UGI to Acquire 100% of the Publicly Held Units of AmeriGas Partners, L.P.

UGI Corporation (NYSE: UGI) and AmeriGas Partners, L.P. (NYSE: APU;
“AmeriGas”) announced today that they have entered into a merger
agreement under which UGI will fully consolidate its ownership of
AmeriGas, the nation’s largest retail propane marketer, by acquiring the
69.2 million publicly held common units it does not already own. Under
the terms of the agreement, AmeriGas unitholders will receive 0.50
shares of UGI common stock plus $7.63 in cash consideration for each
common unit of AmeriGas, representing a premium of 21.9% to AmeriGas’
30-day volume weighted average price and a 13.5% premium to the April 1,
2019 closing price of $31.13. AmeriGas unitholders will continue to
receive a $0.95 per unit distribution for each quarter completed prior
to the closing of the merger.

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As part of the transaction, AmeriGas will no longer be a Master Limited
Partnership (“MLP”) and will instead become a wholly owned subsidiary of
UGI. UGI currently holds an approximate 26% ownership interest in
AmeriGas. AmeriGas Propane, Inc., a wholly owned UGI subsidiary, has
served as AmeriGas’ sole general partner since 1995 (the “General
Partner”).

The General Partner’s Audit Committee, comprised entirely of independent
directors, after consultation with its independent legal and financial
advisors, unanimously approved the merger agreement and determined it to
be fair and reasonable to, and in the best interests of, AmeriGas and
the unitholders unaffiliated with UGI. Subsequently, the transaction was
approved by the Boards of both UGI and the General Partner.

“Our two companies have a long and successful history of working
together, spanning 60 years,” said John L. Walsh, President and Chief
Executive Officer of UGI. “A consolidation of AmeriGas’ ownership
maximizes value for both companies and our respective stakeholders, as
we will be better positioned to invest and grow. In particular, we
welcome AmeriGas’ current unitholders and look forward to being
exceptional stewards of their capital.”

The closing of the merger is subject to satisfaction of customary
conditions. Under the partnership agreement, the merger is required to
be approved by a majority of the outstanding AmeriGas common units.
Affiliates of UGI own approximately 26% of the outstanding common units
and have entered into a support agreement with AmeriGas whereby they
have agreed to vote their common units in favor of the transaction.

Compelling Financial and Strategic Benefits

The transaction offers compelling financial and strategic benefits for
both UGI and AmeriGas in the near and long term.

For UGI, the transaction is expected to:

• Increase UGI’s cash flow per share by over 15% for fiscal 2020 on a
  fully consolidated basis.
• Provide over $200 million in additional annual cash flow, increasing
  its capability to make diversified investments across all business
  segments to further the company’s growth strategy.
• Support the increase of UGI’s annualized dividend to its shareholders,
  by $0.16 for the July dividend and another $0.10 following the
  transaction’s close.
• Be accretive to Adjusted EPS beginning in fiscal 2020.

For AmeriGas and its current investors, the
transaction is expected to:

• Provide unitholders an immediate 13.5% premium to the value of their
  units.
• Improve AmeriGas’ cost of capital through the elimination of incentive
  distribution rights payable to the General Partner and support the
  long-term strength and stability of AmeriGas.
• Enable unitholders to share in the value of UGI, which has a
  diversified asset portfolio and a history of meeting long-term
  commitments to shareholders including 6% - 10% annual earnings growth
  and 4% annual dividend growth.
• Support the paydown of AmeriGas’ short-term debt as a means of
  reducing leverage resulting in an enhanced credit profile.
• Eliminate administrative complexities and costs inherent to the MLP
  structure and resolve distribution coverage challenges.

“After conducting a comprehensive review of strategic alternatives, both
the AmeriGas and UGI Boards determined that a merger of AmeriGas was the
most compelling next step in our development. The transaction with UGI
supports a strong and stable AmeriGas and empowers a focus on growth
opportunities,” said Hugh J. Gallagher, President and Chief Executive
Officer of AmeriGas.

Roger Perreault, Executive Vice President, Global LPG, added, “This
transaction provides an opportunity to further align AmeriGas and UGI
International’s LPG distribution operations to drive efficiencies,
support strategic initiatives, and accelerate growth. Additionally,
AmeriGas unitholders will share in the value of a company with an
outstanding track record of enhancing shareholder value.”

John L. Walsh concluded, “We are pleased to increase our ownership of
AmeriGas. This merger offers a compelling premium for AmeriGas
unitholders and creates a platform for future cash flow and earnings
growth for UGI. Our dividend increases represent our confidence in that
future outlook.”

