AmeriGas Partners, L.P.
2013 Annual Report
Driving
Every Day
Our vision will span
the country
while our service goes
door to door.
Driving
Every Day
From the desk to the dashboard from the office to the road
It is what we see from our stores. This is what we do. It is who we are.
We are providers. Just like our customers.
AmeriGas distributes nearly 1.4 billion gallons of propane
annually to over 2 million residential, commercial/industrial,
motor fuel, agricultural and wholesale customers in all
50 states. Through the Partnership’s AmeriGas Cylinder
Exchange “ACE” program, ACE cylinders are available at
nearly 47,500 retail locations throughout the United States.
AmeriGas operates over 2,500 distribution locations and
has nearly 8,500 dedicated employees focused on fulfilling
AmeriGas’ commitment to be the most reliable, safest and
most responsive propane company in the nation.
AmeriGas Partners, L.P. is a publicly traded master limited
partnership that operates the nation’s largest retail propane
distribution business. The common units of AmeriGas
Partners, L.P. are traded on the New York Stock Exchange
under the symbol “APU.” UGI Corporation, through
subsidiaries, is the sole General Partner and owns 26%
of the Partnership. An affiliate of Energy Transfer Partners,
L.P. owns 24% of the Partnership and the public owns the
remaining 50%.
As a clean versatile energy source, propane is used for a
wide variety of applications. Residential and commercial
customers use propane for space heating, water heating,
cooking and drying while industrial customers use it to fire
furnaces, as a cutting gas and in other process applications.
Propane is also used to power over-the-road vehicles,
forklifts and stationary engines. Agricultural applications
include crop drying and chicken brooding. Propane
shows promise as an environmentally friendly fuel source
for commercial lawnmowers, energy efficient combined
heat and power generation, and liquid injection systems
designed to enhance mileage on diesel-powered vehicles.
For more information about AmeriGas,
visit www.amerigas.com
AmeriGas serves over
2 million customers
in all 50 states
from over 2,500 locations.
Financial Highlights
Year Ended September 30,
2013
2012
2011
(Millions of dollars, except as noted)
1,245.2
Retail gallons sold (millions)
(4.9%)
Degree days – % (warmer) than normal (1)
$ 3,166.5
Revenues
Operating income
$ 392.2
Net income attributable to AmeriGas Partners, L.P. $ 221.2
1.7
Income tax expense
165.4
Interest expense
202.9
Depreciation and amortization
1,017.5
(18.6%)
$ 2,921.6
$ 170.6
11.0
$
2.0
142.6
169.1
874.2
(1.0%)
$ 2,538.0
$ 242.9
$ 138.5
0.4
63.5
94.7
EBITDA (2)
$ 591.2
$ 324.7
$ 297.1
Units outstanding – end of year (millions)
92.8
92.8
57.1
National Retail Sales
by Volume (3)
Residential: 42%
Commercial: 33%
Agriculture and transport: 13%
Motor fuel: 12%
(1) Deviation from average heating degree days for the 30-year period 1971 – 2000 based upon national weather statistics provided by the National Oceanic and Atmospheric Administration for
335 airports in the United States, excluding Alaska.
(2) Earnings before interest expense, income taxes, depreciation and amortization (“EBITDA”) should not be considered as an alternative to net income attributable to AmeriGas Partners, L.P. (as
an indicator of operating performance) and is not a measure of performance or financial condition under accounting principles generally accepted in the United States (“GAAP”). Management
believes EBITDA is a meaningful non-GAAP financial measure used by investors to (1) compare the Partnership’s operating performance with other companies within the propane industry and
(2) assess its ability to meet loan covenants. The Partnership’s definition of EBITDA may be different from that used by other companies.
Management uses EBITDA to compare year-over-year profitability of the business without regard to capital structure as well as to compare the relative performance of the Partnership to that of
other master limited partnerships without regard to their financing methods, capital structure, income taxes or historical cost basis. In view of the omission of interest, income taxes, depreciation
and amortization from EBITDA, management also assesses the profitability of the business by comparing net income attributable to AmeriGas Partners, L.P. for the relevant years.
Management also uses EBITDA to assess the Partnership’s profitability because its parent, UGI Corporation, uses the Partnership’s EBITDA to assess the profitability of the Partnership. UGI
Corporation discloses the Partnership’s EBITDA as the profitability measure to comply with the GAAP requirement to provide profitability information about its domestic propane segment.
EBITDA in Fiscal 2013 includes Heritage Propane transition expenses of $26.5 million. EBITDA in Fiscal 2012 includes pre-tax losses of $13.3 million associated with the early extinguishments of
debt and Heritage Propane acquisition and transition expenses of $46.2 million. EBITDA in Fiscal 2011 includes pre-tax losses of $38.1 million associated with the early extinguishments of debt.
(3) Based upon retail gallons sold for the 12 month period ended September 30, 2013.
Dear Fellow Unitholder,
Fiscal 2013 was a very successful year for the New AmeriGas.
Growth
During the first two quarters, we paused integration activities
There are additional benefits to the unmatched national footprint
related to the Heritage Propane acquisition so that we could focus
that our new company now enjoys. Examples include our two
operationally on executing through the critical winter earnings
national growth thrusts which each enjoyed record years in 2013.
season. We benefited from reasonably normal weather across the
country and emerged in the spring to complete the final phase of
the integration – and we are pleased to say that the integration
was completed in line with our original plan.
There are a variety of beneficial outcomes resulting from this large
scale and transformational acquisition, including:
• AmeriGas Cylinder Exchange, our national barbeque cylinder
program increased sales by 8% and added over 3,000 new
exchange locations. We sold a record number of cylinders in
2013 – over 14 million.
• Our National Accounts program, where large scale customers
use AmeriGas to provide propane to their locations all over the
• Realization of an annualized $60 million in net synergies from the
U.S. while receiving just one invoice and one point of contact,
integration, 20% above our original expectations;
increased sales volume by 30% and now serves customers at
• The merging of the cultures of two large propane operations
32,000 locations across the country.
and selection of the best management from both organizations;
In addition, our best-in-class footprint also allows AmeriGas to
• The creation of a “customer advocacy” function to facilitate an
energized customer service culture;
gain synergies from small and medium sized acquisitions in almost
any corner of the country. In 2013, we acquired two business
adding five million annualized gallons. Although we de-emphasized
• The rollout of our enterprise order-to-cash system to all of
acquisitions during the integration, we now have our corporate
our integrated locations, setting the foundation for bigger and
development team at full strength, pursuing acquisitions among the
better use of mobile devices by our drivers and an easier on-line
over 3,000 independent propane marketers across the U.S.
experience for our customers.
The Results
The Propane Cost Environment
One of the best ways to demonstrate the significant financial
It is not clear what the significant increase in propane supply
benefits of the Heritage Propane acquisition is through a
arising from the “shale revolution” in the United States will mean.
comparison to 2011, the year prior to the completion of the
Annualized U.S. supply has grown to 1.4 million barrels per day
transaction. The following charts illustrate the greater scale of
(MBD) up from 1.0 MBD in 2010 and the U.S. is now the number
the New AmeriGas.
one exporter of propane.
During 2013, we experienced propane prices in the U.S. at levels
19% below 2012. These lower prices are good for the industry
and our customers as it provides stable home heating and
operational costs. As a margin-based business, AmeriGas has
demonstrated a consistent ability to achieve margin growth in line
with inflation despite increases or decreases in the underlying cost
of propane. This is a core strength of the business that allows for
our cash flow to be consistent and reliable. Therefore, regardless
of the cost of propane in the future, we will be well positioned to
continue to deliver growth in cash flow as we grow our business.
0
-1
-2
-3
-4
-5
Degree Days % (warmer) than normal
Retail Gallons Sold (millions)
Enterprise Value ($ billions)
Annualized Distribution (per unit)
Adjusted EBITDA
Operating Income (per gallon)
-1.0%
2011
-4.9%
2013
1500
1000
500
1,245
874
2011
2013
8.0
6.5
5.0
3.5
2.0
$3.6
2011
3.5
3.0
2.5
2.0
800
600
400
200
$335
2011
0.3
0.2
0.1
$6.4
$2.96
$3.36
$618
$0.24
$0.29
2013
2011
2013
2013
2011
2013
Delighting the Customer
We are dedicating 2014 to the year of “Delighting the
Customer.” We have made significant investments in better
customer service capability including new training for all
employees, better phone technology to improve customer
service and a focused investment in the leadership development
of our field management teams.
John L. Walsh Jerry E. Sheridan Lon R. Greenberg
Degree Days % (warmer) than normal
Retail Gallons Sold (millions)
Enterprise Value ($ billions)
Annualized Distribution (per unit)
Adjusted EBITDA
Operating Income (per gallon)
-1.0%
0
-1
-2
-3
-4
-5
2011
-4.9%
2013
1500
1000
500
1,245
874
2011
2013
8.0
6.5
5.0
3.5
2.0
$6.4
2013
$3.6
2011
3.5
3.0
2.5
2.0
$3.36
$2.96
2011
2013
800
600
400
200
$618
2013
$335
2011
0.3
0.2
0.1
$0.29
$0.24
2011
2013
AmeriGas brings significant resources to bear – namely training,
We are proud to be America’s Propane Company with our
equipment and technology which allows our stores serving all
8,500 colleagues nationwide who are focused on delighting our
50 states to “play big” while also maintaining a strong local presence
customers and our unitholders.
in the communities we serve. In many parts of the country, AmeriGas
is akin to the local utility, providing energy to many households and
businesses. As we say – our business spans the country, but our
service goes door to door.
On behalf of the AmeriGas board and our colleagues, we thank
you for your investment in AmeriGas.
Lon R. Greenberg
Chairman
John L. Walsh
Vice Chairman
Jerry E. Sheridan
President and
Chief Executive Officer
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013
Commission file number 1-13692
AMERIGAS PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
23-2787918
(I.R.S. Employer Identification No.)
460 North Gulph Road, King of Prussia, PA 19406
(Address of Principal Executive Offices) (Zip Code)
(610) 337-7000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Name of each Exchange on Which Registered
Common Units representing limited partner interests
New York Stock Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
No
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
No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). Yes
No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
No
The aggregate market value of AmeriGas Partners, L.P. Common Units held by non-affiliates of AmeriGas Partners, L.P. on March 31, 2013 was
approximately $1,774,405,258. At November 15, 2013, there were outstanding 92,827,774 Common Units representing limited partner interests.
TABLE OF CONTENTS
PART I:
Forward-Looking Information
Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Mine Safety Disclosures
PART II:
Item 5. Market for Registrant’s Common Equity, Related Security Holder Matters and Issuer Purchases of
Equity Securities
Item 6. Selected Financial Data
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
PART III:
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Security Holder
Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accounting Fees and Services
PART IV:
Item 15. Exhibits and Financial Statement Schedules
Signatures
Index to Financial Statements and Financial Statement Schedules
Page
3
3
9
18
18
19
19
19
20
22
30
30
31
31
31
31
37
74
77
78
80
86
F-2
2
Table of Contents
FORWARD-LOOKING INFORMATION
Information contained in this Annual Report on Form 10-K may contain forward-looking statements. Such statements
use forward-looking words such as “believe,” “plan,” “anticipate,” “continue,” “estimate,” “expect,” “may,” or other similar words.
These statements discuss plans, strategies, events or developments that we expect or anticipate will or may occur in the future.
A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking
statement. We believe that we have chosen these assumptions or bases in good faith and that they are reasonable. However, we
caution you that actual results almost always vary from assumed facts or bases, and the differences between actual results and
assumed facts or bases can be material, depending on the circumstances. When considering forward-looking statements, you
should keep in mind the following important factors which could affect our future results and could cause those results to differ
materially from those expressed in our forward-looking statements: (1) adverse weather conditions resulting in reduced demand;
(2) cost volatility and availability of propane, and the capacity to transport propane to our customers; (3) the availability of, and
our ability to consummate, acquisition or combination opportunities; (4) successful integration and future performance of acquired
assets or businesses and achievement of anticipated synergies; (5) changes in laws and regulations, including safety, tax, consumer
protection and accounting matters; (6) competitive pressures from the same and alternative energy sources; (7) failure to acquire
new customers and retain current customers thereby reducing or limiting any increase in revenues; (8) liability for environmental
claims; (9) increased customer conservation measures due to high energy prices and improvements in energy efficiency and
technology resulting in reduced demand; (10) adverse labor relations; (11) large customer, counterparty or supplier defaults;
(12) liability in excess of insurance coverage for personal injury and property damage arising from explosions and other catastrophic
events, including acts of terrorism, resulting from operating hazards and risks incidental to transporting, storing and distributing
propane, butane and ammonia; (13) political, regulatory and economic conditions in the United States and foreign countries;
(14) capital market conditions, including reduced access to capital markets and interest rate fluctuations; (15) changes in commodity
market prices resulting in significantly higher cash collateral requirements; (16) the impact of pending and future legal proceedings;
and (17) the timing and success of our acquisitions and investments to grow our business.
These factors are not necessarily all of the important factors that could cause actual results to differ materially from
those expressed in any of our forward-looking statements. Other unknown or unpredictable factors could also have material
adverse effects on future results. We undertake no obligation to update publicly any forward-looking statement whether as a
result of new information or future events except as required by the federal securities laws.
PART I:
ITEM 1.
BUSINESS
General
AmeriGas Partners, L.P. is a publicly traded limited partnership formed under Delaware law on November 2, 1994. We
are the largest retail propane distributor in the United States based on the volume of propane gallons distributed annually. The
Partnership serves over 2 million residential, commercial, industrial, agricultural, wholesale and motor fuel customers in all 50
states from over 2,500 propane distribution locations.
We are a holding company and we conduct our business principally through our subsidiaries, AmeriGas Propane, L.P.
(“AmeriGas OLP”), a Delaware limited partnership, and, prior to its merger with and into AmeriGas OLP on July 1, 2013, Heritage
Operating, L.P. (“HOLP”), a Delaware limited partnership. AmeriGas OLP and, prior to the merger, HOLP are referred to herein
as “the Operating Partnership.” Our common units (“Common Units”), which represent limited partner interests, are traded on
the New York Stock Exchange under the symbol “APU.” Our executive offices are located at 460 North Gulph Road, King of
Prussia, Pennsylvania 19406, and our telephone number is (610) 337-7000. In this Report, the terms “Partnership” and “AmeriGas
Partners,” as well as the terms “our,” “we,” and “its,” are used sometimes as abbreviated references to AmeriGas Partners, L.P.
itself or collectively, AmeriGas Partners, L.P. and its consolidated subsidiaries, including the Operating Partnership. The terms
“Fiscal 2013” and “Fiscal 2012” refer to the fiscal years ended September 30, 2013 and September 30, 2012, respectively.
AmeriGas Propane, Inc. is our general partner (the “General Partner”) and is responsible for managing our operations.
The General Partner is a wholly owned subsidiary of UGI Corporation (“UGI”), a publicly traded company listed on the New
York Stock Exchange. The General Partner has an approximate 26% effective ownership interest in the Partnership and an affiliate
of Energy Transfer Partners, L.P., a Delaware limited partnership (“ETP”), has an effective 24% ownership interest in the
Partnership.
3
Table of Contents
Business Strategy
On January 12, 2012, AmeriGas Partners completed the acquisition of the subsidiaries of ETP that operated ETP’s propane
distribution business (“Heritage Propane”). The acquired business conducted its propane operations in 41 states through HOLP
and Titan Propane LLC. Effective August 1, 2012, Titan Propane LLC merged with and into AmeriGas OLP. Effective July 1,
2013, HOLP and its general partner, Heritage Operating GP, LLC, merged with and into AmeriGas OLP. According to LP-Gas
Magazine rankings published on February 1, 2012, Heritage Propane was the third largest retail propane distributor in the United
States, delivering over 500 million gallons to more than one million retail propane customers in 2011. See “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and Note 4 to Consolidated Financial Statements.
Since January 2012, our focus has been on the successful integration of Heritage Propane and the achievement of the
benefits of the Heritage Propane acquisition. In addition, we have continued our efforts to execute our strategy to grow by (i)
pursuing opportunistic acquisitions, (ii) developing internal sales and marketing programs, (iii) leveraging our scale and driving
productivity, and (iv) achieving world class safety performance. We regularly consider and evaluate opportunities for growth
through the acquisition of local, regional, and national propane distributors. We compete for acquisitions with others engaged in
the propane distribution business. During Fiscal 2013, we completed the acquisition of two propane distribution businesses. We
expect that internal growth will be provided in part from the continued expansion of our AmeriGas Cylinder Exchange (“ACE”)
program through which consumers can purchase propane cylinders or exchange empty propane cylinders at various retail locations,
and our National Accounts program, through which we encourage multi-location propane users to enter into a supply agreement
with us rather than with many suppliers.
General Partner Information
The Partnership’s website can be found at www.amerigas.com. Information on our website is not intended to be
incorporated into this Report. The Partnership makes available free of charge at this website (under the tab “Investor Relations,”
caption “SEC Filings”) copies of its reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, including its Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K.
The General Partner’s Principles of Corporate Governance, Code of Ethics for the Chief Executive Officer and Senior Financial
Officers, Code of Business Conduct and Ethics for Directors, Officers and Employees, and charters of the Corporate Governance,
Audit and Compensation/Pension Committees of the Board of Directors of the General Partner are also available on the Partnership’s
website (under the tab “Investor Relations,” caption “Corporate Governance”). All of these documents are also available free of
charge by writing to Treasurer, AmeriGas Propane, Inc., P.O. Box 965, Valley Forge, PA 19482.
Products, Services and Marketing
The Partnership serves over 2 million customers in all 50 states from over 2,500 propane distribution locations. In addition
to distributing propane, the Partnership also sells, installs and services propane appliances, including heating systems. Typically,
we are located in suburban and rural areas where natural gas is not readily available. Our district offices generally consist of a
business office, appliance showroom, warehouse, and service facilities, with one or more 18,000 to 30,000 gallon storage tanks
on the premises. As part of its overall transportation and distribution infrastructure, the Partnership operates as an interstate carrier
in 48 states throughout the continental United States. It is also licensed as a carrier in the Canadian Provinces of Ontario, British
Columbia and Quebec.
The Partnership sells propane primarily to residential, commercial/industrial, motor fuel, agricultural and wholesale
customers. The Partnership distributed nearly 1.4 billion gallons of propane in Fiscal 2013. Approximately 92% of the Partnership’s
Fiscal 2013 sales (based on gallons sold) were to retail accounts and approximately 8% were to wholesale customers. Sales to
residential customers in Fiscal 2013 represented approximately 42% of retail gallons sold; commercial/industrial customers 33%;
motor fuel customers 12%; and agricultural customers 8%. Transport gallons, which are large-scale deliveries to retail customers
other than residential, accounted for 5% of Fiscal 2013 retail gallons. No single customer represents, or is anticipated to represent,
more than 5% of the Partnership’s consolidated revenues.
The Partnership continues to expand its ACE program. At September 30, 2013, ACE cylinders were available at nearly
47,500 retail locations throughout the United States. Sales of our ACE cylinders to retailers are included in commercial/industrial
sales. The ACE program enables consumers to purchase propane cylinders or exchange their empty propane cylinders at various
retail locations such as home centers, gas stations, mass merchandisers and grocery and convenience stores. We also supply
retailers with large propane tanks to enable retailers to replenish customers’ propane cylinders directly at the retailer’s location.
Residential customers use propane primarily for home heating, water heating and cooking purposes. Commercial users,
which include hotels, restaurants, churches, warehouses and retail stores, generally use propane for the same purposes as residential
customers. Industrial customers use propane to fire furnaces, as a cutting gas and in other process applications. Other industrial
4
Table of Contents
customers are large-scale heating accounts and local gas utility customers who use propane as a supplemental fuel to meet peak
load deliverability requirements. As a motor fuel, propane is burned in internal combustion engines that power over-the-road
vehicles, forklifts, commercial lawn mowers, and stationary engines. Agricultural uses include tobacco curing, chicken brooding
and crop drying. In its wholesale operations, the Partnership principally sells propane to large industrial end-users and other propane
distributors.
Retail deliveries of propane are usually made to customers by means of bobtail and rack trucks. Propane is pumped from
the bobtail truck, which generally holds 2,400 to 3,000 gallons of propane, into a stationary storage tank on the customer’s premises.
The Partnership owns most of these storage tanks and leases them to its customers. The capacity of these tanks ranges from
approximately 120 gallons to approximately 1,200 gallons. The Partnership also delivers propane in portable cylinders, including
ACE cylinders. Some of these deliveries are made to the customer’s location, where empty cylinders are either picked up or
replenished in place.
Propane Supply and Storage
The Partnership has approximately 250 domestic and international sources of supply, including the spot market. Supplies
of propane from the Partnership’s sources historically have been readily available. During Fiscal 2013, approximately 90% of the
Partnership’s propane supply was purchased under supply agreements with terms of 1 to 3 years. The availability of propane supply
is dependent upon, among other things, the severity of winter weather, the price and availability of competing fuels such as natural
gas and crude oil, and the amount and availability of imported supply. Although no assurance can be given that supplies of propane
will be readily available in the future, management currently expects to be able to secure adequate supplies during fiscal year
2014. If supply from major sources were interrupted, however, the cost of procuring replacement supplies and transporting those
supplies from alternative locations might be materially higher and, at least on a short-term basis, margins could be adversely
affected. Enterprise Products Partners, L.P., Plains Marketing, and Targa Liquids Marketing & Trade supplied approximately 51%
of the Partnership’s Fiscal 2013 propane supply. No other single supplier provided more than 10% of the Partnership’s total
propane supply in Fiscal 2013. In certain geographical areas, however, a single supplier provides more than 50% of the Partnership’s
requirements. Disruptions in supply in these areas could also have an adverse impact on the Partnership’s margins.
The Partnership’s supply contracts typically provide for pricing based upon (i) index formulas using the current prices
established at a major storage point such as Mont Belvieu, Texas, or Conway, Kansas, or (ii) posted prices at the time of delivery.
In addition, some agreements provide maximum and minimum seasonal purchase volume guidelines. The percentage of contract
purchases, and the amount of supply contracted for at fixed prices, will vary from year to year as determined by the General Partner.
The Partnership uses a number of interstate pipelines, as well as railroad tank cars, delivery trucks and barges, to transport propane
from suppliers to storage and distribution facilities. The Partnership stores propane at various storage facilities and terminals
located in strategic areas across the United States.
Because the Partnership’s profitability is sensitive to changes in wholesale propane costs, the Partnership generally seeks
to pass on increases in the cost of propane to customers. There is no assurance, however, that the Partnership will always be able
to pass on product cost increases fully, particularly when product costs rise rapidly. Product cost increases can be triggered by
periods of severe cold weather, supply interruptions, increases in the prices of base commodities such as crude oil and natural gas,
or other unforeseen events. The General Partner has adopted supply acquisition and product cost risk management practices to
reduce the effect of volatility on selling prices. These practices currently include the use of summer storage, forward purchases
and derivative commodity instruments, such as options and propane price swaps. See “Management’s Discussion and Analysis
of Financial Condition and Results of Operations - Market Risk Disclosures.”
The following graph shows the average prices of propane on the propane spot market during the last 5 fiscal years at
Mont Belvieu, Texas, a major storage area.
5
Table of Contents
Average Propane Spot Market Prices
General Industry Information
Propane is separated from crude oil during the refining process and also extracted from natural gas or oil wellhead gas
at processing plants. Propane is normally transported and stored in a liquid state under moderate pressure or refrigeration for
economy and ease of handling in shipping and distribution. When the pressure is released or the temperature is increased, it is
usable as a flammable gas. Propane is colorless and odorless; an odorant is added to allow for its detection. Propane is considered
a clean alternative fuel under the Clean Air Act Amendments of 1990, producing negligible amounts of pollutants when properly
consumed.
Competition
Propane competes with other sources of energy, some of which are less costly for equivalent energy value. Propane
distributors compete for customers with suppliers of electricity, fuel oil and natural gas, principally on the basis of price, service,
availability and portability. Electricity is currently more expensive than propane, but the convenience of electricity makes it an
attractive energy source for consumers. Fuel oil is also a major competitor of propane and is generally more expensive than
propane. Furnaces and appliances that burn propane will not operate on fuel oil, and vice versa, and, therefore, a conversion from
one fuel to the other requires the installation of new equipment. Propane serves as an alternative to natural gas in rural and suburban
areas where natural gas is unavailable or portability of product is required. Natural gas is generally a significantly less expensive
source of energy than propane, although in areas where natural gas is available, propane is used for certain industrial and commercial
applications and as a standby fuel during interruptions in natural gas service. The gradual expansion of the nation’s natural gas
distribution systems has resulted in the availability of natural gas in some areas that previously depended upon propane. However,
natural gas pipelines are not present in many areas of the country where propane is sold for heating and cooking purposes.
For motor fuel customers, propane competes with gasoline, diesel fuel, electric batteries, fuel cells, and, in certain
applications, liquefied natural gas and compressed natural gas. Wholesale propane distribution is a highly competitive, low margin
business. Propane sales to other retail distributors and large-volume, direct-shipment industrial end-users are price sensitive and
frequently involve a competitive bidding process.
While volume in the retail propane industry has been declining for several years, it is anticipated that no or modest growth
in total demand is foreseen in the next several years. Therefore, the Partnership’s ability to grow within the industry is dependent
on its ability to acquire other retail distributors and to achieve internal growth, which includes expansion of the ACE program and
the National Accounts program, as well as the success of its sales and marketing programs designed to attract and retain customers.
The failure of the Partnership to retain and grow its customer base would have an adverse effect on its long-term results.
The domestic propane retail distribution business is highly competitive. The Partnership competes in this business with
6
Table of Contents
other large propane marketers, including other full-service marketers, and thousands of small independent operators. Some rural
electric cooperatives and fuel oil distributors have expanded their businesses to include propane distribution and the Partnership
competes with them as well. The ability to compete effectively depends on providing high quality customer service, maintaining
competitive retail prices and controlling operating expenses. The Partnership also offers customers various payment and service
options, including guaranteed price programs, fixed price arrangements and pricing arrangements based on published propane
prices at specified terminals.
In Fiscal 2013, the Partnership’s retail propane sales totaled over 1.2 billion gallons. Based on the most recent annual
survey by the American Petroleum Institute, 2011 domestic retail propane sales (annual sales for other than chemical uses) in the
United States totaled approximately 8.9 billion gallons. Based on LP-GAS magazine rankings, 2011 sales volume of the ten largest
propane companies (including AmeriGas Partners) represented approximately 40% of domestic retail sales.
Trade Names, Trade and Service Marks
The Partnership markets propane principally under the “AmeriGas®”, “America’s Propane Company®”, Heritage
Propane®”, “Titan Propane®” and “Relationships Matter®” trade names and related service marks. UGI owns, directly or indirectly,
all the right, title and interest in the “AmeriGas” name and related trade and service marks. The Partnership also markets propane
under other various trade names throughout the United States. The General Partner owns all right, title and interest in the “America’s
Propane Company” trade name and related service marks. The Partnership has an exclusive (except for use by UGI, AmeriGas,
Inc., AmeriGas Gas Polska Sp. z.o.o. and the General Partner), royalty-free license to use these trade names and related service
marks. UGI and the General Partner each have the option to terminate its respective license agreement (on 12 months prior notice
in the case of UGI), without penalty, if the General Partner is removed as general partner of the Partnership other than for cause.
If the General Partner ceases to serve as the general partner of the Partnership for cause, the General Partner has the option to
terminate its license agreement upon payment of a fee to UGI equal to the fair market value of the licensed trade names. UGI has
a similar termination option; however, UGI must provide 12 months prior notice in addition to paying the fee to the General
Partner.
Seasonality
Because many customers use propane for heating purposes, the Partnership’s retail sales volume is seasonal. During
Fiscal 2013, approximately 65% of the Partnership’s retail sales volume occurred, and substantially all of the Partnership’s operating
income was earned, during the peak heating season from October through March. As a result of this seasonality, sales are typically
higher in the Partnership’s first and second fiscal quarters (October 1 through March 31). Cash receipts are generally greatest
during the second and third fiscal quarters when customers pay for propane purchased during the winter heating season.
Sales volume for the Partnership traditionally fluctuates from year-to-year in response to variations in weather, prices,
competition, customer mix and other factors, such as conservation efforts and general economic conditions. For information on
national weather statistics, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Government Regulation
The Partnership is subject to various federal, state and local environmental, health, safety and transportation laws and
regulations governing the storage, distribution and transportation of propane and the operation of bulk storage propane terminals.
Generally, these laws impose limitations on the discharge of pollutants, establish standards for the handling of solid and hazardous
substances, and require the investigation and cleanup of environmental contamination. These laws include, among others, the
federal Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act
(“CERCLA”), the Clean Air Act, the Occupational Safety and Health Act, the Homeland Security Act of 2002, the Emergency
Planning and Community Right to Know Act, the Clean Water Act and comparable state statutes. The Partnership incurs expenses
associated with compliance with its obligations under federal and state environmental laws and regulations, and we believe that
the Partnership is in material compliance with all of its obligations. The Partnership maintains various permits that are necessary
to operate its facilities, some of which may be material to its operations. The Partnership continually monitors its operations with
respect to potential environmental issues, including changes in legal requirements.
Hazardous Substances and Wastes
The Partnership is investigating and remediating contamination at a number of present and former operating sites in the
U.S., including former sites where it or its former subsidiaries operated manufactured gas plants. CERCLA and similar state laws
impose joint and several liability on certain classes of persons considered to have contributed to the release or threatened release
7
Table of Contents
of a “hazardous substance” into the environment without regard to fault or the legality of the original conduct. Propane is not a
hazardous substance within the meaning of federal and most state environmental laws.
Health and Safety
The Partnership is subject to the requirements of the federal Occupational Safety and Health Act (“OSHA”) and comparable
state laws that regulate the protection of the health and safety of its workers. These laws require the Partnership, among other
things, to maintain information about materials, some of which may be hazardous or toxic, that are used, released, or produced in
the course of its operations. Certain portions of this information must be provided to employees, state and local governmental
authorities and responders, and local citizens in accordance with applicable federal and state Emergency Planning and Community
Right-to-Know Act requirements. The Partnership’s operations are also subject to the safety hazard communication requirements
and reporting obligations set forth in federal workplace standards.
All states in which the Partnership operates have adopted fire safety codes that regulate the storage and distribution of
propane. In some states, these laws are administered by state agencies, and in others they are administered on a municipal level.
The Partnership conducts training programs to help ensure that its operations are in compliance with applicable governmental
regulations. With respect to general operations, National Fire Protection Association (“NFPA”) Pamphlets No. 54 and No. 58 and/
or one or more of various international codes (including international fire, building and fuel gas codes) establish rules and procedures
governing the safe handling of propane, or comparable regulations, which have been adopted by all states in which the Partnership
operates. Management believes that the policies and procedures currently in effect at all of its facilities for the handling, storage
and distribution of propane are consistent with industry standards and are in compliance in all material respects with applicable
environmental, health and safety laws.
With respect to the transportation of propane by truck, the Partnership is subject to regulations promulgated under federal
legislation, including the Federal Motor Carrier Safety Act and the Homeland Security Act of 2002. Regulations under these
statutes cover the security and transportation of hazardous materials and are administered by the United States Department of
Transportation (“DOT”), Pipeline and Hazardous Materials Safety Administration. The Natural Gas Safety Act of 1968 required
the DOT to develop and enforce minimum safety regulations for the transportation of gases by pipeline. The DOT's pipeline safety
regulations apply to, among other things, a propane gas system which supplies 10 or more residential customers or 2 or more
commercial customers from a single source and to a propane gas system any portion of which is located in a public place. The
DOT’s pipeline safety regulations require operators of all gas systems to provide operator qualification standards and training and
written instructions for employees and third party contractors working on covered pipelines and facilities, establish written
procedures to minimize the hazards resulting from gas pipeline emergencies, and conduct and keep records of inspections and
testing. Operators are subject to the Pipeline Safety Improvement Act of 2002. Management believes that the procedures currently
in effect at all of the Partnership’s facilities for the handling, storage, transportation and distribution of propane are consistent with
industry standards and are in compliance, in all material respects, with applicable laws and regulations.
Climate Change
There continues to be concern, both nationally and internationally, about climate change and the contribution of greenhouse
gas (“GHG”) emissions, most notably carbon dioxide, to global warming. Because propane is considered a clean alternative fuel
under the federal Clean Air Act Amendments of 1990, the Partnership anticipates that this will provide it with a competitive
advantage over other sources of energy, such as fuel oil and coal, to the extent new climate change regulations become effective.
At the same time, increased regulation of GHG emissions, especially in the transportation sector, could impose significant additional
costs on the Partnership, its suppliers and its customers. The impact of new legislation and regulations will depend on a number
of factors, including (i) which industry sectors would be impacted, (ii) the timing of required compliance, (iii) the overall GHG
emissions cap level, (iv) the allocation of emission allowances to specific sources, and (v) the costs and opportunities associated
with compliance.
Employees
The Partnership does not directly employ any persons responsible for managing or operating the Partnership. The General
Partner provides these services and is reimbursed for its direct and indirect costs and expenses, including all compensation and
benefit costs. At September 30, 2013, the General Partner had nearly 8,500 employees, including nearly 600 part-time, seasonal
and temporary employees, working on behalf of the Partnership. UGI also performs certain financial and administrative services
for the General Partner on behalf of the Partnership and is reimbursed by the Partnership.
8
Table of Contents
ITEM 1A.
RISK FACTORS
There are many factors that may affect our business and results of operations. Additional discussion regarding factors
that may affect our businesses and operating results is included elsewhere in this Report.
Risks Related to Our Business
Decreases in the demand for propane because of warmer-than-normal heating season weather or unfavorable weather may
adversely affect our results of operations.
Because many of our customers rely on propane as a heating fuel, our results of operations are adversely affected by
warmer-than-normal heating season weather. Weather conditions have a significant impact on the demand for propane for both
heating and agricultural purposes. Accordingly, the volume of propane sold is at its highest during the peak heating season of
October through March and is directly affected by the severity of the winter weather. For example, historically approximately
60% to 70% of our annual retail propane volumes are sold during these months. There can be no assurance that normal winter
weather in our service territories will occur in the future.
The agricultural demand for propane is also affected by weather, as dry or warm weather during the harvest season may
reduce the demand for propane. Our ACE operations experience higher volumes in the spring and summer, mainly due to the
grilling season. Sustained periods of unfavorable weather conditions can negatively affect our ACE revenues. Unfavorable weather
conditions may also cause a reduction in the purchase and use of grills and other propane appliances which could reduce the
demand for our ACE cylinders.
Our profitability is subject to propane pricing and inventory risk.
The retail propane business is a “margin-based” business in which gross profits are dependent upon the excess of the
sales price over the propane supply costs. Propane is a commodity, and, as such, its unit price is subject to volatile fluctuations in
response to changes in supply or other market conditions. We have no control over these market conditions. Consequently, the
unit price of the propane that we and other marketers purchase can change rapidly over a short period of time. Most of our propane
product supply contracts permit suppliers to charge posted prices at the time of delivery or the current prices established at major
storage points such as Mont Belvieu, Texas or Conway, Kansas. Because our profitability is sensitive to changes in wholesale
propane supply costs, it will be adversely affected if we cannot pass on increases in the cost of propane to our customers. Due to
competitive pricing in the industry, we may not be able to pass on product cost increases to our customers when product costs rise
rapidly, or when our competitors do not raise their product prices. Finally, market volatility may cause us to sell inventory at less
than the price we purchased it, which would adversely affect our operating results.
High propane prices can lead to customer conservation and attrition, resulting in reduced demand for our product.
Prices for propane are subject to volatile fluctuations in response to changes in supply and other market conditions. During
periods of high propane costs our prices generally increase. High prices can lead to customer conservation and attrition, resulting
in reduced demand for our product.
Volatility in credit and capital markets may restrict our ability to grow, increase the likelihood of defaults by our customers
and counterparties and adversely affect our operating results.
The volatility in credit and capital markets may create additional risks to our business in the future. We are exposed to
financial market risk (including refinancing risk) resulting from, among other things, changes in interest rates and conditions in
the credit and capital markets. Developments in the credit markets during the past few years increase our possible exposure to the
liquidity, default and credit risks of our suppliers, counterparties associated with derivative financial instruments and our customers.
Although we believe that current financial market conditions, if they were to continue for the foreseeable future, will not have a
significant impact on our ability to fund our existing operations, such market conditions could restrict our ability to grow through
acquisitions, could limit the scope of major capital projects if access to credit and capital markets is limited or could adversely
affect our operating results.
Supplier defaults may have a negative effect on our operating results.
When we enter into fixed-price sales contracts with customers, we typically enter into fixed-price purchase contracts
with suppliers. Depending on changes in the market prices of propane compared to the prices secured in our contracts with suppliers
of propane, a default of one or more of our suppliers under such contracts could cause us to purchase propane at higher prices
which would have a negative impact on our operating results.
9
Table of Contents
We are dependent on our principal propane suppliers, which increases the risks from an interruption in supply and
transportation.
During Fiscal 2013, AmeriGas Propane purchased over 90% of its propane needs from twenty suppliers. If supplies from
these sources were interrupted, the cost of procuring replacement supplies and transporting those supplies from alternative locations
might be materially higher and, at least on a short-term basis, our earnings could be affected. Additionally, in certain geographical
areas, a single supplier may provide more than 50% of our propane requirements. Disruptions in supply in these areas could also
have an adverse impact on our earnings.
Changes in commodity market prices may have a negative effect on our liquidity.
Depending on the terms of our contracts with suppliers as well as our use of financial instruments to reduce volatility in
the cost of propane, changes in the market price of propane can create margin payment obligations for us and expose us to an
increased liquidity risk.
Our operations may be adversely affected by competition from other energy sources.
Propane competes with other sources of energy, some of which are less costly on an equivalent energy basis. In addition,
we cannot predict the effect that the development of alternative energy sources might have on our operations. We compete for
customers against suppliers of electricity, fuel oil and natural gas.
Electricity is a major competitor of propane and is currently more expensive than propane for space heating, water heating,
and cooking. The convenience of electricity makes it an attractive energy source for consumers. Fuel oil is also a major competitor
of propane and is generally more expensive than propane. Furnaces and appliances that burn propane will not operate on fuel oil
and vice versa, and, therefore, a conversion from one fuel to the other requires the installation of new equipment. Our customers
generally have an incentive to switch to fuel oil only if fuel oil becomes significantly less expensive than propane. Except for
certain industrial and commercial applications, propane is generally not competitive with natural gas in areas where natural gas
pipelines already exist because natural gas is generally a significantly less expensive source of energy than propane. As long as
natural gas remains a less expensive energy source than propane, our business will lose customers in each region into which natural
gas distribution systems are expanded. The gradual expansion of the nation’s natural gas distribution systems has resulted, and
may continue to result, in the availability of natural gas in some areas that previously depended upon propane.
Our ability to increase revenues is adversely affected by the decline of the retail propane industry.
The retail propane industry has been declining over the past several years, with no or modest growth in total demand
foreseen in the next several years. Accordingly, we expect that year-to-year industry volumes will be principally affected by weather
patterns. Therefore, our ability to grow within the industry is dependent on our ability to acquire other retail distributors and to
achieve internal growth, which includes expansion of our ACE and National Accounts programs, as well as the success of our
sales and marketing programs designed to attract and retain customers. Any failure to retain and grow our customer base would
have an adverse effect on our results.
Our ability to grow will be adversely affected if we are not successful in making acquisitions or integrating the acquisitions we
have made.
We have historically expanded our propane business through acquisitions. We regularly consider and evaluate
opportunities for growth through the acquisition of local, regional and national propane distributors. We may choose to finance
future acquisitions with debt, equity, cash or a combination of the three. We can give no assurances that we will find attractive
acquisition candidates in the future, that we will be able to acquire such candidates on economically acceptable terms, that we
will be able to finance acquisitions on economically acceptable terms, that any acquisitions will not be dilutive to earnings and
distributions or that any additional debt incurred to finance an acquisition will not affect our ability to make distributions.
To the extent we are successful in making acquisitions, such acquisitions involve a number of risks, including, but not
limited to, the assumption of material liabilities, the diversion of management’s attention from the management of daily operations
to the integration of operations, difficulties in the assimilation and retention of employees and difficulties in the assimilation of
different cultures and practices and internal controls, as well as in the assimilation of broad and geographically dispersed personnel
and operations. The failure to successfully integrate acquisitions could have an adverse effect on our business, financial condition
and results of operations.
We are subject to operating and litigation risks that may not be covered by insurance.
Our operations are subject to all of the operating hazards and risks normally incidental to handling, storing, transporting
10
Table of Contents
and otherwise providing combustible liquids such as propane for use by consumers. These risks could result in substantial losses
due to personal injury and/or loss of life, and severe damage to and destruction of property and equipment arising from explosions
and other catastrophic events, including acts of terrorism. As a result, we are often a defendant in legal proceedings and litigation
arising in the ordinary course of business. There can be no assurance that our insurance will be adequate to protect us from all
material expenses related to pending and future claims or that such levels of insurance will be available in the future at economical
prices.
Our net income and earnings will decrease if we are required to incur additional costs to comply with new governmental safety,
health, transportation, tax and environmental regulations.
We are subject to various federal, state and local safety, health, transportation, tax and environmental laws and regulations
governing the storage, distribution and transportation of propane. We have implemented safety and environmental programs and
policies designed to avoid potential liability and costs under applicable laws. It is possible, however, that we will incur increased
costs as a result of complying with new safety, health, transportation and environmental regulations and such costs will reduce
our net income. It is also possible that material environmental liabilities will be incurred, including those relating to claims for
damages to property and persons.
Our operations, capital expenditures and financial results may be affected by regulatory changes and/or market responses to
global climate change.
There continues to be concern, both nationally and internationally, about climate change and the contribution of greenhouse
gas (“GHG”) emissions, most notably carbon dioxide, to global warming. Because propane is considered a clean alternative fuel
under the federal Clean Air Act Amendments of 1990, we anticipate that this will provide us with a competitive advantage over
other sources of energy, such as fuel oil and coal, as new climate change regulations become effective. At the same time, increased
regulation of GHG emissions, especially in the transportation sector, could impose significant additional costs on us, our suppliers
and our customers. While some states have adopted laws and regulations regulating the emission of GHGs for some industry
sectors, there is currently no federal or regional legislation mandating the reduction of GHG emissions in the United States.
Although Congress has not enacted federal climate change legislation, the EPA has begun adopting and implementing regulations
to restrict emissions of GHGs from motor vehicles and certain large stationary sources, and to require reporting of GHG emissions
by certain regulated facilities on an annual basis. The Partnership’s facilities are not currently subject to these regulations, but the
potential increased costs of regulatory compliance and mandatory reporting by our customers and suppliers could have an effect
on our operations or financial condition.
The adoption of additional federal or state climate change legislation or regulatory programs to reduce emissions of GHGs
could also require the Partnership or its suppliers to incur increased capital and operating costs, with resulting impact on product
price and demand. The impact of new legislation and regulations will depend on a number of factors, including (i) which industry
sectors would be impacted, (ii) the timing of required compliance, (iii) the overall GHG emissions cap level, (iv) the allocation
of emission allowances to specific sources, and (v) the costs and opportunities associated with compliance. At this time, we cannot
predict the effect that climate change regulation may have on our business, financial condition or operations in the future.
Unforeseen difficulties with the operation of our information systems could adversely affect our internal controls and our
business.
We contracted with third-party consultants to assist us with the design and implementation of an information system that
supports our Order-to-Cash business processes. The efficient execution of our business is dependent upon the proper functioning
of our internal systems. Any significant failure or malfunction of our information system may result in disruptions of our operations.
Our results of operations could be adversely affected if we encounter unforeseen problems with respect to the operation of this
system.
Risks Inherent in an Investment in Our Common Units
Cash distributions are not guaranteed and may fluctuate with our performance.
Although we distribute all of our available cash each quarter, the amount of cash that we generate each quarter fluctuates.
As a result, we cannot guarantee that we will pay the current regular quarterly distribution each quarter. Available cash generally
means, with respect to any fiscal quarter, all cash on hand at the end of each quarter, plus all additional cash on hand as of the date
of the determination of available cash resulting from borrowings after the end of the quarter, less the amount of reserves established
to provide for the proper conduct of our business, to comply with applicable law or agreements, or to provide funds for future
distributions to partners. The actual amount of cash that is available to be distributed each quarter will depend upon numerous
factors, including:
11
Table of Contents
•
•
•
•
•
•
•
•
•
•
•
•
our cash flow generated by operations;
the weather in our areas of operation;
our borrowing capacity under our bank credit facilities;
required principal and interest payments on our debt;
fluctuations in our working capital;
our cost of acquisitions (including related debt service payments);
restrictions contained in our debt instruments;
our capital expenditures;
our issuances of debt and equity securities;
reserves made by our General Partner in its discretion;
prevailing economic and industry conditions; and
financial, business and other factors, a number of which are beyond our control.
As is the case for most master limited partnerships, our Fourth Amended and Restated Agreement of Limited Partnership
dated as of July 27, 2009, as amended as of March 13, 2012 (the “Partnership Agreement”) requires that distributions to our
partners upon our liquidation (or to a partner upon certain redemptions) be made in accordance with positive capital account
balances in order to comply with Treasury regulation (“Treasury Regulations”) promulgated under the Internal Revenue Code of
1986, as amended (the “Code”), as to our allocations of tax items. Although our Partnership Agreement grants our General Partner
broad discretion to use special allocations, capital account adjustments, and other corrective measures to prevent this capital
account liquidation requirement from causing economic distortions, it is not possible to confirm in all instances that such economic
distortions will not result from this capital account liquidation requirement.
Our General Partner has broad discretion to determine the amount of “available cash” for distribution to holders of our equity
securities through the establishment and maintenance of cash reserves, thereby potentially lessening and limiting the amount
of “available cash” eligible for distribution.
Our General Partner determines the timing and amount of our distributions and has broad discretion in determining the
amount of funds that will be recognized as “available cash.” Part of this discretion comes from the ability of our General Partner
to establish reserves. Decisions as to amounts to be reserved have a direct impact on the amount of available cash for distributions
because reserves are taken into account in computing available cash. Each fiscal quarter, our General Partner may, in its reasonable
discretion, determine the amounts to be reserved, subject to restrictions on the purposes of the reserves. Reserves may be made,
increased or decreased for any proper purpose, including, but not limited to, reserves:
•
•
•
to comply with terms of any of our agreements or obligations, including the establishment of reserves to fund the future
payment of interest and principal on our debt securities;
to provide for level distributions of cash notwithstanding the seasonality of our business; and
to provide for future capital expenditures and other payments deemed by our General Partner to be necessary or advisable.
The decision by our General Partner to establish reserves may limit the amount of cash available for distribution to holders
of our equity securities. Holders of our equity securities will not receive payments unless we are able to first satisfy our own
obligations and the establishment of any reserves.
We are a holding company and have no material operations or assets. Accordingly, unitholders will receive distributions only
if we receive distributions from our Operating Partnership after it meets its own financial obligations.
We are a holding company for our subsidiaries, with no material operations and only limited assets. We are dependent
on cash distributions from the Operating Partnership to make cash distributions to our unitholders.
Unitholders will not receive cash distributions unless the Operating Partnership is able to make distributions to us after
it first satisfies its obligations under the terms of its own borrowing arrangements and reserves any necessary amounts to meet its
own financial obligations. The Operating Partnership is required to distribute all of its available cash each quarter, less the amounts
of cash reserves that our General Partner determines are necessary or appropriate in its reasonable discretion to provide for the
proper conduct of our Operating Partnership’s business, to enable it to make distributions to us so that we can make timely
distributions to our limited partners and the General Partner under our Partnership Agreement during the next four quarters, or to
comply with applicable law or any of our Operating Partnership’s debt or other agreements.
The agreements governing certain of the Operating Partnership’s debt obligations require the Operating Partnership to
include in its cash reserves amounts for future required payments. This limits the amount of available cash the Operating Partnership
may distribute to us each quarter.
12
Table of Contents
Holders of Common Units may experience dilution of their interests.
We may issue an unlimited number of additional limited partner interests and other equity securities, including senior
equity securities, for such consideration and on such terms and conditions as shall be established by our General Partner in its sole
discretion, without the approval of any unitholders. We also may issue an unlimited number of partnership interests junior to the
Common Units without a unitholder vote. When we issue additional equity securities, a unitholder’s proportionate partnership
interest will decrease and the amount of cash distributed on each unit and the market price of the Common Units could decrease.
Issuance of additional Common Units will also diminish the relative limited voting power of each previously outstanding unit.
Please read “Holders of Common Units have limited voting rights, management and control of us” below. The ultimate effect of
any such issuance may be to dilute the interests of holders of units in AmeriGas Partners and to make it more difficult for a person
or group to remove our General Partner or otherwise change our management.
The market price of the Common Units may be adversely affected by various change of management provisions.
Our Partnership Agreement contains certain provisions that are intended to discourage a person or group from attempting
to remove our General Partner as general partner or otherwise change the management of AmeriGas Partners. If any person or
group other than the General Partner or its affiliates acquires beneficial ownership of 20% or more of the Common Units, such
person or group will lose its voting rights with respect to all of its Common Units. The effect of these provisions and the change
of control provisions in our debt instruments may be to diminish the price at which the Common Units will trade under certain
circumstances.
Restrictive covenants in the agreements governing our indebtedness and other financial obligations may reduce our operating
flexibility.
The various agreements governing our and the Operating Partnership’s indebtedness and other financing transactions
restrict quarterly distributions. These agreements contain various negative and affirmative covenants applicable to us and the
Operating Partnership and some of these agreements require us and the Operating Partnership to maintain specified financial ratios.
If we or the Operating Partnership violate any of these covenants or requirements, a default may result and distributions would
be limited. These covenants limit our and the Operating Partnership’s ability to, among other things:
incur additional indebtedness;
engage in transactions with affiliates;
create or incur liens;
sell assets;
•
•
•
•
• make restricted payments, loans and investments;
•
•
enter into business combinations and asset sale transactions; and
engage in other lines of business.
Holders of Common Units have limited voting rights, management and control of us.
Our General Partner manages and operates AmeriGas Partners. Unlike the holders of common stock in a corporation,
holders of outstanding Common Units have only limited voting rights on matters affecting our business. Holders of Common
Units have no right to elect the general partner or its directors, and our General Partner generally may not be removed except
pursuant to the vote of the holders of not less than two-thirds of the outstanding units. In addition, removal of the general partner
may result in a default under our debt instruments and loan agreements. As a result, holders of Common Units have limited say
in matters affecting our operations and others may find it difficult to attempt to gain control or influence our activities.
Holders of Common Units may be required to sell their Common Units against their will.
If at any time our General Partner and its affiliates hold 80% or more of the issued and outstanding Common Units, our
General Partner will have the right (but not the obligation) to purchase all, but not less than all, of the remaining Common Units
held by nonaffiliates at certain specified prices pursuant to the Partnership Agreement. Accordingly, under certain circumstances
holders of Common Units may be required to sell their Common Units against their will and the price that they receive for those
securities may be less than they would like to receive. They may also incur a tax liability upon a sale of their Common Units.
Holders of Common Units may not have limited liability in certain circumstances and may be liable for the return of distributions
that cause our liabilities to exceed our assets.
The limitations on the liability of holders of Common Units for the obligations of a limited partnership have not been
clearly established in some states. If it were determined that AmeriGas Partners had been conducting business in any state without
13
Table of Contents
compliance with the applicable limited partnership statute, or that the right or the exercise of the right by the holders of Common
Units as a group to remove or replace our General Partner, to make certain amendments to our Partnership Agreement or to take
other action pursuant to that Partnership Agreement constituted participation in the “control” of the business of AmeriGas Partners,
then a holder of Common Units could be held liable under certain circumstances for our obligations to the same extent as our
General Partner. We are not obligated to inform holders of Common Units about whether we are in compliance with the limited
partnership statutes of any states.
Holders of Common Units may also have to repay AmeriGas Partners amounts wrongfully returned or distributed to
them. Under Delaware law, we may not make a distribution to holders of Common Units if the distribution causes our liabilities
to exceed the fair value of our assets. Liabilities to partners on account of their partnership interests and nonrecourse liabilities
are not counted for purposes of determining whether a distribution is permitted. Delaware law provides that a limited partner who
receives such a distribution and knew at the time of the distribution that the distribution violated Delaware law will be liable to
the limited partnership for the distribution amount for three years from the distribution date.
Our General Partner has conflicts of interest and limited fiduciary responsibilities, which may permit our General Partner to
favor its own interest to the detriment of holders of Common Units.
Conflicts of interest can arise as a result of the relationships between AmeriGas Partners, on the one hand, and the General
Partner and its affiliates, on the other. The directors and officers of the General Partner have fiduciary duties to manage the General
Partner in a manner beneficial to the General Partner’s sole shareholder, AmeriGas, Inc., a wholly owned subsidiary of UGI
Corporation. At the same time, the General Partner has fiduciary duties to manage AmeriGas Partners in a manner beneficial to
both it and the unitholders. The duties of our General Partner to AmeriGas Partners and the unitholders, therefore, may come into
conflict with the duties of the directors and officers of our General Partner to its sole shareholder, AmeriGas, Inc.
