EX-99.1 2 a991jun14.htm EXHIBIT 99.1 99.1 Jun14


Exhibit 99.1
 
 
 
 
 
 
 
 
 
 
Contact:
  
610-337-7000
  
 
  
For Immediate Release:
  
 
 
  
Daniel Platt, ext. 1029
  
 
  
July 29, 2014
  
 
 
  
Shelly Oates, ext. 3202
  
 
  
 
  
 
 
  
 
  
 
  
 
  
 
AmeriGas Partners Reports Third Quarter Earnings, Confirms Guidance

VALLEY FORGE, Pa., July 29 - AmeriGas Propane, Inc., general partner of AmeriGas Partners, L.P. (NYSE: APU), reported a seasonal net loss attributable to AmeriGas Partners for the third quarter of fiscal 2014 ended June 30, 2014 of $37.8 million compared to a seasonal net loss of $34.6 million for the third quarter of fiscal 2013. The Partnership’s adjusted earnings before interest expense, income taxes, depreciation and amortization (Adjusted EBITDA) decreased to $55.1 million for the third quarter of 2014 compared to $69.0 million for the same period last year.

For the three months ended June 30, 2014, retail propane volumes sold were 215.6 million gallons compared with retail propane volumes of 224.7 million gallons in the prior-year period. Weather for the quarter was 9.3% warmer than normal and 9.7% warmer than in the prior-year period, according to the National Oceanic and Atmospheric Administration (NOAA).

Jerry E. Sheridan, chief executive officer of AmeriGas, said “Our results for the quarter were in line with our expectations given the warmer weather. As we had previously stated, last year’s third quarter results were unusually favorable due to cold spring weather that followed a relatively warm winter. We continue to make significant progress with our growth initiatives. Our National Accounts program experienced a solid quarter with volume up 11%. AmeriGas Cylinder Exchange, our nationwide cylinder exchange program, delivered volume growth of 4% during the third quarter. We continue to make good progress in expanding our exchange program, with more than 1,000 new distribution locations added this year.”

Sheridan continued, “Given our results thus far and our current assessment of business conditions for the remainder of the fiscal year, we continue to anticipate Adjusted EBITDA for fiscal 2014 to be in the range of $660 million to $675 million. We are pleased with the strong performance of the business thus far. Our year to date Adjusted EBITDA of $617 million is just about equal to our Adjusted EBITDA for all of last year. At the low end of our guidance levels, Adjusted EBITDA would be up 7% from last year and would have nearly doubled from just three years ago.”

Revenues for the quarter increased to $613.2 million from $581.7 million in the prior-year period, reflecting higher average selling prices, largely due to higher propane product costs, but partially offset by lower retail volumes sold. The average wholesale cost of propane at Mont Belvieu, Texas, for the current quarter was approximately 16% higher than the average cost in the same period last year. Total margin decreased $6.4 million principally reflecting lower retail propane total margin of $3.4 million and a $2.8 million loss on unsettled commodity derivative instruments. The lower retail propane margin is principally due to the decrease in volumes sold partially offset by modestly higher average retail propane unit margins.

Operating and administrative expenses in the prior-year period included $9.9 million of transition expenses associated with the integration of Heritage Propane. Excluding the effects of this expense, operating and administrative expenses increased $10.5 million during the 2014 period principally reflecting higher





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AmeriGas Partners Reports Third Quarter Earnings, Confirms Guidance


payroll and benefits, general insurance, equipment repair and maintenance and advertising expenses. Operating income decreased $2.2 million principally reflecting the decrease in margin offset by lower depreciation expense.
    
Adjusted EBITDA and total margin are non-GAAP financial measures. Adjusted EBITDA is defined herein as earnings before interest expense, income taxes, depreciation and amortization, unrealized and realized gains and losses on commodity derivative instruments not associated with current period transactions and Heritage Propane acquisition and transition expenses. Total margin represents total revenues less total cost of sales. Management believes the presentation of these measures provides useful information to investors to more effectively evaluate the year-over-year results of operations of the Partnership. These measures are not comparable to measures used by other entities and should only be considered in conjunction with net income attributable to AmeriGas Partners, L.P.  A reconciliation of EBITDA and Adjusted EBITDA to the most comparable GAAP financial measure is included on the last page of this press release.


About AmeriGas
AmeriGas is the nation’s largest retail propane marketer, serving over two million customers in all 50 states from over 2,500 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 third quarter earnings and other current activities at 9:00 AM ET on Wednesday, July 30, 2014. 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 Wednesday, July 30 through 11:59 PM ET on Wednesday, August 6. The replay may be accessed at 1-855-859-2056, and internationally at 1-404-537-3406, conference ID 69809906.

