AmeriGas Propane, Inc., general partner of AmeriGas Partners,
L.P. (NYSE: APU), reported adjusted net income attributable to
AmeriGas Partners for the quarter ended March 31, 2016 of $206.9
million, compared to adjusted net income of $252.1 million for the
quarter ended March 31, 2015. Adjusted net income attributable to
AmeriGas Partners excludes the impact of gains and losses on
commodity derivative instruments. On a GAAP basis, net income
attributable to AmeriGas Partners was $245.9 million for the
quarter ended March 31, 2016, compared to $326.1 million in the
prior year.
The Partnership’s adjusted earnings before interest expense,
income taxes, depreciation and amortization (Adjusted EBITDA) was
$295.4 million for the second fiscal quarter compared with $342.1
million in the prior year. Retail volumes sold for the quarter
decreased 13.9% to 385.8 million gallons from 448.0 million gallons
in the prior year. The decrease in retail gallons sold reflects
temperatures that were 11.7% warmer than normal according to the
National Oceanic and Atmospheric Administration (NOAA).
Jerry E. Sheridan, president and chief executive officer of
AmeriGas, said, “This was a challenging quarter in which the
company performed well despite weather that was the second warmest
on record and 13% warmer than the prior year period. Retail volumes
declined in line with the weather, but our focus on expense and
margin management enabled the company to offset nearly $30 million
of earnings shortfall, and deliver adjusted EBITDA of $295
million.”
Sheridan continued, “We continue to make substantial progress on
our core growth initiatives. We added accounts to our Cylinder
Exchange program that bring our total retail outlets to nearly
51,000. Our National Accounts program has added 31 new accounts and
negotiated 23 contract renewals so far this year, and our
acquisition program has completed three acquisitions.
“Based on our results thus far and our expectations for the
remainder of the year, we now expect adjusted EBITDA of $575
million to $600 million for the fiscal year ending September 30,
2016. Finally, we were pleased to recently announce an increase in
our distribution to $3.76 annually, marking our 12th consecutive
year of distribution growth.”
About AmeriGas
AmeriGas is the nation’s largest retail propane marketer,
serving approximately two million customers in all 50 states from
approximately 2,000 distribution locations. UGI Corporation,
through subsidiaries, is the sole General Partner and owns 26% of
the Partnership and the public owns the remaining 74%.
AmeriGas Partners, L.P. will hold a live Internet Audio Webcast
of its conference call to discuss fiscal 2016 second quarter
earnings and other current activities at 9:00 AM ET on Tuesday, May
3, 2016. Interested parties may listen to the audio webcast both
live and in replay on the Internet at
http://investors.amerigas.com/investor-relations/events-presentations
or at the company website http://www.amerigas.com under Investor
Relations. A telephonic replay will be available from 12:00 PM
ET on May 3 through 11:59 PM on May 9. The replay may be
accessed at (855) 859-2056, and internationally at 1-404-537-3406,
conference ID 13859024.
Comprehensive information about AmeriGas is available on the
Internet at http://www.amerigas.com
This press release contains certain forward-looking statements
that management believes to be reasonable as of today’s date only.
Actual results may differ significantly because of risks and
uncertainties that are difficult to predict and many of which are
beyond management’s control. You should read the Partnership’s
Annual Report on Form 10-K for a more extensive list of factors
that could affect results. Among them are adverse weather
conditions, cost volatility and availability of propane, increased
customer conservation measures, the capacity to transport propane
to our market areas, the impact of pending and future legal
proceedings, political, economic and regulatory conditions in the
U.S. and abroad, and our ability to successfully integrate
acquisitions and achieve anticipated synergies. The Partnership
undertakes no obligation to release revisions to its
forward-looking statements to reflect events or circumstances
occurring after today.
