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 February 1, 2017. |
UGI Utilities, Inc. | ||
February 2, 2017 | 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 February 1, 2017. |
Contact: | 610-337-1000 | For Immediate Release: | ||
Will Ruthrauff, ext. 6571 | February 1, 2017 | |||
Shelly Oates, ext. 3202 |
• | GAAP net income of $230.7 million, or $1.30 per diluted share, compared to $114.6 million, or $0.65 per diluted share in the prior year |
• | Adjusted net income of $160.9 million, or $0.91 per diluted share, compared to $112.4 million, or $0.64 per diluted share in the prior year; exceeds prior year in all of our business units |
• | Sunbury pipeline construction completed |
• | New UGI Gas base rates went into effect on October 19, 2016, rate case for UGI Penn Natural Gas filed on January 19, 2017 |
UGI Reports Record First Quarter Earnings | Page 2 |
For the fiscal quarter ended December 31, | 2016 | 2015 | Increase (Decrease) | ||||||||||||
Revenues | $ | 677.2 | $ | 644.1 | $ | 33.1 | 5.1 | % | |||||||
Total margin (a) | $ | 416.5 | $ | 400.9 | $ | 15.6 | 3.9 | % | |||||||
Partnership operating and administrative expenses | $ | 226.8 | $ | 230.9 | $ | (4.1 | ) | (1.8 | )% | ||||||
Operating income | $ | 141.9 | $ | 129.6 | $ | 12.3 | 9.5 | % | |||||||
Partnership Adjusted EBITDA | $ | 185.1 | $ | 177.7 | $ | 7.4 | 4.2 | % | |||||||
Loss on extinguishment of debt | $ | 33.2 | $ | — | $ | 33.2 | N.M. | ||||||||
Retail gallons sold | 305.7 | 295.1 | 10.6 | 3.6 | % | ||||||||||
Heating degree days - % (warmer) than normal | (13.9 | )% | (19.9 | )% | |||||||||||
Capital expenditures | $ | 26.4 | $ | 28.0 | $ | (1.6 | ) | (5.7 | )% |
• | Retail gallons sold increased versus the prior year due to temperatures that were colder than the prior year although significantly warmer than normal. |
• | Total margin increased primarily reflecting higher retail propane margin due to the increase in volumes sold. |
• | Partnership operating and administrative expenses decreased primarily reflecting lower employee benefits expenses. |
• | Partnership Adjusted EBITDA increased principally reflecting the higher total margin and lower operating expenses. These increases were partially offset by the impact of an $8.8 million adjustment to correct previously recorded gains on sales of fixed assets acquired with the Heritage acquisition in 2012. |
For the fiscal quarter ended December 31, | 2016 | 2015 | Increase (Decrease) | ||||||||||||
Revenues | $ | 539.1 | $ | 578.2 | $ | (39.1 | ) | (6.8 | )% | ||||||
Total margin (a) | $ | 281.1 | $ | 275.4 | $ | 5.7 | 2.1 | % | |||||||
Operating and administrative expenses | $ | 165.6 | $ | 159.6 | $ | 6.0 | 3.8 | % | |||||||
Operating income | $ | 88.9 | $ | 85.1 | $ | 3.8 | 4.5 | % | |||||||
Income before income taxes | $ | 84.0 | $ | 78.5 | $ | 5.5 | 7.0 | % | |||||||
Finagaz integration expenses | $ | 8.1 | $ | 2.3 | $ | 5.8 | 252.2 | % | |||||||
Adjusted income before income taxes | $ | 92.1 | $ | 80.8 | $ | 11.3 | 14.0 | % | |||||||
Retail gallons sold | 254.2 | 259.1 | (4.9 | ) | (1.9 | )% | |||||||||
Heating degree days - % (warmer) than normal | (0.5 | )% | (17.6 | )% | |||||||||||
Capital Expenditures | $ | 21.5 | $ | 21.0 | $ | 0.5 | 2.4 | % |