Comprehensive information about AmeriGas is available on the Internet at http://www.amerigas.com.

This press release contains certain forward-looking statements which 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 and Quarterly Reports on Form 10-Q 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.


 
 
 
 
 
 
 
AP-09
  
 
###
 
 
7/29/14



AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
REPORT OF EARNINGS
(Thousands, except per unit and where otherwise indicated)
(Unaudited)
 
 
Three Months Ended
June 30,
 
Nine Months Ended
June 30,
 
Twelve Months Ended
June 30,
 
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
Propane
 
$
549,976

 
$
518,361

 
$
2,941,701

 
$
2,413,802

 
$
3,412,665

 
$
2,863,857

Other
 
63,261

 
63,358

 
210,985

 
220,771

 
271,991

 
281,001

 
 
613,237

 
581,719

 
3,152,686

 
2,634,573

 
3,684,656

 
3,144,858

Costs and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Cost of sales - propane
 
320,839

 
283,037

 
1,750,500

 
1,306,728

 
2,015,346

 
1,554,526

Cost of sales - other
 
22,822

 
22,657

 
61,336

 
63,460

 
86,355

 
87,569

Operating and administrative expenses
225,141

 
224,452

 
744,007

 
733,267

 
954,668

 
966,870

Depreciation
 
37,069

 
41,738

 
116,925

 
117,668

 
158,563

 
157,300

Amortization
 
10,788

 
10,775

 
32,411

 
32,825

 
43,151

 
43,821

Other income, net
 
(7,848
)
 
(7,579
)
 
(21,534
)
 
(23,385
)
 
(30,652
)
 
(32,975
)
 
 
608,811

 
575,080

 
2,683,645

 
2,230,563

 
3,227,431

 
2,777,111

Operating income
 
4,426

 
6,639

 
469,041

 
404,010

 
457,225

 
367,747

Interest expense
 
(41,328
)
 
(41,247
)
 
(124,964
)
 
(124,219
)
 
(166,177
)
 
(163,429
)
(Loss) income before income taxes
 
(36,902
)
 
(34,608
)
 
344,077

 
279,791

 
291,048

 
204,318

Income tax expense (benefit)
 
(847
)
 
59

 
(2,204
)
 
(516
)
 
(3,359
)
 
(1,441
)
Net (loss) income
 
(37,749
)
 
(34,549
)
 
341,873

 
279,275

 
287,689

 
202,877

Less: net income attributable to noncontrolling interest
 
(12
)
 
(46
)
 
(4,633
)
 
(3,997
)
 
(4,505
)
 
(3,602
)
Net (loss) income attributable to AmeriGas Partners, L.P.
 
$
(37,761
)
 
$
(34,595
)
 
$
337,240

 
$
275,278

 
$
283,184

 
$
199,275

General partner’s interest in net (loss) income attributable to AmeriGas Partners, L.P.
 
$
6,155

 
$
5,045

 
$
20,689

 
$
16,648

 
$
25,540

 
$
20,139

Limited partners’ interest in net (loss) income attributable to AmeriGas Partners, L.P.
 
$
(43,916
)
 
$
(39,640
)
 
$
316,551

 
$
258,630

 
$
257,644

 
$
179,136

(Loss) income per limited partner unit (a)
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
(0.47
)
 
$
(0.43
)
 
$
3.04

 
$
2.70

 
$
2.76

 
$
1.92

Diluted
 
$
(0.47
)
 
$
(0.43
)
 
$
3.04

 
$
2.70

 
$
2.76

 
$
1.92

Average limited partner units outstanding:
 
 
 
 
 
 
 
 
 
 
Basic
 
92,888

 
92,838

 
92,873

 
92,830

 
92,865

 
92,824

Diluted
 
92,888

 
92,838

 
92,941

 
92,904

 
92,939

 
92,899

SUPPLEMENTAL INFORMATION:
 
 
 
 
 
 
 
 
 
 
 
 
Retail gallons sold (millions)
 
215.6

 
224.7

 
1,064.6

 
1,039.8

 
1,270.0

 
1,243.0

Wholesale gallons sold (millions)
 
10.1

 
16.6

 
82.9

 
81.9

 
102.8

 
104.1

EBITDA (b)
 
$
52,271

 
$
59,106

 
$
613,744

 
$
550,506

 
$
654,434

 
$
565,266

Adjusted EBITDA (b)
 
$
55,052

 
$
68,968

 
$
616,525

 
$
571,252

 
$
663,008

 
$
605,307

Expenditures for property, plant and equipment:
 
 
 
 
 
 
 
 
 
 
Maintenance capital expenditures
 
$
16,581

 
$
12,645

 
$
46,972

 
$
33,992

 
$
64,467

 
$
44,550

Transition capital related to Heritage integration
 
$
—

 
$
4,749

 
$
—

 
$
15,730

 
$
4,645

 
$
28,995

Growth capital expenditures
 
$
12,702

 
$
8,905

 
$
33,320

 
$
31,014

 
$
41,502

 
$
40,067

(a)
(Loss) 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, 2013.

