AmeriGas Propane, Inc., general partner of AmeriGas Partners,
L.P. (NYSE: APU), reported an adjusted seasonal net loss of $40.2
million for the quarter ended June 30, 2015, compared with an
adjusted seasonal net loss of $35.0 million for the quarter ended
June 30, 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. Most of the mark-to-market adjustments relate to our
normal business practice of hedging fixed-price commitments to our
customers. On a GAAP basis, including the impact of such
mark-to-market changes, AmeriGas Partners reported a seasonal net
loss of $25.6 million for the fiscal quarter ended June 30,
2015.
The Partnership’s adjusted earnings before interest expense,
income taxes, depreciation and amortization (Adjusted EBITDA) was
$48.9 million for the third quarter of fiscal 2015 compared with
$55.0 million in the prior year. Retail volumes sold for the third
quarter decreased 6.2% to 202.2 million gallons from 215.6 million
gallons in the prior year. The decrease in retail gallons sold
reflects temperatures that were 10.2% warmer than the prior year
and 18.5% warmer than normal according to the National Oceanic and
Atmospheric Administration (NOAA).
Jerry E. Sheridan, president and chief executive officer of
AmeriGas, said, “Warmer spring weather led to an early end to the
heating season for the first time in three years. In addition, the
wet weather experienced later in the quarter had a negative impact
on our barbeque cylinder exchange business. We were pleased to
deliver nearly $50 million in Adjusted EBITDA during the quarter in
spite of these weather challenges, as we remained focused on
operational execution and cost management. We also continued to
benefit, along with our customers, from lower commodity costs that
continued to decline this quarter and were approximately 55% lower
than the same period last year.”
Sheridan continued, “Given the challenge of the weather this
quarter and our assessment of operating conditions for the
remainder of the year, we now expect Adjusted EBITDA of $635
million to $645 million for the fiscal year ending September 30,
2015.”
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 third quarter fiscal 2015
earnings and other current activities at 9:00 AM EDT on Tuesday,
August 4, 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 August 4 through 11:59 PM EDT on August 10. The replay may be
accessed at (855) 859-2056, and internationally at 1-404-537-3406,
conference ID 62313636.
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 Nine Months Ended Twelve Months Ended June 30, June
30, June 30, 2015 2014 2015
2014 2015 2014 Revenues:
Propane $ 414,146 $ 549,976 $ 2,254,961 $ 2,941,701 $ 2,754,128 $
3,412,665 Other 63,831 63,261 212,125
210,985 273,207 271,991
477,977 613,237 2,467,086
3,152,686 3,027,335 3,684,656
Costs and expenses: Cost of sales - propane 172,803
320,839 1,163,089 1,750,500 1,447,181 2,015,346 Cost of sales -
other 23,745 22,822 64,607 61,336 85,253 86,355 Operating and
administrative expenses 223,306 225,141 727,303 744,007 947,259
954,668 Depreciation 37,370 37,069 113,454 116,925 150,549 158,563
Amortization 10,666 10,788 32,065 32,411 42,849 43,151 Other
operating income, net (5,548 ) (7,848 )
(23,088 ) (21,534 ) (29,004 ) (30,652 )
462,342 608,811 2,077,430
2,683,645 2,644,087 3,227,431
Operating income 15,635 4,426 389,656 469,041 383,248 457,225
Interest expense (40,274 ) (41,328 ) (122,404
) (124,964 ) (163,021 ) (166,177 ) (Loss)
income before income taxes (24,639 ) (36,902 ) 267,252 344,077
220,227 291,048 Income tax expense (802 ) (847 )
(2,478 ) (2,204 ) (2,885 ) (3,359 ) Net
(loss) income (25,441 ) (37,749 ) 264,774 341,873 217,342 287,689
Deduct net income attributable to noncontrolling interest
(137 ) (12 ) (3,868 ) (4,633 )
(3,783 ) (4,505 ) Net (loss) income attributable to AmeriGas
Partners, L.P. $ (25,578 ) $ (37,761 ) $ 260,906 $ 337,240
$ 213,559 $ 283,184
General partner's interest in net (loss)
income attributable to AmeriGas Partners, L.P.
$ 8,389 $ 6,155 $ 24,321 $ 20,689 $ 30,380
$ 25,540
Limited partners' interest in net (loss)
income attributable to AmeriGas Partners, L.P.
