AmeriGas Propane, Inc., general partner of AmeriGas Partners, L.P. (NYSE: APU), reported net income attributable to AmeriGas Partners for the second quarter of Fiscal 2013 ended March 31, 2013 of $213.2 million compared to $133.9 million for the same period last year. Net income attributable to AmeriGas Partners, L.P. for the current-year period was revised to reflect the impact of an $8.7 million adjustment to correct the Partnership’s method of accounting for certain customer credits. Net income attributable to AmeriGas Partners, L.P. for the current-year period also includes the impact of $5.4 million in acquisition and transition expenses associated with Heritage Propane. Net income attributable to AmeriGas Partners, L.P. for the prior-year quarter includes the impact of a $13.4 million loss on extinguishment of debt and $8.1 million in acquisition and transition expenses. The Partnership’s adjusted earnings before interest expense, income taxes, depreciation and amortization (Adjusted EBITDA) increased to $309.0 million for the second quarter of fiscal 2013 compared to $246.0 million for the same period last year. The improved results for the current-year period reflect winter weather that was markedly colder than the record warmth experienced during the prior-year period and, to a much lesser extent, the full-period effects of Heritage Propane, which was acquired January 12, 2012.
Jerry E. Sheridan, chief executive officer of AmeriGas, said, “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 2013 to be near the midpoint of our previously-stated guidance of $620 million to $645 million.”
Adjusted EBITDA is a non-GAAP financial measure defined herein as earnings before interest expense, income taxes, depreciation and amortization, losses on extinguishment of debt and Heritage Propane acquisition and transition expenses. 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. This measure is 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 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 2,100 distribution locations. UGI Corporation, through subsidiaries, is the sole General Partner and owns 26% of the Partnership. An affiliate of Energy Transfer Partners, L.P. owns 32% of the Partnership and the public owns the remaining 42%.
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 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 Heritage Propane 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 (REVISED) (a) | ||||||||||||||||||||||||||
| (Thousands, except per unit and where otherwise indicated) | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | Twelve Months Ended | ||||||||||||||||||||||||
| March 31, | March 31, | March 31, | ||||||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Propane | $ | 1,098,382 | $ | 1,082,764 | $ | 1,895,441 | $ | 1,720,047 | $ | 2,853,025 | $ | 2,567,079 | ||||||||||||||
| Other | 77,825 | 72,810 | 157,413 | 119,339 | 282,059 | 203,270 | ||||||||||||||||||||
| 1,176,207 | 1,155,574 | 2,052,854 | 1,839,386 | 3,135,084 | 2,770,349 | |||||||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||||||||
| Cost of sales - propane | 594,128 | 652,393 | 1,023,691 | 1,082,373 | 1,583,976 | 1,656,125 | ||||||||||||||||||||
| Cost of sales - other | 18,282 | 17,618 | 40,803 | 31,446 | 86,428 | 62,882 | ||||||||||||||||||||
| Operating and administrative expenses | 265,298 | 252,275 | 508,815 | 412,185 | 985,323 | 705,861 | ||||||||||||||||||||
| Depreciation | 37,607 | 35,351 | 75,930 | 56,282 | 153,873 | 98,841 | ||||||||||||||||||||
| Amortization | 11,022 | 9,441 | 22,050 | 12,698 | 44,250 | 18,978 | ||||||||||||||||||||
| Other income, net | (7,635 | ) | (6,551 | ) | (15,806 | ) | (10,741 | ) | (31,586 | ) | (24,229 | ) | ||||||||||||||
| 918,702 | 960,527 | 1,655,483 | 1,584,243 | 2,822,264 | 2,518,458 | |||||||||||||||||||||
| Operating income | 257,505 | 195,047 | 397,371 | 255,143 | 312,820 | 251,891 | ||||||||||||||||||||
| (Loss) gain on extinguishments of debt | 0 | (13,379 | ) | 0 | (13,379 | ) | 30 | (32,695 | ) | |||||||||||||||||
| Interest expense | (41,776 | ) | (45,045 | ) | (82,972 | ) | (61,578 | ) | (164,035 | ) | (93,374 | ) | ||||||||||||||
| Income before income taxes | 215,729 | 136,623 | 314,399 | 180,186 | 148,815 | 125,822 | ||||||||||||||||||||
| Income tax benefit (expense) | 52 | (764 | ) | (575 | ) | (1,214 | ) | (1,292 | ) | (1,256 | ) | |||||||||||||||
| Net income | 215,781 | 135,859 | 313,824 | 178,972 | 147,523 | 124,566 | ||||||||||||||||||||
| Less: net income attributable to noncontrolling interests | (2,573 | ) | (1,974 | ) | (3,951 | ) | (2,562 | ) | (3,035 | ) | (2,503 | ) | ||||||||||||||
| Net income attributable to AmeriGas Partners, L.P. | $ | 213,208 | $ | 133,885 | $ | 309,873 | $ | 176,410 | $ | 144,488 | $ | 122,063 | ||||||||||||||
| General partner's interest in net income attributable | ||||||||||||||||||||||||||
| to AmeriGas Partners, L.P. | $ | 6,384 | $ | 4,282 | $ | 11,603 | $ | 6,273 | $ | 18,449 | $ | 8,862 | ||||||||||||||
