Form 8-K Amendment No. 1

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K/A

Amendment No. 1

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 12, 2012

 

 

AmeriGas Partners, L.P.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   1-13692   23-2787918

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

460 No. Gulph Road, King of Prussia, Pennsylvania   19406
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (610) 337-7000

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Explanatory Note

AmeriGas Partners, L.P., a Delaware limited partnership (the “Partnership), previously filed a Current Report on Form 8-K with the Securities and Exchange Commission dated January 12, 2012 (the “Original Form 8-K”) to report the acquisition by the Partnership of substantially all of Energy Transfer Partners, L.P.’s, a Delaware limited partnership, retail propane distribution business conducted by its subsidiaries, Heritage Operating, L.P. and Titan Energy Partners, L.P. (the “Heritage Acquisition”). This Form 8-K/A amends Item 9.01 of the Original Form 8-K for the purpose of filing the financial statements and pro forma financial information required by Item 9.01 with respect to the Heritage Acquisition. All of the other Items in the Original Form 8-K remain the same and are hereby incorporated by reference into this Form 8-K/A.

 

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired

The Audited Combined Financial Statements of Heritage Operating, L.P. and subsidiaries and Titan Energy Partners, L.P. and subsidiaries as of December 31, 2010 and 2009, and for the years ended December 31, 2010, 2009 and 2008, filed as Exhibit 99.1 to the Form 8-K dated January 4, 2012, are incorporated by reference herein.

The Unaudited Condensed Combined Financial Statements of Heritage Operating, L.P. and subsidiaries and Titan Energy Partners, L.P. and subsidiaries as of September 30, 2011 and December 31, 2010, and for the nine months ended September 30, 2011 and 2010, filed as Exhibit 99.2 to the Form 8-K dated January 4, 2012, are incorporated by reference herein.

(b) Pro Forma Financial Information

The Unaudited Pro Forma Condensed Combined Financial Statements of the Partnership and subsidiaries as of September 30, 2011, and for the year ended September 30, 2011 are attached hereto as Exhibit 99.3 and incorporated herein by reference.

(d) Exhibits

23.1 Consent of Grant Thornton LLP.

99.1 Audited Combined Financial Statements of Heritage Operating, L.P. and subsidiaries and Titan Energy Partners, L.P. and subsidiaries as of December 31, 2010 and 2009, and for the years ended December 31, 2010, 2009 and 2008.

99.2 Unaudited Condensed Combined Financial Statements of Heritage Operating, L.P. and subsidiaries and Titan Energy Partners, L.P. and subsidiaries as of September 30, 2011 and December 31, 2010, and for the nine months ended September 30, 2011 and 2010.

99.3 Unaudited Pro Forma Condensed Combined Financial Statements.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: February 8, 2012

 

AmeriGas Partners, L.P.
By: John S. Iannarelli
By:  

/s/ John S. Iannarelli

  Name: John S. Iannarelli
  Title: Vice President - Finance and Chief
  Financial Officer of AmeriGas
  Propane, Inc., the general partner of
  AmeriGas Partners, L.P.


Exhibit Index

 

Exhibit
No.

 

Description

23.1   Consent of Grant Thornton LLP.
99.1*   Audited Combined Financial Statements of Heritage Operating, L.P. and subsidiaries and Titan Energy Partners, L.P. and subsidiaries as of December 31, 2010 and 2009, and for the years ended December 31, 2010, 2009 and 2008.
99.2**   Unaudited Condensed Combined Financial Statements of Heritage Operating, L.P. and subsidiaries and Titan Energy Partners, L.P. and subsidiaries as of September 30, 2011 and December 31, 2010, and for the nine months ended September 30, 2011 and 2010.
99.3   Unaudited Pro Forma Condensed Combined Financial Statements.

 

* Incorporated by reference to Exhibit 99.1 to the Partnership’s Form 8-K dated January 4, 2012.
** Incorporated by reference to Exhibit 99.2 to the Partnership’s Form 8-K dated January 4, 2012.

 

Consent of Grant Thornton LLP.

