Issues 2019 Guidance
AmeriGas Propane, Inc., general partner of AmeriGas Partners,
L.P. ("the Partnership," NYSE: APU), today reported financial
results for the fiscal year ended September 30, 2018.
HIGHLIGHTS
- GAAP net income of $190.5 million and
Adjusted net income of $252.4 million
- Adjusted EBITDA of $605.5 million, an
increase of $54.2 million above Fiscal 2017 results
- Issued Adjusted EBITDA guidance of $610
- $650 million for the fiscal year ending September 30, 2019
"Temperatures returned to normal this year after consecutive
years of historically warm conditions. We delivered Adjusted EBITDA
that was 10% higher than last year on weather that was 13% colder
than last year," said Hugh J. Gallagher, president and chief
executive officer of AmeriGas. "We maintained our unit margins
despite a 19% increase in propane costs, delivered record results
in our ACE and National Accounts programs, and continued to
leverage our investments in technology to enhance both our business
and the customer experience. We look to build on our 2018 results
as we enter the 2019 heating season."
Gallagher continued, “Our teams remain focused on our core
operations, advancing our strategic initiatives and providing great
customer service. I would like to thank our 7,700 employees for
their energy and commitment this year."
STRATEGIC ACCOMPLISHMENTS
- Delivered record volume and earnings
results in ACE and National Accounts programs
- Completed two acquisitions, adding 3
million gallons of motor-fuel business
- Completed strategic divestiture of
non-core assets; proceeds of approximately $12 million
- Continued to reduce distribution costs
and optimize delivery routing through AmeriMobile platform;
launched AmeriMobile for service business
2019 OUTLOOK
AmeriGas provided Adjusted EBITDA guidance in the range of $610
- $650 million for the fiscal year ending September 30, 2019.1 This
guidance range assumes normal weather, based upon a 15-year
average, and excludes mark-to-market gains and losses on commodity
derivative instruments.
EARNINGS CALL and WEBCAST
AmeriGas Partners, L.P. will hold a live Internet Audio Webcast
of its conference call to discuss fiscal 2018 earnings and other
current activities at 9:00 AM ET on Tuesday, November 13, 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 November
13 through 11:59 PM on November 20. The replay may be accessed at
(855) 859-2056, and internationally at 1-404-537-3406, conference
ID 8897959.
ABOUT AMERIGAS
AmeriGas is the nation’s largest retail propane marketer,
serving over 1.7 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 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.
1 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 2019 Adjusted EBITDA, a non-GAAP
measure, to net income attributable 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.
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, liability for uninsured claims and for claims in
excess of insurance coverage, 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.
REPORT OF EARNINGS AMERIGAS PARTNERS, L.P. AND
SUBSIDIARIES (Thousands, except per unit and where otherwise
indicated) (Unaudited)
Three Months Ended Twelve
Months Ended September 30, September 30, 2018
2017 2018 2017 Revenues: Propane $ 404,666 $ 379,722
$ 2,545,794 $ 2,183,538 Other 62,281 65,451 277,184
269,957 466,947 445,173 2,822,978
2,453,495 Costs and expenses: Cost of sales – propane
175,969 128,730 1,215,616 891,261 Cost of sales – other 21,806
20,335 86,576 80,611 Operating and administrative expenses 218,918
220,953 923,064 915,133 Impairment of tradenames and trademarks — —
75,000 — Depreciation and amortization 46,785 54,741 185,753
190,505 Other operating income, net (6,930 ) (1,086 ) (24,373 )
(11,873 ) 456,548 423,673 2,461,636 2,065,637
Operating income 10,399 21,500 361,342 387,858 Loss on
extinguishments of debt — — — (59,729 ) Interest expense (41,104 )
(39,630 ) (163,125 ) (160,226 ) (Loss) income before income taxes
(30,705 ) (18,130 ) 198,217 167,903 Income tax (expense) benefit
(557 ) 95 (4,215 ) (2,034 ) Net (loss) income including
noncontrolling interest (31,262 ) (18,035 ) 194,002 165,869 (Deduct
net income) attributable to noncontrolling interest (65 ) (196 )
(3,480 ) (3,810 ) Net (loss) income attributable to AmeriGas
Partners, L.P. $ (31,327 ) $ (18,231 ) $ 190,522 $ 162,059
General partner’s interest in net (loss) income attributable
to AmeriGas Partners, L.P. $ 11,018 $ 11,146 $ 47,226
$ 45,146 Limited partners’ interest in net (loss)
income attributable to AmeriGas Partners, L.P. $ (42,345 ) $
(29,377 ) $ 143,296 $ 116,913 Income (loss) per
limited partner unit (a) Basic $ (0.46 ) $ (0.32 ) $ 1.54 $
1.25 Diluted $ (0.46 ) $ (0.32 ) $ 1.54 $ 1.25
Weighted-average limited partner units outstanding: Basic 93,044
93,011 93,034 92,996 Diluted 93,044
93,011 93,086 93,050 SUPPLEMENTAL
INFORMATION: Retail gallons sold (millions) 175.8 183.5 1,081.3
1,046.9 Wholesale gallons sold (millions) 13.2 10.6 62.3 49.1 Total
margin (b) $ 269,172 $ 296,108 $ 1,520,786 $ 1,481,623 Adjusted
total margin (c) $ 246,562 $ 256,193 $ 1,508,313 $ 1,450,561 EBITDA
(c) $ 57,119 $ 76,045 $ 543,615 $ 514,824 Adjusted EBITDA (c) $
34,737 $ 36,533 $ 605,510 $ 551,274 Adjusted net (loss) income
attributable to AmeriGas Partners, L.P. (c) $ (53,709 ) $ (57,743 )
$ 252,417 $ 198,509 Expenditures for property, plant and equipment:
Maintenance capital expenditures $ 17,594 $ 12,180 $ 52,936 $
52,034 Growth capital expenditures $ 10,774 $ 11,473 $ 48,325 $
46,130 (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, 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 (loss) attributable to AmeriGas Partners, L.P.