Such conflicts of interest might arise in the following situations, among others:
• Decisions of our General Partner with respect to the amount and timing of cash expenditures, borrowings, issuances of
additional units and reserves in any quarter affect whether and the extent to which there is sufficient available cash from
operating surplus to make quarterly distributions in a given quarter. In addition, actions by our General Partner may
have the effect of enabling the General Partner to receive distributions that exceed 2% of total distributions.
• AmeriGas Partners does not have any employees and relies solely on employees of the General Partner and its affiliates.
• Under the terms of the Partnership Agreement, we reimburse our General Partner and its affiliates for costs incurred in
managing and operating AmeriGas Partners, including costs incurred in rendering corporate staff and support services
to us.
• Any agreements between us and our General Partner and its affiliates do not grant to the holders of Common Units,
separate and apart from AmeriGas Partners, the right to enforce the obligations of our General Partner and such affiliates
in our favor. Therefore, the General Partner, in its capacity as the general partner of AmeriGas Partners, is primarily
responsible for enforcing such obligations.
• Under the terms of the Partnership Agreement, our General Partner is not restricted from causing us to pay the General
Partner or its affiliates for any services rendered on terms that are fair and reasonable to us or entering into additional
contractual arrangements with any of such entities on behalf of AmeriGas Partners. Neither the Partnership Agreement
nor any of the other agreements, contracts and arrangements between us, on the one hand, and the General Partner and
its affiliates, on the other, are or will be the result of arm’s-length negotiations.
• Our General Partner may exercise its right to call for and purchase units as provided in the Partnership Agreement or
assign such right to one of its affiliates or to us.
Our Partnership Agreement expressly permits our General Partner to resolve conflicts of interest between itself or its
affiliates, on the one hand, and us or the unitholders, on the other, and to consider, in resolving such conflicts of interest, the
interests of other parties in addition to the interests of the unitholders. In addition, the Partnership Agreement provides that a
purchaser of Common Units is deemed to have consented to certain conflicts of interest and actions of our General Partner and
its affiliates that might otherwise be prohibited and to have agreed that such conflicts of interest and actions do not constitute a
breach by the General Partner of any duty stated or implied by law or equity. The General Partner is not in breach of its obligations
under the Partnership Agreement or its duties to us or the unitholders if the resolution of such conflict is fair and reasonable to us.
The latitude given in the Partnership Agreement to the General Partner in resolving conflicts of interest may significantly limit
14
Table of Contents
the ability of a unitholder to challenge what might otherwise be a breach of fiduciary duty.
Our Partnership Agreement expressly limits the liability of our General Partner by providing that the General Partner, its
affiliates and its officers and directors are not liable for monetary damages to us, the limited partners or assignees for errors of
judgment or for any actual omissions if the General Partner and other persons acted in good faith. In addition, we are required to
indemnify our General Partner, its affiliates and their respective officers, directors, employees and agents to the fullest extent
permitted by law, against liabilities, costs and expenses incurred by our General Partner or such other persons, if the General
Partner or such persons acted in good faith and in a manner they reasonably believed to be in, or not opposed to, our best interests
and, with respect to any criminal proceedings, had no reasonable cause to believe the conduct was unlawful.
Our General Partner may voluntarily withdraw or sell its general partner interest.
Our General Partner may withdraw as the general partner of AmeriGas Partners and the Operating Partnership without
the approval of our unitholders. Our General Partner may also sell its general partner interest in AmeriGas Partners and the
Operating Partnership without the approval of our unitholders. Any such withdrawal or sale could have a material adverse effect
on us and could substantially change the management and resolutions of conflicts of interest, as described above.
Our substantial debt could impair our financial condition and our ability to make distributions to holders of Common Units
and operate our business.
Our substantial debt and our ability to incur significant additional indebtedness, subject to the restrictions under AmeriGas
OLP’s bank credit agreement, the outstanding HOLP note agreements and the indentures governing our outstanding notes could
adversely affect our ability to make distributions to holders of our Common Units and could limit our flexibility in planning for,
or reacting to, changes in our business and the industry in which we operate and place us at a competitive disadvantage compared
to our competitors that have proportionately less debt. If we are unable to meet our debt service obligations, we could be forced
to restructure or refinance our indebtedness, seek additional equity capital or sell assets. We may be unable to obtain financing or
sell assets on satisfactory terms, or at all.
Because we issued a significant number of Common Units in connection with the Heritage Propane acquisition and the
applicable holding period has expired, the holder of such units could attempt to sell a significant number of such units in the
future, which could have a material adverse effect on the market price of our Common Units.
On January 12, 2012, in connection with the Partnership’s acquisition of Heritage Propane, we issued 29,567,362 Common
Units to ETP’s subsidiary, Heritage ETC, L.P., as equity consideration. On the same day, ETP entered into a unitholder agreement
with us. The unitholder agreement restricted Heritage ETC, L.P. any any person who became a holder of Common Units under
the agreement from transferring the Common Units until January 13, 2013. The agreement also provided ETP with registration
rights related to the Common Units following such holding period. Following completion of the holding period on January 13,
2013, Heritage ETC, L.P. elected to cause us to register the offer and sale of all 29,567,362 Common Units held by them. On July
12, 2013, Heritage ETC, L.P. completed a public offering of 7,500,000 of its Common Units.
If all or a substantial portion of the remaining Common Units held by ETP were to be offered for sale, or there was a
perception that such resales might occur, the market price of the Common Units could decrease and it may be more difficult for
us to sell our equity securities in the future at a time and upon terms that we deem appropriate.
Our agreement with ETP may delay or prevent a change of control, which could adversely affect the price of our Common
Units.
Various provisions in the Contingent Residual Support Agreement (“CRSA”) that we entered into on January 12, 2012
with ETP and UGI Corporation may delay or prevent a change in control of AmeriGas Partners, which could adversely affect the
price of our Common Units. These provisions may also make it more difficult for our unitholders to benefit from transactions,
including an actual or threatened change in control of us, even though such a transaction may offer our unitholders the opportunity
to sell their Common Units at a price above the prevailing market price. The CRSA provides that, during the five-year period
following the effectiveness of the CRSA, UGI Corporation may not cease to control the General Partner without the consent of
ETP (such consent not to be unreasonably withheld). Thereafter, until termination of the CRSA, which will occur on the earlier
of (a) payment in full of the Supported Debt Principal Amount as defined in the CRSA and (b) payment by ETP of the maximum
amount due by ETP under the CRSA, ETP will not have any consent right with respect to a change of control of the General
Partner unless such change of control would result in a downgrade of the credit rating of the senior notes issued in connection
with the Heritage Propane acquisition. Such provisions may prevent unitholders from realizing potential increases in the price of
our Common Units from an actual or threatened change in control.
15
Table of Contents
Our partnership agreement limits our General Partner’s fiduciary duties of care to unitholders and restricts remedies available
to unitholders for actions taken by our General Partner that might otherwise constitute breaches of fiduciary duties.
Our partnership agreement contains provisions that reduce the standards of care to which our General Partner would
otherwise be held by state fiduciary duty law. For example, our partnership agreement waives or limits, to the extent permitted by
law, any standard of care and duty imposed under state law to act in accordance with the provisions of our partnership agreement
so long as such action is reasonably believed by our General Partner to be in, or not inconsistent with, our best interest. Accordingly,
you may not be entitled to the benefits of certain fiduciary duties imposed by statute or otherwise that would ordinarily apply to
directors and senior officers of publicly traded corporations.
Tax Risks
Our tax treatment depends on our status as a partnership for federal income tax purposes. If the IRS were to treat us as a
corporation, then our cash available for distribution to holders of Common Units would be substantially reduced.
The availability to a common unitholder of the federal income tax benefits of an investment in the Common Units depends,
in large part, on our classification as a partnership for federal income tax purposes. No ruling from the IRS as to this status has
been or is expected to be requested.
If we were classified as a corporation for federal income tax purposes (including, but not limited to, due to a change in
our business or a change in current law), we would be required to pay tax on our income at corporate tax rates (currently a maximum
35% federal rate, in addition to state and local income taxes at varying rates), and distributions received by the Common Unitholders
would generally be taxed a second time as corporate distributions. Because a tax would be imposed upon us as an entity, the cash
available for distribution to the Common Unitholders would be substantially reduced. Treatment of us as a corporation would
cause a material reduction in the anticipated cash flow and after-tax return to the Common Unitholders, likely causing a substantial
reduction in the value of the Common Units.
Our Partnership Agreement provides that if a law is enacted or existing law is modified or interpreted in a manner that
subjects us to taxation as a corporation or otherwise subjects us to entity-level taxation for federal, state, or local income tax
purposes, our Partnership distribution levels will change. These changes would include a decrease in the current regular quarterly
distribution and the target distribution levels to reflect the impact of this law on us. Any such reductions could increase our General
Partner’s percentage of cash distributions and decrease our limited partners’ percentage of cash distributions.
If federal or state tax treatment of partnerships changes to impose entity-level taxation, the amount of cash available to us for
distributions may be lower and distribution levels may have to be decreased.
Current law may change, causing us to be treated as a corporation for federal income tax purposes or otherwise subjecting
us to entity-level taxation. For example, the Obama Administration and members of Congress have recently considered substantive
changes to the existing federal income tax laws that would have affected certain publicly traded partnerships. Specifically, federal
income tax legislation has been considered that would have eliminated partnership tax treatment for certain publicly traded
partnerships and recharacterized certain types of income received from partnerships. Similarly, several states currently impose
entity-level taxes on partnerships, including us. If any additional states were to impose a tax upon us as an entity, our cash available
for distribution would be reduced. We are unable to predict whether any such changes in state entity-level taxes will ultimately
be enacted. Any such changes could negatively impact the value of an investment in our Common Units.
Holders of Common Units will likely be subject to state, local and other taxes in states where holders of Common Units live or
as a result of an investment in the Common Units.
In addition to United States federal income taxes, unitholders will likely be subject to other taxes, such as state and local
taxes, unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in
which the unitholder resides or in which we do business or own property. A unitholder will likely be required to file state and local
income tax returns and pay state and local income taxes in some or all of the various jurisdictions in which we do business or own
property and may be subject to penalties for failure to comply with those requirements. It is the responsibility of each unitholder
to file all applicable United States federal, state and local tax returns.
A successful IRS contest of the federal income tax positions that we take may adversely affect the market for Common Units
and the costs of any contest will be borne directly or indirectly by the unitholders and our General Partner.
We have not requested a ruling from the IRS with respect to our classification as a partnership for federal income tax
purposes, the classification of any of the revenue from our propane operations as “qualifying income” under Section 7704 of the
Internal Revenue Code, or any other matter affecting us. Accordingly, the IRS may adopt positions that differ from the conclusions
16
Table of Contents
expressed herein or the positions taken by us. It may be necessary to resort to administrative or court proceedings in an effort to
sustain some or all of such conclusions or the positions taken by us. A court may not concur with some or all of our positions. Any
contest with the IRS may materially and adversely impact the market for the Common Units and the prices at which they trade.
In addition, the costs of any contest with the IRS will be borne directly or indirectly by the unitholders and our General Partner.
Holders of Common Units may be required to pay taxes on their allocable share of our taxable income even if they do not
receive any cash distributions.
A unitholder will be required to pay federal income taxes and, in some cases, state and local income taxes on the unitholder’s
allocable share of our taxable income, even if the unitholder receives no cash distributions from us. We cannot guarantee that a
unitholder will receive cash distributions equal to the unitholder’s allocable share of our taxable income or even the tax liability
to the unitholder resulting from that income.
Ownership of Common Units may have adverse tax consequences for tax-exempt organizations and certain other investors.
Investment in Common Units by certain tax-exempt entities, regulated investment companies and foreign persons raises
issues unique to them. For example, virtually all of our taxable income allocated to organizations exempt from federal income
tax, including individual retirement accounts and other retirement plans, will be unrelated business taxable income and thus will
be taxable to the unitholder. Distributions to foreign persons will be reduced by withholding taxes at the highest applicable effective
tax rate, and foreign persons will be required to file U.S. federal income tax returns and pay tax on their share of our taxable
income. Prospective unitholders who are tax-exempt organizations or foreign persons should consult their tax advisors before
investing in Common Units.
There are limits on the deductibility of losses that may adversely affect holders of Common Units.
In the case of taxpayers subject to the passive loss rules (generally, individuals, closely-held corporations and regulated
investment companies), any losses generated by us will only be available to offset our future income and cannot be used to offset
income from other activities, including other passive activities or investments. Unused losses may be deducted when the unitholder
disposes of the unitholder’s entire investment in us in a fully taxable transaction with an unrelated party. A unitholder’s share of
our net passive income may be offset by unused losses from us carried over from prior years, but not by losses from other passive
activities, including losses from other publicly traded partnerships.
Tax gain or loss on disposition of Common Units could be different than expected.
A unitholder who sells Common Units will recognize the gain or loss equal to the difference between the amount realized,
including the unitholder’s share of our nonrecourse liabilities, and the unitholder’s adjusted tax basis in the Common Units. Prior
distributions in excess of cumulative net taxable income allocated for a Common Unit which decreased a unitholder’s tax basis
in that unit will, in effect, become taxable income if the Common Unit is sold at a price greater than the unitholder’s tax basis in
that Common Unit, even if the price is less than the unit’s original cost. A portion of the amount realized, whether or not representing
gain, may be ordinary income. Furthermore, should the IRS successfully contest some conventions used by us, a unitholder could
recognize more gain on the sale of Common Units than would be the case under those conventions, without the benefit of decreased
income in prior years.
The reporting of partnership tax information is complicated and subject to audits.
We will furnish each unitholder with a Schedule K-1 that sets forth the unitholder’s share of our income, gains, losses
and deductions. In preparing these schedules, we will use various accounting and reporting conventions and adopt various
depreciation and amortization methods. We cannot guarantee that these schedules will yield a result that conforms to statutory or
regulatory requirements or to administrative pronouncements of the IRS. Further, our tax return may be audited, which could
result in an audit of a unitholder’s individual tax return and increased liabilities for taxes because of adjustments resulting from
the audit. The rights of a unitholder owning less than a 1% profits interest in us to participate in the income tax audit process are
very limited. Further, any adjustments in our tax returns will lead to adjustments in the unitholders’ tax returns and may lead to
audits of unitholders’ tax returns and adjustments of items unrelated to us. Each unitholder would bear the cost of any expenses
incurred in connection with an examination of the unitholder’s personal tax return.
There is a possibility of loss of tax benefits relating to nonconformity of Common Units and nonconforming depreciation
conventions.
Because we cannot match transferors and transferees of Common Units, uniformity of the tax characteristics of the
Common Units to a purchaser of Common Units of the same class must be maintained. To maintain uniformity and for other
reasons, we have adopted certain depreciation and amortization conventions which we believe conform to Treasury Regulations
17
Table of Contents
under Section 743(b) of the Internal Revenue Code. A successful challenge to those conventions by the IRS could adversely affect
the amount of tax benefits available to a purchaser of Common Units and could have a negative impact on the value of the Common
Units.
We prorate our items of income, gain, loss, and deduction for federal income tax purposes between transferors and transferees
of our units each month based upon the ownership of our units on the first day of each month, instead of on the basis of the
date a particular unit is transferred. The IRS may challenge this treatment, which could change the allocation of items of
income, gain, loss, and deduction amount our unitholders.
We will prorate our items of income, gain, loss and deduction for federal income tax purposes between transferors and
transferees of our units each month based upon the ownership of our units on the first day of each month, instead of on the basis
of the date a particular unit is transferred. The use of this proration method may not be permitted under existing Treasury Regulations,
and, accordingly, our counsel is unable to opine as to the validity of this method. Recently, however, the U.S. Treasury Department
issued proposed regulations that provide a safe harbor pursuant to which publicly traded partnerships may use a similar monthly
simplifying convention to allocate tax items among transferor and transferee unitholders. Nonetheless, the proposed regulations
do not specifically authorize the use of the proration method. If the IRS were to challenge this method or new Treasury regulations
were issued, we may be required to change the allocation of items of income, gain, loss and deduction among our unitholders.
Holders of Common Units may have negative tax consequences if we default on our debt or sell assets.
If we default on any of our debt, the lenders will have the right to sue us for non-payment. This could cause an investment
loss and negative tax consequences for unitholders through the realization of taxable income by unitholders without a corresponding
cash distribution. Likewise, if we were to dispose of assets and realize a taxable gain while there is substantial debt outstanding
and proceeds of the sale were applied to the debt, our unitholders could have increased taxable income without a corresponding
cash distribution.
The sale or exchange of 50% or more of our capital and profits interests during any twelve-month period will result in the
termination of our partnership for federal income tax purposes.
We will be considered to have technically terminated our partnership for federal income tax purposes if there is a sale or
exchange of 50% or more of the total interests in our capital and profits within any twelve-month period. Our termination would,
among other things, result in the closing of our taxable year for all unitholders, which would result in us filing more than one tax
return (and our unitholders could receive two Schedules K-1) for one fiscal year and could result in a significant deferral of
depreciation deductions allowable in computing our taxable income. In the case of a unitholder reporting on a taxable year other
than a fiscal year ending December 31, the closing of our taxable year may also result in more than twelve months of our taxable
income or loss being includable in his taxable income for the year of termination. Our termination would not affect our classification
as a partnership for federal income tax purposes, but, instead, we would be treated as a new partnership for tax purposes. If treated
as a new partnership, we must make new tax elections and could be subject to penalties if we are unable to determine that a
termination occurred. However, under an IRS relief program, a publicly traded partnership that technically terminates may be
allowed to provide one Schedule K-1 to unitholders for the year, notwithstanding that it has more than one partnership tax year.
In connection with the Heritage Propane acquisition, we issued 29,567,362 of our Common Units to Heritage ETC, L.P., a Delaware
limited partnership, as partial consideration for the contribution by Heritage ETC, L.P. to us of all the equity interests of Heritage
Propane. Following Heritage ETC, L.P.’s completion of a public offering of 7,500,000 of our Common Units, Heritage ETC, L.P.
currently holds 22,067,362 Common Units. ETP directly and indirectly owns 100% of the equity interests in Heritage ETC, L.P.
If ETP transfers our Common Units it beneficially received in the Heritage Propane acquisition or engages in certain other
transactions with respect to such Common Units, these transactions may be treated for tax purposes as a sale or exchange of our
Common Units. If there is a sale or exchange of our Common Units by any other unitholders within 12 months of such a transaction
that would result in a sale or exchange of 50% or more of our Common Units in the aggregate, then we may be considered to have
technically terminated for federal income tax purposes with the attendant consequences described above.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
None.
ITEM 2.
PROPERTIES
As of September 30, 2013, the Partnership owned over 90% of its approximately 950 district offices throughout the
country. The transportation of propane requires specialized equipment. The trucks and railroad tank cars utilized for this purpose
carry specialized steel tanks that maintain the propane in a liquefied state. As of September 30, 2013, the Partnership operated a
transportation fleet with the following assets:
18
Table of Contents
750
360
360
4,000
350
4,100
Approximate Quantity & Equipment Type
% Owned
% Leased
Trailers
Tractors
Railroad tank cars
Bobtail trucks
Rack trucks
Service and delivery trucks
85%
13%
4%
49%
6%
61%
15%
87%
96%
51%
94%
39%
Other assets owned at September 30, 2013 included approximately 1.8 million stationary storage tanks with typical
capacities of more than 120 gallons and approximately 4.5 million portable propane cylinders with typical capacities of 1 to 120
gallons.
ITEM 3.
LEGAL PROCEEDINGS
With the exception of the matters set forth in Note 12 to Consolidated Financial Statements included in Item 8 of this
Report, no material legal proceedings are pending involving the Partnership, any of its subsidiaries, or any of their properties, and
no such proceedings are known to be contemplated by governmental authorities other than claims arising in the ordinary course
of the Partnership’s business.
ITEM 4.
MINE SAFETY DISCLOSURES
None.
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
Each Common Unit represents a limited partner interest in the Partnership. Common Units are listed on the New York
Stock Exchange, which is the principal trading market for such securities, under the symbol “APU.” The following table sets forth,
for the periods indicated, the high and low sale prices per Common Unit, as reported on the New York Stock Exchange (“NYSE”)
Composite Transactions tape, and the amount of cash distributions paid per Common Unit.
2013 Fiscal Year
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
2012 Fiscal Year
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
$
$
Price Range
High
Low
$
50.15
50.45
45.19
45.49
41.23
42.15
37.67
37.63
Cash
Distribution
0.840
$
0.840
$
0.800
$
0.800
$
Price Range
High
Low
$
45.04
40.89
46.46
46.67
39.22
37.00
39.60
41.69
Cash
Distribution
0.800
$
$
0.800
0.7625
$
0.740
$
As of November 15, 2013, there were 875 record holders of the Partnership’s Common Units.
The Partnership makes quarterly distributions to its partners in an aggregate amount equal to its Available Cash, as
defined in the Fourth Amended and Restated Agreement of Limited Partnership of AmeriGas Partners, L.P. (the “Partnership
Agreement”). Available Cash generally means, with respect to any fiscal quarter of the Partnership, all cash on hand at the end
of such quarter, plus all additional cash on hand as of the date of determination resulting from borrowings subsequent to the end
of such quarter, less the amount of cash reserves established by the General Partner in its reasonable discretion for future cash
19
Table of Contents
requirements. Reserves may be maintained to provide for (i) the proper conduct of the Partnership’s business, (ii) distributions
during the next four fiscal quarters and (iii) compliance with applicable law or any debt instrument or other agreement or
obligation to which the Partnership is a party or its assets are subject. The information concerning restrictions on distributions
required by Item 5 of this Report is incorporated herein by reference to Notes 5 and 6 to Consolidated Financial Statements
which are incorporated herein by reference.
ITEM 6.
SELECTED FINANCIAL DATA
(Thousands of dollars, except per unit
amounts)
FOR THE PERIOD:
Income statement data:
Revenues
Net income
Less: net income attributable to
noncontrolling interests
Net income attributable to AmeriGas
Partners, L.P.
Limited partners’ interest in net
income attributable to AmeriGas
Partners, L.P.
Income (loss) per limited partner unit
— basic and diluted (b)
Cash distributions declared per limited
partner unit
AT PERIOD END:
Balance sheet data:
Current assets
Total assets
Year Ended September 30,
2013 (a)
2012 (a)
2011
2010
2009
$ 3,166,543
$ 2,921,616
$ 2,537,959
$ 2,320,342
$ 2,260,095
$
225,091
$
12,671
$
140,924
$
167,494
$
227,610
(3,869)
(1,646)
(2,401)
(2,281)
(2,967)
$
$
$
$
221,222
199,724
2.14
3.28
$
$
$
$
11,025
(2,094)
(0.11)
3.10
$
$
$
$
138,523
132,101
2.30
2.89
$
$
$
$
165,213
160,522
2.80
2.75
$
$
$
$
224,643
217,906
3.59
2.79
$
500,692
$
523,368
$
393,819
$
325,858
$
316,507
$ 4,409,846
$ 4,517,331
$ 1,795,735
$ 1,696,219
$ 1,657,564
Current liabilities (excluding debt)
$
488,060
$
590,239
$
350,829
Total debt
Partners’ capital:
$ 2,417,011
$ 2,377,969
$ 1,029,022
AmeriGas Partners, L.P. partners’
capital
Noncontrolling interests
Total partners’ capital
$ 1,385,103
$ 1,429,108
39,034
39,452
$ 1,424,137
$ 1,468,560
OTHER DATA:
Capital expenditures (including
capital leases)
$
111,058
$
103,140
Retail propane gallons sold (millions)
1,245.2
1,017.5
$
$
$
338,656
12,823
351,479
77,228
874.2
$
$
$
$
$
349,139
882,402
380,848
12,038
392,886
83,170
893.4
$
$
$
$
$
338,380
865,644
364,459
11,866
376,325
78,739
928.2
Degree days — % (warmer) than
normal (c)
(4.9)%
(18.6)%
(1.0)%
(2.3)%
(3.1)%
(a)
(b)
Reflects the Heritage Propane operations since January 12, 2012, and the impact of subsequent transition and integration
activities.
Calculated in accordance with accounting guidance regarding the application of the two-class method for determining
earnings per share as it relates to master limited partnerships.
20
Table of Contents
(c)
Deviation from average heating degree days for the 30-year period of 1971-2000 based upon national weather statistics
provided by the National Oceanic and Atmospheric Administration (“NOAA”) for 335 airports in the United States,
excluding Alaska.
21
Table of Contents
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) discusses our results
of operations and our financial condition. MD&A should be read in conjunction with our Items 1 “Business,” 1A “Risk Factors,”
and 2 “Properties” and our Consolidated Financial Statements in Item 8 below.
Executive Overview
Our results in Fiscal 2013 were significantly affected by colder heating-season and spring weather and the full-year operations
of Heritage Propane which we acquired in January 2012. Although temperatures based upon heating degree days averaged slightly
warmer than normal in Fiscal 2013, temperatures were significantly colder than the record-setting warm temperatures experienced
in Fiscal 2012 which significantly increased our retail volumes sold.
Net income attributable to AmeriGas Partners for Fiscal 2013 was $221.2 million compared with net income attributable to
AmeriGas Partners for Fiscal 2012 of $11.0 million. Results in Fiscal 2013 benefited from the full-year operations of Heritage
Propane which was acquired by the Partnership on January 12, 2012 (see Note 4 to Consolidated Financial Statements for further
information). Notwithstanding average temperatures that were approximately 5% warmer than normal in Fiscal 2013, temperatures
were approximately 16% colder than the prior year. Results for Fiscal 2013 include $26.5 million of transition costs associated
with Heritage Propane while Fiscal 2012 includes $46.2 million of transition and acquisition costs associated with Heritage Propane.
Fiscal 2012 results also include a $13.3 million loss on extinguishments of debt.
Looking ahead, our results in Fiscal 2014 will be influenced by a number of factors including, among others, temperatures
in our service territories during the peak heating-season, the level and volatility of commodity prices for propane, the strength of
economic activity and customer conservation. During Fiscal 2013, we completed the integration of Heritage Propane and we
expect to reap the full-year benefits of the integration in Fiscal 2014.
Analysis of Results of Operations
The following analyses compare the Partnership’s results of operations for (1) Fiscal 2013 with Fiscal 2012 and (2) Fiscal
2012 with the year ended September 30, 2011 (“Fiscal 2011”).
Fiscal 2013 Compared with Fiscal 2012
(Dollars in millions)
Gallons sold (millions):
Retail
Wholesale
Revenues:
Retail propane
Wholesale propane
Other
Total margin (a)
Operating and administrative expense
EBITDA (b)
Operating income
Net income attributable to AmeriGas Partners
Heating degree days — % (warmer) than normal (c)
N.M. - Variance is not meaningful.
2013
2012
Increase
(Decrease)
1,245.2
101.8
1,347.0
2,775.8
109.0
281.7
3,166.5
1,506.5
943.9
591.2
392.2
221.2
(4.9)%
$
$
$
$
$
$
$
1,017.5
105.6
1,123.1
2,536.3
141.3
244.0
2,921.6
1,201.9
888.7
324.7
170.6
11.0
(18.6)%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
227.7
(3.8)
223.9
239.5
(32.3)
37.7
244.9
304.6
55.2
266.5
221.6
210.2
—
22.4 %
(3.6)%
19.9 %
9.4 %
(22.9)%
15.5 %
8.4 %
25.3 %
6.2 %
82.1 %
129.9 %
N.M.
—
(a)
Total margin represents total revenues less cost of sales — propane and cost of sales — other.
22
Table of Contents
(b)
Earnings before interest expense, income taxes, depreciation and amortization (“EBITDA”) should not be considered as
an alternative to net income attributable to AmeriGas Partners (as an indicator of operating performance) and is not a
measure of performance or financial condition under accounting principles generally accepted in the United States of
America (“GAAP”). Management believes EBITDA is a meaningful non-GAAP financial measure used by investors to
(1) compare the Partnership’s operating performance with that of other companies within the propane industry and
(2) assess the Partnership’s ability to meet loan covenants. The Partnership’s definition of EBITDA may be different from
those used by other companies. Management uses EBITDA to compare year-over-year profitability of the business without
regard to capital structure as well as to compare the relative performance of the Partnership to that of other master limited
partnerships without regard to their financing methods, capital structure, income taxes or historical cost basis. In view
of the omission of interest, income taxes, depreciation and amortization from EBITDA, management also assesses the
profitability of the business by comparing net income attributable to AmeriGas Partners for the relevant years. Management
also uses EBITDA to assess the Partnership’s profitability because its parent, UGI Corporation, uses the Partnership’s
EBITDA to assess the profitability of the Partnership which is one of UGI Corporation’s industry segments. UGI
Corporation discloses the Partnership’s EBITDA in its disclosure about industry segments as the profitability measure
for its domestic propane segment. EBITDA for Fiscal 2012 includes net pre-tax losses associated with extinguishments
of debt of $13.3 million. EBITDA and operating income for Fiscal 2013 and Fiscal 2012 include acquisition and transition
expenses of $26.5 million and $46.2 million, respectively, associated with Heritage Propane.
The following table includes reconciliations of net income attributable to AmeriGas Partners to EBITDA for the periods
presented:
Net income attributable to AmeriGas Partners
Income tax expense
Interest expense
Depreciation
Amortization
EBITDA
Fiscal
2013
2012
221.2
1.7
165.4
159.3
43.6
591.2
$
$
11.0
2.0
142.6
134.2
34.9
324.7
$
$
(c)
Deviation from average heating degree days for the 30-year period 1971-2000 based upon national weather statistics
provided by NOAA for 335 airports in the United States, excluding Alaska.
Results for Fiscal 2013 reflect the full-year operations of Heritage Propane acquired in January 2012. Based upon heating
degree-day data, temperatures in the Partnership’s service territories during Fiscal 2013 averaged approximately 4.9% warmer
than normal but 16.2% colder than in Fiscal 2012. Retail gallons sold increased 227.7 million gallons (22.4%) principally reflecting
the full-year impact of the Heritage Propane operations and the colder Fiscal 2013 weather.
Retail propane revenues increased $239.5 million during Fiscal 2013 reflecting the higher retail volumes sold ($567.6
million) partially offset by a decline in average retail selling prices ($328.1 million) which were the result of lower propane product
costs. Wholesale propane revenues declined $32.3 million principally reflecting lower average wholesale propane selling prices
($27.2 million) and lower wholesale volumes sold ($5.1 million). Average daily wholesale propane commodity prices during Fiscal
2013 at Mont Belvieu, Texas, one of the major supply points in the U.S., were approximately 19% lower than such prices during
Fiscal 2012. Total revenues from fee income and other ancillary sales and services in Fiscal 2013 were $37.7 million higher than
in Fiscal 2012 principally reflecting the full-year effects of Heritage Propane. Total propane cost of sales decreased $71.0 million
principally reflecting the effects of the previously mentioned lower propane commodity prices on retail propane cost of sales
($371.7 million) and lower wholesale propane cost of sales ($35.4 million) substantially offset by the effects of the greater retail
volumes sold ($336.1 million). Cost of sales associated with ancillary sales and services increased $11.3 million principally
reflecting the full-year effects of Heritage Propane.
Total margin increased $304.6 million in Fiscal 2013 principally reflecting higher total propane margin ($278.2 million)
and greater total margin from fee income and ancillary sales and services ($26.4 million). These increases principally reflect the
incremental full-year effects of Heritage Propane, the colder Fiscal 2013 weather and, with respect to total propane margin, slightly
higher average unit margins reflecting in large part the lower propane product costs.
EBITDA in Fiscal 2013 increased $266.5 million principally reflecting the higher total margin ($304.6 million) and the
absence of the $13.3 million loss on extinguishments of debt recorded in Fiscal 2012 partially offset by higher Partnership operating
and administrative expenses ($55.2 million) primarily attributable to the full-year effects of Heritage Propane operations. Operating
23
Table of Contents
and administrative expenses in Fiscal 2013 include $26.5 million of transition expenses associated with the integration of Heritage
Propane while operating and administrative expenses in Fiscal 2012 include Heritage Propane acquisition and transition-related
expenses of $46.2 million. Operating income increased $221.6 million in Fiscal 2013 principally reflecting the higher total margin
($304.6 million) partially offset by the previously mentioned greater operating and administrative expenses ($55.2 million) and
increased depreciation and amortization expense ($33.7 million) reflecting in large part the full-year effects of Heritage Propane.
Interest expense was $22.8 million higher in Fiscal 2013 principally reflecting the full-year effects of interest on long-term debt
used to fund the Heritage Propane acquisition.
Fiscal 2012 Compared with Fiscal 2011
(Dollars in millions)
Gallons sold (millions):
Retail
Wholesale
Revenues:
Retail propane
Wholesale propane
Other
Total margin (a)
Operating and administrative expenses
EBITDA (b)
Operating income
Net income attributable to AmeriGas Partners
Heating degree days — % (warmer) than normal (c)
2012
2011
Increase
(Decrease)
1,017.5
105.6
1,123.1
2,536.3
141.3
244.0
2,921.6
1,201.9
888.7
324.7
170.6
11.0
(18.6)%
$
$
$
$
$
$
$
874.2
124.8
999.0
2,173.5
187.0
177.5
2,538.0
932.7
620.6
297.1
242.9
138.5
(1.0)%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
143.3
(19.2)
124.1
362.8
(45.7)
66.5
383.6
269.2
268.1
27.6
(72.3)
(127.5)
—
16.4 %
(15.4)%
12.4 %
16.7 %
(24.4)%
37.5 %
15.1 %
28.9 %
43.2 %
9.3 %
(29.8)%
(92.1)%
—
(a)
(b)
Total margin represents total revenues less cost of sales — propane and cost of sales — other.
EBITDA should not be considered as an alternative to net income attributable to AmeriGas Partners (as an indicator of
operating performance) and is not a measure of performance or financial condition under GAAP. Management believes
EBITDA is a meaningful non-GAAP financial measure used by investors to (1) compare the Partnership’s operating
performance with other companies within the propane industry and (2) assess its ability to meet loan covenants. The
Partnership’s definition of EBITDA may be different from that used by other companies. Management uses EBITDA to
compare year-over-year profitability of the business without regard to capital structure as well as to compare the relative
performance of the Partnership to that of other master limited partnerships without regard to their financing methods,
capital structure, income taxes or historical cost basis. In view of the omission of interest, income taxes, depreciation and
amortization from EBITDA, management also assesses the profitability of the business by comparing net income
attributable to AmeriGas Partners for the relevant years. Management also uses EBITDA to assess the Partnership’s
profitability because its parent, UGI Corporation, uses the Partnership’s EBITDA to assess the profitability of the
Partnership. UGI Corporation discloses the Partnership’s EBITDA as the profitability measure to comply with the GAAP
requirement to provide profitability information about its domestic propane segment. EBITDA for Fiscal 2012 and Fiscal
2011 includes net pre-tax losses of $13.3 million and $38.1 million, respectively, associated with extinguishments of
debt. EBITDA and operating income for Fiscal 2012 include acquisition and transition expenses of $46.2 million associated
with Heritage Propane.
24
Table of Contents
The following table includes reconciliations of net income attributable to AmeriGas Partners to EBITDA for the periods
presented:
Net income attributable to AmeriGas Partners
Income tax expense
Interest expense
Depreciation
Amortization
EBITDA
Fiscal
2012
2011
11.0
2.0
142.6
134.2
34.9
324.7
$
$
138.5
0.4
63.5
83.0
11.7
297.1
$
$
(c)
Deviation from average heating degree days for the 30-year period 1971-2000 based upon national weather statistics
provided by NOAA for 335 airports in the United States, excluding Alaska.
Based upon heating degree-day data, temperatures in the Partnership's service territories during Fiscal 2012 averaged
18.6% warmer than normal and 18.3% warmer than Fiscal 2011. The winter heating season also came to an early end with
temperatures in the month of March averaging 38% warmer than normal. Notwithstanding the record warm weather’s impact on
our legacy volumes, retail propane gallons sold were 143.3 million gallons greater than in the prior year reflecting the impact of
Heritage Propane.
Retail propane revenues increased $362.8 million during Fiscal 2012 primarily reflecting higher retail volumes sold. The
higher retail volumes sold reflects incremental gallons sold associated with Heritage Propane partially offset by the effects of
weather-reduced volumes in our legacy operations. Wholesale propane revenues decreased $45.7 million principally reflecting
lower wholesale volumes sold ($28.8 million) and lower average wholesale propane selling prices ($16.9 million). Average daily
wholesale propane commodity prices during Fiscal 2012 at Mont Belvieu, Texas, one of the major supply points in the U.S., were
approximately 20% lower than such prices during Fiscal 2011. Total revenues from fee income and other ancillary sales and
services in Fiscal 2012 were $66.5 million higher than Fiscal 2011 reflecting such revenues from Heritage Propane. Total cost of
sales increased $114.4 million principally reflecting incremental cost of sales from Heritage Propane offset in part by both the
previously mentioned lower retail and wholesale volumes sold by our legacy operations and the lower average propane commodity
prices.
Total margin increased $269.2 million in Fiscal 2012 reflecting higher total propane margin ($220.7 million) and higher
total margin from ancillary sales and services ($48.5 million). The increases principally reflect incremental margin from Heritage
Propane partially offset by lower total propane margin from our legacy operations resulting from the significantly warmer weather.
EBITDA (which includes the losses on extinguishments of debt) in Fiscal 2012 increased $27.6 million principally
reflecting the higher total margin ($269.2 million) and a $24.8 million lower loss from extinguishments of debt partially offset by
higher operating and administrative expenses ($268.1 million) primarily attributable to Heritage Propane. Fiscal 2012 operating
and administrative expenses include $46.2 million of acquisition and transition expenses associated with Heritage Propane.
Operating income (which excludes the losses on extinguishments of debt) decreased $72.3 million in Fiscal 2012 principally
reflecting the higher total margin ($269.2 million) more than offset by the increased operating and administrative costs ($268.1
million) and greater depreciation and amortization expense ($74.4 million) principally associated with Heritage Propane. Interest
expense was $79.1 million higher in Fiscal 2012 principally reflecting interest on long-term debt used to fund the Heritage Propane
acquisition.
Financial Condition and Liquidity
Capitalization and Liquidity
The Partnership’s debt outstanding at September 30, 2013, totaled $2,417.0 million (including current maturities of long-
term debt of $12.0 million and bank loans of $116.9 million). The Partnership’s debt outstanding at September 30, 2012, totaled
$2,378.0 million (including current maturities of long-term debt of $30.7 million and bank loans of $49.9 million). Total long-
term debt outstanding at September 30, 2013, including current maturities, comprises $2,250.8 million of AmeriGas Partners’
Senior Notes, $32.0 million of HOLP Senior Notes and $17.3 million of other long-term debt.
25
Table of Contents
In order to finance the cash portion of the acquisition of Heritage Propane, on January 12, 2012, AmeriGas Finance Corp.
and AmeriGas Finance LLC (the “Issuers”) issued $550 million principal amount of 6.75% Notes due May 2020 (the “6.75%
Notes”) and $1 billion principal amount of 7.00% Notes due May 2022 (the “7.00% Notes). The 6.75% Notes and the 7.00%
Notes are fully and unconditionally guaranteed on a senior unsecured basis by AmeriGas Partners. The 6.75% Notes and the 7.00%
Notes and the guarantees rank equal in right of payment with all of AmeriGas Partners’ existing Senior Notes. In connection with
the acquisition of Heritage Propane, AmeriGas Partners, AmeriGas Finance Corp., AmeriGas Finance LLC and UGI entered into
a Contingent Residual Support Agreement (“CRSA”) with ETP pursuant to which ETP will provide contingent, residual support
of $1.5 billion of debt (“Supported Debt” as defined in the CRSA).
AmeriGas OLP’s short-term borrowing needs are seasonal and are typically greatest during the fall and winter heating-season
months due to the need to fund higher levels of working capital. At September 30, 2013, AmeriGas OLP had a $525 million
unsecured credit agreement (“Credit Agreement”) which is scheduled to expire in October 2016.
At September 30, 2013 and 2012, there were $116.9 million and $49.9 million of borrowings outstanding under the Credit
Agreement, respectively. The average interest rates on the Credit Agreement borrowings at September 30, 2013 and 2012, were
2.69% and 2.72%, respectively. Borrowings under the Credit Agreement are classified as bank loans on the Consolidated Balance
Sheets. Issued and outstanding letters of credit under the Credit Agreement, which reduce the amounts available for borrowings,
totaled $53.7 million and $47.9 million at September 30, 2013 and 2012, respectively. The average daily and peak bank loan
borrowings outstanding under the Credit Agreement during Fiscal 2013 were $103.8 million and $200.5 million, respectively. The
average daily and peak bank loan borrowings outstanding under credit agreements during Fiscal 2012 were $95.3 million and
$239.5 million, respectively. At September 30, 2013, the Partnership’s available borrowing capacity under the Credit Agreement
was $354.4 million.
Based on existing cash balances, cash expected to be generated from operations, and borrowings available under the Credit
Agreement, the Partnership’s management believes that the Partnership will be able to meet its anticipated contractual commitments
and projected cash needs during Fiscal 2014. For a more detailed discussion of the Credit Agreement, see Note 6 to Consolidated
Financial Statements.
Partnership Distributions
The Partnership makes distributions to its partners approximately 45 days after the end of each fiscal quarter in a total amount
equal to its Available Cash as defined in the Fourth Amended and Restated Agreement of Limited Partnership, as amended, (the
“Partnership Agreement”) for such quarter. Available Cash generally means:
1. cash on hand at the end of such quarter,
2. plus all additional cash on hand as of the date of determination resulting from borrowings after the end of such quarter,
3. less the amount of cash reserves established by the General Partner in its reasonable discretion.
The General Partner may establish reserves for the proper conduct of the Partnership’s business and for distributions during
the next four quarters.
Distributions of Available Cash are made 98% to limited partners and 2% to the General Partner (giving effect to the 1.01%
interest of the General Partner in distributions of Available Cash from AmeriGas OLP to AmeriGas Partners) until Available Cash
exceeds the Minimum Quarterly Distribution of $0.55 and the First Target Distribution of $0.055 per Common Unit (or a total of
$0.605 per Common Unit). When Available Cash exceeds $0.605 per Common Unit in any quarter, the General Partner will receive
a greater percentage of the total Partnership distribution but only with respect to the amount by which the distribution per Common
Unit to limited partners exceeds $0.605.
Quarterly distributions of Available Cash per limited partner unit paid during Fiscal 2013, Fiscal 2012 and Fiscal 2011 were
as follows:
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
2013
$0.80
0.80
0.84
0.84
Fiscal
2012
$0.7400
0.7625
0.8000
0.8000
2011
$0.705
0.705
0.740
0.740
26
Table of Contents
During Fiscal 2013, Fiscal 2012 and Fiscal 2011, the Partnership made quarterly distributions to Common Unitholders in
excess of $0.605 per limited partner unit. As a result, the General Partner received a greater percentage of the total Partnership
distribution than its aggregate 2% general partner interest in AmeriGas OLP and AmeriGas Partners. The total amount of
distributions received by the General Partner with respect to its aggregate 2% general partner ownership interests totaled $27.4
million in Fiscal 2013, $19.7 million in Fiscal 2012 and $9.0 million in Fiscal 2011. Included in these amounts are incentive
distributions received by the General Partner during Fiscal 2013, Fiscal 2012 and Fiscal 2011 of $19.3 million, $13.0 million and
$5.0 million, respectively.
Cash Flows
Operating activities. Due to the seasonal nature of the Partnership’s business, cash flows from operating activities are generally
greatest during the second and third fiscal quarters when customers pay for propane consumed during the heating season months.
Conversely, operating cash flows are generally at their lowest levels during the first and fourth fiscal quarters when the Partnership’s
investment in working capital, principally accounts receivable and inventories, is generally greatest. The Partnership may use its
credit agreements to satisfy its seasonal operating cash flow needs.
Cash flow from operating activities was $355.6 million in Fiscal 2013, $344.4 million in Fiscal 2012 and $188.9 million in
Fiscal 2011. Cash flow from operating activities before changes in operating working capital was $439.3 million in Fiscal 2013,
$211.3 million in Fiscal 2012 and $283.7 million in Fiscal 2011. Cash provided by (used to) fund changes in operating working
capital totaled $(83.7) million in Fiscal 2013, $133.2 million in Fiscal 2012 and $(94.9) million in Fiscal 2011. Cash flow from
changes in operating working capital primarily reflects the impact of propane prices on cash receipts from customers as reflected
in changes in accounts receivable and cash paid for propane purchased as reflected in changes in inventories and accounts payable.
The greater cash flow from operating activities before changes in operating working capital in Fiscal 2013 largely reflects the full
year effects of the operations of Heritage Propane and the improved operating results. The greater cash provided by changes in
working capital in Fiscal 2012 largely reflects the timing of the acquisition of Heritage Propane on cash receipts from Heritage
Propane customers and the effects of lower volumes sold on changes in accounts receivable from our legacy operations.
Investing activities. Investing activity cash flow principally comprises expenditures for property, plant and equipment, cash paid
for acquisitions of businesses and proceeds from sales of assets. Cash flow used in investing activities was $108.9 million in Fiscal
2013, $1,520.1 million in Fiscal 2012 and $106.1 million in Fiscal 2011. Fiscal 2012 cash flow used in investing activities reflects
cash used for the acquisition of Heritage Propane. We spent $111.1 million for property, plant and equipment (comprising
$51.5 million of maintenance capital expenditures, $20.4 million of capital expenditures associated with Heritage Propane
integration activities and $39.2 million of growth capital expenditures) in Fiscal 2013; $103.1 million for property, plant and
equipment (comprising $45.0 million of maintenance capital expenditures, $17.6 million of capital expenditures associated with
Heritage Propane integration activities and $40.5 million of growth capital expenditures) in Fiscal 2012; and $77.2 million for
property, plant and equipment (comprising $38.2 million of maintenance capital expenditures and $39.0 million of growth capital
expenditures) in Fiscal 2011. Cash paid for acquisitions in Fiscal 2012 principally reflects the January 2012 acquisition of Heritage
Propane.
Financing activities. Financing activity cash flow principally comprises distributions on AmeriGas Partners Common Units,
issuances and repayments of long-term debt, bank loan borrowings, and issuances of AmeriGas Partners Common Units. Cash
flow provided (used) by financing activities was $(294.2) million in Fiscal 2013, $1,227.1 million in Fiscal 2012 and $(81.8)
million in Fiscal 2011. The greater distributions in Fiscal 2013 primarily reflects the higher quarterly per-unit distribution rates
and the full-year impact of a greater number of Common Units outstanding. The greater distributions in Fiscal 2012 compared
to Fiscal 2011 reflects a greater number of Common Units outstanding, due to the acquisition of Heritage Propane and the public
Common Unit offering, and higher quarterly per-unit distribution rates in Fiscal 2012.
In order to finance the cash portion of the acquisition of Heritage Propane, on January 12, 2012, AmeriGas Partners issued
$550 million principal amount of the 6.75% Notes due 2020 and $1.0 billion principal amount of 7.00% Notes due 2022. During
March 2012, AmeriGas Partners sold 7 million Common Units in an underwritten public offering and used a portion of the net
proceeds to repay $200 million of outstanding 6.50% Senior Notes due 2021, to reduce bank loan borrowings and for general
corporate purposes. During June 2012, AmeriGas Partners repurchased an additional $19.2 million of its 7.00% Notes.
Capital Expenditures
In the following table, we present capital expenditures (which exclude acquisitions) for Fiscal 2013, Fiscal 2012 and Fiscal
2011. We also provide amounts we expect to spend in Fiscal 2014. We expect to finance Fiscal 2014 capital expenditures principally
from cash generated by operations and borrowings under our Credit Agreement.
27
Table of Contents
Year Ended September 30,
(millions of dollars)
2014
(estimate)
2013
2012
2011
Property, plant and equipment (a)
$
108.4
$
111.1
$
103.1
$
77.2
(a) Fiscal 2013 and 2012 capital expenditures include $20.4 million and $17.6 million, respectively, of transition capital expenditures relating
to Heritage Propane integration activities.
Contractual Cash Obligations and Commitments
The Partnership has certain contractual cash obligations that extend beyond Fiscal 2013 including scheduled repayments of
long-term debt, interest on long-term fixed-rate debt, lease obligations, capital expenditures and propane supply contracts. The
following table presents significant contractual cash obligations as of September 30, 2013:
(millions of dollars)
Long-term debt (a)
Interest on long-term fixed-rate debt (b)
Operating leases
Propane supply contracts
Other purchase obligations (c)
Total
$
$
Payments Due by Period
Total
Fiscal 2014
Fiscal 2015 -
2016
Fiscal 2017 -
2018
Fiscal 2019
and
thereafter
2,296.4
1,196.4
230.2
296.2
28.6
4,047.8
$
$
12.0
154.0
51.0
176.9
28.6
422.5
$
$
16.3
306.6
75.1
119.3
—
517.3
$
$
9.2
305.2
48.3
—
—
362.7
$
$
2,258.9
430.6
55.8
—
—
2,745.3
(a)
(b)
(c)
Based upon stated maturity dates.
Based upon stated interest rates.
Includes material capital expenditure obligations.
The components of other noncurrent liabilities included in our Consolidated Balance Sheet at September 30, 2013, principally
consist of property and casualty liabilities and, to a much lesser extent, liabilities associated with executive compensation plans
and employee post-employment benefit programs. These liabilities are not included in the table of Contractual Cash Obligations
and Commitments because they are estimates of future payments and not contractually fixed as to timing or amount. Certain of
our operating lease arrangements, primarily vehicle leases with remaining lease terms of one to ten years, have residual value
guarantees. Although such fair values at the end of the leases have historically exceeded the guaranteed amount, at September 30,
2013, the maximum potential amount of future payments under lease guarantees, assuming the leased equipment was deemed
worthless at the end of the lease term, was approximately $15.5 million.
Related Party Transactions
Pursuant to the Partnership Agreement, 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, which totaled $540.3 million in Fiscal 2013, $374.9
million in Fiscal 2012, and $363.4 million in Fiscal 2011, include employee compensation and benefit expenses of employees of
the General Partner and general and administrative expenses.
UGI provides certain financial and administrative services to the General Partner. UGI bills the General Partner monthly
for all direct and indirect corporate expenses incurred in connection with providing these services and the General Partner is
reimbursed by the Partnership for these expenses. The allocation of indirect UGI corporate expenses to the Partnership utilizes a
weighted, three-component formula based on the relative percentage of the Partnership’s revenues, operating expenses and net
assets employed to the total of such items for all UGI operating subsidiaries for which general and administrative services are
provided. The General Partner believes that this allocation method is reasonable and equitable to the Partnership. Such corporate
expenses totaled $18.6 million in Fiscal 2013, $10.1 million in Fiscal 2012 and $10.8 million in Fiscal 2011. In addition, UGI and
certain of its subsidiaries provide office space, stop loss medical coverage and automobile liability insurance to the Partnership.
The costs related to these items totaled $4.5 million in Fiscal 2013, $3.8 million in Fiscal 2012 and $3.2 million in Fiscal 2011.
From time to time, AmeriGas OLP purchases propane on an as needed basis from UGI Energy Services, Inc. (“Energy
Services”). The price of the purchases are generally based on market price at the time of purchase. Purchases of propane by
28
Table of Contents
AmeriGas OLP from Energy Services totaled $2.0 million, $0.4 million and $4.1 million during Fiscal 2013, Fiscal 2012 and
Fiscal 2011, respectively.
In addition, the Partnership sells propane to affiliates of UGI. Such amounts were not material in Fiscal 2013, Fiscal 2012
or Fiscal 2011.
Off-Balance-Sheet Arrangements
We do not have any off-balance-sheet arrangements that are expected to have an effect on the Partnership’s financial condition,
change in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Market Risk Disclosures
Our primary financial market risks include commodity prices for propane and interest rates on borrowings. 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.
Commodity Price Risk
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 Partnership generally passes on increases in such costs to customers. The Partnership
may not, however, always be able to pass through product cost increases fully or on a timely basis, 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. These derivative financial instruments contain
collateral provisions. The fair value of unsettled commodity price risk sensitive instruments at September 30, 2013 and 2012, were
gains (losses) of $18.1 million and $(40.5) million, respectively. A hypothetical 10% adverse change in the market price of propane
would result in a decrease in such fair values of $24.2 million and $20.7 million, respectively.
Because the Partnership’s propane derivative instruments generally qualify as hedges under GAAP, we expect that changes
in the fair value of derivative instruments used to manage propane market price risk would be substantially offset by gains or
losses on the associated anticipated transactions.
Interest Rate Risk
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 their 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 the Credit Agreement. This agreement has interest rates that are generally
indexed to short-term market interest rates. At September 30, 2013 and 2012, there were $116.9 million and $49.9 million,
respectively, of borrowings outstanding under the Credit Agreement. Based upon the average level of borrowings outstanding
under the Credit Agreement during Fiscal 2013 and 2012, an increase in short-term interest rates of 100 basis points (1%) would
have increased annual interest expense by approximately $1.0 million for each year.
The remainder of our debt outstanding is subject to fixed rates of interest. A 100 basis point increase in market interest rates
would result in decreases in the fair value of this fixed-rate debt of $141.3 million and $122.1 million at September 30, 2013 and
2012, respectively. A 100 basis point decrease in market interest rates would result in increases in the fair market value of this
debt of $69.3 million and $93.6 million at September 30, 2013 and 2012, respectively.
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 forecasted issuances of fixed-rate debt, from time to time, we may enter into interest rate protection
agreements. There were no settled or unsettled amounts relating to interest rate protection agreements at September 30, 2013 or
2012.
