AmeriGas Propane, Inc., general partner of AmeriGas Partners,
L.P. (NYSE: APU), reported adjusted net income of $97.3 million for
the first quarter of fiscal 2015, compared with $134.9 million for
the fiscal quarter ended December 31, 2013. Adjusted net income
attributable to AmeriGas Partners eliminates the impact of
mark-to-market changes in commodity derivative instruments not
associated with current period transactions. On a GAAP basis,
including the impact of such mark-to-market changes, AmeriGas
Partners reported a net loss of $39.6 million for the fiscal
quarter ended December 31, 2014. Most of the mark-to-market
adjustment relates to our normal business practice of hedging
fixed-price commitments to our customers.
The Partnership’s adjusted earnings before interest expense,
income taxes, depreciation and amortization (Adjusted EBITDA) was
$188.5 million for the first quarter compared with $230.2 million
in the prior year. Retail volumes sold for the first quarter
decreased 9.1% to 340 million gallons from 374 million gallons in
the prior year. The decrease in retail gallons sold reflects
temperatures that were 9.6% warmer than the prior year and 6.2%
warmer than normal according to the National Oceanic and
Atmospheric Administration (“NOAA”). In a normal fiscal year, about
50% of first quarter degree days occur during the month of December
and December 2014 was 18% warmer than last year and 13.4% warmer
than normal according to NOAA.
Jerry E. Sheridan, president and chief executive officer of
AmeriGas, said, “We were able to effectively manage the challenge
of the unseasonably warm weather that we experienced this quarter
and deliver EBITDA of $189 million. Additionally, our Propane
Exchange and National Accounts programs continued to grow. We were
pleased to see a significant drop in propane commodity prices,
which declined 55% during the quarter, and expect to see a lower
cost of gas for the remainder of the year as we utilize our
existing higher cost inventory. Declining propane prices are a
positive development for our customers, and the industry as a
whole, as we enjoy moderating gas costs following last year’s
unprecedented run up in propane prices. The business remains
strong, with a healthy balance sheet and distribution coverage
ratio. We remain focused on delivering excellent customer service
while optimizing business results regardless of the short-term
vagaries of weather.”
Sheridan continued, “Following the weather impact we saw in the
first quarter, we expect to report Adjusted EBITDA in the range of
$635 million to $665 million for the fiscal year ending September
30, 2015. The midpoint of this guidance is approximately two
percent below the record EBITDA we delivered in fiscal 2014, which
benefitted from much colder weather than normal.”
About AmeriGas
AmeriGas is the nation’s largest retail propane marketer,
serving approximately two million customers in all 50 states from
over 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 first quarter fiscal 2015
earnings and other current activities at 9:00 AM EST on Thursday,
February 5, 2015. 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 EST
on February 5 through 11:59 PM on February 11. The replay may be
accessed at (855) 859-2056, and internationally at 1-404-537-3406,
conference ID 63035555.
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 Twelve Months Ended December 31, December 31, 2014
2013 2014 2013 Revenues: Propane $ 812,735 $ 970,302 $ 3,283,301 $
3,058,009 Other 76,057 75,524
272,600 277,713 888,792
1,045,826 3,555,901 3,335,722
Costs and expenses: Cost of sales - propane 578,541 562,448
2,050,685 1,704,459 Cost of sales - other 22,040 20,259 83,763
86,217 Operating and administrative expenses 246,651 237,548
973,066 937,959 Depreciation 38,682 41,503 151,199 162,486
Amortization 10,686 10,819 43,062 43,356 Other operating income,
net (10,148 ) (6,444 ) (31,154 )
(30,776 ) 886,452 866,133
3,270,621 2,903,701 Operating income 2,340
179,693 285,280 432,021 Interest expense (41,034 )
(41,590 ) (165,025 ) (165,826 ) (Loss) income before
income taxes (38,694 ) 138,103 120,255 266,195 Income tax expense
(870 ) (1,431 ) (2,050 ) (2,475 ) Net
(loss) income (39,564 ) 136,672 118,205 263,720 Deduct net
income attributable to noncontrolling interest (7 )
(1,774 ) (2,781 ) (4,265 ) Net (loss) income
attributable to AmeriGas Partners, L.P. $ (39,571 ) $ 134,898
$ 115,424 $ 259,455
General partner's interest in net (loss)
income attributable to AmeriGas Partners, L.P.
