AmeriGas Propane, Inc., general partner of AmeriGas Partners,
L.P. (NYSE: APU), reported GAAP net income attributable to AmeriGas
Partners for the year ended September 30, 2016 of $207.0 million,
compared to net income attributable to AmeriGas Partners of $211.2
million for the year ended September 30, 2015. On an adjusted
basis, the Partnership reported net income attributable to AmeriGas
Partners of $190.5 million for the year compared with $258.6
million in the prior year. Adjusted net income attributable to
AmeriGas Partners excludes the impact of unrealized gains and
losses on commodity derivative instruments and losses from the
early extinguishments of debt. A reconciliation of adjusted net
income to GAAP net income is set forth at the end of this
release.
The Partnership’s adjusted earnings before interest expense,
income taxes, depreciation and amortization (Adjusted EBITDA) was
$543.0 million for the year compared with $619.2 million in the
prior year. Retail volumes sold for the year decreased 10% to 1.07
billion gallons from 1.18 billion gallons in the prior year. The
decrease in retail gallons sold reflects temperatures that were 15%
warmer than normal and 12.5% warmer than the prior year.
Jerry E. Sheridan, president and chief executive officer of
AmeriGas, said, "This year was a challenge due to significantly
warmer weather than the prior year but our team navigated this
challenge well. Our unit margins increased and our operating
expenses were contained as we initiated our warm weather plan early
in the heating season. We advanced our growth strategy through the
completion of six acquisitions during the year and increased the
number of National Accounts and Cylinder Exchange locations.
"In addition, we were pleased to have increased our distribution
for the 12th consecutive year. Looking forward, we are eager to
continue making progress on our growth initiatives as well as
deploying our technology across our national footprint to drive
operational efficiency and improve the customer experience."
The Partnership announced earnings guidance for fiscal 2017 last
month. For the year ending September 30, 2017, it expects to report
adjusted EBITDA of $660 million to $700 million, assuming normal
weather and excluding mark-to-market gains and losses on commodity
derivative instruments. Because we are unable to predict certain
potentially material items affecting net income on a GAAP basis,
principally mark-to-market gains and losses on commodity derivative
instruments, we cannot reconcile 2017 Adjusted EBITDA, a non-GAAP
measure, to net income attribute to AmeriGas Partners, L.P., the
most directly comparable GAAP measure, in reliance on the
“unreasonable efforts” exception set forth in SEC rules.
Adjustments that management can reasonably estimate are provided
below.
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 earnings and other
current activities at 9:00 AM ET on Thursday, November 10, 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 November
10 through 11:59 PM on November 16. The replay may be accessed at
(855) 859-2056, and internationally at 1-404-537-3406, conference
ID 13777143.
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 EndedSeptember 30,
Twelve Months EndedSeptember 30,
2016 2015 2016 2015 Revenues: Propane $ 334,412 $
357,440 $ 2,053,160 $ 2,612,401 Other 59,136 60,796
258,657 272,921 393,548 418,236
2,311,817 2,885,322 Costs and expenses: Cost of sales
- propane 128,487 138,078 719,842 1,301,167 Cost of sales - other
19,684 22,031 78,857 86,638 Operating and administrative expenses
242,208 225,980 928,786 953,283 Depreciation 35,998 38,750 146,805
152,204 Amortization 10,947 10,611 43,175 42,676 Other operating
income, net (6,173 ) (8,267 ) (28,252 ) (31,355 ) 431,151
427,183 1,889,213 2,504,613 Operating (loss)
income (37,603 ) (8,947 ) 422,604 380,709 Loss on extinguishments
of debt (11,803 ) — (48,889 ) — Interest expense (41,426 ) (40,438
) (164,095 ) (162,842 ) (Loss) income before income taxes (90,832 )
(49,385 ) 209,620 217,867 Income tax benefit (expense) 3,680
(420 ) 1,573 (2,898 ) Net (loss) income including
noncontrolling interest (87,152 ) (49,805 ) 211,193 214,969 Add net
loss (deduct net income) attributable to noncontrolling interest
324 110 (4,209 ) (3,758 ) Net (loss) income
attributable to AmeriGas Partners, L.P. $ (86,828 ) $ (49,695 ) $
206,984 $ 211,211 General partner’s interest in net
(loss) income attributable to AmeriGas Partners, L.P. $ 9,564
$ 8,148 $ 40,227 $ 32,469 Limited
partners’ interest in net (loss) income attributable to AmeriGas
Partners, L.P. $ (96,392 ) $ (57,843 ) $ 166,757 $ 178,742
Income (loss) per limited partner unit (a) Basic $ (1.04 ) $
(0.62 ) $ 1.77 $ 1.91 Diluted $ (1.04 ) $ (0.62 ) $
1.77 $ 1.91 Average limited partner units
outstanding: Basic 92,962 92,918 92,949 92,910
Diluted 92,962 92,918 93,023 92,977
SUPPLEMENTAL INFORMATION: Retail gallons sold (millions)
181.8 193.9 1,065.5 1,184.3 Wholesale gallons sold (millions) 9.7
12.3 49.7 54.4 Total margin (b) $ 245,377 $ 258,127 $ 1,513,118 $
1,497,517 Adjusted total margin (c) $ 240,969 $ 257,290 $ 1,447,039
$ 1,545,358 EBITDA (c) $ (2,137 ) $ 40,524 $ 559,486 $ 571,831
Adjusted EBITDA (c) $ 5,302 $ 39,696 $ 542,963 $ 619,189 Adjusted
net (loss) income attributable to AmeriGas Partners, L.P. (c) $
(79,389 ) $ (50,523 ) $ 190,461 $ 258,569 Expenditures for
property, plant and equipment: Maintenance capital expenditures $
15,829 $ 14,238 $ 52,104 $ 57,815 Growth capital expenditures $
11,392 $ 9,913 $ 49,589 $ 44,194 (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.