(b)
Earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") should not be considered as an alternative to net income (loss) attributable to AmeriGas Partners, L.P. (as an indicator of operating performance) and is not a measure of performance or financial condition under accounting principles generally accepted in the United States ("GAAP"). Management believes 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 EBITDA may be different from those used by other companies.

(continued)


1


AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
REPORT OF EARNINGS
(Thousands, except per unit and where otherwise indicated)
(Unaudited)
(continued) 

Management uses 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 or historical cost basis. In view of the omission of interest, income taxes, depreciation and amortization from 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 EBITDA to assess the Partnership's profitability because its parent, UGI Corporation, uses EBITDA to assess the profitability of the Partnership, which is one of UGI Corporation's reportable segments. UGI Corporation discloses the Partnership's EBITDA in its disclosure about reportable segments as the profitability measure for its domestic propane segment. EBITDA in the twelve months ended June 30, 2014 includes transition expenses of $5,793 associated with the Heritage Propane acquisition. EBITDA in the three, nine and twelve months ended June 30, 2013 includes acquisition and transition expenses of $9,862, $20,746 and $40,041, respectively, associated with the Heritage Propane acquisition.
The following table includes reconciliations of net income attributable to AmeriGas Partners, L.P. to EBITDA and Adjusted EBITDA (1) for all periods presented:
 
 
Three Months Ended
June 30,
 
Nine Months Ended
June 30,
 
Twelve Months Ended
June 30,
 
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Net (loss) income attributable to AmeriGas Partners, L.P.
 
$
(37,761
)
 
$
(34,595
)
 
$
337,240

 
$
275,278

 
$
283,184

 
$
199,275

Income tax expense (benefit)
 
847

 
(59
)
 
2,204

 
516

 
3,359

 
1,441

Interest expense
 
41,328

 
41,247

 
124,964

 
124,219

 
166,177

 
163,429

Depreciation
 
37,069

 
41,738

 
116,925

 
117,668

 
158,563

 
157,300

Amortization
 
10,788

 
10,775

 
32,411

 
32,825

 
43,151

 
43,821

EBITDA
 
$
52,271

 
$
59,106

 
$
613,744

 
$
550,506

 
$
654,434

 
$
565,266

Heritage Propane acquisition and transition expenses
 
—

 
9,862

 
—

 
20,746

 
5,793

 
40,041

Net losses on commodity derivative instruments entered into beginning April 1, 2014, not associated with current period transactions
 
2,781

 
—

 
2,781

 
—

 
2,781

 
—

Adjusted EBITDA (1)
 
$
55,052

 
$
68,968

 
$
616,525

 
$
571,252

 
$
663,008

 
$
605,307

The following table includes a reconciliation of forecasted net income attributable to AmeriGas Partners, L.P. to forecasted Adjusted EBITDA for the fiscal year ending September 30, 2014: 
 
Forecast
Fiscal Year
Ending
September 30,
2014
Net income attributable to AmeriGas Partners, L.P. (estimate)
$
292,000

Interest expense (estimate)
166,000

Income tax expense (estimate)
3,000

Depreciation (estimate)
160,000

Amortization (estimate)
43,000

Net losses on commodity derivative instruments entered into beginning April 1, 2014, not associated with current period transactions
3,000

Adjusted EBITDA
$
667,000


(1) Adjusted EBITDA is a non-GAAP financial measure. Management believes the presentation of this measure provides useful information to investors to more effectively evaluate the year-over-year results of operations of the Partnership. Management uses Adjusted EBITDA to exclude from AmeriGas Partners' EBITDA unrealized and realized gains and losses on commodity derivative instruments entered into beginning April 1, 2014, not associated with current period transactions and other gains and losses that competitors do not necessarily have to provide additional insight into the comparison of year-over-year profitability to that of other master limited partnerships. AmeriGas Propane accounts for gains and losses on its commodity derivative instruments in earnings as a component of cost of sales. This measure is not comparable to measures used by other entities and should only be considered in conjunction with net income (loss) attributable to AmeriGas Partners, L.P. for the relevant periods.

2