Guidance Update¹

As the heating season concludes, UGI is updating its fiscal 2019
adjusted EPS guidance to $2.40 - $2.60 from $2.75 - $2.95, due to
significantly warmer-than-normal winter weather in its European markets,
as well as the impact of limited weather volatility during the fiscal
2019 heating season on its capacity management business. This updated
guidance excludes the impact of the proposed merger described above.

AmeriGas expects to be at the low end of its fiscal 2019 Adjusted EBITDA
guidance range of $610mm - $650mm due in large part to unfavorable
weather patterns in the Southern U.S. during January and February.

Dividend Increase

UGI plans to increase its second fiscal quarter dividend by 15% (an
increase from $0.26 to $0.30) and an additional 10% (an increase from
$0.30 to $0.325) following the closing of the transaction.

Financing

UGI, which does not currently have debt at the corporate level, plans to
finance the cash portion of the transaction by entering into a bank term
loan of approximately $500 million. The merger is not, however, subject
to any financing condition.

Closing Details

This transaction is subject to the approval of AmeriGas’ unitholders, as
well as the satisfaction of customary closing conditions. The
transaction is expected to close in the fourth quarter of fiscal 2019.

Advisors

J.P. Morgan Securities LLC is serving as UGI’s financial advisor and
Latham & Watkins LLP is serving as legal counsel.

Tudor, Pickering, Holt & Co. is serving as financial advisor to
AmeriGas’ Audit Committee. Potter Anderson & Corroon LLP is serving as
legal counsel to AmeriGas’ Audit Committee and Baker Botts L.L.P. is
serving as legal counsel to AmeriGas.

In connection with the transaction, the financial advisors provided
fairness opinions to both UGI’s Board and AmeriGas’ Audit Committee. The
fairness opinions referred to herein are, in each case, subject to
certain assumptions made, matters considered, procedures followed, and
other qualifications and limitations described in such opinions.

Investment Community Call

UGI and AmeriGas will hold a live Internet Audio Webcast of its
conference call to discuss the proposed merger of AmeriGas at 9:00 AM ET
on Tuesday, April 2, 2019. Interested parties may listen to the audio
webcast both live and in replay on the Internet at http://www.ugicorp.com/investor-relations/events-and-presentations/default.aspx
or at the company website at http://www.ugicorp.com under
Investor Relations. A telephonic replay will be available from 12:00 PM
ET on April 2, 2019 through 11:59 PM ET on April 9, 2019. The replay may
be accessed at (800) 585-8367, and internationally at (416) 621-4642,
conference ID 8689186.

About UGI Corporation

UGI Corporation is a distributor and marketer of energy products and
services. Through subsidiaries, UGI operates natural gas and electric
utilities in Pennsylvania, distributes propane both domestically and
internationally, manages midstream energy and electric generation assets
in Pennsylvania, and engages in energy marketing in ten states,
the District of Columbia and internationally in France, Belgium, the
Netherlands and the UK. UGI, through subsidiaries, is the sole general
partner and owns approximately 26% of AmeriGas, the nation's largest
retail propane distributor.

About AmeriGas Partners, L.P.

AmeriGas Partners, L.P. is the nation’s largest retail propane marketer,
serving over 1.7 million customers in all 50 states from approximately
1,900 distribution locations. UGI, through subsidiaries, is currently
the sole general partner and owns approximately 26% of AmeriGas, with
the public owning the remaining 74%. Comprehensive information about
AmeriGas is available on the Internet at http://www.amerigas.com.

USE OF NON-GAAP MEASURES

UGI

Management uses "adjusted diluted earnings per share," which is derived
from "adjusted net income attributable to UGI Corporation," both of
which are non-GAAP financial measures, when evaluating UGI's overall
performance. For the periods presented, adjusted net income attributable
to UGI Corporation is net income attributable to UGI Corporation after
excluding net after-tax gains and losses on commodity and certain
foreign currency derivative instruments not associated with
current-period transactions (principally comprising changes in
unrealized gains and losses on such derivative instruments), losses
associated with extinguishments of debt, and the impact on net deferred
tax liabilities from a change in the French tax rate and U.S. tax reform
legislation. Volatility in net income at UGI can occur as a result of
gains and losses on commodity and certain foreign currency derivative
instruments not associated with current-period transactions but included
in earnings in accordance with U.S. generally accepted accounting
principles ("GAAP").

Non-GAAP financial measures are not in accordance with, or an
alternative to, GAAP and should be considered in addition to, and not as
a substitute for, the comparable GAAP measures. Management believes that
these non-GAAP measures provide meaningful information to investors
about UGI’s performance because they eliminate the impact of (1) gains
and losses on commodity and certain foreign currency derivative
instruments not associated with current-period transactions and (2)
other significant discrete items that can affect the comparison of
period-over-period results.

