Pennsylvania | 1-1398 | 23-1174060 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
2525 N. 12th Street, Suite 360 P.O. Box 12677 Reading, PA | 19612 | |
(Address of principal executive offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1 | Press Release of UGI Corporation, the parent of UGI Utilities, Inc., dated November 9, 2016. |
UGI Utilities, Inc. | ||
November 10, 2016 | By: | /s/ G. Gary Garcia |
Name: | G. Gary Garcia | |
Title: | Assistant Treasurer |
EXHIBIT NO. | DESCRIPTION |
99.1 | Press Release of UGI Corporation, the parent of UGI Utilities, Inc., dated November 9, 2016. |
Contact: | 610-337-1000 | For Immediate Release: | ||
Will Ruthrauff, ext. 6571 | November 9, 2016 | |||
Shelly Oates, ext. 3202 |
• | GAAP net income of $364.7 million, or $2.08 per diluted share, compared to $281.0 million, or $1.60 per diluted share in the prior year |
• | Adjusted net income of $360.0 million, or $2.05 per diluted share, compared to $353.8 million, or $2.01 per diluted share in the prior year |
• | Reiterating fiscal 2017 adjusted diluted EPS guidance of $2.30 to $2.45 |
• | UGI Utilities executed a record amount of capital investment this past year, added over 16,000 heating customers and filed a base rate case for UGI Gas which went into effect last month. |
• | Midstream & Marketing began construction of the Sunbury pipeline as well as its new LNG liquefaction plant, and awaits the final environmental impact statement for the PennEast pipeline. |
• | UGI International is on track with its integration of Finagaz, as well as the integrations of smaller-scale acquisitions at Flaga and AvantiGas. |
• | AmeriGas delivered solid unit margins despite weather that was significantly warmer than the prior year, and made progress on its acquisition, national account, and cylinder growth platforms." |
For the year ended September 30, | 2016 | 2015 | Increase (Decrease) | ||||||||||||
Revenues | $ | 2,311.8 | $ | 2,885.3 | $ | (573.5 | ) | (19.9 | )% | ||||||
Total margin (a) | $ | 1,447.0 | $ | 1,545.3 | $ | (98.3 | ) | (6.4 | )% | ||||||
Partnership operating and administrative expenses | $ | 928.8 | $ | 953.3 | $ | (24.5 | ) | (2.6 | )% | ||||||
Operating income | $ | 356.3 | $ | 427.6 | $ | (71.3 | ) | (16.7 | )% | ||||||
Loss on extinguishments of debt | $ | 48.9 | $ | — | $ | 48.9 | N.M. | ||||||||
Partnership Adjusted EBITDA | $ | 543.0 | $ | 619.2 | $ | (76.2 | ) | (12.3 | )% | ||||||
Retail gallons sold | 1,065.5 | 1,184.3 | (118.8 | ) | (10.0 | )% | |||||||||
Degree days - % (warmer) than normal | (15.0 | )% | (2.9 | )% | |||||||||||
Capital expenditures | $ | 101.7 | $ | 102.0 | $ | (0.3 | ) | (0.3 | )% |
• | Retail gallons sold decreased primarily due to temperatures that were 15% warmer than normal and 12.5% warmer than the prior year. |
• | Total margin decreased primarily reflecting lower retail total margin due to the decrease in retail gallons sold and, to a much lesser extent, lower margin from ancillary sales and services. |
• | Partnership operating and administrative expenses decreased primarily reflecting lower vehicle fuel, employee compensation and benefits, and uncollectible accounts expenses, partially offset by higher uninsured litigation expenses. |
• | Partnership Adjusted EBITDA decreased principally reflecting the lower total margin partially offset by lower operating and administrative expenses. |
For the year ended September 30, | 2016 | 2015 | Increase (Decrease) | ||||||||||||
Revenues | $ | 1,868.8 | $ | 1,808.5 | $ | 60.3 | 3.3 | % | |||||||
