AmeriGas Propane, Inc., general partner of AmeriGas Partners,
L.P. (NYSE: APU), reported a GAAP net loss attributable to AmeriGas
Partners for the quarter ended June 30, 2016 of $33.1 million,
compared to a GAAP net loss of $25.6 million for the quarter ended
June 30, 2015. The GAAP net loss for the current quarter includes a
$37.1 million loss due to early extinguishments of debt. On an
adjusted basis, the Partnership reported a seasonal net loss of
$23.6 million for the quarter compared with a seasonal net loss of
$40.2 million in the prior year. Adjusted results exclude the
impact of unrealized gains and losses on commodity derivative
instruments and losses from the early extinguishments of debt.
The Partnership’s adjusted earnings before interest expense,
income taxes, depreciation and amortization (Adjusted EBITDA) was
$64.6 million for the third fiscal quarter compared with $48.9
million in the prior year. Retail volumes sold for the quarter were
202.8 million gallons, comparable with the prior year amount of
202.2 million. The slight increase in retail gallons sold reflects
temperatures that were slightly colder than the prior year,
although 7.5% warmer than normal, according to the National Oceanic
and Atmospheric Administration (NOAA).
Jerry E. Sheridan, president and chief executive officer of
AmeriGas, said, "After experiencing one of the warmest winters in
history, the business rebounded with a very solid third quarter.
Adjusted EBITDA was 32% higher than last year on weather that was
5.5% colder. Continued focus on unit margin management and expense
control were the keys to our improved results during the quarter as
we were able to deliver a combination of both higher adjusted total
margin and lower operating expenses. We completed two acquisitions
in June, and one in July, bringing our acquisition count for the
year to six. Finally, we were pleased to complete a $1.35 billion
debt offering during the quarter to refinance the senior notes
maturing in 2019, 2020 and 2021 at an average rate of 5.75%,
lowering our weighted average cost of debt while addressing our
refinancing needs through 2022."
Sheridan continued, "Based on our results thus far and our
expectations for the remainder of the year, we confirm our Adjusted
EBITDA guidance range of $575 million to $600(a) million for the
fiscal year ending September 30, 2016."
(a) Due to the forward looking nature of full year Adjusted EBITDA,
we are unable to reconcile this non-GAAP financial measure to the
most directly comparable GAAP financial measure. Management is
unable to project certain reconciling items, in particular
mark-to-market gains (losses) on commodity derivative instruments
for future periods, due to market volatility.
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 third quarter
earnings and other current activities at 9:00 AM ET on Tuesday,
August 2, 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 August 2 through 11:59 PM on August 18. The replay
may be accessed at (855) 859-2056, and internationally at
1-404-537-3406, conference ID 13747593.
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 EndedJune 30, Nine Months EndedJune 30, Twelve Months
EndedJune 30, 2016 2015 2016 2015 2016 2015 Revenues: Propane $
385,566 $ 414,146 $ 1,718,748 $ 2,254,961 $ 2,076,188 $ 2,754,128
Other 61,118 63,831 199,521
212,125 260,317 273,207
446,684 477,977 1,918,269
2,467,086 2,336,505
3,027,335 Costs and expenses: Cost of sales - propane
121,812 172,803 591,355 1,163,089 729,433 1,447,181 Cost of sales -
other 21,145 23,745 59,173 64,607 81,204 85,253 Operating and
administrative expenses 217,154 223,306 686,578 727,303 912,558
947,259 Depreciation 35,668 37,370 110,807 113,454 149,557 150,549
Amortization 10,742 10,666 32,228 32,065 42,839 42,849 Other
operating income, net (6,041 ) (5,548 )
(22,079 ) (23,088 ) (30,346 ) (29,004 )
400,480 462,342 1,458,062
2,077,430 1,885,245 2,644,087
Operating income 46,204 15,635 460,207 389,656 451,260 383,248 Loss
on extinguishments of debt (37,086 ) — (37,086 ) — (37,086 ) —
Interest expense (40,838 ) (40,274 ) (122,669
) (122,404 ) (163,107 ) (163,021 ) (Loss)
income before income taxes (31,720 ) (24,639 ) 300,452 267,252
251,067 220,227 Income tax expense (907 ) (802 )
(2,107 ) (2,478 ) (2,527 ) (2,885 ) Net
(loss) income including noncontrolling interest (32,627 ) (25,441 )
298,345 264,774 248,540 217,342 Deduct net income attributable to