29
Table of Contents
Derivative Financial Instruments Credit Risk
The Partnership is exposed to credit loss in the event of nonperformance by counterparties to derivative financial and
commodity instruments. Our counterparties principally consist of major energy companies and major U.S. financial institutions.
We maintain credit policies with regard to our counterparties that we believe reduce overall credit risk. These policies include
evaluating and monitoring our counterparties’ financial condition, including their credit ratings, and entering into agreements with
counterparties that govern credit limits. Certain of these agreements call for the posting of collateral by the counterparty or by the
Partnership in the form of letters of credit, parental guarantees or cash.
Critical Accounting Policies and Estimates
Accounting policies and estimates discussed in this section are those that we consider to be the most critical to an understanding
of our financial statements because they involve significant judgments and uncertainties. Changes in these policies and estimates
could have a material effect on the financial statements. The application of these accounting policies and estimates necessarily
requires management’s most subjective or complex judgments regarding estimates and projected outcomes of future events which
could have a material impact on the financial statements. Management has reviewed these critical accounting policies, and the
estimates and assumptions associated with them, with the General Partner’s Audit Committee. In addition, management has
reviewed the following disclosures regarding the application of these critical accounting policies and estimates with the Audit
Committee. Also, see Note 2 to Consolidated Financial Statements which discusses the significant accounting policies that we
have selected from acceptable alternatives.
Litigation Accruals and Environmental Liabilities. The Partnership is involved in litigation regarding pending claims and legal
actions that arise in the normal course of its business and may own sites at which hazardous substances may be present. In accordance
with GAAP, the Partnership establishes reserves for pending claims and legal actions or environmental remediation liabilities
when it is probable that a liability exists and the amount or range of amounts can be reasonably estimated. Reasonable estimates
involve management judgments based on a broad range of information and prior experience. These judgments are reviewed
quarterly as more information is received and the amounts reserved are updated as necessary. Such estimated reserves may differ
materially from the actual liability and such reserves may change materially as more information becomes available and estimated
reserves are adjusted.
Depreciation and Amortization of Long-Lived assets. We compute depreciation on property, plant and equipment on a straight-
line basis over estimated useful lives generally ranging from 2 to 40 years. We also use amortization methods and determine asset
values of intangible assets subject to amortization using reasonable assumptions and projections. Changes in the estimated useful
lives of property, plant and equipment and changes in intangible asset amortization methods or values could have a material effect
on our results of operations. As of September 30, 2013, our net property, plant and equipment totaled $1,437.5 million and we
recorded depreciation expense of $159.3 million during Fiscal 2013. As of September 30, 2013, our net intangible assets subject
to amortization totaled $411.8 million and we recorded amortization expense on intangible assets subject to amortization of $38.8
million during Fiscal 2013.
Purchase Price Allocations. From time to time, we enter into material business combinations. In accordance with accounting
guidance associated with business combinations, the purchase price is allocated to the various assets acquired and liabilities
assumed at their estimated fair value. Fair values of assets acquired and liabilities assumed are based upon available information
and may involve us engaging an independent third party to perform an appraisal. Estimating fair values can be complex and subject
to significant business judgment. Estimates most commonly impact property, plant and equipment and intangible assets, including
those with indefinite lives. Generally, we have, if necessary, up to one year from the acquisition date to finalize the purchase price
allocation.
Recently Issued Accounting Pronouncements
See Note 3 to Consolidated Financial Statements for a discussion of recently issued accounting guidance.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
“Quantitative and Qualitative Disclosures About Market Risk” are contained in Management’s Discussion and Analysis
of Financial Condition and Results of Operations under the caption “Market Risk Disclosures” and are incorporated herein by
reference.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
30
Table of Contents
Management’s Annual Report on Internal Control Over Financial Reporting and the financial statements and financial
statement schedules referred to in the Index contained on page F-2 of this Report are incorporated herein by reference.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A.
CONTROLS AND PROCEDURES
(a)
(b)
(c)
The General Partner’s disclosure controls and procedures are designed to provide reasonable assurance that the information
required to be disclosed by the Partnership in reports filed under the Securities Exchange Act of 1934, as amended, is
(i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and
(ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding required disclosure. The General Partner’s management, with
the participation of the General Partner’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness
of the Partnership’s disclosure controls and procedures as of the end of the period covered by this Report. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Partnership’s disclosure controls
and procedures, as of the end of the period covered by this Report, were effective at the reasonable assurance level.
For “Management’s Annual Report on Internal Control Over Financial Reporting” see Item 8 of this Report (which
information is incorporated herein by reference).
During the most recent fiscal quarter, no change in the Partnership’s internal control over financial reporting occurred
that has materially affected, or is reasonably likely to materially affect, the Partnership’s internal control over financial
reporting.
ITEM 9B.
OTHER INFORMATION
None.
PART III:
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
We do not directly employ any persons responsible for managing or operating the Partnership. The General Partner and
UGI provide such services and are reimbursed for direct and indirect costs and expenses including all compensation and benefit
costs. See “Certain Relationships and Related Transactions, and Director Independence - Related Person Transactions” and Note
13 to Consolidated Financial Statements.
The Board of Directors of the General Partner has an Audit Committee, Compensation/Pension Committee, Corporate
Governance Committee and Executive Committee. The functions of and other information about these committees is summarized
below.
The Audit Committee has the authority to (i) make determinations or review determinations made by management in
transactions that require special approval by the Audit Committee under the terms of the Partnership Agreement and (ii) at the
request of the General Partner, review specific matters as to which the General Partner believes there may be a conflict of interest,
in order to determine if the resolution of such conflict is fair and reasonable to the Partnership. In addition, the Audit Committee
acts on behalf of the Board of Directors in fulfilling its responsibility to:
•
oversee the accounting and financial reporting processes and audits of the financial statements of the Partnership;
• monitor the independence of the Partnership’s independent registered public accounting firm and the
performance of the independent registered public accountants and internal audit staff;
•
•
oversee the adequacy of the Partnership’s controls relative to financial and business risk;
provide a means for open communication among the independent registered public accountants, management,
internal audit staff and the Board of Directors; and
31
Table of Contents
•
oversee compliance with applicable legal and regulatory requirements.
The Audit Committee has sole authority to appoint, retain, fix the compensation of and oversee the work of the Partnership’s
independent registered public accounting firm. A copy of the current charter of the Audit Committee is posted on the Partnership’s
website, www.amerigas.com; see “Investor Relations - Corporate Governance.”
The Audit Committee members are Messrs. Marrazzo (Chairman), Ford, Stoeckel and Turner. Each member of the Audit
Committee is “independent” as defined by the New York Stock Exchange listing standards. In addition, the Board of Directors
of the General Partner has determined that all members of the Audit Committee qualify as “audit committee financial experts”
within the meaning of the Securities and Exchange Commission regulations.
The Compensation/Pension Committee members are Messrs. Schlanger (Chairman) and Marrazzo and Mrs. Pol. The
Committee establishes executive compensation policies and programs, confirms that executive compensation plans do not
encourage unnecessary risk-taking; recommends to the independent members of the Board of Directors base salary, annual bonus
target levels and long-term compensation awards for executives, approves corporate goals and objectives relating to the Chief
Executive Officer’s compensation, assists the Board in establishing a succession plan for the Chief Executive Officer, and reviews
the General Partner’s plans for senior management succession and management development. Each member of the Compensation/
Pension Committee is independent as defined by the New York Stock Exchange listing standards.
The Executive Committee members are Messrs. Schlanger (Chairman), Greenberg, Marrazzo and Walsh. The Committee
has the full authority of the Board to act on matters between meetings of the Board, with specified limitations relating to major
transactions.
The Corporate Governance Committee members are Messrs. Stoeckel (Chairman), Ford and Schlanger and Mrs. Pol.
The Committee identifies nominees and reviews qualifications of persons eligible to stand for election as Directors and makes
recommendations to the Board on these matters, advises the Board with respect to significant developments in corporate governance
matters, reviews and assesses the performance of the Board and each Committee, and reviews and makes recommendations to the
Board of Directors regarding director compensation. Each member of the Corporate Governance Committee is independent as
defined by the New York Stock Exchange listing standards.
When considering whether the Board’s Directors and nominees have the experience, qualifications, attributes and skills,
taken as a whole, to satisfy the oversight responsibilities of the Board, the Corporate Governance Committee and the Board
considered primarily the information about the backgrounds and experiences of the Directors contained under the section of this
Report entitled “Directors, Executive Officers and Corporate Governance - Directors and Executive Officers of the General
Partner.” In particular, with regard to Mr. Greenberg, the Board considered his executive leadership and vision demonstrated in
leading the Partnership’s successful growth for more than 18 years, and his extensive industry knowledge and experience. With
regard to Mr. Sheridan, the Board considered his senior management experience with the General Partner and another global
company. With regard to Mr. Walsh, the Board considered his appointment as Chief Executive Officer of UGI Corporation following
Mr. Greenberg’s retirement, his experience managing UGI Corporation as Chief Operating Officer, his prior senior management
experience with a global public company, and his broad industry knowledge and insight. With regard to Mr. Ford, the Board
considered his extensive financial, audit, accounting, and retail experience as a partner of a large public accounting firm and his
public company directorship and audit committee experience. With regard to Mr. Marrazzo, the Board considered his extensive
experience as Chief Executive Officer of both non-profit and public companies, his city government leadership experience, and
his public and private company directorship and committee experience. With regard to Mrs. Pol, the Board considered her significant
experience as a senior executive managing high technology, traditional manufacturing and services businesses, including experience
in human resource management. With regard to Mr. Schlanger, the Board considered his senior management experience as Chief
Executive Officer, Chief Operating Officer, and Chief Financial Officer of a large public company, and his experience serving as
chairman, director and committee member of the boards of directors of large public and private international companies, including
his experience serving on boards of directors of public companies as a result of being nominated by a major shareholder. With
regard to Mr. Stoeckel, the Board considered his management experience as Chief Executive Officer of a large private company
sharing similarities with the Partnership, such as a similar workforce and a large number of geographically dispersed retail locations,
and his private company directorship experience. With regard to Mr. Turner, the Board considered Mr. Turner’s service on other
boards of directors of public companies, including energy companies.
The General Partner has adopted a Code of Ethics for the Chief Executive Officer and Senior Financial Officers that
applies to the General Partner’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. The Code of Ethics
is included as an exhibit to this Report and is posted on the Partnership’s website, www.amerigas.com; see “Investor Relations -
Corporate Governance.” Copies of all corporate governance documents posted on the Partnership’s website are available free of
charge by writing to Treasurer, AmeriGas Propane, Inc., P. O. Box 965, Valley Forge, PA 19482.
32
Table of Contents
Directors and Executive Officers of the General Partner
The following table sets forth certain information with respect to the directors and executive officers of the General
Partner. AmeriGas, Inc., as the sole shareholder of the General Partner, elects directors annually. AmeriGas, Inc. is a wholly owned
subsidiary of UGI. Executive officers are elected for one-year terms. There are no family relationships between any of the directors
or any of the executive officers or between any of the executive officers and any of the directors.
Name
Jerry E. Sheridan
Lon R. Greenberg
John L. Walsh
Brian R. Ford
William J. Marrazzo
Anne Pol
Marvin O. Schlanger
Howard B. Stoeckel
K. Richard Turner
Robert J. Cane
Troy E. Fee
Hugh J. Gallagher
R. Paul Grady
Stephen Lee
David L. Lugar
Andrew J. Peyton
Kathy L. Prigmore
Kevin Rumbelow
Steven A. Samuel
Age
Position with the General Partner
48 President, Chief Executive Officer and Director
63 Chairman and Director
58 Vice Chairman and Director
64 Director
64 Director
66 Director
65 Director
68 Director
55 Director
48 Controller and Chief Accounting Officer
45 Vice President - Human Resources
50 Vice President - Finance and Chief Financial Officer
60 Vice President and Chief Operating Officer
46 Vice President - Strategic Initiatives and Marketing
56 Vice President - Supply and Logistics
45 Vice President - Corporate Development
50 Vice President - Operations Support and Customer Advocacy
53 Vice President - Supply Chain
53 Vice President - Law and General Counsel
Mr. Sheridan is President, Chief Executive Officer and a Director of the General Partner (since March 2012). Previously,
he served as Vice President - Operations and Chief Operating Officer of the General Partner (2011 to 2012) and as Vice President
- Finance and Chief Financial Officer (2005 to 2011). Mr. Sheridan served as President and Chief Executive Officer (2003 to 2005)
of Potters Industries, Inc., a global manufacturer of engineered glass materials and a wholly-owned subsidiary of PQ Corporation,
a global producer of inorganic specialty chemicals. In addition, Mr. Sheridan served as Executive Vice President (2003 to 2005)
and as Vice President and Chief Financial Officer (1999 to 2003) of PQ Corporation. Mr. Sheridan also serves on the Management
Board of CP Kelco (since 2013), a privately held company that provides innovative products and solutions through the use of
nature-based chemistry.
Mr. Greenberg is a Director (since 1994) and Non-Executive Chairman of the General Partner. He previously served as
Chief Executive Officer (since 1995), President (1994 to 2005) and Senior Vice President - Legal and Corporate Development of
UGI Corporation (1989 to 1994). Mr. Greenberg also serves as a Director and Non-Executive Chairman UGI Corporation and
UGI Utilities, Inc. and as a Director of Aqua America, Inc., Ameriprise Financial, Inc. and AmerisourceBergen Corporation.
Mr. Walsh is a director and Vice Chairman of the General Partner (since 2005). He also serves as a director and President
(since 2005) and Chief Executive Officer (since 2013) of UGI Corporation. In addition, Mr. Walsh is a director and Vice Chairman
of UGI Utilities, Inc. (since 2005). He served as Chief Operating Officer (2005 to 2013) of UGI Corporation and as President
and Chief Executive Officer (2009 to 2011) of UGI Utilities, Inc. Previously, Mr. Walsh was the Chief Executive of the Industrial
and Special Products division of the BOC Group plc, an industrial gases company, a position he assumed in 2001. He was also
an Executive Director of BOC (2001 to 2005). He joined BOC in 1986 as Vice President-Special Gases and held various senior
management positions in BOC, including President of Process Gas Solutions, North America (2000 to 2001) and President of
BOC Process Plants (1996 to 2000).
Mr. Ford served as the Chief Executive Officer of Washington Philadelphia Partners, LP, a real estate investment company,
from 2008 to 2010. Prior to that, Mr. Ford was a partner of Ernst & Young LLP, a multinational professional services firm offering
assurance, tax, consulting, and advisory services, where he served in various roles of increasing responsibility from 1971 until his
33
Table of Contents
retirement in 2008. Mr. Ford currently serves as a member of the Board of Directors, as Chairman of the Audit Committee, and
as a member of the Governance and Nominating Committee of GulfMark Offshore, Inc., a public, global provider of marine
transportation. Mr. Ford also serves as a member of the Board of Directors and as a member of the Audit, Compensation, and
Corporate Governance, Conflicts and Nominating Committees of NRG Yield, Inc., a public, wholly owned subsidiary of NRG
Energy, Inc., that invests in contracted renewable and conventional generation and thermal infrastructure assets. Mr. Ford also
serves on the Board of Trustees of Drexel University, the Board of Directors of the Drexel College of Medicine and the Advisory
Boards of Rutgers School of Business and the Drexel Law School.
Mr. Marrazzo was elected a director of the General Partner on April 23, 2001. He is Chief Executive Officer and President
of WHYY, Inc., a public television and radio company in the nation’s fourth largest market (since 1997). Previously, he was Chief
Executive Officer and President of Roy F. Weston, Inc. (1988 to 1997); Water Commissioner for the Philadelphia Water Department
(1971 to 1988) and Managing Director for the City of Philadelphia (1983 to 1984). He also serves as a director of American Water
Works Company, Inc.
Mrs. Pol was elected a director of the General Partner on January 23, 2013. Mrs. Pol retired in 2005 as President and
Chief Operating Officer of Trex Enterprises Corporation, a high technology research and development company (2001 to 2005).
She previously served as Senior Vice President (1998 to 2001) and Vice President (1996 to 1998) of Thermo Electron Corporation,
an environmental monitoring and analytical instruments company and a major producer of recycling equipment, biomedical
products and alternative energy systems. Mrs. Pol also served as President of Pitney Bowes Shipping and Weighing Systems
Division, a business unit of Pitney Bowes Inc., a company that sells mailing and related business equipment (1993 to 1996); Vice
President of New Product Programs in the Mailing Systems Division of Pitney Bowes Inc. (1991 to 1993); and Vice President of
Manufacturing Operations in the Mailing Systems Division of Pitney Bowes Inc. (1990 to 1991). Mrs. Pol also serves as a Director
of UGI Corporation and UGI Utilities, Inc.
Mr. Schlanger was elected a director of the General Partner on January 26, 2009. Mr. Schlanger is a Principal in the firm
of Cherry Hill Chemical Investments, LLC, a management services and capital firm for chemical and allied industries (since 1998).
Mr. Schlanger also serves as Chairman of the Board (since 2009) of CEVA Holdings LLC, an international logistics supplier, and
as Chairman of the Supervisory Board of LyondellBasell Industries NV (since 2010). He was previously Chairman, Chief Executive
Officer and President of Resolution Performance Products, LLC (2000 to 2005), Chairman of Covalence Specialty Materials Corp.
(2006 to 2007), Chairman of Resolution Specialty Materials, LLC (2004 to 2005), Vice Chairman of Hexion Specialty Materials,
LLC (2005 to 2010), and Chief Executive Officer (2012 to 2013) of CEVA Holdings LLC. Mr. Schlanger also serves as a Director
of UGI Utilities, Inc., Taminco Global Chemical Holdings, LLP and Momentive Specialty Chemicals Holdings, LLC.
Mr. Stoeckel was elected a Director of the General Partner on September 30, 2006. Mr. Stoeckel serves as Vice Chairman
of the Board of Directors of Wawa, Inc., a multi-state retailer of food products and gasoline. He joined Wawa, Inc. in 1987 as
Vice President - Human Resources and was promoted to various positions, including Chief Executive Officer, President, Chief
Operating Officer, Executive Vice President, Chief Retail Officer, and Vice President - Marketing. He also serves as a trustee for
Rider University. As previously announced, Mr. Stoeckel will resign from the Board of the General Partner effective December
31, 2013.
Mr. Turner was elected a director of the General Partner on March 21, 2012. Mr. Turner is currently active with several
private equity groups, after having retired from the Stephens Group, LLC (a private, family-owned investment firm) in 2011. He
first became a private equity principal in 1990. He also serves as a board member for the general partner of Energy Transfer
Equity, L.P. (since 2002), North American Energy Partners Inc. (since 2003) and several private companies. He also has served
on the Board of Directors of the general partner of Energy Transfer Partners, L.P. (“ETP”) (2004 to 2011). ETP designated Mr.
Turner as its nominee to serve on the Board of Directors of the General Partner pursuant to its rights under the Contingent Residual
Support Agreement by and among AmeriGas Partners, L.P., AmeriGas Finance LLC, AmeriGas Finance Corp., UGI Corporation,
and ETP dated as of January 12, 2012.
Mr. Cane is Controller and Chief Accounting Officer of the General Partner (since February 2013). Mr. Cane joined the
General Partner in 2004 as Director of Accounting and Financial Control and has held various positions at the General Partner,
including Director of Field Service Initiative (September 2012 to February 2013), Director of Integration Management Office
(2011 to 2012), and Director of Corporate Development (2007 to 2011). Mr. Cane also served as Corporate Controller at ImageMax,
Inc., a provider of outsourced document management solutions, a position in which he served from 2002 to 2004.
Mr. Fee is Vice President - Human Resources of the General Partner (since May 2013). Mr. Fee served as Senior Vice
President - Human Resources (2007 to 2013) at PEP BOYS, a retail and service chain serving the automotive aftermarket. Prior
to joining PEP BOYS, Mr. Fee served as Senior Vice President, Human Resources Shared Services of TBC Corporation, a marketer
of tires for the automotive replacement market (2006 to 2007) and as Vice President - Human Resources TBC Retail Group (2003
34
Table of Contents
to 2006). Mr. Fee also served in various positions at Sears, Roebuck & Company, a nationwide retail company, from 1987 to
2003, including as Director Human Resources - Sears Automotive Group (2002 to 2003), Northwest Regional Human Resources
Director - Sears Stores (2001 to 2002), Labor Relations Manager - Sears (2000 to 2001), and Regional Human Resources Manager
- Sears Automotive (1999 to 2000). Mr. Fee held various positions of increasing responsibility at Sears, Roebuck & Company
from 1987 to 1999.
Mr. Gallagher is Vice President - Finance and Chief Financial Officer of the General Partner (since April 2013). He
also serves as Treasurer of the General Partner and UGI Corporation. Previously, Mr. Gallagher served as UGI Corporation’s
Director - Treasury Services and Investor Relations (2009 to 2011) and Director - Treasury Services (2007 to 2009). He has
also served as the General Partner’s Director - Corporate Development (2004 to 2007), Director of Financial Planning, (2000 to
2004), Financial Manager - Operations (1999 to 2000), Manager of Financial Reporting (1996 to 1999), and Team Leader -
Financial Reporting (1995 to 1996). Mr. Gallagher joined UGI Corporation in 1990, serving in various finance and accounting
roles of increasing responsibility.
Mr. Grady is Vice President and Chief Operating Officer of the General Partner (since March of 2012), having served as
Vice President - Operations of the General Partner (January 2012 to March 2012). Previously, he served as President (2011 to
2012) and Senior Vice President and Chief Operating Officer (2006 to 2011) of Heritage Operating, L.P. Mr. Grady served as
Senior Vice President and Chief Operating Officer (2000 to 2003), Senior Vice President - Operations (1999 to 2000) and Vice
President - Sales and Operations (1995 to 1999) of the General Partner. Mr. Grady previously served as Director of Corporate
Development of UGI Corporation (1990 to 1995).
Mr. Lee is Vice President - Strategic Initiatives and Marketing of the General Partner (since March 2013). He previously
served the General Partner as Operating Vice President for the Mid-Atlantic region (2012 to March 2013) and General Manager
for the Southeast Region (2011 to 2012). Prior to joining the General Partner, Mr. Lee served as Vice President - Sales at Cannon
Equipment, a designer and manufacturer of carts, cages, racks, and automation equipment (2010 to 2011), and Global General
Manager - Personal Care at Dow Chemical Company/Rohm and Haas Company, a manufacturer of specialty materials.
Mr. Lugar is Vice President - Supply and Logistics of the General Partner (since 2000). Previously, he served as Director
- NGL Marketing for Conoco, Inc., where he spent 20 years in various positions of increasing responsibility in propane marketing,
operations, and supply.
Ms. Prigmore is Vice President - Operations Support and Customer Advocacy of the General Partner (since 2012). She
previously served as General Manager of the Northeast Region (2006 to 2008 and 2010 to March 2012) and as a member of the
team leading the development and roll-out of the General Partner’s proprietary revenue system (2008 to 2010). Prior to 2006,
Ms. Prigmore held various positions of increasing responsibility with the General Partner, including Vice President and General
Manager of the former Mountain Central Region and Group Director, Process Improvement and Training since joining the General
Partner in 1983.
Mr. Peyton is Vice President - Corporate Development (since 2012). Previously, he served the General Partner as Vice
President - Sales and Marketing (2010 to 2012), as General Manager, Southern Region and Northeast Region (2009 to 2010) and
as General Manager, Southern Region (2006 to 2009). Prior to joining the General Partner, Mr. Peyton served in a variety of
positions, including national accounts and product management, during his more than ten year tenure at Ryerson, Inc.
Mr. Rumbelow is Vice President - Supply Chain of the General Partner (since March 2012). Previously, Mr. Rumbelow
served as Vice President - Operations Support of the General Partner (2006 to 2012). Prior to joining the General Partner, Mr.
Rumbelow spent over 20 years at Rohm and Haas Company in Philadelphia, Pennsylvania and the United Kingdom, in positions
of increasing responsibility, including Corporate Logistics/Supply Chain Director (2000 to 2006), North American Region Logistics
Manager (1998 to 2000), and Inter Regional Logistics Manager (1996 to 1998).
Mr. Samuel is Vice President - Law and General Counsel of the General Partner (since 2011). Previously, Mr. Samuel
served the General Partner as Vice President - Law and Associate General Counsel (2008 to 2011); Group Counsel - Propane
(2004 to 2007); Senior Counsel (1999 to 2004) and Counsel (1996 to 1999). He joined UGI Corporation as Associate Counsel in
1993.
35
Table of Contents
Director Independence
The Board of Directors of the General Partner has determined that, other than Messrs. Sheridan, Greenberg and Walsh,
no director has a material relationship with the Partnership and each is an “independent director” as defined under the rules of the
New York Stock Exchange. The Board of Directors has established the following guidelines to assist it in determining director
independence:
(i) service by a director on the Board of Directors of UGI Corporation and its subsidiaries in and of itself will not be
considered to result in a material relationship between such director and the Partnership;
(ii) if a director serves as an officer, director or trustee of a non-profit organization, charitable contributions to that
organization by the Partnership and its affiliates in an amount up to $250,000 per year will not be considered to result
in a material relationship between such director and the Partnership;
(iii) service by a director or his immediate family member as a non-management director of a company that does business
with the Partnership or an affiliate of the Partnership will not be considered to result in a material relationship between
such director and the Partnership where the business is done in the ordinary course of the Partnership’s or affiliate’s
business and on substantially the same terms and conditions as would be available to similarly situated customers; and
(iv) service by a director or his immediate family member as an executive officer or employee of a company that makes
payments to, or receives payments from, the Partnership or its affiliates for property or services in an amount which, in
any of the last three fiscal years, does not exceed the greater of $1 million or 2% of such other company’s consolidated
gross revenues, will not be considered to result in a material relationship between such director and the Partnership.
In making its determination of independence, the Board of Directors considered (i) charitable contributions and
underwriting support given by the Partnership and its affiliates in prior years to WHYY, of which Mr. Marrazzo is the Chief
Executive Officer, and (ii) Mr. Schlanger’s service on the Board of CEVA Logistics, a customer of AmeriGas Propane, L.P. All
such transactions were in compliance with the categorical standards set by the Board of Directors for determining director
independence.
Non-management Directors
Non-management directors meet at regularly scheduled executive sessions without management present. These sessions
are led by Mr. Schlanger, who currently holds the position of Presiding Director.
Communications with the Board of Directors and Non-management Directors
Interested persons wishing to communicate directly with the Board of Directors or the non-management directors as a
group may do so by sending written communications addressed to them c/o AmeriGas Propane, Inc., P.O. Box 965, Valley Forge,
PA 19482. Any communications directed to the Board of Directors or the non-management directors as a group from employees
or others that concern complaints regarding accounting, internal controls or auditing matters will be handled in accordance with
procedures adopted by the Audit Committee of the Board.
All other communications directed to the Board of Directors or the non-management directors as a group are initially
reviewed by the General Counsel. The Chairman of the Corporate Governance Committee is advised promptly of any such
communication that alleges misconduct on the part of management or raises legal, ethical or compliance concerns about the policies
or practices of the General Partner.
On a periodic basis, the Chairman of the Corporate Governance Committee receives updates on other communications
that raise issues related to the affairs of the Partnership but do not fall into the two prior categories. The Chairman of the Corporate
Governance Committee determines which of these communications he would like to review. The Corporate Secretary maintains
a log of all such communications that is available for review for one year upon request of any member of the Board.
Typically, the General Partner does not forward to the Board of Directors communications from Unitholders or other
parties which are of a personal nature or are not related to the duties and responsibilities of the Board, including customer complaints,
job inquiries, surveys and polls and business solicitations.
These procedures have been posted on the Partnership’s website at www.amerigas.com (first click the “Investor Relations”
caption, then click the “Corporate Governance” caption, then click on “Contact AmeriGas Propane, Inc. Board of Directors”).
36
Table of Contents
Section 16(a) — Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the directors and certain officers of the General Partner
and any 10% beneficial owners of the Partnership to send reports of their beneficial ownership of Common Units and changes in
beneficial ownership to the Securities and Exchange Commission. During Fiscal 2013, due to an administrative error, late Section
16(a) reports on Form 4 were filed for Messrs. Grady, Iannarelli, Lugar, Peyton, Samuel and Sheridan. The late reports disclosed
discretionary grants of AmeriGas Partners phantom units to each of Messrs. Grady, Iannarelli, Lugar, Peyton, Samuel and Sheridan
in recognition of their contributions and leadership with respect to the acquisition and integration of Heritage Propane during
Fiscal 2012. The phantom units have a grant date of December 3, 2012 and were reported on Form 4s filed January 3, 2013.
Except as previously described, based on our records, we believe that, during Fiscal 2013, all of such reporting persons complied
with Section 16(a) reporting requirements applicable to them.
ITEM 11.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation/Pension Committee of the General Partner are Messrs. Schlanger (Chairman) and
Marrazzo and Mrs. Pol. None of the members is a former or current officer or employee of the General Partner or any of its
subsidiaries. None of the members has any relationship required to be disclosed under this caption under the rules of the Securities
and Exchange Commission.
REPORT OF THE COMPENSATION/PENSION COMMITTEE
The Compensation/Pension Committee has reviewed and discussed with management the Compensation Discussion and
Analysis. Based on this review and discussion, the Committee recommended to the General Partner’s Board of Directors, and the
Board of Directors approved, the inclusion of the Compensation Discussion and Analysis in the Partnership’s Annual Report on
Form 10-K for the year ended September 30, 2013.
Compensation/Pension Committee
Marvin O. Schlanger, Chairman
William J. Marrazzo
Anne Pol
COMPENSATION DISCUSSION AND ANALYSIS
Introduction
In this Compensation Discussion and Analysis, we address the compensation paid or awarded to the following executive
officers: Jerry E. Sheridan, our President and Chief Executive Officer; Hugh J. Gallagher, our Vice President-Finance and Chief
Financial Officer, since May 20, 2013; John S. Iannarelli, our former Vice President - Finance and Chief Financial Officer, through
May 19, 2013; John L. Walsh, our Vice Chairman; R. Paul Grady, our Vice President and Chief Operating Officer; Steven A.
Samuel, our Vice President - Law and General Counsel; Lon R. Greenberg, our non-executive Chairman of the Board of Directors
and, through March 31, 2013, our executive Chairman; and William D. Katz, our former Vice President - Human Resources,
through May 28, 2013. We refer to these executive officers as our “named executive officers” for Fiscal 2013.
Compensation decisions for Messrs. Sheridan, Gallagher, Iannarelli, Grady, Samuel and Katz (collectively, the “AmeriGas
NEOs”) were made by the independent members of the Board of Directors of the General Partner after receiving the recommendation
of its Compensation/Pension Committee. Compensation decisions for Messrs. Walsh and Greenberg were made by the independent
members of the Board of Directors of UGI Corporation after receiving the recommendations of its Compensation and Management
Development Committee. For ease of understanding, we will use the term “we” to refer to AmeriGas Propane, Inc. and/or UGI
Corporation and the term “Committee” or “Committees” to refer to the AmeriGas Propane, Inc. Compensation/Pension Committee
and/or the UGI Corporation Compensation and Management Development Committee as appropriate in the relevant compensation
decisions, unless the context indicates otherwise. We will use the term “Company” to refer to AmeriGas Propane, Inc.
37
Table of Contents
Executive Summary
Objectives of Our Compensation Program
Our compensation program for named executive officers is designed to:
•
•
•
•
provide a competitive level of total compensation;
motivate and encourage our executives to contribute to our financial success;
retain talented and experienced executives; and
reward our executives for leadership excellence and performance that promotes sustainable growth in unitholder
value.
Components of Annual Fiscal 2013 Compensation Program
The following chart provides a brief summary of the principal elements of our executive compensation program for Fiscal
2013. We describe these elements, as well as retirement, severance and other benefits, in more detail later in this Compensation
Discussion and Analysis.
38
Table of Contents
Components of Compensation Paid to Named Executive Officers in Fiscal 2013
Compensation Element
Form
Salary
Fixed annual cash paid
bi-weekly
Annual Bonus Awards
Variable cash and
equity, paid on an
annual basis.
Long-Term Compensation
Performance Units
payable in Common
Units or UGI stock
Compensation
Objective
Relation to
Performance
Merit salary increases
are based on subjective
performance
evaluations.
The amount of the
annual bonus, if any, is
entirely dependent on
achievement of our
goals relating to
Adjusted EBITDA,
subject to modification
for customer growth
(for the AmeriGas
NEOs), and earnings
per share (for Messrs.
Walsh and Greenberg).
The total unitholder
return of AmeriGas
Partners Common Units
(or shareholder return
of UGI stock) relative
to entities in an industry
index over a three year
period.
Compensate executives
for their level of
responsibility and
sustained individual
performance based on
market data.
Motivate executives to
focus on achievement of
our annual business
objectives.
Align executive
interests with unitholder
and shareholder
interests; create a strong
financial incentive for
achieving long-term
performance goals by
encouraging total
AmeriGas common
unitholder return that
compares favorably to
energy master limited
partnerships or total
UGI shareholder return
that compares favorably
to other utility
companies.
Long-Term Compensation
UGI Stock Options
The increase in value of
stock options is
dependent on increases
in UGI’s stock price.
Align executive
interests with
shareholder interests;
create a strong financial
incentive for achieving
or exceeding long-term
performances goals, as
the value of stock
options is a function of
the price of UGI stock.
2013 Actions/Results
Merit salary increases
ranged from 2.0% to
6.0%.
Target incentives ranged
from 45% to 120% of
salary.
Actual bonuses earned
were based on entity
performance as follows:
AmeriGas Propane,
67.2% of target.
UGI Corporation, 95.9%
of target.
Performance units
constitute approximately
65% of our long-term
compensation
opportunity for the
AmeriGas NEOs (with
the exception of Mr.
Gallagher) and
approximately 50% for
Messrs. Walsh and
Greenberg. The number
of performance units
awarded in Fiscal 2013
ranged from 1,700 to
65,000.
The actual number of
Common Units or shares
to be awarded can range
from 0% to 200% of
performance units
awarded, depending on
comparative returns
during the three-year
period from January 1,
2013 through December
31, 2015.
Stock options constitute
approximately 35% of
our long-term
compensation
opportunity for the
AmeriGas NEOs (with
the exception of Mr.
Gallagher) and
approximately 50% for
Messrs. Walsh and
Greenberg. The number
of shares underlying
option awards ranged
from 11,000 shares to
300,000 shares.
Compensation Governance Practices
The Committee seeks to implement and maintain sound compensation and corporate governance practices, which include
the following:
• The Committee is composed entirely of directors who are independent, as defined in the corporate governance listing
standards of the New York Stock Exchange.
39
Table of Contents
• The Committee utilizes the services of Pay Governance LLC (“Pay Governance”), an independent outside compensation
consultant.
• AmeriGas Partners allocates a substantial portion of compensation to performance-based compensation. In Fiscal 2013,
73 percent of the principal compensation components, in the case of Mr. Sheridan, and 48 percent to 82 percent of the
principal compensation components, in the case of all other named executive officers were variable and tied to financial
performance or total shareholder return.
• AmeriGas Partners awards a substantial portion of compensation in the form of long-term awards, namely stock options
and performance units, so that executive officers’ interests are aligned with unitholders and our long-term performance.
• Annual bonus opportunities for the named executive officers were based on key financial metrics. Similarly, long-term
incentives were based on the relative performance of AmeriGas Partners Common Units (or, in the case of Messrs. Walsh
and Greenberg, UGI Corporation common stock values and relative stock price performance).
• We require termination of employment for payment under our change in control agreements (referred to as a “double
trigger”). We also have not entered into change in control agreements providing for tax gross-up payments under Section
280G of the Internal Revenue Code since 2010. See “Potential Payments Upon Termination of Employment or Change
in Control - Change in Control Agreements.”
• We have meaningful equity ownership guidelines. See “Equity Ownership Guidelines” in this Compensation Discussion
and Analysis for information on equity ownership.
• We have a recoupment policy for incentive-based compensation paid or awarded to current and former executive officers
in the event of a significant restatement of the Company’s financial results.
• During Fiscal 2013, we implemented a policy prohibiting the Company’s directors and executive officers from (i) hedging
the securities of AmeriGas Partners and UGI Corporation, (ii) holding AmeriGas Partners and UGI Corporation securities
in margin accounts as collateral for a margin loan, and (iii) pledging the securities of AmeriGas Partners and UGI
Corporation. Prior to the implementation of this policy, there were no executive officers or directors who had engaged
in the hedging or pledging of AmeriGas Partners or UGI Corporation securities.
The Compensation Committee believes that, during Fiscal 2013, there was no conflict of interest between Pay Governance
and the Compensation Committee. Additionally, the Compensation Committee believes that Pay Governance was independent.
In reaching the foregoing conclusions, the Compensation Committee considered the factors set forth by the New York Stock
Exchange regarding compensation committee advisor independence.
Compensation Philosophy and Objectives
Our compensation program for our named executive officers is designed to provide a competitive level of total
compensation necessary to attract and retain talented and experienced executives. Additionally, our compensation program is
intended to motivate and encourage our executives to contribute to our success and reward our executives for leadership excellence
and performance that promotes sustainable growth in unitholder and shareholder value.
In Fiscal 2013, the components of our compensation program included salary, annual bonus awards, long-term incentive
compensation (performance unit awards and UGI Corporation stock option grants), perquisites, retirement benefits and other
benefits, all as described in greater detail in this Compensation Discussion and Analysis. We believe that the elements of our
compensation program are essential components of a balanced and competitive compensation program to support our annual and
long-term goals.
The compensation paid to Mr. Gallagher during Fiscal 2013 reflects his service as Vice President - Finance and Chief
Financial Officer of the General Partner, a position he has held since May 20, 2013. Prior to commencement of this role, Mr.
Gallagher was employed by UGI Corporation as Treasurer.
40
Table of Contents
Determination of Competitive Compensation
In determining Fiscal 2013 compensation, the Committees engaged Pay Governance as their compensation consultant.
The primary duties of Pay Governance were to:
•
•
•
•
provide the Committees with independent and objective market data;
conduct compensation analysis;
review and advise on pay programs and salary, target bonus and long-term incentive levels applicable to our executives;
review components of our compensation program as requested from time to time by the Committees and recommend
plan design changes as appropriate; and
•
provide general consulting services related to the fulfillment of the Committees’ charters.
Pay Governance has not provided actuarial or other services relating to pension and post-retirement plans or services
related to other benefits to us or our affiliates, and generally all of its services are those that it provides to the Committees. Pay
Governance has provided market data for positions below the senior executive level as requested by management, but its fees for
this work historically are modest relative to its overall fees.
In assessing competitive compensation, we referenced market data provided to us in Fiscal 2012 by Pay Governance.
Pay Governance provided us with two reports: the “2012 Executive Cash Compensation Review” and the “2012 Executive Long-
Term Incentive Review.” We do not benchmark against specific companies in the databases utilized by Pay Governance in preparing
its reports. Our Committees do benchmark, however, by using Pay Governance’s analysis of compensation databases that include
numerous companies as a reference point to provide a framework for compensation decisions. Our Committees exercise discretion
and also review other factors, such as internal equity and sustained individual and company performance, when setting our
executives’ compensation.
For the AmeriGas NEOs, the executive compensation analysis is based on general industry data in Towers Watson’s 2012
General Industry Executive Compensation Database (“General Industry Database”), which includes approximately 435 companies.
For Messrs. Walsh and Greenberg, the analysis was based on the General Industry Database and Towers Watson’s 2012 Energy
Services Executive Compensation Database (“Energy Services Database”). This weighting is designed to approximate the relative
sizes of UGI’s non-utility and utility businesses. Towers Watson’s General Industry Database is comprised of companies from a
broad range of industries, including oil and gas, aerospace, automotive and transportation, chemicals, computer, consumer products,
electronics, food and beverages, metals and mining, pharmaceutical and telecommunications. The Towers Watson Energy Services
Database is comprised of approximately 95 companies, primarily utilities.
For Messrs. Walsh and Greenberg, Pay Governance weighted the General Industry Database survey data 75 percent and
the Energy Services Database survey data 25 percent and added the two. For example, if the relevant market rate for a particular
executive position derived from information in the General Industry Database was $100,000 and the relevant market rate derived
from information in the Energy Services Database was $90,000, Pay Governance would provide us with a market rate of $97,500
for that position (($100,000 x 75 percent = $75,000) plus ($90,000 x 25 percent = $22,500)). The impact of weighting information
derived from the two databases is to obtain a market rate designed to approximate the relative sizes of UGI’s nonutility and utility
businesses. The identities of the companies that comprise the databases utilized by Pay Governance have not been disclosed to
us by Pay Governance.
We generally seek to position a named executive officer’s salary grade so that the midpoint of the salary range for his
salary grade approximates the 50th percentile of “going rate” for comparable executives included in the executive compensation
database material referenced by Pay Governance. By comparable executive, we mean an executive having a similar range of
responsibilities and the experience to fully perform these responsibilities. Pay Governance size-adjusted the survey data to account
for the relative revenues of the survey companies in relation to ours. In other words, the adjustment reflects the expectation that
a larger company would be more likely to pay a higher amount of compensation for the same position than a smaller company.
Using this adjustment, Pay Governance developed going rates for positions comparable to those of our executives, as if the
companies included in the respective databases had revenues similar to ours. We believe that Pay Governance’s application of
size adjustments to applicable positions in these databases is an appropriate method for establishing market rates. After consultation
with Pay Governance, we considered salary grade midpoints that were within 15 percent of the median going rate developed by
Pay Governance to be competitive.
41
Table of Contents
Elements of Compensation
Salary
Salary is designed to compensate executives for their level of responsibility and sustained individual performance. We
pay our executive officers a salary that is competitive with that of other executive officers providing comparable services, taking
into account the size and nature of the business of AmeriGas Partners or UGI Corporation, as the case may be.
As noted above, we seek to establish the midpoint of the salary grade for the positions held by our named executive
officers at approximately the 50th percentile of the going rate for executives in comparable positions. Based on the data provided
by Pay Governance in July 2012, we increased the range of salary in each salary grade for each named executive officer, other
than Mr. Greenberg, by 1.5 percent. The Committee established Mr. Greenberg’s Fiscal 2013 salary grade midpoint at the market
median of comparable executives as identified by Pay Governance based on its analysis of the executive compensation databases.
For Mr. Greenberg, this resulted in an increase of the range of salary in his salary grade from the prior year of approximately 5
percent.
For Fiscal 2013, the merit increases were targeted at 2.5 percent, but individual increases varied based on performance
evaluations and the individual’s position within the salary range. Performance evaluations were based on qualitative and subjective
assessments of each individual’s contribution to the achievement of our business strategies, including the development of growth
opportunities and leadership in carrying out our talent development program. Messrs. Sheridan and Greenberg, in their capacities
as chief executive officers of the General Partner and UGI Corporation, respectively, had additional goals and objectives for Fiscal
2013, as established during the first fiscal quarter of Fiscal 2013. Mr. Sheridan’s annual goals and objectives for Fiscal 2013
included achievement of annual financial goals, establishment of a customer advocacy function to improve customer service, and
implementation of AmeriGas Propane’s growth strategies. Mr. Greenberg’s annual goals and objectives included the achievement
of annual financial goals, the transition of Chief Executive duties and responsibilities to Mr. Walsh, collaboration with Mr. Walsh
on a succession plan for senior leadership of UGI and its subsidiaries, and leadership in identifying investment opportunities for
UGI and its subsidiaries.
All named executive officers received a salary in Fiscal 2013 that was within 81 percent to 117 percent of the midpoint
for his salary range. The following table sets forth each named executive officer’s Fiscal 2013 salary.
Name
J. E. Sheridan
H. J. Gallagher
John S. Iannarelli
J. L. Walsh
R.P. Grady
S. A. Samuel
L. R. Greenberg
W. D. Katz
Percentage Increase
over Fiscal 2012
Salary
4.0%(1)
N/A
4.0%
N/A
3.0%
3.0%
5.0%
2.0%
Salary
475,020
96,827(2)
182,232(3)
861,710(4)
412,022
249,002
594,594(5)
218,278(6)
(1)
(2)
Mr. Sheridan received a merit salary increase of 4.0% in Fiscal 2013, plus an equity adjustment of $7,000 to better align
Mr. Sheridan’s salary with the market data provided by Pay Governance. Including this equity adjustment, Mr. Sheridan’s
total increase in salary was 5.6% over Fiscal 2012. For purposes of the comparison to Fiscal 2012, an annualized salary
that assumed Mr. Sheridan had served as the President and Chief Executive Officer for the entire Fiscal 2012 was used.
Mr. Gallagher’s salary was prorated in Fiscal 2013 based the number of months he served as Vice President - Finance
and Chief Financial Officer of the General Partner. Prior to Mr. Gallagher’s employment with the General Partner on
May 20, 2013, he received compensation from UGI Corporation for his service as Treasurer of UGI Corporation.
(3)
Mr. Iannarelli received a prorated salary in Fiscal 2013 based on his separation of service date of June 18, 2013.
42
Table of Contents
(4)
(5)
Mr. Walsh’s salary reflects the portion of Fiscal 2013 that he served as President and Chief Operating Officer (until April
1, 2013) as well as his promotion to President and Chief Executive Officer (effective April 1, 2013). Following his
promotion, Mr. Walsh’s Fiscal 2013 salary compared to his Fiscal 2012 salary was approximately 22.8% higher.
Mr. Greenberg’s salary was prorated based on his retirement date of April 1, 2013. During Fiscal 2013, Mr. Greenberg
also received a payout for his earned and accrued vacation equal to $134,813 and compensation as Chairman of the Board
of Directors of the General Partner. See Compensation of Directors - Director Compensation Table - Fiscal 2013 and
accompanying narrative for additional information.
(6)
Mr. Katz received a prorated salary in Fiscal 2013 based on his separation of service date of July 15, 2013.
Annual Bonus Awards
Our annual bonus plans provide our named executive officers with the opportunity to earn annual cash and equity incentives
provided that certain performance goals are satisfied. Our annual incentives are intended to motivate our executives to focus on
the achievement of our annual business objectives by providing competitive incentive opportunities to those executives who have
the ability to significantly impact our financial performance. We believe that basing a meaningful portion of an executive’s
compensation on financial performance emphasizes our pay for performance philosophy and will result in the enhancement of
unitholder or shareholder value.
In determining each executive position’s target award level under our annual bonus plans, we considered database
information derived by Pay Governance regarding the percentage of salary payable upon achievement of target goals for executives
in similar positions at other companies as described above. In establishing the target award level, we positioned the amount at the
50th percentile for comparable positions. Beginning in Fiscal 2013, we changed the target award level from a range (the 50th to
75th percentile) to the 50th percentile to more closely align our policy with past practice.
Messrs. Sheridan, Gallagher, Grady and Samuel (and prior to their separation from service, Messrs. Iannarelli and Katz)
participate in the AmeriGas Propane, Inc. Executive Annual Bonus Plan (the “AmeriGas Bonus Plan”). For the AmeriGas NEOs,
the entire target award opportunity was principally based on AmeriGas Partners’ earnings before interest, taxes, depreciation and
amortization (“EBITDA”), adjusted to exclude acquisition and transition expenses related to the Heritage Propane acquisition
(“Adjusted EBITDA”). Adjusted EBITDA was then subject to modification based on achievement of AmeriGas Partners’ customer
growth goal, as described below. We believe that customer growth for AmeriGas Partners is an important component of the bonus
calculation because we foresee no or minimal growth in total demand for propane in the next several years, and, therefore, customer
growth and customer retention are important factors in our ability to improve the long-term financial performance of AmeriGas
Partners. Additionally, the customer growth adjustment serves to balance the risk of AmeriGas Partners’ achieving short-term
annual financial goals at the expense of AmeriGas Partners’ long-term goal to increase its customer base. In prior years, bonus
awards were based on earnings per common unit (“EPU”), subject to adjustment based on customer growth. Given the Heritage
Propane acquisition in Fiscal 2012 and its overall effect on the financial results of AmeriGas Partners, in Fiscal 2013, the Committee
changed the financial metric from EPU to EBITDA to remove uncertainties associated with the calculation of depreciation and
amortization levels.
Messrs. Walsh and Greenberg participate in the UGI Corporation Executive Annual Bonus Plan. For reasons similar to
those underlying our use of Adjusted EBITDA as a goal for the AmeriGas NEOs, the entire target award for Mr. Walsh (and prior
to his retirement, Mr. Greenberg) was based on UGI’s earnings per share (“EPS”). We also believe that EPS is an appropriate
measure for Messrs. Walsh and Greenberg, whose duties encompass UGI and its affiliated enterprises, including the General
Partner and the Partnership. The EPS measure is not subject to adjustment based on customer growth or any other metric.
As noted above, the target award opportunity for the AmeriGas NEOs was based on Adjusted EBITDA of the Partnership,
subject to modification based on customer growth. The applicable range for targeted Adjusted EBITDA for bonus purposes for
Fiscal 2013 was $620 million to $660 million. Under the target bonus criteria, no bonus would be paid if actual Adjusted EBITDA
amount was less than 90 percent of the actual Adjusted EBITDA target, while 200 percent of the target bonus could be payable
if Adjusted EBITDA equaled or exceeded 110 percent of the Adjusted EBITDA target. The percentage of target bonus payable
based on the level of achievement of Adjusted EBITDA is referred to as the “Adjusted EBITDA Leverage Factor.” The amount
of the award determined by applying the Adjusted EBITDA Leverage Factor is then modified to reflect the degree of achievement
of a predetermined customer growth objective (“Customer Growth Leverage Factor”). For Fiscal 2013, the percentage representing
the Customer Growth Leverage Factor ranged from 80 percent if the growth target was not achieved, to a maximum of 120 percent
if growth exceeded the target by 60 percent or more. We believe the Customer Growth Leverage Factor for Fiscal 2013 represented
an achievable but challenging growth target. Once the Adjusted EBITDA Leverage Factor and Customer Growth Leverage Factor
are determined, the Adjusted EBITDA Leverage Factor is multiplied by the Customer Growth Leverage Factor to obtain a total
43
Table of Contents
adjusted leverage factor (the “Total Adjusted Leverage Factor”). The Total Adjusted Leverage Factor is then multiplied by the
target bonus opportunity to arrive at the bonus award payable for the fiscal year. The actual Adjusted EBITDA achieved for Fiscal
2013 was $617.7 million. The Committee then reduced achievement for bonus purposes to $595.7 million, representing the
inclusion of a pre-determined amount of acquisition and transition expenses related to the heritage Propane acquisition (otherwise
excluded from the calculation of Adjusted EBITDA). After application of the Total Adjusted Leverage Factor to the applicable
target bonus opportunity, Messrs. Sheridan, Gallagher, Grady and Samuel each received a bonus payout equal to 67.2 percent of
his target for Fiscal 2013. For Messrs. Sheridan, Gallagher and Grady, 10 percent of his bonus was paid in AmeriGas Partners
common units to satisfy the Company’s ongoing equity ownership requirement.
EBITDA and Adjusted EBITDA should not be considered as alternatives to net income (as indicators of operating
performance) or as alternatives to cash flow (as measures of liquidity or ability to service debt obligations) and are not measures
of performance or financial condition under GAAP. See Exhibit 99.2 for a reconciliation of EBITDA and Adjusted EBITDA to
net income.
Each Committee has discretion under our executive annual bonus plans to (i) adjust EBITDA and EPS for extraordinary
items or other events as the Committee deems appropriate, (ii) increase or decrease the amount of an award determined to be
payable under the bonus plan by up to 50 percent, and (iii) beginning in Fiscal 2013, review quantitative factors (such as Company
performance) and qualitative factors (such as individual performance and overall contributions to the Company) when determining
the annual bonus to be paid to an executive that terminates employment during the fiscal year on account of retirement, death or
disability. In addition, during Fiscal 2013, each of the AmeriGas Bonus Plan and the UGI Bonus Plan was amended to provide
that, unless the Committee determines otherwise, all executive officers who have not fulfilled their equity ownership requirement
receive as part of their ongoing compliance up to 10 percent of their gross annual bonus in fully vested AmeriGas Partners common
units or UGI Corporation stock, as applicable.
Mr. Iannarelli received a prorated bonus of $75,000 based on service through May 19, 2013, the date he ceased serving
as an officer of the General Partner. The Committee considered quantitative factors, including the Company’s performance
through the second quarter of Fiscal 2013 and projected performance through September 30, 2013, and qualitative factors,
including Mr. Iannarelli’s 26 years of service to the Company. Based on the quantitative factors, Mr. Iannarelli would have
received 82.7 percent of his prorated target bonus. The Committee exercised its discretion and increased Mr. Iannarelli’s bonus
payout by approximately seven percent. In accordance with Mr. Katz’s separation agreement, Mr. Katz received a prorated
bonus of $65,706 based on service through May 28, 2013, the date he ceased serving as an officer of the General Partner. The
Committee considered quantitative factors, including the Company’s performance through the third quarter of Fiscal 2013 and
projected performance through September 30, 2013, in determining Mr. Katz’s bonus amount. Based on the quantitative
factors, Mr. Katz received 79.5 percent of his prorated target bonus. A description of Mr. Katz’s separation agreement is set
forth in “Ongoing Plans and Post-Employment Agreements” of this Compensation Discussion and Analysis.