• | Total retail gallons sold were slightly lower, principally reflecting the impact on retail volumes from exiting lower-margin autogas business in Poland in 2016, partially offset by the effects of significantly colder weather. |
• | Total margin increased primarily reflecting higher total margin from residential bulk sales that reflect the colder weather, higher natural gas total margin, and slightly higher average LPG unit margins. |
• | Operating expenses increased primarily reflecting higher integration expenses associated with the Finagaz acquisition. |
• | The increase in adjusted income before taxes primarily reflects the higher total margin and a $4.6 million increase in other operating income due to the absence of a $3.4 million loss related to interest rate hedge ineffectiveness that impacted the prior-year period. |
UGI Reports Record First Quarter Earnings | Page 3 |
For the fiscal quarter ended December 31, | 2016 | 2015 | Increase | ||||||||||||
Revenues | $ | 269.8 | $ | 226.9 | $ | 42.9 | 18.9 | % | |||||||
Total margin (a) | $ | 78.0 | $ | 72.4 | $ | 5.6 | 7.7 | % | |||||||
Operating and administrative expenses | $ | 23.0 | $ | 22.1 | $ | 0.9 | 4.1 | % | |||||||
Operating income | $ | 49.7 | $ | 42.9 | $ | 6.8 | 15.9 | % | |||||||
Income before income taxes | $ | 49.1 | $ | 42.1 | $ | 7.0 | 16.6 | % | |||||||
Heating degree days - % (warmer) than normal | (10.7 | )% | (30.0 | )% | |||||||||||
Capital expenditures | $ | 61.5 | $ | 22.4 | $ | 39.1 | 174.6 | % |
• | Revenues increased reflecting higher natural gas volumes associated with weather that was 10.7% warmer than normal but 27.4% colder than the prior year. |
• | Total margin increased principally reflecting higher peaking, natural gas, and, to a lesser extent, higher capacity management total margin, partially offset by lower electric generation and storage margins. |
• | The higher natural gas total margin reflects the effects of the higher volumes while the increase in peaking total margin reflects an increase in demand for peaking services. |
• | Operating income and income before taxes increased reflecting the higher total margin and higher other operating income, which primarily reflects an allowance for funds used during construction, partially offset by slightly higher operating, administrative, and depreciation expenses. |
For the fiscal quarter ended December 31, | 2016 | 2015 | Increase (Decrease) | ||||||||||||
Revenues | $ | 261.4 | $ | 198.0 | $ | 63.4 | 32.0 | % | |||||||
Total margin (a) | $ | 150.6 | $ | 121.5 | $ | 29.1 | 24.0 | % | |||||||
Operating and administrative expenses | $ | 48.6 | $ | 50.2 | $ | (1.6 | ) | (3.2 | )% | ||||||
Operating income | $ | 82.2 | $ | 48.3 | $ | 33.9 | 70.2 | % | |||||||
Income before income taxes | $ | 72.2 | $ | 38.8 | $ | 33.4 | 86.1 | % | |||||||
Gas Utility system throughput - billions of cubic feet | |||||||||||||||
Core market | 23.0 | 17.4 | 5.6 | 32.2 | % | ||||||||||
Total | 66.2 | 49.9 | 16.3 | 32.7 | % | ||||||||||
Gas Utility heating degree days - % (warmer) than normal | (6.3 | )% | (25.3 | )% | |||||||||||
Capital expenditures | $ | 64.1 | $ | 61.5 | $ | 2.6 | 4.2 | % |