Total margin (a) | $ | 965.0 | $ | 688.5 | $ | 276.5 | 40.2 | % | |||||||
Operating and administrative expenses | $ | 639.7 | $ | 493.7 | $ | 146.0 | 29.6 | % | |||||||
Operating income | $ | 206.6 | $ | 112.8 | $ | 93.8 | 83.2 | % | |||||||
Income before income taxes | $ | 182.0 | $ | 76.4 | $ | 105.6 | 138.2 | % | |||||||
Finagaz integration and acquisition expenses | $ | 27.9 | $ | 22.6 | $ | 5.3 | 23.5 | % | |||||||
Costs associated with extinguishment of debt | $ | — | $ | 10.3 | $ | (10.3 | ) | N.M. | |||||||
Adjusted income before income taxes | $ | 209.9 | $ | 109.3 | $ | 100.6 | 92.0 | % | |||||||
Retail gallons sold | 820.5 | 697.0 | 123.5 | 17.7 | % | ||||||||||
Degree days - % (warmer) than normal | |||||||||||||||
UGI France | (13.9 | )% | (11.0 | )% | |||||||||||
Capital expenditures | $ | 99.9 | $ | 87.5 | $ | 12.4 | 14.2 | % |
• | Results for fiscal 2016 include the full-year results of Finagaz, which was acquired on May 29, 2015. The Finagaz acquisition nearly doubled our retail distribution business in France and is a significant contributor to the variances in the table above. |
• | Total retail gallons sold were higher, principally reflecting incremental retail gallons attributable to Finagaz and, to a lesser extent, retail gallons associated with small-scale acquisitions at Flaga and AvantiGas. These increases were partially offset by Flaga exiting its lower-margin autogas business in Poland. |
• | Total margin increased primarily reflecting incremental margin from Finagaz and, to a lesser extent, higher average unit margins in our legacy UGI France and Flaga businesses and the impact of the small-scale acquisitions at Flaga and AvantiGas. |
• | Operating expenses increased primarily reflecting incremental expenses associated with Finagaz. |
• | The increase in operating income primarily reflects the higher total margin, partially offset by increased operating, administrative, and depreciation expenses. |
For the year ended September 30, | 2016 | 2015 | Increase (Decrease) | ||||||||||||
Revenues | $ | 866.6 | $ | 1,163.6 | $ | (297.0 | ) | (25.5 | )% | ||||||
Total margin (a) | $ | 264.4 | $ | 309.0 | $ | (44.6 | ) | (14.4 | )% | ||||||
Operating and administrative expenses | $ | 90.9 | $ | 98.6 | $ | (7.7 | ) | (7.8 | )% | ||||||
Operating income | $ | 146.7 | $ | 182.6 | $ | (35.9 | ) | (19.7 | )% | ||||||
Income before income taxes | $ | 144.6 | $ | 180.5 | $ | (35.9 | ) | (19.9 | )% | ||||||
Degree days - % (warmer) colder than normal | (17.8 | )% | 4.5 | % | |||||||||||
Capital expenditures | $ | 140.4 | $ | 88.0 | $ | 52.4 | 59.5 | % |
• | Results reflect temperatures that were 17.8% warmer than normal and 20.5% warmer than the prior year. |
• | Total margin decreased principally reflecting lower capacity management ($41.7 million), natural gas and retail power ($14.9 million), electric generation ($9.4 million), and HVAC total margin. These decreases were partially offset by higher natural gas gathering ($15.6 million) and peaking ($11.8 million) margin. |
• | The lower capacity management margin reflects lower prices for pipeline capacity as the current year experienced lower locational basis differentials in capacity values between Marcellus and non-Marcellus delivery points. |
• | Natural gas gathering margins increased reflecting the expansion of natural gas gathering assets. |
• | Peaking margins increased reflecting increased demand for peaking services. |
