10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2009

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-13692

AMERIGAS PARTNERS, L.P.

(Exact name of registrant as specified in its charters)

Delaware	23-2787918
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

460 North Gulph Road, King of Prussia, PA 19406
(Address of principal executive offices) (Zip Code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

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 o No o

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. (Check one):

Large accelerated filer þ Accelerated filer o Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

At January 31, 2010, there were 57,054,888 Common Units of AmeriGas Partners, L.P. outstanding.

AMERIGAS PARTNERS, L.P.

TABLE OF CONTENTS

	PAGES
Part I Financial Information
Item 1. Financial Statements (unaudited)
Condensed Consolidated Balance Sheets as of December 31, 2009, September 30, 2009 and December 31, 2008		1
Condensed Consolidated Statements of Operations for the three months ended December 31, 2009 and 2008		2
Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2009 and 2008		3
Condensed Consolidated Statements of Partners’ Capital for the three months ended December 31, 2009 and 2008		4
Notes to Condensed Consolidated Financial Statements		5 - 15
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		16 - 22
Item 3. Quantitative and Qualitative Disclosures About Market Risk		22 - 23
Item 4. Controls and Procedures		24
Part II Other Information
Item 1A. Risk Factors		25
Item 6. Exhibits		25
Signatures		26
Exhibit 10.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32

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AMERIGAS PARTNERS, L.P.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(Thousands of dollars)

	December 31,		September 30,			December 31,
	2009		2009 (1)			2008 (1)
ASSETS
Current assets:
Cash and cash equivalents	$	10,486	$	59,213		$	42,032
Accounts receivable (less allowances for doubtful accounts of $12,936 $13,239 and $24,610, respectively)		271,065		136,147			267,057
Accounts receivable — related parties		6,888		5,851			4,888
Inventories		119,850		87,940			105,646
Derivative financial instruments		43,757		14,970			600
Collateral deposits		—		—			131,784
Prepaid expenses and other current assets		11,357		12,386			15,856
Total current assets		463,403		316,507			567,863
Property, plant and equipment (less accumulated depreciation and amortization of $821,470, $804,239 and $752,464, respectively)		637,325		628,899			622,639
Goodwill		666,404		665,663			660,597
Intangible assets (less accumulated amortization of $25,363, $23,970 and $21,350, respectively)		32,894		32,611			31,433
Other assets		12,618		13,884			14,476
Total assets	$	1,812,644	$	1,657,564		$	1,897,008
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Current maturities of long-term debt	$	82,705	$	82,225		$	71,249
Bank loans		24,000		—			146,000
Accounts payable — trade		212,845		115,041			179,066
Accounts payable — related parties		4,393		2,252			1,830
Customer deposits and advances		68,293		87,760			83,148
Derivative financial instruments		15,633		19,284			158,369
Other current liabilities		88,452		114,043			86,486
Total current liabilities		496,321		420,605			726,148
Long-term debt		784,146		783,419			861,756
Other noncurrent liabilities		74,224		77,215			89,047
Commitments and contingencies (note 6)
Partners’ capital:
AmeriGas Partners, L.P. partners’ capital:
Common unitholders (units issued - 57,054,888, 57,046,388 and		412,471		367,708			394,350
57,013,951, respectively)
General partner		4,149		3,698			3,963
Accumulated other comprehensive income (loss)		28,799		(6,947	)		(188,481	)
Total AmeriGas Partners, L.P. partners’ capital		445,419		364,459			209,832
Noncontrolling interests		12,534		11,866			10,225
Total partners’ capital		457,953		376,325			220,057
Total liabilities and partners’ capital	$	1,812,644	$	1,657,564		$	1,897,008

(1) As adjusted in accordance with the transition provisions for accounting for noncontrolling interests in consolidated subsidiaries (Note 3).

See accompanying notes to condensed consolidated financial statements.

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AMERIGAS PARTNERS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(Thousands of dollars, except per unit amounts)

	Three Months Ended
	December 31,
	2009			2008 (1)
Revenues:
Propane	$	614,358		$	678,628
Other		42,237			48,436
		656,595			727,064
Costs and expenses:
Cost of sales — propane (excluding depreciation shown below)		375,449			428,469
Cost of sales — other (excluding depreciation shown below)		14,120			17,069
Operating and administrative expenses		146,814			159,985
Depreciation		19,983			19,420
Amortization		1,398			1,323
Gain on sale of California storage facility		—			(39,887	)
Other income, net		(3,783	)		(4,081	)
		553,981			582,298
Operating income		102,614			144,766
Interest expense		(16,493	)		(18,725	)
Income before income taxes		86,121			126,041
Income taxes		(1,167	)		(637	)
Net income		84,954			125,404
Less: net income attributable to noncontrolling interests		(995	)		(1,441	)
Net income attributable to AmeriGas Partners, L.P.	$	83,959		$	123,963
General partner’s interest in net income attributable to AmeriGas Partners, L.P.	$	1,407		$	1,545
Limited partners’ interest in net income attributable to AmeriGas Partners, L.P.	$	82,552		$	122,418
Income per limited partner unit — basic and diluted (note 2)
Basic	$	1.15		$	1.50
Diluted	$	1.15		$	1.50
Average limited partner units outstanding (thousands):
Basic		57,055			57,014
Diluted		57,105			57,062

(1) As adjusted in accordance with the transition provisions for accounting for noncontrolling interests in consolidated subsidiaries (Note 3).

See accompanying notes to condensed consolidated financial statements.

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AMERIGAS PARTNERS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(Thousands of dollars)

	Three Months Ended
	December 31,
	2009			2008 (1)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	84,954		$	125,404
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		21,381			20,743
Provision for uncollectible accounts		3,236			8,589
Gain on sale of California LPG storage facility		—			(39,887	)
Net change in settled accumulated other comprehensive income (loss)		3,841			(11,408	)
Other, net		(143	)		(1,590	)
Net change in:
Accounts receivable		(138,657	)		(56,193	)
Inventories		(31,725	)		39,663
Accounts payable		99,945			5,342
Collateral deposits		—			(113,954	)
Other current assets		1,050			12,740
Other current liabilities		(47,302	)		(57,449	)
Net cash used by operating activities		(3,420	)		(68,000	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property, plant and equipment		(26,726	)		(19,139	)
Proceeds from disposals of assets		1,566			1,605
Net proceeds from sale of California LPG storage facility		—			42,426
Acquisitions of businesses, net of cash acquired		(4,386	)		(33,784	)
Net cash used by investing activities		(29,546	)		(8,892	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions		(39,186	)		(37,166	)
Noncontrolling interest activity		(687	)		(667	)
Increase in bank loans		24,000			146,000
Repayment of long-term debt		(201	)		(271	)
Proceeds from issuance of Common Units, net of tax withheld		310			118
Capital contributions from General Partner		3			1
Net cash (used) provided by financing activities		(15,761	)		108,015
Cash and cash equivalents (decrease) increase	$	(48,727	)	$	31,123
CASH AND CASH EQUIVALENTS:
End of period	$	10,486		$	42,032
Beginning of period		59,213			10,909
(Decrease) increase	$	(48,727	)	$	31,123

(1) As adjusted in accordance with the transition provisions for accounting for noncontrolling interests in consolidated subsidiaries (Note 3).

See accompanying notes to condensed consolidated financial statements.

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AMERIGAS PARTNERS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(unaudited)

(Thousands of dollars, except unit data)

									Accumulated			Total
									other			AmeriGas						Total
	Number of		Common			General			comprehensive			Partners, L.P.			Noncontrolling			partners’
	Common Units		unitholders			partner			income (loss)			partners’ capital			interests			capital
For the three months ended December 31, 2009:
Balance September 30, 2009		57,046,388	$	367,708		$	3,698		$	(6,947	)	$	364,459		$	11,866		$	376,325
Net income attributable to AmeriGas Partners, L.P				82,552			1,407						83,959			995			84,954
Net gains on derivative instruments										44,188			44,188			448			44,636
Reclassification of net gains on derivative instruments										(8,442	)		(8,442	)		(87	)		(8,529	)
Comprehensive income				82,552			1,407			35,746			119,705			1,356			121,061
Distributions				(38,227	)		(959	)					(39,186	)		(687	)		(39,873	)
Unit-based compensation expense				128			—						128			—			128
Common Units issued in connection with incentive compensation plans, net of tax withheld		8,500		310			3						313						313
Balance December 31, 2009		57,054,888	$	412,471		$	4,149		$	28,799		$	445,419		$	12,535		$	457,954
For the three months ended December 31, 2008 (1):
Balance September 30, 2008		57,009,951	$	308,186		$	3,094		$	(63,905	)	$	247,375		$	10,723		$	258,098
Net income attributable to AmeriGas Partners, L.P				122,418			1,545						123,963			1,441			125,404
Net losses on derivative instruments										(179,913	)		(179,913	)		(1,835	)		(181,748	)
Reclassification of net losses on derivative instruments										55,337			55,337			563			55,900
Comprehensive loss				122,418			1,545			(124,576	)		(613	)		169			(444	)
Distributions				(36,489	)		(677	)					(37,166	)		(667	)		(37,833	)
Unit-based compensation expense				117			—						117			—			117
Common Units issued in connection with incentive compensation plans, net of tax withheld		4,000		118			1						119						119
Balance December 31, 2008		57,013,951	$	394,350		$	3,963		$	(188,481	)	$	209,832		$	10,225		$	220,057

(1) As adjusted in accordance with the transition provisions for accounting for noncontrolling interests in consolidated subsidiaries (Note 3).

