AmeriGas Propane, Inc., general partner of AmeriGas Partners,
L.P. ("the Partnership," NYSE: APU), today reported financial
results for the fiscal quarter ended December 31, 2017.
EARNINGS HIGHLIGHTS
- GAAP net income of $104.4 million and
adjusted net income of $103.7 million
- Adjusted EBITDA of $194.1 million,
compared with $185.1 million in the prior year
Jerry E. Sheridan, president and chief executive officer of
AmeriGas, said, "We had a solid operating quarter, with National
Accounts and Cylinder Exchange programs both posting volume
increases over the prior year and our bulk business experiencing a
slight increase in unit margins despite increases in product costs.
Weather was close to normal, an improvement over the prior two warm
years, although the colder weather disproportionately occurred in
the final week of December, and much of the sales volume associated
with that colder weather occurred in January. The cold weather led
to operating conditions that underscore the benefits of the scale
and reach of our supply infrastructure, which is unmatched in the
industry. We quickly redeployed our extensive network of supply
assets to the hardest hit areas of the Northeast and South to
ensure continuity of supply to our customers during the peak
heating season."
Given the significance of the second fiscal quarter to full year
results, AmeriGas intends to provide an update regarding its
adjusted EBITDA guidance upon completion of the second fiscal
quarter ending March 31, 2018.
KEY DRIVERS OF RESULTS
- Temperatures were 1.4% warmer than
normal and 9.9% colder than the prior year, however they were
significantly impacted by the last week in December which was 60%
colder than the prior year period. Excluding that week, weather was
6.6% warmer than normal and 3.8% colder than the prior year.
- Cylinder Exchange volume increased 9%
over prior year.
- National Accounts volume increased 7%
over prior year.
- Unit margins increased $0.01 despite
Mont. Belvieu prices that were 64% higher than the prior year.
- Adjusted EBITDA for the prior-year
period included a previously-reported charge of $8.8 million to
correct gains on sales of certain assets related to the Heritage
Propane Acquisition.
EARNINGS CALL and WEBCAST
AmeriGas Partners, L.P. will hold a live Internet Audio Webcast
of its conference call to discuss fiscal first quarter earnings and
other current activities at 9:00 AM ET on Thursday, February 1,
2018. 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 February 1 through 11:59 PM on February 8. The replay may be
accessed at (855) 859-2056, and internationally at 1-404-537-3406,
conference ID 2603134.
ABOUT AMERIGAS
AmeriGas is the nation’s largest retail propane marketer,
serving over 1.8 million customers in all 50 states from
approximately 1,900 distribution locations. UGI Corporation,
through subsidiaries, is the sole General Partner and owns 26% of
the Partnership and the public owns the remaining 74%.
Comprehensive information about AmeriGas is available on the
Internet at http://www.amerigas.com.
USE OF FORWARD-LOOKING STATEMENTS
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, the availability, timing and success of our
acquisitions, commercial initiatives and investments to grow our
business, our ability to successfully integrate acquisitions and
achieve anticipated synergies, and the interruption, disruption,
failure, malfunction or breach of our information technology
systems, including due to cyber-attack. The Partnership undertakes
no obligation to release revisions to its forward-looking
statements to reflect events or circumstances occurring after
today.
USE OF NON-GAAP MEASURES
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 periods. Management also uses Adjusted EBITDA to
assess the Partnership’s profitability because its parent, UGI
Corporation, uses the Partnership’s Adjusted EBITDA to assess the
profitability of the Partnership, which is one of UGI Corporation’s
industry segments. UGI Corporation discloses the Partnership’s
Adjusted EBITDA 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.
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 are presented at the end of
this press release.