The bonus award opportunity for each of Messrs. Walsh and Greenberg was structured so that no amounts would be paid
unless UGI’s EPS was at least 80 percent of the target amount, with the target bonus award being paid out if EPS was 100 percent
of the targeted EPS. The maximum award, equal to 200 percent of the target award, would be payable if EPS equaled or exceeded
120 percent of the EPS target. The targeted EPS for bonus purposes for Fiscal 2013 was established to be in the range of $2.45 to
$2.55 per share, and EPS achieved for Fiscal 2013, as published in UGI Corporation’s Earnings Release dated November 18,
2013, was $2.39. The Committee exercised its discretion and adjusted the actual EPS for bonus purposes to exclude the impact
of transition expenses and margin income earned during Fiscal 2013 associated with an acquisition in Poland. As a result, EPS,
as adjusted for purposes of the bonus calculation, was $2.40 and Mr. Walsh received a bonus payout equal to 95.9 percent of his
target award for Fiscal 2013. Mr. Walsh received 10 percent of his payout in UGI Corporation common stock to satisfy his
ongoing stock ownership compliance requirement.
In accordance with UGI Corporation’s Annual Bonus Plan, Mr. Greenberg was eligible to receive a portion of his Fiscal
2013 annual bonus for his service as Chief Executive Officer of UGI Corporation through his retirement date of April 1, 2013. In
calculating Mr. Greenberg’s bonus, the Committee prorated his target bonus to reflect both the period of time Mr. Greenberg served
as Chief Executive Officer during Fiscal 2013 as well as Mr. Greenberg’s accrued vacation time which he did not use in order to
ensure a smooth transition of his duties. Pursuant to the Annual Bonus Plan, the Committee then considered quantitative factors,
including the Company’s performance through Mr. Greenberg’s retirement date, and qualitative factors, including Mr. Greenberg’s
service to the Company and his proven leadership during his tenure and increased Mr. Greenberg’s bonus amount by approximately
ten percent. As a result, Mr. Greenberg received a bonus for Fiscal 2013 equal to $1,050,000.
The following annual bonus payments were made for Fiscal 2013:
44
Table of Contents
Name
J. E. Sheridan
H. J. Gallagher(1)
J. S. Iannarelli(2)
J. L. Walsh(3)
R. P. Grady
S. A. Samuel
L.R. Greenberg(4)
W. D. Katz(5)
Percent of
Target
Bonus Paid
67.2%
67.2%
N/A
95.9%
67.2%
67.2%
N/A
N/A
Cash
$229,875
$28,487
$75,000
$812,236
$137,072
$75,298
$1,050,000
$65,706
Equity
$25,496
$8,613
$0
$90,219
$15,212
$0
$0
$0
(1) Mr. Gallagher’s bonus was prorated in Fiscal 2013 based the number of months he served as Vice President -
Finance and Chief Financial Officer of the General Partner. Mr. Gallagher also received a prorated bonus from UGI
Corporation for his service as Treasurer of UGI Corporation through May 19, 2013.
(2) As described above, Mr. Iannarelli received a prorated annual bonus through May 19, 2013.
(3) Mr. Walsh’s bonus reflects the portion of Fiscal 2013 that he served as President and Chief Operating Officer
(until April 1, 2013) as well as his promotion to President and Chief Executive Officer (effective April 1, 2013).
(4) The calculation of Mr. Greenberg’s bonus is described above.
(5) As described above, Mr. Katz received a prorated annual bonus in accordance with his separation agreement.
Long-Term Compensation - Fiscal 2013 Equity Awards
Our long-term incentive compensation is intended to create a strong financial incentive for achieving or exceeding long-
term performance goals and to encourage executives to hold a significant equity stake in our Company in order to align the
executives’ interests with unitholder interests. Additionally, we believe our long-term incentives provide us the ability to attract
and retain talented executives in a competitive market.
Our long-term compensation for Fiscal 2013 included UGI Corporation stock option grants and either AmeriGas Partners
or UGI Corporation performance unit awards. UGI Corporation stock option grants were awarded under the 2004 Plan. AmeriGas
Partners performance units were awarded under the 2010 AmeriGas Propane, Inc. Long-Term Incentive Plan on behalf of AmeriGas
Partners, L.P. (“AmeriGas 2010 Plan”) and UGI Corporation performance units were awarded under the 2013 Plan. Each of the
AmeriGas NEOs was awarded performance unit awards tied to the three-year total return performance of AmeriGas Partners
Common Units relative to that of the limited partnerships in the Alerian MLP Index. Messrs. Walsh and Greenberg were each
awarded UGI Corporation performance units tied to the three-year total return performance of UGI’s common stock relative to
that of the companies in the Russell MidCap Utilities Index (exclusive of telecommunications companies) (“Adjusted Russell
MidCap Utilities Index”). Each performance unit represents the right of the recipient to receive a Common Unit or a share of
common stock if specified performance goals and other conditions are met. Mr. Iannarelli forfeited all of his AmeriGas Partners
performance units, AmeriGas Partners phantom units and UGI stock options granted during Fiscal 2013 in connection with his
separation from service. Mr. Katz forfeited two-thirds of his AmeriGas performance units granted during Fiscal 2013 in connection
with his separation from service.
As is the case with cash compensation and annual bonus awards, we referenced Pay Governance’s analysis of executive
compensation database information in establishing equity compensation for the named executive officers. In determining the total
dollar value of the long-term compensation opportunity to be provided in Fiscal 2013, we initially referenced (i) median salary
information, and (ii) the percentage of the market median base salary for each position to be delivered as a long-term compensation
opportunity, both as calculated by Pay Governance. Pay Governance developed the percentages of base salary used to determine
the amount of equity compensation based on the applicable executive compensation databases and such percentages were targeted
to produce a long-term compensation opportunity at the 50th percentile level.
For the AmeriGas NEOs, we initially applied approximately 35 percent of the amount of his long-term incentive
opportunity to stock options and approximately 65 percent to AmeriGas performance units. For Messrs. Walsh and Greenberg,
we initially applied approximately 50 percent of the amount of the long-term incentive opportunity to stock options and
45
Table of Contents
approximately 50 percent to performance units. We believe this bifurcation provides a good balance between two related, but
discrete, goals. Stock options are designed to align the executive’s interests with shareholder interests, because the value of stock
options is a function of the appreciation or depreciation of UGI’s stock price. As explained in more detail below, the performance
units are designed to encourage total unitholder or shareholder return that compares favorably relative to a competitive peer group.
For Fiscal 2013 equity awards, our compensation consultant provided the competitive market incentive levels based on
its assessment of accounting values. The consultant then provided data for our long-term incentive values by utilizing similar
accounting values. Accounting values are reported directly by companies to the survey databases and are determined in accordance
with GAAP.
In providing award calculations, Pay Governance valued our stock options using UGI’s accounting value approach. Using
this value, Pay Governance provided the total number of UGI stock options calibrating to 35 percent for the AmeriGas NEOs and
50 percent for Messrs. Walsh and Greenberg of the total market median long-term incentive value. As discussed below and
consistent with past practice, management uses the Pay Governance calculations as a starting point and recommends adjustments
to the Committee.
The remaining approximately 65 percent of the long-term compensation opportunity for the AmeriGas NEOs and 50
percent for Messrs. Walsh and Greenberg is awarded as performance units. In calculating the number of AmeriGas Partners
performance units to be awarded to each of the AmeriGas NEOs, with the exception of Mr. Gallagher, Pay Governance established
a value of $49.09 per performance unit using the accounting values approach. The number of UGI performance unit awards was
computed in a similar fashion. In calculating the number of UGI performance units to be awarded to Messrs. Walsh and Greenberg,
Pay Governance established a value of $33.82 per performance unit using the accounting values approach. Pay Governance
determined the number of AmeriGas Partners and UGI Corporation performance units calibrating to 65 percent and 50 percent,
respectively, of the total market median long-term incentive value.
While management used the Pay Governance calculations as a starting point, in accordance with past practice, management
recommended adjustments to the aggregate number of AmeriGas Partners’ and UGI’s performance units and UGI’s stock options
calculated by Pay Governance. The adjustments were designed to address historic grant practices, internal pay equity and the
policy of UGI that the three-year average of the annual number of equity awards made under UGI’s 2004 Plan for the fiscal years
2011 through 2013, expressed as a percentage of common shares outstanding at fiscal year-end, will not exceed 2 percent. For
purposes of calculating the annual number of equity awards used in this calculation: (i) each stock option granted is deemed to
equal one share, and (ii) each performance unit earned and paid in shares of stock and each stock unit granted and expected to be
paid in shares of stock is deemed to equal 4.67 shares. The adjustments generally, with the exception of Mr. Katz, resulted in a
significant decrease in the number of shares underlying options and, with the exception of Messrs. Sheridan, Walsh and Greenberg,
a decrease in the number of performance units awarded, in each case as compared to amounts calculated by Pay Governance using
accounting values. In all cases, however, the overall value that was delivered to management was less than the total value
recommended by Pay Governance.
As a result of the Committee’s acceptance of management’s recommendations, the named executive officers, excluding
Mr. Gallagher, received between approximately 78 percent and 96 percent of the total dollar value of long-term compensation
opportunity consisting of stock options and performance units recommended by Pay Governance using the accounting values
approach. The actual grant amounts based on the foregoing analysis are as follows:
Name
J. E. Sheridan
H. J. Gallagher(2)
J. S. Iannarelli(3)
J. L. Walsh(4)
R. P. Grady
S. A. Samuel
L. R. Greenberg(6)
W. D. Katz(8)
Shares
Underlying
Stock
Options #
Granted
71,250
1,500
17,000
119,000
28,000
11,000
300,000
12,000
Performance
Units
# Granted
1/1/2013
14,250
1,100
2,900
23,000(5)
5,200
1,900
65,000(7)
1,700
Phantom
Units
# Granted
12/3/2012(1)
1,821
0
758
0
1,370
677
0
0
46
Table of Contents
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Phantom units with distribution equivalents were awarded to Messrs. Sheridan, Iannarelli, Grady and Samuel on December
3, 2012 in recognition of their contributions and leadership with respect to the acquisition and integration of Heritage
Propane during Fiscal 2012.
Mr. Gallagher’s awards were granted May 20, 2013 in connection with the commencement of his employment with the
General Partner as Vice President - Finance and Chief Financial Officer. In addition, Mr. Gallagher was awarded 18,000
stock options and 2,300 UGI Corporation performance units on January 1, 2013 in connection with his employment by
UGI Corporation as Treasurer.
Mr. Iannarelli forfeited the performance units, phantom units and options granted to him in Fiscal 2013 due to his separation
from service on June 18, 2013.
Mr. Walsh was awarded an additional 86,000 UGI stock options and 21,000 UGI performance units in connection with
his promotion to President and Chief Executive Officer in April 2013.
Constitutes UGI performance units.
In accordance with the terms of the 2004 Plan and 2013 Plan, Mr. Greenberg did not forfeit his Fiscal 2013 equity awards
upon retirement due to his continuing service on the Company’s Board of Directors.
Constitutes UGI performance units.
Mr. Katz forfeited two-thirds of his performance units granted in Fiscal 2013 due to his separation from service.
While the number of performance units awarded to the named executive officers was determined as described above, the
actual number of Common Units or shares underlying performance units that are paid out at the expiration of the three-year
performance period will be based upon comparative AmeriGas Partners’ total unitholder return (“TUR”) or UGI total shareholder
return (“TSR”) over the period from January 1, 2013 to December 31, 2015. In computing TUR, we use the average of the daily
closing prices for our Common Units and those of each of the limited partnerships in the Alerian MLP Index for the calendar
quarter prior to January 1 of the beginning and end of a given three-year performance period. In addition, TUR gives effect to all
distributions throughout the three-year performance period as if they had been reinvested. For the AmeriGas Partners performance
units awarded to the AmeriGas NEOs, we compare the TUR of AmeriGas Partners’ Common Units to the TUR performance of
each of the other limited partnerships in the Alerian MLP Index. If a partnership is added to the Alerian MLP Index during a three-
year performance period, we do not include that partnership in our TUR analysis. We will only remove a partnership that was
included in the Alerian MLP Index at the beginning of a performance period if such partnership ceases to exist during the applicable
performance period. The limited partnerships comprising the Alerian MLP Index as of January 1, 2013 were as follows:
Access Midstream Partners, L.P.
EV Energy Partners, L.P.
PAA Natural Gas Storage, L.P.
Alliance Resource Partners, L.P.
Exterran Partners, L.P
Pioneer Southwest Energy Partners L.P.
AmeriGas Partners, L.P.
Atlas Pipeline Partners, L.P.
Boardwalk Pipeline Partners, LP
Breitburn Energy Partners, L.P.
Ferrellgas Partners, L.P.
Genesis Energy, L.P.
Plains All American Pipeline, L.P.
PVR Partners, L.P.
Holly Energy Partners, L.P.
Kinder Morgan Energy Partners, L.P. Regency Energy Partners LP
QR Energy, LP
Buckeye Partners, L.P.
Kinder Morgan Management, LLC
Spectra Energy Partners, LP
Calumet Specialty Products Partners, L.P.
Legacy Reserves LP
Suburban Propane Partners, L.P.
Copano Energy, L.L.C.
Linn Energy, LLC
Sunoco Logistics Partners L.P.
Crestwood Midstream Partners, L.P.
Magellan Midstream Partners, L.P.
TC PipeLines, LP
Crosstex Energy, L.P.
Markwest Energy Partners, L.P.
Targa Resources Partners LP
DCP Midstream Partners, LP
Martin Midstream Partners L.P.
Teekay LNG Partners L.P.
El Paso Pipeline Partners, L.P.
Natural Resource Partners L.P.
Teekay Offshore Partners L.P.
Enbridge Energy Partners, L.P.
Navios Maritime Partners L.P.
Vanguard Natural Resources LLC
Energy Transfer Equity, L.P.
NuStar Energy L.P.
Western Gas Partners, LP
Energy Transfer Partners, L.P.
Nustar GP Holdings, LLC
Williams Partners L.P.
Enterprise Products Partners L.P.
ONEOK Partners, L.P.
47
Table of Contents
In determining the number of UGI performance units to be paid out, UGI will compare the TSR of UGI common stock
relative to the TSR performance of those companies comprising the Adjusted Russell MidCap Utilities Index as of the beginning
of the performance period. In computing TSR, UGI uses the average of the daily closing prices for its common stock and the
common stock of each company in the Adjusted Russell MidCap Utilities Index for the calendar quarter prior to January 1 of the
beginning and end of a given three-year performance period. In addition, TSR gives effect to all dividends throughout the three-
year performance period as if they had been reinvested. If a company is added to the Adjusted Russell MidCap Utilities Index
during a three-year performance period, we do not include that company in our TSR analysis. UGI will only remove a company
that was included in the Adjusted Russell MidCap Utilities Index at the beginning of a performance period if such company ceases
to exist during the applicable performance period. Those companies in the Adjusted Russell MidCap Utilities Index as of January
1, 2013 were as follows:
AGL Resources Inc.
Great Plains Energy Inc.
Pinnacle West Capital Corp.
Alliant Energy Corporation
Hawaiian Electric Industries, Inc.
PPL Corporation
Ameren Corporation
Integrys Energy Group, Inc.
Questar Corporation
American Water Works Company, Inc.
ITC Holdings Corp.
SCANA Corporation
Aqua America, Inc.
MDU Resources Group, Inc.
Sempra Energy
Atmos Energy Corporation
National Fuel Gas Company
TECO Energy, Inc.
Calpine Corporation
Centerpoint Energy, Inc.
CMS Energy Corporation
DTE Energy Company
Edison International
Energen Corporation
Entergy Corporation
NiSource Inc.
Northeast Utilities
NRG Energy, Inc.
NV Energy, Inc.
OGE Energy Corp.
ONEOK, Inc.
Pepco Holdings, Inc.
The AES Corporation
UGI Corporation
Vectren Corporation
Westar Energy, Inc.
Wisconsin Energy Corporation
Xcel Energy Inc.
The Company determined that the Adjusted Russell MidCap Utilities Index is an appropriate peer group because the
companies included in the Russell MidCap Utilities Index generally are comparable to the Company in terms of market capitalization
and the Company is included in the Russell MidCap Utilities Index. The Company, with approval of the Committee, excluded
telecommunications companies from the peer group because the nature of the telecommunications business is markedly different
from that of other companies in the utilities industry.
For AmeriGas Partners’ performance units, the minimum award, equivalent to 25 percent of the number of performance
units, will be payable if the TUR rank is at the 25th percentile of the Alerian Index. The target award, equivalent to 100 percent
of the number of performance units, will be payable if the TUR rank is at the 50th percentile. The maximum award, equivalent to
200 percent of the number of performance units, will be payable if the TUR rank is at the 90th percentile of the Alerian Index.
The number of UGI Corporation common shares underlying performance units that will be paid out to Messrs. Walsh and Greenberg
will be based upon UGI Corporation’s TSR rank relative to the Russell Midcap Utilities Index entities and is computed using a
methodology analogous to that described above with regard to the AmeriGas Partners’ TUR ranking.
Based on advice from the Committee’s compensation consultant regarding long-term incentive compensation practices, the
Committee modified the performance unit payout schedules in Fiscal 2013 in order to maintain a competitive equity program.
The target award, equivalent to 100 percent of the number of performance units payable if the TUR or TSR rank is equal to the
50th percentile, remained the same as in the prior year. Previously, each of the AmeriGas 2010 Plan and the 2004 Plan provided
for no payout if the TUR or TSR was less than the 40th percentile and a maximum payout of 200 percent only if the TUR or TSR
was the highest in the peer group. The changes made by the Committee in Fiscal 2013 only affected (i) the required degree of
performance to attain the maximum payout of 200 percent (now attained if TUR or TSR is at least equal to the 90th percentile of
the peer group), and (ii) the minimum payout was reduced from 50 percent if the TUR or TSR is at least equal to the 40th percentile
to 25 percent if the TUR or TSR is at least equal to the 25th percentile of the peer group.
Each award payable to the named executive officers provides a number of AmeriGas Partners’ Common Units or UGI
shares equal to the number of performance units earned. After the Committee has determined that the conditions for payment
have been satisfied, management of the General Partner or UGI, as the case may be, has the authority to provide for a cash payment
to the named executives in lieu of a limited number of the shares or Common Units payable. The cash payment is based on the
value of the securities at the end of the performance period and is designed to meet minimum statutory tax withholding requirements.
48
Table of Contents
In the event that UGI executives earn shares in excess of the target award, the value of the shares earned in excess of target is paid
entirely in cash.
All performance units have partnership distribution or dividend equivalent rights, as applicable. A distribution equivalent
is an amount determined by multiplying the number of performance units credited to a recipient’s account by the per-unit cash
distribution or the per-unit fair market value of any non-cash distribution paid by AmeriGas Partners during the performance period
on its Common Units on a distribution payment date. Accrued distribution and dividend (in the case of UGI performance units)
equivalents are payable in cash based on the number of Common Units or common shares, if any, paid out at the end of the
performance period.
In addition to the performance units described above, the Compensation/Pension Committee of AmeriGas Propane and the
independent members of the AmeriGas Propane Board of Directors approved a discretionary grant of AmeriGas Partners phantom
units with distribution equivalents to Messrs. Sheridan, Iannarelli, Grady and Samuel in recognition of their contributions and
leadership with respect to the acquisition and integration of Heritage Propane during Fiscal 2012 to support the long-term best
interests of the Company. The phantom units have a grant date of December 3, 2012 and represent time-restricted AmeriGas
Partners common units that will vest on December 3, 2014, subject to continued employment. In the event of termination of
employment for any reason, other than retirement, death or disability, the unvested phantom units and dividend equivalents will
be forfeited. In the event of retirement, death or disability during the initial year following the grant, one half of the number of
units granted would immediately vest and the other half of units would be forfeited.
Long-Term Compensation - Payout of Performance Units for 2010-2012 Period
During Fiscal 2013, we paid out awards to those executives who received UGI performance units in our 2010 fiscal year
covering the period from January 1, 2010 to December 31, 2012. For that period, UGI Corporation’s TSR ranked 19th relative to
the 32 companies in the S&P Utilities Index, placing UGI slightly below the 42nd percentile ranking, resulting in a 59.7 percent
payout of the target award. AmeriGas Partners’ TUR ranked 34th relative to its peer group, placing AmeriGas Partners at
approximately the 35th percentile ranking, resulting in no payout of the target award for Messrs. Sheridan, Iannarelli, Grady, Samuel,
and Katz. The payouts for Fiscal 2013 on UGI performance unit awards were as follows:
Name
John L. Walsh
Lon R. Greenberg
Performance Unit
Payout (#)
Performance Unit
Payout Value(1) ($)
16,716
41,790
$597,764
$1,494,410
(1)
Includes dividend equivalent payout.
Payments to Messrs. Iannarelli and Katz
In connection with his separation from service on June 18, 2013, Mr. Iannarelli received a cash payout in the amount of
$664,133 consistent with the AmeriGas Propane, Inc. Senior Executive Employee Severance Plan (the “AmeriGas Severance
Plan”). Mr. Iannarelli’s payout includes all amounts due to him under the AmeriGas Severance Plan, including his Fiscal 2013
bonus.
Mr. Katz entered into a Separation Agreement and General Release with the General Partner effective July 15, 2013 (the
“Separation Agreement”). In accordance with the Separation Agreement, Mr. Katz received a lump sum payment of $375,000 in
consideration of Mr. Katz assisting with the integration of Heritage Propane and transition of responsibilities to his successor. In
addition, Mr. Katz received an annual bonus in the amount of $65,706. For a description of the Separation Agreement, see “Ongoing
Plans and Post-Employment Agreements” in this Compensation Discussion and Analysis.
Perquisites and Other Compensation
We provide limited perquisite opportunities to our executive officers. We provide reimbursement for tax preparation
services and limited spousal travel. Our named executive officers may also occasionally use UGI’s tickets for sporting events for
personal rather than business purposes. We discontinued reimbursement for tax preparation services in Fiscal 2011 for newly hired
executives. The aggregate cost of perquisites for all named executive officers in Fiscal 2013 was less than $15,000.
49
Table of Contents
Other Benefits
Our named executive officers participate in various retirement, deferred compensation and severance plans which are
described in greater detail in the “Ongoing Plans and Post-Employment Agreements” section of this Compensation Discussion
and Analysis. We also provide employees, including the named executive officers, with a variety of other benefits, including
medical and dental benefits, disability benefits, life insurance, and paid time off for holidays and vacations. These benefits generally
are available to all of our full-time employees, although the AmeriGas NEOs were provided certain enhanced disability and life
insurance benefits having an aggregate total cost in Fiscal 2013 of less than $30,000.
Ongoing Plans and Post-Employment Agreements
We have several plans and agreements (described below) that enable our named executive officers to accrue retirement
benefits as the executives continue to work for us, provide severance benefits upon certain types of termination of employment
events or provide other forms of deferred compensation.
AmeriGas Propane, Inc. Savings Plan (the “AmeriGas Savings Plan”)
This plan is a tax-qualified defined contribution plan for AmeriGas Propane employees. Subject to Internal Revenue
Code (the “Code”) limits, which are the same as described below with respect to the UGI Savings Plan, an employee may contribute,
on a pre-tax basis, up to 50 percent of his or her eligible compensation, and AmeriGas Propane provides a matching contribution
equal to 100 percent of the first 5 percent of eligible compensation contributed in any pay period. Amounts credited to an employee’s
account in the plan may be invested among a number of funds, including UGI’s stock fund. Messrs. Sheridan, Gallagher, Grady
and Samuel are eligible to participate in the AmeriGas Savings Plan.
UGI Utilities, Inc. Savings Plan (the “UGI Savings Plan”)
This plan is a tax-qualified defined contribution plan available to, among others, employees of UGI. Under the plan, an
employee may contribute, subject to Code limitations (which, among other things, limited annual contributions in 2013 to $17,500),
up to a maximum of 50 percent of his or her eligible compensation on a pre-tax basis and up to 20 percent of his or her eligible
compensation on an after-tax basis. The combined maximum of pre-tax and after-tax contributions is 50 percent of his or her
eligible compensation. UGI provides matching contributions targeted at 50 percent of the first 3 percent of eligible compensation
contributed by the employee in any pay period, and 25 percent of the next 3 percent. For participants entering the UGI Savings
Plan on or after January 1, 2009, who are not eligible to participate in the UGI Pension Plan, UGI provides matching contributions
targeted at 100 percent of the first 5 percent of eligible compensation contributed by the employee in any pay period. Like the
AmeriGas Savings Plan, participants in the UGI Savings Plan may invest amounts credited to their account among a number of
funds, including the UGI stock fund. Mr. Walsh is eligible to participate in the UGI Savings Plan.
Retirement Income Plan for Employees of UGI Utilities, Inc. (the “UGI Pension Plan”)
This plan is a tax-qualified defined benefit plan available to, among others, employees of UGI and certain of its subsidiaries,
but not including the General Partner. The UGI Pension Plan was closed to new participants as of January 1, 2009. The UGI
Pension Plan provides an annual retirement benefit based on an employee’s earnings and years of service, subject to maximum
benefit limitations. Mr. Walsh participates in the UGI Pension Plan. Messrs. Gallagher, Grady, Samuel, Iannarelli, and Katz have
vested benefits, but they no longer participate. Mr. Greenberg received benefits under UGI Pension Plan during Fiscal 2013 as a
result of his retirement. See Compensation of Executive Officers - Pension Benefits Table - Fiscal 2013 and accompanying
narrative for additional information.
UGI Corporation Supplemental Executive Retirement Plan and Supplemental Savings Plan
UGI Corporation Supplemental Executive Retirement Plan
This plan is a nonqualified defined benefit plan that provides retirement benefits that would otherwise be provided under
the UGI Pension Plan to employees hired prior to January 1, 2009, but are prohibited from being paid from the UGI Pension Plan
by Code limits. The plan also provides additional benefits in the event of certain terminations of employment covered by a change
in control agreement. Mr. Walsh participates in the UGI Corporation Supplemental Executive Retirement Plan. Mr. Greenberg
received a payout under the UGI Corporation Supplemental Executive Retirement Plan during Fiscal 2013 in connection with his
retirement. See Compensation of Executive Officers - Pension Benefits Table - Fiscal 2013 and accompanying narrative for
additional information.
50
Table of Contents
UGI Corporation Supplemental Savings Plan
This plan is a nonqualified deferred compensation plan that provides benefits that would be provided under the qualified
UGI Savings Plan to employees hired prior to January 1, 2009 in the absence of Code limitations. The Supplemental Savings Plan
is intended to pay an amount substantially equal to the difference between UGI matching contribution to the qualified UGI Savings
Plan and the matching contribution that would have been made under the qualified UGI Savings Plan if the Code limitations were
not in effect. At the end of each plan year, a participant’s account is credited with earnings equal to the weighted average return
on two indices: 60 percent on the total return of the Standard and Poor’s 500 Index and 40 percent on the total return of the Barclays
Capital U.S. Aggregate Bond Index. The plan also provides additional benefits in the event of certain terminations of employment
covered by a change in control agreement. Mr. Walsh is eligible to participate in the UGI Corporation Supplemental Savings Plan.
See Compensation of Executive Officers - Nonqualified Deferred Compensation Table - Fiscal 2013 and accompanying narrative
for additional information.
AmeriGas Propane, Inc. Supplemental Executive Retirement Plan
The General Partner maintains a supplemental executive retirement plan, which is a nonqualified deferred compensation
plan for highly compensated employees of the General Partner. Under the plan, the General Partner credits to each participant’s
account annually an amount equal to 5 percent of the participant’s compensation up to the Code compensation limits and 10 percent
of compensation in excess of such limit. In addition, if any portion of the General Partner’s matching contribution under the
AmeriGas Savings Plan is forfeited due to nondiscrimination requirements under the Code, the forfeited amount, adjusted for
earnings and losses on the amount, will be credited to a participant’s account. Participants direct the investment of the amounts
in their accounts among a number of mutual funds. Messrs. Sheridan, Gallagher, Grady and Samuel participate in the AmeriGas
Propane, Inc. Supplemental Executive Retirement Plan. See Compensation of Executive Officers - Nonqualified Deferred
Compensation Table - Fiscal 2013 and accompanying narrative for additional information.
AmeriGas Propane, Inc. Nonqualified Deferred Compensation Plan
AmeriGas Propane maintains a nonqualified deferred compensation plan under which participants may defer up to $10,000
of their annual compensation. Deferral elections are made annually by eligible participants in respect of compensation to be earned
for the following year. Participants may direct the investment of deferred amounts into a number of mutual funds. Payment of
amounts accrued for the account of a participant generally is made following the participant’s termination of employment. Messrs.
Sheridan, Gallagher, Grady and Samuel are eligible to participate in the AmeriGas Propane, Inc. Nonqualified Deferred
Compensation Plan. See Compensation of Executive Officers - Nonqualified Deferred Compensation Table - Fiscal 2013 and
accompanying narrative for additional information.
UGI Corporation 2009 Deferral Plan, As Amended and Restated Effective June 1, 2010
This plan provides deferral options that comply with the requirements of Section 409A of the Code related to (i) all
phantom units and stock units granted to the General Partner’s and UGI’s non-employee Directors, (ii) benefits payable under the
UGI Corporation Supplemental Executive Retirement Plan, (iii) the 2009 UGI Corporation SERP, and (iv) benefits payable under
the AmeriGas Propane, Inc. Supplemental Executive Retirement Plan. If an eligible participant elects to defer payment under the
plan, the participant may receive future benefits after separation from service as (x) a lump sum payment, (y) annual installment
payments over a period between two and ten years, or (z) one to five retirement distribution amounts to be paid in a lump sum in
the year specified by the individual. Deferred benefits, other than phantom units and stock units, will be deemed to be invested in
investment funds selected by the participant from among a list of available funds. The plan also provides newly eligible participants
with a deferral election that must be acted upon promptly.
Severance Pay Plans for Senior Executive Employees
The General Partner and UGI each maintain a severance pay plan that provides severance compensation to certain senior
level employees. The plans are designed to alleviate the financial hardships that may be experienced by executive employee
participants whose employment is terminated without just cause, other than in the event of death or disability. The General Partner’s
plan covers the AmeriGas NEOs and UGI’s plan covers Mr. Walsh. During Fiscal 2013, Mr. Iannarelli received severance
compensation under the General Partner’s severance plan. See Compensation of Executive Officers - Potential Payments Upon
Termination or Change in Control for further information regarding the severance plans.
51
Table of Contents
Separation Agreement with Mr. Katz
Mr. Katz entered into the Separation Agreement with the General Partner effective July 15, 2013. The agreement provided
for a cash payment of $375,000 in consideration of Mr. Katz assisting with the integration of Heritage Propane and the transition
of his responsibilities to his successor. Pursuant to the Separation Agreement, Mr. Katz resigned from all offices he held effective
May 28, 2013 and received a bonus prorated through May of 2013. See “Elements of Compensation - Annual Bonus Awards” in
this Compensation Discussion and Analysis for additional information related to Mr. Katz’s bonus. The Separation Agreement
provides that all options granted to Mr. Katz will continue to be exercisable through their original terms. Additionally, Mr. Katz
retained his performance units, except that he forfeited one-third of the performance units granted to him in Fiscal 2012 and two-
thirds of the performance units granted to him in Fiscal 2013. Mr. Katz’s agreement required that he execute a release discharging
the Company and its subsidiaries from liability in connection with his separation of service from the Company. See Compensation
of Executive Officers- Potential Payments Upon Termination or Change in Control below for further information.
Change in Control Agreements
The General Partner has change in control agreements with Messrs. Sheridan, Gallagher, Grady, and Samuel. UGI has
change in control agreements with Mr. Walsh. The change in control agreements are designed to reinforce and encourage the
continued attention and dedication of the executives without distraction in the face of potentially disturbing circumstances arising
from the possibility of the change in control and to serve as an incentive to their continued employment with us. The agreements
provide for payments and other benefits if we terminate an executive’s employment without cause or if the executive terminates
employment for good reason within two years following a change in control of UGI (and, in the case of Messrs. Sheridan, Gallagher,
Grady and Samuel, the General Partner or AmeriGas Partners). See Compensation of Executive Officers - Potential Payments
Upon Termination of Employment or Change in Control for further information regarding the change in control agreements.
Equity Ownership Guidelines
We seek to align executives’ interests with unitholder and shareholder interests through our equity ownership guidelines.
We believe that by encouraging our executives to maintain a meaningful equity interest in AmeriGas Partners or, if applicable,
UGI, we will enhance the link between our executives and unitholders or shareholders. Under our guidelines, an executive must
meet 10 percent of the ownership requirement within one year from the date of employment or promotion. During Fiscal 2013,
each of the UGI Bonus Plan and the AmeriGas Bonus Plan was amended to require that, unless the Committee determines otherwise,
all executive officers who have not fulfilled their equity ownership requirement receive up to 10 percent of their gross annual
bonus in fully vested UGI Corporation stock or AmeriGas Partners common units. In addition, the guidelines require that 50
percent of the net proceeds from a “cashless exercise” of UGI stock options be used to purchase equity until the ownership
requirement is met. The guidelines also require that, until the share ownership requirement is met, the executive retain all shares
or Common Units received in connection with the payout of performance units. Up to 20 percent of the ownership requirement
may be satisfied through holdings of UGI common stock in the executive’s account in the relevant savings plan.
As of September 30, 2013, the equity ownership requirements for the named executive officers were as follows: (1) Mr.
Sheridan - 40,000 common units; (2) Mr. Gallagher - 12,000 common units; (3) Mr. Walsh - 225,000 UGI Corporation common
shares; (4) Mr. Grady - 20,000 common units; and (5) Mr. Samuel - 6,000 common units. Messrs. Sheridan, Gallagher, Grady
and Samuel are permitted to satisfy their requirements through ownership of Common Units, UGI common stock, or a combination
of Common Units and UGI common stock, with each Common Unit equivalent to 1.5 shares of UGI common stock. The stock
ownership guidelines further permit any UGI executive who was formerly employed by the General Partner to satisfy up to two-
thirds of his or her stock ownership requirement with Common Units. Although not all named executive officers have met their
respective ownership requirements due to the amount of time they have served in their current positions, all named executive
officers are in compliance with the Company’s guidelines requiring the accumulation of common units, or shares in the case of
Mr. Walsh, over time.
Stock Option Grant Practices
The Committees approve annual stock option grants to executive officers in the last calendar quarter of each year, to be
effective the following January 1. The exercise price per share of the options is equal to or greater than the closing share price of
UGI common stock on the last trading day of December. A grant to a new employee is generally effective on the later of the date
the employee commences employment with us or the date the Committee authorizes the grant. In either case, the exercise price
is equal to or greater than the closing price per share of UGI common stock on the effective date of grant. From time to time,
management recommends stock option grants for non-executive employees, and the grants, if approved by the Committee, are
effective on or after the date of Committee action and have an exercise price equal to or greater than the closing price per share
52
Table of Contents
of UGI common stock on the effective date of grant. We believe that our stock option grant practices are appropriate and effectively
eliminate any question regarding “timing” of grants in anticipation of material events.
Role of Executive Officers in Determining Executive Compensation
In connection with Fiscal 2013 compensation, Mr. Greenberg, aided by our human resources personnel, provided statistical
data and recommendations to the appropriate Committee to assist it in determining compensation levels. Mr. Greenberg did not
make recommendations as to his own compensation and was excused from the Committee meeting when his compensation was
discussed by the Committee. While the Committees utilized information provided by Mr. Greenberg, and valued Mr. Greenberg’s
observations with regard to other executive officers, the ultimate decisions regarding executive compensation were made by the
independent members of the appropriate Board of Directors following Committee recommendations.
Tax Considerations
In Fiscal 2013, we paid salary and annual bonus compensation to named executive officers that were not fully deductible
under U.S. federal tax law because it did not meet the statutory performance criteria. Section 162(m) of the Code precludes us
from deducting certain forms of compensation in excess of $1,000,000 paid to the named executive officers in any one year. Our
policy generally is to preserve the federal income tax deductibility of equity compensation paid to our executives by making it
performance-based. We will continue to consider and evaluate all of our compensation programs in light of federal tax law and
regulations. Nevertheless, we believe that, in some circumstances, factors other than tax deductibility take precedence in
determining the forms and amount of compensation, and we retain the flexibility to authorize compensation that may not be
deductible if we believe it is in the best interests of our Company.
RISKS RELATED TO COMPENSATION POLICIES AND PRACTICES
Management conducted a risk assessment of our compensation policies and practices for Fiscal 2013. Based on its
evaluation, management does not believe that any such policies or practices create risks that are reasonably likely to have a
material adverse effect on the Partnership.
53
Table of Contents
SUMMARY COMPENSATION TABLE
The following tables, narrative and footnotes provide information regarding the compensation of our Chief Executive
Officers, Chief Financial Officers and our 3 other most highly compensated executive officers in Fiscal 2013.
Summary Compensation Table — Fiscal 2013
Name and
Principal
Position
(a)
J. E. Sheridan
President and
Chief Executive Officer
H. J. Gallagher
Vice President - Finance
Chief Financial Officer
J. S. Iannarelli
Former Vice President -
Finance and
Chief Financial Officer
J. L. Walsh
Vice Chairman
R. P. Grady
Vice President and
Chief Operating Officer
S. A. Samuel
Vice President - Law and
General Counsel
L. R. Greenberg
Chairman
W. D. Katz
Former Vice President-
Human Resources
Fiscal
Year
(b)
2013
2012
2011
2013
2013
2012
2011
2013
2012
2011
2013
2012
Salary
($)
(1)(c)
474,539
410,220
337,759
91,731
186,795
243,071
199,546
856,377
701,470
674,040
411,791
300,000
Bonus
($)
(d)
0
0
0
0
0
0
0
0
0
50,000(7)
0
0
2013
248,863
2013
2012
2011
2013
2012
2011
751,187
1,131,924
1,099,047
223,472
269,986
274,563
0
0
0
0
0
0
0
Stock
Awards
($)
(2)(e)
678,156
603,500
174,432
59,103
156,048
115,872
81,765
1,877,710
760,500
991,760
280,315
833,995
Option
Awards
($)
(2)
(f)
338,366
305,110
148,418
9,441
80,733
86,890
89,595
1,060,319
543,065
678,750
132,972
123,395
Non-Equity
Incentive
Plan
Compensation
($)
(3)
(g)
Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
(4)
(h)
All Other
Compensation
($)
(5)
(i)
255,371
0
125,000
37,100
75,000
0
89,051
902,454
413,478
508,494
152,283
0
0
0
0
6,696
0
11,127
0
481,670
651,008
376,855
0
25,940
76,241
48,587
47,479
10,519
689,704
29,144
29,490
26,618
27,985
28,023
56,657
100,131
110,637
52,239
75,298
0
34,574
2,487,550
1,901,250
2,479,400
70,788
72,420
92,667
1,424,700
1,303,355
1,629,000
56,988
56,479
65,160
1,050,000
772,406
1,072,821
65,706
30,385
91,152
1,124,933
2,883,824
3,258,787
0
5,838
399
71,905
67,459
62,162
402,613
31,468
37,355
Total
($)
(6)
(j)
1,822,673
1,367,417
833,088
214,590
0
0
1,188,280
486,104
489,447
5,205,148
3,097,506
3,257,922
1,034,018
1,383,461
521,611
0
0
6,910,275
8,060,218
9,601,217
819,567
466,576
561,296
(1)
(2)
(3)
The amounts shown in column (c) represent salary payments actually received during the fiscal year shown based on the
number of pay periods within such fiscal year. Mr. Gallagher received a prorated salary in Fiscal 2013 based on his
employment date of May 20, 2013 with the General Partner. Mr. Iannarelli received a prorated salary in Fiscal 2013 based
on his separation of service date of June 18, 2013. Mr. Walsh’s salary reflects the portion of Fiscal 2013 that he served
as President and Chief Operating Officer (until April 1, 2013) as well as his promotion to President and Chief Executive
Officer (effective April 1, 2013). Mr. Greenberg received a prorated salary in Fiscal 2013 based on his retirement date
of April 1, 2013. Mr. Greenberg’s prorated salary includes $134,813 related to his earned and accrued vacation. In addition,
Mr. Greenberg received compensation of $100,000 for his service as Non-Executive Chairman of the General Partner’s
Board of Directors following his retirement in April 2013 - see Director Compensation Table - Fiscal 2013. Mr. Katz
received a prorated salary in Fiscal 2013 based on his separation of service date of July 15, 2013.
The amounts shown in columns (e) and (f) above represent the fair value of awards of performance units, stock units and
stock options, as the case may be, on the date of grant. The assumptions used in the calculation of the amounts shown
are included in Note 2 and Note 11 to our Consolidated Financial Statements for Fiscal 2013 and in Exhibit No. 99 to
this Report. Mr. Iannarelli’s unvested stock options and all of his performance units and phantom units were forfeited
as a result of his separation from service. Mr. Katz forfeited two-thirds of his Fiscal 2013 performance units and one-
third of his Fiscal 2012 performance units as a result of his separation from service.
The amounts shown in this column represent payments made under the applicable performance-based annual bonus plan.
Messrs. Sheridan, Gallagher, and Grady received 10% of their respective payouts in AmeriGas Partners Common Units
in compliance with the Company’s ongoing equity ownership compliance requirements. Mr. Walsh received 10% of his
payout in UGI Corporation common stock in compliance with the Company’s ongoing stock ownership requirement.
54
Table of Contents
(4)
Mr. Katz’s non-equity incentive compensation payout was paid in accordance with his Separation Agreement. Mr.
Greenberg received a prorated non-equity incentive compensation payout as discussed in greater detail in Compensation
Discussion and Analysis.
The amounts shown in column (h) of the Summary Compensation Table - Fiscal 2013 reflect (i) for Messrs. Gallagher,
Iannarelli, Walsh, Grady, Samuel, Greenberg and Katz, the change in the actuarial present value from September 30,
2012 to September 30, 2013 of the named executive officer’s accumulated benefit under UGI’s defined benefit pension
plans, including, with respect to Messrs. Walsh, Greenberg, and Gallagher, the UGI Corporation Supplemental Executive
Retirement Plan, and (ii) the above-market portion of earnings, if any, on nonqualified deferred compensation accounts.
The change in pension value from year to year as reported in this column is subject to market volatility and may not
represent the value that a named executive officer will actually accrue under the UGI pension plans during any given
year. Messrs. Gallagher, Iannarelli, Grady, Samuel and Katz each have vested annual benefit amounts under the Retirement
Income Plan for Employees of UGI Utilities, Inc. based on prior credited service of approximately $37,100, $5,556,
$12,695, $4,281 and $2,855, respectively. None of Messrs. Gallagher, Iannarelli, Grady or Katz is currently earning
benefits under that plan. Mr. Sheridan is not eligible to participate in the UGI pension plan. The material terms of the
pension plans and deferred compensation plans are described in the Pension Benefits Table - Fiscal 2013 and the
Nonqualified Deferred Compensation Table - Fiscal 2013, and the related narratives to each. Earnings on deferred
compensation are considered above-market to the extent that the rate of interest exceeds 120 percent of the applicable
federal long-term rate. For purposes of the Summary Compensation Table - Fiscal 2013, the market rate on deferred
compensation most analogous to the rate at the time the interest rate is set under the UGI plan for Fiscal 2013 was 2.87
percent, which is 120 percent of the federal long-term rate for December 2012. Earnings on deferred compensation are
market-based, calculated by reference to externally managed mutual funds. The amounts included in column (h) of the
Summary Compensation Table - Fiscal 2013 are itemized below.
Name
J. E. Sheridan
H. J. Gallagher
J. S. Iannarelli
J. L. Walsh
R. P. Grady
S. A. Samuel
L. R. Greenberg
W. D. Katz
Change in
Pension Value
(a)
Above-
Market
Earnings on
Deferred
Compensation
$
$
$
$
$
$
$
$
0
0
0
464,544
0
0
1,095,416
0
$
$
$
$
$
$
$
$
0
0
0
17,126
0
0
29,517
0
(a) The pension values for Messrs. Iannarelli, Grady, Samuel, and Katz decreased during Fiscal 2013 as follows: Mr.
Iannarelli - $6,714; Mr. Grady - $9,662; Mr. Samuel - $4,281; Mr. Katz - $2,191.
(5)
The table below shows the components of the amounts included for each named executive officer under the “All Other
Compensation” column in the Summary Compensation Table - Fiscal 2013. None of the named executive officers received
perquisites with an aggregate value of $10,000 or more.
55
Table of Contents
Name
J. E. Sheridan
H. J. Gallagher
J. S. Iannarelli (a)
J. L. Walsh
R. P. Grady
S. A. Samuel
L. R. Greenberg
W. D. Katz
Employer
Contribution
to AmeriGas
Supplemental
Executive
Retirement Plan/
UGI
Supplemental
Savings Plan
Employer
Contribution
to
401(k)
Savings Plan
Tax
Reimbursement
Termination
Payments
Total
$
$
$
$
$
$
$
$
12,750 $
4,077 $
9,291 $
5,094 $
12,750 $
12,443 $
5,738 $
10,112 $
60,491 $
6,442 $
13,680 $
19,674 $
43,907 $
19,916 $
66,167 $
16,418 $
3,000 $
0 $
0 $
0 $
76,241
10,519
2,600 $
664,133 $
689,704
1,850 $
0 $
2,215 $
0 $
0 $
0 $
0 $
0 $
26,618
56,657
34,574
71,905
1,083 $
375,000 $
402,613
(a) Mr. Iannarelli’s payout is consistent with the AmeriGas Severance Plan and the amount includes his Fiscal 2013
bonus.
(6)
(7)
The compensation reported for Messrs. Walsh and Greenberg is paid by UGI. For Fiscal 2013, UGI charged the Partnership
53% percent of the total compensation expense, other than the change in pension value, for Messrs. Walsh and Greenberg.
Discretionary bonus awarded in recognition of Mr. Walsh’s overall exceptional leadership, including serving as President
and Chief Executive Officer of UGI Utilities, Inc.
56
e
t
a
D
t
n
a
r
G
e
u
l
a
V
r
i
a
F
r
o
e
s
i
c
r
e
x
E
e
s
a
B
r
e
h
t
O
l
l
A
n
o
i
t
p
O
:
s
d
r
a
w
A
f
o
r
e
b
m
u
N
l
l
A
r
e
h
t
O
k
c
o
t
S
:
s
d
r
a
w
A
r
e
d
n
U
s
t
u
o
y
a
P
e
l
b
i
s
s
o
P
d
e
t
a
m
i
t
s
E
f
o
d
n
a
k
c
o
t
S
f
o
e
c
i
r
P
n
o
i
t
p
O
s
e
i
t
i
r
u
c
e
S
g
n
i
y
l
r
e
d
n
U
f
o
r
e
b
m
u
N
f
o
s
e
r
a
h
S
r
e
d
n
U
s
t
u
o
y
a
P
e
r
u
t
u
F
d
e
t
a
m
i
t
s
E
)
2
(
s
d
r
a
w
A
n
a
l
P
e
v
i
t
n
e
c
n
I
y
t
i
u
q
E
n
a
l
P
e
v
i
t
n
e
c
n
I
y
t
i
u
q
E
-
n
o
N
)
1
(
s
d
r
a
w
A
n
o
i
t
p
O
s
d
r
a
w
A
)
m
(
)
h
S
/
$
(
)
l
(
)
4
(
)
k
(
)
3
(
)
#
(
s
t
i
n
U
)
j
(
)
#
(
)
i
(
)
#
(
)
h
(
)
#
(
)
g
(
)
$
(
)
f
(
)
$
(
)
e
(
)
$
(
)
d
(
s
d
r
a
w
A
)
#
(
s
n
o
i
t
p
O
r
o
k
c
o
t
S
m
u
m
i
x
a
M
t
e
g
r
a
T
d
l
o
h
s
e
r
h
T
m
u
m
i
x
a
M
t
e
g
r
a
T
d
l
o
h
s
e
r
h
T
d
r
a
o
B
n
o
i
t
c
A
e
t
a
D
)
c
(
t
n
a
r
G
e
t
a
D
)
b
(
e
m
a
N
)
a
(
2
3
0
,
0
6
7
6
1
0
,
0
8
3
8
0
4
,
2
8
1
2
1
0
2
/
5
1
/
1
1
2
1
0
2
/
1
/
0
1
n
a
d
i
r
e
h
S
.
E
.
J
3
1
0
2
l
a
c
s
i
F
—
e
l
b
a
T
s
d
r
a
w
A
d
e
s
a
B
-
n
a
l
P
f
o
s
t
n
a
r
G
.
3
1
0
2
l
a
c
s
i
F
n
i
s
r
e
c
i
f
f
o
e
v
i
t
u
c
e
x
e
d
e
m
a
n
e
h
t
o
t
s
t
n
a
r
g
n
a
l
p
y
t
i
u
q
e
-
n
o
n
d
n
a
y
t
i
u
q
e
g
n
i
d
r
a
g
e
r
n
o
i
t
a
m
r
o
f
n
i
e
d
i
v
o
r
p
s
e
t
o
n
t
o
o
f
d
n
a
e
l
b
a
t
g
n
i
w
o
l
l
o
f
e
h
T
3
1
0
2
l
a
c
s
i
F
n
I
s
d
r
a
w
A
d
e
s
a
B
-
n
a
l
P
f
o
s
t
n
a
r
G
6
8
7
,
4
8
6
6
3
,
8
3
3
0
7
3
,
3
9
5
2
8
4
,
5
8
1
2
0
,
8
8
1
4
4
,
9
3
0
1
,
9
5
2
9
2
,
5
3
3
3
7
,
0
8
6
5
7
,
0
2
1
1
3
1
,
5
6
5
0
1
2
,
0
8
8
8
8
1
,
5
9
4
0
0
5
,
7
9
9
7
8
7
,
3
6
2
7
9
,
2
3
1
8
2
5
,
6
1
2
1
2
5
,
1
3
9
3
2
,
2
5
6
1
1
,
9
7
1
7
.
2
3
0
0
0
,
8
1
3
4
.
1
4
0
0
5
,
1
1
7
.
2
3
0
5
2
,
1
7
1
2
8
,
1
1
7
.
2
3
0
0
0
,
9
1
1
4
2
.
8
3
0
0
0
,
6
8
1
7
.
2
3
0
0
0
,
7
1
8
5
7
1
7
.
2
3
0
0
0
,
8
2
1
7
.
2
3
0
0
0
,
1
1
0
7
3
,
1
7
7
6
0
0
7
,
4
2
4
,
1
1
7
.
2
3
0
0
0
,
0
0
3
8
8
9
,
6
5
8
8
7
,
0
7
0
5
5
,
7
8
4
,
2
1
7
.
2
3
0
0
0
,
2
1
0
0
5
,
8
2
0
5
2
,
4
1
2
6
5
,
3
0
0
6
,
4
0
0
3
,
2
0
0
2
,
2
0
0
1
,
1
5
7
5
5
7
2
0
0
8
,
5
0
0
9
,
2
5
2
7
0
0
0
,
6
4
0
0
0
,
3
2
0
5
7
,
5
0
0
0
,
2
4
0
0
0
,
1
2
0
5
2
,
5
0
0
4
,
0
1
0
0
2
,
5
0
0
3
,
1
0
0
8
,
3
0
0
9
,
1
5
7
4
0
0
0
,
0
3
1
0
0
0
,
5
6
0
5
2
,
6
1
2
3
1
,
1
6
6
5
1
4
1
4
7
0
,
2
8
8
,
1
7
3
0
,
1
4
9
2
2
6
,
4
6
5
2
1
0
2
/
6
1
/
1
1
2
1
0
2
/
1
/
0
1
h
s
l
a
W
.
L
.
J
2
1
0
2
/
6
1
/
1
1
3
1
0
2
/
1
/
1
2
1
0
2
/
6
1
/
1
1
3
1
0
2
/
4
2
/
1
3
1
0
2
/
8
1
/
3
3
1
0
2
/
1
/
4
3
1
0
2
/
8
1
/
3
3
1
0
2
/
1
/
4
4
2
2
,
3
5
4
2
1
6
,
6
2
2
4
7
7
,
8
0
1
2
1
0
2
/
5
1
/
1
1
2
1
0
2
/
1
/
0
1
y
d
a
r
G
.
P
R
2
1
0
2
/
5
1
/
1
1
2
1
0
2
/
3
/
2
1
2
1
0
2
/
6
1
/
1
1
3
1
0
2
/
1
/
1
2
1
0
2
/
5
1
/
1
1
3
1
0
2
/
1
/
1
0
0
1
,
4
2
2
0
5
0
,
2
1
1
4
8
7
,
3
5
2
1
0
2
/
5
1
/
1
1
2
1
0
2
/
1
/
0
1
l
e
u
m
a
S
.
A
.
S
0
0
0
,
0
5
0
,
1
6
0
7
,
5
6
2
1
0
2
/
5
1
/
1
1
2
1
0
2
/
3
/
2
1
2
1
0
2
/
6
1
/
1
1
3
1
0
2
/
1
/
1
2
1
0
2
/
5
1
/
1
1
3
1
0
2
/
1
/
1
3
1
0
2
/
2
1
/
6
2
1
0
2
/
1
/
0
1
2
1
0
2
/
6
1
/
1
1
3
1
0
2
/
1
/
1
2
1
0
2
/
6
1
/
1
1
3
1
0
2
/
4
2
/
1
3
1
0
2
/
9
2
/
7
2
1
0
2
/
1
/
0
1
2
1
0
2
/
6
1
/
1
1
3
1
0
2
/
1
/
1
2
1
0
2
/
5
1
/
1
1
3
1
0
2
/
1
/
1
g
r
e
b
n
e
e
r
G
.