AmeriGas

AmeriGas’ management uses certain non-GAAP financial measures, including
adjusted total margin, EBITDA, adjusted EBITDA and adjusted net income
(loss) attributable to AmeriGas Partners, L.P., when evaluating
AmeriGas’ overall performance. These financial measures are not in
accordance with, or an alternative to, GAAP and should be considered in
addition to, and not as a substitute for, the comparable GAAP measures.

Management believes earnings before interest, income taxes, depreciation
and amortization (“EBITDA”), as adjusted for the effects of gains and
losses on commodity derivative instruments not associated with
current-period transactions and other gains and losses that competitors
do not necessarily have ("Adjusted EBITDA"), is a meaningful non-GAAP
financial measure used by investors to (1) compare AmeriGas’ operating
performance with that of other companies within the propane industry and
(2) assess AmeriGas’ ability to meet loan covenants. AmeriGas’
definition of Adjusted EBITDA may be different from those used by other
companies.

Management uses Adjusted EBITDA to compare year-over-year profitability
of the business without regard to capital structure as well as to
compare the relative performance of AmeriGas to that of other MLPs
without regard to their financing methods, capital structure, income
taxes, the effects of gains and losses on commodity derivative
instruments not associated with current-period transactions or
historical cost basis. In view of the omission of interest, income
taxes, depreciation and amortization, gains and losses on commodity
derivative instruments not associated with current-period transactions
and other gains and losses that competitors do not necessarily have from
adjusted EBITDA, management also assesses the profitability of the
business by comparing net income attributable to AmeriGas Partners, L.P.
for the relevant periods. Management also uses Adjusted EBITDA to assess
AmeriGas’ profitability because its parent, UGI, uses AmeriGas’ Adjusted
EBITDA to assess the profitability of AmeriGas, which is one of UGI’s
industry segments. UGI discloses AmeriGas’ Adjusted EBITDA as the
profitability measure for its domestic propane segment.

Management believes the presentation of other non-GAAP financial
measures, comprised of adjusted total margin and adjusted net income
(loss) attributable to AmeriGas Partners, L.P., provide useful
information to investors to more effectively evaluate the
period-over-period results of operations of the Partnership. Management
uses these non-GAAP financial measures because they eliminate the impact
of (1) gains and losses on commodity derivative instruments that are not
associated with current-period transactions and (2) other gains and
losses that competitors do not necessarily have to provide insight into
the comparison of period-over-period profitability to that of other
master limited partnerships.

A Note on Guidance¹

UGI

Because UGI is unable to predict certain potentially material items
affecting diluted earnings per share on a GAAP basis, principally
mark-to-market gains and losses on commodity and certain foreign
currency derivative instruments and impacts from tax reform in the U.S.
and France, UGI cannot reconcile 2019 adjusted earnings per share
guidance, a non-GAAP measure, to diluted earnings per share, the most
directly comparable GAAP measure, in reliance on the “unreasonable
efforts” exception set forth in the rules of the U.S. Securities and
Exchange Commission (“SEC”).

AmeriGas

Because AmeriGas is unable to predict certain potentially material items
affecting net income on a GAAP basis, principally mark-to-market gains
and losses on commodity derivative instruments, we cannot reconcile 2018
Adjusted EBITDA, a non-GAAP measure, to net income attributable to
AmeriGas Partners, L.P., the most directly comparable GAAP measure, in
reliance on the “unreasonable efforts” exception set forth in SEC rules.
Adjustments that management can reasonably estimate are provided below.

The following table includes a quantification of interest expense,
income tax expense, depreciation and amortization included in the
calculation of forecasted Adjusted EBITDA guidance range for the fiscal
year ending September 30, 2019:

Forward-Looking Statements

All statements in this press release (and oral statements made regarding
the subjects of this communication) other than historical facts are
forward-looking statements. The safe harbor provisions under Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934 do not apply to forward-looking statements made or referred
to in this release. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
uncertainties and factors, many of which are outside the control of UGI
and AmeriGas, which could cause actual results to differ materially from
such statements. Forward-looking information includes, but is not
limited to: statements regarding the expected benefits of the proposed
transaction to UGI and its shareholders and to AmeriGas and its
unitholders; the anticipated completion of the proposed transaction and
the timing thereof; the expected future growth, dividends and
distributions of the combined company; and plans and objectives of
management for future operations. While UGI believes that the
assumptions concerning future events are reasonable, it cautions that
there are inherent difficulties in predicting certain important factors
that could impact the future performance or results of its business.
Among the factors that could cause results to differ materially from
those indicated by such forward-looking statements are: the failure to
realize the anticipated costs savings, synergies and other benefits of
the transaction; the possible diversion of management time on
transaction-related issues; the risk that the requisite approvals to
complete the transaction are not obtained; local, regional and national
economic conditions and the impact they may have on UGI, AmeriGas and
their customers; changes in tax laws that impact MLPs and the continued
analysis of recent tax legislation; conditions in the energy industry,
including cost volatility and availability of all energy products,
including propane, natural gas, electricity and fuel oil as well as
increased customer conservation measures; adverse weather conditions;
the financial condition of UGI’s and AmeriGas’ customers; any
non-performance by customers of their contractual obligations; changes
in customer, employee or supplier relationships; changes in safety,
health, environmental and other regulations; liability for uninsured
claims and for claims in excess of insurance coverage; domestic and
international political, regulatory and economic conditions in the U.S.
and in foreign countries, including the current conflicts in the Middle
East; foreign currency exchange rate fluctuations (particularly the
euro); the timing of development of Marcellus Shale gas production; the
results of any reviews, investigations or other proceedings by
government authorities; addressing any reviews, investigations or other
proceedings by government authorities or shareholder actions; the
performance of AmeriGas; and the interruption, disruption, failure,
malfunction or breach of UGI’s or AmeriGas’ information technology
systems, including due to cyber-attack.

These forward-looking statements are also affected by the risk factors,
forward-looking statements and challenges and uncertainties described in
each of UGI’s and AmeriGas’ Annual Reports on Form 10-K for the fiscal
year ended September 30, 2018, and those set forth from time to time in
each entity’s filings with the SEC, which are available at www.ugicorp.com
and www.amerigas.com,
respectively. Except as required by law, UGI and AmeriGas expressly
disclaim any intention or obligation to revise or update any
forward-looking statements whether as a result of new information,
future events or otherwise.

No Offer or Solicitation

This press release is for informational purposes only and shall not
constitute an offer to sell or the solicitation of an offer to buy any
securities pursuant to the proposed transaction or otherwise, nor shall
there be any sale of securities in any jurisdiction in which the offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such jurisdiction. No
offer of securities shall be made except by means of a prospectus
meeting the requirements of Section 10 of the Securities Act of 1933, as
amended.

Additional Information and Where You Can Find It

UGI and AmeriGas will each file with the SEC a Current Report on Form
8-K, which will contain, among other things, a copy of the merger
agreement and the support agreement. In connection with the proposed
transaction, UGI and AmeriGas, as applicable, will file a registration
statement on Form S-4, including a proxy statement/prospectus, and other
related documents, including a Schedule 13E-3, with the SEC. This press
release is not a substitute for the merger agreement, proxy
statement/prospectus, the Schedule 13E-3 or any other document that UGI
or AmeriGas may file with the SEC in connection with the transaction.
BEFORE MAKING ANY VOTING DECISION OR ELECTION, SECURITY HOLDERS OF
AMERIGAS ARE ADVISED TO CAREFULLY READ THE MERGER AGREEMENT, THE PROXY
STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO),
THE SCHEDULE 13E-3, AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN
CONNECTION WITH THE TRANSACTION, WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION, THE PARTIES TO
THE TRANSACTION AND THE RISKS ASSOCIATED WITH THE TRANSACTION. A
definitive proxy statement/prospectus will be sent to AmeriGas
unitholders in connection with the special meeting. Investors and
security holders may obtain a free copy of the proxy
statement/prospectus (when available), the Schedule 13E-3 (when
available) and other relevant documents filed by UGI or AmeriGas with
the SEC from the SEC’s website at www.sec.gov.
Security holders and other interested parties will also be able to
obtain, without charge, a copy of the proxy statement/prospectus, the
Schedule 13E-3 and other relevant documents (when available) from www.ugicorp.com
under the tab “Investor Relations” and then under the heading “SEC
Filings.”

Participants in the Solicitation

UGI, AmeriGas, the General Partner and their respective directors,
executive officers and certain other members of management may be deemed
to be participants in the solicitation of proxies from their respective
security holders with respect to the transaction. Information about
these persons is set forth in UGI’s proxy statement relating to its 2019
Annual Meeting of Shareholders, which was filed with the SEC on December
20, 2018, and AmeriGas’ Annual Report on Form 10-K for the fiscal year
ended September 30, 2018, which was filed with the SEC on November 20,
2018, and subsequent statements of changes in beneficial ownership on
file with the SEC. Security holders and investors may obtain additional
information regarding the interests of such persons, which may be
different than those of the respective companies’ security holders
generally, by reading the joint proxy statement/prospectus and other
relevant documents regarding the transaction, which will be filed with
the SEC.

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