AMERIGAS PARTNERS, L.P. AND SUBSIDIARIESREPORT
OF EARNINGS(Thousands, except per unit and where otherwise
indicated)(Unaudited)
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 EndedSeptember 30, Twelve Months
EndedSeptember 30, 2016 2015 2016 2015 Adjusted total
margin: Total revenues $ 393,548 $ 418,236 $ 2,311,817 $ 2,885,322
Cost of sales - propane (128,487 ) (138,078 ) (719,842 ) (1,301,167
) Cost of sales - other (19,684 ) (22,031 ) (78,857 ) (86,638 )
Total margin 245,377 258,127 1,513,118 1,497,517 (Subtract net
gains) add net losses on commodity derivative instruments not
associated with current-period transactions (4,408 ) (837 ) (66,079
) 47,841 Adjusted total margin $ 240,969 $ 257,290
$ 1,447,039 $ 1,545,358 Adjusted net
(loss) income attributable to AmeriGas Partners, L.P.: Net (loss)
income attributable to AmeriGas Partners, L.P. $ (86,828 ) $
(49,695 ) $ 206,984 $ 211,211 (Subtract net gains) add net losses
on commodity derivative instruments not associated with
current-period transactions (4,408 ) (837 ) (66,079 ) 47,841
Noncontrolling interest in net gains (losses) on commodity
derivative instruments not associated with current-period
transactions 44 9 667 (483 ) Loss on extinguishments of debt 11,803
— 48,889 — Adjusted net (loss) income
attributable to AmeriGas Partners, L.P. $ (79,389 ) $ (50,523 ) $
190,461 $ 258,569 Three Months
EndedSeptember 30, Twelve Months EndedSeptember 30, 2016 2015 2016
2015 EBITDA and Adjusted EBITDA: Net (loss) income attributable to
AmeriGas Partners, L.P. $ (86,828 ) $ (49,695 ) $ 206,984 $ 211,211
Income tax (benefit) expense (3,680 ) 420 (1,573 ) 2,898 Interest
expense 41,426 40,438 164,095 162,842 Depreciation 35,998 38,750
146,805 152,204 Amortization 10,947 10,611 43,175
42,676 EBITDA (2,137 ) 40,524 559,486 571,831
(Subtract net gains) add net losses on commodity derivative
instruments not associated with current-period transactions (4,408
) (837 ) (66,079 ) 47,841 Noncontrolling interest in net gains
(losses) on commodity derivative instruments not associated with
current-period transactions 44 9 667 (483 ) Loss on extinguishments
of debt 11,803 — 48,889 — Adjusted
EBITDA $ 5,302 $ 39,696 $ 542,963 $ 619,189
The following table includes a quantification of interest
expense, income tax expense, depreciation and amortization included
in the calculation of forecasted Adjusted EBITDA guidance range for
the fiscal year ending September 30, 2017:
Forecast Fiscal Year EndingSeptember 30,
2017
(Low End) (High End) Adjusted EBITDA (estimate) $ 660,000 $
700,000 Interest expense (estimate) 160,000 159,000 Income tax
expense (estimate) 3,000 3,000 Depreciation (estimate) 141,000
141,000 Amortization (estimate) 43,000 43,000
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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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