investee income and minority interests) 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. EBITDA is included to provide additional
information for evaluating (1) the Partnership's ability to declare and
pay the Minimum Quarterly Distribution and (2) its performance. The
Partnership's definition of EBITDA may be different from that used by
other companies.
(c) Deviation from average heating degree days based upon national weather
statistics provided by the National Oceanic and Atmospheric Administration
("NOAA") for 335 airports in the continental United States.
-17-
AMERIGAS PARTNERS, L.P.
Nationwide temperatures based upon heating degree day statistics provided by
NOAA were 1.1% colder than normal in the 2002 three-month period compared with
temperatures that were 15.3% warmer than normal in the prior-year three-month
period. Retail gallons sold increased 15.4% principally as a result of the
colder 2002 three-month period weather. Commercial and industrial sales in both
three-month periods were negatively affected by a sluggish U.S. economy. Low
margin wholesale volumes increased 6.1 million gallons primarily reflecting the
effects of the colder 2002 three-month period weather.
Retail propane revenues were $361.8 million in the 2002 three-month period, an
increase of $63.0 million, reflecting a $46.1 million increase as a result of
the greater retail volumes sold and a $16.9 million increase as a result of
higher average selling prices. Wholesale propane revenues increased $8.4 million
reflecting higher average wholesale selling prices and the previously mentioned
increase in wholesale volumes sold. The higher average retail and wholesale
selling prices in the 2002 three-month period reflect higher propane commodity
prices. Total cost of sales increased $44.2 million reflecting the effects of
the greater retail and wholesale volumes sold and the increase in the commodity
price of propane.
Total margin increased $29.5 million principally as a result of the
weather-related increase in retail gallons sold during the 2002 three-month
period and, to a lesser extent, a $4.4 million increase in margin from PPX(R).
The increase in PPX(R) margin reflects higher volumes, and greater unit margins
to fund the purchase of grill cylinder overfill protection devices ("OPDs") in
order to meet National Fire Protection Association ("NFPA") guidelines. These
guidelines require that propane grill cylinders refilled after April 1, 2002, be
fitted with OPDs. The extent to which this greater level of PPX(R) margin is
sustainable will depend upon a number of factors including the continuing rate
of OPD valve replacement and competitive market conditions.
The $23.8 million increase in EBITDA (earnings before interest expense, income
taxes, depreciation and amortization, minority interests and income from equity
investees) in the 2002 three-month period principally reflects the previously
mentioned higher total margin and a $2.1 million increase in other income
partially offset by a $7.8 million increase in the Partnership's operating and
administrative expenses. Although EBITDA is not a measure of performance or
financial condition under accounting principles generally accepted in the United
States, it is included in this analysis to provide additional information for
evaluating the Partnership's ability to pay and declare the Minimum Quarterly
Distribution of $0.55 ("MQD") and for evaluating the Partnership's performance.
The Partnership's definition of EBITDA may be different from the definition of
EBITDA used by other companies. Notwithstanding the significant increase in
retail volumes sold in the 2002 three-month period, payroll and benefits expense
increased only $2.0 million principally reflecting the full-period benefit of
the consolidation of 90 Columbia Propane and AmeriGas Propane districts. In
addition, 2002 three-month period operating and administrative expenses reflect
higher provisions for doubtful accounts due in large part to the increased
sales; greater general insurance and litigation expense; and an increase in
delivery vehicle expenses due in large part to the greater retail volumes
delivered during the 2002 three-month period. Other income in the prior-year
three-month period was reduced by a $2.1 million loss from declines in the value
of propane commodity option contracts. Operating income increased less than the
increase in EBITDA principally as a result of higher depreciation expense
associated with OPDs.
-18-
AMERIGAS PARTNERS, L.P.
FINANCIAL CONDITION AND LIQUIDITY
FINANCIAL CONDITION
The Partnership's long-term debt outstanding at December 31, 2002 totaled
$1,035.7 million (including current maturities of $60.6 million) compared to
$945.8 million of long-term debt (including current maturities of $60.4 million)
at September 30, 2002. On December 3, 2002, AmeriGas Partners issued $88 million
face amount of 8.875% Senior Notes due 2011 at an effective interest rate of
8.30%. The net proceeds of approximately $89.1 million, which are included in
cash and cash equivalents at December 31, 2002, were used on January 6, 2003,
subsequent to the end of the quarter, to redeem prior to maturity AmeriGas
Partners' $85 million face amount of 10.125% Senior Notes due 2007 at a
redemption price of 102.25%, plus accrued interest. The Partnership will
recognize a loss of approximately $3.0 million in the quarter ending March 31,
2003 relating to the redemption premium and other associated costs and expenses.