R
.
L
z
t
a
K
.
D
.
W
2
1
0
2
/
5
1
/
1
1
2
1
0
2
/
3
/
2
1
2
1
0
2
/
6
1
/
1
1
3
1
0
2
/
1
/
1
2
1
0
2
/
5
1
/
1
1
3
1
0
2
/
1
/
1
6
1
4
,
0
1
1
8
0
2
,
5
5
0
0
5
,
6
2
2
1
0
2
/
6
1
/
1
1
2
1
0
2
/
1
/
0
1
)
5
(
r
e
h
g
a
l
l
a
G
.
J
.
H
0
0
0
,
5
7
2
1
0
2
/
6
1
/
1
1
3
1
0
2
/
1
/
1
2
1
0
2
/
6
1
/
1
1
3
1
0
2
/
4
2
/
1
3
1
0
2
/
0
3
/
4
3
1
0
2
/
0
2
/
5
3
1
0
2
/
9
2
/
4
3
1
0
2
/
0
2
/
5
3
1
0
2
/
9
2
/
4
2
1
0
2
/
1
/
0
1
2
1
0
2
/
5
1
/
1
1
2
1
0
2
/
3
/
2
1
2
1
0
2
/
6
1
/
1
1
3
1
0
2
/
1
/
1
2
1
0
2
/
5
1
/
1
1
3
1
0
2
/
1
/
1
i
l
l
e
r
a
n
n
a
I
.
S
.
J
57
n
m
u
l
o
c
n
o
i
t
a
s
n
e
p
m
o
C
n
a
l
P
e
v
i
t
n
e
c
n
I
y
t
i
u
q
E
-
n
o
N
e
h
t
n
i
d
e
d
u
l
c
n
i
e
r
a
d
n
a
d
e
n
i
m
r
e
t
e
d
n
e
e
b
y
d
a
e
r
l
a
e
v
a
h
s
d
r
a
w
a
e
s
e
h
t
r
o
f
s
t
n
e
m
y
a
P
.
s
n
a
l
p
s
u
n
o
b
l
a
u
n
n
a
e
h
t
f
o
n
o
i
t
p
i
r
c
s
e
d
a
r
o
f
f
o
t
n
e
m
e
v
e
i
h
c
a
n
o
d
e
s
a
b
s
i
l
e
u
m
a
S
d
n
a
,
y
d
a
r
G
,
r
e
h
g
a
l
l
a
G
,
n
a
d
i
r
e
h
S
.
s
r
s
s
e
M
r
o
f
n
w
o
h
s
t
n
u
o
m
a
d
l
o
h
s
e
r
h
t
e
h
T
.
3
1
0
2
l
a
c
s
i
F
-
e
l
b
a
T
n
o
i
t
a
s
n
e
p
m
o
C
y
r
a
m
m
u
S
e
h
t
f
o
)
)
g
(
n
m
u
l
o
c
(
t
n
u
o
m
a
d
l
o
h
s
e
r
h
t
e
h
T
.
s
e
v
i
t
c
e
j
b
o
h
t
w
o
r
g
r
e
m
o
t
s
u
c
f
o
t
n
e
m
e
v
e
i
h
c
a
t
e
g
r
a
t
-
w
o
l
e
b
r
o
f
d
e
d
i
v
o
r
p
t
n
e
t
x
e
m
u
m
i
x
a
m
e
h
t
o
t
d
e
c
u
d
e
r
t
n
u
o
m
a
g
n
i
t
l
u
s
e
r
e
h
t
h
t
i
w
l
a
o
g
l
a
i
c
n
a
n
i
f
e
h
t
f
o
t
n
e
c
r
e
p
0
9
,
s
t
u
o
y
a
p
l
a
u
t
c
a
r
i
e
h
t
o
t
l
a
u
q
e
e
r
a
z
t
a
K
d
n
a
i
l
l
e
r
a
n
n
a
I
.
s
r
s
s
e
M
r
o
f
n
w
o
h
s
s
t
n
u
o
m
a
t
e
g
r
a
t
e
h
T
.
l
a
o
g
l
a
i
c
n
a
n
i
f
I
G
U
e
h
t
f
o
t
n
e
c
r
e
p
0
8
f
o
t
n
e
m
e
v
e
i
h
c
a
n
o
d
e
s
a
b
s
i
h
s
l
a
W
.
r
M
r
o
f
n
w
o
h
s
”
s
i
s
y
l
a
n
A
d
n
a
n
o
i
s
s
u
c
s
i
D
n
o
i
t
a
s
n
e
p
m
o
C
“
e
e
S
.
3
1
0
2
l
a
c
s
i
F
r
o
f
n
a
l
p
s
u
n
o
b
l
a
u
n
n
a
s
’
y
n
a
p
m
o
c
t
n
a
v
e
l
e
r
e
h
t
r
e
d
n
u
s
e
i
t
i
n
u
t
r
o
p
p
o
s
u
n
o
b
o
t
e
t
a
l
e
r
g
n
i
d
a
e
h
s
i
h
t
r
e
d
n
u
n
w
o
h
s
s
t
n
u
o
m
a
e
h
T
)
1
(
.
t
u
o
y
a
p
l
a
u
t
c
a
s
i
h
o
t
l
a
u
q
e
s
i
g
r
e
b
n
e
e
r
G
.
r
M
r
o
f
n
w
o
h
s
t
n
u
o
m
a
t
e
g
r
a
t
e
h
T
.
n
o
i
t
a
r
a
p
e
s
f
o
s
e
t
a
d
r
i
e
h
t
n
o
d
e
s
a
b
3
1
0
2
l
a
c
s
i
F
r
o
f
d
e
t
a
r
o
r
p
e
s
a
c
e
h
t
n
i
s
e
r
u
t
i
e
f
r
o
f
d
e
t
a
r
-
o
r
p
h
t
i
w
,
t
n
e
m
y
o
l
p
m
e
f
o
n
o
i
t
a
n
i
m
r
e
t
f
o
t
n
e
v
e
e
h
t
n
i
d
o
i
r
e
p
e
c
n
a
m
r
o
f
r
e
p
e
h
t
f
o
d
n
e
e
h
t
l
i
t
n
u
e
l
b
a
t
i
e
f
r
o
f
e
r
a
s
t
i
n
u
e
c
n
a
m
r
o
f
r
e
P
”
.
s
i
s
y
l
a
n
A
d
n
a
n
o
i
s
s
u
c
s
i
D
h
s
a
c
n
i
d
i
a
p
e
b
l
l
i
w
s
t
n
e
l
a
v
i
u
q
e
n
o
i
t
u
b
i
r
t
s
i
d
d
n
a
s
t
i
n
u
e
c
n
a
m
r
o
f
r
e
p
g
n
i
d
n
a
t
s
t
u
o
,
l
o
r
t
n
o
c
n
i
e
g
n
a
h
c
a
f
o
e
s
a
c
e
h
t
n
I
.
y
t
i
l
i
b
a
s
i
d
r
o
h
t
a
e
d
,
t
n
e
m
e
r
i
t
e
r
o
t
e
u
d
t
n
e
m
y
o
l
p
m
e
f
o
n
o
i
t
a
n
i
m
r
e
t
d
e
s
a
b
,
l
o
r
t
n
o
c
n
i
e
g
n
a
h
c
e
h
t
f
o
e
t
a
d
e
h
t
n
o
d
e
d
n
e
d
o
i
r
e
p
e
c
n
a
m
r
o
f
r
e
p
e
h
t
f
i
e
l
b
a
y
a
p
e
b
d
l
u
o
w
t
a
h
t
t
n
u
o
m
a
d
r
a
w
a
e
h
t
)
i
i
(
r
o
,
d
r
a
w
a
t
e
g
r
a
t
e
h
t
)
i
(
f
o
r
e
t
a
e
r
g
e
h
t
o
t
l
a
u
q
e
t
n
u
o
m
a
n
a
f
o
n
i
r
o
f
n
w
o
h
s
s
d
r
a
w
a
e
h
T
.
e
e
t
t
i
m
m
o
C
n
o
i
s
n
e
P
/
n
o
i
t
a
s
n
e
p
m
o
C
e
h
t
y
b
d
e
n
i
m
r
e
t
e
d
s
a
,
l
o
r
t
n
o
c
n
i
e
g
n
a
h
c
e
h
t
f
o
e
t
a
d
e
h
t
f
o
s
a
l
a
o
g
e
c
n
a
m
r
o
f
r
e
p
e
h
t
f
o
t
n
e
m
e
v
e
i
h
c
a
s
’
p
i
h
s
r
e
n
t
r
a
P
e
h
t
n
o
n
o
i
s
s
u
c
s
i
D
n
o
i
t
a
s
n
e
p
m
o
C
“
n
i
d
e
b
i
r
c
s
e
d
s
a
,
n
a
l
P
3
1
0
2
n
o
i
t
a
r
o
p
r
o
C
I
G
U
e
h
t
r
e
d
n
u
s
t
i
n
u
e
c
n
a
m
r
o
f
r
e
p
e
r
a
r
e
h
g
a
l
l
a
G
.
r
M
r
o
f
n
w
o
h
s
s
d
r
a
w
a
0
0
3
,
2
d
n
a
g
r
e
b
n
e
e
r
G
d
n
a
h
s
l
a
W
.
s
r
s
s
e
M
s
u
o
g
o
l
a
n
a
e
r
a
,
n
a
l
P
3
1
0
2
n
o
i
t
a
r
o
p
r
o
C
I
G
U
e
h
t
d
n
a
n
a
l
P
4
0
0
2
n
o
i
t
a
r
o
p
r
o
C
I
G
U
e
h
t
n
i
d
e
n
i
f
e
d
s
a
,
l
o
r
t
n
o
c
n
i
e
g
n
a
h
c
d
n
a
s
e
r
u
t
i
e
f
r
o
f
o
t
t
c
e
p
s
e
r
h
t
i
w
s
d
r
a
w
a
e
s
e
h
t
f
o
s
m
r
e
T
”
.
s
i
s
y
l
a
n
A
d
n
a
t
l
u
s
e
r
a
s
a
d
e
t
i
e
f
r
o
f
e
r
e
w
s
t
i
n
u
m
o
t
n
a
h
p
d
n
a
s
t
i
n
u
e
c
n
a
m
r
o
f
r
e
p
s
’
i
l
l
e
r
a
n
n
a
I
.
r
M
.
n
a
l
P
e
v
i
t
n
e
c
n
I
m
r
e
T
-
g
n
o
L
s
a
G
i
r
e
m
A
0
1
0
2
e
h
t
r
e
d
n
u
d
e
t
n
a
r
g
s
t
i
n
u
e
c
n
a
m
r
o
f
r
e
p
e
h
t
f
o
s
m
r
e
t
e
h
t
o
t
m
o
r
f
n
o
i
t
a
r
a
p
e
s
s
i
h
f
o
t
l
u
s
e
r
a
s
a
s
t
i
n
u
e
c
n
a
m
r
o
f
r
e
p
2
1
0
2
l
a
c
s
i
F
s
i
h
f
o
d
r
i
h
t
-
e
n
o
d
n
a
s
t
i
n
u
e
c
n
a
m
r
o
f
r
e
p
3
1
0
2
l
a
c
s
i
F
s
i
h
f
o
s
d
r
i
h
t
-
o
w
t
d
e
t
i
e
f
r
o
f
z
t
a
K
.
r
M
.
e
c
i
v
r
e
s
m
o
r
f
n
o
i
t
a
r
a
p
e
s
s
i
h
f
o
n
o
i
t
a
s
n
e
p
m
o
C
“
n
i
d
e
b
i
r
c
s
e
d
s
a
,
n
a
l
P
e
v
i
t
n
e
c
n
I
m
r
e
T
-
g
n
o
L
s
a
G
i
r
e
m
A
0
1
0
2
e
h
t
r
e
d
n
u
s
t
i
n
u
e
c
n
a
m
r
o
f
r
e
p
e
r
a
r
e
h
g
a
l
l
a
G
.
r
M
r
o
f
n
w
o
h
s
s
d
r
a
w
a
0
1
1
,
1
d
n
a
n
a
d
i
r
e
h
S
.
r
M
r
o
f
n
w
o
h
s
s
d
r
a
w
a
e
h
T
)
2
(
.
e
c
i
v
r
e
s
s
t
i
n
u
m
o
t
n
a
h
p
d
e
t
s
e
v
n
u
e
h
t
,
y
t
i
l
i
b
a
s
i
d
r
o
h
t
a
e
d
,
t
n
e
m
e
r
i
t
e
r
n
a
h
t
r
e
h
t
o
,
n
o
s
a
e
r
y
n
a
r
o
f
t
n
e
m
y
o
l
p
m
e
f
o
n
o
i
t
a
n
i
m
r
e
t
f
o
t
n
e
v
e
e
h
t
n
I
.
t
n
e
m
y
o
l
p
m
e
d
e
u
n
i
t
n
o
c
o
t
t
c
e
j
b
u
s
,
4
1
0
2
,
3
r
e
b
m
e
c
e
D
d
l
u
o
w
d
e
t
n
a
r
g
s
t
i
n
u
f
o
r
e
b
m
u
n
e
h
t
f
o
f
l
a
h
e
n
o
,
t
n
a
r
g
e
h
t
g
n
i
w
o
l
l
o
f
r
a
e
y
l
a
i
t
i
n
i
e
h
t
g
n
i
r
u
d
y
t
i
l
i
b
a
s
i
d
r
o
h
t
a
e
d
,
t
n
e
m
e
r
i
t
e
r
f
o
t
n
e
v
e
e
h
t
n
I
.
d
e
t
i
e
f
r
o
f
e
b
l
l
i
w
s
t
n
e
l
a
v
i
u
q
e
d
n
e
d
i
v
i
d
d
n
a
n
o
t
s
e
v
l
l
i
w
t
a
h
t
s
t
i
n
u
n
o
m
m
o
c
s
r
e
n
t
r
a
P
s
a
G
i
r
e
m
A
d
e
t
c
i
r
t
s
e
r
-
e
m
i
t
t
n
e
s
e
r
p
e
r
d
n
a
n
a
l
P
e
v
i
t
n
e
c
n
I
m
r
e
T
-
g
n
o
L
s
a
G
i
r
e
m
A
0
1
0
2
e
h
t
r
e
d
n
u
d
e
t
n
a
r
g
s
t
i
n
u
m
o
t
n
a
h
p
e
r
a
n
w
o
h
s
s
d
r
a
w
a
e
h
T
)
3
(
.
e
c
i
v
r
e
s
m
o
r
f
n
o
i
t
a
r
a
p
e
s
s
i
h
f
o
t
l
u
s
e
r
a
s
a
d
e
t
i
e
f
r
o
f
e
r
e
w
s
d
r
a
w
a
s
’
i
l
l
e
r
a
n
n
a
I
.
r
M
.
d
e
t
i
e
f
r
o
f
e
r
a
r
e
d
n
i
a
m
e
r
e
h
t
d
n
a
t
s
e
v
y
l
e
t
a
i
d
e
m
m
i
58
y
l
l
a
r
e
n
e
g
s
i
n
o
i
t
p
o
h
c
a
e
f
o
m
r
e
t
e
h
T
.
e
t
a
d
e
r
u
t
u
f
d
e
i
f
i
c
e
p
s
a
r
o
t
n
a
r
g
e
h
t
f
o
e
t
a
d
e
h
t
r
e
h
t
i
e
s
i
h
c
i
h
w
,
t
n
a
r
g
e
h
t
f
o
e
t
a
d
e
v
i
t
c
e
f
f
e
e
h
t
n
o
k
c
o
t
S
n
o
m
m
o
C
s
’
I
G
U
f
o
e
u
l
a
v
t
e
k
r
a
m
r
i
a
f
e
h
t
f
o
s
n
o
i
t
p
o
l
l
A
.
e
t
a
d
t
n
a
r
g
e
h
t
f
o
y
r
a
s
r
e
v
i
n
n
a
t
s
r
i
f
e
h
t
n
o
g
n
i
n
n
i
g
e
b
s
t
n
e
m
l
l
a
t
s
n
i
l
a
u
n
n
a
l
a
u
q
e
e
e
r
h
t
n
i
e
l
b
a
s
i
c
r
e
x
e
e
m
o
c
e
b
s
n
o
i
t
p
o
e
h
T
.
m
r
e
t
e
l
b
a
w
o
l
l
a
m
u
m
i
x
a
m
e
h
t
s
i
h
c
i
h
w
,
s
r
a
e
y
0
1
n
o
i
t
a
n
i
m
r
e
t
g
n
i
w
o
l
l
o
f
e
s
i
c
r
e
x
e
r
o
f
s
n
o
i
t
p
e
c
x
e
h
t
i
w
,
e
t
a
i
l
i
f
f
a
n
a
r
o
I
G
U
,
r
e
n
t
r
a
P
l
a
r
e
n
e
G
e
h
t
y
b
d
e
y
o
l
p
m
e
s
i
e
e
n
o
i
t
p
o
e
h
t
e
l
i
h
w
y
l
n
o
e
l
b
a
s
i
c
r
e
x
e
y
l
l
a
r
e
n
e
g
d
n
a
e
l
b
a
r
e
f
s
n
a
r
t
n
o
n
e
r
a
n
o
i
t
a
n
i
m
r
e
t
f
o
e
t
a
d
e
h
t
f
o
s
a
d
e
t
s
e
v
s
a
h
t
i
t
a
h
t
t
n
e
t
x
e
e
h
t
o
t
y
l
n
o
e
l
b
a
s
i
c
r
e
x
e
e
b
l
l
i
w
n
o
i
t
p
o
e
h
t
,
e
s
u
a
c
t
u
o
h
t
i
w
n
o
i
t
a
n
i
m
r
e
t
f
o
e
s
a
c
e
h
t
n
I
.
h
t
a
e
d
d
n
a
y
t
i
l
i
b
a
s
i
d
,
t
n
e
m
e
r
i
t
e
r
,
e
s
u
a
c
t
u
o
h
t
i
w
n
o
i
t
a
n
i
m
r
e
t
f
o
e
t
a
d
e
h
t
n
o
g
n
i
c
n
e
m
m
o
c
d
o
i
r
e
p
h
t
n
o
m
-
3
1
e
h
t
f
o
n
o
i
t
a
r
i
p
x
e
e
h
t
d
n
a
n
o
i
t
p
o
e
h
t
f
o
e
t
a
d
n
o
i
t
a
r
i
p
x
e
e
h
t
f
o
r
e
i
l
r
a
e
e
h
t
n
o
p
u
e
t
a
n
i
m
r
e
t
l
l
i
w
n
o
i
t
p
o
e
h
t
d
n
a
t
n
e
m
y
o
l
p
m
e
f
o
d
e
u
n
i
t
n
o
c
r
o
,
y
b
d
e
y
o
l
p
m
e
e
b
o
t
d
e
u
n
i
t
n
o
c
d
a
h
e
e
n
o
i
t
p
o
e
h
t
f
i
s
a
e
l
b
a
s
i
c
r
e
x
e
e
m
o
c
e
b
r
e
t
f
a
e
r
e
h
t
l
l
i
w
n
o
i
t
p
o
e
h
t
,
t
n
e
m
e
r
i
t
e
r
o
t
e
u
d
s
r
u
c
c
o
t
n
e
m
y
o
l
p
m
e
f
o
n
o
i
t
a
n
i
m
r
e
t
f
I
.
t
n
e
m
y
o
l
p
m
e
f
o
n
o
i
t
p
o
e
h
t
,
y
t
i
l
i
b
a
s
i
d
o
t
e
u
d
s
r
u
c
c
o
t
n
e
m
y
o
l
p
m
e
f
o
n
o
i
t
a
n
i
m
r
e
t
f
I
.
n
o
i
t
p
o
e
h
t
f
o
e
t
a
d
n
o
i
t
a
r
i
p
x
e
l
a
n
i
g
i
r
o
e
h
t
n
o
p
u
e
t
a
n
i
m
r
e
t
l
l
i
w
n
o
i
t
p
o
e
h
t
d
n
a
,
y
n
a
p
m
o
C
e
h
t
,
o
t
e
c
i
v
r
e
s
e
d
i
v
o
r
p
o
t
e
h
t
h
t
i
w
e
c
n
a
d
r
o
c
c
a
n
i
s
e
u
n
i
t
n
o
c
g
n
i
t
s
e
v
d
n
a
,
e
t
a
d
n
o
i
t
a
r
i
p
x
e
l
a
n
i
g
i
r
o
e
h
t
d
n
a
,
t
n
e
m
y
o
l
p
m
e
f
o
n
o
i
t
a
n
i
m
r
e
t
h
c
u
s
f
o
e
t
a
d
e
h
t
f
o
y
r
a
s
r
e
v
i
n
n
a
d
r
i
h
t
e
h
t
f
o
r
e
i
l
r
a
e
e
h
t
o
t
d
e
n
e
t
r
o
h
s
s
i
m
r
e
t
e
h
t
f
o
r
e
i
l
r
a
e
e
h
t
o
t
d
e
n
e
t
r
o
h
s
e
b
l
l
i
w
m
r
e
t
n
o
i
t
p
o
e
h
t
d
n
a
d
e
t
s
e
v
y
l
l
u
f
e
m
o
c
e
b
l
l
i
w
n
o
i
t
p
o
e
h
t
,
e
e
y
o
l
p
m
e
n
a
e
l
i
h
w
e
e
n
o
i
t
p
o
e
h
t
f
o
h
t
a
e
d
f
o
t
n
e
v
e
e
h
t
n
I
.
e
l
u
d
e
h
c
s
g
n
i
t
s
e
v
l
a
n
i
g
i
r
o
,
s
t
i
l
p
s
k
c
o
t
s
,
s
n
o
i
t
a
z
i
l
a
t
i
p
a
c
e
r
f
o
t
n
e
v
e
e
h
t
n
i
t
n
e
m
t
s
u
j
d
a
o
t
t
c
e
j
b
u
s
e
r
a
s
n
o
i
t
p
O
.
e
t
a
d
n
o
i
t
a
r
i
p
x
e
l
a
n
i
g
i
r
o
e
h
t
d
n
a
,
h
t
a
e
d
s
’
e
e
n
o
i
t
p
o
e
h
t
g
n
i
w
o
l
l
o
f
d
o
i
r
e
p
h
t
n
o
m
-
2
1
e
h
t
f
o
n
o
i
t
a
r
i
p
x
e
.
k
c
o
t
s
n
o
m
m
o
c
s
’
I
G
U
g
n
i
t
c
e
f
f
a
s
n
o
i
t
c
a
s
n
a
r
t
e
t
a
r
o
p
r
o
c
r
a
l
i
m
i
s
r
e
h
t
o
d
n
a
,
s
r
e
g
r
e
m
t
n
e
c
r
e
p
0
0
1
n
a
h
t
s
s
e
l
t
o
n
s
i
e
c
i
r
p
e
s
i
c
r
e
x
e
n
o
i
t
p
o
e
h
t
,
s
n
a
l
P
e
s
e
h
t
f
o
h
c
a
e
r
e
d
n
U
.
n
a
l
P
3
1
0
2
n
o
i
t
a
r
o
p
r
o
C
I
G
U
e
h
t
r
o
n
a
l
P
4
0
0
2
n
o
i
t
a
r
o
p
r
o
C
I
G
U
e
h
t
r
e
h
t
i
e
r
e
d
n
u
d
e
t
n
a
r
g
e
r
a
s
n
o
i
t
p
O
)
4
(
r
e
r
u
s
a
e
r
T
s
a
e
l
o
r
s
i
h
h
t
i
w
n
o
i
t
c
e
n
n
o
c
n
i
n
o
i
t
a
r
o
p
r
o
C
I
G
U
y
b
e
d
a
m
e
r
e
w
,
3
1
0
2
,
4
2
y
r
a
u
n
a
J
n
o
d
e
t
n
a
r
g
s
t
i
n
u
e
c
n
a
m
r
o
f
r
e
p
d
n
a
,
3
1
0
2
,
1
y
r
a
u
n
a
J
n
o
r
e
h
g
a
l
l
a
G
.
r
M
o
t
d
e
t
n
a
r
g
s
n
o
i
t
p
o
e
h
T
)
5
(
.
n
o
i
t
a
r
o
p
r
o
C
I
G
U
f
o
y
t
i
u
q
E
e
v
i
t
n
e
c
n
I
d
e
t
s
e
V
t
e
k
r
a
M
:
s
d
r
a
w
A
n
a
l
P
d
e
n
r
a
e
n
U
f
o
e
u
l
a
V
t
u
o
y
a
P
r
o
s
t
h
g
i
R
r
e
h
t
O
t
o
N
e
v
a
H
t
a
h
T
r
o
s
t
i
n
U
,
s
e
r
a
h
S
y
t
i
u
q
E
e
v
i
t
n
e
c
n
I
d
e
t
s
e
V
:
s
d
r
a
w
A
n
a
l
P
d
e
n
r
a
e
n
U
f
o
r
e
b
m
u
N
r
e
h
t
O
r
o
t
o
N
e
v
a
H
t
a
h
T
s
t
h
g
i
R
s
t
i
n
U
,
s
e
r
a
h
S
)
$
(
)
j
(
5
1
8
,
3
9
1
0
6
5
,
4
4
3
8
4
7
,
3
1
6
)
#
(
)
i
(
)
1
2
(
0
0
2
,
3
)
2
2
(
4
8
5
,
1
)
3
2
(
0
0
5
,
4
)
4
2
(
0
0
0
,
8
)
5
2
(
0
5
2
,
4
1
7
7
3
,
7
4
)
6
2
(
0
0
1
,
1
0
4
9
,
3
4
7
0
8
3
,
7
1
0
,
1
0
9
9
,
9
9
8
0
3
7
,
1
2
8
)
8
2
(
0
0
0
,
8
2
)
9
2
(
0
0
0
,
6
2
)
0
3
(
0
0
0
,
3
2
)
1
3
(
0
0
0
,
1
2
)
0
2
(
0
3
4
,
8
7
)
8
1
(
1
2
8
,
1
)
$
(
)
h
(
f
o
e
u
l
a
V
t
e
k
r
a
M
d
e
t
s
e
V
t
o
N
e
v
a
H
t
a
h
T
s
t
i
n
U
p
i
h
s
r
e
n
t
r
a
P
r
o
s
e
r
a
h
S
/
k
c
o
t
S
f
o
s
t
i
n
U
)
#
(
)
g
(
/
k
c
o
t
S
f
o
p
i
h
s
r
e
n
t
r
a
P
f
o
r
e
b
m
u
N
s
t
i
n
U
r
o
s
e
r
a
h
S
d
e
t
s
e
V
t
o
N
e
v
a
H
t
a
h
t
s
t
i
n
U
8
1
0
2
/
1
3
/
2
1
9
1
0
2
/
1
3
/
2
1
0
2
0
2
/
1
3
/
2
1
1
2
0
2
/
8
/
5
1
2
0
2
/
1
3
/
2
1
2
2
0
2
/
2
/
3
2
2
0
2
/
1
3
/
2
1
e
t
a
D
)
f
(
1
2
0
2
/
1
/
7
0
2
0
2
/
1
3
/
2
1
1
2
0
2
/
1
3
/
2
1
2
2
0
2
/
1
3
/
2
1
3
2
0
2
/
9
1
/
5
4
1
0
2
/
8
1
/
7
4
1
0
2
/
8
1
/
7
4
1
0
2
/
8
1
/
7
7
1
0
2
/
1
3
/
2
1
8
1
0
2
/
1
3
/
2
1
9
1
0
2
/
1
3
/
2
1
0
2
0
2
/
1
3
/
2
1
1
2
0
2
/
1
3
/
2
1
2
2
0
2
/
1
3
/
2
1
n
o
i
t
p
O
n
o
i
t
a
r
i
p
x
E
2
4
.
4
2
9
1
.
4
2
8
5
.
1
3
2
5
.
2
3
0
4
.
9
2
4
0
.
8
2
1
7
.
2
3
8
5
.
1
3
7
4
.
2
3
0
4
.
9
2
1
7
.
2
3
3
4
.
1
4
9
1
.
5
2
8
5
.
1
3
0
4
.
9
2
5
2
.
7
2
2
4
.
4
2
9
1
.
4
2
8
5
.
1
3
0
4
.
9
2
1
7
.
2
3
)
3
(
4
3
3
,
7
)
4
(
8
7
7
,
1
)
5
(
0
0
0
,
0
2
)
6
(
1
0
0
,
8
2
)
7
(
0
5
2
,
1
7
)
3
(
0
0
5
,
2
)
8
(
2
4
0
,
1
)
5
(
4
3
3
,
1
1
)
7
(
0
0
0
,
8
1
)
9
(
0
0
5
,
1
)
3
(
7
6
6
,
1
4
)
5
(
4
3
3
,
3
8
)
7
(
0
0
0
,
9
1
1
n
o
i
t
p
O
e
s
i
c
r
e
x
E
e
c
i
r
P
)
$
(
)
e
(
)
#
(
s
n
o
i
t
p
O
s
e
i
t
i
r
u
c
e
S
f
o
r
e
b
m
u
N
g
n
i
y
l
r
e
d
n
U
)
c
(
e
l
b
a
s
i
c
r
e
x
e
n
U
)
b
(
)
1
(
0
0
0
,
1
2
)
2
(
0
0
0
,
2
2
)
3
(
6
6
6
,
4
1
)
4
(
5
5
5
,
3
)
5
(
0
0
0
,
0
1
)
6
(
9
9
9
,
3
1
)
3
(
0
)
8
(
3
8
0
,
2
)
5
(
6
6
6
,
5
)
0
1
(
0
0
5
,
1
)
1
1
(
3
3
3
,
6
)
2
1
(
6
6
6
,
6
)
3
1
(
0
0
0
,
0
2
1
)
1
(
0
0
0
,
5
2
1
)
2
(
0
0
0
,
5
2
1
)
3
(
3
3
3
,
3
8
)
5
(
6
6
6
,
1
4
)
#
(
s
n
o
i
t
p
O
s
e
i
t
i
r
u
c
e
S
f
o
r
e
b
m
u
N
g
n
i
y
l
r
e
d
n
U
d
e
s
i
c
r
e
x
e
n
U
e
l
b
a
s
i
c
r
e
x
E
n
a
d
i
r
e
h
S
.
E
.
J
e
m
a
N
)
a
(
59
r
e
h
g
a
l
l
a
G
.
J
.
H
i
l
l
e
r
a
n
n
a
I
.
S
.
J
h
s
l
a
W
.
L
.
J
s
d
r
a
w
A
k
c
o
t
S
s
d
r
a
w
A
n
o
i
t
p
O
3
1
0
2
l
a
c
s
i
F
—
e
l
b
a
T
d
n
E
-
r
a
e
Y
t
a
s
d
r
a
w
A
y
t
i
u
q
E
g
n
i
d
n
a
t
s
t
u
O
:
s
r
e
c
i
f
f
o
e
v
i
t
u
c
e
x
e
d
e
m
a
n
e
h
t
f
o
h
c
a
e
r
o
f
3
1
0
2
,
0
3
r
e
b
m
e
t
p
e
S
f
o
s
a
s
d
r
a
w
a
y
t
i
u
q
e
g
n
i
d
n
a
t
s
t
u
o
e
h
t
s
w
o
h
s
w
o
l
e
b
e
l
b
a
t
e
h
T
d
n
E
-
r
a
e
Y
t
a
s
d
r
a
w
A
y
t
i
u
q
E
g
n
i
d
n
a
t
s
t
u
O
9
4
8
,
9
5
8
,
1
0
5
4
,
3
4
5
,
2
0
5
4
,
3
4
5
,
2
)
8
2
(
0
0
0
,
0
7
)
9
2
(
0
0
0
,
5
6
)
0
3
(
0
0
0
,
5
6
)
9
2
(
0
7
0
,
3
4
)
0
3
(
8
7
3
,
4
2
)
1
2
(
0
0
7
,
1
)
3
2
(
)
2
3
(
)
5
2
(
)
3
3
(
0
0
0
,
1
6
6
5
5
1
8
,
3
9
1
4
6
9
,
3
2
2
6
2
5
,
7
7
3
3
8
,
1
8
)
7
2
(
0
0
5
,
4
)
5
2
(
0
0
2
,
5
)
1
2
(
0
0
0
,
2
)
3
2
(
0
0
8
,
1
)
5
2
(
0
0
9
,
1
)
0
2
(
4
8
3
,
2
8
4
)
0
2
(
6
0
0
,
9
5
)
9
1
(
0
0
2
,
1
1
)
8
1
(
0
7
3
,
1
)
0
2
(
8
5
1
,
9
2
)
8
1
(
7
7
6
3
2
0
2
/
1
3
/
3
2
2
0
2
/
6
1
/
1
2
2
0
2
/
1
3
/
2
1
6
1
0
2
/
1
3
/
2
1
7
1
0
2
/
1
3
/
2
1
8
1
0
2
/
4
2
/
1
8
1
0
2
/
1
3
/
2
1
9
1
0
2
/
1
3
/
2
1
0
2
0
2
/
1
3
/
2
1
1
2
0
2
/
1
3
/
2
1
2
2
0
2
/
1
3
/
2
1
7
1
0
2
/
1
3
/
2
1
8
1
0
2
/
1
3
/
2
1
9
1
0
2
/
1
3
/
2
1
0
2
0
2
/
1
3
/
2
1
1
2
0
2
/
1
3
/
2
1
2
2
0
2
/
1
3
/
2
1
8
1
0
2
/
1
3
/
2
1
9
1
0
2
/
1
3
/
2
1
0
2
0
2
/
1
3
/
2
1
1
2
0
2
/
1
3
/
2
1
2
2
0
2
/
1
3
/
2
1
4
2
.
8
3
3
0
.
8
2
1
7
.
2
3
8
2
.
7
2
5
2
.
7
2
9
8
.
4
2
2
4
.
4
2
9
1
.
4
2
8
5
.
1
3
0
4
.
9
2
1
7
.
2
3
5
2
.
7
2
2
4
.
4
2
9
1
.
4
2
8
5
.
1
3
0
4
.
9
2
1
7
.
2
3
2
4
.
4
2
9
1
.
4
2
8
5
.
1
3
0
4
.
9
2
1
7
.
2
3
)
4
1
(
0
0
0
,
6
8
)
5
1
(
0
0
0
,
0
2
)
7
(
0
0
0
,
8
2
)
3
(
0
0
0
,
4
)
5
(
0
0
0
,
8
)
7
(
0
0
0
,
1
1
)
3
(
0
0
0
,
0
0
1
)
5
(
0
0
0
,
0
0
2
)
7
(
0
0
0
,
0
0
3
)
3
(
0
0
0
,
4
)
5
(
7
6
6
,
8
)
7
(
0
0
0
,
2
1
)
5
1
(
0
0
0
,
0
1
y
d
a
r
G
.
P
.
R
)
6
1
(
0
0
5
,
6
)
3
1
(
0
0
0
,
6
)
7
1
(
0
0
0
,
5
)
1
(
0
0
0
,
1
1
)
2
(
0
0
0
,
2
1
)
3
(
0
0
0
,
8
)
5
(
0
0
0
,
4
)
3
1
(
0
0
0
,
0
0
2
)
1
(
0
0
0
,
0
0
3
)
2
(
0
0
0
,
0
0
3
)
3
(
0
0
0
,
0
0
2
)
5
(
0
0
0
,
0
0
1
)
1
(
4
3
3
,
4
)
2
(
7
6
6
,
8
)
3
(
0
0
0
,
8
)
5
(
3
3
3
,
4
l
e
u
m
a
S
.
A
.
S
g
r
e
b
n
e
e
r
G
.
R
.
L
z
t
a
K
.
D
.
W
60
Table of Contents
Note: Column (d) was intentionally omitted.
(1) These options were granted effective January 1, 2009 and were fully vested on January 1, 2012.
(2) These options were granted effective January 1, 2010 and were fully vested on January 1, 2013.
(3) These options were granted effective January 1, 2011. These options vest 33 1/3 percent on each anniversary of the grant
date and will be fully vested on January 1, 2014.
(4) These options were granted effective May 9, 2011. These options vest 33 1/3 percent on each anniversary of the grant
date and will be fully vested on May 9, 2014.
(5) These options were granted effective January 1, 2012. These options vest 33 1/3 percent on each anniversary of the
grant date and will be fully vested on January 1, 2015.
(6) These options were granted effective March 3, 2012. These options vest 33 1/3 percent on each anniversary of the grant
date and will be fully vested on March 3, 2015.
(7) These options were granted effective January 1, 2013. These options vest 33 1/3 percent on each anniversary of the grant
date and will be fully vested on January 1, 2016.
(8) These options were granted effective July 1, 2011. These options vest 33 1/3 percent on each anniversary of the grant
date and will be fully vested on July 1, 2014.
(9) These options were granted effective May 20, 2013. These options vest 33 1/3 percent on each anniversary of the grant
date and will be fully vested on May 20, 2016.
(10) These options were granted effective March 1, 2010. These options vest 33 1/3 percent on each anniversary of the grant
date and will be fully vested on March 1, 2013.
(11) These options were granted effective January 1, 2011. The options reported represent the number of options vested as
of Mr. Iannarelli’s termination date of June 18, 2013.
(12) These options were granted effective January 1, 2012. The options reported represent the number of options vested as
of Mr. Iannarelli’s termination date of June 18, 2013.
(13) These options were granted effective January 1, 2008 and were fully vested on January 1, 2011.
(14) These options were granted effective April 1, 2013 in connection with Mr. Walsh’s promotion to Chief Executive
Officer in 2013. These options vest 33 1/3 percent on each anniversary of the grant date and will be fully vested on
April 1, 2016.
(15) These options were granted effective January 17, 2012. These options vest 33 1/3 percent on each anniversary of the
grant date and will be fully vested on January 17, 2015.
(16) These options were granted effective January 1, 2007 and were fully vested on January 1, 2010.
(17) These options were granted effective January 25, 2008 and were fully vested on January 25, 2011.
(18) Phantom units with distribution equivalents were awarded to Messrs. Sheridan, Grady and Samuel on December 3,
2012 in recognition of their contributions and leadership with respect to the acquisition and integration of Heritage
Propane during Fiscal 2012. The awards represent time-restricted AmeriGas Partners common units that will vest on
December 3, 2014, subject to continued employment. In the event of termination of employment for any reason, other
than retirement, death or disability, the unvested phantom units and dividend equivalents will be forfeited. In the
event of retirement, death or disability during the initial year following the grant, one half of the number of units
granted would immediately vest and the remained are forfeited.
(19) This phantom unit award was granted effective January 17, 2012. This award vested 20% on January 12, 2013 and the
remaining 80% will vest on January 12, 2014.
(20) The amount shown represents the closing price of AmeriGas Partners common units on September 30, 2013 multiplied
by the number of phantom units awarded.
61
Table of Contents
(21) The amount shown relates to a target award of AmeriGas Partners restricted units granted effective January 1, 2011.
The performance measurement period for these restricted units is January 1, 2011 through December 31, 2013. The
value of the number of restricted units that may be earned at the end of the performance period is based on the
AmeriGas Partners’ TUR relative to that of each of the master limited partnerships in the Alerian MLP Index as of the
first day of the performance measurement period. The actual number of restricted units and accompanying
distribution equivalents earned may be higher (up to 200% of the target award) or lower than the amount shown, based
on TUR performance through the end of the performance period. The restricted units will be payable, if at all, on
January 1, 2014. As of September 30, 2013, the AmeriGas Partners’ TUR ranking qualified for no payout in respect of
this award. See “Compensation Discussion & Analysis - Long-Term Compensation - Fiscal 2013 Equity Awards” for
more information on the TUR performance goal measurements.
(22) These performance units were awarded May 9, 2011. The measurement period and the performance goal is the same
as described in footnote 21. The performance units will be payable, if at all, on January 1, 2014.
(23) These performance units were awarded January 1, 2012. The measurement period for the performance goal is January
1, 2012 through December 31, 2014. The performance goal is the same as described in footnote 21, but is measured
for a different three-year period. The performance units will be payable, if at all, on January 1, 2015.
(24) These performance units were awarded March 3, 2012 in connection with Mr. Sheridan’s promotion to Chief
Executive Officer in 2012. The measurement period is the same as described in footnote 23 and the performance goal
is the same as described in footnote 21. The performance units will be payable, if at all, on January 1, 2015.
(25) These performance units were awarded January 1, 2013. The measurement period for the performance goal is January
1, 2013 through December 31, 2015. The performance goal is the same as described in footnote 21, but is measured
for a different three-year period. The performance units will be payable, if at all, on January 1, 2016.
(26) These performance units were awarded on May 20, 2013 in connection with Mr. Gallagher’s promotion to Chief
Financial Officer. The measurement period is the same as described in footnote 25 and the performance goal is the
same as described in footnote 21. The performance units will be payable, if at all, on January 1, 2016.
(27) These performance units were awarded January 17, 2012. The measurement period is the same as described in
footnote 23 and the performance goal is the same as described in footnote 21. The performance units will be payable,
if at all, on January 1, 2015.
(28) The amount shown relates to a target award of performance units granted effective January 1, 2011. The performance
measurement period for these performance units is January 1, 2011 through December 31, 2013. The value of the
number of performance units that may be earned at the end of the performance period is based on the Company’s TSR
relative to that of each of the companies in the Russell Midcap Utility Index, excluding telecommunications
companies, as of the first day of the performance measurement period. The actual number of performance units and
accompanying dividend equivalents earned may be higher (up to 200% of the target award) or lower than the amount
shown, based on TSR performance through the end of the performance period. The performance units will be payable,
if at all, on January 1, 2014. As of September 30, 2013, the Company’s TSR ranking qualified for 67.9% leverage of
the target number of performance units originally granted. See Compensation Discussion and Analysis - Long-Term
Compensation - Fiscal 2013 Equity Awards for more information on the TSR performance goal measurements.
(29) These performance units were awarded January 1, 2012. The measurement period for the performance goal is January
1, 2012 through December 31, 2014. The performance goal is the same as described in footnote 28, but is measured
for a different three-year period. The performance units will be payable, if at all, on January 1, 2015.
(30) These performance units were awarded January 1, 2013. The measurement period for the performance goal is January
1, 2013 through December 31, 2015. The performance goal is the same as described in footnote 28, but is measured
for a different three-year period. The performance units will be payable, if at all, on January 1, 2016.
(31) These performance units were awarded April 1, 2013 in connection with Mr. Walsh’s promotion to Chief Executive
Officer in 2013. The measurement period for the performance goal is January 1, 2013 through December 31, 2015.
The performance goal is the same as described in footnote 28, but is measured for a different three-year period. The
performance units will be payable, if at all, on January 1, 2016.
(32) Mr. Katz forfeited 500 performance units upon his separation from service.
(33) Mr. Katz forfeited 1,134 performance units upon his separation from service.
62
Table of Contents
Option Exercises and Stock Vested Table — Fiscal 2013
The following table sets forth (1) the number of shares of UGI common stock acquired by the named executive officers
in Fiscal 2013 from the exercise of stock options, (2) the value realized by those officers upon the exercise of stock options based
on the difference between the market price for UGI’s common stock on the date of exercise and the exercise price for the options,
(3) for Messrs. Walsh and Greenberg, the number of UGI performance units previously granted that vested in Fiscal 2013, (4) for
Messrs. Sheridan, Gallagher, Iannarelli, Grady, Samuel, and Katz, the number of AmeriGas performance units previously granted
that vested in Fiscal 2013, and (5) for Mr. Grady, the value realized was based on the the closing price on the NYSE for AmeriGas
Partners Common Units and for Messrs. Walsh and Greenberg, the value realized was based on the closing price on the NYSE
for shares of UGI common stock, on the vesting date.
Option Awards
Stock/Unit Awards
Number of
Shares
Acquired on
Exercise
(#)
(b)
68,000
5,000
27,666
190,000
0
14,000
845,000
28,000
Value
Realized
on Exercise
($)
(c)
1,134,480
26,825
238,266
2,525,750
0
233,460
12,557,550
244,858
Number of
Shares/Units
Acquired on
Vesting
(#)
(d)
Value
Realized
on Vesting
($)
(e)
0
0
0
0
2,800
0
0
0
0
0
0
0
109,172
0
0
0
Name
(a)
J. E. Sheridan
H. J. Gallagher
J. S. Iannarelli
J. L. Walsh
R. P. Grady
S. A. Samuel
L. R. Greenberg
W. D. Katz
Retirement Benefits
The following table shows the number of years of credited service for the named executive officers under the UGI Utilities,
Inc. Retirement Income Plan (which we refer to below as the “UGI Utilities Retirement Plan”) and the UGI Corporation
Supplemental Executive Retirement Plan (which we refer to below as the “UGI SERP”) and the actuarial present value of
accumulated benefits under those plans as of September 30, 2013 and any payments made to the named executive officers in Fiscal
2013 under those plans.
63
Table of Contents
Name
(a)
J. E. Sheridan(1)
H. J. Gallagher(2)
J. S. Iannarelli
J. L. Walsh
R. P. Grady(2)
S. A. Samuel(2)
L. R. Greenberg
W. D. Katz
Pension Benefits Table — Fiscal 2013
Plan Name
(b)
None
UGI Utilities Retirement Plan
UGI SERP
UGI Utilities Retirement Plan
UGI SERP
UGI Utilities Retirement Plan
UGI Utilities Retirement Plan
UGI Utilities Retirement Plan
UGI SERP
UGI Utilities Retirement Plan
UGI Utilities Retirement Plan
Number of
Years
Credited
Service
(#)
(c)
Present Value
of
Accumulated
Benefit
($)
(d)
Payments
During Last
Fiscal Year
($)
(e)
0
11
11
6
8
8
5
3
33
33
1
0
257,941
12,360
36,186
2,324,054
366,055
145,627
29,003
0
1,913,115
32,607
0
0
0
0
0
0
0
0
21,019,606
60,818
0
(1)
(2)
Mr. Sheridan does not participate in any defined benefit pension plan.
Messrs. Gallagher, Grady and Samuel each have vested annual benefit amounts under the UGI Utilities, Inc. Retirement
Plan based on prior credited service of approximately $37,100, $12,695 and $4,281, respectively. Messrs. Gallagher,
Grady and Samuel are not currently earning benefits under that plan.
Retirement Income Plan for Employees of UGI Utilities, Inc.
UGI participates in the UGI Utilities Retirement Plan, a qualified defined benefit retirement plan (“Pension Plan”) to
provide retirement income to its employees hired prior to January 1, 2009. The Pension Plan pays benefits based upon final
average earnings, consisting of base salary or wages and annual bonuses and years of credited service. Benefits vest after the
participant completes five years of vesting service.
The Pension Plan provides normal annual retirement benefits at age 65, unreduced early retirement benefits at age 62
with ten years of service and reduced, but subsidized, early retirement benefits at age 55 with ten years of service. Employees
terminating prior to early retirement eligibility are eligible to receive a benefit under the plan formula commencing at age 65 or
an unsubsidized benefit as early as age 55, provided they had 10 years of service at termination. Employees who have attained
age 50 with 15 years of service and are involuntarily terminated by UGI prior to age 55 are also eligible for subsidized early
retirement benefits, beginning at age 55.
The Pension Plan’s normal retirement benefit formula is (A) - (B) and is shown below:
A = The minimum of (1) and (2), where
(1) = 1.9% of five-year final average earnings (as defined in the Pension Plan) multiplied by years of service;
(2) = 60% of the highest year of earnings; and
B = 1% of the estimated primary Social Security benefit multiplied by years of service.
The amount of the benefit produced by the formula will be reduced by an early retirement factor based on the employee’s
actual age in years and months as of his early retirement date. The reduction factors range from 65 percent at age 55 to 100 percent
(no reduction) at age 62.
The normal form of benefit under the Pension Plan for a married employee is a 50 percent joint and survivor lifetime
annuity. Regardless of marital status, a participant may choose from a number of lifetime annuity payments.
The Pension Plan is subject to qualified-plan Code limits on the amount of annual benefit that may be paid, and on the
amount of compensation that may be taken into account in calculating retirement benefits under the plan. For 2013, the limit on
64
Table of Contents
the compensation that may be used is $255,000 and the limit on annual benefits payable for an employee retiring at age 65 in 2013
is $205,000. Benefits in excess of those permitted under the statutory limits are paid to certain employees under the UGI Corporation
Supplemental Executive Retirement Plan, described below.
Mr. Walsh is currently eligible for early retirement benefits under the Pension Plan. Mr. Greenberg retired in Fiscal 2013
and has begun receiving benefits from the Retirement Income Plan.
UGI Corporation Supplemental Executive Retirement Plan
The UGI Corporation Supplemental Executive Retirement Plan (“UGI SERP”) is a non-qualified defined benefit plan
that provides retirement benefits that would otherwise be provided under the Pension Plan, but are prohibited from being paid
from the Pension Plan by Code limits. The benefit paid by the UGI SERP is approximately equal to the difference between the
benefits provided under the Pension Plan and benefits that would have been provided by the Pension Plan if not for the limitations
of the Employee Retirement Income Security Act of 1974, as amended, and the Code. Benefits vest after the participant completes
5 years of vesting service. The benefits earned under the UGI SERP are payable in the form of a lump sum payment or rolled
over to the company’s nonqualified deferred compensation plan. For participants who attained age 50 prior to January 1, 2004,
the lump sum payment is calculated using two interest rates. One rate is for the service prior to January 1, 2004 and the other is
for service after January 1, 2004. The rate for pre-January 1, 2004 service is the daily average of Moody’s Aaa bond yields for
the month in which the participant’s termination date occurs, plus 50 basis points, and tax-adjusted using the highest marginal
federal tax rate. The interest rate for post-January 1, 2004 service is the daily average of ten-year Treasury Bond yields in effect
for the month in which the participant’s termination date occurs. The latter rate is used for calculating the lump sum payment for
participants attaining age 50 on or after January 1, 2004. Payment is due within 60 days after the termination of employment,
except as required by Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is
made within 15 days after expiration of a six-month postponement period following “separation from service” as defined in the
Code.
Mr. Greenberg retired in Fiscal 2013 and his benefit was transferred into the Company’s nonqualified deferred
compensation plan.
Actuarial assumptions used to determine values in the Pension Benefits Table
The amounts shown in the Pension Benefit Table above are actuarial present values of the benefits accumulated through
September 30, 2013. An actuarial present value is calculated by estimating expected future payments starting at an assumed
retirement age, weighting the estimated payments by the estimated probability of surviving to each post-retirement age, and
discounting the weighted payments at an assumed discount rate to reflect the time value of money. The actuarial present value
represents an estimate of the amount that, if invested today at the discount rate, would be sufficient on an average basis to provide
estimated future payments based on the current accumulated benefit. The assumed retirement age for each named executive is
age 62, which is the earliest age at which the executive could retire without any benefit reduction due to age. Actual benefit present
values will vary from these estimates depending on many factors, including an executive’s actual retirement age. The key
assumptions included in the calculations are as follows:
65
Table of Contents
Discount rate for Pension Plan for all purposes and for SERP,
for pre-commencement calculations
SERP lump sum rate
Retirement age:
Postretirement mortality for Pension Plan
Postretirement Mortality for SERP
Preretirement Mortality
Termination and disability rates
Form of payment - qualified plan
Form of payment - nonqualified plan
September 30, 2013
5.20%
September 30, 2012
4.20%
3.10% for applicable
pre-2004 service; 2.60% for
other service
62
2.60%
62
RP-2000, combined, healthy
table projected to 2020 using
Scale AA without collar
adjustments
RP-2000, combined, healthy
table projected to 2019 using
Scale AA without collar
adjustments
1994 GAR Unisex
1994 GAR Unisex
none
none
none
none
Single life annuity
Single life annuity
Lump sum
Lump sum
66
Table of Contents
Nonqualified Deferred Compensation
The following table shows the contributions, earnings, withdrawals and account balances for each of the named executive
officers in the AmeriGas Propane, Inc. Supplemental Executive Retirement Plan (“AmeriGas SERP”), the AmeriGas Nonqualified
Deferred Compensation Plan and the UGI Corporation Supplemental Savings Plan.
Nonqualified Deferred Compensation Table — Fiscal 2013
Executive
Contributions
in Last Fiscal
Year
Employer
Contributions
in Last Fiscal
Year
Aggregate
Earnings
in Last
Fiscal Year
Aggregate
Withdrawals/
Distributions
Name
(a)
J. E. Sheridan
H. J. Gallagher
J. S. Iannarelli
J. L. Walsh
R. P. Grady
S. A. Samuel
Plan Name
AmeriGas SERP
AmeriGas SERP
AmeriGas SERP
AmeriGas Non-Qualified
Deferred Compensation Plan
UGI Supplemental Savings Plan
AmeriGas SERP
AmeriGas SERP
AmeriGas Non-Qualified
Deferred Compensation Plan
($)
(b)
($)
(c)
0
0
0
7,007
0
0
9,955
60,491 (1)
6,442 (1)
13,680 (1)
0
19,674 (3)
43,907 (1)
19,916 (1)
0
($)
(d)
51,101
0
7,896
4,894
18,677
2,592
34,074
18,667
L. R. Greenberg
UGI Supplemental Savings Plan
66,167 (3)
162,256
W. D. Katz
AmeriGas SERP
UGI 2009 Deferral Plan
AmeriGas Non-Qualified
Deferred Compensation Plan
_________________
0
2,539
16,418 (1)
0
292
1,731
($)
(e)
0
0
0
0
0
0
0
0
0
0
0
Aggregate
Balance at
Last
Fiscal Year
($)(2)
(f)
325,210
0
117,194
73,907
203,638
25,842
171,385
99,921
1,902,451
399,319
25,857
(1)
(2)
(3)
This amount represents the employer contribution to the named executive officer under the AmeriGas SERP, which is
also reported in the Summary Compensation Table - Fiscal 2013 in the “All Other Compensation” column.