See accompanying notes to condensed consolidated financial statements.

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AMERIGAS PARTNERS, L.P.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(Thousands of dollars, except per unit)

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 subsidiaries AmeriGas Propane, L.P. (“AmeriGas OLP”) and AmeriGas OLP’s subsidiary, AmeriGas Eagle Propane, L.P. (“Eagle OLP”). AmeriGas Partners, AmeriGas OLP and Eagle OLP are Delaware limited partnerships. AmeriGas OLP and Eagle OLP are collectively referred to herein as “the Operating Partnerships,” and AmeriGas Partners, the Operating Partnerships and all of their subsidiaries are collectively referred to herein as “the Partnership” or “we.”
	The Operating Partnerships are engaged in the distribution of propane and related equipment and supplies. The Operating Partnerships comprise the largest retail propane distribution business in the United States serving residential, commercial, industrial, motor fuel and agricultural customers from locations in 50 states.
	At December 31, 2009, 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 24,691,209 Common Units of AmeriGas Partners. The remaining 32,363,679 Common Units are publicly held. The Common Units represent limited partner interests in AmeriGas Partners.
	AmeriGas Partners holds a 99% limited partner interest in AmeriGas OLP. AmeriGas OLP, indirectly through subsidiaries, owns an effective 0.1% general partner interest and a direct 99.9% limited partner interest in Eagle OLP.
	AmeriGas Partners and the Operating Partnerships have no employees. Employees of the General Partner conduct, direct and manage our operations. The General Partner provides management and administrative services to AmeriGas Eagle Holdings, Inc. (“AEH”), the general partner of Eagle OLP, under a management services agreement. The General Partner is reimbursed monthly for all direct and indirect expenses it incurs on our behalf (see Note 5).

2. Significant Accounting Policies

The condensed consolidated financial statements include the accounts of AmeriGas Partners and its majority owned subsidiaries principally comprising AmeriGas OLP and Eagle OLP. We eliminate all significant intercompany accounts and transactions when we consolidate. We account for the General Partner’s 1.01% interest in AmeriGas OLP and an unrelated third party’s approximate 0.1% limited partner interest in Eagle OLP (prior to its redemption in July 2009) as noncontrolling interests in the condensed consolidated financial statements.

AmeriGas Finance Corp., AmeriGas Eagle Finance Corp. and AP Eagle Finance Corp. are wholly owned finance subsidiaries of AmeriGas Partners. Their sole purpose is to serve as co-obligors for debt securities issued by AmeriGas Partners.

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AMERIGAS PARTNERS, L.P.

Notes to Condensed Consolidated Financial Statements
(unaudited)
(Thousands of dollars, except per unit)

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). They include all adjustments which we consider necessary for a fair statement of the results for the interim periods presented. Such adjustments consisted only of normal recurring items unless otherwise disclosed. The September 30, 2009 condensed consolidated balance sheet data were derived from audited financial statements, but do not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). These financial statements should be read in conjunction with the financial statements and related notes included in our Annual Report on Form 10-K for the year ended September 30, 2009. Weather significantly impacts demand for propane and profitability because many customers use propane for heating purposes. Due to the seasonal nature of the Partnership’s propane business, the results of operations for interim periods are not necessarily indicative of the results to be expected for a full year.

As discussed below, certain prior-period amounts have been adjusted to comply with recently adopted Financial Accounting Standards Board (“FASB”) accounting guidance for the presentation of noncontrolling interests in consolidated financial statements.

Allocation of Net Income Attributable to AmeriGas Partners. 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 distributions rights (“IDRs”) under the Fourth Amended and Restated Agreement of Limited Partnership of AmeriGas Partners (“Partnership Agreement”).

Net Income Per Unit. On October 1, 2009, we adopted new accounting guidance regarding the application of the two-class method for determining income per unit. This new guidance addresses the application of the two-class method for master limited partnerships (“MLPs”) when IDRs are present and entitle the holder of such rights to a portion of distributions from the MLP. The new guidance addresses how current period earnings of the MLP should be allocated to the general partner, limited partners and, when applicable, holders of IDRs.

The new guidance regarding 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. 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 new guidance requires retrospective application of the guidance to all periods presented. The retrospective impact of the new guidance did not impact the three months ended December 31, 2008.

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AMERIGAS PARTNERS, L.P.

Notes to Condensed Consolidated Financial Statements
(unaudited)
(Thousands of dollars, except per unit)

The following table sets forth the allocation of net income attributable to AmeriGas Partners to the limited partners in accordance with the two-class method and the terms of our Partnership Agreement:

	Three Months Ended
	December 31,
	2009		2008
Common Unitholders’ interest in net income attributable to AmeriGas Partners	$	65,408	$	85,598
Weighted average Common Units outstanding — basic (thousands)		57,055		57,014
Potentially dilutive Common Units (thousands)		50		48
Weighted average Common Units outstanding — diluted (thousands)		57,105		57,062

Theoretical distributions of net income in accordance with the two-class method for the three months ended December 31, 2009 and 2008 resulted in an increased allocation of net income 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 $0.30 and $0.65, respectively.

Potentially dilutive Common Units included in the diluted limited partner units outstanding computation reflect the effects of restricted Common Unit awards granted under the General Partner’s incentive compensation plans.

Comprehensive Income. Other comprehensive income (loss) is principally the result of changes in the fair value of propane commodity derivative instruments and interest rate protection agreements qualifying as cash flow hedges, net of reclassifications of net gains and losses to net income.

Reclassifications. In addition to the previously mentioned prior-period adjustments resulting from the adoption of accounting guidance relating to the presentation of noncontrolling interests, we have reclassified certain other prior-period balances to conform to the current-period presentation.

Use of Estimates. We make estimates and assumptions when preparing financial statements in conformity with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities. Actual results could differ from these estimates.

Subsequent Events. Management has evaluated the impact of subsequent events through February 5, 2010, the date the financial statements were filed with the SEC, and the effects of such evaluation have been reflected in the financial statements and related disclosures.

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AMERIGAS PARTNERS, L.P.

Notes to Condensed Consolidated Financial Statements
(unaudited)
(Thousands of dollars, except per unit)

3.	Accounting Changes
	Adoption of New Accounting Standards
	Noncontrolling Interests. Effective October 1, 2009, we adopted new guidance regarding the accounting for and presentation of noncontrolling interests in consolidated financial statements. The new guidance significantly changed the accounting and reporting relating to noncontrolling interests in a consolidated subsidiary. Noncontrolling interests are now classified within partners’ capital, a change from their prior classification between liabilities and partners’ capital. Earnings attributable to noncontrolling interests are now included in net income and deducted from net income to determine net income attributable to AmeriGas Partners. In addition, changes in a parent’s ownership interest while retaining control are accounted for as equity transactions and any retained noncontrolling equity investments in a former subsidiary are initially measured at fair value. In accordance with the new guidance, prior periods have been adjusted to conform to the new presentation.
	Earnings Per Unit. As previously mentioned, on October 1, 2009, we adopted new accounting guidance regarding the application of the two-class method for determining income per unit as it relates to MLPs. This new guidance addresses the application of the two-class method for MLPs when incentive distribution rights are present and entitle the holder of such rights to a portion of the distributions. See Net Income Per Unit above for additional information.
	Business Combinations. On October 1, 2009, we adopted new guidance on the accounting for business combinations. The new guidance applies to all transactions or other events in which an entity obtains control of one or more businesses. The new guidance establishes, among other things, principles and requirements for how the acquirer (1) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (2) recognizes and measures the goodwill acquired in a business combination or gain from a bargain purchase; and (3) determines what information with respect to a business combination should be disclosed. The new guidance applies prospectively to business combinations for which the acquisition date is on or after the date of adoption. Among the more significant changes in accounting for acquisitions are (1) transaction costs will generally be expensed (rather than being included as costs of the acquisition); (2) contingencies, including contingent consideration, will generally be recorded at fair value with subsequent adjustments recognized in operations (rather than as adjustments to the purchase price); and (3) decreases in valuation allowances on acquired deferred tax assets will be recognized in operations (rather than decreases in goodwill). The new guidance did not have a material effect on the three months ended December 31, 2009.
	Intangible Asset Useful Lives. On October 1, 2009, we adopted new accounting guidance which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under GAAP. The intent of the new guidance is to improve the consistency between the useful life of a recognized intangible asset under GAAP relating to intangible asset accounting and the period of expected cash flows used to measure the fair value of the asset under GAAP relating to business combinations and other applicable accounting literature. The new guidance must be applied prospectively to intangible assets acquired after the effective date. The adoption of the new guidance did not impact our financial statements.

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AMERIGAS PARTNERS, L.P.

Notes to Condensed Consolidated Financial Statements
(unaudited)
(Thousands of dollars, except per unit)

4.	Intangible Assets
	The Partnership’s intangible assets comprise the following:

	December 31,			September 30,			December 31,
	2009			2009			2008
Subject to amortization:
Customer relationships and noncompete agreements	$	58,257		$	56,581		$	52,783
Accumulated amortization		(25,363	)		(23,970	)		(21,350	)
	$	32,894		$	32,611		$	31,433
Not subject to amortization:
Goodwill	$	666,404		$	665,663		$	660,597

The increase in goodwill and other intangible assets during the three months ended December 31, 2009 principally reflects the effects of acquisitions. Amortization expense of intangible assets was $1,393 and $1,317 for the three months ended December 31, 2009 and 2008, respectively. No amortization is included in cost of sales in the Condensed Consolidated Statements of Operations. Our expected aggregate amortization expense of intangible assets for the next five fiscal years is as follows: Fiscal 2010 — $5,456; Fiscal 2011 — $5,366; Fiscal 2012 — $5,297; Fiscal 2013 — $4,742; Fiscal 2014 — $3,789.