AmeriGas OLP's Second Amended and Restated Bank Credit Agreement consists of a
$100 million Revolving Credit Facility and a $75 million Acquisition Facility.
At December 31, 2002, there was $37 million outstanding under the Revolving
Credit Facility. Issued and outstanding letters of credit under the Revolving
Credit Facility, which reduce available borrowing capacity, totaled $22.2
million at December 31, 2002.
During the three months ended December 31, 2002, the Partnership declared and
paid the MQD on all limited partner units for the quarter ended September 30,
2002. The MQD for the quarter ended December 31, 2002 will be paid on February
18, 2003 to holders of record on February 10, 2003. Effective November 18, 2002,
the 9,891,072 Subordinated Units held by the General Partner were converted to
Common Units (see "Conversion of Subordinated Units" below). The ability of the
Partnership to declare and pay the MQD on limited partner units in the future
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 increasing operating capacity); (3)
changes in operating working capital; and (4) the Partnership's ability to
borrow under its Bank Credit Agreement, to refinance maturing debt, and to
increase its long-term debt. Some of these factors are affected by conditions
beyond our control including weather, competition in markets we serve, and the
cost of propane.
CONVERSION OF SUBORDINATED UNITS
In December 2002, the General Partner determined that the cash-based performance
and distribution requirements for the conversion of the remaining 9,891,072
Subordinated Units, all of which were held by the General Partner, had been met
in respect of the quarter ended September 30, 2002. As a result, these
Subordinated Units were converted to a like number of Common Units effective
November 18, 2002. The conversion of the Subordinated Units did not result in an
increase in the total number of AmeriGas Partners limited partner units
outstanding.
-19-
AMERIGAS PARTNERS, L.P.
CASH FLOWS
The Partnership had cash and cash equivalents totaling $110.5 million at
December 31, 2002 compared to $47.4 million at September 30, 2002. The
significantly higher cash balances at December 31, 2002 include the proceeds
from the previously mentioned December 3, 2002 issuance of $88 million face
amount of 8.875% AmeriGas Partners Senior Notes. Due to the seasonal nature of
the propane business, cash flows from operating activities are generally
strongest during the second and third fiscal quarters when customers pay for
propane purchased during the heating season and are generally at their lowest
levels during the first and fourth fiscal quarters. Accordingly, cash flows from
operating activities during the three months ended December 31, 2002 are not
necessarily indicative of cash flows to be expected for a full year.
OPERATING ACTIVITIES. Cash used by operating activities was $8.6 million during
the 2002 three-month period compared to cash provided by operating activities of
$8.4 million in the prior-year three-month period. Cash required to fund changes
in operating working capital during the 2002 three-month period was $70.7
million, a significant increase from the $24.6 million required in the
prior-year three-month period, reflecting the effects of the higher propane
volumes sold and higher propane commodity costs. Cash flow from operating
activities before changes in working capital was $62.1 million in the 2002
three-month period compared to $33.1 million in the prior-year three-month
period reflecting the significant improvement in 2002 three-month period
operating results.
INVESTING ACTIVITIES. We spent $15.6 million for property, plant and equipment
(including maintenance capital expenditures of $5.7 million) during the three
months ended December 31, 2002 compared to $14.6 million (including maintenance
capital expenditures of $6.5 million) during the prior-year three-month period.
Proceeds from asset disposals were lower in the 2002 three-month period
principally due to lower sales of Columbia Propane excess assets. During the
three months ended December 31, 2002, the Partnership acquired a propane
distribution business for $2.2 million.
FINANCING ACTIVITIES. The Partnership declared and paid the MQD on all limited
partner units and the general partner interests during each of the 2002 and 2001
three-month periods. AmeriGas OLP Revolving Credit Agreement borrowings
increased $27.0 million during the 2002 three-month period compared to an
increase of $8.0 million in the prior-year period reflecting higher cash needs
to fund operating working capital. In December 2002, AmeriGas Partners received
$89.1 million of net proceeds from the issuance of $88 million face amount of
8.875% Senior Notes due 2011. On January 6, 2003, subsequent to the end of the
quarter, the net proceeds were used to repay prior to maturity the remaining $85
million face amount of 10.125% Senior Notes at a redemption price of 102.25%,
plus accrued interest. During the prior-year three-month period, the Partnership
sold 350,000 Common Units to the General Partner and 1,843,047 Common Units to
the public in conjunction with an underwritten public offering. The net proceeds
of these sales and related capital contributions from the General Partner
totaling approximately $45 million were contributed to AmeriGas OLP and used to
reduce Bank Credit Agreement borrowings and for working capital. Also during the
2001 three-month period, AmeriGas Partners redeemed prior to maturity $15
million of its 10.125% Senior Notes and AmeriGas OLP repaid $20 million of
Acquisition Facility borrowings.
