AMERIGAS PARTNERS LP, 10-Q filed on 5/5/2017
Quarterly Report
Document and Entity Information
6 Months Ended
Mar. 31, 2017
Apr. 30, 2017
Document and Entity Information [Abstract]
 
 
Entity Registrant Name
AMERIGAS PARTNERS LP 
 
Entity Central Index Key
0000932628 
 
Document Type
10-Q 
 
Document Period End Date
Mar. 31, 2017 
 
Amendment Flag
false 
 
Document Fiscal Year Focus
2017 
 
Document Fiscal Period Focus
Q2 
 
Current Fiscal Year End Date
--09-30 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
92,958,063 
Condensed Consolidated Balance Sheets (unaudited) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Sep. 30, 2016
Mar. 31, 2016
Current assets:
 
 
 
Cash and cash equivalents
$ 94,535 
$ 15,827 
$ 15,740 
Accounts receivable (less allowances for doubtful accounts of $13,777, $11,436 and $12,858, respectively)
299,203 
182,665 
257,110 
Accounts receivable — related parties
4,083 
2,643 
3,475 
Inventories
104,549 
78,823 
94,959 
Derivative instruments
5,081 
7,994 
0 
Prepaid expenses and other current assets
48,433 
56,496 
60,444 
Total current assets
555,884 
344,448 
431,728 
Property, plant and equipment (less accumulated depreciation and amortization of $1,552,790, $1,499,396 and $1,435,097, respectively)
1,245,390 
1,274,557 
1,303,281 
Goodwill
1,981,842 
1,978,981 
1,971,999 
Intangible assets, net
395,010 
411,319 
424,062 
Derivative instruments
944 
1,166 
0 
Other assets
49,189 
47,299 
37,116 
Total assets
4,228,259 
4,057,770 
4,168,186 
Current liabilities:
 
 
 
Current maturities of long-term debt
109,512 
8,475 
7,441 
Short-term borrowings
0 
153,200 
65,300 
Accounts payable — trade
127,280 
94,007 
107,549 
Accounts payable — related parties
603 
2,759 
381 
Customer deposits and advances
66,136 
119,319 
74,145 
Derivative instruments
16 
381 
16,920 
Other current liabilities
188,180 
210,314 
186,687 
Total current liabilities
491,727 
588,455 
458,423 
Long-term debt
2,562,376 
2,325,334 
2,255,253 
Derivative instruments
156 
36 
6,595 
Other noncurrent liabilities
122,665 
124,736 
109,142 
Total liabilities
3,176,924 
3,038,561 
2,829,413 
Commitments and contingencies (Note 6)
   
   
   
AmeriGas Partners, L.P. partners’ capital:
 
 
 
Common unitholders (units issued — 92,958,063, 92,923,410 and 92,922,445, respectively)
996,264 
967,073 
1,280,915 
General partner
17,445 
17,148 
20,324 
Total AmeriGas Partners, L.P. partners’ capital
1,013,709 
984,221 
1,301,239 
Noncontrolling interest
37,626 
34,988 
37,534 
Total partners’ capital
1,051,335 
1,019,209 
1,338,773 
Total liabilities and partners’ capital
$ 4,228,259 
$ 4,057,770 
$ 4,168,186 
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Mar. 31, 2017
Sep. 30, 2016
Mar. 31, 2016
Statement of Financial Position [Abstract]
 
 
 
Accounts receivable, allowances for doubtful accounts
$ 13,777 
$ 11,436 
$ 12,858 
Property, plant and equipment, accumulated depreciation and amortization
$ 1,552,790 
$ 1,499,396 
$ 1,435,097 
Common unitholders, units issued
92,958,063 
92,923,410 
92,922,445 
Condensed Consolidated Statements of Operations (unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
Revenues:
 
 
 
 
Propane
$ 795,806 
$ 759,278 
$ 1,399,862 
$ 1,333,182 
Other
67,854 
68,209 
140,964 
138,403 
Total, revenues
863,660 
827,487 
1,540,826 
1,471,585 
Costs and expenses:
 
 
 
 
Cost of sales — propane (excluding depreciation shown below)
367,079 
241,621 
581,484 
469,543 
Cost of sales — other (excluding depreciation shown below)
17,327 
17,161 
37,909 
38,028 
Operating and administrative expenses
240,006 
238,535 
466,808 
469,424 
Depreciation
34,420 
36,533 
68,409 
75,139 
Amortization
10,592 
10,886 
21,214 
21,486 
Other operating income, net
(5,628)
(7,131)
(2,493)
(16,038)
Total, costs and expenses
663,796 
537,605 
1,173,331 
1,057,582 
Operating income
199,864 
289,882 
367,495 
414,003 
Loss on extinguishments of debt
(22,144)
0 
(55,295)
0 
Interest expense
(39,991)
(40,806)
(80,019)
(81,831)
Income before income taxes
137,729 
249,076 
232,181 
332,172 
Income tax expense
(646)
(290)
(1,483)
(1,200)
Net income including noncontrolling interest
137,083 
248,786 
230,698 
330,972 
Deduct net income attributable to noncontrolling interest
(1,995)
(2,878)
(3,656)
(4,091)
Net income attributable to AmeriGas Partners, L.P.
135,088 
245,908 
227,042 
326,881 
General partner’s interest in net income attributable to AmeriGas Partners, L.P.
11,786 
11,107 
23,138 
20,562 
Limited partners’ interest in net income attributable to AmeriGas Partners, L.P.
$ 123,302 
$ 234,801 
$ 203,904 
$ 306,319 
Income per limited partner unit — basic and diluted:
 
 
 
 
Basic (in usd per unit)
$ 1.14 
$ 1.74 
$ 2.04 
$ 2.58 
Diluted (in usd per unit)
$ 1.14 
$ 1.74 
$ 2.04 
$ 2.58 
Weighted average limited partner units outstanding (thousands):
 
 
 
 
Basic (in units)
93,003 
92,954 
92,987 
92,939 
Diluted (in units)
93,045 
93,020 
93,039 
93,014 
Condensed Consolidated Statements of Cash Flows (unaudited) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Mar. 31, 2017
Mar. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
Net income including noncontrolling interest
$ 230,698 
$ 330,972 
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities:
 
 
Depreciation and amortization
89,623 
96,625 
Provision for uncollectible accounts
7,464 
7,207 
Change in unrealized losses (gains) on derivative instruments
2,887 
(33,821)
Loss on extinguishments of debt
55,295 
0 
Other, net
6,803 
(1,078)
Net change in:
 