The aggregate balances include the following aggregate amounts previously reported in the Summary Compensation
Table as compensation in prior years: Mr. Sheridan, $256,619; Mr. Gallagher, 6,442; Mr. Iannarelli, $35,789; Mr. Walsh,
$178,548; Mr. Grady, $43,907; Mr. Samuel, $29,871; and Mr. Katz, $36,744.
This amount represents the employer contribution to the named executive officer under the UGI Supplemental Savings
Plan which is also reported in the Summary Compensation Table - Fiscal 2013 in the “All Other Compensation” column.
The AmeriGas Propane, Inc. Supplemental Executive Retirement Plan is a nonqualified deferred compensation plan that
is intended to provide retirement benefits to certain AmeriGas executive officers. Under the plan, AmeriGas credits to each
participant’s account annually an amount equal to 5 percent of the participant’s compensation (salary and annual bonus) up to the
Code compensation limit ($250,000 for plan year 2013) and 10 percent of compensation in excess of such limit. In addition, if
any portion of the General Partner’s matching contribution under the AmeriGas Propane, Inc. qualified 401(k) Savings Plan is
forfeited due to nondiscrimination requirements under the Code, the forfeited amount, adjusted for earnings and losses on the
amount, will be credited to a participant’s account. Benefits vest on the fifth anniversary of a participant’s employment
commencement date. Participants direct the investment of their account balances among a number of mutual funds, which are
generally the same funds available to participants in the AmeriGas 401(k) Savings Plan, other than the UGI Corporation stock
fund. Account balances are payable in a lump sum within 60 days after termination of employment, except as required by
Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is made within 15 days
after expiration of a six-month postponement period following “separation from service” as defined in the Code. Amounts payable
under the AmeriGas SERP may be deferred in accordance with the UGI Corporation 2009 Deferral Plan. See “Compensation
Discussion and Analysis-UGI Corporation 2009 Deferral Plan.”
The AmeriGas Propane, Inc. Nonqualified Deferred Compensation Plan is a nonqualified deferred compensation plan
that provides benefits to certain named executive officers that would otherwise be provided under the AmeriGas 401(k) Savings
67
Table of Contents
Plan. The plan is intended to permit participants to defer up to $10,000 of annual compensation that would generally not be eligible
for contribution to the AmeriGas 401(k) Savings Plan due to Code limitations and nondiscrimination requirements. Participants
may direct the investment of deferred amounts into a number of funds. The funds available are the same funds available under
the AmeriGas 401(k) Savings Plan, other than the UGI Corporation stock fund. Account balances are payable in a lump sum within
60 days after termination of employment, except as required by Section 409A of the Code. If payment is required to be delayed
by Section 409A of the Code, payment is made within 15 days after expiration of a six-month postponement period following
“separation from service” as defined in the Code.
The UGI Corporation Supplemental Savings Plan (“SSP”) is a nonqualified deferred compensation plan that provides
benefits to certain named executive officers that would otherwise be provided under UGI’s qualified 401(k) Savings Plan in the
absence of Code limitations. Benefits vest after the participant completes 5 years of service. The SSP is intended to pay an amount
substantially equal to the difference between the UGI matching contribution that would have been made under the 401(k) Savings
Plan if the Code limitations were not in effect, and the UGI match actually made under the 401(k) Savings Plan. The Code
compensation limits for each of plan years 2011 and 2012 was $245,000 and for plan year 2013, $250,000. The Code contribution
limit for fiscal year 2011 was $49,000 and for each of fiscal years 2012 and 2013, was $50,000. Under the SSP, the participant is
credited with a UGI match on compensation in excess of Code limits using the same formula applicable to contributions to the
UGI Corporation 401(k) Savings Plan, which is a match of 50 percent of the first 3 percent of eligible compensation, and a match
of 25 percent on the next 3 percent, assuming that the employee contributed to the 401(k) Savings Plan the lesser of 6 percent of
eligible compensation and the maximum amount permissible under the Code. Amounts credited to the participant’s account are
credited with interest. The rate of interest currently in effect is the rate produced by blending the annual return on the S&P 500
Index (60 percent weighting) and the annual return on the Lehman Brothers Bond Index (40 percent weighting). Account balances
are payable in a lump sum within 60 days after termination of employment, except as required by Section 409A of the Code. If
payment is required to be delayed by Section 409A of the Code, payment is made within 15 days after expiration of a six-month
postponement period following “separation from service” as defined in the Code.
Potential Payments Upon Termination of Employment or Change in Control
Severance Pay Plan for Senior Executive Employees
Named Executive Officers Employed by the General Partner. The AmeriGas Propane, Inc. Senior Executive Employee
Severance Plan (the “AmeriGas Severance Plan”) provides for payment to certain senior level employees of the General Partner,
including Messrs. Sheridan, Gallagher, Grady and Samuel, in the event their employment is terminated without fault on their part.
Specified benefits are payable to a senior executive covered by the AmeriGas Severance Plan if the senior executive’s employment
is involuntarily terminated for any reason other than for just cause or as a result of the senior executive’s death or disability. Under
the AmeriGas Severance Plan, “just cause” generally means dismissal of an executive due to (i) misappropriation of funds, (ii)
substance abuse or habitual insobriety that adversely affects the executive’s ability to perform his or her job, (iii) conviction of a
crime involving moral turpitude, or (iv) gross negligence in the performance of duties.
Except as provided herein, the AmeriGas Severance Plan provides for cash payments equal to a participant’s compensation
for a period of time ranging from 6 months to 18 months, depending on length of service (the “Continuation Period”). In the case
of Mr. Sheridan, the Continuation Period ranges from 12 months to 24 months, depending on length of service. In addition, a
participant may receive an annual bonus for his or her year of termination, subject to the Committee’s discretion and not to exceed
the amount of his or her bonus under the Annual Bonus Plan, pro-rated for the number of months served in the fiscal year prior
to termination. The levels of severance payments were established by the Compensation/Pension Committee based on competitive
practice and are reviewed by management and the Compensation/Pension Committee from time to time.
Under the AmeriGas Severance Plan, the participant also receives a payment equal to the cost he would have incurred
to continue medical and dental coverage under the General Partner’s plans for the Continuation Period (less the amount the
participant would be required to contribute for such coverage if he were an active employee), provided continued medical and
dental coverage would not result in adverse tax consequences to the participant or the General Partner and its affiliates and is
permitted under the applicable medical and dental plans. This amount includes a tax gross-up payment equal to 75 percent of the
payment relating to medical and dental coverage. The AmeriGas Severance Plan also provides for outplacement services for a
period of 12 months following a participant’s termination of employment. Participants, if eligible, are entitled to receive
reimbursement for tax preparation services for the final year of employment.
In order to receive benefits under the AmeriGas Severance Plan, a participant is required to execute a release that discharges
the General Partner and its affiliates from liability for any claims the senior executive may have against any of them, other than
claims for amounts or benefits due to the executive under any plan, program or contract provided by or entered into with the
General Partner or its affiliates. Each senior executive is also required to ratify any existing post-employment activities agreement
(which restricts the senior executive from competing with the Partnership and its affiliates following termination of employment)
68
Table of Contents
and to cooperate in attending to matters pending at the time of termination of employment.
Named Executive Officers Employed by UGI Corporation. The UGI Corporation Senior Executive Employee Severance
Plan (the “UGI Severance Plan”) provides for payment to certain senior level employees of UGI, including Mr. Walsh, in the event
their employment is terminated without fault on their part. Benefits are payable to a senior executive covered by the UGI Severance
Plan if the senior executive’s employment is involuntarily terminated for any reason other than for just cause or as a result of the
senior executive’s death or disability. Under the UGI Severance Plan, “just cause” generally means dismissal of an executive due
to (i) misappropriation of funds, (ii) substance abuse or habitual insobriety that adversely affects the executive’s ability to perform
his or her job, (iii) conviction of a crime involving moral turpitude, or (iv) gross negligence in the performance of duties.
Except as provided herein, the UGI Severance Plan provides for cash payments equal to a participant’s compensation for
a period of time ranging from 6 months to 18 months, depending on the Continuation Period. In the case of Mr. Walsh, the
Continuation Period is 30 months. In addition, a participant may receive an annual bonus for his or her year of termination, subject
to the Committee’s discretion and not to exceed the amount of his or her bonus under the Annual Bonus Plan, pro-rated for the
number of months served in the fiscal year prior to termination. The levels of severance payment were established by the
Compensation and Management Development Committee based on competitive practice and are reviewed by management and
the Compensation and Management Development Committee from time to time.
Under the UGI Severance Plan, the participant also receives a payment equal to the cost he would have incurred to
continue medical and dental coverage under UGI’s plans for the Continuation Period (less the amount the participant would be
required to contribute for such coverage if the participant were an active employee), provided continued medical and dental
coverage would not result in adverse tax consequences to the participant or UGI and its affiliates and is permitted under the
applicable medical and dental plans. This amount includes a tax gross-up payment equal to 75 percent of the payment relating to
medical and dental coverage. The UGI Severance Plan also provides for outplacement services for a period of 12 months following
a participant’s termination of employment. Participants, if eligible, are entitled to receive reimbursement for tax preparation services
for their final year of employment under the UGI Severance Plan.
In order to receive benefits under the UGI Severance Plan, a participant is required to execute a release that discharges
UGI and its subsidiaries from liability for any claims the senior executive may have against any of them, other than claims for
amounts or benefits due to the executive under any plan, program or contract provided by or entered into with UGI or its subsidiaries.
Each senior executive is also required to ratify any existing post-employment activities agreement (which restricts the senior
executive from competing with UGI and its affiliates following termination of employment) and to cooperate in attending to
matters pending at the time of termination of employment.
Change in Control Arrangements
Named Executive Officers Employed by the General Partner. Messrs. Sheridan, Gallagher, Grady and Samuel each have
an agreement with the General Partner that provides benefits in the event of a change in control. The agreements have a term of
3 years with automatic one-year extensions each year, unless in each case, prior to a change in control, the General Partner terminates
such agreement. In the absence of a change in control or termination by the General Partner, each agreement will terminate when,
for any reason, the executive terminates his or her employment with the General Partner. A change in control is generally deemed
to occur in the following instances:
•
•
any person (other than certain persons or entities affiliated with UGI), together with all affiliates and associates of such
person, acquires securities representing 20 percent or more of either (i) the then outstanding shares of common stock, or
(ii) the combined voting power of UGI’s then outstanding voting securities;
individuals, who at the beginning of any 24-month period constitute the UGI Board of Directors (the “Incumbent Board”)
and any new Director whose election by the Board of Directors, or nomination for election by UGI’s shareholders, was
approved by a vote of at least a majority of the Incumbent Board, cease for any reason to constitute a majority;
• UGI is reorganized, merged or consolidated with or into, or sells all or substantially all of its assets to, another corporation
in a transaction in which former shareholders of UGI do not own more than 50 percent of, respectively, the outstanding
common stock and the combined voting power of the then outstanding voting securities of the surviving or acquiring
corporation;
•
the General Partner, Partnership or Operating Partnership is reorganized, merged or consolidated with or into, or sells all
or substantially all of its assets to, another entity in a transaction with respect to which all of the individuals and entities
who were owners of the General Partner’s voting securities or of the outstanding units of the Partnership immediately
prior to such transaction do not, following such transaction, own more than 50 percent of, respectively, the outstanding
69
Table of Contents
common stock and the combined voting power of the then outstanding voting securities of the surviving or acquiring
corporation, or if the resulting entity is a partnership, the former unitholders do not own more than 50 percent of the
outstanding Common Units in substantially the same proportion as their ownership immediately prior to the transaction;
• UGI, the General Partner, the Partnership or the Operating Partnership is liquidated or dissolved;
• UGI fails to own more than 50 percent of the general partnership interests of the Partnership or the Operating Partnership;
• UGI fails to own more than 50 percent of the outstanding shares of common stock of the General Partner; or
• AmeriGas Propane, Inc. is removed as the general partner of the Partnership or the Operating Partnership.
The General Partner will provide Messrs. Sheridan, Gallagher, Grady and Samuel with cash benefits if we terminate the
executive’s employment without “cause” or if the executive terminates employment for “good reason” at any time within 2 years
following a change in control of the General Partner, AmeriGas Partners or UGI. “Cause” generally includes (i) misappropriation
of funds, (ii) habitual insobriety or substance abuse, (iii) conviction of a crime involving moral turpitude, or (iv) gross negligence
in the performance of duties, which gross negligence has had a material adverse effect on the business, operations, assets, properties
or financial condition of the General Partner. “Good reason” generally includes a material diminution in authority, duties,
responsibilities or base compensation; a material breach by the General Partner of the terms of the agreement; and substantial
relocation requirements. If the events trigger a payment following a change in control, the benefits payable to Messrs. Sheridan,
Gallagher, Grady and Samuel will be as specified under his change in control agreement unless payments under the AmeriGas
Severance Plan described above would be greater, in which case benefits would be provided under the AmeriGas Severance Plan.
Benefits under this arrangement would be equal to 3 times Mr. Sheridan’s base salary and annual bonus and 2 times the
base salary and annual bonus of each of Messrs. Gallagher, Grady and Samuel. Each named executive officer would also receive
the cash equivalent of his target bonus, prorated for the number of months served in the fiscal year. In addition, Messrs. Sheridan,
Gallagher, Grady and Samuel are each entitled to receive a payment equal to the cost he would incur if he enrolled in the General
Partner's medical and dental plans for 3 years in the case of Mr. Sheridan and 2 years in the case of the other AmeriGas executives
(in each case less the amount he would be required to contribute for such coverage if he were an active employee). Messrs. Sheridan,
Gallagher, Grady and Samuel would also receive their benefits under the AmeriGas Supplemental Executive Retirement Plan
calculated as if he had continued in employment for 3 years or 2 years, respectively. In addition, outstanding performance units
and distribution equivalents will be paid in cash based on the fair market value of Common Units in an amount equal to the greater
of (i) the target award, and (ii) the award amount that would have been paid if the measurement period ended on the date of the
change in control, as determined by the Compensation/Pension Committee. For treatment of stock options, see “Grants of Plan-
Based Awards Table - Fiscal 2013.”
AmeriGas Propane discontinued the use of a tax gross-up in November of 2010 and, as a result, the benefits for Messrs.
Sheridan, Gallagher and Grady are not subject to a “conditional gross-up” for excise and related taxes in the event they would
constitute “excess parachute payments,” as defined in Section 280G of the Code.
In order to receive benefits under his change in control agreement, each named executive is required to execute a release
that discharges the General Partner and its affiliates from liability for any claims he may have against any of them, other than
claims for amounts or benefits due to the executive under any plan, program or contract provided by or entered into with the
General Partner or its affiliates.
Named Executive Officers Employed By UGI Corporation. Mr. Walsh has an agreement with UGI which provides benefits
in the event of a change in control. The agreement has a term of 3 years with automatic one-year extensions each year, unless in
each case, prior to a change in control, UGI terminates an agreement. In the absence of a change in control or termination by UGI,
the agreement will terminate when, for any reason, the executive terminates his employment with UGI. A change in control is
generally deemed to occur in the following instances:
•
•
any person (other than certain persons or entities affiliated with UGI), together with all affiliates and associates of such
person, acquires securities representing 20 percent or more of either (i) the then outstanding shares of common stock, or
(ii) the combined voting power of UGI’s then outstanding voting securities;
individuals, who at the beginning of any 24-month period constitute the UGI Board of Directors (the “Incumbent Board”)
and any new Director whose election by the Board of Directors, or nomination for election by UGI’s shareholders, was
approved by a vote of at least a majority of the Incumbent Board, cease for any reason to constitute a majority;
70
Table of Contents
• UGI is reorganized, merged or consolidated with or into, or sells all or substantially all of its assets to, another corporation
in a transaction in which former shareholders of UGI do not own more than 50 percent of, respectively, the outstanding
common stock and the combined voting power of the then outstanding voting securities of the surviving or acquiring
corporation; or
• UGI Corporation is liquidated or dissolved.
UGI will provide Mr. Walsh with cash benefits if UGI terminates his employment without “cause” or if he terminates
employment for “good reason” at any time within 2 years following a change in control of UGI. “Cause” generally includes
(i) misappropriation of funds, (ii) habitual insobriety or substance abuse, (iii) conviction of a crime involving moral turpitude, or
(iv) gross negligence in the performance of duties, which gross negligence has had a material adverse effect on the business,
operations, assets, properties or financial condition of UGI. “Good reason” generally includes material diminution in authority,
duties, responsibilities or base compensation; a material breach by UGI of the terms of the agreement; and substantial relocation
requirements. If the events trigger a payment following a change in control, the benefits payable to Mr. Walsh will be as specified
under his change in control agreement unless payments under the UGI Severance Plan described above would be greater, in which
case benefits would be provided under the UGI Severance Plan.
Benefits under this arrangement would be equal to 3 times Mr. Walsh’s base salary and annual bonus. He would also
receive the cash equivalent of his target bonus, prorated for the number of months served in the fiscal year. In addition, Mr. Walsh
is entitled to receive a payment equal to the cost he would incur if he enrolled in UGI’s medical and dental plans for 3 years (less
the amount he would be required to contribute for such coverage if he were an active employee). Mr. Walsh would also have
benefits under UGI’s Supplemental Executive Retirement Plan calculated as if he had continued in employment for 3 years. In
addition, outstanding performance units, stock units and dividend equivalents will be paid in cash based on the fair market value
of UGI’s common stock in an amount equal to the greater of (i) the target award, and (ii) the award amount that would have been
paid if the performance unit measurement period ended on the date of the change in control, as determined by UGI’s Compensation
and Management Development Committee. For treatment of stock options, see “Grants of Plan-Based Awards Table - Fiscal 2013.”
The benefits are subject to a “conditional gross up” for excise and related taxes in the event they would constitute “excess
parachute payments,” as defined in Section 280G of the Code. UGI will provide the tax gross-up if the aggregate parachute value
of benefits is greater than 110 percent of the maximum amount that may be paid under Section 280G of the Code without imposition
of an excise tax. If the parachute value does not exceed the 110 percent threshold, the benefits for Mr. Walsh will be reduced to
the extent necessary to avoid imposition of the excise tax on “excess parachute payments.” UGI Corporation discontinued the
use of a tax gross-up in July 2010 for executives who enter into change in control agreements subsequent thereto.
In order to receive benefits under his change in control agreement, Mr. Walsh is required to execute a release that discharges
UGI and its subsidiaries from liability for any claims he may have against any of them, other than claims for amounts or benefits
due to the executive under any plan, program or contract provided by or entered into with UGI or its subsidiaries.
Potential Payments Upon Termination or Change in Control Table — Fiscal 2013
The amounts shown in the table below assume that each named executive officer's termination was effective as of
September 30, 2013 and are merely estimates of the incremental amounts that would be paid out to the named executive officers
upon their termination. The actual amounts to be paid out can only be determined at the time of such named executive officer's
termination of employment. The amounts set forth in the table below do not include compensation to which each named executive
officer would be entitled without regard to his termination of employment, including (i) base salary and short-term incentives that
have been earned but not yet paid or (ii) amounts that have been earned, but not yet paid, under the terms of the plans listed under
the “Pension Benefits Table - Fiscal 2013” and the “Nonqualified Deferred Compensation Table - Fiscal 2013.” There are no
incremental payments in the event of voluntary resignation, termination for cause, disability or upon retirement. For a description
of the amount paid to Mr. Greenberg as a result of his retirement, see the “Pension Benefits Table - Fiscal 2013.”
71
Table of Contents
Potential Payments Upon Termination or Change in Control Table - Fiscal 2013
Name & Triggering Event
Severance
Pay($)(1)(2)
Equity
Awards with
Accelerated
Vesting($)(3)
Nonqualified
Retirement
Benefits($)(4)
Welfare &
Other Benefits
($)(5)
J. E. Sheridan
Death
Involuntary Termination Without Cause
Termination Following Change in Control
0
1,557,335
2,945,124
1,838,423
0
2,466,261
H. J. Gallagher
Death
Involuntary Termination Without Cause
Termination Following Change in Control
0
663,860
849,632
350,499
0
587,008
0
0
218,261
6,889
7,640
56,449
0
41,462
66,462
0
38,462
44,308
Total($)
1,838,423
1,598,797
5,696,108
357,388
709,962
1,537,397
J. S. Iannarelli(6)
Involuntary Termination Without Cause
664,133
0
0
0
0
J. L. Walsh
Death
Involuntary Termination Without Cause
Termination Following Change in Control
0
4,576,942
6,704,864
4,313,737
0
7,504,162
1,751,952
2,018,378
4,846,734
0
60,690
6,788,120
6,065,689
6,656,010
25,843,880
R. P. Grady
Death
Involuntary Termination Without Cause
Termination Following Change in Control
0
597,511
1,503,880
1,117,512
0
1,360,929
S. A. Samuel
Death
Involuntary Termination Without Cause
Termination Following Change in Control
0
623,077
834,154
358,341
0
453,317
0
0
102,227
0
0
46,710
0
30,875
29,530
1,117,512
628,386
2,996,566
0
67,196
555,164
358,341
690,273
1,889,345
W. D. Katz(7)
Involuntary Termination Without Cause
_________________
375,000
0
0
0
0
(1)
(2)
(3)
(4)
(5)
(6)
Amounts shown under “Severance Pay” in the case of involuntary termination without cause are calculated under the
terms of the UGI Severance Plan for Mr. Walsh, and the AmeriGas Severance Plan for Messrs. Sheridan, Gallagher,
Grady and Samuel. We assumed that 100 percent of the target annual bonus was paid.
Amounts shown under “Severance Pay” in the case of termination following a change in control are calculated under the
officer’s change in control agreement.
In calculating the amounts shown under “Equity Awards with Accelerated Vesting,” we assumed (i) the continuation of
AmeriGas Partners’ distribution (and UGI’s dividend, as applicable) at the rate in effect on September 30, 2013; and (ii)
performance at the greater of actual through September 30, 2013 and target levels with respect to performance units.
Amounts shown under “Nonqualified Retirement Benefits” are in addition to amounts shown in the “Pension Benefits
Table - Fiscal 2013” and “Non-Qualified Deferred Compensation Table - Fiscal 2013.”
Amounts shown under “Welfare and Other Benefits” include estimated payments for (i) medical and dental and life
insurance premiums, (ii) outplacement services, (iii) tax preparation services, and (iv) an estimated Code Section 280G
tax gross up payment of $6,728,347 for Mr. Walsh and $490,487 for Mr. Samuel in the event of a change in control.
In connection with Mr. Iannarelli’s separation of service effective June 18, 2013, Mr. Iannarelli received payments
consistent with the AmeriGas Severance Plan.
(7)
In connection with Mr. Katz’s separation of service, Mr. Katz received payments in accordance with his Separation
72
Table of Contents
Agreement effective July 15, 2013.
COMPENSATION OF DIRECTORS
The table below shows the components of director compensation for Fiscal 2013. A Director who is an officer or employee
of the General Partner or its subsidiaries is not compensated for service on the Board of Directors or on any Committee of the
Board.
Director Compensation Table — Fiscal 2013
Fees
Earned
or Paid
in Cash
($)(2)
(b)
20,594
100,000
87,083
44,627
52,500
87,500
92,500
78,752
Stock
Awards
($)(3)
(c)
Option
Awards
($)
(d)
43,010
41,336
0
43,010
43,010
43,010
43,010
43,010
43,010
0
41,336
41,336
41,336
41,336
41,336
41,336
Non-Equity
Incentive
Plan
Compensation
($)
(e)
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
(f)
All Other
Compensation
($)
(g)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Total
($)
(h)
61,973
100,000
128,462
86,006
93,879
128,879
133,879
120,131
Name (1)
(a)
S. D. Ban
L. R. Greenberg
W. J. Marrazzo
A. Pol
G. A. Pratt
M. O. Schlanger
H. B. Stoeckel
K. R. Turner
_________________
(1)
(2)
(3)
Mr. Ford was elected to the General Partner’s Board of Directors on November 1, 2013, and as such received no
compensation during Fiscal 2013. He is a member of the Audit Committee and the Corporate Governance Committee.
In Fiscal 2013, the General Partner paid its non-management directors an annual retainer of $65,000 for Board service.
It paid an additional annual retainer of $20,000 to members of the Audit Committee, other than the chairperson. The
chairperson of the Audit Committee was paid an additional annual retainer of $25,000. The General Partner pays no
meeting attendance fees to its directors. Mrs. Pol received a pro-rated retainer fee for partial year service in Fiscal 2013.
The General Partner also paid an additional retainer of $7,500 for the chairperson of the Compensation and Management
Development and the Corporate Governance Committees. The General Partner also paid its Presiding Director a retainer
of $15,000 in Fiscal 2013. Mr. Greenberg’s amount reflects a pro-rated retainer for the number of months he served as
Non-Executive Chairman of the General Partner’s Board of Directors during Fiscal 2013. Mr. Greenberg will not receive
any equity compensation for his service as Non-Executive Chairman.
All non-employee Directors, excluding Mr. Greenberg, received 1,100 Phantom Units in Fiscal 2013 as part of their
annual compensation. The Phantom Units were awarded under the AmeriGas Propane, Inc. 2010 Long-Term Incentive
Plan on behalf of AmeriGas Partners, L.P. (the “2010 Plan”) approved by the Partnership’s Common Unitholders on
July 30, 2010. Each Phantom Unit represents the right to receive an AmeriGas Partners Common Unit and distribution
equivalents when the Director ends his service on the Board. Phantom Units earn distribution equivalents on each record
date for the payment of a distribution by the Partnership on its Common Units. Accrued distribution equivalents are
converted to additional Phantom Units annually, on the last date of the calendar year, based on the closing price for the
Partnership’s Common Units on the last trading day of the year. All Phantom Units and distribution equivalents are fully
vested when credited to the Director’s account. Account balances become payable 65 percent in AmeriGas Partners
Common Units and 35 percent in cash, based on the value of a Common Unit, upon retirement or termination of service
unless otherwise deferred. In the case of a change in control of the Partnership, the Phantom Units and distribution
equivalents will be paid in cash based on the fair market value of the Partnership’s Common Units on the date of the
change in control. The amounts shown in column (c) above represent the grant date fair value of the awards of Phantom
Units. The assumptions used in the calculation of the amounts shown are included in Note 2 and Note 11 to our audited
consolidated financial statements for Fiscal 2013. For the number of Phantom Units credited to each Director’s account
73
Table of Contents
as of September 30, 2013, see Securities Ownership of certain beneficial owners and management and related security
holder matters - Beneficial Ownership of Partnership Common Units by the Directors and Named Executive Officers of
the General Partner.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED SECURITY HOLDER MATTERS
Ownership of Limited Partnership Units by Certain Beneficial Owners
The following table sets forth certain information regarding each person known by the General Partner to have been the
beneficial owner of more than 5 percent of the Partnership’s voting securities representing limited partner interests as of October 1,
2013. AmeriGas Propane, Inc. is the sole general partner of the Partnership.
Title of Class
Common Units
Name and Address (1) of
Beneficial Owner
UGI Corporation
AmeriGas, Inc.
AmeriGas Propane, Inc.
Petrolane Incorporated
Energy Transfer Partners, L.P.
Amount and
Nature of
Beneficial
Ownership of
Partnership
Units
23,756,882(2)
23,756,882(3)
23,756,882(4)
6,905,584(4)
22,067,362
Percent of
Class
26%
26%
26%
7%
24%
(1)
(2)
(3)
(4)
The address of each of UGI and the General Partner is 460 North Gulph Road, King of Prussia, PA 19406. The address
of each of AmeriGas, Inc. and Petrolane Incorporated (“Petrolane”) is 2525 N. 12th Street, Suite 360, Reading, PA 19612.
The address of Energy Transfer Partners, L.P. is 3738 Oak Lawn Avenue, Dallas, Texas 75219.
Based on the number of units held by its indirect, wholly-owned subsidiaries, AmeriGas Propane, Inc. and Petrolane.
Based on the number of units held by its direct and indirect, wholly-owned subsidiaries, AmeriGas Propane, Inc. and
Petrolane.
AmeriGas Propane, Inc.’s beneficial ownership includes 6,905,584 Common Units held by its subsidiary, Petrolane.
Beneficial ownership of those Common Units is shared with UGI and AmeriGas, Inc.
Ownership of Partnership Common Units by the Directors and Named Executive Officers of the General Partner
The table below sets forth, as of October 1, 2013, the beneficial ownership of Partnership Common Units by each director
and each of the named executive officers, as well as by the directors and all of the executive officers of the General Partner as a
group. No director, named executive officer or executive officer beneficially owns 1 percent or more of the Partnership’s Common
Units. The total number of Common Units beneficially owned by the directors and executive officers of the General Partner as
a group represents less than 1 percent of the Partnership’s outstanding Common Units.
74
Table of Contents
Name of Beneficial Owner
J. E. Sheridan
H. J. Gallagher
J. S. Iannarelli
J. L. Walsh
R. P. Grady
S. A. Samuel
L. R. Greenberg
W. D. Katz
B. R. Ford
W. J. Marrazzo
A. Pol
M. O. Schlanger
H. B. Stoeckel
K. R. Turner
Directors and executive officers as a group (19 persons)
_________________
Amount and
Nature of
Beneficial
Ownership
of
Partnership
Common
Units (1)
26,244 (2)
400
5,027
7,000 (3)
4,924 (4)
5,721 (5)
15,000 (6)
18,610 (7)
1,550 (8)
1,000 (9)
0
1,000 (10)
13,000 (11)
3,000 (12)
96,787
Number of
AmeriGas
Partners
Phantom
Units (13)
1,821
0
0
0
1,370
677
0
0
0
2,807
1,100
2,807
2,807
1,697
17,354
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Sole voting and investment power unless otherwise specified.
Mr. Sheridan’s Units are held jointly with his spouse.
Mr. Walsh’s Units are held jointly with his spouse.
Mr. Grady’s Units are held jointly with his spouse.
Mr. Samuel’s Units are held jointly with his spouse.
Mr. Greenberg’s Units are held jointly with his spouse.
Mr. Katz jointly holds 1,000 Units with his spouse.
Mr. Ford’s Units are held in the following manner: (i) 1,200 Units are held jointly with his spouse; (ii) 50 Units are held
jointly with Colleen Ford; (iii) 50 Units are held jointly with Kevin Ford; (iv) 50 Units are held jointly with Brandon
Ford; and (v) 200 Units are held jointly with Brian Ford, Jr.
(9)
Mr. Marrazzo’s Units are held jointly with his spouse.
(10)
The Units shown are owned by Mr. Schlanger’s spouse. Mr. Schlanger disclaims beneficial ownership of his spouse’s
Units.
(11) Mr. Stoeckel’s Units are held jointly with his spouse.
(12)
(13)
The Turner Family Partnership holds 1,000 of Mr. Turner’s Units and Mr. Turner disclaims beneficial ownership of these
Units, except to the extent of his interest as the general partner of the Turner Family Partnership.
The 2010 Plan provides that Phantom Units will be converted to AmeriGas Partners Common Units and paid out to
Directors upon termination of service.
75
Table of Contents
The General Partner is a wholly owned subsidiary of AmeriGas, Inc. which is a wholly owned subsidiary of UGI. The
table below sets forth, as of October 1, 2013, the beneficial ownership of UGI Common Stock by each director and each of the
named executive officers, as well as by the directors and the executive officers of the General Partner as a group. Including the
number of shares of stock underlying exercisable options, Mr. Greenberg is the beneficial owner of approximately 1.3 percent of
UGI’s Common Stock. All other directors and executive officers own less than 1 percent of UGI’s outstanding shares. The total
number of shares beneficially owned by the directors and executive officers as a group (including 2,020,633 shares subject to
exercisable options and stock units held by directors under the 2004 plan) represents approximately 2.4 percent of UGI’s outstanding
shares.
Name of Beneficial Owner
J. E. Sheridan
H. J. Gallagher
J. S. Iannarelli
J. L. Walsh
R. P. Grady
S. A. Samuel
L. R. Greenberg
W. D. Katz
B. R. Ford
W. J. Marrazzo
A. Pol
M. O. Schlanger
H. B. Stoeckel
K. R. Turner
Number of
UGI Shares
and Stock
Units and
Nature
of Beneficial
Ownership
Excluding
UGI Stock
Options (1)
(9)
1,275 (2)
3,369 (3)
1,208
184,790 (4)
4,788 (5)
11,204 (2)
382,063 (6)
12,373
900 (7)
0
78,018
78,574 (8)
0
0
Number of
Exercisable
UGI Stock
Options
85,220
7,749
14,499
494,999
10,000
52,500
1,100,000
25,334
0
0
76,500
76,500
0
0
Directors and executive officers as a group (19 persons)
758,826
2,020,633
_________________
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Sole voting and investment power unless otherwise specified.
Messrs. Sheridan and Samuel each hold these shares in their respective 401(k) Savings Plan.
Mr. Gallagher holds 494 shares jointly with his spouse.
Mr. Walsh holds these shares jointly with his spouse.
Mr. Grady holds these shares jointly with his spouse.
Mr. Greenberg holds 248,415 shares jointly with his spouse and 116,977 shares in a charitable trust for which Mr.
Greenberg and his spouse are co-trustees.
Mr. Ford’s shares are held in the following manner: (i) 300 shares are held jointly with Kevin Ford; (ii) 300 shares are
held jointly with Brandon Ford; and (iii) 300 shares are held jointly with Brian Ford, Jr.
(8)
Includes 2,000 shares owned by Mr. Schlanger’s spouse. Mr. Schlanger disclaims beneficial ownership of his spouse’s
76
Table of Contents
shares.
(9)
Included in the number of shares shown are Stock Units (“Units”) under the 2004 Plan. Each Unit will be paid out to
the director upon retirement or termination of service from the UGI Board of Directors in the form of shares of UGI
Common Stock (65 percent) and cash (35 percent). The number of Units included for the directors is as follows: Mr.
Schlanger - 62,350 and Mrs. Pol - 74,761.
Equity Compensation Plan Information
The following table sets forth information as of the end of Fiscal 2013 with respect to compensation plans under which
equity securities of the Partnership are authorized for issuance.
(c)
Number of
securities
remaining
available
for future
issuance
under equity
compensation
plans
(excluding
securities
reflected in
column (a))
2,484,839(1)
0
(a)
Number of
securities to
be issued
upon exercise
of
outstanding
options,
warrants and
rights
224,168
0
224,168
(b)
Weighted
average
exercise price
of
outstanding
options,
warrants and
rights
0
0
0
Plan category
Equity compensation plans approved by security holders (1)(2)
Equity compensation plans not approved by security holders
Total
(1)
(2)
The AmeriGas Propane, Inc. 2000 Long-Term Incentive Plan and the AmeriGas Propane, Inc. Discretionary Long-Term
Incentive Plan for Non-Executive Key Employees were approved pursuant to Section 6.4 of the Partnership Agreement.
The sole plan with securities remaining for future issuance is the AmeriGas Propane, Inc. 2010 Long-Term Incentive
Plan on behalf of AmeriGas Partners, L.P. (“2010 Plan”). The 2010 Plan was approved by security holders on July 30,
2010.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
We do not have any employees. We are managed by our General Partner. Pursuant to the Partnership Agreement, the
General Partner is entitled to reimbursement for all direct and indirect expenses incurred or payments it makes on behalf of the
Partnership. For information regarding our related person transactions in general, please read Note 13 to Consolidated Financial
Statements included under Item 8 of this Report. The information summarizes our business relationships and related transactions
with our General Partner and its affiliates, including UGI, during Fiscal 2013.
Interests of the General Partner in the Partnership
We make quarterly cash distributions of all of our Available Cash, generally defined as all cash on hand at the end of
such quarter, plus all additional cash on hand as of the date of determination resulting from borrowings subsequent to the end of
such quarter, less the amount of cash reserves established by the General Partner in its reasonable discretion for future cash
requirements. According to the Partnership Agreement, the General Partner receives cash distributions as follows:
Distributions of Available Cash are made 98% to limited partners and 2% to the General Partner (giving effect to the
1.01% interest of the General Partner in distributions of Available Cash from AmeriGas OLP to the Partnership) until Available
Cash exceeds the Minimum Quarterly Distribution of $0.55 and the First Target Distribution of $0.055 per Common Unit (or a
total of $0.605 per Common Unit). When Available Cash exceeds $0.605 per Common Unit in any quarter, the General Partner
will receive a greater percentage of the total Partnership distribution but only with respect to the amount by which the distribution
per Common Unit to limited partners exceeds $0.605.
77
Table of Contents
Related Person Transactions
The General Partner employs persons responsible for managing and operating the Partnership. The Partnership reimburses
the General Partner for the direct and indirect costs of providing these services, including all compensation and benefit costs. For
Fiscal 2013, these costs totaled approximately $540.3 million.
The Partnership and the General Partner also have extensive, ongoing relationships with UGI and its affiliates. UGI
performs certain financial and administrative services for the General Partner on behalf of the Partnership. UGI does not receive
a fee for such services, but is reimbursed for all direct and indirect expenses incurred in connection with providing these services,
including all compensation and benefit costs in accordance with an allocation formula. A wholly owned subsidiary of UGI provides
the Partnership with automobile liability insurance with limits of $0.5 million per occurrence and, in the aggregate, $1.0 million
in excess of the deductible, and stop loss medical coverage per occurrence in excess of $0.3 million per employee per year. Another
wholly owned subsidiary of UGI leases office space to the General Partner for its headquarters staff. The Partnership is also covered
by UGI master insurance policies that generally provide excess liability, property and other standard insurance coverages. In
general, the coverage afforded by the UGI master policies is shared with other UGI operating subsidiaries. As discussed under
“Business-Trade Names, Trade and Service Marks,” UGI and the General Partner have licensed the trade names “AmeriGas” and
“America’s Propane Company” and the related service marks and trademark to the Partnership on a royalty-free basis in the U.S.
The Partnership obtains management information services from the General Partner, and reimburses the General Partner for its
direct and indirect expenses related to those services. For Fiscal 2013, the Partnership paid approximately $23.1 million for the
services referred to in this paragraph.
AmeriGas OLP purchases propane from UGI Energy Services, Inc. and its subsidiaries (“Energy Services”), which are
affiliates of UGI. Purchases of propane by AmeriGas OLP from Energy Services totaled approximately $2.0 million during Fiscal
2013. Amounts due to Energy Services at September 30, 2013 were not material.
The Partnership sold propane to certain affiliates of UGI which totaled approximately $1.3 million in Fiscal 2013. The
highest amounts due from affiliates of the Partnership during Fiscal 2013 and at November 1, 2013 were $2.2 million and $1.47
million, respectively.
Policies Regarding Transactions with Related Persons
The Partnership Agreement, the Audit Committee Charter and the Codes of Conduct set forth policies and procedures
for the review and approval of certain transactions with persons affiliated with the Partnership.
Pursuant to the Audit Committee Charter, the Audit Committee has responsibility to review, and if acceptable, approve
any transactions involving the Partnership or the General Partner in which a director or executive officer has a material interest.
The Audit Committee also has authority to review and approve any transaction involving a potential conflict of interest between
the General Partner and any of its affiliates, on the one hand, or the Partnership or any partner or assignee, on the other hand, based
on the provisions of the Partnership Agreement for determining that a transaction is fair and reasonable to the Partnership. Such
determinations are made at the request of the General Partner. In addition, the Audit Committee conducts an annual review of all
“related person transactions,” as defined by applicable rules of the SEC.
Director Independence
For a discussion of director independence, see Item 10 “Directors, Executive Officers and Corporate Governance - Director
Independence.”
ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
The aggregate fees billed by PricewaterhouseCoopers LLP, the Partnership’s independent registered public accounting
firm, in Fiscal 2013 and Fiscal 2012 were as follows:
Audit Fees(1)
Audit-Related Fees
Tax Fees(2)
All Other Fees
Total Fees for Services Provided
_________________
78
2013
2012
$
$
1,327,000 $
0
581,000
0
1,908,000 $
1,942,500
35,000
625,000
0
2,602,500
Table of Contents
(1)
Audit Fees were for audit services, including (i) the annual audit of the consolidated financial statements of the Partnership,
(ii) subsidiary audits, (iii) review of the interim financial statements included in the Quarterly Reports on Form 10-Q of
the Partnership, and (iv) services that only the independent registered public accounting firm can reasonably be expected
to provide, such as services associated with SEC registration statements, and documents issued in connection with
securities offerings. The year-over-year decrease in audit fees is primarily attributable to audit efficiencies associated
with the integration of Heritage Propane.
(2)
Tax Fees were for the preparation of Substitute Schedule K-1 forms for unitholders of the Partnership.
In the course of its meetings, the Audit Committee considered whether the provision by PricewaterhouseCoopers LLP
of the professional services described under “Tax Fees” was compatible with PricewaterhouseCoopers LLP’s independence. The
Committee concluded that the independent auditor is independent from the Partnership and its management.
Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing,
setting compensation and overseeing the work of the Partnership’s independent accountants. In recognition of this responsibility,
the Audit Committee has a policy of pre-approving all audit and permissible non-audit services provided by the independent
accountants.
Prior to engagement of the Partnership’s independent accountants for the next year’s audit, management submits to the
Audit Committee for approval a list of services expected to be rendered during that year.
79
Table of Contents
PART IV:
ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)
Documents filed as part of this report:
(1)
Financial Statements:
Included under Item 8 are the following financial statements and supplementary data:
Management’s Annual Report on Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of September 30, 2013 and 2012
Consolidated Statements of Operations for the years ended September 30, 2013, 2012 and 2011
Consolidated Statements of Comprehensive Income for the years ended September 30, 2013, 2012 and
2011
Consolidated Statements of Cash Flows for the years ended September 30, 2013, 2012 and 2011
Consolidated Statements of Partners’ Capital for the years ended September 30, 2013, 2012 and 2011
Notes to Consolidated Financial Statements
Quarterly Data for the years ended September 30, 2013 and 2012
(2)
Financial Statement Schedules:
I — Condensed Financial Information of Registrant (Parent Company)
II — Valuation and Qualifying Accounts for the years ended September 30, 2013, 2012 and 2011
We have omitted all other financial statement schedules because the required information is (1) not present;
(2) not present in amounts sufficient to require submission of the schedule; or (3) included elsewhere in
the financial statements or notes thereto contained in this report.
(3)
List of Exhibits:
The exhibits filed as part of this report are as follows (exhibits incorporated by reference are set forth with
the name of the registrant, the type of report and registration number or last date of the period for which it
was filed, and the exhibit number in such filing):
Incorporation by Reference
Exhibit No.
2.1
2.2
2.3
2.4
Exhibit
Merger and Contribution Agreement among AmeriGas
Partners, L.P., AmeriGas Propane, L.P., New AmeriGas
Propane, Inc., AmeriGas Propane, Inc., AmeriGas
Propane-2, Inc., Cal Gas Corporation of America, Propane
Transport, Inc. and NORCO Transportation Company.
Conveyance and Contribution Agreement among
AmeriGas Partners, L.P., AmeriGas Propane, L.P. and
Petrolane Incorporated.
Contribution and Redemption Agreement, dated
October 15, 2011, by and among AmeriGas Partners, L.P.,
Energy Transfer Partners, L.P., Energy Transfer Partners
GP, L.P. and Heritage ETC, L.P.
Amendment No. 1, dated as of December 1, 2011, to the
Contribution and Redemption Agreement, dated as of
October 15, 2011, by and among Energy Transfer Partners,
L.P., Energy Transfer Partners GP, L.P., Heritage ETC, L.P.
and AmeriGas Partners, L.P.
Registrant
AmeriGas
Partners, L.P.
Filing
Registration
Statement on
Form S-4
(No. 33-92734)
Exhibit
10.21
AmeriGas
Partners, L.P.
AmeriGas
Partners, L.P.
Registration
Statement on
Form S-4
(No. 33-92734)
Form 8-K
(10/15/11)
AmeriGas
Partners, L.P.
Form 8-K
(12/1/11)
10.22
2.1
2.1
80
Exhibit No.
2.5
2.6
2.7
3.1
3.2
3.3
4.1
4.2
4.3
4.4
4.5
4.6
Table of Contents
Incorporation by Reference
Exhibit
Amendment No. 2, dated as of January 11, 2012, to the
Contribution and Redemption Agreement, dated as of
October 15, 2012, by and among Energy Transfer Partners,
L.P., Energy Transfer Partners GP, L.P., Heritage ETC, L.P.
and AmeriGas Partners, L.P.
Letter Agreement, dated as of January 11, 2012, by and
among Energy Transfer Partners, L.P., Energy Transfer
Partners GP, L.P., Heritage ETC, L.P. and AmeriGas
Partners, L.P.
Amendment to Contribution and Redemption Agreement,
dated as of October 15, 2011, by an among Energy
Transfer Partners, L.P., Energy Transfer Partners GP, L.P.,
Heritage ETC, L.P. and AmeriGas Partners, L.P., dated as
of March 20, 2013.
Registrant
AmeriGas
Partners, L.P.
Filing
Form 8-K
(1/11/12)
Exhibit
2.1
AmeriGas
Partners, L.P.
Form 8-K
(1/11/12)
AmeriGas
Partners, L.P.
Form 10-Q
(3/31/13)
Fourth Amended and Restated Agreement of Limited
Partnership of AmeriGas Partners, L.P. dated as of July 27,
2009.
AmeriGas
Partners, L.P.
Form 10-Q
(6/30/09)
Amendment No. 1 to Fourth Amended and Restated
Agreement of Limited Partnership of AmeriGas Partners,
L.P. dated as of March 13, 2012.
AmeriGas
Partners, L.P.
Form 8-K
(3/14/12)
Second Amended and Restated Agreement of Limited
Partnership of AmeriGas Propane, L.P. dated as of
December 1, 2004.
Instruments defining the rights of security holders,
including indentures. (The Partnership agrees to furnish to
the Commission upon request a copy of any instrument
defining the rights of holders of long-term debt not
required to be filed pursuant to Item 601(b)(4) of
Regulation S-K).
AmeriGas
Partners, L.P.
Form 10-K
(9/30/04)
3.1(a)
Indenture, dated as of January 20, 2011, by and among
AmeriGas Partners, L.P., AmeriGas Finance Corp. and
U.S. Bank National Association, as trustee.
AmeriGas
Partners, L.P.
Form 10-Q
(12/31/10)
First Supplemental Indenture, dated as of January 20,
2011, to Indenture dated as of January 20, 2011, by and
among AmeriGas Partners, L.P., AmeriGas Finance Corp.
and U.S. Bank National Association, as trustee.
Second Supplemental Indenture, dated as of August 10,
2011, to Indenture dated as of January 20, 2011, by and
among AmeriGas Partners, L.P., AmeriGas Finance Corp.
and U.S. Bank National Association, as trustee.
Indenture, dated as of January 12, 2012, among AmeriGas
Finance Corp., AmeriGas Finance LLC, AmeriGas
Partners, L.P., as guarantor, and U.S. Bank National
Association, as trustee.
First Supplemental Indenture, dated as of January 12,
2012, among AmeriGas Finance Corp., AmeriGas Finance
LLC, AmeriGas Partners, L.P., as guarantor, and U.S.
Bank National Association, as trustee.
AmeriGas
Partners, L.P.
Form 8-K
(1/19/11)
AmeriGas
Partners, L.P.
Form 8-K
(8/10/11)
AmeriGas
Partners, L.P.
Form 8-K
(1/12/12)
AmeriGas
Partners, L.P.
Form 8-K
(1/12/12)
10.1**
10.2**
UGI Corporation 2004 Omnibus Equity Compensation
Plan Amended and Restated as of December 5, 2006.
UGI Corporation 2004 Omnibus Equity Compensation
Plan Amended and Restated as of December 5, 2006 -
Terms and Conditions as amended and restated effective
November, 2012.
UGI
UGI
Form 8-K
(2/27/07)
Form 10-K
(9/30/13)
81
2.1
2.1
3.1
3.1
4.1
4.1
4.1
4.1
4.2
10.1
10.2
Table of Contents
Exhibit No.
10.3**
10.4**
10.5**
10.6**
10.7**
10.8**
10.9**
10.10**
10.11**
10.12**
10.13**
10.14**
10.15**
10.16**
10.17**
10.18**
10.19**
10.20**
10.21**
Incorporation by Reference
Exhibit
UGI Corporation 2009 Deferral Plan As Amended and
Restated Effective June 1, 2010.
UGI Corporation Senior Executive Employee Severance
Plan, as amended and restated as of November 16, 2012.
UGI Corporation Executive Employee Severance Plan, as
amended and restated as of November 16, 2012.
UGI Corporation Supplemental Executive Retirement Plan
and Supplemental Savings Plan, as Amended and Restated
effective January 1, 2009.
Amendment 2009-1 to the UGI Corporation Supplemental
Executive Retirement Plan and Supplemental Savings Plan
as Amended and Restated effective January 1, 2009.
UGI Corporation 2009 Supplemental Executive
Retirement Plan For New Employees as Amended and
Restated as of October 1, 2010.
UGI Corporation Executive Annual Bonus Plan effective
as of October 1, 2006, as amended November 16, 2012.
Registrant
UGI
UGI
UGI
UGI
UGI
UGI
UGI
Filing
Form 10-Q
(6/30/10)
Form 10-Q
(6/30/13)
Form 10-Q
(6/30/13)
Form 10-K
(9/30/09)
Form 10-Q
(12/31/09)
Form 10-Q
(12/31/09)
Form 10-Q
(3/31/13)
AmeriGas Propane, Inc. 2010 Long-Term Incentive Plan
on Behalf of AmeriGas Partners, L.P. effective July 30,
2010.
AmeriGas Propane, Inc. 2010 Long-Term Incentive Plan
on Behalf of AmeriGas Partners, L.P. effective July 30,
2010 - Terms and Conditions.
AmeriGas
Partners, L.P.
Form 8-K
(7/30/10)
AmeriGas
Partners, L.P.
Form 10-K
(9/30/10)
AmeriGas Propane, Inc. Non-Qualified Deferred
Compensation Plan, as Amended and Restated effective
January 1, 2012.
AmeriGas Propane, Inc. Senior Executive Employee
Severance Plan, as amended and restated as of November
15, 2012.
AmeriGas
Partners, L.P.
Form 10-Q
(3/31/12)
AmeriGas
Partners, L.P.
Form 10-Q
(6/30/13)
AmeriGas Propane, Inc. Executive Employee Severance
Plan, as amended and restated as of November 15, 2012.
AmeriGas
Partners, L.P.
AmeriGas Propane, Inc. Supplemental Executive
Retirement Plan, as Amended and Restated effective
January 1, 2009.
AmeriGas
Partners, L.P.
Form 10-Q
(6/30/13)
Form 10-Q
(12/31/09)
AmeriGas Propane, Inc. Executive Annual Bonus Plan,
effective as of October 1, 2006, as amended November 15,
2012.
UGI Corporation 2013 Omnibus Incentive Compensation
Plan.
UGI Corporation 2004 Omnibus Equity Compensation
Plan Nonqualified Stock Option Grant Letter for Mr.
Grady dated January 17, 2012.
AmeriGas
Partners, L.P.
Form 10-Q
(3/31/13)
UGI
Registration
Statement on
Form S-8
(No. 333-186178)
AmeriGas
Partners, L.P.
Form 10-Q
(3/31/12)
AmeriGas Propane, Inc. 2010 Long-Term Incentive Plan
on Behalf of AmeriGas Partners, L.P., Phantom Unit Grant
Letter for Mr. Grady dated as of January 17, 2012.
AmeriGas
Partners, L.P.
Form 10-Q
(3/31/12)
AmeriGas Propane, Inc. 2010 Long-Term Incentive Plan
on Behalf of AmeriGas Partners, L.P., Performance Unit
Grant Letter for Mr. Grady dated January 17, 2012.
AmeriGas
Partners, L.P.
Form 10-Q
(3/31/12)
AmeriGas Propane, Inc. 2010 Long-Term Incentive Plan
on Behalf of AmeriGas Partners, L.P. Performance Unit
Grant Letter for Employees dated January 1, 2013.
AmeriGas
Partners, L.P.
Form 10-Q
(3/31/13)
82
Exhibit
10.1
10.1
10.2
10.11
10.1
10.2
10.14
10.2
10.10
10.5
10.1
10.2
10.1
10.9
99.1
10.9
10.7
10.8
10.8
Table of Contents
Exhibit No.
*10.22**
Exhibit
AmeriGas Propane, Inc. 2010 Long-Term Incentive Plan
on Behalf of AmeriGas Partners, L.P., Performance Unit
Grant Letter for Mr. Gallagher dated May 1, 2013.
Registrant
Filing
Exhibit
Incorporation by Reference
10.23**
10.24**
10.25**
10.26**
10.27**
10.28**
10.29**
10.30**
10.31**
*10.32**
AmeriGas Propane, Inc. 2010 Long-Term Incentive Plan
on Behalf of AmeriGas Partners, L.P., Phantom Unit Grant
Letter for Non Employee Directors, dated January 8, 2013.
AmeriGas Propane, Inc. 2010 Long-Term Incentive Plan
on Behalf of AmeriGas Partners, L.P., Phantom Unit Grant
Letter for Employees, dated December 3, 2012.
