AMERIGAS PARTNERS LP, 10-Q filed on 8/7/2014
Quarterly Report
Document and Entity Information
9 Months Ended
Jun. 30, 2014
Jul. 31, 2014
Document and Entity Information [Abstract]
 
 
Entity Registrant Name
AMERIGAS PARTNERS LP 
 
Entity Central Index Key
0000932628 
 
Document Type
10-Q 
 
Document Period End Date
Jun. 30, 2014 
 
Amendment Flag
false 
 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q3 
 
Current Fiscal Year End Date
--09-30 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
92,866,796 
Condensed Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Sep. 30, 2013
Jun. 30, 2013
Current assets:
 
 
 
Cash and cash equivalents
$ 14,655 
$ 12,635 
$ 16,533 
Accounts receivable (less allowances for doubtful accounts of $22,880, $18,552 and $23,510, respectively)
311,873 
290,701 
298,558 
Accounts receivable - related parties
1,821 
1,509 
1,234 
Inventories
148,881 
158,928 
142,406 
Derivative financial instruments
4,181 
18,036 
424 
Prepaid expenses and other current assets
11,314 
18,883 
10,045 
Total current assets
492,725 
500,692 
469,200 
Property, plant and equipment (less accumulated depreciation and amortization of $1,280,164, $1,231,688 and $1,194,133, respectively)
1,389,832 
1,437,514 
1,456,055 
Goodwill
1,934,581 
1,933,929 
1,924,820 
Intangible assets, net
468,543 
496,328 
497,648 
Other assets
44,251 
41,383 
40,487 
Total assets
4,329,932 
4,409,846 
4,388,210 
Current liabilities:
 
 
 
Current maturities of long-term debt
9,700 
12,014 
10,006 
Bank loans
92,500 
116,900 
80,000 
Accounts payable - trade
138,086 
170,705 
127,497 
Accounts payable - related parties
537 
1,071 
1,518 
Customer deposits and advances
57,426 
128,122 
80,194 
Derivative financial instruments
238 
135 
13,573 
Other current liabilities
162,533 
188,027 
164,020 
Total current liabilities
461,020 
616,974 
476,808 
Long-term debt
2,285,128 
2,288,097 
2,293,199 
Other noncurrent liabilities
85,772 
80,638 
87,331 
Total liabilities
2,831,920 
2,985,709 
2,857,338 
Commitments and contingencies (note 6)
   
   
   
AmeriGas Partners, L.P. partners’ capital:
 
 
 
Common unitholders (units issued - 92,866,796, 92,824,539 and 92,821,523, respectively)
1,434,093 
1,354,187 
1,490,680 
General partner
16,751 
15,930 
17,310 
Accumulated other comprehensive income (loss)
7,604 
14,986 
(16,959)
Total AmeriGas Partners, L.P. partners’ capital
1,458,448 
1,385,103 
1,491,031 
Noncontrolling interest
39,564 
39,034 
39,841 
Total partners’ capital
1,498,012 
1,424,137 
1,530,872 
Total liabilities and partners’ capital
$ 4,329,932 
$ 4,409,846 
$ 4,388,210 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Jun. 30, 2014
Sep. 30, 2013
Jun. 30, 2013
Statement of Financial Position [Abstract]
 
 
 
Allowances for doubtful accounts
$ 22,880 
$ 18,552 
$ 23,510 
Depreciation and amortization on property, plant and equipment
$ 1,280,164 
$ 1,231,688 
$ 1,194,133 
Common units, issued (in units)
92,866,796 
92,824,539 
92,821,523 
Condensed Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Revenues:
 
 
 
 
Propane
$ 549,976 
$ 518,361 
$ 2,941,701 
$ 2,413,802 
Other
63,261 
63,358 
210,985 
220,771 
Total, Revenues
613,237 
581,719 
3,152,686 
2,634,573 
Costs and expenses:
 
 
 
 
Cost of sales - propane (excluding depreciation shown below)
320,839 
283,037 
1,750,500 
1,306,728 
Cost of sales - other (excluding depreciation shown below)
22,822 
22,657 
61,336 
63,460 
Operating and administrative expenses
225,141 
224,452 
744,007 
733,267 
Depreciation
37,069 
41,738 
116,925 
117,668 
Amortization
10,788 
10,775 
32,411 
32,825 
Other income, net
(7,848)
(7,579)
(21,534)
(23,385)
Total, costs and expenses
608,811 
575,080 
2,683,645 
2,230,563 
Operating income
4,426 
6,639 
469,041 
404,010 
Interest expense
(41,328)
(41,247)
(124,964)
(124,219)
(Loss) income before income taxes
(36,902)
(34,608)
344,077 
279,791 
Income tax (expense) benefit
(847)
59 
(2,204)
(516)
Net (loss) income
(37,749)
(34,549)
341,873 
279,275 
Less: net income attributable to noncontrolling interest
(12)
(46)
(4,633)
(3,997)
Net (loss) income attributable to AmeriGas Partners, L.P.
(37,761)
(34,595)
337,240 
275,278 
General partner’s interest in net (loss) income attributable to AmeriGas Partners, L.P.
6,155 
5,045 
20,689 
16,648 
Limited partners’ interest in net (loss) income attributable to AmeriGas Partners, L.P.
$ (43,916)
$ (39,640)
$ 316,551 
$ 258,630 
(Loss) income per limited partner unit - basic and diluted:
 
 
 
 
Basic (in usd per unit)
$ (0.47)
$ (0.43)
$ 3.04 
$ 2.70 
Diluted (in usd per unit)
$ (0.47)
$ (0.43)
$ 3.04 
$ 2.70 
Average limited partner units outstanding (thousands):
 
 
 
 
Basic (in shares)
92,888 
92,838 
92,873 
92,830 
Diluted (in shares)
92,888 
92,838 
92,941 
92,904 
Condensed Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net (loss) income
$ (37,749)
$ (34,549)
$ 341,873 
$ 279,275 
Other comprehensive income (loss):
 
 
 
 
Net gains (losses) on derivative instruments
884 
(19,434)
46,231 
(24,348)
Reclassifications of net (gains) losses on derivative instruments
(5,258)
8,479 
(53,685)
51,229 
Other comprehensive (loss) income
(4,374)
(10,955)
(7,454)
26,881 
Total comprehensive (loss) income
(42,123)
(45,504)
334,419 
306,156 
Add comprehensive loss (deduct comprehensive income) attributable to noncontrolling interest
32 
65 
(4,561)
(4,268)
Comprehensive (loss) income attributable to AmeriGas Partners, L.P.
$ (42,091)
$ (45,439)
$ 329,858 
$ 301,888 
Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Jun. 30, 2014
Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
Net income
$ 341,873 
$ 279,275 
Adjustments to reconcile net income to net cash from operating activities
 
 
Depreciation and amortization
149,336 
150,493 
Provision for uncollectible accounts
23,254 
12,045 
Other, net
4,293 
3,038 
Net change in:
 
 
Accounts receivable
(44,642)
(46,531)
Inventories
10,111 
21,358 
Accounts payable
(33,132)
(43,423)
Other current assets
6,274 
9,472 
Other current liabilities
(94,176)
(113,348)
Net cash provided by operating activities
363,191 
272,379 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
Expenditures for property, plant and equipment
(80,291)
(80,736)
Proceeds from disposals of assets
(12,572)
(5,891)
Acquisitions of businesses, net of cash acquired
(1,933)
(1,045)
Net cash used by investing activities
(69,652)
(75,890)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
Distributions
(257,597)
(242,795)
Noncontrolling interest activity
(4,031)
(3,879)
(Decrease) increase in bank loans
(24,400)
30,100 
Repayments of long-term debt
(5,662)
(24,806)
Proceeds associated with equity-based compensation plans, net of tax withheld
146 
1,312 
Capital contributions from General Partner
25 
10 
Net cash used by financing activities
(291,519)
(240,058)
Cash and cash equivalents increase (decrease)
2,020 
(43,569)
CASH AND CASH EQUIVALENTS:
 
 
End of period
14,655 
16,533 
Beginning of period
12,635 
60,102 
Increase (decrease)
$ 2,020 
$ (43,569)
Condensed Consolidated Statements of Partner's Capital (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Beginning Balance (in usd)
 
