AmeriGas Propane, Inc., general partner of AmeriGas Partners, L.P. (the
“Partnership,” NYSE: APU), today reported financial results for the
fiscal quarter ended June 30, 2018.
HIGHLIGHTS
Jerry E. Sheridan, president and chief executive officer of AmeriGas,
said, “We are pleased that the Partnership generated adjusted EBITDA of
$67.2 million, 15% higher than the prior year and our strongest third
quarter since fiscal 2013. This result was driven by higher retail
volume, continued success of our National Accounts program, and expense
control despite increased delivery activity. Although not as critical as
in the first and second quarters, our results benefited from colder
April weather, but were negatively impacted by warmer weather in May and
June when compared to the prior year.”
Based on the results of the first nine months of the fiscal year and
expectations for the fourth quarter, the Partnership is updating its
adjusted EBITDA guidance from a range of $625 to $645 million to a range
of $610 to $620 million for the fiscal year ending September 30, 2018.1
KEY DRIVERS OF THIRD QUARTER RESULTS
EARNINGS CALL and WEBCAST
AmeriGas Partners, L.P. will hold a live Internet Audio Webcast of its
conference call to discuss fiscal second quarter earnings and other
current activities at 9:00 AM ET on Thursday, August 2, 2018. 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 2nd through 11:59 PM on August 9th. The replay may
be accessed at (855) 859-2056, and internationally at 1-404-537-3406,
conference ID 3385959.
ABOUT AMERIGAS
AmeriGas is the nation’s largest retail propane marketer, serving over
1.8 million customers in all 50 states from approximately 1,900
distribution locations. UGI Corporation, through subsidiaries, is the
sole General Partner and owns 26% of the Partnership and the public owns
the remaining 74%. Comprehensive information about AmeriGas is available
on the Internet at http://www.amerigas.com.
NOTE ON GUIDANCE and USE OF FORWARD-LOOKING STATEMENTS
Because we are unable to predict certain potentially material items
affecting net income on a GAAP basis, principally mark-to-market gains
and losses on commodity derivative instruments, we cannot reconcile 2018
Adjusted EBITDA, a non-GAAP measure, to net income attributable to
AmeriGas Partners, L.P., the most directly comparable GAAP measure, in
reliance on the “unreasonable efforts” exception set forth in SEC rules.
Adjustments that management can reasonably estimate are provided below.
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, the availability, timing and success of our
acquisitions, commercial initiatives and investments to grow our
business, our ability to successfully integrate acquisitions and achieve
anticipated synergies, and the interruption, disruption, failure,
malfunction or breach of our information technology systems, including
due to cyber-attack. The Partnership undertakes no obligation to release
revisions to its forward-looking statements to reflect events or
circumstances occurring after today.
USE OF NON-GAAP MEASURES
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.
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 periods. Management also uses Adjusted EBITDA to assess
the Partnership’s profitability because its parent, UGI Corporation,
uses the Partnership’s Adjusted EBITDA to assess the profitability of
the Partnership, which is one of UGI Corporation’s industry segments.
UGI Corporation discloses the Partnership’s Adjusted EBITDA as the
profitability measure for its domestic propane segment.
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.
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 are presented at the end of this press release.
The following table includes a quantification of interest expense,
income tax expense, depreciation and amortization included in the
calculation of forecasted Adjusted EBITDA guidance range for the fiscal
year ending September 30, 2018:
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