 
Accounts receivable
(127,268)
(67,457)
Inventories
(25,620)
(861)
Accounts payable
34,217 
5,896 
Other current assets
3,255 
(4,201)
Other current liabilities
(75,166)
(59,195)
Net cash provided by operating activities
202,188 
274,087 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
Expenditures for property, plant and equipment
(53,616)
(55,787)
Proceeds from disposals of assets
8,161 
8,780 
Acquisitions of businesses, net of cash acquired
(7,257)
(25,761)
Net cash used by investing activities
(52,712)
(72,768)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
Distributions
(197,587)
(190,123)
Noncontrolling interest activity
(1,018)
(2,714)
Decrease in short-term borrowings
(153,200)
(2,800)
Issuances of long-term debt, net of issuance costs
1,207,658 
0 
Repayments of long-term debt, including redemption premiums
(928,114)
(5,837)
Proceeds associated with equity-based compensation plans, net of tax withheld
1,478 
1,127 
Capital contributions from General Partner
15 
11 
Net cash used by financing activities
(70,768)
(200,336)
Cash and cash equivalents increase
78,708 
983 
CASH AND CASH EQUIVALENTS
 
 
End of period
94,535 
15,740 
Beginning of period
15,827 
14,757 
Increase
$ 78,708 
$ 983 
Condensed Consolidated Statements of Partners' Capital (unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Total AmeriGas Partners, L.P. partners’ capital
Common units
General partner
Noncontrolling interest
Beginning Balance at Sep. 30, 2015
$ 1,200,373 
$ 1,164,216 
$ 1,145,291 
$ 18,925 
$ 36,157 
Beginning Balance (in units) at Sep. 30, 2015
 
 
92,889,980 
 
 
Increase (Decrease) in Partners' Capital
 
 
 
 
 
Net income including noncontrolling interest
330,972 
326,881 
306,319 
20,562 
4,091 
Distributions
(192,837)
(190,123)
(170,949)
(19,174)
(2,714)
Unit-based compensation expense
827 
827 
827 
 
 
Common Units issued in connection with employee and director plans, net of tax withheld (in units)
 
 
32,465 
 
 
Common Units issued in connection with employee and director plans, net of tax withheld
(562)
(562)
(573)
11 
 
Ending Balance at Mar. 31, 2016
1,338,773 
1,301,239 
1,280,915 
20,324 
37,534 
Ending Balance (in units) at Mar. 31, 2016
 
 
92,922,445 
 
 
Beginning Balance at Sep. 30, 2016
1,019,209 
984,221 
967,073 
17,148 
34,988 
Beginning Balance (in units) at Sep. 30, 2016
 
 
92,923,410 
 
 
Increase (Decrease) in Partners' Capital
 
 
 
 
 
Net income including noncontrolling interest
230,698 
227,042 
203,904 
23,138 
3,656 
Distributions
(200,207)
(197,587)
(174,731)
(22,856)
(2,620)
Unit-based compensation expense
774 
774 
774 
 
 
General Partner contribution to AmeriGas Propane, L.P.
1,602 
0 
 
 
1,602 
Common Units issued in connection with employee and director plans, net of tax withheld (in units)
 
 
34,653 
 
 
Common Units issued in connection with employee and director plans, net of tax withheld
(741)
(741)
(756)
15 
 
Ending Balance at Mar. 31, 2017
$ 1,051,335 
$ 1,013,709 
$ 996,264 
$ 17,445 
$ 37,626 
Ending Balance (in units) at Mar. 31, 2017
 
 
92,958,063 
 
 
Nature of Operations
Nature of Operations
Note 1 — 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”). AmeriGas Partners and AmeriGas OLP are Delaware limited partnerships. AmeriGas Partners, AmeriGas OLP and all of their subsidiaries are collectively referred to herein as “the Partnership” or “we.”

AmeriGas OLP is engaged in the distribution of propane and related equipment and supplies. AmeriGas OLP 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 March 31, 2017, 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, prior to its merger with and into the General Partner effective October 1, 2016, Petrolane Incorporated (a predecessor company of the Partnership), also owns AmeriGas Partners Common Units (“Common Units”). The remaining Common Units outstanding represents publicly held Common Units. Common Units represent limited partner interests in AmeriGas Partners. AmeriGas Partners holds a 98.99% limited partner interest in AmeriGas OLP.

AmeriGas Partners and AmeriGas OLP have no employees. Employees of the General Partner conduct, direct and manage our operations. The General Partner is reimbursed monthly for all direct and indirect expenses it incurs on our behalf (see Note 9).
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Note 2 — Summary of Significant Accounting Policies
 
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, 2016, 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, 2016 (“the Partnership’s 2016 Annual Report”). 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.

Principles of Consolidation. The consolidated financial statements include the accounts of AmeriGas Partners, its majority-owned subsidiary AmeriGas OLP, and its 100%-owned finance subsidiaries AmeriGas Finance Corp., AmeriGas Eagle Finance Corp., AP Eagle Finance Corp., and AmeriGas Finance LLC. AmeriGas Partners and AmeriGas OLP are under the common control of the General Partner. The General Partner of AmeriGas OLP, which is also the General Partner of AmeriGas Partners, makes all decisions for AmeriGas OLP; limited partners of AmeriGas OLP do not have the ability to remove the General Partner or participate in the decision-making for AmeriGas OLP. The accounts of AmeriGas OLP are included based upon the determination that AmeriGas Partners has a controlling financial interest in and is the primary beneficiary of AmeriGas OLP.

Allocation of Net Income. 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, L.P., as amended (“Partnership Agreement”).

Net Income (Loss) Per Unit. Income (loss) per limited partner unit is computed in accordance with GAAP regarding the application of the two-class method for determining income (loss) 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
March 31,
 
Six Months Ended
March 31,
 
 
2017
 
2016
 
2017
 
2016
Net income attributable to AmeriGas Partners, L.P.
 
$
135,088

 
$
245,908

 
$
227,042

 
$
326,881

Adjust for general partner share and theoretical distributions of net income attributable to AmeriGas Partners, L.P. to the general partner in accordance with the two-class method for MLPs
 
(29,381
)
 
(84,240
)
 
(37,427
)
 
(86,865
)
Common Unitholders’ interest in net income attributable to AmeriGas Partners, L.P. under the two-class method for MLPs
 
$
105,707

 
$
161,668

 
$
189,615

 
$
240,016

Weighted average Common Units outstanding — basic (thousands)
 
93,003

 
92,954

 
92,987

 
92,939

Potentially dilutive Common Units (thousands)
 
42

 
66

 
52

 
75

Weighted average Common Units outstanding — diluted (thousands)
 
93,045

 
93,020

 
93,039

 
93,014



Theoretical distributions of net income attributable to AmeriGas Partners, L.P. in accordance with the two-class method for the three months ended March 31, 2017 and 2016, 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 $0.19 and $0.79, respectively. Theoretical distributions of net income attributable to AmeriGas Partners, L.P. in accordance with the two-class method for the six months ended March 31, 2017 and 2016, 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 $0.15 and $0.71, respectively.

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.

Derivative Instruments. Derivative instruments are reported on the Condensed Consolidated Balance Sheets at their fair values, unless the derivative instruments qualify for the normal purchase and normal sale (“NPNS”) exception under GAAP. The accounting for changes in fair value depends upon the purpose of the derivative instrument and whether it is designated and qualifies for hedge accounting. For the six months ended March 31, 2017 and 2016, none of our derivative instruments were designated as hedges under GAAP.

