AmeriGas Propane, Inc., general partner of AmeriGas Partners,
L.P. (NYSE: APU), reported adjusted net income of $252.1 million
for the quarter ended March 31, 2015, compared with $240.1 million
for the quarter ended March 31, 2014. 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 net income of $326.1 million for the fiscal
quarter ended March 31, 2015. Most of the mark-to-market
adjustments relate 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
$342.1 million for the second quarter of fiscal 2015 compared with
$331.2 million in the prior year. Retail volumes sold for the
second quarter decreased 5.7% to 448.0 million gallons from 474.9
million gallons in the prior year. The decrease in retail gallons
sold reflects temperatures that were 7.2% warmer than the prior
year and close to normal according to the National Oceanic and
Atmospheric Administration (“NOAA”).
Jerry E. Sheridan, president and chief executive officer of
AmeriGas, said, “We were pleased to deliver record adjusted net
income and adjusted EBITDA for the second quarter despite weather
that was seven percent warmer than the prior year. A continued
focus on operational execution and expense management contributed
to our strong performance this quarter. We also benefited from the
continued moderation in gas costs as we sold off the higher-cost
inventory that was on hand at the beginning of the heating season.
Lower commodity prices are good for our customers and for the
industry as a whole, and the beneficial impact of lower product
costs were clearly evident in our retail selling prices for the
quarter, which on average were about 20% lower than last year.”
Sheridan continued, “Given our solid performance this quarter
and our expectations for relatively normal weather and business
conditions for the remainder of the year, we continue to expect to
deliver adjusted EBITDA of $635 million to $665 million for the
fiscal year ending September 30, 2015. Finally, we were pleased to
recently announce a 4.5% increase in our distribution to $3.68
annually, marking our 11th consecutive year of distribution growth.
We are particularly pleased to have delivered consistent
distribution growth to our unitholders over an extended period of
time that has included varying economic, market, and weather
conditions.”
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 second quarter fiscal 2015
earnings and other current activities at 9:00 AM EDT on Tuesday,
May 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 EDT
on May 5 through 11:59 PM EDT on May 12. The replay may be accessed
at (855) 859-2056, and internationally at 1-404-537-3406,
conference ID 62294652.
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 2015 2014 2015 2014 2015 2014 Revenues:
Propane $ 1,028,080 $ 1,421,423 $ 1,840,815 $ 2,391,725 $ 2,889,958
$ 3,381,050 Other 72,237 72,200
148,294 147,724 272,637
272,088 1,100,317 1,493,623
1,989,109 2,539,449 3,162,595
3,653,138 Costs and expenses: Cost of
sales - propane 411,745 867,213 990,286 1,429,661 1,595,217
1,977,544 Cost of sales - other 18,822 18,255 40,862 38,514 84,330
86,190 Operating and administrative expenses 257,346 281,318
503,997 518,866 949,094 953,979 Depreciation 37,402 38,353 76,084
79,856 150,248 163,232 Amortization 10,713 10,804 21,399 21,623
42,971 43,138 Other operating income, net (7,392 )
(7,242 ) (17,540 ) (13,686 ) (31,304 )
(30,383 ) 728,636 1,208,701
1,615,088 2,074,834 2,790,556
3,193,700 Operating income 371,681 284,922 374,021
464,615 372,039 459,438 Interest expense (41,096 )
(42,046 ) (82,130 ) (83,636 ) (164,075 )
(166,096 ) Income before income taxes 330,585 242,876
291,891 380,979 207,964 293,342 Income tax (expense) benefit
(806 ) 74 (1,676 ) (1,357 )
(2,930 ) (2,453 ) Net income 329,779 242,950 290,215 379,622
205,034 290,889 Deduct net income attributable to
noncontrolling interest (3,724 ) (2,847 )
(3,731 ) (4,621 ) (3,658 ) (4,539 ) Net income
attributable to AmeriGas Partners, L.P. $ 326,055 $ 240,103
$ 286,484 $ 375,001 $ 201,376 $ 286,350
General partner's interest in net income
attributable to AmeriGas Partners, L.P.
$ 9,795 $ 7,794 $ 15,932 $ 14,534 $
28,146 $ 24,429
Limited partners' interest in net income
attributable to AmeriGas Partners, L.P.
