Cornerstone Propane Partners, L.P. Reports 46% Increase in EBITDA for Third Quarter of Fiscal 1999.

WATSONVILLE, Calif.--(BUSINESS WIRE)--May 3, 1999--

Cornerstone Propane Partners, L.P. (NYSE: CNO), ("Cornerstone" or the "Partnership"), today announced a 46% increase in EBITDA for the quarter ended March 31, 1999 versus the same quarter last year.

Net income for the quarter of $21.2 million was $6.2 million better than reported net income of $15.0 million for the same period in 1998. Net income of $.89 per equivalent unit increased by $.13 per unit (approximately 17%) as compared to $.76 for the same period last year.

Revenue for the quarter increased to $336.1 million, up 47% ($106.8 million) over the same quarter of last year, while operating expenses increased by $9.2 million (approximately 36%) to $34.6. The increase in both revenues and operating expenses is related primarily to the Partnership's active internal and external growth programs, including the acquisition of Propane Continental, Inc. in mid December 1998. This growth contributed to the increase in Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") which was up $11.3 million (approximately 46%) at $35.9 million versus $24.6 million in the third quarter of 1998.

The winter of 1998/1999 was one of the warmest winters on record in the United States. In the U.S. markets served by the Partnership, weather conditions in the third quarter of fiscal 1999 were substantially warmer than normal and warmer than last year by 13.0% and 2.5%, respectively. Unseasonable weather patterns during the quarter served to keep traditional winter storms out of many U.S. markets.

Quarterly retail sales volumes of 107.8 million gallons were up 24.3 million gallons (about 29%) over the 83.5 million gallons reported for the same period last year. This increase reflects the contributions from acquisitions and the Partnership's internal customer growth, offset to some extent by the unusually mild winter heating season. During this quarter, Cornerstone was able to increase the average EBITDA per retail gallon by about 13% to $.333 per gallon from $.295 per gallon in the same quarter of last year.

"The primary long term strategy that will continue to produce year to year increases in cash flow is a balanced emphasis on both external growth through acquisitions and internal growth through market share expansion of existing operations", said Keith G. Baxter, chief executive officer. "Our best weather hedge continues to be growth, margin management, and a fanatical focus on the customer", he added.

During the third quarter of fiscal 1999, the Partnership continued its acquisition activity with the consummation of four acquisitions, which added approximately 3.5 million retail gallons and approximately 4,000 retail customers. Since the beginning of the current fiscal year, Cornerstone has completed twelve acquisitions, which in aggregate added approximately 59.0 million retail gallons and 73,000 customers. The most recent retail additions to the Cornerstone family were located in Pennsylvania (MG Industries), California (Lake Almanor) and Michigan (Delta Gas). In addition, Cornerstone's energy services division, Coast Energy Group, acquired ERI and PetroSource, both of Calgary, Canada.

Cornerstone Propane Partners, L.P. and subsidiaries condensed consolidated statements of operations for the quarters and nine months ended March 31, 1999 and 1998 are presented below. Figures are in thousands of dollars, except per unit figures. -0-

                  Cornerstone Propane Partners, L.P.
            Condensed Consolidated Statements of Operations
      For the Three and Nine Months Ended March 31, 1999 and 1998
                              (Unaudited)

                                 Quarters Ended    Nine Months Ended
                                    March 31            March 31
                                 1999      1998      1999      1998

Revenues                       $336,102  $229,332  $732,579  $623,267
Cost and Expenses
Cost of sales                   265,589   179,362   589,273   505,302
Operating, SG&A Expenses         34,571    25,340    90,372    72,757
Depreciation and amortization     7,848     4,714    18,657    13,615

Income from Operations           28,094    19,916    34,277    31,593
Interest Expense                  6,864     4,824    17,788    14,641

Pre-tax Income                   21,230    15,092    16,489    16,952
Provisions for Income Taxes        --          43        67        95
Net Income                       21,230    15,049    16,422    16,857
General Partner's interest
 in net income                      425       301       328       337
Limited Partners' interest
 in net income                 $ 20,805  $ 14,748  $ 16,094  $ 16,520

Supplemental Information
Weighted Average Units
 Outstanding                     23,378    19,407    21,280    17,962
Net Income per Unit            $    .89  $    .76  $    .76  $    .92
EBITDA (a)                     $ 35,942  $ 24,630  $ 52,934  $ 45,208
EBITDA per Unit                $   1.54  $   1.27  $   2.49  $   2.52
Retail Gallons Sold             107,829    83,500   220,846   199,709

(a)  EBITDA is defined as earnings before interest, income taxes,
     depreciation and amortization. EBITDA should not be considered as
     an alternative to net income (as an indicator of operating
     performance) or as an alternative to cash flow (as a measure of
     liquidity or ability to service debt obligations) and is not in
     accordance with nor superior to generally accepted accounting
     principles, but provides additional information for evaluating
     the Partnership's ability to pay its Minimum Quarterly
     Distributions ("MQD").

-0-

Cornerstone Propane Partners, L.P. is a master limited partnership. The Partnership believes it is the nation's fourth largest retail propane marketer serving over 440,000 retail propane customers with annual retail propane sales of approximately 300 million retail gallons annually in 34 states. Through its energy services division, Coast Energy Group, the Partnership also markets over 400 million gallons of natural gas liquids annually to resellers and end users and averages approximately 750 mmbtu per day in natural gas sales and 75,000 barrels per day in crude oil sales in the United States and Canada. For more information, please visit our website at www.cornerstonepropane.com.

The information presented herein may contain certain "forward-looking statements" within the meaning of the federal securities laws. The Partnership's actual future performance will be affected by a number of factors, risks and uncertainties, including without limitation, weather conditions, regulatory changes, competitive factors, the Partnership's success in dealing with the Year 2000 issues and the operations of vendors, suppliers and customers, many of which are beyond the Partnership's control. Future events and results may vary substantially from what the Partnership currently foresees, and there can be no assurance that the Partnership's actual results will not differ materially from its expectations. The Partnership undertakes no obligation to publicly release any revision to these forward-looking statements to reflect events or circumstances after the date of such statements or reflect the occurrence of anticipated or unanticipated events.