Changes in the fair values of commodity derivative instruments for all periods presented are reflected in “Cost of sales — propane” on the Condensed Consolidated Statements of Operations. Cash flows from derivative instruments are included in cash flows from operating activities.

For additional information on the accounting for our derivative instruments, see Note 2, “Summary of Significant Accounting Policies,” in the Partnership’s 2016 Annual Report.

Deferred Debt Issuance Costs. During the fourth quarter of Fiscal 2016, we adopted new accounting guidance regarding the classification of deferred debt issuance costs. Deferred debt issuance costs associated with long-term debt are reflected as a direct deduction from the carrying amount of such debt. Deferred debt issuance costs associated with line of credit facilities continue to be classified as “Other assets” on our Condensed Consolidated Balance Sheets. As a result of the retrospective application of the new accounting guidance, the Partnership has reflected $19,535 of such costs as a reduction to long-term debt, including current maturities, on the accompanying March 31, 2016, Condensed Consolidated Balance Sheet. Previously, these costs were presented within “Other assets.”

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.

Correction of Prior Period Error. During the first quarter of Fiscal 2017, the Partnership determined that it had not properly recorded gains on sales of fixed assets relating to certain assets acquired in the acquisition of Heritage Propane in Fiscal 2012.  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 six months ended March 31, 2017, or any prior period financial statements, and recorded the cumulative effect of the error in accounting for certain property, plant and equipment disposals as of October 1, 2016. The correction of the error decreased “Other operating income, net” by $8,847 and decreased depreciation expense by $1,162 which is reflected in the Condensed Consolidated Statements of Operations for the six months ended March 31, 2017.

Reclassifications. Certain prior period amounts have been reclassified to conform to the current-period presentation.
Accounting Changes
Accounting Changes
Note 3 — Accounting Changes

Adoption of New Accounting Standards

Consolidation. Effective October 1, 2016, the Partnership adopted Accounting Standards Update (“ASU”) No. 2015-02, “Amendments to Consolidation Analysis” and ASU No. 2016-17, “Interest Held through Related Parties That Are under Common Control.” These ASUs provide new accounting guidance regarding whether a reporting entity should consolidate certain types of legal entities including variable interest entities (“VIEs”). Among other things, the new guidance affects the consolidation analysis of reporting entities that are involved with VIEs and requires that, under ASU 2015-02, if a single decision maker and its related parties are under common control, the single decision maker consider indirect interests in the entity held through these related parties to be the equivalent of direct interests, in their entirety. ASU 2016-07 amended the guidance in ASU 2015-02 to provide that such indirect interests be considered the equivalent of direct interests, on a proportionate basis. The adoption of this new guidance did not impact our consolidated financial statements.

Accounting Standards Not Yet Adopted

Goodwill Impairment. In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment.” Under the new accounting guidance, an entity will no longer determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Instead, an entity will perform its goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount. An entity will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value but not to exceed the total amount of the goodwill of the reporting unit. The provisions of the new accounting guidance are required to be applied prospectively. The new accounting guidance is effective for the Partnership for goodwill impairment tests performed in fiscal years beginning after December 15, 2019 (Fiscal 2021). Early adoption is permitted for goodwill impairment tests performed after January 1, 2017. The Partnership is in the process of assessing the impact on its financial statements from the adoption of the new guidance and determining the period in which the new guidance will be adopted.

Cash Flow Classification. In August 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments.” This ASU provides guidance on the classification of certain cash receipts and payments in the statement of cash flows. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2017 (Fiscal 2019). Early adoption is permitted. The amendments in the ASU should generally be adopted on a retrospective basis. The Partnership is in the process of assessing the impact on its financial statements from the adoption of the new guidance and determining the period in which the new guidance will be adopted.

Leases. In February 2016, the FASB issued ASU No. 2016-02, "Leases." This ASU amends existing guidance to require entities that lease assets to recognize the assets and liabilities for the rights and obligations created by those leases on the balance sheet. The new guidance also requires additional disclosures about the amount, timing and uncertainty of cash flows from leases. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2018 (Fiscal 2020). Early adoption is permitted. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Partnership is in the process of assessing the impact on its financial statements from the adoption of the new guidance and determining the period in which the new guidance will be adopted but anticipates an increase in the recognition of right-of-use assets and lease liabilities.

Revenue Recognition. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” The guidance provided under this ASU, as amended, supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) No. 605, “Revenue Recognition,” and most industry-specific guidance included in the ASC. 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 entity expects to be entitled in exchange for those goods or services. The new guidance is effective for the Partnership for interim and annual periods beginning after December 15, 2017 (Fiscal 2019) and allows for either full retrospective adoption or modified retrospective adoption. The Partnership has not yet selected a transition method and is in the process of assessing the impact on its financial statements from the adoption of the new guidance.
Goodwill and Intangible Assets
Goodwill and Intangible Assets
Note 4 — Goodwill and Intangible Assets

The Partnership’s goodwill and intangible assets comprise the following:
 
 
March 31,
2017
 
September 30,
2016
 
March 31,
2016
Goodwill (not subject to amortization)
 
$
1,981,842

 
$
1,978,981

 
$
1,971,999

Intangible assets:
 
 
 
 
 
 
Customer relationships and noncompete agreements
 
$
522,700

 
$
520,180

 
$
523,783

Accumulated amortization
 
(210,634
)
 
(191,805
)
 
(182,665
)
Intangible assets, net (definite-lived)
 
312,066

 
328,375

 
341,118

Trademarks and tradenames (indefinite-lived)
 
82,944

 
82,944

 
82,944

Total intangible assets, net
 
$
395,010

 
$
411,319

 
$
424,062



Amortization expense of intangible assets was $9,398 and $9,693 for the three months ended March 31, 2017 and 2016, respectively. Amortization expense of intangible assets was $18,829 and $19,101 for the six months ended March 31, 2017 and 2016, respectively. No amortization expense is included in cost of sales on the Condensed Consolidated Statements of Operations. The estimated aggregate amortization expense of intangible assets for the remainder of Fiscal 2017 and the next four fiscal years is as follows: remainder of Fiscal 2017 — $18,604; Fiscal 2018 — $36,226; Fiscal 2019 — $35,029; Fiscal 2020 — $33,847; Fiscal 2021 — $32,012.
Debt
Debt
Note 5 — Debt

In December 2016, AmeriGas Partners and AmeriGas Finance Corp., a 100% wholly owned finance subsidiary of AmeriGas Partners, issued $700,000 of 5.50% Senior Notes due May 2025 (the “5.50% Senior Notes”). The 5.50% Senior Notes rank equally with AmeriGas Partners’ existing outstanding senior notes. The net proceeds from the issuance of the 5.50% Senior Notes were used in December 2016 for (1) the early repayment, pursuant to a tender offer, of a portion of AmeriGas Partners’ 7.00% Senior Notes (the “7.00% Senior Notes”) having an aggregate principal balance of $499,970 plus accrued and unpaid interest and early redemption premiums; (2) the reduction of short-term borrowings; and (3) general corporate purposes.