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES REPORT OF EARNINGS
(Thousands, except per unit and where otherwise indicated)
(Unaudited)
Three Months Ended Six Months Ended Twelve Months Ended March 31,
March 31, March 31, 2016 2015 2016 2015 2016 2015 Revenues: Propane
$ 759,278 $ 1,028,080 $ 1,333,182 $ 1,840,815 $ 2,104,768 $
2,889,958 Other 68,209 72,237
138,403 148,294 263,030
272,637 827,487 1,100,317
1,471,585 1,989,109 2,367,798
3,162,595 Costs and expenses: Cost of sales -
propane 241,621 411,745 469,543 990,286 780,424 1,595,217 Cost of
sales - other 17,161 18,822 38,028 40,862 83,804 84,330 Operating
and administrative expenses 238,535 257,346 469,424 503,997 918,710
949,094 Depreciation 36,533 37,402 75,139 76,084 151,259 150,248
Amortization 10,886 10,713 21,486 21,399 42,763 42,971 Other
operating income, net (7,131 ) (7,392 )
(16,038 ) (17,540 ) (29,853 ) (31,304 )
537,605 728,636 1,057,582
1,615,088 1,947,107 2,790,556
Operating income 289,882 371,681 414,003 374,021 420,691 372,039
Interest expense (40,806 ) (41,096 ) (81,831 )
(82,130 ) (162,543 ) (164,075 ) Income before
income taxes 249,076 330,585 332,172 291,891 258,148 207,964 Income
tax expense (290 ) (806 ) (1,200 )
(1,676 ) (2,422 ) (2,930 ) Net income including
noncontrolling interest 248,786 329,779 330,972 290,215 255,726
205,034
Deduct net income attributable to
noncontrolling interest
(2,878 ) (3,724 ) (4,091 ) (3,731 )
(4,118 ) (3,658 ) Net income attributable to AmeriGas
Partners, L.P. $ 245,908 $ 326,055 $ 326,881 $
286,484 $ 251,608 $ 201,376
General partner's interest in net income
attributable to AmeriGas Partners, L.P.
$ 11,107 $ 9,795 $ 20,562 $ 15,932 $
37,098 $ 28,146
Limited partners' interest in net income
attributable to AmeriGas Partners, L.P.
$ 234,801 $ 316,260 $ 306,319 $ 270,552
$ 214,510 $ 173,230 Income per limited
partner unit (a) Basic $ 1.74 $ 2.18 $ 2.58
$ 2.36 $ 2.29 $ 1.85 Diluted $
1.74 $ 2.17 $ 2.58 $ 2.36 $ 2.29
$ 1.85 Average limited partner units outstanding:
Basic 92,954 92,914
92,939 92,905 92,931
92,898 Diluted 93,020 92,963
93,014 92,970 93,003
92,964 SUPPLEMENTAL INFORMATION:
Retail gallons sold (millions) 385.8 448.0 680.9 788.2 1,077.0
1,214.8 Wholesale gallons sold (millions) 16.4 16.6 31.3 30.8 54.9
51.4 Total margin (b) $ 568,705 $ 669,750 $ 964,014 $ 957,961 $
1,503,570 $ 1,483,048 Adjusted total margin (c) $ 529,251 $ 595,011
$ 930,193 $ 1,021,452 $ 1,454,099 $ 1,556,034 EBITDA (c) $ 334,423
$ 416,072 $ 506,537 $ 467,773 $ 610,595 $ 561,600 Adjusted EBITDA
(c) $ 295,368 $ 342,088 $ 473,058 $ 530,623 $ 561,624 $ 633,849
Adjusted net income attributable to AmeriGas Partners, L.P. (c) $
206,853 $ 252,071 $ 293,402 $ 349,334 $ 202,637 $ 273,625
Expenditures for property, plant and equipment: Maintenance capital
expenditures $ 13,375 $ 14,761 $ 26,290 $ 31,774 $ 52,332 $ 71,671
Growth capital expenditures $ 14,438 $ 12,026 $ 29,497 $ 25,443 $
48,247 $ 48,471 (a) Income per limited partner unit
is computed in accordance with accounting guidance regarding the
application of the two-class method for determining earnings per
share as it relates to master limited partnerships. Refer to Note 2
to the consolidated financial statements included in the AmeriGas
Partners, L.P. Annual Report on Form 10-K for the fiscal year ended
September 30, 2015. (b) Total margin represents total
revenues less cost of sales — propane and cost of sales — other.
(c)
The Partnership’s management uses certain
non-GAAP financial measures, including adjusted total margin,
EBITDA, adjusted EBITDA and adjusted net income attributable to
AmeriGas Partners, L.P., when evaluating the Partnership’s 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 the
Partnership’s operating performance with that of other companies
within the propane industry and (2) assess the Partnership’s
ability to meet loan covenants. The Partnership’s definition of
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
the Partnership to that of other master limited partnerships
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 years. Management also uses Adjusted EBITDA to assess
the Partnership’s profitability because its parent, UGI
Corporation, uses the Partnership’s EBITDA, as adjusted to exclude
gains and losses on commodity derivative instruments not associated
with current-period transactions, to assess the profitability of
the Partnership which is one of UGI Corporation’s industry
segments. UGI Corporation discloses the Partnership’s EBITDA, as so
adjusted, in its disclosure about industry segments 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.