 
$ 1,424,137 
$ 1,468,560 
Net income
(37,749)
(34,549)
341,873 
279,275 
Net gains (losses) on derivative instruments
884 
(19,434)
46,231 
(24,348)
Reclassifications of net (gains) losses on derivative instruments
(5,258)
8,479 
(53,685)
51,229 
Distributions
 
 
(261,628)
(246,674)
Unit-based compensation expense
 
 
2,002 
2,996 
Common Units issued in connection with incentive compensation plans, net of tax withheld (in usd)
 
 
(918)
(166)
Ending Balance (in usd)
1,498,012 
1,530,872 
1,498,012 
1,530,872 
Total AmeriGas Partners, L.P. Partners' Capital
 
 
 
 
Beginning Balance (in usd)
 
 
1,385,103 
1,429,108 
Net income
 
 
337,240 
275,278 
Net gains (losses) on derivative instruments
 
 
45,761 
(24,102)
Reclassifications of net (gains) losses on derivative instruments
 
 
(53,143)
50,712 
Distributions
 
 
(257,597)
(242,795)
Unit-based compensation expense
 
 
2,002 
2,996 
Common Units issued in connection with incentive compensation plans, net of tax withheld (in usd)
 
 
(918)
(166)
Ending Balance (in usd)
1,458,448 
1,491,031 
1,458,448 
1,491,031 
Limited Partner
 
 
 
 
Beginning Balance (in units)
 
 
92,824,539 
92,801,347 
Beginning Balance (in usd)
 
 
1,354,187 
1,455,702 
Net income
 
 
316,551 
258,630 
Distributions
 
 
(237,704)
(226,472)
Unit-based compensation expense
 
 
2,002 
2,996 
Common Units issued in connection with incentive compensation plans, net of tax withheld (in units)
 
 
42,257 
20,176 
Common Units issued in connection with incentive compensation plans, net of tax withheld (in usd)
 
 
(943)
(176)
Ending Balance (in units)
92,866,796 
92,821,523 
92,866,796 
92,821,523 
Ending Balance (in usd)
1,434,093 
1,490,680 
1,434,093 
1,490,680 
General Partner
 
 
 
 
Beginning Balance (in usd)
 
 
15,930 
16,975 
Net income
 
 
20,689 
16,648 
Distributions
 
 
(19,893)
(16,323)
Common Units issued in connection with incentive compensation plans, net of tax withheld (in usd)
 
 
25 
10 
Ending Balance (in usd)
16,751 
17,310 
16,751 
17,310 
Accumulated Other Comprehensive Income (Loss)
 
 
 
 
Beginning Balance (in usd)
 
 
14,986 
(43,569)
Net gains (losses) on derivative instruments
 
 
45,761 
(24,102)
Reclassifications of net (gains) losses on derivative instruments
 
 
(53,143)
50,712 
Ending Balance (in usd)
7,604 
(16,959)
7,604 
(16,959)
Noncontrolling Interest
 
 
 
 
Beginning Balance (in usd)
 
 
39,034 
39,452 
Net income
 
 
4,633 
3,997 
Net gains (losses) on derivative instruments
 
 
470 
(246)
Reclassifications of net (gains) losses on derivative instruments
 
 
(542)
517 
Distributions
 
 
(4,031)
(3,879)
Ending Balance (in usd)
$ 39,564 
$ 39,841 
$ 39,564 
$ 39,841 
Nature of Operations
Nature of Operations
Nature of Operations

AmeriGas Partners, L.P. (“AmeriGas Partners”) is a publicly traded limited partnership that conducts a national propane distribution business through its principal operating subsidiary AmeriGas Propane, L.P. (“AmeriGas OLP”) and prior to its merger with AmeriGas OLP on July 1, 2013 (the “Merger”), AmeriGas OLP’s principal operating subsidiary Heritage Operating, L.P. (“HOLP”). AmeriGas OLP after the Merger, and AmeriGas OLP and HOLP prior to the Merger, are referred to herein as the “Operating Partnership.” AmeriGas Partners and AmeriGas OLP are Delaware limited partnerships. AmeriGas Partners, the Operating Partnership and its subsidiaries are collectively referred to herein as the “Partnership” or “we.”
The Operating Partnership is engaged in the distribution of propane and related equipment and supplies. The Operating Partnership comprises the largest retail propane distribution business in the United States serving residential, commercial, industrial, motor fuel and agricultural customers in all 50 states.
At June 30, 2014, AmeriGas Propane, Inc. (the “General Partner”), an indirect wholly owned subsidiary of UGI Corporation (“UGI”), held a 1% general partner interest in AmeriGas Partners and a 1.01% general partner interest in AmeriGas OLP. The General Partner and its wholly owned subsidiary Petrolane Incorporated (“Petrolane,” a predecessor company of the Partnership) also owned 23,756,882 AmeriGas Partners Common Units (“Common Units”). The remaining Common Units outstanding at June 30, 2014, comprise 69,109,914 publicly held Common Units of which 4,367,362 Common Units are held by a subsidiary of Energy Transfer Partners, L.P. (“ETP”) as a result of the January 12, 2012, acquisition of substantially all of ETP’s propane operations (the “Heritage Acquisition”). The Common Units represent limited partner interests in AmeriGas Partners. AmeriGas Partners holds a 98.99% limited partner interest in AmeriGas OLP. In January 2014 and June 2014, ETP sold 9,200,000 and 8,500,000, respectively, of the Common Units it held in underwritten public offerings, pursuant to its registration rights in its unitholder agreement. AmeriGas Partners did not receive any proceeds from either sale of Common Units by ETP.
AmeriGas Partners and the Operating Partnership have no employees. Employees of the General Partner conduct, direct and manage our operations. Prior to the Merger, the General Partner provided management and administrative services to Heritage Operating GP, LLC (“HOLP GP”), the general partner of HOLP, under a management services agreement. The General Partner is reimbursed monthly for all direct and indirect expenses it incurs on our behalf (see Note 5).
Significant Accounting Policies
Significant Accounting Policies
Significant Accounting Policies

The condensed consolidated financial statements include the accounts of AmeriGas Partners, its majority-owned subsidiary AmeriGas OLP, and its 100%-owned finance subsidiaries AmeriGas Finance Corp., AP Eagle Finance Corp. and AmeriGas Finance, LLC. The accounts of AmeriGas Partners’ majority-owned subsidiary AmeriGas OLP are included based upon the determination that, given the Partnership’s structure, AmeriGas Partners will absorb a majority of AmeriGas OLP’s expected losses, will receive a majority of AmeriGas OLP’s expected residual returns, and is AmeriGas OLP’s primary beneficiary. AmeriGas OLP includes the accounts of its wholly owned subsidiaries. We eliminate all significant intercompany accounts and transactions when we consolidate. We account for the General Partner’s 1.01% interest in AmeriGas OLP as noncontrolling interest in the condensed consolidated financial statements.
AmeriGas Finance Corp., AP Eagle Finance Corp. and AmeriGas Finance LLC are 100%-owned finance subsidiaries of AmeriGas Partners. Their sole purpose is to serve as issuers or co-obligors for debt securities issued or guaranteed by AmeriGas Partners. The 6.75% and 7.00% Senior Notes were co-issued by AmeriGas Finance Corp. and AmeriGas Finance LLC and are fully and unconditionally guaranteed on a senior unsecured basis by AmeriGas Partners.
 
The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). They include all adjustments which we consider necessary for a fair statement of the results for the interim periods presented. Such adjustments consist only of normal recurring items unless otherwise disclosed. The September 30, 2013, condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”).