In February 2017, AmeriGas Partners and AmeriGas Finance Corp. issued $525,000 of 5.75% Senior Notes due May 2027 (the “5.75% Senior Notes”). The 5.75% Senior Notes rank equally with AmeriGas Partners’ existing outstanding senior notes. The net proceeds from the issuance of the 5.75% Senior Notes were used in February 2017 for (1) the early repayment, pursuant to a tender offer, of a portion of the 7.00% Senior Notes having an aggregate principal balance of $378,340 plus accrued and unpaid interest and early redemption premiums; (2) the repayment of short-term borrowings; and (3) general corporate purposes.

In connection with these early repayments of the 7.00% Senior Notes, during the three and six months ended March 31, 2017, the Partnership recognized losses of $22,144 and $55,295, comprising $18,917 and $47,665 of early redemption premiums and the write-off of $3,227 and $7,630 of unamortized debt issuance costs, respectively. The losses are reflected in “Loss on extinguishments of debt” on the Condensed Consolidated Statements of Operations.

In March 2017, AmeriGas Partners issued a notice of early redemption for the remaining 7.00% Senior Notes not previously tendered, having an aggregate principal balance of $102,512, plus early redemption premiums and accrued and unpaid interest. These 7.00% Senior Notes, which have a redemption date of May 20, 2017, are included in “Current maturities of long-term debt” on the March 31, 2017, Condensed Consolidated Balance Sheet. The Partnership expects to recognize a loss on extinguishment of debt of approximately $5,000 during the third quarter of Fiscal 2017 associated with this redemption.
Commitments and Contingencies
Commitments and Contingencies
Note 6 — Commitments and Contingencies

Contingencies

Class Action Judgment. In connection with the Partnership’s 2012 acquisition of the subsidiaries of Energy Transfer Partners, L.P. (“ETP”) that operated ETP’s propane distribution business (“Heritage Propane”), the Partnership became party to a class action lawsuit that was filed against Heritage Operating, L.P. in 2005 by Alfred L. Williams, II, on behalf of himself and all others similarly situated. The class action lawsuit alleged, among other things, wrongful collection of tank rental payments from legacy customers of People’s Gas, which was acquired by Heritage Propane in 2000. In 2010, the Florida District Court certified the class and in January 2015, the Florida District Court awarded the class approximately $18,000. In April 2016, the Partnership appealed the verdict to the Florida Second District Court of Appeals (the “Second DCA”) and, in September 2016, the Second DCA affirmed the verdict without opinion. Prior to the Second DCA’s action in the case, we believed that the likelihood of the Second DCA affirming the Florida District Court’s decision was remote. As a result of the Second DCA’s actions, in September 2016, the Partnership recorded a $14,950 adjustment to its litigation accrual to reflect the full amount of the judgment plus associated interest. In October 2016, the Partnership filed a Motion for Written Opinion and for Rehearing En Banc with the Second DCA. Following denial of such motion, the Partnership satisfied such judgment.

Purported Class Action Lawsuits. Between May and October of 2014, more than 35 purported class action lawsuits were filed in multiple jurisdictions against the Partnership/UGI and a competitor by certain of their direct and indirect customers.  The class action lawsuits allege, among other things, that the Partnership and its competitor colluded, beginning in 2008, to reduce the fill level of portable propane cylinders from 17 pounds to 15 pounds and combined to persuade their 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.  On October 16, 2014, the United States Judicial Panel on Multidistrict Litigation transferred all of these purported class action cases to the Western Division of the United States District Court for the Western District of Missouri (“District Court”).  In July 2015, the District Court dismissed all claims brought by direct customers and all claims other than those for injunctive relief brought by indirect customers.  The direct customers filed an appeal with the United States Court of Appeals for the Eighth Circuit (“Eighth Circuit”) and, in August 2016, the Eighth Circuit affirmed the District Court’s dismissal of the direct customer’s claims against the Partnership/UGI. The direct customers filed a petition requesting an en banc review of the Eighth Circuit decision, which was granted. The rehearing occurred in April 2017. The indirect customers filed an amended complaint with the District Court claiming injunctive relief and state law claims under Wisconsin, Maine and Vermont law. In September 2016, the District Court dismissed the amended complaint in its entirety. The indirect customers appealed this decision to the Eighth Circuit; this appeal has been stayed pending the en banc review of the direct purchasers’ claims. On July 21, 2016, several new indirect customer plaintiffs filed an antitrust class action lawsuit against the Partnership in the Western District of Missouri.  The new indirect customer class action lawsuit was dismissed in September 2016 and certain indirect customer plaintiffs appealed the decision, consolidating their appeal with the indirect customer appeal still pending in the Eighth Circuit. 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 financial statements.
Fair Value Measurements
Fair Value Measurements
Note 7 — Fair Value Measurements

Derivative Instruments

The following table presents on a gross basis our derivative assets and liabilities, including both current and noncurrent portions, that are measured at fair value on a recurring basis within the fair value hierarchy, as of March 31, 2017, September 30, 2016 and March 31, 2016: 
 
 
Asset (Liability)
 
 
Level 1
 
Level 2
 
Level 3
 
Total
March 31, 2017:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Propane contracts
 
$
—

 
$
9,911

 
$
—

 
$
9,911

Liabilities:
 
 
 
 
 
 
 
 
Propane contracts
 
$
—

 
$
(4,058
)
 
$
—

 
$
(4,058
)
September 30, 2016:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Propane contracts
 
$
—

 
$
13,522

 
$
—

 
$
13,522

Liabilities:
 
 
 
 
 
 
 
 
Propane contracts
 
$
—

 
$
(4,779
)
 
$
—

 
$
(4,779
)
March 31, 2016:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Propane contracts
 
$
—

 
$
2,691

 
$
—

 
$
2,691

Liabilities:
 
 
 
 
 
 
 
 
Propane contracts
 
$
—

 
$
(26,206
)
 
$
—

 
$
(26,206
)

 
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. 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). The carrying amount and estimated fair value of our long-term debt (including current maturities but excluding unamortized debt issuance costs) at March 31, 2017, September 30, 2016 and March 31, 2016 were as follows:

 
March 31, 2017
 
September 30, 2016
 
March 31, 2016
Carrying amount
$
2,705,277

 
$
2,360,434

 
$
2,282,229

Estimated fair value
$
2,694,848

 
$
2,483,565

 
$
2,329,842



Financial instruments other than derivative instruments, such as short-term investments and trade accounts receivable, could expose us to concentrations of credit risk. We limit credit risk from short-term investments by investing only in investment-grade commercial paper, money market mutual funds, securities guaranteed by the U.S. Government or its agencies and FDIC insured bank deposits. The credit risk arising from concentrations of trade accounts receivable is limited because we have a large customer base that extends across many different U.S. markets.
Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities
Note 8 — Derivative Instruments and Hedging Activities

The Partnership is exposed to certain market risks associated with its ongoing business operations. Management uses derivative financial and commodity instruments, among other things, to manage these risks. The primary risk managed by derivative instruments is commodity price risk. 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. Although our commodity derivative instruments extend over a number of years, a significant portion of our commodity derivative instruments economically hedge commodity price risk during the next twelve months.