5. Related Party Transactions

Pursuant to the Partnership Agreement and a Management Services Agreement among AEH, the general partner of Eagle OLP, and the General Partner, the General Partner is entitled to reimbursement for all direct and indirect expenses incurred or payments it makes on behalf of the Partnership. These costs which totaled $90,495 and $90,750 for the three months ended December 31, 2009 and 2008, respectively, 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 UGI’s other 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 $1,203 and $2,249 during the three months ended December 31, 2009 and 2008, respectively. In addition, UGI and certain of its subsidiaries provide office space, stop loss medical coverage and automobile liability insurance to the Partnership. These expenses, net of any recoveries, totaled $88 and $813 during the three months ended December 31, 2009 and 2008, respectively.

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AMERIGAS PARTNERS, L.P.

Notes to Condensed Consolidated Financial Statements
(unaudited)
(Thousands of dollars, except per unit)

AmeriGas OLP purchases propane from UGI Energy Services, Inc. and subsidiaries (“Energy Services”), which is owned by an affiliate of UGI, pursuant to a Product Sales Agreement whereby Energy Services has agreed to sell and AmeriGas OLP has agreed to purchase a specified amount of propane annually at a terminal located in Chesapeake, Virginia. The Product Sales Agreement took effect on May 1, 2005 and will continue until April 30, 2010. The price to be paid for product purchased under the agreement is determined annually using a contractual formula that takes into account published index prices and the locational value of deliveries at the terminal. Purchases of propane by AmeriGas OLP from Energy Services totaled $9,784 and $5,874 during the three months ended December 31, 2009 and 2008, respectively. Amounts due to Energy Services at December 31, 2009, September 30, 2009 and December 31, 2008 totaled $3,982, $1,451 and $1,081, respectively, which are included in accounts payable — related parties in our Condensed Consolidated Balance Sheets.

The Partnership also sells propane to other affiliates of UGI. Such amounts were not material during the three months ended December 31, 2009 and 2008, respectively.

6. Commitments and Contingencies

Environmental Matters

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 Partner 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 has communicated the results of its research to DEC and is awaiting a response before doing any additional investigation. Because of the preliminary nature of available environmental information, the ultimate amount of expected clean up costs cannot be reasonably estimated.

Other Matters

On May 27, 2009, the General Partner was named as a defendant in a purported class action lawsuit in the Superior Court of the State of California in which plaintiffs are challenging AmeriGas OLP’s weight disclosure with regard to its portable propane grill cylinders. The complaint purports to be brought on behalf of a class of all consumers in the state of California during the four years prior to the date of the California complaint, who exchanged an empty cylinder and were provided with what is alleged to be only a partially-filled cylinder. The plaintiffs seek restitution, injunctive relief, interest, costs, attorneys’ fees and other appropriate relief.

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AMERIGAS PARTNERS, L.P.

Notes to Condensed Consolidated Financial Statements
(unaudited)
(Thousands of dollars, except per unit)

Since that initial suit, various AmeriGas entities have been named in more than a dozen similar suits that have been filed in various courts throughout the United States. These complaints purport to be brought on behalf of nationwide classes, which are loosely defined as to include all purchasers of liquefied propane gas cylinders marketed or sold by AmeriGas OLP and another unaffiliated entity nationwide in 2008 and 2009. The complaints claim that defendants’ conduct constituted unfair and deceptive practices that injured consumers and violated the consumer protection statutes of at least thirty-seven states and the District of Columbia, thereby entitling the class to damages, restitution, disgorgement, injunctive relief, costs and attorneys fees. Some of the complaints also allege violation of state “slack filling” laws. Additionally the complaints allege that defendants were unjustly enriched by their conduct and they seek restitution of any unjust benefits received, punitive or treble damages, and pre-judgment and post-judgment interest. A motion to consolidate the purported class action lawsuits was heard by the Multidistrict Litigation Panel (“MDL Panel”) on September 24, 2009 in the United States District Court for the District of Kansas. By Order, dated October 6, 2009, the MDL Panel transferred the pending cases to the United States District Court for the Western District of Missouri.

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 have commenced an investigation into AmeriGas OLP’s cylinder labeling and filling practices in California and issued an administrative subpoena seeking documents and information relating to those practices. We are cooperating with these California governmental investigations and we are vigorously defending the lawsuits.

Samuel and Brenda Swiger and their son (the “Swigers”) sustained personal injuries and property damage as a result of a fire that occurred when propane that leaked from an underground line ignited. In July 1998, the Swigers filed a class action lawsuit against AmeriGas Propane, L.P. (named incorrectly as “UGI/AmeriGas, Inc.”), in the Circuit Court of Monongalia County, West Virginia, in which they sought to recover an unspecified amount of compensatory and punitive damages and attorney’s fees, for themselves and on behalf of persons in West Virginia for whom the defendants had installed propane gas lines, resulting from the defendants’ alleged failure to install underground propane lines at depths required by applicable safety standards. In 2003, AmeriGas OLP settled the individual personal injury and property damage claims of the Swigers. In 2004, the court granted the plaintiffs’ motion to include customers acquired from Columbia Propane Corporation in August 2001 as additional potential class members and the plaintiffs amended their complaint to name additional parties pursuant to such ruling. Subsequently, in March 2005, AmeriGas OLP filed a crossclaim against Columbia Energy Group, former owner of Columbia Propane Corporation, seeking indemnification for conduct undertaken by Columbia Propane Corporation prior to AmeriGas OLP’s acquisition. Class counsel has indicated that the class is seeking compensatory damages in excess of $12,000 plus punitive damages, civil penalties and attorneys’ fees.

In 2005, 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 the Harrison County lawsuit, the Swigers are seeking compensatory and punitive damages on behalf of the putative class for violations of the West Virginia Insurance Unfair Trade Practice Act, negligence, intentional misconduct, and civil conspiracy. The Swigers have also requested that the Court rule that insurance coverage exists under the policies issued by the defendant insurance companies for damages sustained by the members of the class in the Monongalia County lawsuit. The Circuit Court of Harrison County has not certified the class in the Harrison County lawsuit at this time and, in October 2008, stayed that lawsuit pending resolution of the class action lawsuit in Monongalia County. We believe we have good defenses to the claims in both actions.

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AMERIGAS PARTNERS, L.P.

Notes to Condensed Consolidated Financial Statements
(unaudited)
(Thousands of dollars, except per unit)

We cannot predict with certainty 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, 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 in the normal course of our businesses. While the results of these other pending claims and legal actions cannot be predicted with certainty, we believe, after consultation with counsel, the final outcome of such other matters will not have a significant effect on our consolidated financial position, results of operations or cash flows.

7.	Fair Value Measurement
	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 December 31, 2009 and 2008:

	Quoted Prices in
	Active Markets		Significant
	for Identical		Other
	Assets and		Observable			Unobservable
	Liabilities		Inputs			Inputs
	(Level 1)		(Level 2)			(Level 3)		Total
Derivative financial instruments:
December 31, 2009:
Assets	$	—	$	43,864		$	—	$	43,864
Liabilities	$	—	$	(15,633	)	$	—	$	(15,633	)
December 31, 2008:
Assets	$	—	$	623		$	—	$	623
Liabilities	$	—	$	(174,860	)	$	—	$	(174,860	)

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AMERIGAS PARTNERS, L.P.

Notes to Condensed Consolidated Financial Statements
(unaudited)
(Thousands of dollars, except per unit)

8.	Disclosures About Derivative Instruments, Hedging Activities and Financial Instruments
	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 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 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 December 31, 2009, there were 93.8 million gallons of propane hedged with over-the-counter price swap and option contracts. The maximum period over which we are currently hedging propane market price risk is 15 months with a weighted average of 3 months. We account for substantially all 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 interests, to the extent effective in offsetting changes in the underlying commodity price risk, until earnings are affected by the hedged item. At December 31, 2009, 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 $40,615.
	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 may enter into interest rate protection agreements (“IRPAs”). At December 31, 2009, the total notional amount of the Partnership’s unsettled IRPAs was $150,000. Our current unsettled IRPA contracts hedge forecasted interest payments associated with the issuance of debt expected to occur in June 2010. We account for IRPAs as cash flow hedges. Changes in the fair values of IRPAs are recorded in AOCI and noncontrolling interests, to the extent effective in offsetting changes in the underlying interest rate risk, until earnings are affected by the hedged interest expense. At December 31, 2009, the amount of net losses associated with IRPAs expected to be reclassified into earnings during the next twelve months based upon current fair values is $1,048.

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AMERIGAS PARTNERS, L.P.

Notes to Condensed Consolidated Financial Statements
(unaudited)
(Thousands of dollars, except per unit)

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. 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 December 31, 2009. We generally do not have credit-risk-related contingent features in our derivative contracts.