These financial statements should be read in conjunction with the financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2013 (“the Partnership’s 2013 Annual Financial Statements and Notes”). Weather significantly impacts demand for propane and profitability because many customers use propane for heating purposes. Due to the seasonal nature of the Partnership’s propane business, the results of operations for interim periods are not necessarily indicative of the results to be expected for a full year.
Allocation of Net Income Attributable to AmeriGas Partners. Net income attributable to AmeriGas Partners, L.P. for partners’ capital and statement of operations presentation purposes is allocated to the General Partner and the limited partners in accordance with their respective ownership percentages after giving effect to amounts distributed to the General Partner in excess of its 1% general partner interest in AmeriGas Partners based on its incentive distribution rights (“IDRs”) under the Fourth Amended and Restated Agreement of Limited Partnership of AmeriGas Partners, as amended (“Partnership Agreement”).
Net Income Per Unit. Income per limited partner unit is computed in accordance with GAAP regarding the application of the two-class method for determining income per unit for master limited partnerships (“MLPs”) when IDRs are present. The two-class method requires that income per limited partner unit be calculated as if all earnings for the period were distributed and requires a separate calculation for each quarter and year-to-date period. In periods when our net income attributable to AmeriGas Partners exceeds our Available Cash, as defined in the Partnership Agreement, and is above certain levels, the calculation according to the two-class method results in an increased allocation of undistributed earnings to the General Partner. Generally, in periods when our Available Cash in respect of the quarter or year-to-date periods exceeds our net income (loss) attributable to AmeriGas Partners, the calculation according to the two-class method results in an allocation of earnings to the General Partner greater than its relative ownership interest in the Partnership (or in the case of a net loss attributable to AmeriGas Partners, an allocation of such net loss to the Common Unitholders greater than their relative ownership interest in the Partnership).
 
The following table sets forth reconciliations of the numerators and denominators of the basic and diluted income per limited partner unit computations:
 
 
 
Three Months Ended
June 30,
 
Nine Months Ended
June 30,
 
 
2014
 
2013
 
2014
 
2013
Net (loss) income attributable to AmeriGas Partners, L.P.
 
$
(37,761
)
 
$
(34,595
)
 
$
337,240

 
$
275,278

Adjust for general partner share and theoretical distributions of net income (loss) attributable to AmeriGas Partners, L.P. to the general partner in accordance with the two-class method for MLPs
 
(6,155
)
 
(5,045
)
 
(54,601
)
 
(24,195
)
Common Unitholders’ interest in net (loss) income attributable to AmeriGas Partners, L.P. under the two-class method for MLPs
 
$
(43,916
)
 
$
(39,640
)
 
$
282,639

 
$
251,083

Weighted average Common Units outstanding—basic (thousands)
 
92,888

 
92,838

 
92,873

 
92,830

Potentially dilutive Common Units (thousands)
 

 

 
68

 
74

Weighted average Common Units outstanding—diluted (thousands)
 
92,888

 
92,838

 
92,941

 
92,904


Theoretical distributions of net income attributable to AmeriGas Partners, L.P. in accordance with the two-class method for the nine months ended June 30, 2014 and 2013, resulted in an increased allocation of net income attributable to AmeriGas Partners, L.P. to the General Partner in the computation of income per limited partner unit which had the effect of decreasing earnings per limited partner unit by $0.37 and $0.08, respectively. There was no dilutive effect based on the computation of income (loss) per limited partner unit in accordance with the two-class method for the three months ended June 30, 2014 and 2013.
Potentially dilutive Common Units included in the diluted limited partner units outstanding computation reflect the effects of restricted Common Unit awards granted under the General Partner’s incentive compensation plans.
Comprehensive Income. Comprehensive income (loss) comprises net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) principally results from gains and losses on derivative instruments qualifying as cash flow hedges, net of reclassifications to net income. For information regarding the amounts and line items on the Condensed Consolidated Statements of Operations associated with reclassifications from accumulated other comprehensive income (“AOCI”), see Note 8.
Reclassifications. Certain prior period amounts have been reclassified to conform to current period presentation.
Use of Estimates. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and costs. These estimates are based on management’s knowledge of current events, historical experience and various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may be different from these estimates and assumptions.
Accounting Changes
Accounting Changes
Accounting Changes

Adoption of New Accounting Standards

Disclosures about Reclassifications Out of Accumulated Other Comprehensive Income. Beginning in Fiscal 2014, the Partnership adopted new accounting guidance regarding disclosures for items reclassified out of AOCI. The disclosures required by the new accounting guidance are included in the notes to the condensed consolidated financial statements. The new disclosures are applied prospectively. As this guidance only affects disclosure requirements, the adoption of this guidance did not impact our results of operations, cash flows or financial position.
Disclosures about Offsetting Assets and Liabilities. Effective October 1, 2013, the Partnership adopted new accounting guidance requiring entities to disclose both gross and net information about recognized derivative instruments that are offset on the balance sheet as a result of an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset on the balance sheet. The new disclosures are applied retroactively for all periods presented. The required disclosures are included in Note 7 to the condensed consolidated financial statements. As this guidance only affects disclosure requirements, the adoption of this guidance did not impact our results of operations, cash flows or financial position.
Accounting Standards Not Yet Adopted
Revenue Recognition. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers.” This ASU supersedes the revenue recognition requirements in Accounting Standards Codification 605, “Revenue Recognition,” and most industry-specific guidance included in the Codification. The standard requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This standard is effective for the Partnership beginning in fiscal 2018 and allows for either full retrospective adoption or modified retrospective adoption. The Partnership’s management is in the process of assessing the impact of the adoption of ASU 2014-09 on its results of operations, cash flows and financial position.
Discontinued Operations. In April 2014, the FASB issued authoritative guidance amending existing requirements for reporting discontinued operations.  Under the new guidance, discontinued operations reporting will be limited to disposal transactions that represent strategic shifts having a major effect on operations and financial results. The amended guidance also enhances disclosures and requires assets and liabilities of a discontinued operation to be classified as such for all periods presented in the financial statements. Public entities will apply the amended guidance prospectively to all disposals occurring within annual periods beginning on or after December 15, 2014, and interim periods within those years. The Partnership will adopt this standard on October 1, 2015.  Due to the change in requirements for reporting discontinued operations described above, presentation and disclosure of future disposal transactions after adoption may be different than under current standards.
Goodwill and Intangible Assets
Goodwill and Intangible Assets
Goodwill and Intangible Assets

The Partnership’s goodwill and intangible assets comprise the following:
 
 
 
June 30,
2014
 
September 30,
2013
 
June 30,
2013
Goodwill (not subject to amortization)
 
$
1,934,581

 
$
1,933,929

 
$
1,924,820

Intangible assets:
 
 
 
 
 
 
Customer relationships and noncompete agreements
 
$
513,716

 
$
512,665

 
$
505,580

Trademarks and tradenames (not subject to amortization)
 
82,944

 
82,944

 
81,800

Gross carrying amount
 
596,660

 
595,609

 
587,380

Accumulated amortization
 
(128,117
)
 
(99,281
)
 
(89,732
)
Intangible assets, net
 
$
468,543

 
$
496,328

 
$
497,648


We amortize customer relationship and noncompete agreement intangible assets over their estimated periods of benefit which do not exceed 15 years. Amortization expense of intangible assets was $9,596 and $28,836 for the three and nine months ended June 30, 2014, respectively, and $9,585 and $29,261 for the three and nine months ended June 30, 2013, respectively. No amortization is included in cost of sales in the Condensed Consolidated Statements of Operations. As of June 30, 2014, our expected aggregate amortization expense of intangible assets for the remainder of Fiscal 2014 and the next four fiscal years is as follows: remainder of Fiscal 2014$9,596; Fiscal 2015$37,309; Fiscal 2016$36,018; Fiscal 2017$33,853; Fiscal 2018$32,493.
Related Party Transactions
Related Party Transactions
Related Party Transactions

Pursuant to the Partnership Agreement and, prior to the Merger, a management services agreement among HOLP GP, HOLP and the General Partner, the General Partner is entitled to reimbursement for all direct and indirect expenses incurred or payments it makes on our behalf. These costs, which totaled $129,799 and $130,079 for the three months ended June 30, 2014 and 2013, respectively, and $429,750 and $420,581 for nine months ended June 30, 2014 and 2013, respectively, include employee compensation and benefit expenses of employees of the General Partner and general and administrative expenses.
UGI provides certain financial and administrative services to the General Partner. UGI bills the General Partner monthly for all direct and indirect corporate expenses incurred in connection with providing these services and the General Partner is reimbursed by the Partnership for these expenses. The allocation of indirect UGI corporate expenses to the Partnership utilizes a weighted, three-component formula based on the relative percentage of the Partnership’s revenues, operating expenses and net assets employed to the total of such items for all UGI operating subsidiaries for which general and administrative services are provided. The General Partner believes that this allocation method is reasonable and equitable to the Partnership. Such corporate expenses totaled $4,322 and $4,218, during the three months ended June 30, 2014 and 2013, respectively, and $15,280 and $14,974 during the nine months ended June 30, 2014 and 2013, respectively. In addition, UGI and certain of its subsidiaries provide office space, stop loss medical coverage and automobile liability insurance to the Partnership. The costs related to these items totaled $976 and $872 for the three months ended June 30, 2014 and 2013, respectively, and $3,191 and $3,498 for the nine months ended June 30, 2014 and 2013, respectively.
From time to time, AmeriGas OLP purchases propane on an as needed basis from UGI Energy Services, LLC. (“Energy Services”). In addition, the Partnership sells propane to Energy Services and certain other affiliates of UGI. Such amounts were not material during the periods presented.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies

Federal Trade Commission Investigation of Propane Grill Cylinder Filling Practices. On or about November 4, 2011, the General Partner received notice that the Federal Trade Commission (“FTC”) had initiated an antitrust and consumer protection investigation into certain practices of the Partnership relating to the filling of portable propane cylinders. On February 2, 2012, the Partnership received a Civil Investigative Demand from the FTC that requested documents and information concerning, among other things, (i) the Partnership’s decision, in 2008, to reduce the volume of propane in cylinders it sells to consumers from 17 pounds to 15 pounds, and (ii) cross-filling, related service arrangements and communications regarding the foregoing with competitors. The Partnership responded to that subpoena and cooperated with subsequent requests for information. On March 27, 2014, the FTC issued an administrative complaint against the Partnership and UGI alleging that the General Partner and one of its competitors colluded in 2008 to persuade its common customer, Walmart Stores, Inc., to accept the cylinder fill reduction from 17 pounds to 15 pounds.  The complaint does not seek monetary remedies.  The Partnership and UGI filed their Answer to the complaint on April 18, 2014, and believe that they have good defenses to the FTC’s claims.  We are unable to reasonably estimate the impact, if any, arising from this claim.  
Purported Class Action Lawsuits.  Following the issuance of the FTC’s administrative complaint described above, more than 25 class action lawsuits have been filed in multiple jurisdictions against the Partnership/UGI Corporation and a competitor by certain of their direct and indirect customers.  The class action lawsuits allege that the Partnership and its competitor colluded in 2008 to reduce the fill level and combined to persuade its common customer, Walmart Stores, Inc., to accept that fill reduction, resulting in increased cylinder costs to retailers and end-user customers in violation of federal and certain state antitrust laws.  The claims seek treble  damages,  injunctive  relief, attorneys’ fees and costs on behalf of the putative classes.  We believe these lawsuits will eventually be consolidated by a multidistrict litigation panel.  We are unable to reasonably estimate the impact, if any, arising from such litigation.  We believe we have strong defenses to the claims and intend to vigorously defend against them.
In addition to the matters described above, there are other pending claims and legal actions arising in the normal course of our businesses. Although we cannot predict the final results of these pending claims and legal actions, we believe, after consultation with counsel, that the final outcome of these matters will not have a material effect on our consolidated financial position, results of operations or cash flows.
Fair Value Measurement
Fair Value Measurements
Fair Value Measurements

Derivative Financial Instruments
The following table presents our financial assets and financial liabilities that are measured at fair value on a recurring basis for each of the fair value hierarchy levels, including both current and noncurrent portions, as of June 30, 2014September 30, 2013 and June 30, 2013:
 
 
 
Asset (Liability)
 
 
Quoted Prices
in Active
Markets for
Identical
Assets and
Liabilities
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Unobservable
Inputs
(Level 3)
 
Total
June 30, 2014:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Commodity contracts
 
$

 
$
4,862

 
$

 
$
4,862

Liabilities:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Commodity contracts
 
$

 
$
(238
)
 
$

 
$
(238
)
September 30, 2013:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Commodity contracts
 
$

 
$
18,252

 
$

 
$
18,252

Liabilities:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Commodity contracts
 
$

 
$
(135
)
 
$

 
$
(135
)
June 30, 2013:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Commodity contracts
 
$

 
$
424

 
$

 
$
424

Liabilities:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Commodity contracts
 
$

 
$
(15,224
)
 
$

 
$
(15,224
)

 
The fair values of our non-exchange-traded commodity derivative contracts included in Level 2 are based upon indicative price quotations available through brokers, industry price publications or recent market transactions and related market indicators. For commodity option contracts not traded on an exchange, we use a Black Scholes option pricing model that considers time value and volatility of the underlying commodity.
Other Financial Instruments
The carrying amounts of other financial instruments included in current assets and current liabilities (except for current maturities of long-term debt) approximate their fair values because of their short-term nature. At June 30, 2014, the carrying amount and estimated fair value of our long-term debt (including current maturities) were $2,294,828 and $2,495,680, respectively. At June 30, 2013, the carrying amount and estimated fair value of our long-term debt (including current maturities) were $2,303,205 and $2,366,116, respectively. We estimate the fair value of long-term debt by using current market prices and by discounting future cash flows using rates available for similar type debt (Level 2).
We have financial instruments such as short-term investments and trade accounts receivable which could expose us to concentrations of credit risk. We limit our credit risk from short-term investments by investing only in investment-grade commercial paper and U.S. Government securities. The credit risk from trade accounts receivable is limited because we have a large customer base which extends across many different U.S. markets.

Disclosures about Offsetting Derivative Assets and Liabilities

Derivative assets and liabilities are presented net by counterparty on our Condensed Consolidated Balance Sheets if the right of offset exists. Our derivative financial instruments principally comprise propane over-the-counter swap and option contracts. Over-the-counter contracts are bilateral contracts that are transacted directly with a third party. Certain over-the-counter contracts contain contractual rights of offset through master netting arrangements and contract default provisions. In addition, contracts may be subject to conditional rights of offset through counterparty nonperformance, insolvency, or other conditions.
In general, most of our over-the-counter transactions are subject to collateral requirements. Cash collateral paid by us to our derivative counterparties, if any, is reflected in the table below to offset derivative liabilities. Cash collateral received by us from our counterparties, if any, is reflected in the table below to offset derivative assets. Certain other accounts receivable and accounts payable balances recognized on our Condensed Consolidated Balance Sheets with our derivative counterparties are not included in the tables below but would reduce our net exposure to such counterparties because they are subject to master netting or similar arrangements.
 
 
 
 
 
Gross Amounts Recognized
Gross Amounts Offset in the Balance Sheet
Net Amounts Presented in the Balance Sheet
June 30, 2014:
 
 
 
Derivative assets
$
8,068

$
(3,206
)
$
4,862

Derivative liabilities
$
(3,444
)
$
3,206

$
(238
)
 
 
 
 
September 30, 2013:
 
 
 
Derivative assets
$
19,621

$
(1,369
)
$
18,252

Derivative liabilities
$
(1,504
)
$
1,369

$
(135
)
 
 
 
 
June 30, 2013:
 
 
 
Derivative assets
$
424

$

$
424

Derivative liabilities
$
(15,224
)
$

$
(15,224
)
 
 
 
