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)) |
Emerging growth company | ¨ |
99.1 | Press Release of UGI Corporation, the parent of UGI Utilities, Inc., dated May 1, 2017. |
UGI Utilities, Inc. | ||
May 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 May 1, 2017. |
Contact: | 610-337-1000 | For Immediate Release: | ||
Will Ruthrauff, ext. 6571 | May 1, 2017 | |||
Shelly Oates, ext. 3202 |
• | GAAP net income attributable to UGI of $219.9 million, or $1.24 per diluted share, compared to $233.2 million, or $1.33 per diluted share in the prior year |
• | Adjusted net income attributable to UGI of $231.8 million, or $1.31 per diluted share, compared to $216.2 million, or $1.24 per diluted share in the prior year |
• | Received Final Environmental Impact Statement for the PennEast pipeline on April 7th |
• | Announced 30th consecutive annual dividend increase on April 25th |
UGI Reports Second Quarter Earnings | Page 2 |
For the fiscal quarter ended March 31, | 2017 | 2016 | Increase (Decrease) | ||||||||||||
Revenues | $ | 863.6 | $ | 827.5 | $ | 36.1 | 4.4 | % | |||||||
Total margin (a) | $ | 507.8 | $ | 529.3 | $ | (21.5 | ) | (4.1 | )% | ||||||
Partnership operating and administrative expenses | $ | 240.0 | $ | 238.5 | $ | 1.5 | 0.6 | % | |||||||
Operating income | $ | 227.3 | $ | 250.4 | $ | (23.1 | ) | (9.2 | )% | ||||||
Partnership Adjusted EBITDA | $ | 271.2 | $ | 295.4 | $ | (24.2 | ) | (8.2 | )% | ||||||
Loss on extinguishment of debt | $ | 22.1 | $ | — | $ | 22.1 | N.M. | ||||||||
Retail gallons sold | 362.7 | 385.8 | (23.1 | ) | (6.0 | )% | |||||||||
Heating degree days - % (warmer) than normal | (13.3 | )% | (11.7 | )% | |||||||||||
Capital expenditures | $ | 27.2 | $ | 27.8 | $ | (0.6 | ) | (2.2 | )% |
• | Retail gallons sold decreased versus the prior year due to temperatures that were 13.3% warmer than normal and 2.9% warmer than the prior year. In addition, the critical heating months of January and February, combined, were 9% warmer than the prior year. |
• | Total margin decreased primarily reflecting the decrease in retail volumes sold. |
• | Partnership operating and administrative expenses were comparable to prior year as higher vehicle fuel, general insurance, and casualty and liability expenses were offset by lower group insurance expenses. |
• | Partnership Adjusted EBITDA decreased principally reflecting the lower total margin. |
For the fiscal quarter ended March 31, | 2017 | 2016 | Increase (Decrease) | ||||||||||||
Revenues | $ | 620.7 | $ | 578.7 | $ | 42.0 | 7.3 | % | |||||||
Total margin (a) | $ | 307.6 | $ | 307.7 | $ | (0.1 | ) | — | % | ||||||
Operating and administrative expenses | $ | 159.6 | $ | 166.4 | $ | (6.8 | ) | (4.1 | )% | ||||||
Operating income | $ | 121.0 | $ | 111.5 | $ | 9.5 | 8.5 | % | |||||||
Income before income taxes | $ | 116.2 | $ | 105.0 | $ | 11.2 | 10.7 | % | |||||||
Finagaz integration expenses | $ | 6.7 | $ | 8.6 | $ | (1.9 | ) | (22.1 | )% | ||||||
Adjusted income before income taxes | $ | 122.9 | $ | 113.6 | $ | 9.3 | 8.2 | % | |||||||
Retail gallons sold | 253.1 | 240.5 | 12.6 | 5.2 | % | ||||||||||
Heating degree days - % (warmer) than normal | (6.2 | )% | (7.4 | )% | |||||||||||
Capital expenditures | $ | 21.5 | $ | 22.3 | $ | (0.8 | ) | (3.6 | )% |
• | Total retail gallons sold increased over the prior year, principally reflecting the effects of weather that was approximately 1.3% colder than the prior year. |
• | Total margin was flat with the prior year as higher retail volumes were offset by slightly lower average retail and cylinder unit margins and the effects of the weaker currencies. |
• | Operating expenses decreased primarily reflecting the translation effects of the weaker currencies, as well as lower integration expenses associated with the Finagaz acquisition. |
• | Operating income increased reflecting the lower operating expenses as well as slightly higher other operating income due to the absence of a $2.1 million loss recorded in the prior year associated with interest rate hedge ineffectiveness. |
• | The increase in adjusted income before taxes primarily reflects the higher operating income and slightly lower interest expense due to a lower interest rate on the senior facilities agreement in France. |
UGI Reports Second Quarter Earnings | Page 3 |
For the fiscal quarter ended March 31, | 2017 | 2016 | Increase | ||||||||||||
Revenues | $ | 423.7 | $ | 298.8 | $ | 124.9 | 41.8 | % | |||||||
Total margin (a) | $ | 113.9 | $ | 109.1 | $ | 4.8 | 4.4 | % | |||||||
Operating and administrative expenses | $ | 24.0 | $ | 23.6 | $ | 0.4 | 1.7 | % | |||||||
Operating income | $ | 82.1 | $ | 77.8 | $ | 4.3 | 5.5 | % | |||||||