The following table provides information regarding the balance sheet location and fair value of derivative assets and liabilities existing as of December 31, 2009:

	Derivative Assets			Derivative Liabilities
	Balance Sheet	Fair		Balance Sheet	Fair
As of December 31, 2009	Location	Value		Location	Value
Derivatives Designated as Hedging Instruments:
Propane contracts	Derivative financial instruments and Other assets	$	38,366	Derivative financial instruments	$	—
Interest rate contracts	Derivative financial instruments		3,856	Derivative financial instruments		(14,049	)
Total Derivatives Designated as Hedging Instruments		$	42,222		$	(14,049	)
Derivatives Not Designated as Hedging Instruments:
Propane contracts	Derivative financial instruments	$	1,642	Derivative financial instruments	$	(1,584	)
Total Derivatives Not Designated as Hedging Instruments		$	1,642		$	(1,584	)
Total Derivatives		$	43,864		$	(15,633	)

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AMERIGAS PARTNERS, L.P.

Notes to Condensed Consolidated Financial Statements
(unaudited)
(Thousands of dollars, except per unit)

The following table provides information on the effects of derivative instruments on the consolidated statement of operations and changes in AOCI and noncontrolling interest for the three months ended December 31, 2009:

Three Months Ended December 31, 2009

			Location of
	Gain		Gain (Loss)	Gain (Loss)
	Recognized in		Reclassified from	Reclassified from
	AOCI and Noncontrolling		AOCI and Noncontrolling	AOCI and Noncontrolling
	Interest		Interest into Income	Interest into Income
Cash Flow
Hedges:
Propane contracts	$	38,947	Cost of sales	$	8,664
Interest rate contracts		5,689	Interest expense /other income		(135	)
Total	$	44,636		$	8,529

The amounts of derivative gains or losses representing ineffectiveness and the amounts of gains or losses recognized in income as a result of excluding from ineffectiveness testing were not material. The amount of net gains or losses associated with propane contracts not designated as hedging instruments was not material during the three months ended December 31, 2009.

Financial Instruments

The carrying amounts of financial instruments included in current assets and current liabilities (excluding unsettled derivative instruments and current maturities of long-term debt) approximate their fair values because of their short-term nature. The carrying amounts and estimated fair values of our remaining financial instrument assets and (liabilities) at December 31, 2009 (including unsettled derivative instruments) are as follows:

	Asset (Liability)
	Carrying		Estimated
	Amount		Fair Value
Derivative instruments	$	28,231	$	28,231
Long-term debt	$	(866,851)	$	(867,392)

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.

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AMERIGAS PARTNERS, L.P.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

Information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain forward-looking statements. Such statements use forward-looking words such as “believe,” “plan,” “anticipate,” “continue,” “estimate,” “expect,” “may,” “will,” 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 market areas; (3) the availability of, and our ability to consummate, acquisition or combination opportunities; (4) successful integration and future performance of acquired assets or businesses; (5) changes in laws and regulations, including safety, tax and accounting matters; (6) competitive pressures from the same and alternative energy sources; (7) failure to acquire new 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, counter-party 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.

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AMERIGAS PARTNERS, L.P.

ANALYSIS OF RESULTS OF OPERATIONS

The following analyses compare the Partnership’s results of operations for (1) the three months ended December 31, 2009 (“2009 three-month period”) with the three months ended December 31, 2008 (“2008 three-month period”).

Executive Overview

Net income attributable to AmeriGas Partners for the 2009 three-month period was $84.0 million compared with net income attributable to AmeriGas Partners for the 2008 three-month period of $124.0 million. The 2008 three-month period net income attributable to AmeriGas Partners includes a $39.5 million gain on the sale of our California storage facility in November 2008. LPG wholesale prices increased approximately 40% during the 2009 three-month period compared with wholesale propane prices that decreased more than 50% from the beginning to the end of the 2008 three-month period. Average temperatures in the Partnership’s service territories were slightly colder in the 2009 three-month period compared with the prior-year period. Notwithstanding the colder weather, retail volumes were 4% lower reflecting the continuing impact of the recession and customer conservation. Total margin declined in the 2009 three-month period primarily due to the lower retail volumes sold. The decline in total margin was substantially offset by lower operating and administrative expenses.

As further described in Note 3 to condensed consolidated financial statements, effective October 1, 2009, we adopted guidance regarding the accounting for and presentation of noncontrolling interests in consolidated financial statements. The new guidance changed the accounting and reporting relating to noncontrolling interests in a consolidated subsidiary. Noncontrolling interests are now classified as a component of partners’ capital on the Condensed Consolidated Balance Sheets, a change from its prior classification between liabilities and partners’ capital. Earnings attributable to noncontrolling interests are now included in net income and deducted from net income to determine net income attributable to AmeriGas Partners. In accordance with the new guidance, prior-year periods have been adjusted. The new guidance had no effect on basic or diluted earnings per unit.

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AMERIGAS PARTNERS, L.P.

2009 three-month period compared with 2008 three-month period

							Increase
Three Months Ended December 31,	2009			2008			(Decrease)
(millions of dollars)
Gallons sold (millions):
Retail		267.4			278.2			(10.8	)	(3.9	)%
Wholesale		44.6			41.4			3.2		7.7	%
		312.0			319.6			(7.6	)	(2.4	)%
Revenues:
Retail propane	$	560.9		$	634.9		$	(74.0	)	(11.7	)%
Wholesale propane		53.5			43.7			9.8		22.4	%
Other		42.2			48.5			(6.3	)	(13.0	)%
	$	656.6		$	727.1		$	(70.5	)	(9.7	)%
Total margin (a)	$	267.0		$	281.5		$	(14.5	)	(5.2	)%
EBITDA (b)	$	123.0		$	164.1		$	(41.1	)	(25.0	)%
Operating income	$	102.6		$	144.8		$	(42.2	)	(29.1	)%
Net income attributable to AmeriGas Partners	$	84.0		$	124.0		$	(40.0	)	(32.3	)%
Heating degree days — % colder (warmer) than normal (c)		1.3	%		(0.8	)%		—		—

(a)

Total margin represents total revenues less cost of sales — propane and cost of sales — other.

(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 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 in the three months ended December 31, 2008 includes a pre-tax gain of $39.9 million from the sale of a California LPG storage facility.

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AMERIGAS PARTNERS, L.P.

The following table includes reconciliations of net income attributable to AmeriGas Partners to EBITDA for the periods presented:

	Three Months Ended
	December 31,
	2009		2008
Net income attributable to AmeriGas Partners	$	84.0	$	124.0
Income tax expense		1.1		0.7
Interest expense		16.5		18.7
Depreciation		20.0		19.4
Amortization		1.4		1.3
EBITDA	$	123.0	$	164.1

(c) 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 (“NOAA”) for 335 airports in the United States, excluding Alaska. Prior year data has been adjusted to correct a NOAA error.

Based upon heating degree-day data, average temperatures in our service territories were 1.3% colder than normal during the 2009 three-month period compared with temperatures in the prior-year period that were 0.8% warmer than normal. Notwithstanding the slightly colder 2009 three-month period weather, retail gallons sold were lower than in the prior-year period reflecting, among other things, the continuing adverse effects of the economic recession on commercial and motor fuel customers and continued customer conservation.

Retail propane revenues declined $74.0 million during the 2009 three-month period reflecting a $49.4 million decrease due to lower average selling prices and a $24.6 million decrease as a result of the lower retail volumes sold. Wholesale propane revenues increased $9.7 million principally reflecting higher year-over-year wholesale selling prices and higher wholesale volumes sold. Average wholesale propane commodity prices at Mont Belvieu, Texas, one of the major supply points in the U.S., were approximately 36% higher in the 2009 three-month period compared to such prices in the 2008 three-month period. The higher average wholesale propane commodity prices in the current year reflect the effects of an increase in wholesale propane commodity prices during the current-year period and a precipitous decline in such prices during the 2008 three-month period. At December 31, 2009, wholesale propane commodity prices at Mont Belvieu were $1.32 a gallon compared with $0.62 a gallon at December 31, 2008. Other non-propane revenues were lower in the 2009 three-month period due in large part to lower fee, hauling and terminal revenues. Total cost of sales decreased $55.9 million to $389.6 million principally reflecting the effects of the lower propane product costs and lower volume sales.

Total margin was $14.5 million lower in the 2009 three-month period primarily due to the lower retail volumes sold.

The $41.1 million decrease in EBITDA during the 2009 three-month period reflects the absence of a $39.9 million pre-tax gain recorded in the prior-year period associated with the November 2008 sale of the Partnership’s California LPG storage facility and the previously mentioned lower 2009 three-month period total margin. The reduction in total margin was substantially offset by lower operating and administrative expenses, principally lower uncollectible accounts expense and lower general insurance and uninsured litigation expenses.

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AMERIGAS PARTNERS, L.P.

Operating income in the 2009 three-month period decreased $42.2 million reflecting the $41.1 million decrease in EBITDA, principally due to the previously mentioned absence of the gain from the sale of the Partnership’s California storage facility, and slightly higher depreciation and amortization expense associated with acquisitions and plant and equipment expenditures made since the prior year. Net income attributable to AmeriGas Partners decreased $40.0 million during the 2009 three-month period largely reflecting the decrease in operating income and higher income tax expense partially offset by lower interest expense on bank loan borrowings and lower interest on long-term debt. Bank loan borrowings were significantly greater in the prior-year three-month period as a result of the need to fund counterparty collateral deposits associated with derivative financial instruments used by the Partnership to manage market price risk associated with fixed sales price commitments.