 
Disclosures about Derivative Instruments and Hedging Activities
Disclosures About Derivative Instruments and Hedging Activities
Disclosures about Derivative Instruments and Hedging Activities
The Partnership is exposed to certain market risks related to its ongoing business operations. Management uses derivative financial and commodity instruments, among other things, to manage these risks. The primary risk currently managed by derivative instruments is commodity price risk for propane. Although we use derivative financial and commodity instruments to reduce market risk associated with forecasted transactions, we do not use derivative financial and commodity instruments for speculative or trading purposes. The use of derivative instruments is controlled by our risk management and credit policies which govern, among other things, the derivative instruments the Partnership can use, counterparty credit limits and contract authorization limits.
Commodity Price Risk
In order to manage market risk associated with the Partnership’s fixed-price programs, which permit customers to lock in the prices they pay for propane principally during the months of October through March, the Partnership uses over-the-counter derivative commodity instruments, principally price swap and option contracts. In addition, the Partnership from time to time enters into price swap and option agreements to reduce short-term commodity price volatility. At June 30, 2014 and 2013, total volumes associated with LPG commodity derivative instruments totaled 210.3 million gallons and 177.8 million gallons, respectively. At June 30, 2014, for those LPG commodity derivative instruments accounted for as cash flow hedges, the maximum period over which we are hedging propane market price risk is 24 months with a weighted average of 7 months.
During the periods presented in the financial statements, we accounted for a significant portion of our commodity price risk contracts as cash flow hedges. Effective April 1, 2014, the Partnership determined that on a prospective basis it would not elect cash flow hedge accounting for its commodity derivative transactions. All unrealized and realized gains and losses on the Partnership’s derivative commodity transactions entered into beginning April 1, 2014, are included as a component of cost of sales on the Condensed Consolidated Statements of Operations. Changes in the fair values of contracts qualifying for cash flow hedge accounting are recorded in AOCI and noncontrolling interest, to the extent effective in offsetting changes in the underlying commodity price risk, until earnings are affected by the hedged item. At June 30, 2014, the amount of net gains associated with commodity price risk hedges expected to be reclassified into earnings during the next twelve months based upon current fair values is $4,772.
Derivative Financial Instruments Credit Risk
The Partnership is exposed to credit loss in the event of nonperformance by counterparties to derivative financial and commodity instruments. Our counterparties principally consist of major energy companies and major U.S. financial institutions. We maintain credit policies with regard to our counterparties that we believe reduce overall credit risk. These policies include evaluating and monitoring our counterparties’ financial condition, including their credit ratings, and entering into agreements with counterparties that govern credit limits. Certain of these agreements call for the posting of collateral by the counterparty or by the Partnership in the forms of letters of credit, parental guarantees or cash. We have concentrations of credit risk associated with derivative financial instruments held by certain derivative financial instrument counterparties. Although we have concentrations of credit risk, the maximum amount of loss due to credit risk that we would incur if these counterparties comprising the concentration failed to perform according to the terms of their contracts was not material at June 30, 2014, based upon the fair values of such derivative instruments. Certain of our derivative contracts have credit-risk-related contingent features that may require the posting of additional collateral in the event of a downgrade in the Partnership’s debt rating. At June 30, 2014, if the credit-risk-related contingent features were triggered, the amount of collateral required to be posted would not be material.

The following table provides information regarding the fair values and balance sheet locations of our derivative assets and liabilities existing as of June 30, 2014 and 2013: 
 
 
Derivative Assets
 
Derivative (Liabilities)
 
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
 
 
2014
 
2013
 
 
2014
 
2013
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Propane contracts
 
Derivative financial instruments and other assets
 
$
6,378

 
$
424

 
Derivative financial instruments and other noncurrent liabilities
 
$

 
$
(15,224
)
Derivatives Not Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Propane contracts
 
Derivative financial instruments 
 
313

 

 
Derivative financial instruments
 
(2,067
)
 

Amounts above offset in the Balance Sheet
 
 
 
(1,829
)
 

 
 
 
1,829

 

Total Derivatives
 
 
 
$
4,862

 
$
424

 

 
$
(238
)
 
$
(15,224
)

The following table provides information on the effects of derivative instruments on the Condensed Consolidated Statements of Operations and changes in AOCI and noncontrolling interest for the three and nine months ended June 30, 2014 and 2013:
Three Months Ended June 30,
 
 
 
 
 
 
 
 
 
 
 
 
Gain (Loss) Recognized in
AOCI  and Noncontrolling
Interest
 
Gain (Loss) Reclassified  from
AOCI and Noncontrolling
Interest into Income
 
Location of Gain  (Loss)
Reclassified from
AOCI and Noncontrolling
Interest into Income
 
 
2014
 
2013
 
2014
 
2013
 
Cash Flow Hedges:
 
 
 
 
 
 
 
 
 
 
Propane contracts
 
$
884

 
$
(19,434
)
 
$
5,258

 
$
(8,479
)
 
Cost of sales - propane
 
 
 
 
 
 
 
 
 
 
 
 
 
 (Loss)
 
 
 
 
 
Location of (Loss)
Recognized in Income
 
 
Recognized in Income
 
 
 
 
 
Derivatives Not Designated as Hedging Instruments:
 
2014
 
2013
 
 
 
 
 
 
Propane contracts
 
$
(2,006
)
 
$

 
 
 
 
 
Cost of sales - propane
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended June 30,
 
 
 
 
 
 
 
 
 
 
 
 
Gain (Loss) Recognized in
AOCI  and Noncontrolling
Interest
 
Gain (Loss) Reclassified  from
AOCI and Noncontrolling
Interest into Income
 
Location of Gain  (Loss)
Reclassified from
AOCI and Noncontrolling
Interest into Income
 
 
2014
 
2013
 
2014
 
2013
 
Cash Flow Hedges:
 
 
 
 
 
 
 
 
 
 
Propane contracts
 
$
46,231

 
$
(24,348
)
 
$
53,685

 
$
(51,229
)
 
Cost of sales - propane
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain
 
 
 
 
 
Location of Gain
Recognized in Income
 
 
Recognized in Income
 
 
 
 
 
Derivatives Not Designated as Hedging Instruments:
 
2014
 
2013
 
 
 
 
 
 
Propane contracts
 
$
4,924

 
$

 
 
 
 
 
Cost of sales - propane
The amounts of derivative gains or losses representing ineffectiveness were not material for the three and nine months ended June 30, 2014 and 2013.

We are also a party to a number of contracts that have elements of a derivative instrument. These contracts include, among others, binding purchase orders and contracts which provide for the purchase and delivery of propane and service contracts that require the counterparty to provide commodity storage or transportation service to meet our normal sales commitments. Although many of these contracts have the requisite elements of a derivative instrument, these contracts qualify for normal purchase and normal sales exception accounting under GAAP because they provide for the delivery of products or services in quantities that are expected to be used in the normal course of operating our business and the price in the contract is based on an underlying that is directly associated with the price of the product or service being purchased or sold.
Error in Accounting for Certain Customer Credits
Accounting Changes and Error Corrections
Error in Accounting for Certain Customer Credits

During the three months ended March 31, 2013, the Partnership identified an error in its accounting for certain customer credits. The Partnership determined that the recording of propane revenues did not appropriately consider the effects of certain customer credits which were recorded when issued in a subsequent period. As a result, the Partnership changed its accounting for customer credits to record an estimate of such credits at the time propane revenues are recorded. Such estimate considers the Partnership’s history of providing credits, propane revenue activity and other factors. During the three months ended March 31, 2013, the Partnership evaluated the impact of the error on prior periods and determined that the effect was not material to the financial statements for the three or six months ended March 31, 2013, or any prior period financial statement and recorded the cumulative effect of the error in accounting for customer credits as of January 1, 2013. If the Partnership had corrected the error in accounting for customer credits for periods prior to Fiscal 2013, net income attributable to AmeriGas Partners, L.P. for the nine months ended June 30, 2013, would have increased by approximately $4,200.
Debt
Debt Disclosure
Debt