Commodity Price Risk

In order to manage market risk associated with the Partnership’s fixed-price programs, the Partnership uses over-the-counter derivative commodity instruments, principally price swap contracts. In addition, the Partnership uses over-the-counter price swap and option contracts to reduce propane price volatility associated with a portion of forecasted propane purchases. In addition, the Partnership from time to time enters into price swap and put option agreements to reduce the effects of short-term commodity price volatility. At March 31, 2017, September 30, 2016 and March 31, 2016, total volumes associated with propane commodity derivatives totaled 199.8 million gallons, 245.4 million gallons and 267.8 million gallons, respectively. At March 31, 2017, the maximum period over which we are economically hedging propane market price risk is 30 months.

Derivative 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 comprise 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. Although we have concentrations of credit risk associated with derivative instruments held by certain derivative instrument counterparties, the maximum amount of loss due to credit risk that we would incur if these counterparties failed to perform according to the terms of their contracts, based upon the gross fair values of the derivative instruments, was not material at March 31, 2017. 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 March 31, 2017, if the credit-risk-related contingent features were triggered, the amount of collateral required to be posted would not be material.

Offsetting Derivative Assets and Liabilities

Derivative assets and liabilities (and cash collateral received and pledged) are presented net by counterparty on our Condensed Consolidated Balance Sheets if the right of offset exists. Our derivative instruments comprise over-the-counter transactions. 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, the contracts are 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. Types of collateral generally include cash or letters of credit. Cash collateral paid by us to our over-the-counter derivative counterparties, if any, is reflected in the table below to offset derivative liabilities. Cash collateral received by us from our over-the-counter derivative 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 table below but could reduce our net exposure to such counterparties because such balances are subject to master netting or similar arrangements.

Fair Value of Derivative Instruments

The following table presents our derivative assets and liabilities by type, as well as the effects of offsetting, as of March 31, 2017, September 30, 2016 and March 31, 2016:

 
 
March 31,
2017
 
September 30,
2016
 
March 31,
2016
Derivative assets not designated as hedging instruments:
 
 
 
 
 
 
Propane contracts
 
$
9,911

 
$
13,522

 
$
2,691

Total derivative assets — gross
 
9,911

 
13,522

 
2,691

Gross amounts offset in the balance sheet
 
(3,886
)
 
(4,362
)
 
(2,691
)
Total derivative assets — net
 
$
6,025

 
$
9,160

 
$
—

 
 
 
 
 
 
 
Derivative liabilities not designated as hedging instruments:
 
 
 
 
 
 
Propane contracts
 
$
(4,058
)
 
$
(4,779
)
 
$
(26,206
)
Total derivative liabilities — gross
 
(4,058
)
 
(4,779
)
 
(26,206
)
Gross amounts offset in the balance sheet
 
3,886

 
4,362

 
2,691

Total derivative liabilities — net
 
$
(172
)
 
$
(417
)
 
$
(23,515
)


Effect of Derivative Instruments

The following tables provide information on the effects of derivative instruments on the Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2017 and 2016:
 
 
 Gain (Loss)
Recognized in Income
 
Location of Gain (Loss)
Recognized in Income
Three Months Ended March 31,
 
2017
 
2016
 
Derivatives Not Designated as Hedging Instruments:
 
 
 
 
 
 
Propane contracts
 
$
(10,706
)
 
$
11,877

 
Cost of sales — propane
 
 
 
 
 
 
 
 
 
Gain (Loss)
Recognized in Income
 
Location of Gain (Loss)
Recognized in Income
Six Months Ended March 31,
 
2017
 
2016
 
Derivatives Not Designated as Hedging Instruments:
 
 
 
 
 
 
Propane contracts
 
$
21,394

 
$
(15,380
)
 
Cost of sales — propane

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, contracts that 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 certain of these contracts have the requisite elements of a derivative instrument, these contracts qualify for NPNS 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.
Related Party Transactions
Related Party Transactions
Note 9 — Related Party Transactions

Pursuant to the Partnership Agreement and a management services agreement, the General Partner is entitled to reimbursement for all direct and indirect expenses incurred or payments it makes on behalf of the Partnership. These costs, which totaled $149,827 and $151,487 for the three months ended March 31, 2017 and 2016, respectively, and $297,418 and $301,541 for the six months ended March 31, 2017 and 2016, 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 $5,697 and $6,032 for the three months ended March 31, 2017 and 2016, respectively, and $9,381 and $9,392 for the six months ended March 31, 2017 and 2016, 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 incurred related to these items during the three and six months ended March 31, 2017 and 2016, were not material.

From time to time, AmeriGas OLP purchases propane on an as needed basis from UGI Energy Services, LLC (“Energy Services”). The price of the purchases is generally based on the market price at the time of purchase. There were no purchases of propane by AmeriGas OLP from Energy Services during the three and six months ended March 31, 2017 and 2016.

In addition, the Partnership sells propane to affiliates of UGI. Sales of propane to affiliates of UGI during the three and six months ended March 31, 2017 and 2016 were not material.
Summary of Significant Accounting Policies (Policies)
Principles of Consolidation 
Principles of Consolidation. The consolidated financial statements include the accounts of AmeriGas Partners, its majority-owned subsidiary AmeriGas OLP, and its 100%-owned finance subsidiaries AmeriGas Finance Corp., AmeriGas Eagle Finance Corp., AP Eagle Finance Corp., and AmeriGas Finance LLC. AmeriGas Partners and AmeriGas OLP are under the common control of the General Partner. The General Partner of AmeriGas OLP, which is also the General Partner of AmeriGas Partners, makes all decisions for AmeriGas OLP; limited partners of AmeriGas OLP do not have the ability to remove the General Partner or participate in the decision-making for AmeriGas OLP. The accounts of AmeriGas OLP are included based upon the determination that AmeriGas Partners has a controlling financial interest in and is the primary beneficiary of AmeriGas OLP.
Allocation of Net Income 
Allocation of Net Income. 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, L.P., as amended (“Partnership Agreement”).
Net Income (Loss) Per Unit 
Net Income (Loss) Per Unit. Income (loss) per limited partner unit is computed in accordance with GAAP regarding the application of the two-class method for determining income (loss) 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).

Derivative Instruments 
Derivative Instruments. Derivative instruments are reported on the Condensed Consolidated Balance Sheets at their fair values, unless the derivative instruments qualify for the normal purchase and normal sale (“NPNS”) exception under GAAP. The accounting for changes in fair value depends upon the purpose of the derivative instrument and whether it is designated and qualifies for hedge accounting. For the six months ended March 31, 2017 and 2016, none of our derivative instruments were designated as hedges under GAAP.