FINANCIAL CONDITION AND LIQUIDITY

Financial Condition

The Partnership’s debt outstanding at December 31, 2009 totaled $890.9 million (including current maturities of long-term debt of $82.7 million) compared with total debt outstanding of $865.6 million (including current maturities of long-term debt of $82.2 million) at September 30, 2009. Total debt outstanding at December 31, 2009 includes long-term debt comprising $779.7 million of AmeriGas Partners’ Senior Notes, $80.0 million of AmeriGas OLP First Mortgage Notes and $7.2 million of other long-term debt. At December 31, 2009, there was $24 million of borrowings outstanding under AmeriGas OLP’s credit agreements (as further described below). There were no such borrowings at September 30, 2009 and $146 million of credit agreement borrowings at December 31, 2008. The significantly higher credit agreement borrowings at December 31, 2008 reflect higher borrowings needed in the prior year to fund counterparty collateral deposits associated with derivative financial instruments used by the Partnership to manage market price risk associated with fixed sales price commitments.

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. In order to meet its short-term cash needs, AmeriGas OLP has a $200 million credit agreement (“Credit Agreement”) which expires on October 15, 2011. AmeriGas OLP also has a $75 million unsecured revolving credit facility (“2009 Supplemental Credit Agreement”) with three banks. AmeriGas OLP’s Credit Agreement consists of (1) a $125 million Revolving Credit Facility and (2) a $75 million Acquisition Facility. The Revolving Credit Facility may be used for working capital and general purposes of AmeriGas OLP. The Acquisition Facility provides AmeriGas OLP with the ability to borrow up to $75 million to finance the purchase of propane businesses or propane business assets or, to the extent it is not so used, for working capital and general purposes. The 2009 Supplemental Credit Agreement expires on July 1, 2010 and permits AmeriGas OLP to borrow up to $75 million for working capital and general purposes.

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AMERIGAS PARTNERS, L.P.

At December 31, 2009, there were $24 million of borrowings outstanding under the Credit Agreements and no amounts outstanding under the 2009 Supplement Credit Agreement which are classified as bank loans on the Condensed Consolidated Balance Sheets. Issued and outstanding letters of credit under the Revolving Credit Facility, which reduce the amount available for borrowings, totaled $36.1 million at December 31, 2009. The average daily and peak bank loan borrowings outstanding under the credit agreements during the 2009 three-month period were $13.2 million and $48.0 million, respectively. The average daily and peak bank loan borrowings outstanding under the credit agreements during the 2008 three-month period were $131.8 million and $184.5 million, respectively. As previously mentioned, the higher average and peak bank loan borrowings in the prior year three-month period resulted from the need to fund counterparty cash collateral obligations associated with derivative financial instruments used by the Partnership to manage price risk associated with fixed sales price commitments to customers. These collateral obligations resulted from the precipitous decline in propane commodity prices that occurred early in Fiscal 2009. At December 31, 2009, the Partnership’s available borrowing capacity under the credit agreements was $214.9 million.

AmeriGas Partners expects to issue $150 million of long-term debt during the summer of 2010. The proceeds from the issuance of such long-term debt is expected to be used to repay $80 million of maturing AmeriGas OLP Series E First Mortgage Notes and for general Partnership purposes.

Based on existing cash balances, cash expected to be generated from operations, borrowings available under AmeriGas OLP’s credit agreements and the previously mentioned issuance of AmeriGas Partners’ long-term debt, the Partnership’s management believes that the Partnership will be able to meet its anticipated contractual commitments and projected cash needs during Fiscal 2010.

During the three months ended December 31, 2009, the Partnership declared and paid quarterly distributions on all limited partner units at a rate of $0.67 per Common Unit for the quarter ended September 30, 2009. The quarterly distribution of $0.67 per limited partner unit for the quarter ended December 31, 2009 will be paid on February 18, 2010 to holders of record on February 10, 2010. The ability of the Partnership to declare and pay the quarterly distribution on its Common Units in the future depends upon a number of factors. These factors include (1) the level of Partnership earnings; (2) the cash needs of the Partnership’s operations (including cash needed for maintaining and increasing operating capacity); (3) changes in operating working capital; and (4) the Partnership’s ability to borrow under its credit agreements, refinance maturing debt, and increase its long-term debt. Some of these factors are affected by conditions beyond the Partnership’s control including weather, competition in markets we serve, the cost of propane and changes in capital market conditions.

Cash Flows

Operating activities. Due to the seasonal nature of the Partnership’s business, cash flows from operating activities are generally strongest 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.

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AMERIGAS PARTNERS, L.P.

Cash flow used by operating activities was $3.4 million in the 2009 three-month period compared to $68.0 million in the 2008 three-month period. Cash flow from operating activities before changes in operating working capital was $113.3 million in the 2009 three-month period compared with $101.9 million in the prior-year period principally reflects the amount and timing of recognition of gains (losses) on settled derivative commodity contracts. Cash required to fund changes in operating working capital totaled $116.7 million in the 2009 three-month period compared with $169.9 million in the prior-year period. The decrease in cash required to fund operating working capital in the current-year period principally reflects the absence of $114.0 million of cash required to fund counterparty collateral requirements in the prior-year period and the timing and amount of cash payments for purchases of propane partially offset by greater cash required to fund accounts receivable and inventories.

Investing activities. Investing activity cash flow is principally affected by investments in property, plant and equipment, cash paid for acquisitions of businesses and proceeds from sales of assets. Cash flow used in investing activities was $29.5 million in the 2009 three-month period compared with $8.9 million in the prior-year period. We spent $26.7 million for property, plant and equipment (comprising $10.4 million of maintenance capital expenditures and $16.3 million of growth capital expenditures) in the 2009 three-month period compared with $19.1 million (comprising $8.6 million of maintenance capital expenditures and $10.5 million of growth capital expenditures) in the 2008 three-month period. The greater capital expenditures in the 2009 three-month period include expenditures associated with an ongoing system software replacement and accelerated opportunistic purchases of cylinders for our AmeriGas Cylinder Exchange program. In November 2008, the Partnership sold its California LPG storage facility for net cash proceeds of $42.4 million.

Financing activities. The Partnership’s financing activities cash flows are typically the result of repayments and issuances of long-term debt, borrowings under AmeriGas OLP’s credit agreements, issuances of Common Units and distributions on partnership interests. Cash used by financing activities was $15.8 million in the 2009 three-month period compared with cash provided by financing activities of $108.0 million in the prior-year period. Distributions in the 2009 three-month period totaled $39.2 million compared with $37.2 million in the prior-year period principally reflecting a higher quarterly per-unit distribution rate. There were $24 million of borrowings under the credit agreements during the 2009 three-month period compared to $146 million during the 2008 three-month period. The higher amount of borrowings in the prior-year period reflects in large part greater borrowings to fund counterparty collateral deposits.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary financial market risks include commodity prices for propane and interest rates on borrowings.

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. In order to minimize our credit risk associated with derivative commodity contracts, we monitor established credit limits with our contract counterparties. Although we use derivative financial and commodity instruments to reduce market price risk associated with forecasted transactions, we do not use derivative financial and commodity instruments for speculative or trading purposes.

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AMERIGAS PARTNERS, L.P.

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 AmeriGas OLP’s credit agreements. These agreements have interest rates that are generally indexed to short-term market interest rates. The remainder of our debt outstanding is subject to fixed rates of interest. 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 enter into interest rate protection agreements.

The following table summarizes the fair values of unsettled market risk sensitive derivative instruments held at December 31, 2009. It also includes the changes in fair value that would result if there were a ten percent adverse change in (1) the market price of propane and (2) the three-month LIBOR:

	Fair Value -
	Asset			Change in
(Millions of dollars)	(Liability)			Fair Value
December 31, 2009:
Propane swap and option contracts	$	38.4		$	(12.1	)
Interest rate protection agreements	$	(10.2	)	$	(5.3	)

Because the Partnership’s derivative instruments generally qualify as hedges under GAAP, we expect that changes in the fair value of derivative instruments used to manage propane price or interest rate risk would be substantially offset by gains or losses on the associated anticipated transactions.

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AMERIGAS PARTNERS, L.P.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

The Partnership’s management, with the participation of the Partnership’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 designed and functioning effectively 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 Securities and Exchange Commission’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 disclosure.

(b) Change in Internal Control over Financial Reporting

No change in the Partnership’s internal control over financial reporting occurred during the Partnership’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

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AMERIGAS PARTNERS, L.P.

PART II OTHER INFORMATION

ITEM 1A. RISK FACTORS

In addition to the other information presented in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2009, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing the Partnership. Other unknown or unpredictable factors could also have material adverse effects on future results.

ITEM 6. 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 last date of the period for which it was filed, and the exhibit number in such filing):

Incorporation by Reference

Exhibit
No.		Exhibit	Registrant	Filing	Exhibit
	10.1	AmeriGas Propane, Inc. Supplemental Executive Retirement Plan as Amended and Restated Effective January 1, 2009
	10.2	Amendment 2009-1 to the UGI Corporation Supplemental Executive Retirement Plan and Supplemental Savings Plan as Amended and Restated effective January 1, 2009	UGI	Form 10-Q (12/31/09)		10.1
	10.3	UGI Corporation 2009 Supplemental Executive Retirement Plan For New Employees	UGI	Form 10-Q (12/31/09)		10.2
	31.1	Certification by the Chief Executive Officer relating to the Registrant’s Report on Form 10-Q for the quarter ended December 31, 2009, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2	Certification by the Chief Financial Officer relating to the Registrant’s Report on Form 10-Q for the quarter ended December 31, 2009, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32	Certification by the Chief Executive Officer and the Chief Financial Officer relating to the Registrant’s Report on Form 10-Q for the quarter ended December 31, 2009, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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AMERIGAS PARTNERS, L.P.