Exhibit 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report dated November 21, 2011, with respect to the combined financial statements of Heritage Operating, L.P. and subsidiaries and Titan Energy Partners, L.P. and subsidiaries as of December 31, 2010 and 2009, and for each of the three years in the period ended December 31, 2010, included in this Current Report of AmeriGas Partners, L.P. on Form 8-K/A. We hereby consent to the incorporation by reference of said report in the Registration Statements of AmeriGas Partners, L.P. on Forms S-3 (File No. 333-178879 and File No. 333-159076) and on Forms S-8 (File No. 333-168604 and File No. 333-104939).

/s/ GRANT THORNTON LLP

Kansas City, Missouri

February 8, 2012

 

Unaudited Pro Forma Condensed Combined Financial Statements

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following Unaudited Pro Forma Condensed Combined Financial Statements of AmeriGas Partners, L.P. and subsidiaries (“AmeriGas Partners”) have been prepared to give effect to the January 12, 2012 acquisition by AmeriGas Partners (the “Heritage Acquisition”) of substantially all of the retail propane distribution businesses of Energy Transfer Partners, L.P., a Delaware limited partnership (“ETP”), comprising the operations of Heritage Operating, L.P. (“HOLP”) and Titan Energy Partners, L.P. (“Titan,” and, together with HOLP, “Heritage Propane”) and their respective general partners and subsidiaries, pursuant to a Contribution and Redemption Agreement, as amended, (the “Contribution Agreement”) between ETP, Energy Transfer Partners GP, L.P., a Delaware limited partnership and general partner of ETP (“ETP GP”), and Heritage ETC, L.P., a Delaware limited partnership (the “Heritage Contributor”), in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations.” In accordance with the Contribution Agreement, AmeriGas Partners acquired the partner interests in HOLP and Titan and their respective general partner interests and subsidiaries, in exchange for 29,567,362 AmeriGas Partners common units and a cash distribution to ETP of approximately $1.46 billion (subject to adjustments for working capital, cash and the amount of indebtedness of HOLP outstanding, in accordance with the Contribution Agreement). The limited partner interests of AmeriGas Partners are referred to herein as “Common Units.” AmeriGas Partners financed the cash distribution with the proceeds from the issuance of $1.55 billion face amount of senior notes issued by AmeriGas Partners’ finance subsidiaries, AmeriGas Finance, LLC and AmeriGas Finance Corp., which are unconditionally guaranteed by AmeriGas Partners.

The Unaudited Pro Forma Condensed Combined Financial Statements do not purport to represent what the results of operations or financial position of AmeriGas Partners would have been if the Heritage Acquisition had occurred on the dates indicated below, nor do they purport to project the results of operations or financial position of AmeriGas Partners for any future period or as of any future date. Under ASC 805, tangible and identifiable intangible assets acquired and liabilities assumed are recorded at their estimated fair values. The Unaudited Pro Forma Condensed Combined Financial Statements were prepared using the acquisition method of accounting with AmeriGas Partners as the acquirer. Accordingly, we have adjusted the historical financial statements to give effect to the impact of the estimated net purchase price in connection with the Heritage Acquisition. In the Unaudited Pro Forma Condensed Combined Balance Sheet, AmeriGas Partners’ estimated net purchase price for Heritage Propane has been allocated to the assets acquired and liabilities assumed based on a preliminary valuation of their fair values using currently available information which is subject to final adjustments. Because the fair values of the tangible and identifiable intangible assets acquired, less liabilities assumed, were less than the purchase price consideration for Heritage Propane, such difference has been reflected as goodwill. The estimated net purchase price, and the actual adjustments to be recorded in connection with the final purchase price allocation, may differ from the actual net purchase price and the pro forma adjustments reflected in the Unaudited Pro Forma Condensed Combined Financial Statements and any such differences may be material.

The Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2011 was prepared by combining the September 30, 2011 audited Consolidated Balance Sheet of AmeriGas Partners and the September 30, 2011 unaudited Condensed Combined Balance Sheet of HOLP and Titan pursuant to the Contribution Agreement as though the Heritage Acquisition had occurred on September 30, 2011. The Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended September 30, 2011 was prepared by combining AmeriGas Partners’ audited Consolidated Statement of Operations for the year ended September 30, 2011 with HOLP and Titan’s unaudited Condensed Combined Statement of Operations for the twelve months ended September 30, 2011, to give effect to the Heritage Acquisition as though it had occurred on October 1, 2010. The estimated pro forma adjustments only give effect to events that are (1) directly attributable to the Heritage Acquisition; (2) factually supportable; and (3) with respect to the Unaudited Pro Forma Condensed Combined Statement of Operations, are expected to have a continuing effect on the combined results. The Unaudited Pro Forma Condensed Combined Statement of Operations does not give effect to any potential cost savings or other operating efficiencies that are expected to result from the integration of Heritage Propane with the operations of AmeriGas Partners or the integration costs expected to be incurred in connection therewith. The historical results of operations of HOLP and Titan include an allocation to Heritage Propane of corporate charges by ETP. Such allocation will be terminated following the Heritage Acquisition, but will be replaced by an allocation of UGI Corporation’s (“UGI”) corporate charges. We expect that such UGI charges are not likely to be greater than the amount recorded on a historical basis in HOLP and Titan’s financial statements.

AmeriGas Partners’ historical amounts as of and for the year ended September 30, 2011 were derived from the audited financial statements included in the Annual Report on Form 10-K filed by AmeriGas Partners on November 21, 2011 with the U.S. Securities and Exchange Commission (“SEC”).

HOLP and Titan’s historical unaudited condensed combined balance sheet amounts as of September 30, 2011 were derived from the Unaudited Condensed Combined Balance Sheet of HOLP and Titan included in our Current Report on Form 8-K filed with the SEC on January 4, 2012 (the “Prior Form 8-K”) and incorporated by reference in this amendment on Form 8-K/A. The unaudited statement of operations data of HOLP and Titan for the twelve months ended September 30, 2011 was derived by combining data in the HOLP and Titan Unaudited Combined Statement of Operations for the nine months ended September 30, 2011 with data in the HOLP and Titan Audited Combined Statement of Operations for the year ended December 31, 2010, and excluding data in the HOLP and Titan Unaudited Combined Statement of Operations for the nine months ended September 30, 2010. These Unaudited Condensed Combined Financial Statements of HOLP and Titan were included in our Prior Form 8-K and are incorporated by reference in this Form 8-K/A.

You should read the following Unaudited Pro Forma Condensed Combined Financial Statements in conjunction with the combined statements of HOLP and Titan, incorporated by reference in this Form 8-K/A, along with AmeriGas Partners’ financial statements and accompanying notes included in its prior SEC filings.


AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

SEPTEMBER 30, 2011

(THOUSANDS OF DOLLARS)

 

     Historical
AmeriGas
Partners (2)
    Historical
HOLP and
Titan (2)
     Eliminate
Assets &
Liabilities Not
Acquired (3)
    Pro Forma
Adjustments
    Pro Forma
Combined
 

ASSETS

           

Current assets:

           

Cash and cash equivalents

   $ 8,632      $ 28,469       $ (458   $ 7,900    (4)    $ 44,543   

Accounts receivable

     233,335        81,312         (4,138     222    (5)      310,731   

Accounts receivable - related parties

     1,299        117,117         (116,895     (222 ) (5)      1,299   

Inventories

     135,815        90,585         (4,902     —          221,498   

Derivative financial instruments

     864        —           —          —          864   

Prepaid expenses and other current assets

     13,874        24,982         (76     —          38,780   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total current assets

     393,819        342,465         (126,469     7,900        617,715   

Property, plant and equipment, net

     645,755        788,055         (50,000     224,945    (6)      1,608,755   

Goodwill

     691,910        619,854         (3,619     331,089    (7)      1,639,234   

Intangible assets

     41,542        155,858         (5,375     544,517    (8)      736,542   

Other assets

     22,709        9,142         —          26,891    (9)      58,742   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total assets

   $ 1,795,735      $ 1,915,374       $ (185,463   $ 1,135,342      $ 4,660,988   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

LIABILITIES AND PARTNERS’ CAPITAL

           

Current liabilities:

           

Current maturities of long-term debt

   $ 4,664      $ 24,076       $ —        $ —        $ 28,740   

Bank loans

     95,500        —           —          (95,500 ) (10)      —     

Accounts payable - trade

     158,554        37,189         (495     19,632   (5)      214,880   

Accounts payable - related parties

     62        34,908         (15,276     (19,632 ) (5)      62   

Customer deposits and advances

     74,979        94,526         —          —          169,505   

Derivative financial instruments

     7,248        1,966         (525     —          8,689   

Other current liabilities

     109,986        57,756         —          —          167,742   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total current liabilities