AmeriGas
Partners, L.P.
Form 10-Q
(3/31/13)
AmeriGas
Partners, L.P.
Form 10-Q
(12/31/12)
UGI Corporation 2004 Omnibus Equity Compensation
Plan Stock Unit Grant Letter for Non Employee Directors,
dated January 8, 2013.
UGI Corporation 2004 Omnibus Equity Compensation
Plan Nonqualified Stock Option Grant Letter for Non
Employee Directors, dated January 8, 2013.
UGI Corporation 2004 Omnibus Equity Compensation
Plan Nonqualified Stock Option Grant Letter for UGI
Employees, dated January 1, 2013.
UGI Corporation 2004 Omnibus Equity Compensation
Plan Nonqualified Stock Option Grant Letter for
AmeriGas Employees, dated January 1, 2013.
UGI Corporation 2013 Omnibus Incentive Compensation
Plan, Performance Unit Grant Letter for Employees, dated
January 24, 2013.
UGI Corporation 2013 Omnibus Incentive Compensation
Plan Nonqualified Stock Option Grant Letter for Mr. John
L. Walsh dated April 1, 2013.
UGI Corporation 2013 Omnibus Incentive Compensation
Plan Performance Unit Grant Letter for Mr. John L. Walsh
dated April 1, 2013.
UGI Corporation 2013 Omnibus Incentive Compensation
Plan Nonqualified Stock Option Grant Letter for Mr. Hugh
J. Gallagher dated May 20, 2013.
UGI
UGI
UGI
UGI
UGI
UGI
UGI
Form 10-Q
(3/31/13)
Form 10-Q
(3/31/13)
Form 10-Q
(3/31/13)
Form 10-Q
(3/31/13)
Form 10-Q
(3/31/13)
Form 10-K
(9/30/13)
Form 10-K
(9/30/13)
10.7
10.1
10.6
10.7
10.8
10.9
10.4
10.33
10.34
10.33**
Description of oral compensation arrangement for Mr.
Walsh.
UGI
Form 10-K
(9/30/13)
10.36
*10.34**
Description of oral compensation arrangement for Messrs.
Jerry E. Sheridan, Hugh J. Gallagher, R. Paul Grady, and
Steven A. Samuel.
*10.35**
Summary of Director Compensation of AmeriGas
Propane, Inc. dated October 1, 2013.
10.36**
10.37*
10.38**
*10.39**
10.40**
Form of Change in Control Agreement Amended and
Restated as of May 12, 2008 for Mr. Walsh.
UGI
Change in Control Agreement for Mr. Sheridan Amended
and Restated as of March 3, 2012.
AmeriGas
Partners, L.P.
Form 10-Q
(6/30/08)
Form 10-Q
(3/31/12)
Change in Control Agreement for R. Paul Grady dated as
of January 12, 2012.
AmeriGas
Partners, L.P.
Form 10-Q
(6/30/12)
10.3
10.6
10.1
Form of Change in Control Agreement for Messrs.
Gallagher and Samuel.
Form of Confidentiality and Post-Employment Activities
Agreement with AmeriGas Propane, Inc. for
Messrs. Gallagher, Grady, Samuel, and Sheridan.
AmeriGas
Partners, L.P.
Form 10-K
(9/30/09)
10.29
83
Table of Contents
Exhibit No.
*10.41**
10.42
10.43
10.44
10.45
10.46
10.47
10.48
14
*21
*23
*31.1
*31.2
Incorporation by Reference
Exhibit
Registrant
Filing
Exhibit
Separation Agreement and General Release by and
between AmeriGas Propane, Inc. and William D. Katz,
dated as of July 15, 2013.
Trademark License Agreement dated April 19, 1995
among UGI Corporation, AmeriGas, Inc., AmeriGas
Propane, Inc., AmeriGas Partners, L.P. and AmeriGas
Propane, L.P.
Trademark License Agreement, dated April 19, 1995
among AmeriGas Propane, Inc., AmeriGas Partners, L.P.
and AmeriGas Propane, L.P.
Credit Agreement dated as of June 21, 2011, as amended
through and including Amendment No. 4 thereto dated
April 18, 2012, by and among AmeriGas Propane, L.P., as
Borrower, AmeriGas Propane, Inc., as a Guarantor, Wells
Fargo Bank, National Association, as Administrative
Agent, Swingline Lender and Issuing Lender (“Agent”),
Wells Fargo Securities, LLC, as Sole Lead Arranger and
Sole Book Manager and the financial institutions from
time to time party thereto.
Release of Liens and Termination of Security Documents
dated as of November 6, 2006 by and among AmeriGas
Propane, Inc., Petrolane Incorporated, AmeriGas Propane,
L.P., AmeriGas Propane Parts & Service, Inc. and
Wachovia Bank, National Association, as Collateral Agent
for the Secured Creditors, pursuant to the Intercreditor and
Agency Agreement dated as of April 19, 1995.
Contingent Residential Support Agreement dated as of
January 12, 2012, among Energy Transfer Partners, L.P.,
AmeriGas Finance LLC, AmeriGas Finance Corp.,
AmeriGas Partners, L.P., and for certain limited purposes
only, UGI Corporation.
Amendment to Contingent Residual Support Agreement
dated as of January 12, 2012, among Energy Transfer
Partners, L.P., AmeriGas Finance LLC, AmeriGas Finance
Corp., AmeriGas Partners, L.P., and for certain limited
purposes only, UGI Corporation, dated as of March 20,
2013.
Unitholder Agreement, dated as of January 12, 2012, by
and among Heritage ETC, L.P., AmeriGas Partners, L.P.,
and, for limited purposes, Energy Transfer Partners, L.P.,
Energy Transfer Partners GP, L.P., and Energy Transfer
Equity, L.P.
UGI
Form 10-K
(9/30/10)
AmeriGas
Partners, L.P.
Form 10-Q
(12/31/10)
AmeriGas
Partners, L.P.
Form 10-K
(9/30/12)
10.37
10.1
10.39
AmeriGas
Partners, L.P.
Form 10-K
(9/30/06)
10.3
AmeriGas
Partners, L.P.
Form 8-K
(1/11/12)
AmeriGas
Partners, L.P.
Form 10-Q
(3/31/13)
AmeriGas
Partners, L.P.
Form 8-K
(1/11/12)
10.1
10.1
10.2
14
Code of Ethics for principal executive, financial and
accounting officers.
UGI
Form 10-K
(9/30/03)
Subsidiaries of the Registrant.
Consent of PricewaterhouseCoopers LLP.
Certification by the Chief Executive Officer relating to the
Registrant’s Report on Form 10-K for the fiscal year ended
September 30, 2013 pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
Certification by the Chief Financial Officer relating to the
Registrant’s Report on Form 10-K for the fiscal year ended
September 30, 2013 pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
84
Table of Contents
Incorporation by Reference
Registrant
Filing
Exhibit
Exhibit No.
*32
*99.1
Exhibit
Certification by the Chief Executive Officer and the Chief
Financial Officer relating to the Registrant’s Report on
Form 10-K for the fiscal year ended September 30, 2013,
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
UGI Corporation Equity-Based Compensation
Information.
*99.2
Reconciliation of EBITDA and Adjusted EBITDA.
*101.INS
XBRL.Instance
*101.SCH XBRL Taxonomy Extension Schema
*101.CAL XBRL Taxonomy Extension Calculation Linkbase
XBRL Taxonomy Extension Definition Linkbase
*101.DEF
*101.LAB XBRL Taxonomy Extension Labels Linkbase
*101.PRE XBRL Taxonomy Extension Presentation Linkbase
*
**
Filed herewith.
As required by Item 15(a)(3), this exhibit is identified as a compensatory plan or arrangement.
85
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused
this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: November 29, 2013
AMERIGAS PARTNERS, L.P.
By: AmeriGas Propane, Inc.,
Its General Partner
By:
/s/ Hugh J. Gallagher
Hugh J. Gallagher
Vice President — Finance and Chief
Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below on November 29,
2013, by the following persons on behalf of the Registrant in the capacities indicated.
Signature
/s/ Jerry E. Sheridan
Jerry E. Sheridan
/s/ Lon R. Greenberg
Lon R. Greenberg
/s/ John L. Walsh
John L. Walsh
/s/ Hugh J. Gallagher
Hugh J. Gallagher
/s/ Robert J. Cane
Robert J. Cane
/s/ R. Paul Grady
R. Paul Grady
/s/ Brian R. Ford
Brian R. Ford
/s/ William J. Marrazzo
William J. Marrazzo
/s/ Anne Pol
Anne Pol
/s/ Marvin O. Schlanger
Marvin O. Schlanger
/s/ Howard B. Stoeckel
Howard B. Stoeckel
/s/ K. Richard Turner
K. Richard Turner
Title
President and Chief Executive Officer
(Principal Executive Officer) and Director
Chairman and Director
Vice Chairman and Director
Vice President — Finance and Chief Financial Officer
(Principal Financial Officer)
Controller and Chief Accounting Officer
(Principal Accounting Officer)
Vice President and Chief Operating Officer
Director
Director
Director
Director
Director
Director
86
AMERIGAS PARTNERS, L.P.
FINANCIAL INFORMATION
FOR INCLUSION IN ANNUAL REPORT ON FORM 10-K
YEAR ENDED SEPTEMBER 30, 2013
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
Financial Statements:
Management’s Annual Report on Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of September 30, 2013 and 2012
Consolidated Statements of Operations for the years ended September 30, 2013, 2012 and 2011
Consolidated Statements of Comprehensive Income for the years ended September 30, 2013, 2012, and 2011
Consolidated Statements of Cash Flows for the years ended September 30, 2013, 2012 and 2011
Consolidated Statements of Partners’ Capital for the years ended September 30, 2013, 2012 and 2011
Notes to Consolidated Financial Statements
Financial Statements Schedules:
For the years ended September 30, 2013, 2012 and 2011:
I — Condensed Financial Information of Registrant (Parent Company)
II — Valuation and Qualifying Accounts
Pages
F-3
F-4
F-5
F-6
F-7
F-8
F-9
F-10
S-1
S-4
We have omitted all other financial statement schedules because the required information is either (1) not present; (2) not present
in amounts sufficient to require submission of the schedule; or (3) included elsewhere in the financial statements or related notes.
F-2
Table of Contents
General Partner’s Report
Financial Statements
The Partnership’s consolidated financial statements and other financial information contained in this Annual Report are
prepared by the management of the General Partner, AmeriGas Propane, Inc., which is responsible for their fairness, integrity and
objectivity. The consolidated financial statements and related information were prepared in accordance with accounting principles
generally accepted in the United States of America and include amounts that are based on management’s best judgments and
estimates.
The Audit Committee of the Board of Directors of the General Partner is composed of three members, none of whom is an
employee of the General Partner. This Committee is responsible for overseeing the financial reporting process and the adequacy
of controls, and for monitoring the independence and performance of the Partnership’s independent registered public accounting
firm and internal auditors. The Committee is also responsible for maintaining direct channels of communication among the Board
of Directors, management and both the independent registered public accounting firm and internal auditors.
PricewaterhouseCoopers LLP, our independent registered public accounting firm, is engaged to perform audits of our
consolidated financial statements. These audits are performed in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Our independent registered public accounting firm was given unrestricted access to all financial
records and related data, including minutes of all meetings of the Board of Directors and committees of the Board. The Partnership
believes that all representations made to the independent registered public accounting firm during their audits were valid and
appropriate.
Management’s Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the
Partnership. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the
Sarbanes-Oxley Act of 2002, management has conducted an assessment, including testing, of the Partnership’s internal control
over financial reporting using the criteria in Internal Control — Integrated Framework (1992), issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO 1992).
Internal control over financial reporting refers to the process designed under the supervision and participation of management
including our Chief Executive Officer and Chief Financial Officer, to provide reasonable, but not absolute, assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting
principles generally accepted in the United States of America and includes policies and procedures that, among other things,
provide reasonable assurance that assets are safeguarded and that transactions are executed in accordance with management’s
authorization and are properly recorded to permit the preparation of reliable financial information. Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate due to changing conditions, or the
degree of compliance with the policies or procedures may deteriorate.
Based on its assessment, management has concluded that the Partnership’s internal control over financial reporting was
effective as of September 30, 2013, based on COSO 1992. PricewaterhouseCoopers LLP, our independent registered public
accounting firm, audited the effectiveness of the Partnership’s internal control over financial reporting as of September 30, 2013,
as stated in their report, which appears herein.
/s/ Jerry E. Sheridan
Chief Executive Officer
/s/ Hugh J. Gallagher
Chief Financial Officer
/s/ Robert J. Cane
Chief Accounting Officer
F-3
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Board of Directors of AmeriGas Propane, Inc. and the
Partners of AmeriGas Partners, L.P.:
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of
comprehensive income, of partners’ capital and of cash flows present fairly, in all material respects, the financial position of
AmeriGas Partners, L.P. and its subsidiaries at September 30, 2013 and 2012, and the results of their operations and their cash
flows for each of the three years in the period ended September 30, 2013 in conformity with accounting principles generally
accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the index appearing
under Item 15 (a)(2) present fairly, in all material respects, the information set forth therein when read in conjunction with the
related consolidated financial statements. Also in our opinion, the Partnership maintained, in all material respects, effective internal
control over financial reporting as of September 30, 2013, based on criteria established in Internal Control - Integrated Framework
(1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 1992). The Partnership’s
management is responsible for these financial statements and financial statement schedules, for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in
the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express
opinions on these financial statements, on the financial statement schedules and on the Partnership’s internal control over financial
reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material misstatement and whether effective internal control over
financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
November 29, 2013
F-4
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Thousands of dollars)
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable (less allowances for doubtful accounts of $18,552 and $17,217,
respectively)
Accounts receivable — related parties
Inventories
Derivative financial instruments
Prepaid expenses and other current assets
Total current assets
Property, plant and equipment (less accumulated depreciation and amortization of
$1,231,688 and $1,075,528, respectively)
Goodwill
Intangible assets
Other assets
Total assets
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Current maturities of long-term debt
Bank loans
Accounts payable — trade
Accounts payable — related parties
Employee compensation and benefits accrued
Interest accrued
Customer deposits and advances
Derivative financial instruments
Other current liabilities
Total current liabilities
Long-term debt
Other noncurrent liabilities
Total liabilities
Commitments and contingencies (Note 12)
Partners’ capital:
AmeriGas Partners, L.P. partners’ capital:
Common unitholders (units issued — 92,824,539 and 92,801,347, respectively)
General partner
Accumulated other comprehensive income (loss)
Total AmeriGas Partners, L.P. partners’ capital
Noncontrolling interest
Total partners’ capital
Total liabilities and partners’ capital
See accompanying notes to consolidated financial statements.
F-5
September 30,
2013
2012
$
12,635
$
60,102
290,701
1,509
158,928
18,036
18,883
500,692
1,437,514
1,936,608
493,649
41,383
266,677
970
163,746
1,478
30,395
523,368
1,499,225
1,914,808
535,996
43,934
$
4,409,846
$
4,517,331
$
12,014
$
116,900
170,705
1,071
44,671
49,013
128,122
135
94,343
616,974
30,706
49,900
170,424
2,012
48,894
49,714
167,614
42,347
109,234
670,845
2,288,097
2,297,363
80,638
80,563
2,985,709
3,048,771
1,354,187
15,930
14,986
1,385,103
39,034
1,455,702
16,975
(43,569)
1,429,108
39,452
1,424,137
1,468,560
$
4,409,846
$
4,517,331
Table of Contents
Revenues:
Propane
Other
Costs and expenses:
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of dollars, except per unit amounts)
Year Ended
September 30,
2013
2012
2011
$
2,884,766
$
2,677,631
$
2,360,439
281,777
3,166,543
243,985
2,921,616
177,520
2,537,959
Cost of sales — propane (excluding depreciation shown below)
1,571,574
1,642,658
1,546,161
Cost of sales — other (excluding depreciation shown below)
Operating and administrative expenses
Depreciation
Amortization
Other income, net
Operating income
Loss on extinguishments of debt
Interest expense
Income before income taxes
Income tax expense
Net income
Less: net income attributable to noncontrolling interest
Net income attributable to AmeriGas Partners, L.P.
General partner’s interest in net income attributable to AmeriGas Partners,
L.P.
Limited partners’ interest in net income attributable to AmeriGas Partners,
L.P.
Income (loss) per limited partner unit — basic (Note 2)
Income (loss) per limited partner unit — diluted (Note 2)
Average limited partner units outstanding (thousands):
$
$
$
$
$
Basic
Diluted
See accompanying notes to consolidated financial statements.
88,479
943,928
159,306
43,565
(32,503)
2,774,349
392,194
—
(165,432)
226,762
(1,671)
225,091
(3,869)
221,222
21,498
199,724
2.14
2.14
92,832
92,910
$
$
$
$
$
77,071
888,693
134,225
34,898
(26,521)
2,751,024
170,592
(13,349)
(142,641)
14,602
(1,931)
12,671
(1,646)
11,025
13,119
$
$
(2,094) $
(0.11) $
(0.11) $
81,433
81,433
59,126
620,576
82,977
11,733
(25,563)
2,295,010
242,949
(38,117)
(63,518)
141,314
(390)
140,924
(2,401)
138,523
6,422
132,101
2.30
2.30
57,119
57,170
F-6
Table of Contents
AMERIGAS PARTNERS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Thousands of dollars)
Year Ended September 30,
2012
2011
2013
$
225,091
$
12,671
$
140,924
6,647
52,503
59,150
284,241
(86,573)
47,569
(39,004)
(26,333)
22,275
(32,243)
(9,968)
130,956
(2,270)
128,686
Net income
Other comprehensive income (loss):
Net gains (losses) on derivative instruments
Reclassifications of net losses (gains) on derivative instruments
Other comprehensive income (loss)
Total comprehensive income (loss)
Less: comprehensive income attributable to noncontrolling interest
Comprehensive income (loss) attributable to AmeriGas Partners, L.P.
(4,464)
279,777
$
(1,251)
(27,584) $
$
See accompanying notes to consolidated financial statements.
F-7
Table of Contents
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of dollars)
Year Ended
September 30,
2012
2013
2011
$
225,091
$
12,671
$
140,924
202,871
16,477
—
(5,100)
(43,378)
5,403
(661)
(2,305)
(42,795)
355,603
(111,058)
22,113
(19,946)
(108,891)
(327,000)
—
(4,882)
67,000
—
(30,531)
169,123
15,088
13,349
1,019
78,703
53,061
(34,577)
11,863
24,129
344,429
(103,140)
8,082
(1,425,002)
(1,520,060)
(271,839)
276,562
(2,979)
(45,600)
1,524,174
(256,992)
1,221
13
(294,179)
(47,467) $
951
2,824
1,227,101
51,470
$
12,635
60,102
(47,467) $
60,102
8,632
51,470
161,562
$
104,248
$
$
$
$
$
$
$
$
94,710
12,807
38,117
(2,812)
(65,578)
(20,532)
25,690
2,912
(37,387)
188,851
(77,228)
5,131
(34,032)
(106,129)
(171,821)
—
(1,485)
4,500
904,332
(817,976)
616
18
(81,816)
906
8,632
7,726
906
66,269
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization
Provision for uncollectible accounts
Loss on extinguishments of debt
Other, net
Net change in:
Accounts receivable
Inventories
Accounts payable
Other current assets
Other current liabilities
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property, plant and equipment
Proceeds from disposals of assets
Acquisitions of businesses, net of cash acquired
Net cash used by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions
Proceeds from issuance of Common Units
Noncontrolling interest activity
Increase (decrease) in bank loans
Issuance of long-term debt
Repayment of long-term debt
Proceeds associated with equity based compensation plans, net of tax
withheld
Capital contributions from General Partner
Net cash (used) provided by financing activities
Cash and cash equivalents (decrease) increase
CASH AND CASH EQUIVALENTS:
End of year
Beginning of year
(Decrease) increase
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest
See accompanying notes to consolidated financial statements.
F-8
Table of Contents
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
(Thousands of dollars, except unit data)
Number of
Common
Units
Common
unitholders
General
partner
Accumulated
other
comprehensive
income (loss)
Total
AmeriGas
Partners,
L.P.
partners’
capital
Noncontrolling
Interest
Total
partners’
capital
Balance September 30, 2010
57,088,509
$
372,220
$
3,751
$
4,877
$
380,848
$
12,038
$
392,886
Net income
132,101
6,422
Net gains on derivative instruments
Reclassification of net gains on derivative
instruments
22,050
138,523
22,050
2,401
225
140,924
22,275
(31,887)
(31,887)
(356)
(32,243)
Distributions
(165,066)
(6,755)
Unit-based compensation expense
1,497
General Partner contribution to AmeriGas
Propane, L.P.
Common Units issued in connection with
employee plans, net of tax withheld
35,787
(572)
Balance September 30, 2011
57,124,296
340,180
18
3,436
13,119
(4,960)
(2,094)
(171,821)
1,497
(554)
338,656
11,025
(2,272)
(174,093)
787
1,497
787
(554)
12,823
1,646
351,479
12,671
(85,699)
(85,699)
(874)
(86,573)
47,090
47,090
479
47,569
(256,112)
(15,727)
(3,992)
(275,831)
Unit-based compensation expense
6,832
29,567,362
1,132,628
(271,839)
6,832
1,132,628
(635,667)
(28,357)
(28,357)
28,357
(298,660)
(13,323)
13,323
7,000,000
276,562
2,800
—
279,362
6,832
1,132,628
—
—
279,362
Balance September 30, 2012
92,801,347
1,455,702
44,016
(614)
199,724
1,013
1,013
24
16,975
21,498
(590)
—
(590)
(43,569)
1,429,108
39,452
1,468,560
6,583
221,222
6,583
3,869
64
225,091
6,647
51,972
51,972
531
52,503
Unit-based compensation expense
3,472
(304,444)
(22,556)
(327,000)
3,472
Common Units issued in connection with
employee and director plans, net of tax
withheld
23,192
(267)
13
(254)
(4,882)
(331,882)
3,472
(254)
Balance September 30, 2013
92,824,539
$ 1,354,187
$
15,930
$
14,986
$ 1,385,103
$
39,034
$ 1,424,137
See accompanying notes to consolidated financial statements.
F-9
Net income
Net losses on derivative instruments
Reclassification of net losses on
derivative instruments
Distributions
Common Units issued in connection with
the Heritage Acquisition
General Partner contribution of Common
Units to AmeriGas OLP in connection
with the Heritage Acquisition
General Partner contribution of Common
Units to AmeriGas Partners, L.P. in
connection with the Heritage Acquisition
Common Units issued in connection with
public offering
General Partner contribution to AmeriGas
Propane, L.P.
Common Units issued in connection with
employee plans, net of tax withheld
Net income
Net gains on derivative instruments
Reclassification of net losses on
derivative instruments
Distributions
Table of Contents
Index to Notes:
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
Note 1 — Nature of Operations
Note 2 — Significant Accounting Policies
Note 3 — Accounting Changes
Note 4 — Acquisitions
Note 5 — Quarterly Distributions of Available Cash
Note 6 — Debt
Note 7 — Employee Retirement Plans
Note 8 — Inventories
Note 9 — Property, Plant and Equipment
Note 10 — Goodwill and Intangible Assets
Note 11 — Partners’ Capital and Incentive Compensation Plans
Note 12 — Commitments and Contingencies
Note 13 — Related Party Transactions
Note 14 — Other Current Liabilities
Note 15 — Fair Value Measurements
Note 16 — Disclosures About Derivative Instruments and Hedging Activities
Note 17 — Other Income, Net
Note 18 — Quarterly Data (Unaudited)
Note 1 — Nature of Operations
AmeriGas Partners, L.P. (“AmeriGas Partners”) is a publicly traded limited partnership that conducts a national propane
distribution business through its principal operating subsidiary AmeriGas Propane, L.P. (“AmeriGas OLP”) and, prior to its merger
with and into AmeriGas OLP in July 2013, AmeriGas OLP’s principal operating subsidiary Heritage Operating, L.P. (“HOLP”).
In addition, from January 12, 2012, through the date of its merger with and into AmeriGas OLP in August 2012, we also conducted
business through AmeriGas OLP’s operating subsidiary, Titan Propane LLC (“Titan LLC”). HOLP and Titan LLC (collectively
“Heritage Propane”) were acquired on January 12, 2012, from Energy Transfer Partners (“ETP”) (see Note 4 for additional
information about the acquisition of Heritage Propane). AmeriGas OLP, along with HOLP and Titan LLC (prior to their mergers
with and into AmeriGas OLP) are referred to herein as the “Operating Partnership.” AmeriGas Partners and AmeriGas OLP are
Delaware limited partnerships. AmeriGas Partners, the Operating Partnership and all of their subsidiaries are collectively referred
to herein as “the Partnership” or “we.”
The Operating Partnership is engaged in the distribution of propane and related equipment and supplies. The Operating
Partnership comprises the largest retail propane distribution business in the United States serving residential, commercial, industrial,
motor fuel and agricultural customers in all 50 states.
At September 30, 2013, AmeriGas Propane, Inc. (the “General Partner”), an indirect wholly owned subsidiary of UGI
Corporation (“UGI”), held a 1% general partner interest in AmeriGas Partners and a 1.01% general partner interest in AmeriGas
OLP. The General Partner and its wholly owned subsidiary, Petrolane Incorporated (“Petrolane,” a predecessor company of the
Partnership), also owned 23,756,882 AmeriGas Partners Common Units (“Common Units”). The remaining Common Units
outstanding comprise 47,000,295 publicly held Common Units and 22,067,362 Common Units held by a subsidiary of Energy
Transfer Partners, L.P. (“ETP”). AmeriGas Partners issued 29,567,362 Common Units to ETP in conjunction with the January
2012 acquisition of Heritage Propane from ETP (see Note 4). In July 2013, ETP sold 7,500,000 of the Common Units it held in
an underwritten public offering, pursuant to its registration rights in its unitholder agreement. AmeriGas Partners did not receive
any proceeds from the sale of the Common Units by ETP. The Common Units represent limited partner interests in AmeriGas
Partners. AmeriGas Partners holds a 99% limited partner interest in AmeriGas OLP.
AmeriGas Partners and the Operating Partnership have no employees. Employees of the General Partner conduct, direct
and manage our operations. The General Partner is reimbursed monthly for all direct and indirect expenses it incurs on our behalf
(see Note 13).
F-10
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
Note 2 — Significant Accounting Policies
Basis of Presentation. Our financial statements are prepared in accordance with accounting principles generally accepted in the
United States of America (“GAAP”).
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenues, expenses and costs. These estimates are based on management’s
knowledge of current events, historical experience and various other assumptions that are believed to be reasonable under the
circumstances. Accordingly, actual results may be different from these estimates and assumptions.
Principles of Consolidation. The consolidated financial statements include the accounts of AmeriGas Partners and its majority-
owned subsidiaries. We eliminate all significant intercompany accounts and transactions when we consolidate. We account for
the General Partner’s 1.01% interest in AmeriGas OLP as noncontrolling interest in the consolidated financial statements.
Finance Corps. AmeriGas Finance Corp., AP Eagle Finance Corp. and AmeriGas Finance LLC are 100%-owned finance
subsidiaries of AmeriGas Partners. Their sole purpose is to serve as issuers or co-obligors for debt securities issued or guaranteed
by AmeriGas Partners.
Fair Value Measurements. We apply fair value measurements to certain assets and liabilities principally our commodity and
interest rate derivative instruments. Fair value in GAAP is defined as the price that would be received to sell an asset or paid to
transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Fair value is based
upon assumptions that market participants would use when pricing an asset or liability, including assumptions about risk and risks
inherent in valuation techniques and inputs to valuations. This includes not only the credit standing of counterparties and credit
enhancements but also the impact of our own nonperformance risk on our liabilities. Fair value measurements require that we
assume that the transaction occurs in the principal market for the asset or liability or in the absence of a principal market, the most
advantageous market for the asset or liability (the market for which the reporting entity would be able to maximize the amount
received or minimize the amount paid). We evaluate the need for credit adjustments to our derivative instrument fair values in
accordance with the requirements noted above. Such adjustments were not material to the fair values of our derivative instruments.
We use the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value
into three broad levels:
•
•
•
Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities that we have the ability to access
at the measurement date. We did not have any derivative financial instruments categorized as Level 1 at September 30, 2013
or 2012.
Level 2 — Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for the
asset or liability, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar
assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability, and inputs
that are derived from observable market data by correlation or other means. Instruments categorized in Level 2 include non-
exchange traded derivatives such as over-the-counter commodity price swap and option contracts and interest rate protection
agreements.
Level 3 — Unobservable inputs for the asset or liability including situations where there is little, if any, market activity for
the asset or liability. We did not have any derivative financial instruments categorized as Level 3 at September 30, 2013 or
2012.
The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to
unobservable data (Level 3). In some cases, the inputs to measure fair value might fall into different levels of the fair value
hierarchy. The lowest level input that is significant to a fair value measurement in its entirety determines the applicable level in
the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement in its entirety requires
judgment, considering factors specific to the asset or liability. See Note 15 for additional information on fair value measurements.
Derivative Instruments. We account for derivative instruments and hedging activities in accordance with guidance provided by
the Financial Accounting Standards Board (“FASB”) which requires that all derivative instruments be recognized as either assets
or liabilities and measured at fair value. The accounting for changes in fair value depends upon the purpose of the derivative
instrument and whether it is designated and qualifies for hedge accounting.
F-11
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
A substantial portion of our derivative financial instruments is designated and qualifies as for accounting as cash flow hedges.
For cash flow hedges, changes in the fair value of the derivative financial instruments are recorded in accumulated other
comprehensive income (“AOCI”) or noncontrolling interest, to the extent effective at offsetting changes in the hedged item, until
earnings are affected by the hedged item. We discontinue cash flow hedge accounting if the occurrence of the forecasted transaction
is determined to be no longer probable. Cash flows from derivative financial instruments are included in cash flows from operating
activities.
For a more detailed description of the derivative instruments we use, our accounting for derivatives, our objectives for using
them and related supplemental information required by GAAP, see Note 16.
Revenue Recognition. Revenues from the sale of propane are recognized principally upon delivery. Revenues from the sale of
appliances and equipment are recognized at the later of sale or installation. Revenues from repair or maintenance services are
recognized upon completion of services. Revenues from annually billed fees are recorded on a straight-line basis over one year.
We present revenue-related taxes collected from customers and remitted to taxing authorities, principally sales and use taxes, on
a net basis.
During the three months ended March 31, 2013, the Partnership identified an error in its accounting for certain customer
credits. The Partnership determined that the recording of propane revenues did not appropriately consider the effects of certain
customer credits which were recorded when issued in a subsequent period. As a result, the Partnership changed its accounting for
customer credits to record an estimate of such credits at the time propane revenues are recorded. Such estimate considers the
Partnership’s history of providing credits, propane revenue activity and other factors. The Partnership has evaluated the impact
of the error on prior periods and has determined that the effect is not material to any prior period financial statement. The correction
of the error in accounting for customer credits had the effect of decreasing propane revenues and accounts receivable by $4,700,
and decreasing net income attributable to AmeriGas Partners, L.P. by $4,652, for Fiscal 2013. If the Partnership had corrected
the error in its accounting for customer credits and recorded the estimate of credits as of September 30, 2012, the cumulative effect
of the change as of that date would have decreased net income attributable to AmeriGas Partners, L.P. by approximately $4,200.
Delivery Expenses. Expenses associated with the delivery of propane to customers (including vehicle expenses, expenses of
delivery personnel, vehicle repair and maintenance and general liability expenses) are classified as operating and administrative
expenses on the Consolidated Statements of Operations. Depreciation expense associated with delivery vehicles is classified in
depreciation on the Consolidated Statements of Operations.
Income Taxes. AmeriGas Partners and the Operating Partnership are not directly subject to federal income taxes. Instead, their
taxable income or loss is allocated to their individual partners. The Operating Partnership has corporate subsidiaries which are
directly subject to federal and state income taxes. Accordingly, our consolidated financial statements reflect income taxes related
to these corporate subsidiaries. Legislation in certain states allows for taxation of partnerships’ income and the accompanying
financial statements reflect state income taxes resulting from such legislation. Net income for financial statement purposes may
differ significantly from taxable income reportable to unitholders. This is a result of (1) differences between the tax basis and
financial reporting basis of assets and liabilities and (2) the taxable income allocation requirements of the Fourth Amended and
Restated Agreement of Limited Partnership of AmeriGas Partners, L.P., as amended (“Partnership Agreement”) and the Internal
Revenue Code.
Comprehensive Income (Loss). Comprehensive income (loss) comprises net income and other comprehensive income (loss).
Other comprehensive income (loss) results from gains and losses on derivative instruments qualifying as cash flow hedges.
Cash and Cash Equivalents. All highly liquid investments with maturities of three months or less when purchased are classified
as cash equivalents.
Inventories. Our inventories are stated at the lower of cost or market. We determine cost using an average cost method for propane,
specific identification for appliances and the first-in, first-out (“FIFO”) method for all other inventories.
Property, Plant and Equipment and Related Depreciation. We record property, plant and equipment at cost. The amounts we
assign to property, plant and equipment of acquired businesses are based upon estimated fair value at date of acquisition.
We compute depreciation expense on plant and equipment using the straight-line method over estimated service lives
generally ranging from 15 to 40 years for buildings and improvements; 7 to 30 years for storage and customer tanks and cylinders;
and 2 to 10 years for vehicles, equipment and office furniture and fixtures. Costs to install Partnership-owned tanks at customer
F-12
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
locations, net of amounts billed to customers, are capitalized and depreciated over the estimated period of benefit not exceeding
ten years.
We include in property, plant and equipment costs associated with computer software we develop or obtain for use in our
business. We amortize computer software costs on a straight-line basis over expected periods of benefit not exceeding 10 years
once the installed software is ready for its intended use.
No depreciation expense is included in cost of sales on the Consolidated Statements of Operations.
Segment Information. We have determined that we have a single reportable operating segment that engages in the distribution
of propane and related equipment and supplies. No single customer represents ten percent or more of consolidated revenues on
an accrual basis. In addition, substantially all of our revenues are derived from sources within the United States and substantially
all of our long-lived assets are located in the United States.
Goodwill and Intangible Assets. In accordance with GAAP relating to intangible assets, we amortize intangible assets over their
estimated useful lives unless we determine their lives to be indefinite. We review identifiable intangible assets subject to amortization
for impairment whenever events or changes in circumstances indicate that the associated carrying amounts may not be recoverable.
Determining whether an impairment loss occurred requires comparing the carrying amount to the sum of undiscounted cash flows
expected to be generated by the asset. Intangible assets with indefinite lives are not amortized but are tested annually for impairment
and written down to fair value as required.
We do not amortize goodwill, but test it at least annually for impairment at the reporting unit level. A reporting unit is an
operating segment or one level below an operating segment (a component) if discrete financial information is prepared and regularly
reviewed by segment management. We are required to recognize an impairment charge under GAAP if the carrying amount of
the reporting unit exceeds its fair value and the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of
that goodwill. Fair value is estimated using a market value approach taking into account the market price of AmeriGas Partners
Common Units. The Partnership adopted new accounting guidance regarding goodwill impairment during Fiscal 2012 which
permits us, in certain circumstances, to perform a qualitative approach to determine if it is more likely than not that the carrying
value of a reporting unit is greater than its fair value.
No provisions for goodwill or other intangible asset impairments were recorded during Fiscal 2013, Fiscal 2012 or Fiscal
2011. No amortization expense of intangible assets is included in cost of sales in the Consolidated Statements of Income. For
further information, see Note 10.
Impairment of Long-Lived Assets. We evaluate the impairment of long-lived assets whenever events or changes in circumstances
indicate that the carrying amount of such assets may not be recoverable. We evaluate recoverability based upon undiscounted
future cash flows expected to be generated by such assets. If the undiscounted future cash flows indicate that the recorded amounts
are not expected to be recoverable, such long-lived assets are reduced to their estimated fair values. Estimates of fair vales are
generally based on recent sales of similar assets and other market indicators (Level 2). During Fiscal 2013, the Partnership recorded
long-lived asset impairment charges of $3,000. No provisions for impairments were recorded during Fiscal 2012 or Fiscal 2011.
Deferred Debt Issuance Costs. Included in other assets are net deferred debt issuance costs of $31,772 and $37,020 at
September 30, 2013 and 2012, respectively. We are amortizing these costs over the terms of the related debt.
Customer Deposits. We offer certain of our customers prepayment programs which require customers to pay a fixed periodic
amount or to otherwise prepay a portion of their anticipated propane purchases. Customer prepayments, in excess of associated
billings, are classified as customer deposits and advances on the Consolidated Balance Sheets.
Equity-Based Compensation. The General Partner may grant Common Unit awards (as further described in Note 11) to employees
and non-employee Directors under its Common Unit plans, and employees of the General Partner may be granted stock options
for UGI Common Stock. All of our equity-based compensation is measured at fair value on the grant date, date of modification
or end of the period, as applicable, and recognized in earnings over the requisite service period. Depending upon the settlement
terms of the awards, all or a portion of the fair value of equity-based awards may be presented as a liability or as equity in our
Consolidated Balance Sheets. Equity-based compensation costs associated with the portion of Common Unit awards classified as
equity are measured based upon their estimated fair value on the date of grant or modification. Equity-based compensation costs
associated with the portion of Common Unit awards classified as liabilities are measured based upon their estimated fair value at
F-13
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
the grant date and remeasured as of the end of each period. For a further description of our equity-based compensation plans and
related disclosures, see Note 11.
Environmental Matters. We are subject to environmental laws and regulations intended to mitigate or remove the effect of past
operations and improve or maintain the quality of the environment. These laws and regulations require the removal or remedy of
the effect on the environment of the disposal or release of certain specified hazardous substances at current or former operating
sites.
Environmental reserves are accrued when assessments indicate that it is probable that a liability has been incurred and an
amount can reasonably be estimated. Amounts recorded as environmental liabilities on the balance sheets represent our best
estimate of costs expected to be incurred or, if no best estimate can be made, the minimum liability associated with a range of
expected environmental investigation and remediation costs. Our estimated liability for environmental contamination is reduced
to reflect anticipated participation of other responsible parties but is not reduced for possible recovery from insurance carriers.
We do not discount to present value the costs of future expenditures for environmental liabilities. At September 30, 2013 and 2012,
the Partnership’s accrued liabilities for environmental investigation and cleanup costs were not material.
Allocation of Net Income. Net income attributable to AmeriGas Partners, L.P. for partners’ capital and statement of operations
presentation purposes is allocated to the General Partner and the limited partners in accordance with their respective ownership
percentages after giving effect to amounts distributed to the General Partner in excess of its 1% general partner interest in AmeriGas
Partners based on its incentive distribution rights (“IDRs”) under the Partnership Agreement (see Note 5).
Net Income (Loss) Per Unit. Income (loss) per limited partner unit is computed in accordance with GAAP regarding the application
of the two-class method for determining income (loss) per unit for master limited partnerships (“MLPs”) when IDRs are present.
The two-class method requires that income per limited partner unit be calculated as if all earnings for the period were distributed
and requires a separate calculation for each quarter and year-to-date period. In periods when our net income attributable to AmeriGas
Partners exceeds our Available Cash, as defined in the Partnership Agreement, and is above certain levels, the calculation according
to the two-class method results in an increased allocation of undistributed earnings to the General Partner. Generally, in periods
when our Available Cash in respect of the quarter or year-to-date periods exceeds our net income (loss) attributable to AmeriGas
Partners, the calculation according to the two-class method results in an allocation of earnings to the General Partner greater than
its relative ownership interest in the Partnership (or in the case of a net loss attributable to AmeriGas Partners, an allocation of
such net loss to the Common Unitholders greater than their relative ownership interest in the Partnership).
The following table sets forth the numerators and denominators of the basic and diluted income (loss) per limited partner
unit computations:
Common Unitholders’ interest in net income attributable to AmeriGas
Partners under the two-class method for MLPs
$
198,583
$
(9,156) $
131,482
2013
2012 (a)
2011
Weighted average Common Units outstanding — basic (thousands)
Potentially dilutive Common Units (thousands)
Weighted average Common Units outstanding — diluted (thousands)
92,832
78
92,910
81,433
—
81,433
57,119
51
57,170
(a) There were 58 potentially dilutive Common Units excluded from the calculation because of the net loss attributable under
the two-class method.
Theoretical distributions of net income attributable to AmeriGas Partners, L.P. in accordance with the two-class method for
Fiscal 2013, Fiscal 2012 and Fiscal 2011 resulted in an increased allocation of net income attributable to AmeriGas Partners, L.P.
to the General Partner in the computation of income per limited partner unit which had the effect of decreasing earnings per limited
partner unit by $0.01, $0.09, and $0.01, respectively.
Note 3 — Accounting Changes
New Accounting Standards Not Yet Adopted
Disclosures about Reclassifications Out of Accumulated Other Comprehensive Income. In February 2013, the FASB issued
new accounting guidance regarding disclosures for items reclassified out of AOCI. The new disclosure guidance is effective for
F-14
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
fiscal years, and interim periods within those fiscal years, beginning after December 15, 2012. The new disclosures are to be
applied prospectively, and early adoption is permitted. We will adopt the new guidance in Fiscal 2014. As this guidance provides
only disclosure requirements, the adoption of this standard will not impact our results of operations, cash flows or financial position.
Disclosures about Offsetting Assets and Liabilities. In December 2011 (and amended in January 2013), the FASB issued
new accounting guidance requiring entities to disclose both gross and net information about recognized derivative instruments
that are offset on the balance sheet or subject to an enforceable master netting arrangement or similar agreement, irrespective of
whether they are offset on the balance sheet. The new guidance is effective for annual reporting periods beginning on or after
January 1, 2013 and interim periods within those annual periods, and is required to be applied retrospectively. We will adopt the
new guidance in Fiscal 2014. As this guidance provides only disclosure requirements, the adoption of this standard will not impact
our results of operations, cash flows or financial position.
Note 4 — Acquisitions
On January 12, 2012 (the “Acquisition Date”), AmeriGas Partners completed the acquisition of Heritage Propane from ETP
for total consideration of $2,598,234, comprising $1,465,606 in cash and 29,567,362 AmeriGas Partners Common Units with a
fair value of $1,132,628 (the “Heritage Acquisition”). The Acquisition Date cash consideration for the Heritage Acquisition was
subject to purchase price adjustments based on working capital, cash and the amount of indebtedness of Heritage Propane (“Working
Capital Adjustment”) and certain excess sales proceeds resulting from ETP’s sale of HOLP’s former cylinder exchange business
(“HPX”). In April 2012, AmeriGas Partners paid $25,504 of additional cash consideration as a result of the Working Capital
Adjustment and in June 2012, AmeriGas Partners received $18,911 in cash representing the excess cash proceeds from the sale
of HPX. The Heritage Acquisition was consummated pursuant to a Contribution and Redemption Agreement dated October 15,
2011, as amended (the “Contribution Agreement”), by and among AmeriGas Partners, ETP, Energy Transfer Partners GP, L.P., the
general partner of ETP (“ETP GP”), and Heritage ETC, L.P. (the “Contributor”). The acquired business conducted its propane
operations in 41 states through HOLP and Titan LLC. According to LP-Gas Magazine rankings published on February 1, 2012,
Heritage Propane was the third largest retail propane distributor in the United States, delivering over 500 million gallons to more
than one million retail propane customers in 2011. The Heritage Acquisition is consistent with our growth strategies, one of which
is to grow our core business through acquisitions.
Pursuant to the Contribution Agreement, the Contributor contributed to AmeriGas Partners a 99.999% limited partner interest
in HOLP; a 100% membership interest in Heritage Operating GP, LLC, a Delaware limited liability company and holder of a
0.001% general partner interest in HOLP; a 99.99% limited partner interest in Titan Energy Partners, L.P., a Delaware limited
partnership and the sole member of Titan LLC; and a 100% membership interest in Titan Energy GP, L.L.C., a Delaware limited
liability company and holder of a 0.01% general partner interest in Titan Energy Partners, L.P. As a result of the Heritage Acquisition,
the General Partner, in order to maintain its general partner interests in AmeriGas Partners and AmeriGas OLP, contributed 934,327
Common Units to the Partnership having a fair value of $41,680. These Common Units were subsequently cancelled.
The cash portion of the Heritage Acquisition was financed by the issuance by AmeriGas Finance Corp. and AmeriGas Finance
LLC, wholly owned finance subsidiaries of AmeriGas Partners (the “Issuers”), of $550,000 principal amount of 6.75% Senior
Notes due May 2020 (the “6.75% Notes”) and $1,000,000 principal amount of 7.00% Senior Notes due May 2022 (the “7.00%
Notes”). For further information on the 6.75% Notes and the 7.00% Notes, see Note 6.
The Consolidated Balance Sheet at September 30, 2012, reflects the final allocation of the purchase price to the assets acquired
and liabilities assumed for the Heritage Propane business combination. The purchase price paid comprises AmeriGas Partners
Common Units issued having a fair value of $1,132,628 and total net cash consideration of $1,472,199 including cash acquired
of $60,748. The fair value of the AmeriGas Partners Common Units issued to ETP was based on the closing price on the Acquisition
Date subject to a discount to reflect certain contractual transfer restrictions for a period of approximately twelve months. The
purchase price allocation was as follows:
F-15
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
Assets acquired:
Current assets
Property, plant & equipment
Customer relationships (estimated useful life of 15 years)
Trademarks and tradenames (a)
Goodwill (a)
Other assets
Total assets acquired
Liabilities assumed:
Current liabilities
Long-term debt
Other noncurrent liabilities
Total liabilities assumed
Total
$
$
$
$
$
301,372
890,215
418,900
91,100
1,217,717
9,947
2,929,251
(238,016)
(62,927)
(23,481)
(324,424)
2,604,827
(a) During Fiscal 2013, the Partnership made correcting adjustments to trademarks and tradenames and goodwill which are not reflected in the
table above (see Note 10).
Goodwill associated with the Heritage Acquisition principally results from synergies expected from combining the operations
and from assembled workforce. We allocated the purchase price of the acquisition to identifiable intangible assets based on
estimated fair values. Tradenames and trademarks were valued using the relief from royalty method and customer relationships
were valued using a discounted cash flow method. The relief from royalty method estimates our theoretical royalty savings from
ownership of the tradenames and trademarks. Key assumptions used in this method include discount rates, royalty rates, growth
rates and sales projections and are the assumptions most sensitive and susceptible to change as they require significant management
judgment. The key assumptions used in the customer relationship discounted cash flow method include discount rates, growth
rates and cash flow projections and are the assumptions most sensitive and susceptible to change as they require significant
management judgment. We allocated the purchase price of the acquisition to property, plant and equipment based on estimated
fair values primarily using replacement cost and market value methods.
Transaction expenses associated with the Heritage Acquisition, which are included in operating and administrative expenses
on the Consolidated Statements of Operations, totaled $5,252 for Fiscal 2012. The results of operations of Heritage Propane are
included in the Partnership’s Consolidated Statements of Operations since the Acquisition Date. As a result of combining the
Heritage Propane operations with our legacy operations, it is impracticable to determine the impact of the Heritage Propane
operations on the revenues and earnings of the Partnership.
The following presents unaudited pro forma income statement and income per unit data for Fiscal 2012 and 2011 as if the
Heritage Acquisition had occurred on October 1, 2010:
Revenues
Net income attributable to AmeriGas Partners
Income per limited partner unit:
Basic
Diluted
2012
3,413,331
30,977
0.17
0.17
$
$
$
$
$
$
$
$
2011
3,968,695
149,743
1.07
1.07
The unaudited pro forma results of operations reflect Heritage Propane’s historical operating results after giving effect to
adjustments directly attributable to the transaction that are expected to have a continuing effect. The unaudited pro forma
consolidated results of operations are not necessarily indicative of the results that would have occurred had the Heritage Acquisition
occurred on the date indicated nor are they necessarily indicative of future operating results.
Also, during Fiscal 2013, Fiscal 2012 and Fiscal 2011, AmeriGas OLP acquired a number of smaller domestic retail propane
distribution businesses for total net cash consideration of $19,945, $13,518 and $34,032, respectively. In conjunction with these
F-16
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
acquisitions, liabilities of $3,970 in Fiscal 2013, $4,844 in Fiscal 2012 and $9,487 in Fiscal 2011 were incurred. The operating
results of these businesses have been included in our operating results from their respective dates of acquisitions. The total purchase
price of these acquisitions has been allocated to the assets acquired and liabilities assumed as follows:
Net current assets
Property, plant and equipment
Goodwill
Customer relationships and noncompete agreements (estimated useful life
of 10 and 5 years, respectively)
Total
$
$
691
5,167
12,481
5,576
23,915
$
$
1,590
6,175
5,363
5,234
18,362
$
$
2,462
15,998
13,053
12,006
43,519
2013
2012
2011
The goodwill above is primarily the result of synergies between the acquired businesses and our existing propane business.
The pro forma effects of these transactions were not material.
Note 5 — Quarterly Distributions of Available Cash
The Partnership makes distributions to its partners approximately 45 days after the end of each fiscal quarter in a total amount
equal to its Available Cash (as defined in the Partnership Agreement) for such quarter. Available Cash generally means:
1.
2.
3.
all cash on hand at the end of such quarter,
plus all additional cash on hand as of the date of determination resulting from borrowings after the end of such quarter,
less the amount of cash reserves established by the General Partner in its reasonable discretion.
The General Partner may establish reserves for the proper conduct of the Partnership’s business and for distributions during
the next four quarters.
Distributions of Available Cash are made 98% to limited partners and 2% to the General Partner (giving effect to the 1.01%
interest of the General Partner in distributions of Available Cash from AmeriGas OLP to AmeriGas Partners) until Available Cash
exceeds the Minimum Quarterly Distribution of $0.55 and the First Target Distribution of $0.055 per Common Unit (or a total of
$0.605 per Common Unit). When Available Cash exceeds $0.605 per Common Unit in any quarter, the General Partner will receive
a greater percentage of the total Partnership distribution (the “incentive distribution”) but only with respect to the amount by which
the distribution per Common Unit to limited partners exceeds $0.605.
Quarterly distributions of Available Cash per limited partner unit during Fiscal 2013, Fiscal 2012 and Fiscal 2011 were as
follows:
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
$
2013
2012
2011
$
0.80
0.80
0.84
0.84
$
0.7400
0.7625
0.8000
0.8000
0.705
0.705
0.740
0.740
During Fiscal 2013, Fiscal 2012 and Fiscal 2011, the Partnership made quarterly distributions to Common Unitholders in
excess of $0.605 per limited partner unit. As a result, the General Partner received a greater percentage of the total Partnership
distribution than its aggregate 2% general partner interest in AmeriGas OLP and AmeriGas Partners. The total amount of
distributions received by the General Partner with respect to its aggregate 2% general partner ownership interests totaled $27,438
in Fiscal 2013, $19,719 in Fiscal 2012 and $9,027 in Fiscal 2011. Included in these amounts are incentive distributions received
by the General Partner during Fiscal 2013, Fiscal 2012 and Fiscal 2011 of $19,286, $13,008 and $5,037, respectively.
F-17
Table of Contents
Note 6 — Debt
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
Long-term debt comprises the following at September 30:
AmeriGas Partners Senior Notes:
7.00%, due May 2022
6.75%, due May 2020
6.50%, due May 2021
6.25%, due August 2019
HOLP Senior Secured Notes
Other
Total long-term debt
Less: current maturities
Total long-term debt due after one year
2013
2012
$
$
980,844
550,000
270,001
450,000
32,001
17,265
2,300,111
(12,014)
2,288,097
$
$
980,844
550,000
270,001
450,000
55,587
21,637
2,328,069
(30,706)
2,297,363
Scheduled principal repayments of long-term debt for each of the next five fiscal years ending September 30 are as follows:
Fiscal 2014 — $12,014; Fiscal 2015 — $9,299; Fiscal 2016 — $6,969; Fiscal 2017 — $4,955; Fiscal 2018 — $4,254.
AmeriGas Partners Senior Notes. In order to finance the cash portion of the Heritage Acquisition, on January 12, 2012,
AmeriGas Finance Corp. and AmeriGas Finance LLC (the “Issuers”) issued $550,000 principal amount of 6.75% Notes due May
2020 and $1,000,000 principal amount of 7.00% Notes due May 2022. The 6.75% Notes and the 7.00% Notes are fully and
unconditionally guaranteed on a senior unsecured basis by AmeriGas Partners. The Issuers have the right to redeem the 6.75%
Notes, in whole or in part, at any time on or after May 20, 2016 and to redeem the 7.00% Notes, in whole or in part, at any time
on or after May 20, 2017, subject to certain restrictions. A premium applies to redemptions of the 6.75% Notes and 7.00% Notes
through May 2018 and May 2020, respectively. On or prior to May 20, 2015, the Issuers may also redeem, at a premium and
subject to certain restrictions, up to 35% of each of the 6.75% Notes and the 7.00% Notes with the proceeds of a registered public
equity offering. The 6.75% Notes and the 7.00% Notes and the guarantees rank equal in right of payment with all of AmeriGas
Partners’ existing senior notes. In connection with the Heritage Acquisition, AmeriGas Partners, AmeriGas Finance Corp.,
AmeriGas Finance LLC and UGI entered into a Contingent Residual Support Agreement (“CRSA”) with ETP pursuant to which
ETP will provide contingent, residual support of $1,500,000 of debt (“Supported Debt” as defined in the CRSA).