SIGNATURES

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

	AmeriGas Partners, L.P. (Registrant)
	By:	AmeriGas Propane, Inc.,
		as General Partner
Date: February 5, 2010	By:	/s/ Jerry E. Sheridan
		Jerry E. Sheridan
		Vice President — Finance and Chief Financial Officer
Date: February 5, 2010	By:	/s/ William J. Stanczak
		William J. Stanczak
		Controller and Chief Accounting Officer

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AMERIGAS PARTNERS, L.P.

EXHIBIT INDEX

10.1	AmeriGas Propane, Inc. Supplemental Executive Retirement Plan as Amended and Restated Effective January 1, 2009.
31.1	Certification by the Chief Executive Officer relating to the Registrant’s Report on Form10-Q for the quarter ended December 31, 2009, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer relating to the Registrant’s Report on Form 10-Q for the quarter ended December 31, 2009, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification by the Chief Executive Officer and the Chief Financial Officer relating to the Registrant’s Report on Form 10-Q for the quarter ended December 31, 2009, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

EX-10.1

Exhibit 10.1

AMERIGAS PROPANE, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

As amended and restated effective January 1, 2009

TABLE OF CONTENTS

		Page
ARTICLE I	STATEMENT OF PURPOSE		2
ARTICLE II	DEFINITIONS		2
ARTICLE III	PARTICIPATION AND VESTING		4
ARTICLE IV	BENEFITS		4
ARTICLE V	FORM AND TIMING OF BENEFIT DISTRIBUTION		6
ARTICLE VI	FUNDING OF BENEFITS		7
ARTICLE VII	THE COMMITTEE		7
ARTICLE VIII	AMENDMENT AND TERMINATION		9
ARTICLE IX	CLAIMS PROCEDURES		9
ARTICLE X	MISCELLANEOUS PROVISIONS		10

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ARTICLE I

STATEMENT OF PURPOSE

The purpose of the AmeriGas Propane, Inc. Supplemental Executive Retirement Plan (the “AGP SERP”) is to provide a fair and competitive level of retirement benefits to certain management and other highly compensated employees and thereby to attract and retain the highest quality executives to AmeriGas Propane, Inc. To address these purposes, certain employees of AmeriGas Propane, Inc. (those designated as “Participants”) will be provided with supplemental retirement benefits. The AGP SERP is now being amended and restated to allow Participants to defer their benefit under the AGP SERP to the UGI Corporation 2009 Deferral Plan. This amendment and restatement of the AGP SERP shall be effective as of January 1, 2009, except as otherwise indicated.

ARTICLE II

DEFINITIONS

Sec. 2.01 “Administrative Committee” shall mean the administrative committee designated pursuant to Article VII to administer the AGP SERP in accordance with its terms.

Sec. 2.02 “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended.

Sec. 2.03 “AGP” shall mean AmeriGas Propane, Inc.

Sec. 2.04 “AGP 401(k) Plan” shall mean the AmeriGas Propane, Inc. 401(k) Savings Plan.

Sec. 2.05 “AGP SERP” shall mean the AmeriGas Propane, Inc. Supplemental Executive Retirement Plan as set forth herein and as the same may be hereafter amended.

Sec. 2.06 “Beneficiary” shall mean the person designated by a Participant to receive any benefits payable after the Participant’s death. AGP shall provide a form for this purpose. In the event a Participant has not filed a Beneficiary designation with AGP or none of the designated Beneficiaries are living at the date of the Participant’s death, the Beneficiary shall be the Participant’s estate.

Sec. 2.07 “Board” shall mean the Board of Directors of AGP.

Sec. 2.08 “Code” shall mean the Internal Revenue Code of 1986, as amended.

Sec. 2.09 “Compensation/Pension Committee” shall mean the Compensation/Pension Committee of the Board or such other committee designated by the Board of AGP to perform certain functions with respect to the AGP SERP.

Sec. 2.10 “Compensation” shall mean a Participant’s actual base salary earned from AGP and its Subsidiaries, plus the amount of annual bonus payable under the applicable bonus or severance plan, in each Plan Year. Compensation shall include any such salary and bonus that that would be payable to the Employee except for an election by the Employee to have such compensation deferred under any qualified savings plan, non-qualified deferred compensation plan, or section 125 plan, of AGP or a Subsidiary. Compensation shall be prorated for any Plan Year during which the Employee ceases to be a Participant and remains an employee of AGP or a Subsidiary or Affiliate.

Sec. 2.11 “Deferral Plan” shall mean the UGI Corporation 2009 Deferral Plan.

Sec. 2.12 “Effective Date” of the AGP SERP shall mean October 1, 1996. The effective date of the amended restated AGP SERP shall mean January 1, 2009, except as otherwise indicated.

Sec. 2.13 “Employee” shall mean any person in the employ of AGP or any AGP Subsidiary other than a person (i) whose terms and conditions of employment are determined through collective bargaining with a third party or (ii) who is characterized as an independent contractor by AGP, no matter how characterized by a court or government agency. No retroactive characterization of an individual’s status for any other purpose shall make an individual an “Employee” for purposes hereof unless specifically determined otherwise by AGP for the purposes of this AGP SERP.

Sec. 2.14 “Employment Commencement Date” shall mean the first day on which a Participant became an employee of AGP, any Subsidiary or Affiliate of AGP, or any entity whose business or assets have been acquired by AGP, its Subsidiary or Affiliate or by any predecessor of such entities. If any interruption of employment occurred after the date described in the preceding sentence, the “Employment Commencement Date” after reemployment shall be the first day on which the Participant became an employee as described in the preceding sentence after the most recent such interruption of the employment relationship between the Participant and AGP or any of its Subsidiaries or Affiliates, unless the Administrative Committee determines otherwise.

Sec. 2.15 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

Sec. 2.16 “Key Employee” shall mean an employee who, at any time during the 12-month period ending on the identification date, is a “specified employee” under section 409A of the Code, as determined by the Compensation and Management Development Committee of the Board of Directors of UGI Corporation or its delegate. The determination of Key Employees, including the number and identity of persons considered specified employees and the identification date, shall be made by such Committee or its delegate in accordance with the provisions of sections 416(i) and 409A of the Code and the regulations issued thereunder.

Sec. 2.17 “Matching Contribution” shall have the meaning given that term under the AGP 401(k) Plan.

Sec. 2.18 “Participant” shall mean each Employee who meets the requirements of Section 3.01 hereof.

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Sec. 2.19 “Plan Year” shall mean a fiscal year beginning October 1 and ending September 30.

Sec. 2.20 “Postponement Period” shall mean, for a Key Employee, the period of six months after separation from service (or such other period as may be required by Section 409A of the Code) during which AGP SERP benefits may not be paid to the Key Employee under section 409A of the Code.

Sec. 2.21 “Subsidiary” shall mean any corporation in which AGP, directly or indirectly, owns at least a 50% interest or an unincorporated entity of which AGP, directly or indirectly, owns at least 50% of the profits or capital interests.

Sec. 2.22 “Termination for Cause” shall mean termination of employment by reason of misappropriation of funds, habitual insobriety, substance abuse, conviction of a crime involving moral turpitude, or gross negligence in the performance of duties, which gross negligence has had a material gross adverse effect on the business, operations, assets, properties or financial condition of AGP, AmeriGas Partners, L.P., AmeriGas Propane, L.P., or their Subsidiaries and Affiliates, taken as a whole.

ARTICLE III

PARTICIPATION AND VESTING

Sec. 3.01 Participation. Each Employee of AGP or an AGP Subsidiary who was a Participant in this AGP SERP on December 31, 2008 shall continue to be a Participant on January 1, 2009.  On and after January 1, 2009, each newly hired Employee of AGP or an AGP Subsidiary who becomes employed on a salaried basis at grade level 36 or higher, or such other level as the Compensation/Pension Committee may designate, shall become a Participant immediately upon his date of hire.  On and after January 1, 2009, each newly promoted Employee of AGP or an AGP Subsidiary shall become a Participant as of the first day of the Plan Year following the date on which he or she meets the eligibility requirements.

Sec. 3.02 Vesting. Benefits under this AGP SERP shall vest on the fifth anniversary of a Participant’s most recent Employment Commencement Date, if the Participant continues to be employed by AGP and its Affiliates through the vesting date, unless the Compensation/Pension Committee determines that a Participant’s benefits should vest, in whole or in part, sooner. A Participant’s benefit under this AGP SERP shall also vest if the Participant’s employment with AGP and its Subsidiaries and Affiliates terminates on account of death or Total Disability, as determined under the AGP 401(k) Plan.

ARTICLE IV

BENEFITS

Sec. 4.01 Benefit Credits.