Changes in the fair values of commodity derivative instruments for all periods presented are reflected in “Cost of sales — propane” on the Condensed Consolidated Statements of Operations. Cash flows from derivative instruments are included in cash flows from operating activities.
Deferred Debt Issuance Costs 
Deferred Debt Issuance Costs. During the fourth quarter of Fiscal 2016, we adopted new accounting guidance regarding the classification of deferred debt issuance costs. Deferred debt issuance costs associated with long-term debt are reflected as a direct deduction from the carrying amount of such debt. Deferred debt issuance costs associated with line of credit facilities continue to be classified as “Other assets” on our Condensed Consolidated Balance Sheets.
Use of Estimates 
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.
Reclassifications 
Reclassifications. Certain prior period amounts have been reclassified to conform to the current-period presentation.
Adoption of New Accounting Standards and Accounting Standards Not Yet Adopted 
Adoption of New Accounting Standards

Consolidation. Effective October 1, 2016, the Partnership adopted Accounting Standards Update (“ASU”) No. 2015-02, “Amendments to Consolidation Analysis” and ASU No. 2016-17, “Interest Held through Related Parties That Are under Common Control.” These ASUs provide new accounting guidance regarding whether a reporting entity should consolidate certain types of legal entities including variable interest entities (“VIEs”). Among other things, the new guidance affects the consolidation analysis of reporting entities that are involved with VIEs and requires that, under ASU 2015-02, if a single decision maker and its related parties are under common control, the single decision maker consider indirect interests in the entity held through these related parties to be the equivalent of direct interests, in their entirety. ASU 2016-07 amended the guidance in ASU 2015-02 to provide that such indirect interests be considered the equivalent of direct interests, on a proportionate basis. The adoption of this new guidance did not impact our consolidated financial statements.

Accounting Standards Not Yet Adopted

Goodwill Impairment. In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment.” Under the new accounting guidance, an entity will no longer determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Instead, an entity will perform its goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount. An entity will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value but not to exceed the total amount of the goodwill of the reporting unit. The provisions of the new accounting guidance are required to be applied prospectively. The new accounting guidance is effective for the Partnership for goodwill impairment tests performed in fiscal years beginning after December 15, 2019 (Fiscal 2021). Early adoption is permitted for goodwill impairment tests performed after January 1, 2017. The Partnership is in the process of assessing the impact on its financial statements from the adoption of the new guidance and determining the period in which the new guidance will be adopted.

Cash Flow Classification. In August 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments.” This ASU provides guidance on the classification of certain cash receipts and payments in the statement of cash flows. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2017 (Fiscal 2019). Early adoption is permitted. The amendments in the ASU should generally be adopted on a retrospective basis. The Partnership is in the process of assessing the impact on its financial statements from the adoption of the new guidance and determining the period in which the new guidance will be adopted.

Leases. In February 2016, the FASB issued ASU No. 2016-02, "Leases." This ASU amends existing guidance to require entities that lease assets to recognize the assets and liabilities for the rights and obligations created by those leases on the balance sheet. The new guidance also requires additional disclosures about the amount, timing and uncertainty of cash flows from leases. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2018 (Fiscal 2020). Early adoption is permitted. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Partnership is in the process of assessing the impact on its financial statements from the adoption of the new guidance and determining the period in which the new guidance will be adopted but anticipates an increase in the recognition of right-of-use assets and lease liabilities.

Revenue Recognition. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” The guidance provided under this ASU, as amended, supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) No. 605, “Revenue Recognition,” and most industry-specific guidance included in the ASC. 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 entity expects to be entitled in exchange for those goods or services. The new guidance is effective for the Partnership for interim and annual periods beginning after December 15, 2017 (Fiscal 2019) and allows for either full retrospective adoption or modified retrospective adoption. The Partnership has not yet selected a transition method and is in the process of assessing the impact on its financial statements from the adoption of the new guidance.
Summary of Significant Accounting Policies (Tables)
Schedule of 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
March 31,
 
Six Months Ended
March 31,
 
 
2017
 
2016
 
2017
 
2016
Net income attributable to AmeriGas Partners, L.P.
 
$
135,088

 
$
245,908

 
$
227,042

 
$
326,881

Adjust for general partner share and theoretical distributions of net income attributable to AmeriGas Partners, L.P. to the general partner in accordance with the two-class method for MLPs
 
(29,381
)
 
(84,240
)
 
(37,427
)
 
(86,865
)
Common Unitholders’ interest in net income attributable to AmeriGas Partners, L.P. under the two-class method for MLPs
 
$
105,707

 
$
161,668

 
$
189,615

 
$
240,016

Weighted average Common Units outstanding — basic (thousands)
 
93,003

 
92,954

 
92,987

 
92,939

Potentially dilutive Common Units (thousands)
 
42

 
66

 
52

 
75

Weighted average Common Units outstanding — diluted (thousands)
 
93,045

 
93,020

 
93,039

 
93,014



Goodwill and Intangible Assets (Tables)
Components of Goodwill and Intangible Assets
The Partnership’s goodwill and intangible assets comprise the following:
 
 
March 31,
2017
 
September 30,
2016
 
March 31,
2016
Goodwill (not subject to amortization)
 
$
1,981,842

 
$
1,978,981

 
$
1,971,999

Intangible assets:
 
 
 
 
 
 
Customer relationships and noncompete agreements
 
$
522,700

 
$
520,180

 
$
523,783

Accumulated amortization
 
(210,634
)
 
(191,805
)
 
(182,665
)
Intangible assets, net (definite-lived)
 
312,066

 
328,375

 
341,118

Trademarks and tradenames (indefinite-lived)
 
82,944

 
82,944

 
82,944

Total intangible assets, net
 
$
395,010

 
$
411,319

 
$
424,062

Fair Value Measurements (Tables)
Financial Assets and Financial Liabilities at Fair Value on a Recurring Basis 
The following table presents on a gross basis our derivative assets and liabilities, including both current and noncurrent portions, that are measured at fair value on a recurring basis within the fair value hierarchy, as of March 31, 2017, September 30, 2016 and March 31, 2016: 
 
 
Asset (Liability)
 
 
Level 1
 
Level 2
 
Level 3
 
Total
March 31, 2017:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Propane contracts
 
$
—

 
$
9,911

 
$
—

 
$
9,911

Liabilities:
 
 
 
 
 
 
 
 
Propane contracts
 
$
—

 
$
(4,058
)
 
$
—

 
$
(4,058
)
September 30, 2016:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Propane contracts
 
$
—

 
$
13,522

 
$
—

 
$
13,522

Liabilities:
 
 
 
 
 
 
 
 
Propane contracts
 
$
—

 
$
(4,779
)
 
$
—

 
$
(4,779
)
March 31, 2016:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Propane contracts
 
$
—

 
$
2,691

 
$
—

 
$
2,691

Liabilities:
 
 
 
 
 
 
 
 
Propane contracts
 
$
—

 
$
(26,206
)
 
