AmeriGas Propane, Inc., general partner of AmeriGas Partners, L.P. (NYSE: APU), reported GAAP net income attributable to AmeriGas Partners for the quarter ended March 31, 2017 of $135.1 million, compared to GAAP net income of $245.9 million for the quarter ended March 31, 2016. Adjusted net income attributable to AmeriGas Partners for the quarter ended March 31, 2017 was $185.6 million compared to adjusted net income of $206.9 million in the prior-year quarter. Adjusted net income excludes the impact of unrealized gains and losses on commodity derivative instruments and a loss from an early extinguishment of debt. A reconciliation of adjusted net income to GAAP net income is set forth at the end of this release.

The Partnership's adjusted earnings before interest expense, income taxes, depreciation and amortization (Adjusted EBITDA) was $271.2 million for the quarter ended March 31, 2017 compared to $295.4 million in the prior-year quarter.

Degree days for the quarter were 13.3% warmer than normal and 2.9% warmer than the prior year; combined heating degree days for January and February, which account for approximately 75% of second quarter heating degree days, were more than 9% warmer than the same period in the prior year, and the month of February was the warmest in 122 years.

Operating and financial highlights were as follows:
  • Retail volumes were 6% lower than the prior year primarily as a result of the warm weather.
  • Unit margins were slightly higher than last year, despite average propane prices at Mt. Belvieu, TX that were $0.33 per gallon (85%) higher than last year's quarter.
  • During the quarter, the Partnership completed the issuance of $525 million of 5.75% notes due in May 2027, tendered for $378.4 million of its 7.00% notes due May 2022, and announced the redemption of the remaining $102.5 million of 7.00% notes. The redemption will be completed on May 20, 2017 and will mark the last step of a complete refinancing of the Partnership's long-term debt.
  • On April 24th, the Partnership announced an increase in its quarterly distribution to $0.95 per unit ($3.80 annualized), marking the 13th consecutive year of distribution increases for its unitholders.

Jerry E. Sheridan, president and chief executive officer of AmeriGas, said, "Our operations were clearly impacted by the very warm weather during the quarter. We met this challenge by maintaining our focus on operational efficiency and containing operating expenses. Our teams did a nice job offsetting increases in the cost of fuel with reductions in overtime and travel expenses while continuing to drive improvement in our unit margins. Considering these difficult conditions, we were pleased with the performance of the business in the second quarter. Another significant accomplishment in the quarter was completing the steps to de-risk our debt structure by extending maturities and lowering average interest rates by over 100 basis points in total. Finally, as was recently announced, our Board approved our 13th consecutive distribution increase for our unitholders, underscoring their confidence in our ability to withstand warm weather in the near-term while focusing on creating long-term, sustainable value for our investors."

Based on the results through the first half of the year, and expectations for the remainder of the year, the company now expects Adjusted EBITDA of $550 million to $580 million for the fiscal year ending September 30, 2017.

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