$ 6,137 $ 6,740 $ 26,146 $ 23,020
Limited partners' interest in net (loss)
income attributable to AmeriGas Partners, L.P.
$ (45,708 ) $ 128,158 $ 89,278 $ 236,435
(Loss) income per limited partner unit (a)
Basic $ (0.49 ) $ 1.14 $ 0.95 $ 2.53
Diluted $ (0.49 ) $ 1.14 $ 0.95 $ 2.53
Average limited partner units outstanding: Basic 92,893
92,847 92,887 92,837
Diluted 92,893 92,943
92,953 92,919 SUPPLEMENTAL
INFORMATION: Retail gallons sold (millions) 340.2 374.1
1,241.7 1,268.6 Wholesale gallons sold (millions) 14.2 37.5 70.1
113.0 Total margin (b) $ 288,211 $ 463,119 $ 1,421,453 $ 1,545,046
Adjusted total margin (c) $ 426,441 $ 463,119 $ 1,569,178 $
1,545,046 EBITDA (c) $ 51,701 $ 230,241 $ 476,760 $ 633,598
Adjusted EBITDA (c) $ 188,535 $ 230,241 $ 622,993 $ 654,649
Adjusted net income attributable to AmeriGas Partners, L.P. (c) $
97,263 $ 134,898 $ 261,657 $ 259,455 Expenditures for property,
plant and equipment: Maintenance capital expenditures $ 17,013 $
13,738 $ 73,562 $ 55,171 Transition capital related to Heritage
integration $ - $ - $ - $ 15,834 Growth capital expenditures $
13,417 $ 9,531 $ 47,533 $ 36,833 (a) (Loss) 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, 2014. (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 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 Twelve Months Ended December 31, December 31, 2014
2013 2014 2013 Adjusted total margin: Total revenues
$ 888,792 $ 1,045,826 $ 3,555,901 $ 3,335,722 Cost of sales -
propane (578,541 ) (562,448 ) (2,050,685 ) (1,704,459 ) Cost of
sales - other (22,040 ) (20,259 ) (83,763 )
(86,217 ) Total margin 288,211 463,119 1,421,453 1,545,046
Add net losses on commodity derivative instruments not associated
with current-period transactions 138,230 -
147,725 - Adjusted total margin
$ 426,441 $ 463,119 $ 1,569,178 $ 1,545,046
Adjusted net income attributable to AmeriGas
Partners, L.P.: Net (loss) income attributable to AmeriGas
Partners, L.P. $ (39,571 ) $ 134,898 $ 115,424 $ 259,455 Add net
losses on commodity derivative instruments not associated with
current-period transactions 138,230 - 147,725 - Noncontrolling
interest in net loss on commodity derivative instruments not
associated with current-period transactions (1,396 )
- (1,492 ) - Adjusted net income
attributable to AmeriGas Partners, L.P. $ 97,263 $ 134,898
$ 261,657 $ 259,455
Three Months Ended Twelve Months Ended December 31, December 31,
2014 2013 2014 2013 EBITDA and Adjusted EBITDA: Net (loss) income
attributable to AmeriGas Partners, L.P. $ (39,571 ) $ 134,898 $
115,424 $ 259,455 Income tax expense 870 1,431 2,050 2,475 Interest
expense 41,034 41,590 165,025 165,826 Depreciation 38,682 41,503
151,199 162,486 Amortization 10,686 10,819
43,062 43,356 EBITDA 51,701
230,241 476,760 633,598 Heritage Propane acquisition and transition
expense - - - 21,051 Add net losses on commodity derivative
instruments not associated with current-period transactions 138,230
- 147,725 - Noncontrolling interest in losses on commodity
derivative instruments not associated with current-period
transactions (1,396 ) - (1,492 )
- Adjusted EBITDA $ 188,535 $ 230,241 $
622,993 $ 654,649 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, 2015:
Forecast Fiscal Year Ending September 30, 2015
Adjusted net income attributable to AmeriGas Partners, L.P.
(estimate) (d) $ 286,000 Interest expense (estimate) 163,000 Income
tax expense (estimate) 4,000 Depreciation (estimate) 154,000
Amortization (estimate) 43,000 Adjusted EBITDA (e) $ 650,000
(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 2015.
AmeriGas Partners, L.P.William Ruthrauff, 610-337-7000 ext.
6571Shelly Oates, 610-337-7000 ext. 3202
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