AmeriGas Partners Reports Significant Increase in First Quarter Earnings Business Wire VALLEY FORGE, Pa. -- January 31, 2013 AmeriGas Propane, Inc., general partner of AmeriGas Partners, L.P. (NYSE: APU), reported net income attributable to AmeriGas Partners for the first quarter of fiscal 2013 ended December 31, 2012 of $96.7 million compared to $42.5 million for the same period last year. Net income attributable to AmeriGas Partners for the current-year period reflects increased earnings associated with the operations of Heritage Propane, which was acquired in January 2012. The Partnership’s adjusted earnings before interest expense, income taxes, depreciation and amortization (Adjusted EBITDA) increased to $193.3 million for the first quarter of 2013 compared to $87.4 million for the same period last year reflecting the impact of the Heritage Propane acquisition. Retail volumes sold reflect incremental sales associated with the operations of Heritage Propane partially offset by the impact of significantly warmer than normal weather. For the three months ended December 31, 2012, retail propane volumes sold were 350.7 million gallons compared with retail propane volumes of 220.9 million gallons in the prior-year period. Weather for the quarter was 9.0% warmer than normal, but 3.4% colder than in the prior-year period, according to the National Oceanic and Atmospheric Administration (“NOAA”). Weather for the month of December was 13.1% warmer than normal and 1.5% warmer than last year, according to NOAA. Jerry E. Sheridan, chief executive officer of AmeriGas, said, “Despite promising weather during much of October and into November, the peak heating season got off to a slow start during December, when we experienced weather that was significantly warmer than normal and even slightly warmer than December 2011. Despite the short-term challenges brought about by these uneven weather patterns, our management team remains focused on providing excellent customer service and delivering the significant benefits of the Heritage Propane acquisition. We are on track to recognize $60 million in synergies when the integration is completed later this year and we are confident that, given a return to more normal weather, we will more fully demonstrate the true earnings power of the New AmeriGas. Given our results thus far and assuming essentially normal weather for the remainder of the year, we now anticipate Adjusted EBITDA for fiscal 2013 to be in the range of $620 million to $645 million.” Revenues for the quarter increased to $876.6 million from $683.8 million in the prior-year period, reflecting the higher retail volumes sold partially offset by lower average selling prices. The average wholesale cost of propane at Mont Belvieu, Texas, for the current quarter was approximately 38% lower than the average cost in the same period last year. Total margin increased $184.6 million due to higher volumes sold, higher average retail unit margins and increased total margin related to ancillary sales and services. Operating and administrative expenses increased $83.6 million primarily reflecting incremental expenses associated with the operations of Heritage Propane. Acquisition and transition expenses associated with Heritage Propane were $5.5 million in the current-year period compared to $3.7 million in the prior-year period. Operating income increased $79.8 million primarily reflecting the higher total margin partially offset by the increased operating expenses and greater depreciation and amortization expenses ($25.2 million) principally associated with Heritage Propane. 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, 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. About AmeriGas AmeriGas is the nation’s largest retail propane marketer, serving over two million customers in all 50 states from approximately 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%. AmeriGas Partners, L.P. will hold a live Internet Audio Webcast of its conference call to discuss first quarter earnings and other current activities at 4:00 PM ET on Thursday, January 31, 2013. 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 7:00 PM ET on January 31 through 9:00 pm on February 5. The replay may be accessed at 1-877-344-7529, conference ID 10019731 and International access 1-412-317-0088, conference ID 10019731. 