| Limited partners' interest in net income attributable | ||||||||||||||||||||||||||
| to AmeriGas Partners, L.P. | $ | 206,824 | $ | 129,603 | $ | 298,270 | $ | 170,137 | $ | 126,039 | $ | 113,201 | ||||||||||||||
| Income per limited partner unit (b) | ||||||||||||||||||||||||||
| Basic | $ | 1.56 | $ | 1.26 | $ | 2.49 | $ | 2.13 | $ | 1.35 | $ | 1.67 | ||||||||||||||
| Diluted | $ | 1.56 | $ | 1.26 | $ | 2.49 | $ | 2.13 | $ | 1.35 | $ | 1.67 | ||||||||||||||
| Average limited partner units outstanding: | ||||||||||||||||||||||||||
| Basic | 92,830 | 83,153 | 92,827 | 70,073 | 92,813 | 63,602 | ||||||||||||||||||||
| Diluted | 92,895 | 83,195 | 92,901 | 70,124 | 92,882 | 63,653 | ||||||||||||||||||||
| SUPPLEMENTAL INFORMATION: | ||||||||||||||||||||||||||
| Retail gallons sold (millions) | 464.4 | 389.4 | 815.1 | 610.3 | 1,222.3 | 911.8 | ||||||||||||||||||||
| EBITDA (c) | $ | 303,561 | $ | 224,486 | $ | 491,400 | $ | 308,182 | $ | 507,938 | $ | 334,512 | ||||||||||||||
| Adjusted EBITDA (c) | $ | 308,957 | $ | 246,003 | $ | 502,284 | $ | 333,416 | $ | 553,124 | $ | 379,062 | ||||||||||||||
| Expenditures for property, plant and equipment: | ||||||||||||||||||||||||||
| Maintenance capital expenditures | $ | 11,293 | $ | 11,514 | $ | 21,347 | $ | 23,304 | $ | 43,108 | $ | 41,757 | ||||||||||||||
| Transition capital related to Heritage integration | $ | 6,440 | $ | 1,343 | $ | 10,981 | $ | 1,343 | $ | 27,246 | $ | 1,343 | ||||||||||||||
| Growth capital expenditures | $ | 10,215 | $ | 10,640 | $ | 22,109 | $ | 20,453 | $ | 42,123 | $ | 38,614 | ||||||||||||||
| (a) | This report of earnings has been revised to reflect impact of the Partnership's correction of its method of accounting for certain customer credits. | |
| (b) | 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, 2012. | |
| (c) | Earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") should not be considered as an alternative to net income 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. |
| 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 years. |
| Management also uses EBITDA to assess the Partnership's profitability because its parent, UGI Corporation, uses the Partnership's 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 three, six and twelve months ended March 31, 2013 includes acquisition and transition expense of $5,396, $10,884 and $45,216, respectively, associated with the Heritage Propane acquisition. EBITDA in the three, six and twelve months ended March 31, 2012 includes acquisition and transition expense of $8,138, $11,855 and $11,855, respectively, associated with the Heritage Propane acquisition. EBITDA in the three, six and twelve months ended March 31, 2012 includes pre-tax losses of $13,379, $13,379 and $32,695, respectively, from extinguishments of debt. |
| 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 | Six Months Ended | Twelve Months Ended | |||||||||||||||||||
| March 31, | March 31, | March 31, | |||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
| Net income attributable to AmeriGas Partners, L.P. | $ | 213,208 | $ | 133,885 | $ | 309,873 | $ | 176,410 | $ | 144,488 | $ | 122,063 | |||||||||
| Income tax (benefit) expense | (52 | ) | 764 | 575 | 1,214 | 1,292 | 1,256 | ||||||||||||||
| Interest expense | 41,776 | 45,045 | 82,972 | 61,578 | 164,035 | 93,374 | |||||||||||||||
| Depreciation | 37,607 | 35,351 | 75,930 | 56,282 | 153,873 | 98,841 | |||||||||||||||
| Amortization | 11,022 | 9,441 | 22,050 | 12,698 | 44,250 | 18,978 | |||||||||||||||
| EBITDA | $ | 303,561 | $ | 224,486 | $ | 491,400 | $ | 308,182 | $ | 507,938 | $ | 334,512 | |||||||||
| Heritage Propane acquisition and transition expense | 5,396 | 8,138 | 10,884 | 11,855 | 45,216 | 11,855 | |||||||||||||||
| Loss (gain) on extinguishments of debt | - | 13,379 | - | 13,379 | (30 | ) | 32,695 | ||||||||||||||
| Adjusted EBITDA (1) | $ | 308,957 | $ | 246,003 | $ | 502,284 | $ | 333,416 | $ | 553,124 | $ | 379,062 | |||||||||
| The following table includes a reconciliation of forecasted net income attributable to AmeriGas Partners, L.P. to forecasted EBITDA and Adjusted EBITDA for the fiscal year ending September 30, 2013: |
| Forecast | |||||
| Fiscal | |||||
| Year | |||||
| Ending | |||||
| September 30, | |||||
| 2013 | |||||
| Net income attributable to AmeriGas Partners, L.P. (estimate) | $ | 239,000 | |||
| Interest expense (estimate) | 166,000 | ||||
| Income tax expense (estimate) | 2,500 | ||||
| Depreciation (estimate) | 156,000 | ||||
| Amortization (estimate) | 44,000 | ||||
| EBITDA | $ | 607,500 | |||
| Transition expenses (estimate) | 25,000 | ||||
| Adjusted EBITDA (1) | $ | 632,500 | |||
| (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 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. This measure is not comparable to measures used by other entities and should only be considered in conjunction with net income attributable to AmeriGas Partners, L.P. for the relevant periods. |
Contacts:
Hugh J. Gallagher, 610-337-7000 ext. 1029
Simon
Bowman, 610-337-7000 ext. 3645
Shelly Oates, 610-337-7000 ext. 3202
