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TheStreet Open House

AmeriGas Partners Reports Second Quarter Results, Updates Guidance

AmeriGas is the nation’s largest retail propane marketer, serving over two million customers in all 50 states from over 1,200 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%.

AmeriGas Partners, L.P. will hold a live Internet Audio Webcast of its conference call to discuss second quarter earnings and other current activities at 4:00 PM ET on Thursday, April 26. Interested parties may listen to the audio webcast both live and in replay on the Internet at http://investor.shareholder.com/ugi/apu/events.cfm or at the company website http://www.amerigas.com under “Investor Relations”. A telephonic replay will be available from 7:00 PM ET on April 26 through midnight Saturday, April 28. The replay may be accessed at 1-855-859-2056, passcode 36867488 and International access 1-404-537-3406, passcode 36867488.

Comprehensive information about AmeriGas is available on the Internet at 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
(Thousands, except per unit and where otherwise indicated)
(Unaudited)
           
 
 
Three Months Ended Six Months Ended Twelve Months Ended
March 31, March 31, March 31,
  2012     2011     2012     2011     2012     2011  
Revenues:
Propane $ 1,082,764 $ 859,595 $ 1,720,047 $ 1,513,407 $ 2,567,079 $ 2,212,806
Other   72,810     47,181     119,339     93,589     203,270     171,836  
  1,155,574     906,776     1,839,386     1,606,996     2,770,349     2,384,642  
 
Costs and expenses:
Cost of sales - propane 652,393 551,709 1,082,373 972,409 1,656,125 1,408,182
Cost of sales - other 17,618 13,085 31,446 27,690 62,882 57,682
Operating and administrative expenses 252,275 170,472 412,185 326,900 705,861 623,700
Depreciation 35,351 20,346 56,282 40,418 98,841 80,183
Amortization 9,441 2,858 12,698 5,453 18,978 9,869
Other (income) expense, net   (6,551 )   (6,320 )   (10,741 )   (12,075 )   (24,229 )   (21,178 )
  960,527     752,150     1,584,243     1,360,795     2,518,458     2,158,438  
Operating income 195,047 154,626 255,143 246,201 251,891 226,204
Loss on extinguishment of debt (13,379 ) (18,801 ) (13,379 ) (18,801 ) (32,695 ) (18,801 )
Interest expense   (45,045 )   (16,347 )   (61,578 )   (31,722 )   (93,374 )   (63,625 )
Income before income taxes 136,623 119,478 180,186 195,678 125,822 143,778
Income tax (expense) benefit   (764 )   71     (1,214 )   (348 )   (1,256 )   (1,897 )
Net income 135,859 119,549 178,972 195,330 124,566 141,881
Less: net income attributable to noncontrolling interests   (1,974 )   (1,547 )   (2,562 )   (2,460 )   (2,503 )   (2,240 )
Net income attributable to AmeriGas Partners, L.P. $ 133,885   $ 118,002   $ 176,410   $ 192,870   $ 122,063   $ 139,641  
 

General partner's interest in net income attributable to AmeriGas Partners, L.P.

$ 4,282   $ 2,133   $ 6,273   $ 3,834   $ 8,862   $ 5,205  
 

Limited partners' interest in net income attributable to AmeriGas Partners, L.P.

$ 129,603   $ 115,869   $ 170,137   $ 189,036   $ 113,201   $ 134,436  
 
 
Income per limited partner unit (a)
 
Basic $ 1.26   $ 1.45   $ 2.13   $ 2.51   $ 1.67   $ 2.34  
 
Diluted $ 1.26   $ 1.45   $ 2.13   $ 2.51   $ 1.67   $ 2.34  
 
Average limited partner units outstanding:
Basic   83,153     57,128     70,073     57,109     63,602     57,099  
 
Diluted   83,195     57,175     70,124     57,159     63,653     57,147  
 
SUPPLEMENTAL INFORMATION:
 
Retail gallons sold (millions) 389.4 316.3 610.3 572.7 911.8 869.5
EBITDA (b) $ 224,486 $ 157,482 $ 308,182 $ 270,811 $ 334,512 $ 295,215
Expenditures for property, plant and equipment:
Maintenance capital expenditures $ 12,857 $ 9,357 $ 24,647 $ 19,719 $ 43,100 $ 39,524
Growth capital expenditures $ 10,640 $ 9,951 $ 20,453 $ 20,895 $ 38,614 $ 38,876
 
(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, 2011.
 
(b) 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 industry segments. UGI Corporation discloses the Partnership's EBITDA in its disclosure about industry segments as the profitability measure for its domestic propane segment. EBITDA in the three months ended March 31, 2012 includes a pre-tax loss of $13,379 from extinguishment of debt and acquisition and transition expense of $8,138 associated with the Heritage Propane acquisition. EBITDA in the six months ended March 31, 2012 includes a pre-tax loss of $13,379 from extinguishment of debt and acquisition and transition expense of $11,855 associated with the Heritage Propane acquisition. EBITDA for the twelve months ended March 31, 2012 includes a pre-tax loss of $32,695 from extinguishment of debt and acquisition and transition expense of $11,855 associated with the Heritage Propane acquisition. EBITDA in the three, six and twelve months ended March 31, 2011 includes pre-tax losses of $18,801 from extinguishments of debt. EBITDA for the twelve months ended March 31, 2011 also includes a $7,000 pre-tax loss associated with increased litigation reserves.
 
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,
2012   2011 2012   2011 2012   2011
 
Net income attributable to AmeriGas Partners, L.P. $ 133,885 $ 118,002 $ 176,410 $ 192,870 $ 122,063 $ 139,641
Income tax expense (benefit) 764 (71 ) 1,214 348 1,256 1,897
Interest expense 45,045 16,347 61,578 31,722 93,374 63,625
Depreciation 35,351 20,346 56,282 40,418 98,841 80,183
Amortization   9,441   2,858     12,698   5,453   18,978   9,869
EBITDA $ 224,486 $ 157,482 $ 308,182 $ 270,811 $ 334,512 $ 295,215
Heritage Propane acquisition & transition expense 8,138 - 11,855 - 11,855 -
Loss on extinguishments of debt 13,379 18,801 13,379 18,801 32,695 18,801
Litigation reserve   -   -     -   -   -   7,000
Adjusted EBITDA (1) $ 246,003 $ 176,283   $ 333,416 $ 289,612 $ 379,062 $ 321,016
 
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 years ending September 30, 2012 and 2013:
   
Forecast Forecast
Fiscal Fiscal
Year Year
Ending Ending
September 30, September 30,
2012 2013
Net income attributable to AmeriGas Partners, L.P. (estimate) $ 5,000 $ 258,000
Interest expense (estimate) 145,000 165,000
Income tax expense (estimate) 3,000 4,000
Depreciation (estimate) 134,000 148,000
Amortization (estimate)   34,000   40,000
EBITDA $ 321,000 $ 615,000
Transition expenses (estimate) 50,000 20,000
Loss on extinguishment of debt (estimate)   14,000   -
Adjusted EBITDA (1) $ 385,000 $ 635,000
 
(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 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.




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