$ (33,967 ) $ (43,916 ) $ 236,585 $ 316,551 $ 183,179
$ 257,644 Income (loss) per limited
partner unit (a) Basic $ (0.37 ) $ (0.47 ) $ 2.53 $
3.04 $ 1.97 $ 2.76 Diluted $ (0.37 ) $
(0.47 ) $ 2.53 $ 3.04 $ 1.96 $ 2.76
Average limited partner units outstanding: Basic
92,918 92,888 92,908
92,873 92,904 92,865
Diluted 92,918 92,888 92,972
92,941 92,970 92,939
SUPPLEMENTAL INFORMATION: Retail gallons sold
(millions) 202.2 215.6 990.4 1,064.6 1,201.4 1,270.0 Wholesale
gallons sold (millions) 11.3 10.1 42.1 82.9 52.6 102.8 Total margin
(b) $ 281,429 $ 269,576 $ 1,239,390 $ 1,340,850 $ 1,494,901 $
1,582,955 Adjusted total margin (c) $ 266,616 $ 272,357 $ 1,288,068
$ 1,343,631 $ 1,550,293 $ 1,585,736 EBITDA (c) $ 63,534 $ 52,271 $
531,307 $ 613,744 $ 572,863 $ 654,434 Adjusted EBITDA (c) $ 48,871
$ 55,024 $ 579,493 $ 616,497 $ 627,695 $ 662,980 Adjusted net
(loss) income attributable to AmeriGas Partners, L.P. (c) $ (40,241
) $ (35,008 ) $ 309,092 $ 339,993 $ 268,391 $ 285,937 Expenditures
for property, plant and equipment: Maintenance capital expenditures
$ 11,803 $ 16,581 $ 43,577 $ 46,972 $ 66,892 $ 64,467 Transition
capital related to Heritage integration $ - $ - $ - $ - $ - $ 4,645
Growth capital expenditures $ 8,838 $ 12,702 $ 34,281 $ 33,320 $
44,608 $ 41,502 (a) Income (loss) 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 (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 Nine Months Ended Twelve
Months Ended June 30, June 30, June 30, 2015
2014 2015 2014 2015
2014 Adjusted total margin: Total revenues $
477,977 $ 613,237 $ 2,467,086 $ 3,152,686 $ 3,027,335 $ 3,684,656
Cost of sales - propane (172,803 ) (320,839 ) (1,163,089 )
(1,750,500 ) (1,447,181 ) (2,015,346 ) Cost of sales - other
(23,745 ) (22,822 ) (64,607 ) (61,336 )
(85,253 ) (86,355 ) Total margin 281,429 269,576 1,239,390
1,340,850 1,494,901 1,582,955 (Subtract net gains) add net losses
on commodity derivative instruments not associated with
current-period transactions (14,813 ) 2,781
48,678 2,781 55,392
2,781 Adjusted total margin $ 266,616 $
272,357 $ 1,288,068 $ 1,343,631 $ 1,550,293
$ 1,585,736 Adjusted net income (loss)
attributable to AmeriGas Partners, L.P.: Net (loss) income
attributable to AmeriGas Partners, L.P. $ (25,578 ) $ (37,761 ) $
260,906 $ 337,240 $ 213,559 $ 283,184 (Subtract net gains) add net
losses on commodity derivative instruments not associated with
current-period transactions (14,813 ) 2,781 48,678 2,781 55,392
2,781 Noncontrolling interest in net gains (losses) on
commodity derivative instruments not associated with current-period
transactions 150 (28 ) (492 )
(28 ) (560 ) (28 ) Adjusted net (loss) income
attributable to AmeriGas Partners, L.P. $ (40,241 ) $ (35,008 ) $
309,092 $ 339,993 $ 268,391 $ 285,937
Three Months Ended Nine Months Ended
Twelve Months Ended June 30, June 30, June 30, 2015
2014 2015 2014
2015 2014 EBITDA and Adjusted EBITDA: Net
(loss) income attributable to AmeriGas Partners, L.P. $ (25,578 ) $
(37,761 ) $ 260,906 $ 337,240 $ 213,559 $ 283,184 Income tax
expense 802 847 2,478 2,204 2,885 3,359 Interest expense 40,274
41,328 122,404 124,964 163,021 166,177 Depreciation 37,370 37,069
113,454 116,925 150,549 158,563 Amortization 10,666
10,788 32,065 32,411
42,849 43,151 EBITDA 63,534 52,271
531,307 613,744 572,863 654,434 Heritage Propane acquisition and
transition expenses - - - - - 5,793 (Subtract net gains) add net
losses on commodity derivative instruments not associated with
current-period transactions (14,813 ) 2,781 48,678 2,781 55,392
2,781 Noncontrolling interest in net gains (losses) on
commodity derivative instruments not associated with current-period
transactions 150 (28 ) (492 )
(28 ) (560 ) (28 ) Adjusted EBITDA $ 48,871 $
55,024 $ 579,493 $ 616,497 $ 627,695 $
662,980 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) $ 280,000 Interest expense (estimate) 163,000 Income
tax expense (estimate) 4,000 Depreciation (estimate) 151,000
Amortization (estimate) 42,000 Adjusted EBITDA (e) $ 640,000
(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.
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AmeriGas Partners, L.P.Will Ruthrauff, 610-337-7000 ext.
6571Shelly Oates, 610-337-7000 ext. 3202
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