Amerigas Partners, Lp

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Amerigas Partners, Lp 2018 Annual Report Delighting the Customer AmeriGas Partners, L.P. is a publicly traded master limited benefits as an environmentally friendly fuel source for school bus partnership that operates the nation’s largest retail propane fleets, energy efficient combined heat and power generation, distribution business. The common units of AmeriGas Partners, and liquid injection systems designed to enhance mileage on L.P. are traded on the New York Stock Exchange under the diesel-powered vehicles. symbol “APU”. UGI Corporation, through subsidiaries, is the AmeriGas distributed over 1.1 billion gallons of propane in 2018 sole General Partner and owns 26% of the Partnership and the to over 1.7 million residential, commercial/industrial, motor fuel, public owns the remaining 74%. agricultural and wholesale customers in all 50 states. Through As a clean, versatile energy source, propane is used for a wide the Partnership’s AmeriGas Cylinder Exchange program, variety of applications. Residential and commercial customers cylinders are available at over 59,000 retail locations throughout use propane for home and space heating, water heating, the United States. cooking and drying while industrial customers use it to fire AmeriGas serves its customers from approximately 1,900 furnaces, as a cutting gas and in other process applications. propane distribution locations and has nearly 7,700 dedicated Propane is also used to power school buses and other over-the- employees focused on fulfilling AmeriGas’ commitment to be the road vehicles, forklifts, commercial lawnmowers and stationary most reliable, safest and most responsive propane company in engines. Agricultural applications include tobacco curing, crop the nation. drying, orchard heating and chicken brooding. Propane has clear Delighting the Customer Second only to safety, Delighting the Customer is our key of the top-ranking service providers in a variety of industries. guiding principle. From advancing the digital customer Our local managers and customer service representatives review experience to ensuring reliability in extreme weather, AmeriGas customer feedback daily and reach out to customers regularly to is committed to Delighting the Customer by providing the best ensure we are providing their expected level of service. NPS is a experience possible. focus of all employees in the organization from the front lines to our CEO. One of the ways we monitor the customer experience is through our Net Promoter Score (NPS). We are very proud of our Net The next few pages provide examples of how AmeriGas Promoter Score of 52 this year. This score puts us among some employees strive to Delight the Customer. Dear Fellow Investor: Fiscal 2018 saw the return of more We have also continued to deliver In addition to emergency response, we normal temperatures across the United long-term value to our investors. Our regularly receive testimonials from both States following two record warm compound annual unitholder return our customers and employees about years in 2016 and 2017. AmeriGas’ for the one-year, five-year and 10-year how AmeriGas responded in extreme Adjusted EBITDA increased $54 million periods ended September 30, 2018 cold weather, keeping homes warm or 10% to $606 million. We were also follows: when needed most. Our scale gives us able to make significant progress 1 Year 5 Year 10 Year access to over 250 suppliers throughout on our strategic initiatives aimed at AmeriGas (4.0%) 6.7% 10.9% the U.S. We also control an extensive enhancing our customer experience and Alerian Index 4.9% (2.7%) 9.1% and flexible supply chain (510 railcars, improving operating capabilities across 920 transport trailers, 3,000 bobtail our nationwide network. A few notable S&P 500 17.9% 13.9% 11.9% trucks and 22 propane storage terminals) achievements include: This Annual Report focuses on the providing additional surety of supply • Our “AmeriMobile” distribution system outstanding customer service our 7,700 throughout the winter months. Most of AmeriGas colleagues provide every day provided greater route efficiency and our competitors are unable to match as we seek to provide an unmatched resulted in fewer trucks and less fuel these capabilities. For example, many customer experience in the communities consumption as a result of reducing competitors ran out of supply during we serve. miles between deliveries. the extreme cold of December 2017, • We have added on-line sign up for new This past year, Hurricanes Florence and many of their customers called customers and on-line chat capabilities and Michael created significant energy AmeriGas for help. AmeriGas customers for all customers. shortages in the Carolinas, parts of can live more worry free knowing there Georgia and the Florida panhandle. • We began to roll out our AmeriMobile is a national network of assets and Additionally, wildfires ravaged parts of technology to our service business. dedicated employees taking care of their the