-20-
AMERIGAS PARTNERS, L.P.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board ("FASB") recently issued SFAS No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure" ("SFAS
148"); SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities" ("SFAS 146"); and FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" ("FIN 45").
SFAS 148 amends SFAS No. 123, "Accounting for Stock-Based Compensation" ("SFAS
123"), to provide alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee compensation.
In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require
prominent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results. As permitted by SFAS 123, we currently apply
the provisions of Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25"), in recording compensation
expense for grants of stock, stock options, and other equity instruments to
employees. We adopted the disclosure provisions of SFAS 148 during the quarter
ended December 31, 2002 (see Note 1 to Condensed Consolidated Financial
Statements).
SFAS 146 addresses accounting for costs associated with exit or disposal
activities and replaces the guidance in Emerging Issues Task Force ("EITF") No.
94-3, "Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity." Generally, SFAS 146 requires that a liability for
costs associated with an exit or disposal activity, including contract
termination costs, employee termination benefits and other associated costs, be
recognized when the liability is incurred. Under EITF No. 94-3, a liability was
recognized at the date an entity committed to an exit plan. SFAS 146 became
effective for disposal activities initiated after December 31, 2002. The initial
adoption of the provisions of SFAS 146 did not affect our financial position or
results of operations.
FIN 45 expands the existing disclosure requirements for guarantees and requires
that companies recognize, at the inception of a guarantee, a liability for the
fair value of the obligations undertaken when issuing the guarantee. The initial
recognition and initial measurement provisions of FIN 45 are effective for
guarantees issued or modified after December 31, 2002. The disclosure
requirements of FIN 45 are included in Note 6 to Condensed Consolidated
Financial Statements. We do not believe the application of FIN 45 will have a
material effect on our financial position or results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our primary financial market risks include commodity prices for propane and
interest rates on borrowings.
The risk associated with fluctuations in the prices the Partnership pays for
propane is principally a result of market forces reflecting changes in supply
and demand for propane and other energy commodities. The Partnership's
profitability is sensitive to changes in propane supply costs, and the
-21-
AMERIGAS PARTNERS, L.P.
Partnership generally attempts to pass on increases in such costs to customers.
The Partnership may not, however, always be able to pass through product cost
increases fully, particularly when product costs rise rapidly. In order to
reduce the volatility of the Partnership's propane market price risk, we use
contracts for the forward purchase or sale of propane, propane fixed-price
supply agreements, and over-the-counter derivative commodity instruments
including price swap and option contracts. Over-the-counter derivative commodity
instruments utilized by the Partnership to hedge forecasted purchases of propane
are generally settled at expiration of the contract. In order to minimize credit
risk associated with derivative commodity contracts, we monitor established
credit limits with the contract counterparties. 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 speculative or trading purposes.
The Partnership has both fixed-rate and variable-rate debt. Changes in interest
rates impact the cash flows of variable-rate debt but generally do not impact
its fair value. Conversely, changes in interest rates impact the fair value of
fixed-rate debt but do not impact their cash flows.
Our variable rate debt includes borrowings under AmeriGas OLP's Bank Credit
Agreement. These debt agreements have interest rates that are generally indexed
to short-term market interest rates. Our long-term debt is typically issued at
fixed rates of interest based upon market rates for debt having similar terms
and credit ratings. As these long-term debt issues mature, we may refinance such
debt with new debt having interest rates reflecting then-current market
conditions. This debt may have an interest rate that is more or less than the
refinanced debt. In order to reduce interest rate risk associated with near-term
forecasted issuances of fixed-rate debt, from time to time we enter into
interest rate protection agreements.
The following table summarizes the fair values of unsettled market risk
sensitive derivative instruments held at December 31, 2002. It also includes the
changes in fair value that would result if there were an adverse change in (1)
the market price of propane of 10 cents per gallon and (2) interest rates on
ten-year U.S. treasury notes of 50 basis points:
Fair Change in
Value Fair Value
-------- ----------
(Millions of dollars)
December 31, 2002:
Propane commodity price risk $ 8.5 $ (5.9)
Interest rate risk (2.2) (2.1)
-------- --------
Because the Partnership's derivative instruments generally qualify as hedges
under SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," we expect that changes in the fair value of derivative instruments
used to manage propane price or interest rate risk would be substantially offset
by gains or losses on the associated underlying transactions.
-22-
AMERIGAS PARTNERS, L.P.