(a) AGP shall establish a bookkeeping account for each Participant. At the end of each Plan Year, AGP shall credit to the Participant’s account an amount equal to 5% of the Participant’s maximum recognizable Compensation under section 401(a)(17) of the Code for the calendar year in which the Plan Year begins, and 10% of the Participant’s Compensation, if any, in excess of such maximum recognizable Compensation under section 401(a)(17) of the Code.

4

(b) In addition, effective for amounts forfeited in 2005 and subsequent years, in the event that any portion of the Matching Contribution allocated to a Participant under the AGP 401(k) Plan with respect to the prior plan year is forfeited to satisfy the nondiscrimination requirements of section 401(k) or 401(m) of the Code, AGP shall credit to the Participant’s account under the AGP SERP, in the Plan Year in which the forfeiture occurs, an amount that is equal to the forfeited Matching Contributions, adjusted for earnings and losses as provided under the AGP 401(k) Plan to the date forfeited. The allocation with respect to forfeited Matching Contributions shall not exceed the Matching Contributions that would have been provided under the AGP 401(k) Plan in the absence of any plan-based restrictions that reflect limits on qualified plan contributions under the Code, in accordance with section 409A of the Code.

Sec. 4.02 Timing of Credits. Amounts shall be credited to a Participant’s account annually within 90 days after the end of the Plan Year.

Sec. 4.03 Earnings.

(a) For Plan Years ending before October 1, 2007, amounts credited to a Participant’s account shall accrue interest from the end of the Plan Year as of which they are so credited until the date on which they are paid to the Participant. Such interest shall be credited annually on the opening balance of a Participant’s account as of each September 30. The rate of interest shall be equal to the total year-to-date rate of return on the trust portfolio for the Retirement Income Plan for Employees of UGI Utilities, Inc. (the “RIP”), except that the rate of interest in any fiscal year may not exceed the rate of return assumed in determining the annual cost of the RIP for that year plus one percent or be less than zero. The Administrative Committee shall make appropriate adjustments to interest credited with respect to any amounts that are credited to the AGP SERP during the Plan Year pursuant to Section 4.01 and with respect to Participants who receive a distribution from the Plan during the Plan Year.

(b) For Plan Years beginning on or after October 1, 2007,

(i) For purposes of measuring the investment returns of a Participant’s account, the Participant may select the investment funds in which all or part of his account shall be deemed to be invested, from the investment funds designated by the Administrative Committee.

(ii) A Participant shall make an investment designation by such method as the Administrative Committee determines. An investment designation shall remain effective until another valid designation has been made by the Participant. The Participant may amend his investment designation at such time or times as permitted by the Administrative Committee in its sole discretion, and in accordance with such procedures as may be established by the Administrative Committee.

5

(iii) In the absence of any Participant election designating the deemed investment of his account, a Participant shall be deemed to have elected that his account be invested in the manner selected by the Administrative Committee for such circumstance.

(iv) Each Participant’s account shall be adjusted periodically to take into account the gains, losses and income returns of the investment funds selected by the Participant.

Sec. 4.04 Divestiture. Each Participant shall be divested of, and shall immediately forfeit, any benefit to which the Participant is otherwise entitled under the AGP SERP if the Participant experiences a Termination for Cause.

ARTICLE V

FORM AND TIMING OF BENEFIT DISTRIBUTION

Sec. 5.01 Form of Benefit Distributions. A Participant’s vested account under the AGP SERP shall be paid in a lump sum to the Participant upon the Participant’s termination of employment with AGP and its Subsidiaries and Affiliates for any reason other than Termination for Cause, as described below. In the event of death, the Participant’s vested account shall be paid in a lump sum to the Participant’s beneficiary designated in writing on a form filed with the Administrative Committee or its designee or, if there is none, to the Participant’s estate.

Sec. 5.02 Timing of Benefit Distributions. Except as otherwise required by Section 5.03 below, benefits payable under the AGP SERP shall be paid within 60 days after a Participant’s termination of employment for a reason other than Termination for Cause.

Sec. 5.03 Key Employees. If required by section 409A of the Code, no benefits shall be paid to a Participant who is a Key Employee during the Postponement Period. If a Participant is a Key Employee and payment of benefits under the AGP SERP is required to be delayed for the Postponement Period, the accumulated amounts withheld on account of section 409A of the Code shall be paid in a lump sum payment within 15 days after the end of the Postponement Period. If the Participant dies during the Postponement Period prior to the payment of benefits, the amounts withheld on account of section 409A of the Code shall be paid to the Participant’s beneficiary (as described in Section 5.01) within 60 days after the Participant’s death.

Sec. 5.04 Deferral Elections. Notwithstanding the foregoing, a Participant may make a one-time, irrevocable election to elect to have the Participant’s vested account under this AGP SERP credited to the Participant’s account under the Deferral Plan on the date of the Participant’s separation from service, in lieu of the payments described in Section 5.01 and 5.02. If the Participant makes a deferral election, the Participant’s vested account under this AGP SERP will be credited to the Participant’s account under the Deferral Plan at separation from service and the amount credited to the Deferral Plan shall be distributed in accordance with the provisions of the Deferral Plan. An election under this Section 5.04 shall be made in writing, on a form and at a time prescribed by the Administrative Committee and shall be irrevocable upon submission to the Corporate Secretary of UGI Corporation.

6

ARTICLE VI

FUNDING OF BENEFITS

Sec. 6.01 Source of Funds. The Board may, but shall not be required to, authorize the establishment of a rabbi trust for the benefits described herein. In any event, AGP’s obligation hereunder shall constitute a general, unsecured obligation, payable solely out of its general assets, and no Participant shall have any right to any specific assets of AGP or any such vehicle.

Sec. 6.02 Participant Contributions. There shall be no contributions made by Participants under the AGP SERP.

ARTICLE VII

THE COMMITTEE

Sec. 7.01 Appointment and Tenure of Administrative Committee Members. The Administrative Committee shall consist of one or more persons who shall be appointed by and serve at the pleasure of the Compensation/Pension Committee. Any Administrative Committee member may resign by delivering his or her written resignation to the Compensation/Pension Committee. Vacancies arising by the death, resignation or removal of an Administrative Committee member may be filled by the Compensation/Pension Committee.

Sec. 7.02 Meetings; Majority Rule. Any and all acts of the Administrative Committee taken at a meeting shall be by a majority of all members of the Administrative Committee. The Administrative Committee may act by vote taken in a meeting (at which a majority of members shall constitute a quorum). The Administrative Committee may also act by unanimous consent in writing without the formality of convening a meeting.

Sec. 7.03 Delegation. The Administrative Committee may, by majority decision, delegate to each or any one of its members, authority to sign any documents on its behalf, or to perform ministerial acts, but no person to whom such authority is delegated shall perform any act involving the exercise of any discretion without first obtaining the concurrence of a majority of the members of the Administrative Committee, even though such person alone may sign any document required by third parties. The Administrative Committee shall elect one of its members to serve as Chairperson. The Chairperson shall preside at all meetings of the Administrative Committee or shall delegate such responsibility to another Administrative Committee member. The Administrative Committee shall elect one person to serve as Secretary to the Administrative Committee. All third parties may rely on any communication signed by the Secretary, acting as such, as an official communication from the Administrative Committee.

Sec. 7.04 Authority and Responsibility of the Administrative Committee. The Administrative Committee shall have only such authority and responsibilities as are delegated to it by the Compensation/Pension Committee or specifically under this AGP SERP. The Administrative Committee shall have full power and express discretionary authority to administer and interpret the AGP SERP, to make factual determinations and to adopt or amend such rules and regulations for implementing the AGP SERP and for the conduct of its business as it deems necessary or advisable, in its sole discretion. The Administrative Committee’s authorities and responsibilities shall also include:

7

(a) maintenance and preservation of records relating to Participants, former Participants, and their beneficiaries;

(b) preparation and distribution to Participants of all information and notices required under federal law or the provisions of the AGP SERP;

(c) preparation and filing of all governmental reports and other information required under law to be filed or published;

(d) construction of the provisions of the AGP SERP, to correct defects therein and to supply omissions thereto;

(e) engagement of assistants and professional advisers;

(f) arrangement for bonding, if required by law; and

(g) promulgation of procedures for determination of claims for benefits.

Sec. 7.05 Compensation of Administrative Committee Members. The members of the Administrative Committee shall serve without compensation for their services as such, but all expenses of the Administrative Committee shall be paid or reimbursed by AGP.

Sec. 7.06 Committee Discretion. Any discretion, actions or interpretations to be made under the AGP SERP by the Administrative Committee or by the Compensation/Pension Committee on behalf of AGP shall be made in its sole discretion, not acting in a fiduciary capacity, need not be uniformly applied to similarly situated individuals, and shall be final, binding and conclusive upon the parties. All benefits under the AGP SERP shall be provided conditional upon the Participant’s acknowledgement, in writing or by acceptance of the benefits, that all decisions and determinations of the Administrative Committee shall be final and binding on the Participant, his or her beneficiaries and any other person having or claiming an interest under the AGP SERP.