On March 28, 2012, AmeriGas Partners announced that holders of approximately $383,455 in aggregate principal amount of
outstanding 6.50% Senior Notes due May 2021 (the “6.50% Notes”), representing approximately 82% of the total $470,000
principal amount outstanding, had validly tendered their notes in connection with the Partnership’s March 14, 2012, offer to
purchase for cash up to $200,000 of the 6.50% Notes. Tendered 6.50% Notes in the amount of $199,999 were redeemed on
March 28, 2012, at an effective price of 105% using an approximate proration factor of 52.3% of total notes tendered. During June
2012, AmeriGas Partners repurchased $19,156 aggregate principal amount of outstanding 7.00% Notes. The Partnership recorded
a net loss of $13,349 on these extinguishments of debt which amount is reflected on the Fiscal 2012 Consolidated Statement of
Operations under the caption loss on extinguishments of debt.
In January 2011, AmeriGas Partners issued $470,000 principal amount of 6.50% Senior Notes due May 2021. The proceeds
from the issuance of the 6.50% Senior Notes were used in February 2011 to repay AmeriGas Partners’ $415,000 principal amount
of its 7.25% Senior Notes due May 15, 2015 pursuant to a tender offer and subsequent redemption. In addition, in February 2011,
AmeriGas Partners redeemed the outstanding $14,640 principal amount of its 8.875% Senior Notes due May 2011. The Partnership
incurred a loss of $18,801 on these extinguishments of debt which amount is reflected on the Fiscal 2011 Consolidated Statement
of Operations under the caption loss on extinguishments of debt.
In August 2011, AmeriGas Partners issued $450,000 principal amount of 6.25% Senior Notes due August 2019. The proceeds
from the issuance of the 6.25% Senior Notes were used to repay $350,000 principal amount of AmeriGas Partners 7.125% Senior
Notes due May 2016 pursuant to a tender offer and subsequent redemption. The Partnership incurred a loss of $19,316 on this
extinguishment of debt which amount is reflected on the Fiscal 2011 Consolidated Statements of Operations under the caption
loss on extinguishments of debt.
F-18
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
The 6.50% and 6.25% Senior Notes generally may be redeemed at our option (pursuant to a tender offer). A redemption
premium applies through May 20, 2019 (with respect to the 6.50% Notes) and through August 20, 2017 (with respect to the 6.25%
Notes). In addition, in the event that AmeriGas Partners completes a registered public offering of Common Units, the Partnership
may, at its option, redeem up to 35% of the outstanding 6.50% Notes (through May 20, 2014) or 35% of the outstanding 6.25%
Notes (through August 20, 2014), each at a premium. AmeriGas Partners may, under certain circumstances involving excess sales
proceeds from the disposition of assets not reinvested in the business or a change of control, be required to offer to prepay its
6.50% and 6.25% Senior Notes.
HOLP Senior Secured Notes. The Partnership’s total long-term debt at September 30, 2013 and 2012, includes $32,001
and $55,587, respectively, of HOLP Senior Secured Notes (including unamortized premium of $3,729 and $4,405, respectively).
The face interest rates on the HOLP Notes ranged from 7.26% to 8.87% with an effective interest rate of 6.75%. The HOLP
Senior Secured Notes are collateralized by AmeriGas OLP’s receivables, contracts, equipment, inventory, general intangibles and
cash.
AmeriGas OLP Credit Agreement. AmeriGas OLP has an unsecured credit agreement (the “Credit Agreement”) with a
group of banks providing for borrowings up to $525,000 (including a $125,000 sublimit for letters of credit) which expires in
October 2016. The Credit Agreement permits AmeriGas OLP to borrow at prevailing interest rates, including the base rate, defined
as the higher of the Federal Funds rate plus 0.50% or the agent bank’s prime rate, or at a one-week, one-, two-, three-, or six-month
Eurodollar Rate, as defined in the Credit Agreement, plus a margin. The margin on base rate borrowings (which ranges from 0.75%
to 1.75%), Eurodollar Rate borrowings (which ranges from 1.75% to 2.75%), and the Credit Agreement facility fee rate (which
ranges from 0.30% to 0.50%) is dependent upon AmeriGas Partners’ ratio of debt to earnings before interest expense, income
taxes, depreciation and amortization (“EBITDA”), each as defined in the Credit Agreement.
At September 30, 2013 and 2012, there were $116,900 and $49,900, respectively, of borrowings outstanding under the Credit
Agreement which amounts are reflected as bank loans on the Consolidated Balance Sheets. The weighted-average interest rates
on borrowings under the Credit Agreement at September 30, 2013 and 2012 were 2.69% and 2.72%, respectively. Issued and
outstanding letters of credit, which reduce available borrowings under the Credit Agreement totaled $53,705 and $47,906 at
September 30, 2013 and 2012, respectively.
Restrictive Covenants. The AmeriGas Partners Senior Notes restrict the ability of the Partnership and AmeriGas OLP to,
among other things, incur additional indebtedness, make investments, incur liens, issue preferred interests, prepay subordinated
indebtedness, and effect mergers, consolidations and sales of assets. Under the Senior Notes indentures, AmeriGas Partners is
generally permitted to make cash distributions equal to available cash, as defined, as of the end of the immediately preceding
quarter, if certain conditions are met. These conditions include:
1. no event of default exists or would exist upon making such distributions and
2. the Partnership’s consolidated fixed charge coverage ratio, as defined, is greater than 1.75-to-1.
If the ratio in item 2 above is less than or equal to 1.75-to-1, the Partnership may make cash distributions in a total amount
not to exceed $75,000 less the total amount of distributions made during the immediately preceding 16 Fiscal quarters. At
September 30, 2013, the Partnership was not restricted by the consolidated fixed charge coverage ratio from making cash
distributions. See the provisions of the Partnership Agreement relating to distributions of Available Cash in Note 5.
The HOLP Senior Secured Notes contain restrictive covenants including the maintenance of financial covenants and limitations
on the disposition of assets, changes in ownership, additional indebtedness, restrictive payments and the creation of liens. The
financial covenants require AmeriGas OLP to maintain a ratio of Consolidated Funded Indebtedness to Consolidated EBITDA (as
defined) below certain thresholds and to maintain a minimum ratio of Consolidated EBITDA to Consolidated Interest Expense
(as defined).
The Credit Agreement restricts the incurrence of additional indebtedness and also restricts certain liens, guarantees,
investments, loans and advances, payments, mergers, consolidations, asset transfers, transactions with affiliates, sales of assets,
acquisitions and other transactions. The Credit Agreement requires that AmeriGas OLP and AmeriGas Partners maintain ratios of
total indebtedness to EBITDA, as defined, below certain thresholds. In addition, the Partnership must maintain a minimum ratio
of EBITDA to interest expense, as defined and as calculated on a rolling four-quarter basis. Generally, as long as no default exists
or would result, AmeriGas OLP is permitted to make cash distributions not more frequently than quarterly in an amount not to
exceed available cash, as defined, for the immediately preceding calendar quarter.
F-19
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
At September 30, 2013, the amount of net assets of the Partnership’s subsidiaries that was restricted from transfer as a result
of the amount of Available Cash, computed in accordance with the Partnership Agreement, applicable debt agreements and the
partnership agreements of the Partnership’s subsidiaries, totaled approximately $3,300,000.
Note 7 — Employee Retirement Plans
The General Partner sponsors a 401(k) savings plan for eligible employees. Participants in the savings plan may contribute
a portion of their compensation on a before-tax basis. Generally, employee contributions are matched on a dollar-for-dollar (100%)
basis up to 5% of eligible compensation. The cost of benefits under our savings plan was $10,777 in Fiscal 2013, $10,716 in Fiscal
2012 and $7,421 in Fiscal 2011.
The General Partner also sponsors a nonqualified deferred compensation plan and a nonqualified supplemental executive
retirement plan. These plans provide benefits to executives that would otherwise be provided under the Partnership’s retirement
plans but are prohibited due to limitations imposed by the Internal Revenue Service. Costs associated with these plans were not
material in Fiscal 2013, Fiscal 2012 and Fiscal 2011.
Note 8 — Inventories
Inventories comprise the following at September 30:
Propane gas
Materials, supplies and other
Appliances for sale
Total inventories
2013
2012
130,410
22,860
5,658
158,928
$
$
131,990
24,259
7,497
163,746
$
$
In addition to inventories on hand, we also enter into contracts to purchase propane to meet a portion of our supply
requirements. Generally, these contracts are one- to three-year agreements subject to annual price and quantity adjustments.
Note 9 — Property, Plant and Equipment
Property, plant and equipment comprise the following at September 30:
Land
Buildings and improvements
Transportation equipment
Storage facilities
Equipment, primarily cylinders and tanks
Other, including construction in process
Gross property, plant and equipment
Less accumulated depreciation and amortization
Net property, plant and equipment
2013
147,405
176,638
227,242
240,251
1,844,423
33,243
2,669,202
(1,231,688)
1,437,514
$
$
2012
148,068
168,250
213,762
230,181
1,778,690
35,802
2,574,753
(1,075,528)
1,499,225
$
$
F-20
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
Note 10 — Goodwill and Intangible Assets
The Partnership’s goodwill and intangible assets comprise the following at September 30:
Goodwill (not subject to amortization)
Intangible assets:
Customer relationships and noncompete agreements
Trademarks and tradenames (not subject to amortization)
Gross carrying amount
Accumulated amortization
Intangible assets, net
Changes in the carrying amount of goodwill are as follows:
Balance September 30, 2011
Acquisitions
Purchase accounting adjustments
Balance September 30, 2012
Acquisitions
Purchase accounting adjustments
Correcting adjustment
Balance September 30, 2013
2013
1,936,608
511,130
81,800
592,930
(99,281)
493,649
$
$
$
2012
1,914,808
505,367
91,100
596,467
(60,471)
535,996
691,910
1,223,080
(182)
1,914,808
12,481
19
9,300
1,936,608
$
$
$
$
$
$
The decrease in trademarks and tradenames and the correcting adjustment to goodwill during the year ended September 30,
2013 primarily reflects a correcting adjustment associated with the Heritage Acquisition. We amortize customer relationships and
noncompete intangibles over their estimated period of benefit which do not exceed 15 years. Amortization expense of intangible
assets was $38,810 in Fiscal 2013, $30,649 in Fiscal 2012 and $8,055 in Fiscal 2011. Estimated amortization expense of intangible
assets during the next five fiscal years is as follows: Fiscal 2014 — $38,112; Fiscal 2015 — $36,309; Fiscal 2016 — $35,018;
Fiscal 2017 — $32,853; Fiscal 2018 — $31,493. There were no accumulated impairment losses at September 30, 2013.
Note 11 — Partners’ Capital and Incentive Compensation Plans
In accordance with the Partnership Agreement, the General Partner may, in its sole discretion, cause the Partnership to issue
an unlimited number of additional Common Units and other equity securities of the Partnership ranking on a parity with the
Common Units.
On March 21, 2012, AmeriGas Partners sold 7,000,000 Common Units in an underwritten public offering at a public offering
price of $41.25 per unit. The net proceeds of the public offering totaling $276,562 and the associated capital contributions from
the General Partner totaling $2,800 were used to redeem $199,999 of the 6.50% Notes pursuant to a tender offer (see Note 6), to
reduce Partnership bank loan borrowings and for general corporate purposes.
The General Partner grants equity-based awards to employees and non-employee directors comprising grants of AmeriGas
Partners equity instruments as further described below. We recognized total pre-tax equity-based compensation expense of $4,647,
$8,373 and $3,257 in Fiscal 2013, Fiscal 2012 and Fiscal 2011, respectively.
Under the AmeriGas Propane, Inc. 2010 Long-Term Incentive Plan on Behalf of AmeriGas Partners, L.P. (“2010 Propane
Plan”), the General Partner may award to employees and non-employee directors grants of Common Units (comprising AmeriGas
Performance Units and AmeriGas Stock Units), options, phantom units, unit appreciation rights and other Common Unit-based
awards. The total aggregate number of Common Units that may be issued under the Plan is 2,800,000. The exercise price for
options may not be less than the fair market value on the date of grant. Awards granted under the 2010 Propane Plan may vest
immediately or ratably over a period of years, and options can be exercised no later than ten years from the grant date. In addition,
F-21
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
the 2010 Propane Plan provides that Common Unit-based awards may also provide for the crediting of Common Unit distribution
equivalents to participants’ accounts.
The 2010 Propane Plan succeeded the AmeriGas Propane, Inc. 2000 Long-Term Incentive Plan (“2000 Propane Plan”),
which expired on December 31, 2009, and replaced the AmeriGas Propane, Inc. Discretionary Long-Term Incentive Plan for Non-
Executive Key Employees (“Nonexecutive Propane Plan”). Under the 2000 Propane Plan, the General Partner could award to key
employees the right to receive AmeriGas Performance Units or cash equivalent to the fair market value of such AmeriGas
Performance Units. In addition, the 2000 Propane Plan authorized the crediting of Common Unit distribution equivalents to
participants’ accounts. Under the Nonexecutive Propane Plan, the General Partner could grant awards to key employees who did
not participate in the 2000 Propane Plan. Generally, awards under the Nonexecutive Propane Plan vest at the end of a three-year
period and are paid in Common Units and cash. No additional grants will be made under the 2000 Propane Plan and the Nonexecutive
Propane Plan.
Recipients of AmeriGas Performance Units are awarded a target number of AmeriGas Performance Units. The number of
AmeriGas Performance Units ultimately paid at the end of the performance period (generally three years) may be higher or lower
than the target number based upon AmeriGas Partners’ Total Unitholder Return (“TUR”) percentile rank relative to entities in a
peer group. Grantees may receive from 0% to 200% of the target award granted. For grants issued on or after January 1, 2013, if
AmeriGas Partners’ TUR is below the 25th percentile compared to the peer group, the grantee will not be paid. At the 40th
percentile, the employee will be paid an award equal to 70% of the target award; at the 50th percentile, 100%; at the 60th percentile,
125%; and at the 90th percentile, 200%. For grants issued before January 1, 2013, grantees of AmeriGas Performance Units will
not be paid if AmeriGas Partners’ TUR is below the 40th percentile of the peer group. At the 40th percentile, the grantee will be
paid an award equal to 50% of the target award; at the 50th percentile, 100%; and at the 100th percentile, 200%. The actual amount
of the award is interpolated between these percentile rankings. Any Common Unit distribution equivalents earned are paid in cash.
Generally, except in the event of retirement, death or disability, each grant, unless paid, will terminate when the participant ceases
to be employed by the General Partner. There are certain change of control and retirement eligibility conditions that, if met,
generally result in accelerated vesting or elimination of further service requirements.
As a result of the Heritage Acquisition, certain Heritage Propane employees were awarded AmeriGas Performance Units,
AmeriGas Stock Units (in the form of phantom units), or a combination of AmeriGas Performance Units and AmeriGas Stock
Units. The terms of the Performance Unit awards granted to Heritage Propane employees are generally the same as those described
above. The AmeriGas Stock Units awards granted to Heritage Propane employees vest in tranches with certain awards beginning
to vest in January 2013 through January 2016. Certain of the AmeriGas Stock Unit awards provide for accelerated vesting under
certain conditions. Under certain conditions, all or a portion of these awards could be forfeited. The AmeriGas Stock Unit awards
granted to Heritage Propane employees provide for the crediting of distribution equivalents to participants’ accounts.
Under GAAP relating to equity-based compensation plans, AmeriGas Performance Units are equity awards with a market-
based condition, which, if settled in Common Units, results in the recognition of compensation cost over the requisite employee
service period regardless of whether the market-based condition is satisfied. The fair values of AmeriGas Performance Units are
estimated using a Monte Carlo valuation model. The fair value associated with the target award and the award above the target,
if any, which will be paid in Common Units, is accounted for as equity and the fair value of all Common Unit distribution equivalents,
which will be paid in cash, is accounted for as a liability. The expected term of the AmeriGas Performance Unit awards is three
years based on the performance period. Expected volatility is based on the historical volatility of Common Units over a three-year
period. The risk-free interest rate is based on rates on U.S. Treasury bonds at the time of grant. Volatility for all entities in the peer
group is based on historical volatility.
The following table summarizes the weighted-average assumptions used to determine the fair value of AmeriGas Performance
Unit awards and related compensation costs:
Grants Awarded in Fiscal Year
2012
2011
2013
Risk-free rate
Expected life
Expected volatility
Dividend Yield
0.4%
3 years
20.7%
8.2%
0.4%
3 years
23.0%
6.4%
1.0%
3 years
34.6%
5.8%
F-22
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
The General Partner granted awards under the 2010 Propane Plan representing 65,136, 248,818 and 49,287 Common Units
in Fiscal 2013, Fiscal 2012 and Fiscal 2011, respectively, having weighted-average grant date fair values per Common Unit subject
to award of $42.58, $43.22 and $53.19, respectively. At September 30, 2013, 2,484,839 Common Units were available for future
award grants under the 2010 Propane Plan.
The following table summarizes AmeriGas Common Unit-based award activity for Fiscal 2013:
Total
Vested
Non-Vested
September 30, 2012
AmeriGas Performance Units:
Granted
Forfeited
Vested
Number of
Common
Units
Subject to
Award
263,967
44,800
$
$
(14,869) $
— $
Weighted
Average
Grant
Date
Fair Value
(per Unit)
Number of
Common
Units
Subject
to Award
Weighted
Average
Grant
Date
Fair Value
(per Unit)
Number of
Common
Units
Subject to
Award
Weighted
Average
Grant
Date
Fair Value
(per Unit)
44.70
65,651
45.42
198,316
$
44.47
$
$
42.36
47.04
—
1,332
— $
$
20,115
(43,350) $
41.64
—
43.68
42.10
43,468
$
(14,869) $
(20,115) $
— $
$
11,894
(11,333) $
(30,909) $
— $
42.38
47.04
43.68
—
45.90
48.79
48.92
—
176,452
$
47.87
Performance criteria not met
(43,350) $
42.10
AmeriGas Stock Units:
Granted
Forfeited
Vested
Awards paid
September 30, 2013
20,336
$
(11,333) $
— $
(35,384) $
224,167
$
43.06
48.79
—
47.04
47.88
8,442
$
39.07
— $
30,909
$
(35,384) $
$
47,715
—
48.92
47.04
47.92
During Fiscal 2013, Fiscal 2012 and Fiscal 2011, the Partnership paid AmeriGas Common Unit-based awards in Common
Units and cash as follows:
Number of Common Units subject to original Awards granted
Fiscal year granted
Payment of Awards:
AmeriGas Partners Common Units issued
Cash paid
2013 (a)
2012 (a)
2011
54,750
2010
60,200
2009
3,850
96
$
3,500
87
$
$
41,064
2008
35,787
1,196
(a) In addition, during Fiscal 2013 and Fiscal 2012, 19,342 AmeriGas Stock Units and $533 in cash, and 40,516 AmeriGas Stock Units and $893
in cash, respectively, were paid to former Heritage Propane employees associated with awards granted in Fiscal 2012.
As of September 30, 2013, there was $1,290 of unrecognized equity-based compensation expense related to non-vested UGI
stock options that is expected to be recognized over a weighted-average period of 1.8 years. As of September 30, 2013, there was
a total of approximately $3,013 of unrecognized compensation cost associated with 224,167 Common Units subject to award that
is expected to be recognized over a weighted-average period of 1.8 years. The total fair values of Common Unit-based awards
that vested during Fiscal 2013, Fiscal 2012 and Fiscal 2011 was $2,752, $5,090 and $2,049, respectively. As of September 30,
2013 and 2012, total liabilities of $1,053 and $1,148 associated with Common Unit-based awards are reflected in employee
compensation and benefits accrued and other noncurrent liabilities in the Consolidated Balance Sheets. It is the Partnership’s
practice to issue new AmeriGas Partners Common Units for the portion of any Common Unit-based awards paid in AmeriGas
Partners Common Units.
F-23
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
Note 12 — Commitments and Contingencies
Commitments
We lease various buildings and other facilities and vehicles, computer and office equipment under operating leases. Certain
of the leases contain renewal and purchase options and also contain step-rent provisions. Our aggregate rental expense for such
leases was $63,585 in Fiscal 2013, $61,075 in Fiscal 2012 and $55,533 in Fiscal 2011.
Minimum future payments under noncancelable operating leases are as follows:
Year Ending September 30,
2014
2015
2016
2017
2018
Thereafter
Total minimum operating lease payments
$
$
51,027
41,367
33,713
26,613
21,667
55,819
230,206
Certain of our operating lease arrangements, primarily vehicle leases with remaining lease terms of one to ten years, have
residual value guarantees. At the end of the lease term, we guarantee that the fair value of the equipment will equal or exceed the
guaranteed amount or we will pay the lessors the difference. Although such fair values at the end of the leases have historically
exceeded the guaranteed amount, at September 30, 2013, the maximum potential amount of future payments under lease guarantees,
assuming the leased equipment was deemed worthless at the end of the lease term, was approximately $15,500. The fair values
of residual lease guarantees were not material at September 30, 2013.
The Partnership enters into fixed-price and variable-price contracts with suppliers to purchase a portion of its propane supply
requirements. Obligations under these contracts existing at September 30, 2013, are: Fiscal 2014 - $176,866; Fiscal 2015 - $97,104;
Fiscal 2016 - $22,239.
The Partnership also enters into contracts to purchase propane to meet additional supply requirements. Generally, these
contracts are one- to three-year agreements subject to annual price and quantity adjustments.
Contingencies
Environmental Matters
Saranac Lake. By letter dated March 6, 2008, the New York State Department of Environmental Conservation (“DEC”) notified
AmeriGas OLP that DEC had placed property owned by the Partnership in Saranac Lake, New York, on its Registry of Inactive
Hazardous Waste Disposal Sites. A site characterization study performed by DEC disclosed contamination related to former
manufactured gas plant (“MGP”) operations on the site. DEC has classified the site as a significant threat to public health or
environment with further action required. The Partnership has researched the history of the site and its ownership interest in the
site. The Partnership has reviewed the preliminary site characterization study prepared by the DEC, the extent of the contamination,
and the possible existence of other potentially responsible parties. The Partnership communicated the results of its research to
DEC in January 2009. There have been no recent developments in this matter. Because of the preliminary nature of available
environmental information, the ultimate amount or range of possible clean up costs cannot be reasonably estimated.
Claremont, New Hampshire and Chestertown, Maryland. In connection with the Heritage Acquisition on January 12, 2012, a
predecessor of Titan Propane, LLC (“Titan LLC”), a former subsidiary acquired in the Heritage Acquisition, is purportedly the
beneficial holder of title with respect to two former MGPs discussed below. The Contribution Agreement provides for
indemnification from ETP for certain expenses associated with remediation of these sites. By letter dated September 30, 2010,
the EPA notified Titan LLC that it may be a potentially responsible party (“PRP”) for cleanup costs associated with contamination
at a former MGP in Claremont, New Hampshire. In June 2010, the Maryland Attorney General (“MAG”) identified Titan LLC as
a PRP in connection with contamination at a former MGP in Chestertown, Maryland and requested that Titan LLC participate in
characterization and remediation activities. Titan LLC has supplied the EPA and MAG with corporate and bankruptcy information
for its predecessors to support its claim that it is not liable for any remediation costs at the sites. Because of the preliminary nature
F-24
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
of available environmental information, the ultimate amount or range of possible clean up costs, if any, cannot be reasonably
estimated.
Other Matters
Cylinder Investigation. On or about October 21, 2009, the General Partner received a notice that the Offices of the District
Attorneys of Santa Clara, Sonoma, Ventura, San Joaquin and Fresno Counties and the City Attorney of San Diego (the “District
Attorneys”) have commenced an investigation into AmeriGas OLP’s cylinder labeling and filling practices in California as a result
of the Partnership’s decision in 2008 to reduce the volume of propane in cylinders it sells to consumers from 17 pounds to 15
pounds. At that time, the District Attorneys issued an administrative subpoena seeking documents and information relating to
those practices. We have responded to the administrative subpoena. On or about July 20, 2011, the General Partner received a
second subpoena from the District Attorneys. The subpoena sought additional information and documents regarding AmeriGas
OLP’s cylinder exchange program and we responded to that subpoena. In connection with this matter, the District Attorneys have
investigated the General Partner with respect to potential violations of California’s antitrust and unfair competition laws, California’s
slack-fill law, and California’s principal false advertising statute. On November 20, 2013, the District Attorneys filed a complaint
against the General Partner and AmeriGas OLP and simultaneously filed a proposed stipulated final consent judgment (the
“Judgment”) which, subject to court approval, resolves all claims against those defendants, which were known to the District
Attorneys as of that date. The Judgment requires the General Partner to pay a civil penalty and to certain injunctive relief including
the posting of a consumer notice on all cylinder cages in California. That notice informs consumers of the reduction of propane
in weight from 17 pounds to 15 pounds. This settlement agreement will not have a material effect on our consolidated financial
position, results of operations or cash flows.
Federal Trade Commission Investigation of Propane Grill Cylinder Filling Practices. On or about November 4, 2011, the General
Partner received notice that the Federal Trade Commission (“FTC”) is conducting an antitrust and consumer protection investigation
into certain practices of the Partnership which relate to the filling of portable propane cylinders. On February 2, 2012, the Partnership
received a Civil Investigative Demand from the FTC that requested documents and information concerning, among other things,
(i) the Partnership’s decision, in 2008, to reduce the volume of propane in cylinders it sells to consumers from 17 pounds to 15
pounds and (ii) cross-filling, related service arrangements and communications regarding the foregoing with competitors. The
Partnership responded to that subpoena and has continued to cooperate with the FTC’s requests for information. The Partnership
believes it has good defenses to any claims that may result from this investigation. We are not able to assess the financial impact
this investigation or any related claims may have on the Partnership.
Purported Class Action Lawsuit. In 2005, Samuel and Brenda Swiger (the “Swigers”) filed what purports to be a class action in
the Circuit Court of Harrison County, West Virginia, against UGI, an insurance subsidiary of UGI, certain officers of UGI and the
General Partner, and their insurance carriers and insurance adjusters. In this lawsuit, the Swigers are seeking compensatory and
punitive damages on behalf of the putative class for alleged violations of the West Virginia Insurance Unfair Trade Practice Act,
negligence, intentional misconduct, and civil conspiracy. The Court has not certified the class and, in October 2008, stayed the
lawsuit pending resolution of a separate, but related class action lawsuit filed against AmeriGas OLP in Monongalia County, which
was settled in Fiscal 2011. We believe we have good defenses to the claims in this action.
We cannot predict the final results of any of the environmental or other pending claims or legal actions described above.
However, it is reasonably possible that some of them could be resolved unfavorably to us and result in losses in excess of recorded
amounts. We are unable to estimate any possible losses in excess of recorded amounts. Although we currently believe, after
consultation with counsel, that damages or settlements in amounts in excess of recorded amounts, if any, recovered by the plaintiffs
in such claims or actions will not have a material adverse effect on our financial position, damages or settlements 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. In addition to the matters described above, there are
other pending claims and legal actions arising generally in the normal course of our businesses. We believe, after consultation
with counsel, the final outcome of such other matters will not have a material effect on our consolidated financial position, results
of operations or cash flows.
Note 13 — Related Party Transactions
Pursuant to the Partnership Agreement and, prior to the Merger, a management services agreement among Heritage Operating
GP, LLC (“HOLP GP”), HOLP 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, which totaled $540,273 in Fiscal 2013, $374,899
in Fiscal 2012, and $363,392 in Fiscal 2011, include employee compensation and benefit expenses of employees of the General
Partner and general and administrative expenses.
F-25
Table of Contents
UGI provides certain financial and administrative services to the General Partner. UGI bills the General Partner monthly
for all direct and indirect corporate expenses incurred in connection with providing these services and the General Partner is
reimbursed by the Partnership for these expenses. The allocation of indirect UGI corporate expenses to the Partnership utilizes a
weighted, three-component formula based on the relative percentage of the Partnership’s revenues, operating expenses and net
assets employed to the total of such items for all UGI operating subsidiaries for which general and administrative services are
provided. The General Partner believes that this allocation method is reasonable and equitable to the Partnership. Such corporate
expenses totaled $18,568 in Fiscal 2013, $10,138 in Fiscal 2012 and $10,805 in Fiscal 2011. In addition, UGI and certain of its
subsidiaries provide office space, stop loss medical coverage and automobile liability insurance to the Partnership. The costs
related to these items totaled $4,543 in Fiscal 2013, $3,760 in Fiscal 2012 and $3,184 in Fiscal 2011.
From time to time, AmeriGas OLP purchases propane on an as needed basis from UGI Energy Services, Inc. (“Energy
Services”). The price of the purchases are generally based on market price at the time of purchase. Purchases of propane by
AmeriGas OLP from Energy Services totaled $1,979, $359 and $4,073 during Fiscal 2013, Fiscal 2012 and Fiscal 2011, respectively.
In addition, the Partnership sells propane to affiliates of UGI. Such amounts were not material in Fiscal 2013, Fiscal 2012
or Fiscal 2011.
Note 14 — Other Current Liabilities
Other current liabilities comprise the following at September 30:
Litigation, property and casualty liabilities
Taxes other than income taxes
Propane exchange liabilities
Deferred tank fee revenue
Other
Total other current liabilities
2013
2012
29,948
9,922
16,654
22,044
15,775
94,343
$
$
38,581
16,737
13,404
24,296
16,216
109,234
$
$
F-26
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
Note 15 — Fair Value Measurements
Derivative Financial Instruments
The following table presents our financial assets and financial liabilities that are measured at fair value on a recurring basis
for each of the fair value hierarchy levels, including both current and noncurrent portions, as of September 30, 2013 and 2012:
Asset (Liability)
Quoted Prices
in
Active
Markets
for Identical
Assets and
Liabilities
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Unobservable
Inputs
(Level 3)
Total
$
$
$
$
— $
18,252
$
— $
18,252
— $
(135) $
— $
(135)
— $
2,089
$
— $
2,089
— $
(42,598) $
— $
(42,598)
September 30, 2013:
Assets:
Derivative financial instruments:
Commodity contracts
Liabilities:
Derivative financial instruments:
Commodity contracts
September 30, 2012:
Assets:
Derivative financial instruments:
Commodity contracts
Liabilities:
Derivative financial instruments:
Commodity contracts
The fair values of our non-exchange traded commodity derivative contracts included in Level 2 are based upon indicative
price quotations available through brokers, industry price publications or recent market transactions and related market indicators.
For commodity option contracts not traded on an exchange, we use a Black Scholes option pricing model that considers time value
and volatility of the underlying commodity.
Other Financial Instruments
The carrying amounts of other financial instruments included in current assets and current liabilities (except for current
maturities of long-term debt) approximate their fair values because of their short-term nature. At September 30, 2013, the carrying
amount and estimated fair value of our long-term debt (including current maturities) were $2,300,111 and $2,393,581, respectively.
At September 30, 2012, the carrying amount and estimated fair value of our long-term debt (including current maturities) were
$2,328,069 and $2,493,053, respectively. We estimate the fair value of long-term debt by using current market prices and by
discounting future cash flows using rates available for similar type debt (Level 2).
We have other financial instruments such as short-term investments and trade accounts receivable which could expose us
to concentrations of credit risk. We limit our credit risk from short-term investments by investing only in investment-grade
commercial paper and U.S. Government securities. The credit risk from trade accounts receivable is limited because we have a
large customer base which extends across many different U.S. markets.
Note 16 — Disclosures About Derivative Instruments and Hedging Activities
The Partnership is exposed to certain market risks related to its ongoing business operations. Management uses derivative
financial and commodity instruments, among other things, to manage these risks. The primary risks managed by derivative
instruments are commodity price risk and interest rate risk. Although we use derivative financial and commodity instruments to
F-27
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
reduce market risk associated with forecasted transactions, we do not use derivative financial and commodity instruments for
speculative or trading purposes. The use of derivative instruments is controlled by our risk management and credit policies which
govern, among other things, the derivative instruments the Partnership can use, counterparty credit limits and contract authorization
limits. Because a substantial portion of our derivative instruments generally qualify as hedges under GAAP, we expect that changes
in the fair value of derivative instruments used to manage commodity or interest rate market risk would be substantially offset by
gains or losses on the associated anticipated transactions.
Commodity Price Risk
In order to manage market risk associated with the Partnership’s fixed-price programs which permit customers to lock in
the prices they pay for propane principally during the months of October through March, the Partnership uses over-the-counter
derivative commodity instruments, principally price swap contracts. At September 30, 2013 and 2012, there were 206.1 million
gallons and 231.4 million gallons, respectively, of propane hedged with over-the-counter price swap and option contracts that
qualify for hedge accounting. At September 30, 2013, the maximum period over which we are hedging propane market price risk
is 24 months with a weighted average of 7 months. In addition, the Partnership from time to time enters into price swap and put
option agreements to reduce the effects of short-term commodity price volatility which agreements are generally not designated
as hedges for accounting purposes.
We account for a significant portion of our commodity price risk contracts as cash flow hedges. Changes in the fair values
of contracts qualifying for cash flow hedge accounting are recorded in AOCI and noncontrolling interest, to the extent effective
in offsetting changes in the underlying commodity price risk, until earnings are affected by the hedged item. At September 30,
2013, the amount of net gains associated with commodity price risk hedges expected to be reclassified into earnings during the
next twelve months based upon current fair values is $14,786.
Interest Rate Risk
Our long-term debt is typically issued at fixed rates of interest. As these long-term debt issues mature, we typically refinance
such debt with new debt having interest rates reflecting then-current market conditions. In order to reduce market rate risk on the
underlying benchmark rate of interest associated with near- to medium-term forecasted issuances of fixed-rate debt, from time to
time we enter into interest rate protection agreements (“IRPAs”). We account for IRPAs as cash flow hedges. Changes in the fair
values of IRPAs are recorded in AOCI, to the extent effective in offsetting changes in the underlying interest rate risk, until earnings
are affected by the hedged interest expense. There were no settled or unsettled amounts relating to IRPAs at September 30, 2013
or 2012.
Derivative Financial Instruments Credit Risk
The Partnership is exposed to credit loss in the event of nonperformance by counterparties to derivative financial and
commodity instruments. Our counterparties principally consist of major energy companies and major U.S. financial institutions.
We maintain credit policies with regard to our counterparties that we believe reduce overall credit risk. These policies include
evaluating and monitoring our counterparties’ financial condition, including their credit ratings, and entering into agreements with
counterparties that govern credit limits. Certain of these agreements call for the posting of collateral by the counterparty or by the
Partnership in the forms of letters of credit, parental guarantees or cash. Although we have concentrations of credit risk associated
with derivative financial instruments held by certain derivative financial instrument counterparties, the maximum amount of loss
due to credit risk that, based upon the gross fair values of the derivative financial instruments, we would incur if these counterparties
that make up the concentration failed to perform according to the terms of their contracts was not material at September 30, 2013.
Certain of our derivative contracts have credit-risk-related contingent features that may require the posting of additional collateral
in the event of a downgrade in the Partnership’s debt rating. At September 30, 2013, if the credit-risk-related contingent features
were triggered, the amount of collateral required to be posted would not be material.
F-28
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
The following table provides information regarding the fair values and balance sheet locations of our derivative assets and
liabilities existing as of September 30, 2013 and 2012:
Derivatives Designated as
Hedging Instruments:
Propane contracts
Derivatives Not Designated as
Hedging Instruments:
Propane contracts
Total Derivatives
Derivative Assets
Derivative (Liabilities)
Balance Sheet
Location
Fair Value
September 30,
2012
2013
Balance Sheet
Location
Fair Value
September 30,
2012
2013
Derivative financial
instruments
and Other assets
$ 14,981
$ 2,089
Derivative financial
instruments and
Other noncurrent
liabilities
$
(135) $(42,598)
Derivative financial
instruments and
Other assets
3,271
—
$ 18,252
$ 2,089
—
—
(135)
(42,598)
The following table provides information on the effects of derivative instruments on the Consolidated Statements of
Operations and changes in AOCI and noncontrolling interest for Fiscal 2013, Fiscal 2012 and Fiscal 2011:
Gain (Loss) Recognized in
AOCI and Noncontrolling
Interest
Gain (Loss) Reclassified from
AOCI and Noncontrolling
Interest into Income
2013
2012
2011
2013
2012
2011
Location of Gain (Loss)
Reclassified from
AOCI and Noncontrolling
Interest into Income
Cash Flow
Hedges:
Propane
contracts
Interest rate
contracts
$
6,647
$ (86,573) $ 22,275
$ (52,503) $ (47,569) $ 35,292 Cost of sales
Total
$
6,647
$ (86,573) $ 22,275
—
—
—
—
(3,049)
$ (52,503) $ (47,569) $ 32,243
—
Interest expense/loss
on extinguishments
of debt
Gain (Loss)
Recognized in Income
Location of Gain (Loss)
Recognized in Income
Derivatives Not
Designated as
Hedging
Instruments:
Propane
contracts
2013
2012
2011
$
1,848
$ (14,883) $
— Cost of sales
The amounts of derivative gains or losses representing ineffectiveness, and the amounts of gains or losses recognized in
income as a result of excluding derivatives from ineffectiveness testing, were not material for Fiscal 2013, Fiscal 2012 or Fiscal
2011. During Fiscal 2012, the Partnership entered into propane swap and put option contracts to reduce short-term volatility in
propane prices associated with a portion of its forecasted propane purchases during the months of April 2012 to August 2012.
These contracts did not qualify for hedge accounting treatment and the change in fair value was recorded through cost of sales in
the Consolidated Statements of Income. Net realized losses recognized in income related to these contracts are included in the
table above under the caption “derivatives not designated as hedging instruments.”
F-29
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
As a result of the Partnership’s refinancing of its 7.125% Senior Notes (see Note 6), during the three months ended September
30, 2011, the Partnership discontinued cash flow hedge accounting for settled but unamortized IRPA losses associated with the
7.125% Senior Notes and recorded a loss of $2,556 which amount is included in loss on extinguishments of debt on the Fiscal
2011 Consolidated Statement of Operations.
We are also a party to a number of contracts that have elements of a derivative instrument. These contracts include, among
others, binding purchase orders, contracts which provide for the purchase and delivery of propane and service contracts that require
the counterparty to provide commodity storage or transportation service to meet our normal sales commitments. Although many
of these contracts have the requisite elements of a derivative instrument, these contracts qualify for normal purchase and normal
sales exception accounting under GAAP because they provide for the delivery of products or services in quantities that are expected
to be used in the normal course of operating our business and the price in the contract is based on an underlying that is directly
associated with the price of the product or service being purchased or sold.
17 — Other Income, Net
Other income, net, comprises the following:
Gains on sales of fixed assets
Finance charges
Other
Total other income, net
2013
2012
2011
$
$
4,115
21,390
6,998
32,503
$
$
3,169
18,841
4,511
26,521
$
$
2,222
15,111
8,230
25,563
F-30
Table of Contents
AmeriGas Partners and Subsidiaries
Notes to Consolidated Financial Statements
(Thousands of dollars, except where indicated otherwise)
Note 18 — Quarterly Data (Unaudited)
The following unaudited quarterly data includes all adjustments (consisting only of normal recurring adjustments with the
exception of those indicated below) which we consider necessary for a fair presentation. Our quarterly results fluctuate because
of the seasonal nature of our propane business.
December 31,
March 31,
June 30,
September 30,
2012
2011
2013 (a)
2012 (b)
2013 (a)
2012
2013
2012
Revenues
$ 876,647
$ 683,812
$ 1,176,207
$ 1,155,574
Operating income (loss)
$ 139,866
$
60,096
$
257,505
$
195,047
$
$
581,719
6,639
$
$
571,945
$ 531,970
$
510,285
(48,288) $ (11,816) $
(36,263)
(Loss) gain on
extinguishments of debt
$
— $
— $
— $
(13,379) $
— $
30
$
— $
—
Net income (loss)
Net income
(loss) attributable to
AmeriGas Partners, L.P. $
$
Income (loss) per limited
partner unit (c):
98,043
$
43,113
$
215,781
$
135,859
$
(34,549) $
(89,903) $ (54,184) $
(76,398)
96,665
$
42,525
$
213,208
$
133,885
$
(34,595) $
(89,382) $ (54,056) $
(76,003)
Basic
Diluted
$
$
0.93
0.93
$
$
0.55
0.55
$
$
1.56
1.56
$
$
1.26
1.26
$
$
(0.43) $
(1.00) $
(0.63) $
(0.43) $
(1.00) $
(0.63) $
(0.86)
(0.86)
(a)
(b)
(c)
The Partnership recorded the cumulative effect of an error in accounting for certain customer credits as of January 1,
2013, which decreased revenues and operating income by $7,038, and decreased net income attributable to AmeriGas
Partners, L.P. by $6,967, for the three months ended March 31, 2013. The correction of the error in accounting for customer
credits increased propane revenues and operating income by $3,600, and decreased net loss attributable to AmeriGas
Partners, L.P. by $3,564, for the three months ended June 30, 2013 (see Note 2).
Includes loss on extinguishment of debt which decreased net income and net income attributable to AmeriGas Partners,
L.P. by $13,379 (see Note 6).
Theoretical distributions of net income (loss) attributable to AmeriGas Partners, L.P. in accordance with accounting
guidance regarding the application of the two-class method for determining earnings per share (see Note 2) resulted in a
different allocation of net income attributable to AmeriGas Partners, L.P. to the General Partner and the limited partners
in the computation of income per limited partner unit which had the effect of decreasing quarterly earnings per limited
partner unit for the quarters ended December 31 and March 31 as follows:
Quarter ended:
Decrease in income per limited partner unit
December 31,
March 31,
2012
2011
2013
2012
$
(0.06) $
(0.16) $
(0.66) $
(0.30)
F-31
Table of Contents
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
BALANCE SHEETS
(Thousands of dollars)
ASSETS
Current assets:
Cash
Accounts receivable — related party
Prepaids and other current assets
Total current assets
Investment in AmeriGas Propane, L.P.
Other assets
Total assets
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Current maturities of long-term debt
Accounts payable and other liabilities
Accrued interest
Total current liabilities
Long-term debt
Commitments and contingencies
Partners’ capital:
Common unitholders
General partner
Accumulated other comprehensive income (loss)
Total partners’ capital
Total liabilities and partners’ capital
Commitments and Contingencies:
September 30,
2013
2012
262
6,479
1,155
7,896
3,648,909
27,300
3,684,105
$
$
708
3,108
1,154
4,970
3,693,018
31,198
3,729,186
— $
495
47,662
48,157
2,250,845
—
503
48,730
49,233
2,250,845
1,354,187
15,930
14,986
1,385,103
3,684,105
$
1,455,702
16,975
(43,569)
1,429,108
3,729,186
$
$
$
$
There are no scheduled principal repayments of long-term debt during the next five fiscal years.
S-1
Table of Contents
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
STATEMENTS OF OPERATIONS
(Thousands of dollars)
Operating (expenses) income, net
Loss on extinguishments of debt
Interest expense
Loss before income taxes
Income tax expense
Loss before equity in income of AmeriGas Propane, L.P.
Equity in income of AmeriGas Propane, L.P.
Net income
General partner’s interest in net income
Limited partners’ interest in net income
Income (loss) per limited partner unit — basic and diluted:
Average limited partner units outstanding — basic (thousands)
Average limited partner units outstanding — diluted (thousands)
Year Ended
September 30,
2013
2012
2011
(289) $
—
(154,593)
(154,882)
1
(154,883)
376,105
$
$
$
$
221,222
21,498
199,724
2.14
92,832
92,910
(3,568) $
(13,349)
(133,372)
(150,289)
3
(150,292)
161,317
75
(38,117)
(58,701)
(96,743)
7
(96,750)
235,273
11,025
$
138,523
$
13,119
(2,094) $
(0.11) $
81,433
81,433
6,422
132,101
2.30
57,119
57,170
$
$
$
$
$
S-2
Table of Contents
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
STATEMENTS OF CASH FLOWS
(Thousands of dollars)
Year
Ended
September 30,
2012
2013
2011
NET CASH PROVIDED BY OPERATING ACTIVITIES (a)
$
325,320
$
170,598
$
156,523
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of businesses, net of cash acquired
Contributions to AmeriGas Propane, L.P.
Net cash used by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions
Issuance of long-term debt
Repayments of long-term debt
Proceeds from issuance of Common Units in public unit offering
Proceeds associated with equity based compensation plans, net of tax
withheld
Capital contribution from General Partner
Net cash (used) provided by financing activities
(Decrease) increase in cash and cash equivalents
CASH AND CASH EQUIVALENTS:
End of year
Beginning of year
(Decrease) increase
—
—
—
(1,411,451)
(60,748)
(1,472,199)
(327,000)
—
—
—
1,221
13
(325,766)
(271,839)
1,524,174
(232,844)
276,562
951
2,824
1,299,828
(446) $
(1,773) $
—
(77,135)
(77,135)
(171,821)
904,210
(810,232)
—
616
18
(77,209)
2,179
$
262
708
(446) $
$
708
2,481
(1,773) $
2,481
302
2,179
$
$
$
(a)
Includes cash distributions received from AmeriGas Propane, L.P. of $478,458, $334,527 and $222,635 for the years
ended September 30, 2013, 2012 and 2011, respectively.
S-3
Table of Contents
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
(Thousands of dollars)
Balance at
beginning
of year
Charged
(credited)
to costs and
expenses
Other
Balance at
end of
year
Year Ended September 30, 2013
Reserves deducted from assets in the consolidated balance
sheet:
Allowance for doubtful accounts
$
17,217
$
16,477
$
(15,142) (1) $
18,552
Year Ended September 30, 2012
Reserves deducted from assets in the consolidated balance
sheet:
Allowance for doubtful accounts
$
17,181
$
15,088
$
(15,052) (1) $
17,217
Year Ended September 30, 2011
Reserves deducted from assets in the consolidated
balance sheet:
Allowance for doubtful accounts
$
15,290
$
12,807
$
(10,916) (1) $
17,181
(1)
Uncollectible accounts written off, net of recoveries.
S-4
Table of Contents
Exhibit No.
10.22
Description
AmeriGas Propane, Inc. 2010 Long-Term Incentive Plan on Behalf of AmeriGas Partners, L.P., Performance
Unit Grant Letter for Mr. Gallagher dated May 1, 2013.
EXHIBIT INDEX
10.32
10.34
10.35
10.39
10.41
21
23
31.1
31.2
32
99.1
99.2
UGI Corporation 2013 Omnibus Incentive Compensation Plan Nonqualified Stock Option Grant Letter for Mr.
Hugh J. Gallagher dated May 20, 2013.
Description of oral compensation arrangement for Messrs. Jerry E. Sheridan, Hugh J. Gallagher, R. Paul Grady,
and Steven A. Samuel.
Summary of Director Compensation of AmeriGas Propane, Inc. dated October 1, 2013.
Form of Change in Control Agreement for Messrs. Gallagher and Samuel.
Separation Agreement and General Release by and between AmeriGas Propane, Inc. and William D. Katz,
dated as of July 15, 2013.
Subsidiaries of the Registrant.
Consent of PricewaterhouseCoopers LLP.
Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
Certification by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-
Oxley Act.
UGI Corporation Equity-Based Compensation Information.
Reconciliation of EBITDA and Adjusted EBITDA.
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
XBRL.Instance
XBRL Taxonomy Extension Schema
XBRL Taxonomy Extension Calculation Linkbase
XBRL Taxonomy Extension Definition Linkbase
XBRL Taxonomy Extension Labels Linkbase
XBRL Taxonomy Extension Presentation Linkbase
EXHIBIT 31.1
I, Jerry E. Sheridan, certify that:
1.
I have reviewed this annual report on Form 10-K of AmeriGas Partners, L.P.;
CERTIFICATION
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial
information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
Date: November 29, 2013
/s/ Jerry E. Sheridan
Jerry E. Sheridan
President and Chief Executive Officer of AmeriGas
Propane, Inc.
EXHIBIT 31.2
CERTIFICATION
I, Hugh J. Gallagher, certify that:
1.
I have reviewed this annual report on Form 10-K of AmeriGas Partners, L.P.;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial
information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
Date: November 29, 2013
/s/ Hugh J. Gallagher
Hugh J. Gallagher
Vice President — Finance and Chief Financial Officer of
AmeriGas Propane, Inc.
Certification by the Chief Executive Officer and Chief Financial Officer
Relating to a Periodic Report Containing Financial Statements
EXHIBIT 32
I, Jerry E. Sheridan, Chief Executive Officer, and I, Hugh J. Gallagher, Chief Financial Officer, of AmeriGas Propane, Inc.,
a Pennsylvania corporation, the General Partner of AmeriGas Partners, L.P. (the “Company”), hereby certify that to our knowledge:
(1) The Company’s annual report on Form 10-K for the period ended September 30, 2013 (the “Form 10-K”) fully complies
with the requirements of section 13(a) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results
of operations of the Company.
* * *
CHIEF EXECUTIVE OFFICER
CHIEF FINANCIAL OFFICER
/s/ Jerry E. Sheridan
Jerry E. Sheridan
Date: November 29, 2013
/s/ Hugh J. Gallagher
Hugh J. Gallagher
Date: November 29, 2013
Partnership Information
Investor Services
Transfer Agent and Registrar
Unitholder communications regarding transfer of units, lost certificates,
lost distribution checks or changes of address should be directed to:
By Mail:
Computershare Investor Services
P.O. Box 43078
Providence, RI 02940-3078
800-254-5196 (U.S. and Canada)
312-360-5100 (other countries)
By Overnight Delivery:
Computershare Investor Services
250 Royall Street
Canton, MA 02021
Unitholders can also view real-time account information and request transfer agent services
online at the Computershare Investor Services website: www.computershare.com/investor.
Computershare Investor Services can be accessed through telecommunications devices for
the hearing impaired by calling:
800-822-2794 (U.S. and Canada)
312-588-4110 (other countries)
Investor Relations
Securities analysts, portfolio managers and other members of the professional investment
community should direct inquiries about the Partnership to:
Treasurer
AmeriGas Propane, Inc.
P.O. Box 965
Valley Forge, PA 19482
610-337-7000
News, Earnings, Financial Reports and Governance Documents
Comprehensive news, webcast events and other information about AmeriGas Partners, L.P.
and UGI Corporation are available via the internet at: www.amerigas.com.
You can also request reports filed with the SEC and corporate governance documents,
including the General Partner’s Codes of Ethics and Principles of Corporate Governance,
free of charge, by writing to, Treasurer at the address above.
Tax Information
AmeriGas Partners, L.P. is a publicly traded master limited partnership. All unitholders
are limited partners eligible to receive cash distributions.
A partnership has different tax implications for its owners than a corporation has for
its shareholders. The annual income, gains, losses, deductions or credits of a partnership
flow through to its unitholders, or limited partners, who are required to report their allocated
share of these amounts on their own income tax returns.
By March 15, 2014, tax information in the form of a Schedule K-1, which will sum-
marize each unitholder’s allocated share of the Partnership’s reportable tax items for the
calendar year ended December 31, 2013, will be mailed to each unitholder of AmeriGas
Partners, L.P. The Schedule K-1 will also be available via the internet by accessing the
Investor Relations section at www.amerigas.com.
For additional information regarding taxes, unitholders should consult
with their personal tax adviser. AmeriGas Tax Information Services, at
800-310-9145, is available for questions regarding the Schedule K-1.
Board of Directors
Lon R. Greenberg 2
Chairman
John L. Walsh 2
Vice Chairman
Jerry E. Sheridan
President and Chief Executive Officer
Brian R. Ford 1,4
Retired partner of Ernst & Young LLP
William J. Marrazzo 1,2,3
Chief Executive Officer and President, WHYY, Inc.
Anne Pol 3,4
Retired President and Chief Operating Officer, Trex Enterprises Corporation
Howard B. Stoeckel 1,4
Vice Chairman and Retired Chief Executive Officer, Wawa, Inc.
Marvin O. Schlanger (Presiding Director) 2,3,4
Principal, Cherry Hill Chemical Investments, LLC
K. Rick Turner 1
Retired private equity principal of the Stephens Group, LLC
1 Audit Committee
2 Executive Committee
3 Compensation/Pension Committee
4 Corporate Governance Committee
Officers
John L. Walsh, Vice Chairman
Jerry E. Sheridan, President and Chief Executive Officer
Robert J. Cane, Controller and Chief Accounting Officer
Troy E. Fee, Vice President – Human Resources
Hugh J. Gallagher, Vice President – Finance and Chief Financial Officer, Treasurer
Monica M. Gaudiosi, Vice President and Secretary
R. Paul Grady, Vice President and Chief Operating Officer
James C. Hamilton, II, Vice President, Southern Region
Stephen Lee, Vice President – Strategic Initiatives & Marketing
David L. Lugar, Vice President – Supply and Logistics
James Marshall, Vice President, Central Region
James L. Palkovic, Vice President, Western Region
Warren J. Patterson, Vice President – National Accounts
Andrew J. Peyton, Vice President – Corporate Development
Kathy L. Prigmore, Vice President – Operations Support and Customer Advocacy
Kevin Rumbelow, Vice President – Supply Chain
Steven A. Samuel, Vice President – Law and General Counsel
Robert Young, Vice President, Eastern Region
AmeriGas Partners, L.P.
P.O. Box 965
Valley Forge, PA 19482
You can obtain news and other information about
AmeriGas Partners, L.P. at www.amerigas.com
Cert no. XXX-XXX-000