     450,993        250,421         (16,296     (95,500     589,618   

Long-term debt

     928,858        60,383         (665     1,558,637   (11)      2,547,213   

Other noncurrent liabilities

     64,405        2,645         (265     —          66,785   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total liabilities

     1,444,256        313,449         (17,226     1,463,137        3,203,616   

Commitments and contingencies

           

Partners Capital:

           

Limited Partners

     340,180        1,601,394         —          (538,069 ) (12)      1,403,505   

General Partner

     3,436        —           —          13,167   (12)      16,603   

Accumulated other comprehensive (loss) income

     (4,960     531         —          (531 ) (12)      (4,960

General Partner interest in AmeriGas OLP

     12,823        —           —          29,401   (12)      42,224   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total partners’ capital

     351,479        1,601,925         —          (496,032     1,457,372   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total liabilities and partners’ capital

   $ 1,795,735      $ 1,915,374       $ (17,226   $ 967,105      $ 4,660,988   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

See accompanying notes to unaudited proforma condensed combined financial statements.

 

2


AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

YEAR ENDED SEPTEMBER 30, 2011

(THOUSANDS OF DOLLARS)

 

     Historical
AmeriGas
Partners (2)
    Historical
HOLP and
Titan (2)
    Reclassifications (13)     Pro Forma
Adjustments
    Pro Forma
Combined
 

Revenues:

          

Propane

   $ 2,360,439      $ 1,372,067      $ —        $ —        $ 3,732,506   

Other

     177,520        108,638        —          —          286,158   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     2,537,959        1,480,705            4,018,664   

Costs and expenses:

          

Cost of sales - propane (excluding depreciation shown below)

     1,546,161        829,300        —          —          2,375,461   

Cost of sales - other (excluding depreciation shown below)

     59,126        21,469        —          —          80,595   

Operating and administrative expenses

     620,576        395,470        —          —          1,016,046   

Depreciation and amortization

     94,710        83,342        —          41,458   (14)      219,510   

Other income, net

     (25,563     —          2,062        —          (23,501
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     2,295,010        1,329,581        2,062        41,458        3,668,111   

Operating income

     242,949        151,124        (2,062     (41,458     350,553   

Loss on extinguishments of debt

     (38,117     —              (38,117

Losses on disposals of assets

     —          (2,671     2,671        —          —     

Other income, net

     —          609        (609     —          —     

Interest expense

     (63,518     (9,456     —          (107,116 ) (15)      (180,090
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     141,314        139,606        —          (148,574     132,346   

Income tax expense

     (390     (409     —          —          (799
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     140,924        139,197        —          (148,574     131,547   

Less: net income attributable to noncontrolling interest

     (2,401     —          —          390   (16)      (2,011
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to AmeriGas Partners, L.P.

   $ 138,523      $ 139,197      $ —        $ (148,184   $ 129,536   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

General partner’s interest in net income attributable to AmeriGas Partners, L.P.

   $ 6,422            $ 8,856   
  

 

 

         

 

 

 

Limited partners’ interest in net income attributable to AmeriGas Partners, L.P.

   $ 132,101            $ 120,680   
  

 

 

         

 

 

 

Income per limited partner unit - basic and diluted

          

Basic

   $ 2.30            $ 1.40   
  

 

 

         

 

 

 

Diluted

   $ 2.30            $ 1.40   
  

 

 

         

 

 

 

Average limited partner units outstanding (thousands):

          

Basic

     57,119            28,633   (17)      85,752   
  

 

 

       

 

 

   

 

 

 

Diluted

     57,170            28,633   (17)      85,803   
  

 

 

       

 

 

   

 

 

 

See accompanying notes to unaudited proforma condensed combined financial statements.