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 (Thousands, except per unit and where otherwise indicated) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2012 2011 2012 2011 Revenues: Propane $ 797,059 $ 637,283 $ 2,837,407 $ 2,343,910 Other 79,588 46,529 277,044 177,641 876,647 683,812 3,114,451 2,521,551 Costs and expenses: Cost of sales - 429,563 429,980 1,642,241 1,555,441 propane Cost of sales - 22,521 13,828 85,764 58,349 other Operating and administrative 243,517 159,910 972,300 624,058 expenses Depreciation 38,323 20,931 151,617 83,836 Amortization 11,028 3,257 42,669 12,395 Other income, net (8,171 ) (4,190 ) (30,502 ) (23,998 ) 736,781 623,716 2,864,089 2,310,081 Operating income 139,866 60,096 250,362 211,470 Loss on extinguishments of 0 0 (13,349 ) (38,117 ) debt Interest expense (41,196 ) (16,533 ) (167,304 ) (64,676 ) Income before 98,670 43,563 69,709 108,677 income taxes Income tax expense (627 ) (450 ) (2,108 ) (421 ) Net income 98,043 43,113 67,601 108,256 Less: net income attributable to (1,378 ) (588 ) (2,436 ) (2,076 ) noncontrolling interests Net income attributable to $ 96,665 $ 42,525 $ 65,165 $ 106,180 AmeriGas Partners, L.P. General partner's interest in net income $ 5,219 $ 1,991 $ 16,347 $ 6,712 attributable to AmeriGas Partners, L.P. Limited partners' interest in net income $ 91,446 $ 40,534 $ 48,818 $ 99,468 attributable to AmeriGas Partners, L.P. Income per limited partner unit (a) Basic $ 0.93 $ 0.55 $ 0.53 $ 1.63 Diluted $ 0.93 $ 0.55 $ 0.53 $ 1.63 Average limited partner units outstanding: Basic 92,820 57,133 90,403 57,128 Diluted 92,902 57,193 90,466 57,180 SUPPLEMENTAL INFORMATION: Retail gallons 350.7 220.9 1,147.3 838.7 sold (millions) EBITDA (b) $ 187,839 $ 83,696 $ 428,863 $ 267,508 Adjusted EBITDA $ 193,327 $ 87,413 $ 490,170 $ 309,342 (b) Expenditures for property, plant and equipment: Maintenance capital $ 10,054 $ 11,790 $ 43,329 $ 39,600 expenditures Transition capital related to $ 4,541 $ 0 $ 22,149 $ 0 Heritage integration Growth capital $ 11,894 $ 9,813 $ 42,548 $ 37,925 expenditures Income per limited partner unit is computed in accordance with accounting guidance regarding the application of the two-class method (a) 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. 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 (b) 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 months ended December 31, 2012 and 2011 includes acquisition and transition expense of $5,488 and $3,717, respectively, associated with the Heritage Propane acquisition. EBITDA in the twelve months ended December 31, 2012 includes a pre-tax loss of $13,349 from extinguishments of debt and acquisition and transition expense of $47,958 associated with the Heritage Propane acquisition. EBITDA in the twelve months ended December 31, 2011 includes a pre-tax loss of $38,117 from extinguishments of debt and acquisition-related expense of $3,717 associated with the Heritage Propane acquisition. 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 Twelve Months Ended December 31, December 31, 2012 2011 2012 2011 Net income attributable to $ 96,665 $ 42,525 $ 65,165 $ 106,180 AmeriGas Partners, L.P. Income tax expense 627 450 2,108 421 Interest expense 41,196 16,533 167,304 64,676 Depreciation 38,323 20,931 151,617 83,836 Amortization 11,028 3,257 42,669 12,395 EBITDA $ 187,839 $ 83,696 $ 428,863 $ 267,508 Heritage Propane acquisition 5,488 3,717 47,958 3,717 and transition expense Loss on extinguishments of debt - - 13,349 38,117 Adjusted EBITDA (1) $ 193,327 $ 87,413 $ 490,170 $ 309,342 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) $ 244,000 Interest expense (estimate) 166,000 Income tax expense (estimate) 2,500 Depreciation (estimate) 156,000 Amortization (estimate) 44,000 EBITDA $ 612,500 Transition expenses (estimate) 20,000 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. Contact: AmeriGas Partners, L.P. Hugh J. Gallagher, 610-337-7000 ext. 1029 Simon Bowman, 610-337-7000 ext. 3645 Shelly Oates, 610-337-7000 ext. 3202
AmeriGas Partners Reports Significant Increase in First Quarter Earnings
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