ITEM 4. CONTROLS AND PROCEDURES
An evaluation of the effectiveness of the design and operation of the
Partnership's disclosure controls and procedures was carried out within the
90-day period prior to the filing of this quarterly report by the General
Partner under the supervision and with the participation of the General
Partner's management, including the Chief Executive Officer and Chief Financial
Officer. Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Partnership's disclosure controls and
procedures have been designed and are being operated in a manner that provides
reasonable assurance that the information required to be disclosed by the
Partnership in reports filed under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms. A controls system, no matter how well designed and
operated, cannot provide absolute assurance that the objectives of the controls
system are met, and no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within a company have
been detected. Subsequent to the date of the most recent evaluation of the
Partnership's internal controls, there were no significant changes in the
Partnership's internal controls or in other factors that could significantly
affect the internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses.
-23-
AMERIGAS PARTNERS, L.P.
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) List of Exhibits:
99 Certification by the Chief Executive Officer and Chief Financial
Officer relating to the Registrants' Reports on Form 10-Q for the
quarter ended December 31, 2002.
(b) The following Current Reports on Form 8-K were filed during the fiscal
quarter ended December 31, 2002:
DATE ITEM NUMBER CONTENT
November 1, 2002 5 Notice of Fourth Quarter and
Year End Earnings Conference
Call Webcast
November 22, 2002 5 Notice of Fourth Quarter and
Year End Earnings; and
Announcement relating to the
10 1/8% Senior Notes Redemption.
-24-
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 13, 2003 By: /s/ Martha B. Lindsay
----------------------------------------
Martha B. Lindsay
Vice President - Finance
and Chief Financial Officer
By: /s/ Richard R. Eynon
----------------------------------------
Richard R. Eynon
Controller and Chief Accounting Officer
AmeriGas Finance Corp.
-----------------------------------------
(Registrant)
Date: February 13, 2003 By: /s/ Martha B. Lindsay
----------------------------------------
Martha B. Lindsay
Vice President - Finance
and Chief Financial Officer
By: /s/ Richard R. Eynon
----------------------------------------
Richard R. Eynon
Controller and Chief Accounting Officer
-25-
AmeriGas Eagle Finance Corp.
----------------------------------------
(Registrant)
Date: February 13, 2003 By: /s/ Martha B. Lindsay
----------------------------------------
Martha B. Lindsay
Vice President - Finance
and Chief Financial Officer
By: /s/ Richard R. Eynon
----------------------------------------
Richard R. Eynon
Controller and Chief Accounting Officer
AP Eagle Finance Corp.
----------------------------------------
(Registrant)
Date: February 13, 2003 By: /s/ Martha B. Lindsay
----------------------------------------
Martha B. Lindsay
Vice President - Finance
and Chief Financial Officer
By: /s/ Richard R. Eynon
----------------------------------------
Richard R. Eynon
Controller and Chief Accounting Officer
-26-
CERTIFICATIONS
I, Eugene V.N. Bissell, certify that:
1. I have reviewed this quarterly report on Form l0-Q of AmeriGas Partners,
L.P., AmeriGas Finance Corp., AmeriGas Eagle Finance Corp. and AP Eagle
Finance Corp.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrants as of, and for, the periods presented in this
quarterly report;
4. The registrants' other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrants and
we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrants, including their
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
(b) evaluated the effectiveness of the registrants' disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrants' other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants' auditors and the audit
committee of each registrant's board of directors:
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants' ability to
record, process, summarize and report financial data and have
identified for the registrants' auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants'
internal controls; and
6. The registrants' other certifying officer and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: February 13, 2003
/s/ Eugene V.N. Bissell
---------------------------------------
Eugene V.N. Bissell
President and Chief Executive Officer
AmeriGas Propane, Inc.
AmeriGas Finance Corp.
AmeriGas Eagle Finance Corp.
AP Eagle Finance Corp.
-27-
I, Martha B. Lindsay, certify that:
1. I have reviewed this quarterly report on Form 10-Q of AmeriGas Partners,
L.P., AmeriGas Finance Corp., AmeriGas Eagle Finance Corp. and AP Eagle
Finance Corp.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrants as of, and for, the periods presented in this
quarterly report;
4. The registrants' other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrants and
we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrants, including their
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
(b) evaluated the effectiveness of the registrants' disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrants' other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants' auditors and the audit
committee of each the registrant's board of directors:
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants' ability to
record, process, summarize and report financial data and have
identified for the registrants' auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants'
internal controls; and
6. The registrants' other certifying officer and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: February 13, 2003
/s/ Martha B. Lindsay
---------------------------------------
Martha B. Lindsay
Vice President - Finance and Chief Financial Officer
AmeriGas Propane, Inc.
AmeriGas Finance Corp.
AmeriGas Eagle Finance Corp.
AP Eagle Finance Corp.
-28-
AMERIGAS PARTNERS, L.P.
EXHIBIT INDEX
99 Certification by the Chief Executive Officer and the Chief Financial
Officer relating to the Registrants' Reports on Form 10-Q for the quarter
ended December 31, 2002.