Exhibit 99.1
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Contact: | | 610-337-7000 | | | | For Immediate Release: |
| | Hugh J. Gallagher, ext. 1029 | | | | April 26, 2012 |
| | Simon Bowman, ext. 3645 | | | | |
| | Shelly Oates, ext. 3202 | | | | |
AmeriGas Partners Reports Second Quarter Results, Updates Guidance
VALLEY FORGE, Pa., April 26 - AmeriGas Propane, Inc., general partner of AmeriGas Partners, L.P. (NYSE: APU), reported net income attributable to AmeriGas Partners, L.P. for the second quarter of fiscal 2012 ended March 31, 2012 of $133.9 million compared to $118.0 million for the same period last year. Net income attributable to AmeriGas Partners, L.P. for the current-year period includes the impact of a $13.4 million loss on extinguishment of debt and $8.1 million in acquisition and transition expenses related to the mid-January acquisition of Heritage Propane. Net income attributable to AmeriGas Partners, L.P. for the prior-year quarter includes the impact of an $18.8 million loss on an extinguishment of debt.
The Partnership’s adjusted earnings before interest expense, income taxes, depreciation and amortization (Adjusted EBITDA) increased to $246.0 million for the second quarter of 2012 compared to $176.3 million for the same period last year, reflecting the impact of the Heritage Propane acquisition partially offset by the impact of record warm temperatures. Weather during the quarter was approximately 22% warmer than normal and the prior-year period, according to the National Oceanic and Atmospheric Administration.
For the three months ended March 31, 2012, retail propane volumes sold were 389.4 million gallons compared with retail propane volumes of 316.3 million gallons in the prior-year period. The increase in volumes sold was largely attributable to incremental volumes resulting from the Heritage Propane acquisition (approximately 138 million gallons) partially offset by the impact of the historically warm weather.
Revenues for the quarter increased to $1,155.6 million from $906.8 million in the prior-year period, reflecting the incremental revenues from the Heritage Propane acquisition (approximately $404 million) partially offset by a weather-related decline in revenues at AmeriGas Propane’s legacy operations. Total margin increased $143.6 million due to the inclusion of Heritage Propane’s operations (approximately $194 million) partially offset by the impact of historically warm weather on total margin at AmeriGas Propane’s legacy operations. Operating expenses increased $81.8 million including expenses of Heritage Propane (approximately $78 million) and $8.1 million in acquisition and transition expenses partially offset by a decrease in expense at AmeriGas Propane legacy operations. Partnership operating income (which excludes the losses on extinguishments of debt) increased $40.4 million, reflecting the higher Adjusted EBITDA offset by higher depreciation and amortization expenses ($21.6 million) and the Heritage Propane acquisition and transition expenses ($8.1 million).
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AmeriGas Partners Reports Second Quarter Results, Updates Guidance | | Page 2 |
Jerry E. Sheridan, president and chief executive officer of AmeriGas, said, “Our results for the quarter reflect the adverse effects of the unprecedented warm weather encountered during the period. The quarter ended March 31, 2012 was the warmest on record in the continental United States. The exceptional warmth experienced during the second quarter followed significantly warmer than normal weather during our first fiscal quarter, resulting in reduced demand for propane during the peak winter season. We were pleased to complete the Heritage Propane acquisition in mid-January and continue to make good progress on the integration of the business. We have filled key operating positions including regional vice presidents and area director positions. Additionally, we have finalized plans for the first phase of field integration efforts to be completed this summer and have begun the integration of back office operations.”
Sheridan continued, “Given our results thus far and our current assessment of acquisition integration efforts and business conditions for the remainder of this fiscal year, we continue to expect Adjusted EBITDA for the fiscal year ending September 30, 2012 to be in the range of $375 million to $395 million. Looking ahead to fiscal 2013, assuming essentially normal weather patterns and given our current assessment of business conditions and acquisition integration efforts, we expect Adjusted EBITDA for the fiscal year ending September 30, 2013 to be in the range of $610 million to $660 million. Our expectations include the impact of approximately $15 million in net synergies expected to be recognized from the Heritage Propane acquisition in fiscal 2012 and approximately $50 million in net synergies expected to be recognized in fiscal 2013.”
EBITDA, 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, losses on extinguishment of debt 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.
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%.
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AmeriGas Partners Reports Second Quarter Results, Updates Guidance | | Page 3 |
AmeriGas Partners, L.P. will hold a live Internet Audio Webcast of its conference call to discuss second quarter earnings and other current activities at4:00 PM ET on Thursday, April 26.Interested parties may listen to the audio webcast both live and in replay on the Internet athttp://investor.shareholder.com/ugi/apu/events.cfm or at the company websitehttp://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 atwww.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.
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AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES
REPORT OF EARNINGS
(Thousands, except per unit and where otherwise indicated)
(Unaudited)
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| | Three Months Ended March 31, | | | Six Months Ended March 31, | | | Twelve Months Ended 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 | |
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| | | 1,155,574 | | | | 906,776 | | | | 1,839,386 | | | | 1,606,996 | | | | 2,770,349 | | | | 2,384,642 | |
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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 | ) |
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| | | 960,527 | | | | 752,150 | | | | 1,584,243 | | | | 1,360,795 | | | | 2,518,458 | | | | 2,158,438 | |
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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 | ) |
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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 | ) |
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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 | ) |
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Net income attributable to AmeriGas Partners, L.P. | | $ | 133,885 | | | $ | 118,002 | | | $ | 176,410 | | | $ | 192,870 | | | $ | 122,063 | | | $ | 139,641 | |
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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 | |
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Limited partners’ interest in net income attributable to AmeriGas Partners, L.P. | | $ | 129,603 | | | $ | 115,869 | | | $ | 170,137 | | | $ | 189,036 | | | $ | 113,201 | | | $ | 134,436 | |
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Income per limited partner unit (a) | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | 1.26 | | | $ | 1.45 | | | $ | 2.13 | | | $ | 2.51 | | | $ | 1.67 | | | $ | 2.34 | |
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Diluted | | $ | 1.26 | | | $ | 1.45 | | | $ | 2.13 | | | $ | 2.51 | | | $ | 1.67 | | | $ | 2.34 | |
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Average limited partner units outstanding: | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | 83,153 | | | | 57,128 | | | | 70,073 | | | | 57,109 | | | | 63,602 | | | | 57,099 | |
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Diluted | | | 83,195 | | | | 57,175 | | | | 70,124 | | | | 57,159 | | | | 63,653 | | | | 57,147 | |
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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. |
(continued)
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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 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:
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| | Three Months Ended March 31, | | | Six Months Ended March 31, | | | Twelve Months Ended March 31, | |
| | 2012 | | | 2011 | | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
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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 | |
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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 | |
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Adjusted EBITDA (1) | | $ | 246,003 | | | $ | 176,283 | | | $ | 333,416 | | | $ | 289,612 | | | $ | 379,062 | | | $ | 321,016 | |
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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:
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| | Forecast Fiscal Year Ending September 30, 2012 | | | Forecast Fiscal Year Ending September 30, 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 | |
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EBITDA | | $ | 321,000 | | | $ | 615,000 | |
Transition expenses (estimate) | | | 50,000 | | | | 20,000 | |
Loss on extinguishment of debt (estimate) | | | 14,000 | | | | — | |
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Adjusted EBITDA (1) | | $ | 385,000 | | | $ | 635,000 | |
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(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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