Inergy, L.P. Announces Intent to Increase Annualized Distribution; Provides Updated Financial Guidance

Inergy, L.P. Announces Intent to Increase Annualized Distribution; Provides Updated Financial Guidance

KANSAS CITY, Mo. — Inergy, L.P. (Nasdaq:NRGY) announced today an intention to recommend to its Board of Directors an increase in the quarterly per unit cash distribution from $0.425 to $0.475 ($1.90 annualized) for the quarter ending December 31, 2004. This recommendation is based on and subject to the expected completion of the pending acquisition of the propane operating partnership of Star Gas Partners, L.P. (NYSE:SGU) (NYSE:SGH) as well as the recently completed acquisition of Moulton Gas Services, Inc. It is also subject to final approval by Inergy’s Board of Directors.

Inergy also provided updated guidance for the 12-month period beginning December 1, 2004, giving effect to the acquisition of Star Gas Propane and Moulton Gas Services. Inergy expects to generate EBITDA of $114 million to $122 million during this period. In addition, Inergy expects to deliver approximately 350 million to 365 million retail gallons of propane and generate $332 million to $338 million of total gross profit. We have presented below a table reconciling anticipated EBITDA to net income:

Forecast Range ($ in millions)

12 Months Ended December 31, 2005

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Net Income (a) $ 30 $ 38

Interest Expense (a) (b) 34 34

Depreciation and Amortization (a) 49 49

Income Taxes (a) 1 1

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EBITDA (a) $114 $122

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Maintenance Capital Expenditures $ 7 $ 7

(a) Estimates exclude one-time or non-recurring charges.

(b) Estimate includes approximately $2 million of non-cash

interest expense.

Inergy, L.P., with headquarters in Kansas City, Mo., is among the fastest-growing master limited partnerships in the country. The company’s operations include the retail marketing, sale and distribution of propane to residential, commercial, industrial and agricultural customers. Today, Inergy serves approximately 275,000 retail customers from approximately 150 customer service centers throughout the eastern half of the United States. The company also operates a growing supply logistics, transportation and wholesale marketing business that serves independent dealers and multi-state marketers in the United States and Canada.

This news release contains forward-looking statements, which are statements that are not historical in nature such as the expectation that (1) there will be a distribution increase for the quarter ending December 31, 2004, (2) the Star Gas Propane transaction will close, and (3) we will achieve certain levels of projected volumes, gross profit, EBITDA and maintenance capital expenditures for the 12-month period beginning December 1, 2004, giving effect to the Star Gas Propane and Moulton acquisitions. Forward-looking statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or any underlying assumption proves incorrect, actual results may vary materially from those anticipated, estimated or projected. Among the key factors that could cause actual results to differ materially from those referred to in the forward-looking statements are: the inability to obtain regulatory approval for the Star Gas Propane acquisition, weather conditions that vary significantly from historically normal conditions, the general level of petroleum product demand and the availability of propane supplies, the price of propane to the consumer compared to the price of alternative and competing fuels, our ability to generate available cash for distribution to unitholders, the costs and effects of legal and administrative proceedings against us or which may be brought against us, and our ability to sustain our historical levels of internal growth. These and other risks and assumptions are described in Inergy’s annual report on Form 10-K and other reports that are available from the United States Securities and Exchange Commission.

Corporate news, unit prices and additional information about Inergy, including reports from the United States Securities and Exchange Commission, are available on the company’s Web site, www.InergyPropane.com. For more information, contact Mike Campbell in Inergy’s Investor Relations Department at 816-842-8181 or via e-mail at investorrelations@inergyservices.com.

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