• | Gas Utility service territory experienced temperatures that were approximately 6.3% warmer than normal but 25.4% colder than the prior year. |
• | Core market throughput increased reflecting the effects of the colder weather. |
• | Gas Utility total margin increased primarily reflecting higher Gas Utility total margin from core customers resulting from the higher throughput and the increase in UGI Gas base rates that became effective on October 19, 2016. |
• | Operating and administrative expenses decreased slightly primarily reflecting lower distribution system expenses. |
• | Operating income increased reflecting the higher total margin and higher other operating income which includes, among other things, lower environmental matters expense. |
(a) | Total margin represents total revenue less total cost of sales and excludes pre-tax gains on commodity derivative instruments not associated with current period transactions. In the case of UGI Utilities, total margin is reduced by revenue-related taxes. |
UGI Reports Record First Quarter Earnings | Page 4 |
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenues: | ||||||||||||||||
AmeriGas Propane | $ | 677.2 | $ | 644.1 | $ | 2,344.9 | $ | 2,640.6 | ||||||||
UGI International | 539.1 | 578.2 | 1,829.7 | 1,824.2 | ||||||||||||
Midstream & Marketing | 269.8 | 226.9 | 909.5 | 1,065.6 | ||||||||||||
UGI Utilities | 261.4 | 198.0 | 831.9 | 952.3 | ||||||||||||
Corporate & Other (a) | (68.0 | ) | (40.6 | ) | (157.4 | ) | (189.6 | ) | ||||||||
Total revenues | $ | 1,679.5 | $ | 1,606.6 | $ | 5,758.6 | $ | 6,293.1 | ||||||||
Operating income (loss): | ||||||||||||||||
AmeriGas Propane | $ | 141.9 | $ | 129.6 | $ | 368.6 | $ | 417.5 | ||||||||
UGI International | 88.9 | 85.1 | 210.4 | 144.4 | ||||||||||||
Midstream & Marketing | 49.7 | 42.9 | 153.5 | 179.9 | ||||||||||||
UGI Utilities | 82.2 | 48.3 | 234.8 | 214.4 | ||||||||||||
Corporate & Other (a) | 103.5 | (0.4 | ) | 181.4 | 100.9 | |||||||||||
Total operating income | 466.2 | 305.5 | 1,148.7 | 1,057.1 | ||||||||||||
Loss from equity investees | (0.2 | ) | (0.1 | ) | (0.3 | ) | (0.3 | ) | ||||||||
Loss on extinguishment of debt | (33.2 | ) | — | (82.1 | ) | — | ||||||||||
Gains on foreign currency contracts, net | 1.3 | — | 1.3 | — | ||||||||||||
Interest expense: | ||||||||||||||||
AmeriGas Propane | (40.0 | ) | (41.0 | ) | (163.1 | ) | (162.8 | ) | ||||||||
UGI International (b) | (4.8 | ) | (6.5 | ) | (22.7 | ) | (35.1 | ) | ||||||||
Midstream & Marketing | (0.6 | ) | (0.8 | ) | (1.9 | ) | (2.4 | ) | ||||||||
UGI Utilities | (10.0 | ) | (9.5 | ) | (38.1 | ) | (40.0 | ) | ||||||||
Corporate & Other, net (a) | — | (0.1 | ) | (0.6 | ) | (0.5 | ) | |||||||||
Total interest expense | (55.4 | ) | (57.9 | ) | (226.4 | ) | (240.8 | ) | ||||||||
Income before income taxes | 378.7 | 247.5 | 841.2 | 816.0 | ||||||||||||
Income tax expense (c) | (87.8 | ) | (79.6 | ) | (229.4 | ) | (234.3 | ) | ||||||||
Net income including noncontrolling interests | 290.9 | 167.9 | 611.8 | 581.7 | ||||||||||||
Deduct net income attributable to noncontrolling interests, principally in AmeriGas Partners, L.P. | (60.2 | ) | (53.3 | ) | (131.0 | ) | (220.2 | ) | ||||||||
Net income attributable to UGI Corporation | $ | 230.7 | $ | 114.6 | $ | 480.8 | $ | 361.5 | ||||||||