• | Operating and administrative expenses were slightly lower principally reflecting lower operating expenses associated with our HVAC business on lower activity. |
For the year ended September 30, | 2016 | 2015 | Increase (Decrease) | ||||||||||||
Revenues | $ | 768.5 | $ | 1,041.6 | $ | (273.1 | ) | (26.2 | )% | ||||||
Total margin (a) | $ | 473.9 | $ | 525.2 | $ | (51.3 | ) | (9.8 | )% | ||||||
Operating and administrative expenses | $ | 192.7 | $ | 218.3 | $ | (25.6 | ) | (11.7 | )% | ||||||
Operating income | $ | 200.9 | $ | 241.7 | $ | (40.8 | ) | (16.9 | )% | ||||||
Income before income taxes | $ | 163.3 | $ | 200.6 | $ | (37.3 | ) | (18.6 | )% | ||||||
System throughput - billions of cubic feet ("bcf") | |||||||||||||||
Core market | 66.2 | 81.3 | (15.1 | ) | (18.6 | )% | |||||||||
Total | 212.4 | 213.5 | (1.1 | ) | (0.5 | )% | |||||||||
Gas Utility Degree days - % (warmer) colder than normal | (13.6 | )% | 6.4 | % | |||||||||||
Capital expenditures | $ | 262.5 | $ | 197.7 | $ | 64.8 | 32.8 | % |
• | Gas Utility core market throughput decreased reflecting temperatures that were 13.6% warmer than normal and 17.8% warmer than the prior year. |
• | Total margin decreased primarily reflecting lower throughput from Gas Utility core market customers and lower Electric Utility margin. |
• | Operating and administrative expenses decreased primarily reflecting lower information technology project costs, and, to a lesser extent, lower uncollectible accounts, system maintenance expenses, and employee benefits. |
• | Operating income decreased due to lower total margin, higher depreciation, and lower other operating income which includes higher environmental expense, lower margin from off-system sales, lower revenue from construction services, and higher interest on PGC overcollections. |
Three Months Ended September 30, | Twelve Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenues: | ||||||||||||||||
AmeriGas Propane | $ | 393.5 | $ | 418.2 | $ | 2,311.8 | $ | 2,885.3 | ||||||||
UGI International | 316.4 | 379.1 | 1,868.8 | 1,808.5 | ||||||||||||
UGI Utilities | 108.2 | 110.2 | 768.5 | 1,041.6 | ||||||||||||
Midstream & Marketing | 174.3 | 188.8 | 866.6 | 1,163.6 | ||||||||||||
Corporate & Other (a) | (16.2 | ) | (13.5 | ) | (130.0 | ) | (207.9 | ) | ||||||||
Total revenues | $ | 976.2 | $ | 1,082.8 | $ | 5,685.7 | $ | 6,691.1 | ||||||||
Operating income (loss): | ||||||||||||||||
AmeriGas Propane | $ | (42.0 | ) | $ | (9.8 | ) | $ | 356.3 | $ | 427.6 | ||||||
UGI International | (23.5 | ) | (5.1 | ) | 206.6 | 112.8 | ||||||||||
UGI Utilities | 8.3 | 3.2 | 200.9 | 241.7 | ||||||||||||
Midstream & Marketing | 14.7 | 18.4 | 146.7 | 182.6 | ||||||||||||
Corporate & Other (a) | (46.1 | ) | (13.3 | ) | 77.5 | (129.8 | ) | |||||||||
Total operating (loss) income | (88.6 | ) | (6.6 | ) | 988.0 | 834.9 | ||||||||||
Loss from equity investees | (0.1 | ) | (0.1 | ) | (0.2 | ) | (1.2 | ) | ||||||||
Loss on extinguishments of debt | (11.8 | ) | — | (48.9 | ) | — | ||||||||||
Interest expense: | ||||||||||||||||
AmeriGas Propane | (41.4 | ) | (40.4 | ) | (164.1 | ) | (162.8 | ) | ||||||||
UGI International (b) | (5.6 | ) | (6.2 | ) | (24.4 | ) | (35.2 | ) | ||||||||
UGI Utilities | (9.7 | ) | (9.9 | ) | (37.6 | ) | (41.1 | ) | ||||||||
Midstream & Marketing | (0.4 | ) | (0.5 | ) | (2.1 | ) | (2.1 | ) | ||||||||
Corporate & Other, net (a) | (0.2 | ) | (0.2 | ) | (0.7 | ) | (0.7 | ) | ||||||||
Total interest expense | (57.3 | ) | (57.2 | ) | (228.9 | ) | (241.9 | ) | ||||||||
(Loss) income before income taxes | (157.8 | ) | (63.9 | ) | 710.0 | 591.8 | ||||||||||