$ 316,260 $ 232,309 $ 270,552 $ 360,467
$ 173,230 $ 261,921 Income per limited
partner unit (a) Basic $ 2.18 $ 1.71 $ 2.36
$ 2.85 $ 1.85 $ 2.81 Diluted $
2.17 $ 1.71 $ 2.36 $ 2.84 $ 1.85
$ 2.81 Average limited partner units outstanding:
Basic 92,914 92,883
92,905 92,867 92,898
92,854 Diluted 92,963 92,934
92,970 92,940 92,964
92,932 SUPPLEMENTAL INFORMATION:
Retail gallons sold (millions) 448.0 474.9 788.2 849.0 1,214.8
1,279.1 Wholesale gallons sold (millions) 16.6 35.3 30.8 72.8 51.4
109.3 Total margin (b) $ 669,750 $ 608,155 $ 957,961 $ 1,071,274 $
1,483,048 $ 1,589,404 Adjusted total margin (c) $ 595,011 $ 608,155
$ 1,021,452 $ 1,071,274 $ 1,556,034 $ 1,589,404 EBITDA (c) $
416,072 $ 331,232 $ 467,773 $ 561,473 $ 561,600 $ 661,269 Adjusted
EBITDA (c) $ 342,088 $ 331,232 $ 530,623 $ 561,473 $ 633,849 $
676,924 Adjusted net income attributable to AmeriGas Partners, L.P.
(c) $ 252,071 $ 240,103 $ 349,334 $ 375,001 $ 273,625 $ 286,350
Expenditures for property, plant and equipment: Maintenance capital
expenditures $ 14,761 $ 16,653 $ 31,774 $ 30,391 $ 71,761 $ 60,531
Transition capital related to Heritage integration $ - $ - $ - $ -
$ - $ 9,394 Growth capital expenditures $ 12,026 $ 11,087 $ 25,443
$ 20,618 $ 48,471 $ 37,705 (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, 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 Six Months Ended
Twelve Months Ended March 31 March 31 March 31 2015 2014
2015 2014 2015 2014 Adjusted total margin: Total
revenues $ 1,100,317 $ 1,493,623 $ 1,989,109 $ 2,539,449 $
3,162,595 $ 3,653,138 Cost of sales - propane (411,745 ) (867,213 )
(990,286 ) (1,429,661 ) (1,595,217 ) (1,977,544 ) Cost of sales -
other (18,822 ) (18,255 ) (40,862 )
(38,514 ) (84,330 ) (86,190 ) Total margin 669,750
608,155 957,961 1,071,274 1,483,048 1,589,404 Add net losses
(subtract net gains) on commodity derivative instruments not
associated with current-period transactions (74,739 )
- 63,491 - 72,986
- Adjusted total margin $ 595,011 $ 608,155
$ 1,021,452 $ 1,071,274 $ 1,556,034 $
1,589,404 Adjusted net income attributable to
AmeriGas Partners, L.P.: Net income attributable to AmeriGas
Partners, L.P. $ 326,055 $ 240,103 $ 286,484 $ 375,001 $ 201,376 $
286,350 Add net losses (subtract net gains) on commodity derivative
instruments not associated with current-period transactions (74,739
) - 63,491 - 72,986 - Noncontrolling interest in net loss on
commodity derivative instruments not associated with current-period
transactions 755 - (641 )
- (737 ) - Adjusted net income
attributable to AmeriGas Partners, L.P. $ 252,071 $ 240,103
$ 349,334 $ 375,001 $ 273,625 $ 286,350
Three Months Ended Six Months Ended Twelve Months Ended March 31
March 31 March 31 2015 2014 2015 2014 2015 2014 EBITDA and Adjusted
EBITDA: Net income attributable to AmeriGas Partners, L.P. $
326,055 $ 240,103 $ 286,484 $ 375,001 $ 201,376 $ 286,350 Income
tax expense (benefit) 806 (74 ) 1,676 1,357 2,930 2,453 Interest
expense 41,096 42,046 82,130 83,636 164,075 166,096 Depreciation
37,402 38,353 76,084 79,856 150,248 163,232 Amortization
10,713 10,804 21,399
21,623 42,971 43,138 EBITDA
416,072 331,232 467,773 561,473 561,600 661,269 Heritage Propane
acquisition and transition expenses - - - - - 15,655 Add net losses
(subtract net gains) on commodity derivative instruments not
associated with current-period transactions (74,739 ) - 63,491 -
72,986 - Noncontrolling interest in net (losses) gains on commodity
derivative instruments not associated with current-period
transactions 755 - (641 )
- (737 ) - Adjusted EBITDA $ 342,088
$ 331,232 $ 530,623 $ 561,473 $ 633,849
$ 676,924 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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