$
—

 
$
(26,206
)
Carrying Amount and Estimated Fair Value of Long-term Debt 
The carrying amount and estimated fair value of our long-term debt (including current maturities but excluding unamortized debt issuance costs) at March 31, 2017, September 30, 2016 and March 31, 2016 were as follows:

 
March 31, 2017
 
September 30, 2016
 
March 31, 2016
Carrying amount
$
2,705,277

 
$
2,360,434

 
$
2,282,229

Estimated fair value
$
2,694,848

 
$
2,483,565

 
$
2,329,842

Derivative Instruments and Hedging Activities (Tables)
Components of Fair Value of Derivative Assets and Liabilities 
The following table presents our derivative assets and liabilities by type, as well as the effects of offsetting, as of March 31, 2017, September 30, 2016 and March 31, 2016:

 
 
March 31,
2017
 
September 30,
2016
 
March 31,
2016
Derivative assets not designated as hedging instruments:
 
 
 
 
 
 
Propane contracts
 
$
9,911

 
$
13,522

 
$
2,691

Total derivative assets — gross
 
9,911

 
13,522

 
2,691

Gross amounts offset in the balance sheet
 
(3,886
)
 
(4,362
)
 
(2,691
)
Total derivative assets — net
 
$
6,025

 
$
9,160

 
$
—

 
 
 
 
 
 
 
Derivative liabilities not designated as hedging instruments:
 
 
 
 
 
 
Propane contracts
 
$
(4,058
)
 
$
(4,779
)
 
$
(26,206
)
Total derivative liabilities — gross
 
(4,058
)
 
(4,779
)
 
(26,206
)
Gross amounts offset in the balance sheet
 
3,886

 
4,362

 
2,691

Total derivative liabilities — net
 
$
(172
)
 
$
(417
)
 
$
(23,515
)


Components of Derivative Instruments Gain (Loss) In Statement of Operations 
The following tables provide information on the effects of derivative instruments on the Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2017 and 2016:
 
 
 Gain (Loss)
Recognized in Income
 
Location of Gain (Loss)
Recognized in Income
Three Months Ended March 31,
 
2017
 
2016
 
Derivatives Not Designated as Hedging Instruments:
 
 
 
 
 
 
Propane contracts
 
$
(10,706
)
 
$
11,877

 
Cost of sales — propane
 
 
 
 
 
 
 
 
 
Gain (Loss)
Recognized in Income
 
Location of Gain (Loss)
Recognized in Income
Six Months Ended March 31,
 
2017
 
2016
 
Derivatives Not Designated as Hedging Instruments:
 
 
 
 
 
 
Propane contracts
 
$
21,394

 
$
(15,380
)
 
Cost of sales — propane

Nature of Operations (Details)
6 Months Ended
Mar. 31, 2017
state
employee
General Partners Interest
 
Number of states in which the company has market share
50 
Limited partner interest held by AmeriGas Partners in AmeriGas OLP (as a percent)
98.99% 
Number of employees of the AmeriGas Partners and the Operating Partnership
0 
AmeriGas Propane Inc Partnership Interest in AmeriGas Partners
 
General Partners Interest
 
General partners ownership interest (as a percent)
1.00% 
AmeriGas Propane Inc Partnership Interest in AmeriGas OLP
 
General Partners Interest
 
General partners ownership interest (as a percent)
1.01% 
Summary of Significant Accounting Policies - Narrative (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
General Partner Interest
 
 
 
 
Dilutive effect of theoretical distributions of net income on earnings (in usd per unit)
$ 0.19 
$ 0.79 
$ 0.15 
$ 0.71 
Deferred debt issuance costs
 
$ 19,535 
 
$ 19,535 
Increase in other operating expense
(5,628)
(7,131)
(2,493)
(16,038)
Decrease in depreciation
(34,420)
(36,533)
(68,409)
(75,139)
Correction of Error in Accounting for Gains on Sales of Fixed Assets |
Restatement Adjustment
 
 
 
 
General Partner Interest
 
 
 
 
Increase in other operating expense
 
 
8,847 
 
Decrease in depreciation
 
 
$ 1,162 
 
AmeriGas Propane Inc Partnership Interest in AmeriGas Partners
 
 
 
 
General Partner Interest
 
 
 
 
General partner interest percentage
1.00% 
 
1.00% 
 
AmeriGas Finance Corp., AP Eagle Finance Corp. and AmeriGas Finance LLC
 
 
 
 
General Partner Interest
 
 
 
 
Ownership interest percentage
100.00% 
 
100.00% 
 
Summary of Significant Accounting Policies - Schedule of Income Per Limited Partner Unit (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
Accounting Policies [Abstract]
 
 
 
 
Net income attributable to AmeriGas Partners, L.P.
$ 135,088 
$ 245,908 
$ 227,042 
$ 326,881 
Adjust for general partner share and theoretical distributions of net income attributable to AmeriGas Partners, L.P. to the general partner in accordance with the two-class method for MLPs
(29,381)
(84,240)
(37,427)
(86,865)
Common Unitholders’ interest in net income attributable to AmeriGas Partners, L.P. under the two-class method for MLPs
$ 105,707 
$ 161,668 
$ 189,615 
$ 240,016 
Weighted average Common Units outstanding—basic (in units)
93,003 
92,954 
92,987 
92,939 
Potentially dilutive Common Units (in units)
42 
66 
52 
75 
Weighted average Common Units outstanding—diluted (in units)
93,045 
93,020 
93,039 
93,014 
Goodwill And Intangible Assets - Components of Goodwill and Intangible Assets (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Sep. 30, 2016
Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
 
Goodwill (not subject to amortization)
$ 1,981,842 
$ 1,978,981 
$ 1,971,999 
Intangible assets:
 
 
 
Customer relationships and noncompete agreements
522,700 
520,180 
523,783 
Accumulated amortization
(210,634)
(191,805)
(182,665)
Intangible assets, net (definite-lived)
312,066 
328,375 
341,118 
Trademarks and tradenames (indefinite-lived)
82,944 
82,944 
82,944 
Total intangible assets, net
$ 395,010 
$ 411,319 
$ 424,062 
Goodwill and Intangible Assets - Narrative (Details) (USD $)
3 Months Ended 6 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
Finite-Lived Intangible Assets
 
 
 
 
Amortization expense of intangible assets
$ 9,398,000 
$ 9,693,000 
$ 18,829,000 
$ 19,101,000 
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity
 
 
 
 
Remainder of Fiscal 2017
18,604,000 
 
18,604,000 
 
Fiscal 2018
36,226,000 
 
36,226,000 
 
Fiscal 2019
35,029,000 
 
35,029,000 
 
Fiscal 2020
33,847,000 
 
33,847,000 
 
Fiscal 2021
32,012,000 
 
32,012,000 
 
Cost of Sales
 
 
 
 
Finite-Lived Intangible Assets
 
 
 