In June 2014, AmeriGas OLP entered into an Amended and Restated Credit Agreement (“Amended and Restated Credit Agreement”) with a group of banks which provides for borrowings up to $525 (including a sublimit of $125 for letters of credit). The Amended and Restated Credit Agreement amends and restates AmeriGas OLP’s prior Credit Agreement entered into with a group of banks in June 2011, as amended from time to time. The Amended and Restated Credit Agreement permits AmeriGas OLP to borrow at prevailing interest rates, including the base rate, defined as the higher of the Federal Funds rate plus 0.50% or the agent bank’s prime rate, or at a one-week, one-, two-, three-, or six-month Eurodollar Rate, as defined in the Amended and Restated Credit Agreement, plus a margin. The Amended and Restated Credit Agreement reduces the applicable margin on base rate borrowings to a range of 0.5% to 1.5% (from a range of 0.75% to 1.75% previously); reduces the applicable margin on Eurodollar Rate borrowings to a range of 1.5% to 2.5% (from a range of 1.75% to 2.75% previously); and reduces the facility fee to a range of 0.3% to 0.45% (from a range of 0.3% to 0.5% previously). The aforementioned margins and facility fees are dependent upon AmeriGas Partners’ ratio of debt to earnings before interest expense, income taxes, depreciation and amortization (each as defined in the Amended and Restated Credit Agreement). The Amended and Restated Credit Agreement expires on June 18, 2019.
The Amended and Restated Credit Agreement restricts the incurrence of additional indebtedness and also restricts certain liens, guarantees, investments, loans and advances, payments, mergers, consolidations, asset transfers, transactions with affiliates, sales of assets, acquisitions and other transactions. The Credit Agreement requires that AmeriGas OLP and AmeriGas Partners maintain ratios of total indebtedness to EBITDA, as defined, below certain thresholds. In addition, the Partnership must maintain a minimum ratio of EBITDA to interest expense, as defined and as calculated on a rolling four-quarter basis. Generally, as long as no default exists or would result therefrom, AmeriGas OLP is permitted to make cash distributions not more frequently than quarterly in an amount not to exceed available cash, as defined, for the immediately preceding calendar quarter.
Significant Accounting Policies (Policies)
Allocation of Net Income Attributable to AmeriGas Partners. Net income attributable to AmeriGas Partners, L.P. for partners’ capital and statement of operations presentation purposes is allocated to the General Partner and the limited partners in accordance with their respective ownership percentages after giving effect to amounts distributed to the General Partner in excess of its 1% general partner interest in AmeriGas Partners based on its incentive distribution rights (“IDRs”) under the Fourth Amended and Restated Agreement of Limited Partnership of AmeriGas Partners, as amended (“Partnership Agreement”).
Net Income Per Unit. Income per limited partner unit is computed in accordance with GAAP regarding the application of the two-class method for determining income per unit for master limited partnerships (“MLPs”) when IDRs are present. The two-class method requires that income per limited partner unit be calculated as if all earnings for the period were distributed and requires a separate calculation for each quarter and year-to-date period. In periods when our net income attributable to AmeriGas Partners exceeds our Available Cash, as defined in the Partnership Agreement, and is above certain levels, the calculation according to the two-class method results in an increased allocation of undistributed earnings to the General Partner. Generally, in periods when our Available Cash in respect of the quarter or year-to-date periods exceeds our net income (loss) attributable to AmeriGas Partners, the calculation according to the two-class method results in an allocation of earnings to the General Partner greater than its relative ownership interest in the Partnership (or in the case of a net loss attributable to AmeriGas Partners, an allocation of such net loss to the Common Unitholders greater than their relative ownership interest in the Partnership).
 
The following table sets forth reconciliations of the numerators and denominators of the basic and diluted income per limited partner unit computations:
 
 
 
Three Months Ended
June 30,
 
Nine Months Ended
June 30,
 
 
2014
 
2013
 
2014
 
2013
Net (loss) income attributable to AmeriGas Partners, L.P.
 
$
(37,761
)
 
$
(34,595
)
 
$
337,240

 
$
275,278

Adjust for general partner share and theoretical distributions of net income (loss) attributable to AmeriGas Partners, L.P. to the general partner in accordance with the two-class method for MLPs
 
(6,155
)
 
(5,045
)
 
(54,601
)
 
(24,195
)
Common Unitholders’ interest in net (loss) income attributable to AmeriGas Partners, L.P. under the two-class method for MLPs
 
$
(43,916
)
 
$
(39,640
)
 
$
282,639

 
$
251,083

Weighted average Common Units outstanding—basic (thousands)
 
92,888

 
92,838

 
92,873

 
92,830

Potentially dilutive Common Units (thousands)
 

 

 
68

 
74

Weighted average Common Units outstanding—diluted (thousands)
 
92,888

 
92,838

 
92,941

 
92,904


Theoretical distributions of net income attributable to AmeriGas Partners, L.P. in accordance with the two-class method for the nine months ended June 30, 2014 and 2013, resulted in an increased allocation of net income attributable to AmeriGas Partners, L.P. to the General Partner in the computation of income per limited partner unit which had the effect of decreasing earnings per limited partner unit by $0.37 and $0.08, respectively. There was no dilutive effect based on the computation of income (loss) per limited partner unit in accordance with the two-class method for the three months ended June 30, 2014 and 2013.
Potentially dilutive Common Units included in the diluted limited partner units outstanding computation reflect the effects of restricted Common Unit awards granted under the General Partner’s incentive compensation plans.
Use of Estimates. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and costs. These estimates are based on management’s knowledge of current events, historical experience and various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may be different from these estimates and assumptions.
Significant Accounting Policies (Tables)
Income per limited partner unit
The following table sets forth reconciliations of the numerators and denominators of the basic and diluted income per limited partner unit computations:
 
 
 
Three Months Ended
June 30,
 
Nine Months Ended
June 30,
 
 
2014
 
2013
 
2014
 
2013
Net (loss) income attributable to AmeriGas Partners, L.P.
 
$
(37,761
)
 
$
(34,595
)
 
$
337,240

 
$
275,278

Adjust for general partner share and theoretical distributions of net income (loss) attributable to AmeriGas Partners, L.P. to the general partner in accordance with the two-class method for MLPs
 
(6,155
)
 
(5,045
)
 
(54,601
)
 
(24,195
)
Common Unitholders’ interest in net (loss) income attributable to AmeriGas Partners, L.P. under the two-class method for MLPs
 
$
(43,916
)
 
$
(39,640
)
 
$
282,639

 
$
251,083

Weighted average Common Units outstanding—basic (thousands)
 
92,888

 
92,838

 
92,873

 
92,830

Potentially dilutive Common Units (thousands)
 

 

 
68

 
74

Weighted average Common Units outstanding—diluted (thousands)
 
92,888

 
92,838

 
92,941

 
92,904

Goodwill and Intangible Assets (Tables)
Components of Intangible Assets
The Partnership’s goodwill and intangible assets comprise the following:
 
 
 
June 30,
2014
 
September 30,
2013
 
June 30,
2013
Goodwill (not subject to amortization)
 
$
1,934,581

 
$
1,933,929

 
$
1,924,820

Intangible assets:
 
 
 
 
 
 
Customer relationships and noncompete agreements
 
$
513,716

 
$
512,665

 
$
505,580

Trademarks and tradenames (not subject to amortization)
 
82,944

 
82,944

 
81,800

Gross carrying amount
 
596,660

 
595,609

 
587,380

Accumulated amortization
 
(128,117
)
 
(99,281
)
 
(89,732
)
Intangible assets, net
 
$
468,543

 
$
496,328

 
$
497,648

Fair Value Measurement (Tables)
The following table presents our financial assets and financial liabilities that are measured at fair value on a recurring basis for each of the fair value hierarchy levels, including both current and noncurrent portions, as of June 30, 2014September 30, 2013 and June 30, 2013:
 
 
 
Asset (Liability)
 
 
Quoted Prices
in Active
Markets for
Identical
Assets and
Liabilities
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Unobservable
Inputs
(Level 3)
 
Total
June 30, 2014:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Commodity contracts
 
$

 
$
4,862

 
$

 
$
4,862

Liabilities:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Commodity contracts
 
$

 
$
(238
)
 
$

 
$
(238
)
September 30, 2013:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Commodity contracts
 
$

 
$
18,252

 
$

 
$
18,252

Liabilities:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Commodity contracts
 
$

 
$
(135
)
 
$

 
$
(135
)
June 30, 2013:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Commodity contracts
 
$

 
$
424

 
$

 
$
424

Liabilities:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Commodity contracts
 
$

 
$
(15,224
)
 
$

 
$
(15,224
)
In general, most of our over-the-counter transactions are subject to collateral requirements. Cash collateral paid by us to our derivative counterparties, if any, is reflected in the table below to offset derivative liabilities. Cash collateral received by us from our counterparties, if any, is reflected in the table below to offset derivative assets. Certain other accounts receivable and accounts payable balances recognized on our Condensed Consolidated Balance Sheets with our derivative counterparties are not included in the tables below but would reduce our net exposure to such counterparties because they are subject to master netting or similar arrangements.
 