REPORT OF EARNINGS
AMERIGAS PARTNERS, L.P. AND
SUBSIDIARIES
(Thousands, except per unit and where
otherwise indicated)
(Unaudited)
Three Months EndedDecember 31, Twelve Months
EndedDecember 31, 2017 2016 2017 2016 Revenues:
Propane $ 711,464 $ 604,056 $ 2,290,946 $ 2,083,312 Other
75,832 73,110 272,679
261,573 787,296 677,166
2,563,625 2,344,885 Costs and expenses: Cost
of sales — propane 344,351 214,405 1,021,207 706,325 Cost of sales
— other 20,994 20,582 81,023 78,572 Operating and administrative
expenses 230,339 226,802 918,670 924,699 Depreciation 37,817 33,989
151,569 142,188 Amortization 9,607 10,622 41,749 43,197 Other
operating (income) expense, net (4,637 ) 3,135
(19,645 ) (16,210 ) 638,471
509,535 2,194,573 1,878,771
Operating income 148,825 167,631 369,052 466,114 Loss on
extinguishments of debt — (33,151 ) (26,578 ) (82,040 ) Interest
expense (40,577 ) (40,028 ) (160,775 )
(163,098 ) Income before income taxes 108,248 94,452 181,699
220,976 Income tax (expense) benefit (2,378 ) (837 )
(3,575 ) 1,646 Net income including
noncontrolling interest 105,870 93,615 178,124 222,622 Deduct net
income attributable to noncontrolling interest (1,449 )
(1,661 ) (3,598 ) (4,657 ) Net income
attributable to AmeriGas Partners, L.P. $ 104,421 $ 91,954
$ 174,526 $ 217,965 General partner’s interest
in net income attributable to AmeriGas Partners, L.P. $ 12,372
$ 11,352 $ 46,166 $ 42,124 Limited
partners’ interest in net income attributable to AmeriGas Partners,
L.P. $ 92,049 $ 80,602 $ 128,360 $ 175,841
Income per limited partner unit (a) Basic $ 0.97 $
0.87 $ 1.37 $ 1.81 Diluted $ 0.97 $
0.87 $ 1.37 $ 1.87 Weighted average limited
partner units outstanding: Basic 93,016 92,967
93,006 95,958 Diluted
93,080 93,019 93,060
93,025 SUPPLEMENTAL INFORMATION: Retail gallons sold
(millions) 305.0 305.7 1,046.2 1,076.1 Wholesale gallons sold
(millions) 17.0 13.6 52.5 48.4 Total margin (b) $ 421,951 $ 442,179
$ 1,461,395 $ 1,559,988 Adjusted total margin (c) $ 421,200 $
416,448 $ 1,455,313 $ 1,462,545 EBITDA (c) $ 194,800 $ 177,430 $
532,194 $ 564,802 Adjusted EBITDA (c) $ 194,057 $ 185,110 $ 560,221
$ 550,383 Adjusted net income attributable to AmeriGas Partners,
L.P. (c) $ 103,678 $ 99,634 $ 202,553 $ 203,546 Expenditures for
property, plant and equipment: Maintenance capital expenditures $
10,105 $ 15,379 $ 46,760 $ 54,568 Growth capital expenditures $
13,480 $ 11,002 $ 48,608 $ 45,532 (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, 2017. (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.
GAAP / NON-GAAP RECONCILIATION
(Thousands)
(Unaudited)
Three Months EndedDecember 31, Twelve Months
EndedDecember 31, 2017 2016 2017 2016
Adjusted
total margin: Total revenues $ 787,296 $ 677,166 $ 2,563,625 $
2,344,885 Cost of sales — propane (344,351 ) (214,405 ) (1,021,207
) (706,325 ) Cost of sales — other (20,994 ) (20,582
) (81,023 ) (78,572 ) Total margin 421,951 442,179
1,461,395 1,559,988 Subtract net gains on commodity derivative
instruments not associated with current-period transactions
(751 ) (25,731 ) (6,082 ) (97,443 ) Adjusted
total margin $ 421,200 $ 416,448 $ 1,455,313 $
1,462,545
Adjusted net income attributable to
AmeriGas Partners, L.P.: Net income attributable to AmeriGas
Partners, L.P. $ 104,421 $ 91,954 $ 174,526 $ 217,965 Subtract net
gains on commodity derivative instruments not associated with
current-period transactions (751 ) (25,731 ) (6,082 ) (97,443 )
Loss on extinguishments of debt — 33,151 26,578 82,040 MGP
environmental accrual — — 7,545 — Noncontrolling interest in net
gains on commodity derivative instruments not associated with
current-period transactions and MGP environmental accrual 8
260 (14 ) 984 Adjusted
net income attributable to AmeriGas Partners, L.P. $ 103,678
$ 99,634 $ 202,553 $ 203,546 Three
Months EndedDecember 31, Twelve Months EndedDecember 31, 2017 2016
2017 2016
EBITDA and Adjusted EBITDA: Net income
attributable to AmeriGas Partners, L.P. $ 104,421 $ 91,954 $
174,526 $ 217,965 Income tax expense (benefit) 2,378 837 3,575
(1,646 ) Interest expense 40,577 40,028 160,775 163,098
Depreciation 37,817 33,989 151,569 142,188 Amortization
9,607 10,622 41,749
43,197 EBITDA 194,800 177,430 532,194 564,802 Subtract net
gains on commodity derivative instruments not associated with
current-period transactions (751 ) (25,731 ) (6,082 ) (97,443 )
Loss on extinguishments of debt — 33,151 26,578 82,040 MGP
environmental accrual — — 7,545 — Noncontrolling interest in net
gains on commodity derivative instruments not associated with
current-period transactions and MGP environmental accrual 8
260 (14 ) 984 Adjusted
EBITDA $ 194,057 $ 185,110 $ 560,221 $ 550,383
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version on businesswire.com: http://www.businesswire.com/news/home/20180131006247/en/
AmeriGas Partners, L.P.Will Ruthrauff, 610-337-7000 ext.
6571Brendan Heck, 610-337-7000 ext. 6608Shelly Oates, 610-337-7000
ext. 3202
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