 

3


NOTES TO UNAUDITED PRO FORMA CONDENSED

COMBINED FINANCIAL STATEMENTS

(thousands of dollars, except per unit data)

Note 1. The Unaudited Pro Forma Condensed Combined Financial Statements of AmeriGas Partners, L.P. and subsidiaries (“AmeriGas Partners”) have been prepared to give effect to the January 12, 2012 acquisition by AmeriGas Partners (the “Heritage Acquisition”) of substantially all of the retail propane distribution businesses of Energy Transfer Partners, L.P., a Delaware limited partnership (“ETP”), comprising substantially all of the operations of Heritage Operating, L.P. (“HOLP”) and Titan Energy Partners, L.P. (“Titan,” and, together with HOLP, “Heritage Propane”) and their respective general partners and subsidiaries, pursuant to a Contribution and Redemption Agreement, as amended (the “Contribution Agreement”), between ETP, Energy Transfer Partners GP, L.P., a Delaware limited partnership and general partner of ETP, and Heritage ETC, L.P., a Delaware limited partnership (the “Heritage Contributor”), in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations.” In accordance with the Contribution Agreement, AmeriGas Partners acquired the partner interests in HOLP and Titan and their related general partners and subsidiaries, in exchange for 29,567,362 AmeriGas Partners Common Units and a cash distribution to ETP of $1,460,000 (subject to adjustments for working capital, cash and the amount of indebtedness of HOLP outstanding, in accordance with the Contribution Agreement). It has been assumed for purposes of the Unaudited Pro Forma Condensed Combined Balance Sheet that the Heritage Acquisition occurred as of September 30, 2011, and for purposes of the Unaudited Pro Forma Condensed Combined Statement of Operations that the Heritage Acquisition occurred as of October 1, 2010.

In addition, immediately prior to the consummation of the Heritage Acquisition, HOLP transferred its interests in the net assets of HOLP’s cylinder exchange business (“HPX”) to Heritage Express Propane, LLC (“HEP”), an indirect wholly owned subsidiary of ETP (see Note 3). References to Heritage Propane herein exclude the HPX net assets. AmeriGas Partners financed the cash distribution to ETP in connection with the Heritage Acquisition with proceeds from the issuance of $550,000 face value of 6.75% senior notes due 2020 and $1,000,000 face value of 7.00% senior notes due 2022 issued by AmeriGas Partners’ finance subsidiaries, AmeriGas Finance, LLC and AmeriGas Finance Corp. and unconditionally guaranteed by AmeriGas Partners (“AmeriGas Partners Senior Notes”).

The Unaudited Pro Forma Condensed Combined Financial Statements of AmeriGas Partners, L.P. also reflect the contribution by AmeriGas Propane, Inc. (“AmeriGas GP”), the general partner of AmeriGas Partners and its operating subsidiary, AmeriGas Propane, L.P. (“AmeriGas OLP”), of a combined 934,327 AmeriGas Partners Common Units held by AmeriGas GP, in order to maintain its 1% general partner interest in AmeriGas Partners and its 1.01% general partner interest in AmeriGas OLP, as a result of the Heritage Acquisition and subsequent contribution by AmeriGas Partners of the partnership interests in HOLP and Titan to AmeriGas OLP.

The purchase price for Heritage Propane assumed in the Unaudited Pro Forma Condensed Combined Balance Sheet at September 30, 2011, is as follows:

 

Purchase price:

  

Cash

   $ 1,460,000   

Estimated working capital adjustment

     (60,064 )

Estimated net cash adjustment

     5,217   

Fair value of AmeriGas Partners Common Units issued to ETP

     1,120,449   
  

 

 

 

Total Purchase Price

   $ 2,525,602   
  

 

 

 

Pursuant to the Contribution Agreement, the purchase price is subject to adjustments for working capital, cash and the amount of indebtedness of HOLP outstanding. The actual amounts of these adjustments will depend on the working capital and net cash amounts, as defined in the Contribution Agreement. Also see Note 3.