 
Amortization expense of intangible assets
$ 0 
$ 0 
$ 0 
$ 0 
Debt (Details) (USD $)
3 Months Ended 6 Months Ended 1 Months Ended 6 Months Ended 1 Months Ended 3 Months Ended 6 Months Ended 1 Months Ended 3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
Dec. 31, 2016
Senior Notes
5.50% Senior Notes due May 2025
Debt Instrument, Redemption, Period One
Dec. 31, 2016
Senior Notes
7.00% Senior Notes
Debt Instrument, Redemption, Period One
Mar. 31, 2017
Senior Notes
7.00% Senior Notes
Debt Instrument, Redemption, Period One
Feb. 28, 2017
Senior Notes
7.00% Senior Notes
Debt Instrument, Redemption, Period Two
Mar. 31, 2017
Senior Notes
7.00% Senior Notes
Debt Instrument, Redemption, Period Two
Mar. 31, 2017
Senior Notes
7.00% Senior Notes
Debt Instrument, Redemption, Period Two
Mar. 31, 2017
Senior Notes
7.00% Senior Notes
Debt Instrument, Redemption, Period Three
Jun. 30, 2017
Senior Notes
7.00% Senior Notes
Debt Instrument, Redemption, Period Three
Scenario, Forecast
Feb. 28, 2017
Senior Notes
5.75% Senior Notes due May 2027
Debt Instrument, Redemption, Period Two
Dec. 31, 2016
AmeriGas Finance Corp.
Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ownership interest percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
Debt issued
 
 
 
 
$ 700,000,000 
 
 
 
 
 
 
 
$ 525,000,000 
 
Stated interest rate
 
 
 
 
5.50% 
7.00% 
 
7.00% 
 
 
7.00% 
 
5.75% 
 
Aggregate principal balance of debt repaid
 
 
 
 
 
499,970,000 
 
378,340,000 
 
 
102,512,000 
 
 
 
Loss on extinguishment of debt
22,144,000 
0 
55,295,000 
0 
 
 
33,151,000 
 
22,144,000 
55,295,000 
 
5,000,000 
 
 
Early redemption premiums
 
 
 
 
 
 
28,748,000 
 
18,917,000 
47,665,000 
 
 
 
 
Write-off of unamortized debt issuance costs
 
 
 
 
 
 
$ 4,403,000 
 
$ 3,227,000 
$ 7,630,000 
 
 
 
 
Commitments and Contingencies (Details) (USD $)
In Thousands, unless otherwise specified
1 Months Ended 6 Months Ended
Sep. 30, 2016
Jan. 31, 2015
Oct. 31, 2014
lawsuit
Mar. 31, 2017
FTC Cylinder Investigation
lb
Commitments and Contingencies Disclosure [Abstract]
 
 
 
 
Amount awarded
 
$ 18,000 
 
 
Adjustment to litigation accrual
$ 14,950 
 
 
 
Class action lawsuits (more than)
 
 
35 
 
Loss Contingencies
 
 
 
 
Amount of propane in cylinders before reduction (in pounds)
 
 
 
17 
Amount of propane in cylinders after reduction (in pounds)
 
 
 
15 
Fair Value Measurements - Financial Assets and Financial Liabilities at Fair Value On a Recurring Basis (Details) (Fair Value, Measurements, Recurring, Propane Contracts, USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Sep. 30, 2016
Mar. 31, 2016
Assets:
 
 
 
Derivative Assets
$ 9,911 
$ 13,522 
$ 2,691 
Liabilities:
 
 
 
Derivative Liabilities
(4,058)
(4,779)
(26,206)
Level 1
 
 
 
Assets:
 
 
 
Derivative Assets
0 
0 
0 
Liabilities:
 
 
 
Derivative Liabilities
0 
0 
0 
Level 2
 
 
 
Assets:
 
 
 
Derivative Assets
9,911 
13,522 
2,691 
Liabilities:
 
 
 
Derivative Liabilities
(4,058)
(4,779)
(26,206)
Level 3
 
 
 
Assets:
 
 
 
Derivative Assets
0 
0 
0 
Liabilities:
 
 
 
Derivative Liabilities
$ 0 
$ 0 
$ 0 
Fair Value Measurements - Other Financial Instruments (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Sep. 30, 2016
Mar. 31, 2016
Carrying amount
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
Long-term debt
$ 2,705,277 
$ 2,360,434 
$ 2,282,229 
Estimated fair value
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
Long-term debt
$ 2,694,848 
$ 2,483,565 
$ 2,329,842 
Derivative Instruments and Hedging Activities - Narrative (Details)
6 Months Ended 12 Months Ended
Mar. 31, 2017
gal
Mar. 31, 2016
gal
Sep. 30, 2016
gal
Derivative Instruments and Hedging Activities Disclosure [Abstract]
 
 
 
Volume of commodity derivative (gallons)
199,800,000 
267,800,000 
245,400,000 
Maximum period of price risk cash flow hedging (in months)
30 months 
 
 
Derivative Instruments and Hedging Activities - Components of Fair Value of Derivative Assets and Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Sep. 30, 2016
Mar. 31, 2016
Derivative Assets, Fair Value
 
 
 
Total derivative assets — gross
$ 9,911 
$ 13,522 
$ 2,691 
Gross amounts offset in the balance sheet
(3,886)
(4,362)
(2,691)
Total derivative assets — net
6,025 
9,160 
0 
Derivative Liabilities, Fair Value
 
 
 
Total derivative liabilities — gross
(4,058)
(4,779)
(26,206)
Gross amounts offset in the balance sheet
3,886 
4,362 
2,691 
Total derivative liabilities — net
(172)
(417)
(23,515)
Not Designated as Hedging Instrument |
Propane Contracts
 
 
 
Derivative Assets, Fair Value
 
 
 
Total derivative assets — gross
9,911 
13,522 
2,691 
Derivative Liabilities, Fair Value
 
 
 
Total derivative liabilities — gross
$ (4,058)
$ (4,779)
$ (26,206)
Derivative Instruments and Hedging Activities - Components of Derivative Instruments Gain Loss in Statement of Operations (Details) (Not Designated as Hedging Instrument, Propane Contracts, Cost of Sales - Propane, USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
Not Designated as Hedging Instrument |
Propane Contracts |
Cost of Sales - Propane
 
 
 
 
Derivative Instruments, Gain (Loss)
 
 
 
 
Gain (Loss) Recognized in Income
$ (10,706)
$ 11,877 
$ 21,394 
$ (15,380)
Related Party Transactions (Details) (USD $)
3 Months Ended 6 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
General Partner |
Reimbursed Expenses or Payments
 
 
 
 
Related Party Transaction
 
 
 
 
Related party costs and expenses
$ 149,827,000 
$ 151,487,000 
$ 297,418,000 
$ 301,541,000 
General Partner |
UGI Corp |
General and Administrative Services
 
 
 
 
Related Party Transaction
 
 
 
 
Related party costs and expenses
5,697,000 
6,032,000 
9,381,000 
9,392,000 
Affiliated Entity |
Energy Services |
Propane Purchases
 
 
 
 
Related Party Transaction
 
 
 
 
Related party costs and expenses
$ 0 
$ 0 
$ 0 
$ 0