 
 
 
 
Gross Amounts Recognized
Gross Amounts Offset in the Balance Sheet
Net Amounts Presented in the Balance Sheet
June 30, 2014:
 
 
 
Derivative assets
$
8,068

$
(3,206
)
$
4,862

Derivative liabilities
$
(3,444
)
$
3,206

$
(238
)
 
 
 
 
September 30, 2013:
 
 
 
Derivative assets
$
19,621

$
(1,369
)
$
18,252

Derivative liabilities
$
(1,504
)
$
1,369

$
(135
)
 
 
 
 
June 30, 2013:
 
 
 
Derivative assets
$
424

$

$
424

Derivative liabilities
$
(15,224
)
$

$
(15,224
)
 
 
 
 
Disclosures About Derivative Instruments and Hedging Activities (Tables)
The following table provides information regarding the fair values and balance sheet locations of our derivative assets and liabilities existing as of June 30, 2014 and 2013: 
 
 
Derivative Assets
 
Derivative (Liabilities)
 
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
 
 
2014
 
2013
 
 
2014
 
2013
Derivatives Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Propane contracts
 
Derivative financial instruments and other assets
 
$
6,378

 
$
424

 
Derivative financial instruments and other noncurrent liabilities
 
$

 
$
(15,224
)
Derivatives Not Designated as Hedging Instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Propane contracts
 
Derivative financial instruments 
 
313

 

 
Derivative financial instruments
 
(2,067
)
 

Amounts above offset in the Balance Sheet
 
 
 
(1,829
)
 

 
 
 
1,829

 

Total Derivatives
 
 
 
$
4,862

 
$
424

 

 
$
(238
)
 
$
(15,224
)
The following table provides information on the effects of derivative instruments on the Condensed Consolidated Statements of Operations and changes in AOCI and noncontrolling interest for the three and nine months ended June 30, 2014 and 2013:
Three Months Ended June 30,
 
 
 
 
 
 
 
 
 
 
 
 
Gain (Loss) Recognized in
AOCI  and Noncontrolling
Interest
 
Gain (Loss) Reclassified  from
AOCI and Noncontrolling
Interest into Income
 
Location of Gain  (Loss)
Reclassified from
AOCI and Noncontrolling
Interest into Income
 
 
2014
 
2013
 
2014
 
2013
 
Cash Flow Hedges:
 
 
 
 
 
 
 
 
 
 
Propane contracts
 
$
884

 
$
(19,434
)
 
$
5,258

 
$
(8,479
)
 
Cost of sales - propane
 
 
 
 
 
 
 
 
 
 
 
 
 
 (Loss)
 
 
 
 
 
Location of (Loss)
Recognized in Income
 
 
Recognized in Income
 
 
 
 
 
Derivatives Not Designated as Hedging Instruments:
 
2014
 
2013
 
 
 
 
 
 
Propane contracts
 
$
(2,006
)
 
$

 
 
 
 
 
Cost of sales - propane
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended June 30,
 
 
 
 
 
 
 
 
 
 
 
 
Gain (Loss) Recognized in
AOCI  and Noncontrolling
Interest
 
Gain (Loss) Reclassified  from
AOCI and Noncontrolling
Interest into Income
 
Location of Gain  (Loss)
Reclassified from
AOCI and Noncontrolling
Interest into Income
 
 
2014
 
2013
 
2014
 
2013
 
Cash Flow Hedges:
 
 
 
 
 
 
 
 
 
 
Propane contracts
 
$
46,231

 
$
(24,348
)
 
$
53,685

 
$
(51,229
)
 
Cost of sales - propane
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain
 
 
 
 
 
Location of Gain
Recognized in Income
 
 
Recognized in Income
 
 
 
 
 
Derivatives Not Designated as Hedging Instruments:
 
2014
 
2013
 
 
 
 
 
 
Propane contracts
 
$
4,924

 
$

 
 
 
 
 
Cost of sales - propane
Nature of Operations - Narrative (Details)
1 Months Ended 9 Months Ended
Jun. 30, 2014
Employee
Jan. 31, 2014
Jun. 30, 2014
States
Employee
General Partners Interest
 
 
 
Number of states in which the company has market share (in states)
 
 
50 
Common units held by the general partner and its wholly owned subsidiary Petrolane Incorporated
23,756,882 
 
23,756,882 
Common Units held by public
69,109,914 
 
69,109,914 
Common Units held by ETP
4,367,362 
 
4,367,362 
Limited partner interest held by AmeriGas Partners in AmeriGas OLP (as a percent)
 
 
98.99% 
Units Issued in Secondary Offering
8,500,000 
9,200,000 
 
Employees of the AmeriGas Partners and the Operating Partnerships (in employees)
 
AmeriGas Propane Inc Partnership Interest In AmeriGas Partners
 
 
 
General Partners Interest
 
 
 
General Partners Ownership Interest (as a percent)
1.00% 
 
1.00% 
AmeriGas Propane Inc Partnership Interest In AmeriGas OLP
 
 
 
General Partners Interest
 
 
 
General Partners Ownership Interest (as a percent)
1.01% 
 
1.01% 
Significant Accounting Policies - Narrative (Details)
3 Months Ended 9 Months Ended
Jun. 30, 2013
Jun. 30, 2013
Jun. 30, 2014
AmeriGas Propane Inc Partnership Interest in AmeriGas OLP
Jun. 30, 2014
AmeriGas Propane Inc Partnership Interest In AmeriGas Partners
Jun. 30, 2014
AmeriGas Finance Corp., AP Eagle Finance Corp. and AmeriGas Finance LLC
Jun. 30, 2014
Amerigas Partners Senior Notes Due 2020
Jun. 30, 2014
Amerigas Partners Senior Notes Due 2022
General Partner Interest
 
 
 
 
 
 
 
General Partners Ownership Interest (as a percent)
 
 
1.01% 
1.00% 
 
 
 
Ownership Percentage of Finance Subsidiaries
 
 
 
 
100.00% 
 
 
Debt Instrument, Interest Rate, Stated Percentage
 
 
 
 
 
6.75% 
7.00% 
General Partner Interest Percentage
 
 
 
1.00% 
 
 
 
Theoretical distributions of net income on earnings (in dollars per unit)
$ 0.37 
$ 0.08 
 
 
 
 
 
Significant Accounting Policies - Schedule of Income Per Limited Partner Unit (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Accounting Policies [Abstract]
 
 
 
 
Net income (loss) attributable to AmeriGas Partners, L.P.
$ (37,761)
$ (34,595)
$ 337,240 
$ 275,278 
Adjust for general partner share and theoretical distributions of net income (loss) attributable to AmeriGas Partners, L.P. to the general partner in accordance with the two-class method for MLPs
(6,155)
(5,045)
(54,601)
(24,195)
Common Unitholders’ interest in net income (loss) attributable to AmeriGas Partners, L.P. under the two-class method for MLPs
$ (43,916)
$ (39,640)
$ 282,639 
$ 251,083 
Weighted average Common Units outstanding—basic (thousands) (in shares)
92,888 
92,838 
92,873 
92,830 
Potentially dilutive Common Units (thousands) (in shares)
68 
74 
Weighted average Common Units outstanding—diluted (thousands) (in shares)
92,888 
92,838 
92,941 
92,904 
Goodwill and Intangible Assets - Narrative (Details) (USD $)
3 Months Ended 9 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Finite-Lived Intangible Assets
 
 
 
 
Finite-Lived Intangible Asset, Useful Life
15 years 
 
 
 
Amortization of Intangible Assets
$ 9,596,000 
$ 9,585,000 
$ 28,836,000 
$ 29,261,000 
Remainder of Fiscal 2014
9,596,000 
 
9,596,000 
 
Fiscal 2015
37,309,000 
 
37,309,000 
 
Fiscal 2016
36,018,000 
 
36,018,000 
 
Fiscal 2017
33,853,000 
 
33,853,000 
 
Fiscal 2018
32,493,000 
 
32,493,000 
 
Cost of Sales
 
 
 
 
Finite-Lived Intangible Assets
 
 
 
 
Amortization of Intangible Assets
$ 0 
 
 
 
Goodwill And Intangible Assets - Components of Intangible Assets (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Sep. 30, 2013
Jun. 30, 2013
Finite-Lived Intangible Assets And Indefinite-Lived Intangible Assets
 
 
 
Goodwill (not subject to amortization)
$ 1,934,581 
$ 1,933,929 
$ 1,924,820 
Customer relationships and noncompete agreements
513,716 
512,665 
505,580 
Trademarks and tradenames (not subject to amortization)
82,944 
82,944 
81,800 
Gross carrying amount
596,660 
595,609 
587,380 
Accumulated amortization
(128,117)
(99,281)
(89,732)
Intangible assets, net
$ 468,543 
$ 496,328 
$ 497,648 
Related Party Transactions - Narrative (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
General Partner Expense
 