 

4


NOTES TO UNAUDITED PRO FORMA CONDENSED

COMBINED FINANCIAL STATEMENTS

(Thousands of dollars, except per unit data)

 

The allocation of the purchase price for Heritage Propane based upon estimated fair values is as follows:

 

     Book Value
of Assets
Acquired
(Liabilities
Assumed)
    Preliminary
Fair
Value
Adjustments
    Preliminary
Fair
Value
 

Current assets

   $ 215,996      $ —        $ 215,996   

Property, plant and equipment

     738,055        224,945        963,000   

Goodwill

     616,235        331,089        947,324   

Intangible assets

     150,483        544,517        695,000   

Current liabilities

     (234,125 )     —          (234,125 )

Noncurrent assets and liabilities, net

     (52,956 )     (8,637 )     (61,593 )
  

 

 

   

 

 

   

 

 

 
   $ 1,433,688      $ 1,091,914      $ 2,525,602   
  

 

 

   

 

 

   

 

 

 

In addition to adjustments for working capital, cash and indebtedness, the preliminary purchase price allocation has not been finalized because we are still in the process of reviewing and determining the fair value of the assets acquired and liabilities assumed which includes, among other things, property, plant and equipment and intangible assets.

The Unaudited Pro Forma Condensed Combined Financial Statements do not give effect to any potential cost savings or operational efficiencies expected to result from the Heritage Acquisition or integration costs related thereto. The Unaudited Pro Forma Condensed Combined Financial Statements are not necessarily indicative of the operating results or financial position that would have occurred had the Heritage Acquisition been completed as of the dates indicated, nor are they necessarily indicative of future operating results or financial position. The purchase accounting adjustments made in connection with the Pro Forma Condensed Combined Financial Statements are preliminary and have been made solely for purposes of developing the pro forma financial information.

Note 2. These columns represent the historical financial position and results of operations of AmeriGas Partners, HOLP and Titan. AmeriGas Partners’ unaudited balance sheet at September 30, 2011 was derived from the audited consolidated balance sheet included in AmeriGas Partners’ Annual Report on Form 10-K for the annual period ended September 30, 2011, filed with the SEC on November 21, 2011. The HOLP and Titan unaudited combined balance sheet at September 30, 2011 was derived from unaudited combined financial statements incorporated by reference herein.

AmeriGas Partners’ consolidated statement of operations for the fiscal year ended September 30, 2011 was derived from information provided in AmeriGas Partners’ Annual Report on Form 10-K filed with the SEC on November 21, 2011. The unaudited combined statement of operations of HOLP and Titan for the twelve months ended September 30, 2011 was derived by combining data in the audited combined statement of operations of HOLP and Titan for the twelve months ended December 31, 2010 with data in the unaudited combined statement of operations for the nine months ended September 30, 2011, and subtracting data in the unaudited combined statement of operations for the nine months ended September 30, 2010, each of which are incorporated by reference herein.

Note 3. Reflects pro forma adjustments to eliminate the assets and liabilities of HPX, and certain accounts receivable and accounts payable with ETP and its affiliates not acquired or assumed. Immediately prior to the consummation of the Heritage Acquisition, the Heritage Contributor caused HOLP to transfer all of HOLP’s title and interest in the net assets of HPX to HEP, and HEP will use its best efforts to sell the HPX business to a third-party. To the extent gross proceeds of the sale of HPX exceed $40,000, AmeriGas Partners will receive a share of such excess upon the closing of the sale of HPX and, to the extent such gross proceeds from the sale of HPX are less than $40,000, AmeriGas Partners will pay Heritage Contributor an amount equal to the shortfall. The Unaudited Condensed Combined Pro Forma Financial Statements do not reflect any adjustment to the purchase price associated with any excess or shortfall in gross proceeds from the sale of HPX.

The Unaudited Pro Forma Condensed Combined Statement of Operations does not reflect any adjustment associated with HPX because any adjustment would not be material.

Note 4. Reflects pro forma adjustments to cash and cash equivalents as follows:

 

Gross proceeds from issuance of AmeriGas Partners Senior Notes

   $ 1,550,000   

Cash payment to ETP pursuant to the Contribution Agreement

     (1,460,000 )

Estimated working capital adjustment pursuant to the Contribution Agreement

     60,064   

Estimated net cash adjustment pursuant to the Contribution Agreement

     (5,217 )

Payment of transaction fees and expenses

     (42,491 )
  

 

 

 

Excess cash proceeds contributed to AmeriGas OLP

     102,356   

Cash contribution by the General Partner to AmeriGas OLP to maintain its 1.01% general partner interest

     1,044   
  

 

 

 

Total cash contributed to AmeriGas OLP

     103,400   

Excess cash used to reduce AmeriGas OLP bank loans (see Note 10)

     (95,500 )
  

 

 

 
   $ 7,900   
  

 

 

 

The estimated working capital and net cash adjustments above are based upon amounts as of September 30, 2011. The actual amounts of these adjustments will depend on the working capital and net cash amounts, as defined in the Contribution Agreement.

