AmeriGas Propane, general partner of AmeriGas Partners, reported adjusted net income attributable to AmeriGas Partners for the 2016 first quarter ended December 31, 2015 of $86.5 million.
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This compares to adjusted net income of $97.3 million for the quarter ended December 31, 2014. Adjusted net income attributable to AmeriGas Partners eliminates the impact of mark-to-market changes in commodity derivative instruments not associated with current period transactions.
Most of the mark-to-market adjustments relate to our normal business practice of hedging fixed-price commitments to our customers. On a GAAP basis, including the impact of such mark-to-market changes, AmeriGas Partners reported net income of $81.0 million for the quarter ended December 31, 2015, compared to a loss of $39.6 million in the prior year.
The Partnership’s adjusted earnings before interest expense, income taxes, depreciation and amortization (Adjusted EBITDA) was $177.7 million for the first fiscal quarter compared with $188.5 million in the prior year.
Retail volumes sold for the quarter decreased 13.3% to 295.1 million gallons from 340.2 million gallons in the prior year. The decrease in retail gallons sold reflects temperatures that were 16.8% warmer than the prior year according to the National Oceanic and Atmospheric Administration (NOAA).
Jerry E. Sheridan, president and chief executive officer of AmeriGas, said, "Although this was a challenging quarter with weather that was approximately 20% warmer than normal and nearly 17% warmer than the prior year, we were pleased to deliver adjusted EBITDA that was only 6% below the prior year.
"This performance was made possible through a focus on operational efficiency and cost containment, as operating expenses decreased nearly $16 million from last year’s quarter. We were pleased to see continued moderation in propane commodity costs, which were 45% lower than the prior-year period.
"Lower propane prices are good for our customers as they benefit from lower bills, and good for our business as we face lower working capital needs and collection-related expenses. Overall, the business remains strong, with a healthy balance sheet and ability to fund our growth initiatives without accessing the capital markets."
"We also continued to make solid progress on each of our growth initiatives. We completed three acquisitions in the quarter which, collectively, are expected to add approximately the same amount of volume as the nine acquisitions we completed in the entire prior fiscal year.
"Our National Accounts program added 21 new customer contracts and our Cylinder Exchange program secured customers that will add 2,500 new locations this fiscal year.
"Due to the importance of the second fiscal quarter to full year results, we intend to update our guidance for the 2016 fiscal year following the completion of our second fiscal quarter on March 31, 2016."†■