 
 
 
Related Party Transaction
 
 
 
 
Costs and Expenses, Related Party
$ 129,799 
$ 130,079 
$ 429,750 
$ 420,581 
UGI Corp Expense Reimbursement
 
 
 
 
Related Party Transaction
 
 
 
 
Costs and Expenses, Related Party
4,322 
4,218 
15,280 
14,974 
UGI Corp Office Insurance Reimbursement
 
 
 
 
Related Party Transaction
 
 
 
 
Costs and Expenses, Related Party
$ 976 
$ 872 
$ 3,191 
$ 3,498 
Commitments and Contingencies - Narrative (Details)
9 Months Ended
Jun. 30, 2014
lb
FTC Investigation
 
Loss Contingencies
 
Amount of propane in cylinders before reduction (in pounds)
17 
Amount of propane in cylinders after reduction (in pounds)
15 
Minimum
 
Loss Contingencies
 
Class action lawsuits (more than 20)
20 
Fair Value Measurement Fair Value Measurements - Narrative (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Jun. 30, 2013
Fair Value Disclosures [Abstract]
 
 
Long-term Debt, Carrying Value
$ 2,294,828 
$ 2,303,205 
Long-term Debt, Fair Value
$ 2,495,680 
$ 2,366,116 
Fair Value Measurement - Financial Assets and Financial Liabilities at Fair Value On a Recurring Basis (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Sep. 30, 2013
Jun. 30, 2013
Assets:
 
 
 
Derivative Assets
$ 4,862 
$ 18,252 
$ 424 
Liabilities:
 
 
 
Derivative Liabilities
238 
135 
15,224 
Commodity Contract |
Fair Value, Measurements, Recurring
 
 
 
Assets:
 
 
 
Derivative Assets
4,862 
18,252 
424 
Liabilities:
 
 
 
Derivative Liabilities
238 
135 
15,224 
Commodity Contract |
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) |
Fair Value, Measurements, Recurring
 
 
 
Assets:
 
 
 
Derivative Assets
Liabilities:
 
 
 
Derivative Liabilities
Commodity Contract |
Significant Other Observable Inputs (Level 2) |
Fair Value, Measurements, Recurring
 
 
 
Assets:
 
 
 
Derivative Assets
4,862 
18,252 
424 
Liabilities:
 
 
 
Derivative Liabilities
238 
135 
15,224 
Commodity Contract |
Unobservable Inputs (Level 3) |
Fair Value, Measurements, Recurring
 
 
 
Assets:
 
 
 
Derivative Assets
Liabilities:
 
 
 
Derivative Liabilities
$ 0 
$ 0 
$ 0 
Fair Value Measurement - Fair Value by Balance Sheet Grouping (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Sep. 30, 2013
Jun. 30, 2013
Fair Value Disclosures [Abstract]
 
 
 
Derivative Assets, Fair Value, Gross
$ 8,068 
$ 19,621 
$ 424 
Derivative Asset, Offset Amount, Gross
(3,206)
(1,369)
Derivative Assets
4,862 
18,252 
424 
Derivative Liabilities, Fair Value, Gross
(3,444)
(1,504)
(15,224)
Derivative Liability, Offset Amount, Gross
3,206 
1,369 
Derivative Liabilities
$ 238 
$ 135 
$ 15,224 
Disclosures About Derivative Instruments and Hedging Activities - Narrative (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 9 Months Ended
Jun. 30, 2014
Jun. 30, 2014
gal
Jun. 30, 2013
gal
Derivative Instruments and Hedging Activities Disclosure [Abstract]
 
 
 
Derivative, Nonmonetary Notional Amount
 
210,300,000 
177,800,000 
Maximum Length of Time Hedged in Price Risk Cash Flow Hedge (in months)
 
24 months 
 
Weighted Average Length of Time Hedge in Price Risk Cash Flow Hedge (in months)
7 months 
 
 
Net losses associated with commodity price risk hedges expected to be reclassified into earnings during the next twelve months
 
$ 4,772 
 
Disclosures About Derivative Instruments and Hedging Activities - Components of Fair Value of Derivative Assets and Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Sep. 30, 2013
Jun. 30, 2013
Derivative Assets, Fair Value
 
 
 
Amounts above offset in the Balance Sheet
$ (1,829)
 
$ 0 
Derivative Liability, Offset Amount, Net
1,829 
 
Total Derivative Assets
4,862 
18,252 
424 
Derivative Liabilities, Fair Value
 
 
 
Total Derivative Liabilities
(238)
(135)
(15,224)
Designated as Hedging Instrument |
Propane contracts |
Derivative Financial Instruments and Other Assets
 
 
 
Derivative Assets, Fair Value
 
 
 
Derivative Assets
6,378 
 
424 
Designated as Hedging Instrument |
Propane contracts |
Derivative Financial Instruments and Other Non Current Liabilities
 
 
 
Derivative Liabilities, Fair Value
 
 
 
Derivative Liabilities
 
(15,224)
Not Designated as Hedging Instrument |
Propane contracts |
Derivative financial instruments
 
 
 
Derivative Assets, Fair Value
 
 
 
Derivative Assets
313 
 
Derivative Liabilities, Fair Value
 
 
 
Derivative Liabilities
$ (2,067)
 
$ 0 
Disclosures About Derivative Instruments and Hedging Activities - Components of Derivative Instruments Gain Loss in Statement of Operations (Details) (Propane contracts, Cost of sales - propane, USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Designated as Hedging Instrument
 
 
 
 
Derivative Instruments, Gain (Loss)
 
 
 
 
Gain (Loss) Recognized in AOCI and Noncontrolling Interest
$ 884 
$ (19,434)
$ 46,231 
$ (24,348)
Gain (Loss) Reclassified from AOCI and Noncontrolling Interest into Income
5,258 
(8,479)
53,685 
(51,229)
Not Designated as Hedging Instrument
 
 
 
 
Derivative Instruments, Gain (Loss)
 
 
 
 
Derivative Instruments, Gain (Loss) Recognized in Income, Net
$ (2,006)
$ 0 
$ 4,924 
$ 0 
Error in Accounting for Certain Customer Credits - Narrative (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Immaterial Error Correction
 
 
4200 
 
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest
$ 37,749 
$ 34,549 
$ (341,873)
$ (279,275)
Restatement Adjustment
 
 
 
 
Accounts Receivable and Propane Revenues
 
 
 
7,038 
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest
 
 
 
$ 6,967 
Debt (Details) (Line of Credit, USD $)
In Millions, unless otherwise specified
9 Months Ended
Jun. 30, 2014
Debt Instrument
 
Maximum borrowing capacity
$ 525 
Credit Agreement |
Minimum
 
Debt Instrument
 
Commitment fee percentage
0.30% 
Credit Agreement |
Maximum
 
Debt Instrument
 
Commitment fee percentage
0.50% 
Credit Agreement |
Base Rate |
Minimum
 
Debt Instrument
 
Applicable margin
0.80% 
Credit Agreement |
Base Rate |
Maximum
 
Debt Instrument
 
Applicable margin
1.80% 
Credit Agreement |
Eurodollar |
Minimum
 
Debt Instrument
 
Applicable margin
1.80% 
Credit Agreement |
Eurodollar |
Maximum
 
Debt Instrument
 
Applicable margin
2.80% 
Amended and Restated Credit Agreement |
Minimum
 
Debt Instrument
 
Commitment fee percentage
0.30% 
Amended and Restated Credit Agreement |
Maximum
 
Debt Instrument
 
Commitment fee percentage
0.45% 
Amended and Restated Credit Agreement |
Federal Funds Rate
 
Debt Instrument
 
Applicable margin
0.50% 
Amended and Restated Credit Agreement |
Base Rate |
Minimum
 
Debt Instrument
 
Applicable margin
0.50% 
Amended and Restated Credit Agreement |
Base Rate |
Maximum
 
Debt Instrument
 
Applicable margin
1.50% 
Amended and Restated Credit Agreement |
Eurodollar |
Minimum
 
Debt Instrument
 
Applicable margin
1.50% 
Amended and Restated Credit Agreement |
Eurodollar |
Maximum
 
Debt Instrument
 
Applicable margin
2.50% 
Letter of Credit
 
Debt Instrument
 
Maximum borrowing capacity
$ 125