Western U.S. Our offices are a key needs. We even have a 24-hour, 365- Our strategic growth platforms continued part of the local communities in which day emergency call center available for to perform well in 2018 as follows: we operate, and our nationwide scale, as customers in need. AmeriGas measures well as our AmeriGas Airborne division, • Our AmeriGas Cylinder Exchange our Net Promoter Score (NPS) daily. program volume grew by 4% and enables us to marshal the resources and assets necessary to ensure security of NPS is a process which is used widely we are now operating at over 59,000 in many industries. This simple survey locations throughout the U.S. supply when these communities need it most. Our fleet of both transport and process following a delivery gives us • Our National Accounts program, which bobtail trucks from all over the country quick feedback as to where we can is unique to AmeriGas given our 50 were positioned to keep our customers improve and whether the customer feels state footprint, grew volume by 11%. supplied with propane during these AmeriGas is easy to do business with. • Both the National Accounts and events. We have included a map from Our focus on the customer experience is AmeriGas Cylinder Exchange programs 2018 showing this “transport cavalry” evident in our NPS scores, which have had record financial performance and right after Hurricane Michael (each increased in four of the last five years. volume years. green dot is an AmeriGas propane trailer carrying 10,000 gallons). We take • We added two acquisitions to our pride in playing a key role in getting our company in 2018, adding 3 million communities back on their feet after gallons of commercial business and these difficult times. enhancing our AmeriGas Cylinder Exchange platform. AmeriGas Airborne Division AmeriGas Airborne is a specialized team from around the country that reacts quickly to help keep propane supply moving in communities hit hard by extreme weather. Airborne brought in over 100 volunteers to support our customers and the recovery efforts in states hit hardest by Hurricanes Florence and Michael. Our teams mobilized quickly and provided relief to the states hit hardest by Hurricane Michael. The green dots represent AmeriGas propane trailers carrying 10,000 gallons each. We remain focused on a balanced advance professionally, and we seek to effort every day and the dedication of our approach to our business designed deliver superior long-term value for our employees in this effort. to benefit all of our key stakeholders. investors. Everything we do is focused Thank you for your investment in AmeriGas. AmeriGas plays a key role in the local on these key constituencies (Community, communities in which we operate and we Customer, Employee and Investor) and continually strive to make AmeriGas easy how we can enhance the benefits of their to do business with for our customers. association with our Company. We hope We strive to provide a workplace where that this Annual Report provides you with our colleagues are valued and can a true sense of the focus we put into this John L. Walsh Hugh Gallagher Chairman President and Chief Executive Officer AmeriGas Cylinder Exchange From grilling and tailgating to generators and patio heating, AmeriGas Cylinder Exchange has you covered. With over 59,000 distribution points, including 24/7 automated, self- serve vending machines, AmeriGas seeks to make your experience as convenient as possible. Financial Highlights Year Ended September 30, 2018 2017 2016 (Millions of dollars, except where noted) Retail gallons sold (millions) 1,081.3 1,046.9 1,065.5 Degree days – % colder (warmer) than normal 1 0.3% (11.3%) (12.4%) Revenues $ 2,823.0 $ 2,453.5 $ 2,311.8 Operating income $ 361.3 $ 387.9 $ 422.6 Net income attributable to AmeriGas Partners, L.P. $ 190.5 $ 162.1 $ 207.0 Income tax expense (benefit) 4.3 2.0 (1.6) Interest expense 163.1 160.2 164.1 Depreciation and amortization 185.8 190.5 190.0 EBITDA 2 $ 543.6 $ 514.8 $ 559.5 Adjusted EBITDA 2 $ 605.5 $ 551.3 $ 543.0 Units outstanding – end of year (millions) 93.0 93.0 93.0 National Retail Sales by Volume 3 AmeriGas serves over 1.7 million • 38% Commercial/Industrial customers in all 50 states from 36% Residential approximately 1,900 distribution • locations. •18% Motor fuel • 8% Agriculture/Transport (1) Deviation from average heating degree days for the 15-year period 2002–2016 based upon national weather statistics provided by the National Oceanic and Atmospheric Administration for 344 Geo regions in the United States, excluding Alaska and Hawaii. (2) Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA are not measures of performance or financial condition under accounting principles generally accepted in the United States of America (“GAAP”). For a more complete description of these non-GAAP measures, why management believes these non-GAAP measures are meaningful to investors, and reconciliations of these measures to net income attributable to AmeriGas Partners, L.P.
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