GLOSSARY OF TERMS

Active Adult Elite (Consumer Segment)

Due to their proximity to urban areas with easy access to natural gas, Active Adult Elite consumers are not ideal targets for propane marketers. The wealthiest active adult households, AA Elite members represent 6 percent of all U.S. households. Fifty-nine percent are still employed full time, mostly as professionals or in management, but less than 1 percent of these households have any children. Averaging $89,575 in household income, AA Elites index highly to belong to fraternal orders and AARP, and to have had a grandchild born within the last 12 months.

Active Adult Entry Level (Consumer Segment)

Due to their limited means and often fixed incomes, consumers in the Active Adult Entry Level segment are not an ideal target for propane marketers. Often, members of this group are semi- to fully retired, lower- to middle-class adults with deep roots in their communities. Seventy-six percent are married or widowed and less than 1 percent of these households have any children. The income for this group is among the lowest of all consumer groups at $22,515, and they index poorly for virtually all types of home improvement as a result. AA Entry Level consumers also index highest to be a one-person household, own a mobile home, and be in retirement.

Active Adult Feature and Location (Consumer Segment)

Well-educated, middle- to upper-class adults nearing or in retirement with fairly active lifestyles including travel and entertainment, Active Adult Feature and Location consumers are not an ideal target for propane marketers due to their proximity to urban cores with easy access to natural gas. This group accounts for 10 percent of all households in the U.S.

Completions Prior Quarter

Observed completions during the prior quarter’s field research survey. A house is defined as completed when all finished flooring (or carpeting) has been installed.

Composite Index

A simple average of the Propane Index, Propane Projected Growth Index, and Propane Demand Index. If one number could represent the health of an MSA for the propane industry, it would be the Propane Composite Index. As of the current reporting period, the national average score is 72.

Consumer Segment

A group of individuals with similar lifestyle characteristics and buying tendencies.

Demand Index

A measure of the concentration of the three (of nine) consumer segments most likely to engage in propane retrofit projects or purchase homes that feature propane appliances. A score of 100 indicates the highest percentage of households falling into the key consumer segments while a score at 0 indicates the lowest percentage. As of the current reporting period, the national average score is 50.

Distance Index

The distance of a ZIP code from natural gas transmission infrastructure. Greater distance from such infrastructure would contribute a positive score to the Propane Index; closer proximity to infrastructure would contribute a negative score.

Elite (Consumer Segment)

Composed of affluent families and older couples with high-end tastes and the means to support them, Elite consumers represent 8 percent of the households in the U.S. Despite their elevated incomes, $179,543 nationally, Elite members tend to live in urban and suburban areas with easy access to natural gas. Forty-one percent have children at home but the group averages fewer than two children per household. This group indexes highest of all groups to possess a postgraduate degree, own a vacation or weekend home, belong to an art association, and own a luxury automobile.

Entry Level (Top Consumer Segment)

A strong target for propane marketers due to typical distance from pipeline and desire to own energy efficient appliances, Entry Level consumers represent 13 percent of all households in the U.S. These consumers are often starting out or starting over as households. Fifty percent are married and 52 percent have children. This group has an average income of $44,612 and carries a high propensity for home improvement projects. Additionally, this group indexed highest to be Hispanic, divorced or separated, or to have changed jobs within the last 12 months.

Existing Home Sales

Sales of homes from one owner to another, as opposed to a newly built home. This variable is measured on a percentage scale relative to other markets. For example, a market with a score of 80 is healthier than 80 percent of all markets.

Family Life (Top Consumer Segment)

Accounting for 6 percent of all households, Family Life consumers are traditional middle- to upper-class families who tend to live in areas with access to natural gas. They average two children per household and 88 percent are married. The group has an average income of $116,610 and is typically college educated and employed in professional occupations. Family Life consumers index highly to be involved in the PTA and frequent Target, Old Navy, and Dick’s Sporting Goods.

Feature and Location (Consumer Segment)

Principally young professionals concentrated in urban areas, Feature and Location consumers typically have easy access to natural gas and are therefore not an ideal target for propane marketers. This group values location and amenities over size and space. It has the second-highest concentration of Millennials. Fifty-two percent of these households are married, but only 22 percent have children. With an average income of $113,830, these consumers index highly to be employed in scientific, technical, or finance professions. The group also indexes highly to expect a better job in the next 12 months.

Finished

The number of finished vacant (unoccupied) homes.

Future

Empty lots with no street in front. May be included in an active subdivision and, if so, indicates the project is being built in phases.

Gas Appliance Index

On a scale of 1 (lowest) to 100 (highest), the measure of consumer preference in this market for gas appliances over electric ones, especially for home heating applications, as indicated in direct surveys.

Household Growth

The rate of new household formations within an area. Household formation is a widely used indicator of housing demand and economic growth. This variable is measured on a percentage scale relative to other markets. For example, a market with a score of 80 is healthier than 80 percent of all other MSAs.

Housing Permits

A permit required in a jurisdiction allowing a party to build a home. This variable is measured on a percentage scale relative to other markets. For example, a market with a score of 80 is healthier than 80 percent of all other MSAs.