Sec. 7.07 Indemnification of the Committees. Each member of the Administrative Committee and each member of the Compensation/Pension Committee shall be indemnified by AGP against costs, expenses and liabilities (other than amounts paid in settlement to which AGP does not consent) reasonably incurred by the member in connection with any action to which the member may be a party by reason of the member’s service on the applicable Committee, except in relation to matters as to which the member shall be adjudged in such action to be personally guilty of gross negligence or willful misconduct in the performance of the member’s duties. The foregoing right to indemnification shall be in addition to such other rights as the Administrative Committee member or the Compensation/Pension Committee member may enjoy as a matter of law or by reason of insurance coverage of any kind, but shall not extend to costs, expenses and/or liabilities otherwise covered by insurance or that would be so covered by any insurance then in force if such insurance contained a waiver of subrogation. Rights granted hereunder shall be in addition to and not in lieu of any rights to indemnification to which the Administrative Committee member or the Compensation/Pension Committee member may be entitled pursuant to the by-laws of AGP. Service on the Administrative Committee or the Compensation/Pension Committee shall be deemed in partial fulfillment of the applicable Committee member’s function as an employee, officer, or director of AGP, if the Committee member also serves in that capacity.

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ARTICLE VIII

AMENDMENT AND TERMINATION

Sec. 8.01 Amendment. The provisions of the AGP SERP may be amended at any time and from time to time by a resolution of the Board; provided, however, that no such amendment shall serve to reduce the benefit that has accrued on behalf of a Participant as of the effective date of the amendment, and, provided further, however, that the Compensation/Pension Committee may make such amendments as are necessary to keep the AGP SERP in compliance with applicable law and minor amendments which do not materially affect the rights of the Participants or significantly increase the cost to AGP, AmeriGas Partners, L.P. or AmeriGas Propane, L.P.

Sec. 8.02 AGP SERP Termination. While it is AGP’s intention to continue the AGP SERP indefinitely in operation, the right is, nevertheless, reserved to terminate the AGP SERP in whole or in part at any time for any reason without either the consent of or prior notice to any Participant. No such termination shall reduce the benefit that has accrued on behalf of a Participant as of the effective date of the termination, but AGP may immediately distribute all accrued benefits upon termination of the AGP SERP in accordance with section 409A of the Code.

ARTICLE IX

CLAIMS PROCEDURES

Sec. 9.01 Claim. Any person or entity claiming a benefit, requesting an interpretation or ruling under the AGP SERP (hereinafter referred to as “claimant”), or requesting information under the AGP SERP shall present the request in writing to the Administrative Committee, which shall respond in writing or electronically. The notice advising of the denial shall be furnished to the claimant within 90 days of receipt of the benefit claim by the Administrative Committee, unless special circumstances require an extension of time to process the claim. If an extension is required, the Administrative Committee shall provide notice of the extension prior to the termination of the 90 day period. In no event may the extension exceed a total of 180 days from the date of the original receipt of the claim.

Sec. 9.02 Denial of Claim. If the claim or request is denied, the written or electronic notice of denial shall state:

(a) The reason(s) for denial;

(b) Reference to the specific AGP SERP provisions on which the denial is based;

9

(c) A description of any additional material or information required and an explanation of why it is necessary; and

(d) An explanation of the AGP SERP’s claims review procedures and the time limits applicable to such procedures, including the right to bring a civil action under section 502(a) of ERISA.

Sec. 9.03 Final Decision. The decision on review shall normally be made within 60 days after the Administrative Committee’s receipt of claimant’s claim or request. If an extension of time is required for a hearing or other special circumstances, the claimant shall be notified and the time limit shall be 120 days. The decision shall be in writing or in electronic form and shall:

(a) State the specific reason(s) for the denial;

(b) Reference the relevant AGP SERP provisions;

(c) State that the claimant is entitled to receive, upon request and free of charge, and have reasonable access to and copies of all documents, records and other information relevant to the claim for benefits; and

(d) State that the claimant may bring an action under section 502(a) of ERISA.

All decisions on review shall be final and bind all parties concerned.

Sec. 9.04 Review of Claim. Any claimant whose claim or request is denied or who has not received a response within 60 days may request a review by notice given in writing or electronic form to the Administrative Committee. Such request must be made within 60 days after receipt by the claimant of the written or electronic notice of denial, or in the event the claimant has not received a response, 60 days after receipt by the Administrative Committee of the claimant’s claim or request. The claim or request shall be reviewed by the Administrative Committee which may, but shall not be required to, grant the claimant a hearing. On review, the claimant may have representation, examine pertinent documents, and submit issues and comments in writing.

ARTICLE X

MISCELLANEOUS PROVISIONS

Sec. 10.01 Nonalienation of Benefits. None of the payments, benefits or rights of any Participant under the AGP SERP shall be subject to any claim of any creditor, and, in particular, to the fullest extent permitted by law, all such payments, benefits and rights shall be free from attachment, garnishment, trustee’s process, or any other legal or equitable process available to any creditor of such Participant. No Participant shall have the right to alienate, anticipate commute, pledge, encumber or assign any of the benefits or payments which he or she may expect to receive, contingently or otherwise, under the AGP SERP, except any right to designate a beneficiary or beneficiaries in connection with any form of benefit payment providing benefits after the Participant’s death.

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Sec. 10.02 No Contract of Employment. Neither the establishment of the AGP SERP, nor any modification thereof, nor the creation of any fund, trust or account, nor the payment of any benefits shall be construed as giving any Participant or Employee, or any person whomsoever, the right to be retained in the service of AGP, and all Participants and other Employees shall remain subject to discharge to the same extent as if the AGP SERP had never been adopted.

Sec. 10.03 Severability of Provisions. If any provision of the AGP SERP shall be held invalid or unenforceable, such validity or unenforceability shall not affect any other provisions hereof, and the AGP SERP shall be construed and enforced as if such provision had not been included.

Sec. 10.04 Heirs, Assigns and Personal Representatives. The AGP SERP shall be binding upon the heirs, executors, administrators, successors and assigns of the parties, including each Participant, present and future.

Sec. 10.05 Headings and Captions. The headings and captions herein are provided for reference and convenience only, shall not be considered part of the AGP SERP, and shall not be employed in the construction of the AGP SERP.

Sec. 10.06 Gender and Number. Except where otherwise clearly indicated by context, the masculine and the neuter shall include the feminine and the neuter, the singular shall include the plural, and vice-versa.

Sec. 10.07 Controlling Law. The AGP SERP shall be construed and enforced according to the laws of the Commonwealth of Pennsylvania to the extent not preempted by federal law, which shall otherwise control, and exclusive of any Pennsylvania choice of law provisions.

Sec. 10.08 Payments to Minors, Etc. Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of receipting therefor shall be deemed paid when paid to such person’s guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge AGP, the Board, the Administrative Committee, the Compensation/Pension Committee and all other parties with respect thereto.

Sec. 10.09 Lost Payees. A benefit (including accrued interest) shall be deemed forfeited if the Board or the Administrative Committee is unable to locate a Participant to whom payment is due; provided, however, that such benefit shall be reinstated if a claim is made by the proper payee for the forfeited benefit.

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Sec. 10.10 Reliance on Data and Consents. AGP, the Board, the Compensation/Pension Committee, the Administrative Committee, all fiduciaries with respect to the AGP SERP, and all other persons or entities associated with the operation of the AGP SERP, and the provision of benefits thereunder, may reasonably rely on the truth, accuracy and completeness of all data provided by the Participant, including, without limitation, data with respect to age, health and marital status. Furthermore, AGP, the Board, the Compensation/Pension Committee, the Administrative Committee and all fiduciaries with respect to the AGP SERP may reasonably rely on all consents, elections and designations filed with the AGP SERP or those associated with the operation of the AGP SERP by any Participant, or the representatives of any such person without duty to inquire into the genuineness of any such consent, election or designation. None of the aforementioned persons or entities associated with the operation of the AGP SERP or the benefits provided under the AGP SERP shall have any duty to inquire into any such data, and all may rely on such data being current to the date of reference, it being the duty of the Participants to advise the appropriate parties of any change in such data.

Sec. 10.11 Taxation. The AGP SERP is intended to comply with the requirements of section 409A of the Code. Notwithstanding anything in the AGP SERP to the contrary, allocations to the AGP SERP shall be made consistent with section 409A, and distributions may only be made under the AGP SERP upon an event and in a manner permitted by section 409A of the Code. All payments under the AGP SERP shall be subject to applicable tax withholding. Distributions upon termination of employment shall only be made upon the Participant’s “separation from service” under section 409A of the Code, and in no event may a Participant designate the calendar year of a payment.

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EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Eugene V.N. Bissell, certify that:

1. I have reviewed this periodic report on Form 10-Q 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: February 5, 2010

/s/ Eugene V. N. Bissell  

Eugene V.N. Bissell 

President and Chief Executive Officer of AmeriGas Propane, Inc. 

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Jerry E. Sheridan, certify that:

1. I have reviewed this periodic report on Form 10-Q 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: February 5, 2010

/s/ Jerry E. Sheridan  

Jerry E. Sheridan 

Vice President - Finance and Chief Financial Officer of AmeriGas Propane, Inc. 

EX-32

EXHIBIT 32

Certification by the Chief Executive Officer and Chief Financial Officer
Relating to a Periodic Report Containing Financial Statements

I, Eugene V.N. Bissell, Chief Executive Officer, and I, Jerry E. Sheridan, 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 periodic report on Form 10-Q for the period ended December 31, 2009 (the “Form 10-Q”) 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-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

CHIEF EXECUTIVE OFFICER	CHIEF FINANCIAL OFFICER
/s/ Eugene V.N. Bissell	/s/ Jerry E. Sheridan
Eugene V.N. Bissell	Jerry E. Sheridan
Date: February 5, 2010	Date: February 5, 2010