GAAP / NON-GAAP RECONCILIATION (Thousands)
(Unaudited) Three Months Ended Twelve Months Ended September
30, September 30, 2018 2017 2018 2017 Adjusted total
margin: Total revenues $ 466,947 $ 445,173 $ 2,822,978 $ 2,453,495
Cost of sales – propane (175,969 ) (128,730 ) (1,215,616 ) (891,261
) Cost of sales – other (21,806 ) (20,335 ) (86,576 ) (80,611 )
Total margin 269,172 296,108 1,520,786 1,481,623 Subtract net gains
on commodity derivative instruments not associated with
current-period transactions (22,610 ) (39,915 ) (12,473 ) (31,062 )
Adjusted total margin $ 246,562 $ 256,193 $ 1,508,313
$ 1,450,561 Adjusted net income (loss)
attributable to AmeriGas Partners, L.P.: Net (loss) income
attributable to AmeriGas Partners, L.P. $ (31,327 ) $ (18,231 ) $
190,522 $ 162,059 Subtract net gains on commodity derivative
instruments not associated with current-period transactions (22,610
) (39,915 ) (12,473 ) (31,062 ) Impairment of Heritage tradenames
and trademarks — — 75,000 — Loss on extinguishments of debt — — —
59,729 MGP environmental accrual — — — 7,545 Noncontrolling
interest in net gains on commodity derivative instruments not
associated with current-period transactions, impairment of Heritage
tradenames and trademarks and MGP environmental accrual 228
403 (632 ) 238 Adjusted net (loss) income
attributable to AmeriGas Partners, L.P. $ (53,709 ) $ (57,743 ) $
252,417 $ 198,509 Three Months Ended
Twelve Months Ended September 30, September 30, 2018 2017 2018 2017
EBITDA and Adjusted EBITDA: Net (loss) income attributable to
AmeriGas Partners, L.P. $ (31,327 ) $ (18,231 ) $ 190,522 $ 162,059
Income tax expense (benefit) 557 (95 ) 4,215 2,034 Interest expense
41,104 39,630 163,125 160,226 Depreciation and amortization 46,785
54,741 185,753 190,505 EBITDA 57,119
76,045 543,615 514,824 Subtract net gains on commodity derivative
instruments not associated with current-period transactions (22,610
) (39,915 ) (12,473 ) (31,062 ) Impairment of Heritage tradenames
and trademarks — — 75,000 — Loss on extinguishments of debt — — —
59,729 MGP environmental accrual — — — 7,545 Noncontrolling
interest in net gains on commodity derivative instruments not
associated with current-period transactions, impairment of Heritage
tradenames and trademarks and MGP environmental accrual 228
403 (632 ) 238 Adjusted EBITDA $ 34,737 $
36,533 $ 605,510 $ 551,274
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, 2019:
Forecast Fiscal Year Ending September 30, 2019 (Low End)
(High End) Adjusted EBITDA (estimate) $ 610,000 $ 650,000
Interest expense (estimate) 162,000 162,000 Income tax expense
(estimate) 3,500 3,500 Depreciation (estimate) 149,000 149,000
Amortization (estimate) 40,000 40,000
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AmeriGas Partners, L.P.Brendan Heck, 610-337-1000 ext.
6608Shelly Oates, 610-337-1000 ext. 3202
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