Note 5. Reflects pro forma adjustment to reclassify certain related party accounts receivable and accounts payable to trade accounts receivable and trade accounts payable.

 

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NOTES TO UNAUDITED PRO FORMA CONDENSED

COMBINED FINANCIAL STATEMENTS

(Thousands of dollars, except per unit data)

 

Note 6. Reflects pro forma adjustment to record property, plant and equipment acquired at estimated fair value as follows:

 

To record estimated fair value of Heritage Propane property, plant and equipment

   $ 963,000   

Eliminate historical net book value of Heritage Propane property, plant and equipment

     (738,055 )
  

 

 

 
   $ 224,945   
  

 

 

 

Note 7. Reflects pro forma adjustments to remove Heritage Propane’s historical goodwill of $616,235 and to record goodwill of $947,324 representing the excess of the net purchase price over the preliminary fair values of the net assets acquired and liabilities assumed. Such goodwill principally comprises buyer-specific synergies and assembled workforce.

 

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NOTES TO UNAUDITED PRO FORMA CONDENSED

COMBINED FINANCIAL STATEMENTS

(Thousands of dollars, except per unit data)

 

Note 8. Reflects pro forma adjustment to record intangible assets at estimated fair value as follows:

 

Allocation of purchase price to customer relationships

   $ 537,000   

Allocation of purchase price to non-amortizable trademarks and tradenames

     158,000   

Eliminate historical cost of Heritage Propane non-competes and customer relationships

     (72,612 )

Eliminate historical cost of Heritage Propane non-amortizable trademarks and tradenames

     (77,871 )
  

 

 

 
   $ 544,517   
  

 

 

 

Customer relationships are expected to be amortized over a period of 15 years.

Note 9. Reflects pro forma adjustment of $26,891 to record estimated debt issue costs paid at closing in conjunction with (1) the issuance of $1,550,000 of AmeriGas Partners Senior Notes and (2) amendments to AmeriGas OLP’s existing credit agreement.

Note 10. Reflects pro forma adjustments to AmeriGas OLP bank loans to reflect the use of estimated excess cash proceeds (see Note 4).

Note 11. Reflects total pro forma adjustment to long-term debt, including current maturities, as follows:

 

Issuance of AmeriGas Partners Senior Notes

   $ 1,550,000   

Fair value of long-term debt assumed

     92,431   

Eliminate historical value of long-term debt assumed

     (83,794 )
  

 

 

 
   $ 1,558,637   
  

 

 

 

The fair value of the debt assumed is based upon an average market interest rate of 6.7%. The final determination of the fair value of the debt will depend upon prevailing market interest rates on the date of the consummation of the Heritage Acquisition, January 12, 2012.

 

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NOTES TO UNAUDITED PRO FORMA CONDENSED

COMBINED FINANCIAL STATEMENTS

(Thousands of dollars, except per unit data)

 

Note 12. Reflects total pro forma adjustments to partners’ capital accounts as follows:

 

     AmeriGas
Partners
Common
Units
    Limited
Partners
    AmeriGas
Partners
General
Partner
    Accumulated
Other
Comprehensive
(Loss) Income
    General
Partner
Interest in
AmeriGas OLP
 

Elimination of Historical HOLP and Titan partners capital

     —        $ (1,601,394 )   $ —        $ —        $ —     

Elimination of Historical HOLP and Titan accumulated other comprehensive income

     —          —          —          (531 )     —     

Issuance of AmeriGas Partners Common Units to ETP pursuant to the Contribution Agreement

     29,567,362        1,120,449        —          —          —     

AmeriGas GP contribution of Common Units to AmeriGas Partners in order to maintain its 1% general partner interest in AmeriGas Partners

     (298,660 )     (13,323 )     13,323        —          —     

AmeriGas GP contribution of Common Units to AmeriGas OLP in order to maintain its 1.01% general partner interest in AmeriGas OLP