noncontrolling interest (442 ) (137 ) (4,533 )
(3,868 ) (4,423 ) (3,783 ) Net (loss) income
attributable to AmeriGas Partners, L.P. $ (33,069 ) $ (25,578 ) $
293,812 $ 260,906 $ 244,117 $ 213,559
General partner’s interest in net (loss) income attributable to
AmeriGas Partners, L.P. $ 10,101 $ 8,389 $ 30,663
$ 24,321 $ 38,811 $ 30,380 Limited
partners’ interest in net (loss) income attributable to AmeriGas
Partners, L.P. $ (43,170 ) $ (33,967 ) $ 263,149 $ 236,585
$ 205,306 $ 183,179 Income (loss) per limited
partner unit (a) Basic $ (0.46 ) $ (0.37 ) $ 2.81 $ 2.53
$ 2.19 $ 1.97 Diluted $ (0.46 ) $ (0.37 ) $
2.80 $ 2.53 $ 2.19 $ 1.96 Average
limited partner units outstanding: Basic 92,960
92,918 92,945 92,908
92,939 92,904 Diluted 92,960
92,918 93,019 92,972
93,014 92,970 SUPPLEMENTAL
INFORMATION: Retail gallons sold (millions) 202.8 202.2 883.7 990.4
1,077.6 1,201.4 Wholesale gallons sold (millions) 8.7 11.2 40.0
42.1 52.3 52.6 Total margin (b) $ 303,727 $ 281,429 $ 1,267,741 $
1,239,390 $ 1,525,868 $ 1,494,901 Adjusted total margin (c) $
275,877 $ 266,616 $ 1,206,070 $ 1,288,068 $ 1,463,360 $ 1,550,293
EBITDA (c) $ 55,086 $ 63,534 $ 561,623 $ 531,307 $ 602,147 $
572,863 Adjusted EBITDA (c) $ 64,603 $ 48,871 $ 537,661 $ 579,493 $
577,356 $ 627,695 Adjusted net (loss) income attributable to
AmeriGas Partners, L.P. (c) $ (23,552 ) $ (40,241 ) $ 269,850 $
309,092 $ 219,326 $ 268,391 Expenditures for property, plant and
equipment: Maintenance capital expenditures $ 9,985 $ 11,803 $
36,275 $ 43,577 $ 50,513 $ 66,892 Growth capital expenditures $
8,700 $ 8,838 $ 38,197 $ 34,281 $ 48,110 $ 44,608 (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, 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 (loss) 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 EndedJune 30, Nine Months
EndedJune 30, Twelve Months EndedJune 30, 2016 2015 2016 2015 2016
2015 Adjusted total margin: Total revenues $ 446,684 $ 477,977 $
1,918,269 $ 2,467,086 $ 2,336,505 $ 3,027,335 Cost of sales -
propane (121,812 ) (172,803 ) (591,355 ) (1,163,089 ) (729,433 )
(1,447,181 ) Cost of sales - other (21,145 ) (23,745
) (59,173 ) (64,607 ) (81,204 ) (85,253
) Total margin 303,727 281,429 1,267,741 1,239,390 1,525,868
1,494,901 (Subtract net gains) add net losses on commodity
derivative instruments not associated with current-period
transactions (27,850 ) (14,813 ) (61,671 )
48,678 (62,508 ) 55,392 Adjusted
total margin $ 275,877 $ 266,616 $ 1,206,070 $
1,288,068 $ 1,463,360 $ 1,550,293
Adjusted net (loss) income attributable to AmeriGas Partners, L.P.:
Net (loss) income attributable to AmeriGas Partners, L.P. $ (33,069
) $ (25,578 ) $ 293,812 $ 260,906 $ 244,117 $ 213,559 (Subtract net
gains) add net losses on commodity derivative instruments not
associated with current-period transactions (27,850 ) (14,813 )
(61,671 ) 48,678 (62,508 ) 55,392 Noncontrolling interest in net
gains (losses) on commodity derivative instruments not associated
with current-period transactions 281 150 623 (492 ) 631 (560 ) Loss
on extinguishments of debt 37,086 —
37,086 — 37,086 —
Adjusted net (loss) income attributable to AmeriGas
Partners, L.P. $ (23,552 ) $ (40,241 ) $ 269,850 $ 309,092
$ 219,326 $ 268,391 Three Months
EndedJune 30, Nine Months EndedJune 30, Twelve Months EndedJune 30,
2016 2015 2016 2015 2016 2015 EBITDA and Adjusted EBITDA: Net
(loss) income attributable to AmeriGas Partners, L.P. $ (33,069 ) $
(25,578 ) $ 293,812 $ 260,906 $ 244,117 $ 213,559 Income tax
expense 907 802 2,107 2,478 2,527 2,885 Interest expense 40,838
40,274 122,669 122,404 163,107 163,021 Depreciation 35,668 37,370
110,807 113,454 149,557 150,549 Amortization 10,742
10,666 32,228 32,065
42,839 42,849 EBITDA 55,086 63,534
561,623 531,307 602,147 572,863 (Subtract net gains) add net losses
on commodity derivative instruments not associated with
current-period transactions (27,850 ) (14,813 ) (61,671 ) 48,678
(62,508 ) 55,392 Noncontrolling interest in net gains (losses) on
commodity derivative instruments not associated with current-period
transactions 281 150 623 (492 ) 631 (560 ) Loss on extinguishments
of debt 37,086 — 37,086
— 37,086 — Adjusted
EBITDA $ 64,603 $ 48,871 $ 537,661 $ 579,493
$ 577,356 $ 627,695
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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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