AmeriGas Partners Reports Solid Fiscal 2016 Third Quarter Earnings
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.
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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.
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AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
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REPORT OF EARNINGS
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(Thousands, except per unit and where otherwise indicated)
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(Unaudited)
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Three Months Ended June 30,
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Nine Months Ended June 30,
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Twelve Months Ended June 30,
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2016
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2015
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2016
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2015
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2016
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2015
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Revenues:
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Propane
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$
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385,566
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$
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414,146
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$
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1,718,748
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$
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2,254,961
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$
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2,076,188
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$
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2,754,128
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Other
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61,118
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63,831
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199,521
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212,125
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260,317
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273,207
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446,684
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477,977
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1,918,269
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2,467,086
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2,336,505
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3,027,335
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Costs and expenses:
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Cost of sales - propane
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121,812
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172,803
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591,355
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1,163,089
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729,433
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1,447,181
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Cost of sales - other
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21,145
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23,745
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59,173
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64,607
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81,204
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85,253
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Operating and administrative expenses
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217,154
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223,306
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686,578
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727,303
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912,558
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947,259
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Depreciation
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35,668
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37,370
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110,807
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113,454
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149,557
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150,549
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Amortization
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10,742
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10,666
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32,228
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32,065
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42,839
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42,849
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Other operating income, net
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(6,041
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)
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(5,548
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)
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(22,079
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)
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(23,088
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)
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(30,346
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)
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(29,004
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)
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400,480
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462,342
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1,458,062
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2,077,430
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1,885,245
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2,644,087
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Operating income
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46,204
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15,635
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460,207
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389,656
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451,260
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383,248
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Loss on extinguishments of debt
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(37,086
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)
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—
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(37,086
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)
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—
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(37,086
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)
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—
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Interest expense
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(40,838
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(40,274
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(122,669
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)
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(122,404
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)
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(163,107
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(163,021
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(Loss) income before income taxes
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(31,720
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)
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(24,639
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300,452
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267,252
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251,067
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220,227
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Income tax expense
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(907
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(802
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)
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(2,107
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(2,478
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(2,527
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)
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(2,885
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Net (loss) income including noncontrolling interest
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(32,627
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)
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(25,441
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)
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298,345
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264,774
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248,540
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217,342
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Deduct net income attributable to noncontrolling interest
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(442
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)
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(137
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(4,533
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(3,868
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)
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(4,423
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(3,783
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Net (loss) income attributable to AmeriGas Partners, L.P.
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$
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(33,069
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$
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(25,578
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$
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293,812
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$
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260,906
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$
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244,117
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$
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213,559
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General partner’s interest in net (loss) income attributable to
AmeriGas Partners, L.P.
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$
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10,101
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$
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8,389
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$
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30,663
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$
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24,321
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$
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38,811
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$
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30,380
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Limited partners’ interest in net (loss) income attributable to
AmeriGas Partners, L.P.
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$
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(43,170
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$
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(33,967
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$
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263,149
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$
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236,585
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$
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205,306
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$
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183,179
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Income (loss) per limited partner unit (a)
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Basic
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$
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(0.46
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$
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(0.37
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$
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2.81
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$
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2.53
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$
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2.19
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$
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1.97
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Diluted
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$
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(0.46
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$
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(0.37
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$
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2.80
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$
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2.53
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$
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2.19
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$
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1.96
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Average limited partner units outstanding:
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Basic
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92,960
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92,918
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92,945
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92,908
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92,939
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92,904
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Diluted
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92,960
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92,918
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93,019
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92,972
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93,014
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92,970
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SUPPLEMENTAL INFORMATION:
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Retail gallons sold (millions)
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202.8
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202.2
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883.7
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990.4
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1,077.6
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1,201.4
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Wholesale gallons sold (millions)
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8.7
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11.2
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40.0
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42.1
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52.3
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52.6
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Total margin (b)
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$
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303,727
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$
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281,429
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$
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1,267,741
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$
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1,239,390
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$
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1,525,868
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$
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1,494,901
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Adjusted total margin (c)
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$
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275,877
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$
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266,616
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$
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1,206,070
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$
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1,288,068
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$
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1,463,360
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$
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1,550,293
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EBITDA (c)
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$
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55,086
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$
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63,534
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$
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561,623
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$
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531,307
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$
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602,147
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$
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572,863
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Adjusted EBITDA (c)
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$
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64,603
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$
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48,871
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$
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537,661
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$
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579,493
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$
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577,356
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$
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627,695
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Adjusted net (loss) income attributable to AmeriGas Partners, L.P.
(c)
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$
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(23,552
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)
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$
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(40,241
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)
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$
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269,850
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$
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309,092
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$
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219,326
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$
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268,391
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Expenditures for property, plant and equipment:
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Maintenance capital expenditures
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$
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9,985
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$
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11,803
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$
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36,275
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$
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43,577
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$
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50,513
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$
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66,892
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Growth capital expenditures
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$
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8,700
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$
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8,838
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$
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38,197
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$
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34,281
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|
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$
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48,110
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$
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44,608
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|
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(a)
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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.
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(b)
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Total margin represents "total revenues" less "cost of sales -
propane" and "cost of sales - other".
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(c)
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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.
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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.
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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.
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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.
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Three Months Ended June 30,
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Nine Months Ended June 30,
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Twelve Months Ended June 30,
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2016
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2015
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2016
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2015
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2016
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2015
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Adjusted total margin:
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Total revenues
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$
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446,684
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|
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$
|
477,977
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|
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$
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1,918,269
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|
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$
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2,467,086
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$
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2,336,505
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|
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$
|
3,027,335
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Cost of sales - propane
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|
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(121,812
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)
|
|
|
(172,803
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)
|
|
|
(591,355
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)
|
|
|
(1,163,089
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)
|
|
|
(729,433
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)
|
|
|
(1,447,181
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Cost of sales - other
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|
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(21,145
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)
|
|
|
(23,745
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)
|
|
|
(59,173
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)
|
|
|
(64,607
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)
|
|
|
(81,204
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)
|
|
|
(85,253
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)
|
Total margin
|
|
|
|
303,727
|
|
|
|
281,429
|
|
|
|
1,267,741
|
|
|
|
1,239,390
|
|
|
|
1,525,868
|
|
|
|
1,494,901
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(Subtract net gains) add net losses on commodity derivative
instruments not associated with current-period transactions
|
|
|
|
(27,850
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)
|
|
|
(14,813
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)
|
|
|
(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 Ended June 30,
|
|
Nine Months Ended June 30,
|
|
Twelve Months Ended June 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160801006340/en/ Copyright Business Wire 2016
Source: Business Wire
(August 1, 2016 - 6:30 PM EDT)
News by QuoteMedia
www.quotemedia.com
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