List Price Range

The asking price of homes, in $100,000 ranges.

Market Health Index

A composite measure of six economic factors — Median Income, Household Growth, Median Home Price, Unemployment Rate, Existing Home Sales, and Total Housing Permits — that correlate highly with residential home purchase and remodeling activity in a given market. This variable is measured on a percentage scale relative to other markets. For example, a market with a score of 80 is healthier than 80 percent of all other MSAs.

Median Home Price

The midway price point of all the houses sold within an MSA or a ZIP code area. In other words, half of the homes sold within the area were more than this price; half were less than this price. This variable is measured on a percentage scale relative to other markets. For example, a market with a score of 80 is healthier than 80 percent of all other MSAs.

Median Income

The midway income figure of the consumers living within an MSA or a ZIP code area. In other words, half of the households within the area earned more than this figure; half earned less than this figure. This variable is measured on a percentage scale relative to other markets. For example, a market with a score of 80 is healthier than 80 percent of all other MSAs.

Metropolitan Statistical Area (MSA)

A geographic region used for statistical purposes, typically centered around a city or other population center. MSAs are defined by the U.S. Office of Management and Budget (OMB).

Metrostudy

Metrostudy (MS) is a residential data provider. MS provides proprietary sets of pricing, product, sales and traffic reports blended with public demographic, economic and permit data representing 900 localities and 96 percent of U.S. markets. MS was responsible for all reporting aspects of this program.

Model

Number of model units in the subdivision.

Newspaper Readership Index

The likelihood of a consumer to read a newspaper or a specific section of a newspaper, relative to the average U.S. consumer. Index values indicate likelihood relative to the average consumer to engage in the specific behavior (i.e. an index value of 110 means that group is 10% more likely than the average consumer to engage in the behavior).

Online Behavior Index

The likelihood of a consumer to engage in a specific online behavior, such as visiting a website, relative to the average U.S. consumer. Index values indicate likelihood relative to the average consumer to engage in the specific behavior (i.e. an index value of 110 means that group is 10% more likely than the average consumer to engage in the behavior).

Projected Growth Index

A measure of the likelihood of growth in propane-related replacement projects within the next three years. A score of 100 indicates the highest expected increase in propane-related replacement projects while a score of 0 indicates the lowest expect growth (or highest contraction) of propane-related projects. The national average score is always 50.

Propane Index

A measure of the level of propane-related replacement activity in an area. The Propane Index itself comprises three other market factors: Distance Index, Gas Appliance Index, and Propane Share Index. A Propane Index score above 100 indicates a level of activity that is higher than the historical national baseline; a number below 100 indicates a level of activity that is lower than that baseline. As of the current reporting period, the national average score is 123.

Propane Share Index

On a scale of 1 (lowest) to 100 (highest), the measure of propane’s share in this market based on the ratio of homes heating with propane versus natural gas. A higher number indicates more instances of propane appliances in the home - and a better chance that the homeowner will consider upgrades of existing propane equipment or installation of new ones.

Radio Listenership Index

The likelihood of a consumer to listen to the radio, or a specific channel type, relative to the average U.S. consumer. Index values indicate likelihood relative to the average consumer to engage in the specific behavior (i.e. an index value of 110 means that group is 10% more likely than the average consumer to engage in the behavior).

Simple Life (Consumer Segment)

A top target for propane marketers due to typical distance from the gas pipeline and elevated income levels, Simple Life consumers represent the second-largest group of households in the U.S. Averaging $78,072 in annual household income, this group shows a high propensity for home improvement projects. This group is generally made up of family households, primarily in suburban, exurban, and rural locations. The group demonstrates a higher interest in outdoor activities and is often employed in mining and construction, production, transportation, and ground maintenance fields.

Starts Prior Quarter

Observed number of new homes being built during the previous quarter’s field research survey.

Television Viewership Index

The likelihood of a consumer to watch television or a specific program, relative to the average U.S. consumer. Index values indicate likelihood relative to the average consumer to engage in the specific behavior (i.e. an index value of 110 means that group is 10% more likely than the average consumer to engage in the behavior).

Total Remaining

The number of unoccupied lots in the subdivision.

Transitional (Consumer Segment)

A top segment for propane marketers, Transitional consumers boast the highest index scores for propane projects in terms of desire but have a lower income index than most groups. The largest consumer group in the U.S., Transitional consumers are ethnically diverse. Only 29 percent of these households are married and 41 percent have children. Averaging $30,138 in household income, these consumers tend to live in multifamily dwellings and plan to buy a first home in the next 12 months. This group has the highest concentration of Millennials. Transitional consumers index low for long-term purchases and financial planning.

UC

Under construction. Indicates that a lot has at least a foundation in place.

Unemployment Rate

A measure of the prevalence of individuals who are not working but are actively seeking work. This variable is measured on a percentage scale relative to other markets. For example, a market with a score of 80 is healthier than 80 percent of all other MSAs

VDL

Vacant developed lot. Indicates an empty, entitled lot with a street in front and where construction may begin soon.