     (635,667 )     (28,357 )     —          —          28,357   

AmeriGas GP cash contribution to AmeriGas OLP in order to maintain its 1.01% general partner interest in AmeriGas OLP (see Note 4)

     —          —          —          —          1,044   

Transaction fees and expenses

     —          (15,444 )     (156 )     —          —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     28,633,035      $ (538,069 )   $ 13,167      $ (531 )   $ 29,401   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The fair value of the AmeriGas Partners Common Units issued to ETP is based on the closing price of AmeriGas Partners Common Units on January 12, 2012 of $41.19 reduced by a discount of approximately $3.30 per Common Unit to reflect certain Common Unit contractual transfer restrictions for a period of approximately twelve months.

In conjunction with ETP’s asset contribution to the Partnership in exchange for the issuance of AmeriGas Partners Common Units to ETP having a fair value of $1,120,449, AmeriGas GP contributed 298,660 of AmeriGas Partners Common Units that it owns, having a total fair value of $13,323, to AmeriGas Partners in order to maintain its 1% General Partner interest in AmeriGas Partners in accordance with the Fourth Amended and Restated Agreement of Limited Partnership of AmeriGas Partners, L.P., dated as of July 27, 2009 (the “Partnership Agreement”). The fair value of the AmeriGas Partners Common Units contributed by AmeriGas GP is based upon a price of $44.61 per unit.

As a result of the contribution by AmeriGas Partners of the partnership interests in HOLP and Titan to AmeriGas OLP, in accordance with the Second Amended and Restated Agreement of Limited Partnership of AmeriGas Propane, L.P., dated as of December 1, 2004 (the “OLP Partnership Agreement”), AmeriGas GP contributed 635,667 AmeriGas Partners Common Units held by AmeriGas GP having a total fair value of $28,357 to AmeriGas OLP in order to maintain its 1.01% general partner interest in AmeriGas OLP. The fair value of the AmeriGas Partners Common Units contributed by AmeriGas GP is based upon a price of $44.61 per unit.

Note 13. Reflects reclassifications of amounts included on Heritage Propane’s Statement of Operations to conform to AmeriGas Partners’ presentation.

 

8


NOTES TO UNAUDITED PRO FORMA CONDENSED

COMBINED FINANCIAL STATEMENTS

(Thousands of dollars, except per unit data)

 

Note 14. Reflects pro forma adjustments to depreciation and amortization expense as follows:

 

Eliminate historical depreciation and amortization expense of Heritage Propane

   $ (83,342 )

Depreciation and amortization expense reflecting preliminary allocation of purchase price:

  

Depreciation expense on allocated property, plant and equipment (2 to 30 years)

     89,000   

Amortization expense of customer relationship intangible (15 years)

     35,800   
  

 

 

 
   $ 41,458   
  

 

 

 

Note 15. Reflects pro forma adjustment to interest expense as follows:

 

Interest on AmeriGas Partners Senior Notes

   $ 107,125   

Amortization of debt issuance costs

     3,030   

Interest on HOLP long-term debt assumed based on current market interest rates

     6,514   

Eliminate interest expense on bank loan borrowings repaid from excess proceeds from the issuance of the AmeriGas Partners Senior Notes

     (1,207 )

Eliminate historical interest on HOLP long-term debt

     (8,346 )
  

 

 

 
   $ 107,116   
  

 

 

 

The pro forma adjustment to interest expense includes estimated interest expense from the issuance of $550,000 face value of 6.75% of AmeriGas Partners Senior Notes due 2020 and $1,000,000 face value of 7.00% AmeriGas Partners Senior Notes due 2022 and amortization of associated debt issuance costs.

Note 16. To adjust income attributable to noncontrolling interest to reflect the impact of the pro forma adjustments.

Note 17. To reflect the effects on average limited partner units outstanding from the issuance of 29,567,362 AmeriGas Partners Common Units to ETP in conjunction with the Heritage Acquisition and the contribution of a combined 934,327 AmeriGas Partners Common Units by AmeriGas GP to AmeriGas Partners and AmeriGas OLP in order to maintain its 1% and 1.01% general partner interests in AmeriGas Partners and AmeriGas OLP, respectively (see Note 12).

 

9