Earnings per share attributable to UGI shareholders: | ||||||||||||||||
Basic | $ | 1.33 | $ | 0.66 | $ | 2.77 | $ | 2.09 | ||||||||
Diluted | $ | 1.30 | $ | 0.65 | $ | 2.72 | $ | 2.06 | ||||||||
Weighted Average common shares outstanding (thousands): | ||||||||||||||||
Basic | 173,512 | 172,862 | 173,325 | 173,101 | ||||||||||||
Diluted | 176,984 | 175,218 | 176,840 | 173,553 | ||||||||||||
Supplemental information: | ||||||||||||||||
Net income attributable to UGI Corporation: | ||||||||||||||||
AmeriGas Propane | $ | 16.6 | $ | 18.6 | $ | 41.2 | $ | 60.7 | ||||||||
UGI International | 88.3 | 46.4 | 153.5 | 66.9 | ||||||||||||
Midstream & Marketing | 29.9 | 24.6 | 92.4 | 105.6 | ||||||||||||
UGI Utilities | 44.3 | 23.4 | 118.3 | 105.7 | ||||||||||||
Corporate & Other (a) | 51.6 | 1.6 | 75.4 | 22.6 | ||||||||||||
Total net income attributable to UGI Corporation | $ | 230.7 | $ | 114.6 | $ | 480.8 | $ | 361.5 |
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Adjusted net income attributable to UGI Corporation: | |||||||||||||||||
Net income attributable to UGI Corporation | $ | 230.7 | $ | 114.6 | $ | 480.8 | $ | 361.5 | |||||||||
Net gains on commodity derivative instruments not associated with current period transactions (net of tax of $33.3, $1.5, $45.3 and $17.6, respectively) (1) (2) | (52.2 | ) | (3.6 | ) | (78.5 | ) | (32.2 | ) | |||||||||
Unrealized gains on foreign currency derivative instruments (net of tax of $0.4, $0.0, $0.4 and $0.0, respectively) (2) | (0.8 | ) | — | (0.8 | ) | — | |||||||||||
Integration expenses associated with Finagaz (net of tax of $(2.8), $(0.9), $(12.5) and $(7.4), respectively) (2) | 5.3 | 1.4 | 21.2 | 13.6 | |||||||||||||
Loss on extinguishments of debt (net of tax of $(3.4), $0.0, $(8.4) and $(5.7), respectively) (2) (3) | 5.3 | — | 13.2 | 4.6 | |||||||||||||
Impact from change in French tax rate | (27.4 | ) | — | (27.4 | ) | — | |||||||||||
Adjusted net income attributable to UGI Corporation | $ | 160.9 | $ | 112.4 | $ | 408.5 | $ | 347.5 | |||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Adjusted diluted earnings per share: | |||||||||||||||||
UGI Corporation earnings per share - diluted | $ | 1.30 | $ | 0.65 | $ | 2.72 | $ | 2.06 | |||||||||
Net gains on commodity derivative instruments not associated with current period transactions | (0.29 | ) | (0.02 | ) | (0.44 | ) | (0.19 | ) | |||||||||
Unrealized gains on foreign currency derivative instruments (1) | (0.01 | ) | — | (0.01 | ) | — | |||||||||||
Integration expenses associated with Finagaz | 0.03 | 0.01 | 0.12 | 0.08 | |||||||||||||
Loss on extinguishments of debt | 0.03 | — | 0.07 | 0.03 | |||||||||||||
Impact from change in French tax rate | (0.15 | ) | — | (0.15 | ) | — | |||||||||||
Adjusted diluted earnings per share | $ | 0.91 | $ | 0.64 | $ | 2.31 | $ | 1.98 | |||||||||
(1) Includes impact of rounding. | |||||||||||||||||
(2) Income taxes associated with pre-tax adjustments determined using statutory business unit tax rates (which approximates the consolidated effective tax rate). | |||||||||||||||||
(3) Costs associated with extinguishment of debt at UGI International in the twelve months ended December 31, 2015 is included in interest expense on the Report of Earnings. |