The following tables include
reconciliations of adjusted total margin, EBITDA, adjusted EBITDA
and adjusted net income attributable to AmeriGas Partners, L.P. to
the most directly comparable financial measure calculated and
presented in accordance with GAAP for all the periods
presented:
Three Months Ended Six Months Ended Twelve Months Ended
March 31, March 31, March 31, 2016 2015 2016 2015 2016 2015
Adjusted total margin: Total revenues $ 827,487 $ 1,100,317 $
1,471,585 $ 1,989,109 $ 2,367,798 $ 3,162,595 Cost of sales -
propane (241,621 ) (411,745 ) (469,543 ) (990,286 ) (780,424 )
(1,595,217 ) Cost of sales - other (17,161 ) (18,822
) (38,028 ) (40,862 ) (83,804 ) (84,330
) Total margin 568,705 669,750 964,014 957,961 1,503,570 1,483,048
(Subtract net gains) add net losses on commodity derivative
instruments not associated with current-period transactions
(39,454 ) (74,739 ) (33,821 ) 63,491
(49,471 ) 72,986 Adjusted total margin $
529,251 $ 595,011 $ 930,193 $ 1,021,452
$ 1,454,099 $ 1,556,034 Adjusted net income
attributable to AmeriGas Partners, L.P.: Net income attributable to
AmeriGas Partners, L.P. $ 245,908 $ 326,055 $ 326,881 $ 286,484 $
251,608 $ 201,376 (Subtract net gains) add net losses on commodity
derivative instruments not associated with current-period
transactions (39,454 ) (74,739 ) (33,821 ) 63,491 (49,471 ) 72,986
Noncontrolling interest in net gains (losses) on commodity
derivative instruments not associated with current-period
transactions 399 755 342
(641 ) 500 (737 ) Adjusted net income
attributable to AmeriGas Partners, L.P. $ 206,853 $ 252,071
$ 293,402 $ 349,334 $ 202,637 $ 273,625
Three Months Ended Six Months
Ended Twelve Months Ended March 31, March 31, March 31, 2016 2015
2016 2015 2016 2015 EBITDA and Adjusted EBITDA: Net income
attributable to AmeriGas Partners, L.P. $ 245,908 $ 326,055 $
326,881 $ 286,484 $ 251,608 $ 201,376 Income tax expense 290 806
1,200 1,676 2,422 2,930 Interest expense 40,806 41,096 81,831
82,130 162,543 164,075 Depreciation 36,533 37,402 75,139 76,084
151,259 150,248 Amortization 10,886 10,713
21,486 21,399 42,763
42,971 EBITDA 334,423 416,072 506,537 467,773
610,595 561,600 (Subtract net gains) add net losses on commodity
derivative instruments not associated with current-period
transactions (39,454 ) (74,739 ) (33,821 ) 63,491 (49,471 ) 72,986
Noncontrolling interest in net gains (losses) on commodity
derivative instruments not associated with current-period
transactions 399 755 342
(641 ) 500 (737 ) Adjusted EBITDA $
295,368 $ 342,088 $ 473,058 $ 530,623 $
561,624 $ 633,849 The
following table includes a reconciliation of forecasted net income
attributable to AmeriGas Partners, L.P. to forecasted Adjusted
EBITDA for the fiscal year ending September 30, 2016:
Forecast Fiscal Year Ending September 30, 2016 Net
income attributable to AmeriGas Partners, L.P. (estimate) (d) $
230,500 Interest expense (estimate) 163,000 Income tax expense
(estimate) 2,000 Depreciation (estimate) 150,000 Amortization
(estimate) 42,000 Adjusted EBITDA (e) $ 587,500
(d) Represents estimated net income
attributable to AmeriGas Partners, L.P. after adjusting for gains
and losses on commodity derivative instruments not associated with
current-period transactions. It is impracticable to determine
actual gains and losses on commodity derivative instruments not
associated with current-period transactions that will be reported
in GAAP net income as such gains and losses will depend upon future
changes in commodity prices for propane which cannot be forecasted.
(e) Represents the midpoint of Adjusted EBITDA guidance
range for fiscal 2016.
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version on businesswire.com: http://www.businesswire.com/news/home/20160502006369/en/
AmeriGas Partners, L.P.Will Ruthrauff, 610-337-7000 ext.
6571Shelly Oates, 610-337-7000 ext. 3202
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