Income tax benefit (expense) | 42.1 | 11.4 | (221.2 | ) | (177.8 | ) | ||||||||||
Net (loss) income including noncontrolling interests | (115.7 | ) | (52.5 | ) | 488.8 | 414.0 | ||||||||||
Add net loss (deduct net income) attributable to noncontrolling interests, principally in AmeriGas Partners, L.P. | 71.9 | 43.3 | (124.1 | ) | (133.0 | ) | ||||||||||
Net (loss) income attributable to UGI Corporation | $ | (43.8 | ) | $ | (9.2 | ) | $ | 364.7 | $ | 281.0 | ||||||
Earnings per share attributable to UGI shareholders: | ||||||||||||||||
Basic | $ | (0.25 | ) | $ | (0.05 | ) | $ | 2.11 | $ | 1.62 | ||||||
Diluted | $ | (0.25 | ) | $ | (0.05 | ) | $ | 2.08 | $ | 1.60 | ||||||
Weighted Average common shares outstanding (thousands): | ||||||||||||||||
Basic | 173,737 | 173,265 | 173,154 | 173,115 | ||||||||||||
Diluted | 173,737 | 173,265 | 175,572 | 175,667 | ||||||||||||
Supplemental information: | ||||||||||||||||
Net income (loss) attributable to UGI Corporation: | ||||||||||||||||
AmeriGas Propane | $ | (10.2 | ) | $ | (1.0 | ) | $ | 43.2 | $ | 61.0 | ||||||
UGI International | (20.7 | ) | (7.1 | ) | 111.6 | 52.7 | ||||||||||
UGI Utilities | (1.8 | ) | (4.6 | ) | 97.4 | 121.1 | ||||||||||
Midstream & Marketing | 9.9 | 11.0 | 87.1 | 107.5 | ||||||||||||
Corporate & Other (a) | (21.0 | ) | (7.5 | ) | 25.4 | (61.3 | ) | |||||||||
Total net (loss) income attributable to UGI Corporation | $ | (43.8 | ) | $ | (9.2 | ) | $ | 364.7 | $ | 281.0 |
Three Months Ended September 30, | Twelve Months Ended September 30, | |||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||
Adjusted net income attributable to UGI Corporation: | ||||||||||||||||||
Net (loss) income attributable to UGI Corporation | $ | (43.8 | ) | $ | (9.2 | ) | $ | 364.7 | $ | 281.0 | ||||||||
Net losses (gains) on commodity derivative instruments not associated with current period transactions (net of tax of $(18.9), $(3.2), $13.5 and $(30.9), respectively) (1) (2) | 25.7 | 7.1 | (29.9 | ) | 53.3 | |||||||||||||
Integration and acquisition expenses associated with Finagaz (net of tax of $(4.7), $(2.4), $(10.6) and $(7.7), respectively) (2) | 7.7 | 4.0 | 17.3 | 14.9 | ||||||||||||||
Loss on extinguishments of debt (net of tax of $(1.1), $0.0, $(5.0) and $(5.7), respectively) (2) (3) | 1.8 | — | 7.9 | 4.6 | ||||||||||||||
Adjusted net (loss) income attributable to UGI Corporation | $ | (8.6 | ) | $ | 1.9 | $ | 360.0 | $ | 353.8 | |||||||||
Three Months Ended September 30, | Twelve Months Ended September 30, | |||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||
Adjusted diluted earnings per share: | ||||||||||||||||||
UGI Corporation earnings per share - diluted | $ | (0.25 | ) | $ | (0.05 | ) | $ | 2.08 | $ | 1.60 | ||||||||
Net losses (gains) on commodity derivative instruments not associated with current period transactions (1) | 0.15 | 0.04 | (0.17 | ) | 0.30 | |||||||||||||
Integration and acquisition expenses associated with Finagaz | 0.04 | 0.02 | 0.10 | 0.08 | ||||||||||||||
Loss on extinguishments of debt | 0.01 | — | 0.04 | 0.03 | ||||||||||||||
Adjusted diluted earnings per share | $ | (0.05 | ) | $ | 0.01 | $ | 2.05 | $ | 2.01 | |||||||||
(1) Includes impact of rounding. | ||||||||||||||||||
(2) Income taxes associated with pre-tax adjustments determined using statutory business unit tax rates. | ||||||||||||||||||
(3) Costs associated with extinguishment of debt for the twelve months ended September 30, 2015 is included in interest expense on the Report of Earnings. |