Income before income taxes | $ | 83.8 | $ | 77.3 | $ | 6.5 | 8.4 | % | |||||||
Heating degree days - % (warmer) than normal | (14.6 | )% | (10.1 | )% | |||||||||||
Capital expenditures | $ | 20.8 | $ | 16.3 | $ | 4.5 | 27.6 | % |
• | Revenues increased primarily reflecting higher natural gas revenue due to higher natural gas prices and volumes, as well as higher peaking revenues due to an increase in demand for peaking services. |
• | Total margin increased principally reflecting higher peaking ($6.6 million) and capacity management ($3.1 million) total margin, as well as slightly higher natural gas ($1.0 million) total margin, partially offset by lower electric generation and storage total margin. |
• | The higher peaking total margin reflects the increased demand for peaking services and the higher capacity management total margin reflects slightly higher year-over-year prices for pipeline capacity; the lower electric generation total margin reflects lower production volumes. |
• | Operating income and income before taxes increased reflecting the higher total margin and higher other operating income, partially offset by slightly higher operating, administrative, and depreciation expenses. |
For the fiscal quarter ended March 31, | 2017 | 2016 | Increase (Decrease) | ||||||||||||
Revenues | $ | 360.0 | $ | 322.0 | $ | 38.0 | 11.8 | % | |||||||
Total margin (a) | $ | 194.2 | $ | 183.2 | $ | 11.0 | 6.0 | % | |||||||
Operating and administrative expenses | $ | 57.6 | $ | 48.9 | $ | 8.7 | 17.8 | % | |||||||
Operating income | $ | 116.4 | $ | 114.5 | $ | 1.9 | 1.7 | % | |||||||
Income before income taxes | $ | 106.1 | $ | 105.2 | $ | 0.9 | 0.9 | % | |||||||
Gas Utility system throughput - billions of cubic feet | |||||||||||||||
Core market | 33.8 | 34.0 | (0.2 | ) | (0.6 | )% | |||||||||
Total | 81.8 | 72.1 | 9.7 | 13.5 | % | ||||||||||
Gas Utility heating degree days - % (warmer) than normal | (11.7 | )% | (9.7 | )% | |||||||||||
Capital expenditures | $ | 56.5 | $ | 48.1 | $ | 8.4 | 17.5 | % |
• | Gas Utility service territory experienced temperatures that were approximately 11.7% warmer than normal and 3.3% warmer than the prior year. |
• | Total Gas Utility distribution system throughput increased reflecting higher large firm delivery service, partially offset by lower core market volumes reflecting the effects of warmer weather. |
• | Total margin increased primarily reflecting higher Gas Utility total margin from core market customers resulting from the increase in UGI Gas base rates and higher large firm delivery service margin, partially offset by the lower core market throughput. |
• | Operating and administrative expenses were higher than the prior year primarily due to a one-time expense credit in the prior year related to the capitalization of development costs associated with an information technology project that had been expensed previously. |
• | Operating income increased reflecting the higher total margin partially offset by the higher operating expenses and higher depreciation and amortization expenses. |
(a) | Total margin represents total revenue less total cost of sales and excludes pre-tax gains and losses 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 Second Quarter Earnings | Page 4 |
Three Months Ended March 31, | Six Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
AmeriGas Propane | $ | 863.6 | $ | 827.5 | $ | 1,540.8 | $ | 1,471.6 | $ | 2,381.0 | $ | 2,367.8 | ||||||||||||
UGI International | 620.7 | 578.7 | 1,159.8 | 1,156.9 | 1,871.7 | 1,882.8 | ||||||||||||||||||
Midstream & Marketing | 423.7 | 298.8 | 693.5 | 525.7 | 1,034.4 | 919.7 | ||||||||||||||||||
UGI Utilities | 360.0 | 322.0 | 621.4 | 520.0 | 869.9 | 773.7 | ||||||||||||||||||
Corporate & Other (a) | (94.2 | ) | (54.9 | ) | (162.2 | ) | (95.5 | ) | (196.7 | ) | (134.4 | ) | ||||||||||||
Total revenues | $ | 2,173.8 | $ | 1,972.1 | $ | 3,853.3 | $ | 3,578.7 | $ | 5,960.3 | $ | 5,809.6 | ||||||||||||
Operating income (loss): | ||||||||||||||||||||||||
AmeriGas Propane | $ | 227.3 | $ | 250.4 | $ | 369.2 | $ | 380.0 | $ | 345.5 | $ | 371.0 | ||||||||||||
UGI International | 121.0 | 111.5 | 209.9 | 196.6 | 219.9 | 191.2 | ||||||||||||||||||
Midstream & Marketing | 82.1 | 77.8 | 131.8 | 120.7 | 157.8 | 158.5 | ||||||||||||||||||
UGI Utilities | 116.4 | 114.5 | 198.6 | 162.8 | 236.7 | 186.2 | ||||||||||||||||||
Corporate & Other (a) | (33.6 | ) | 61.2 | 69.9 | 60.8 | 86.6 | 63.5 | |||||||||||||||||
Total operating income | 513.2 | 615.4 | 979.4 | 920.9 | 1,046.5 | 970.4 | ||||||||||||||||||
Income (loss) from equity investees | 2.3 | — | 2.1 | (0.1 | ) | 2.0 | (0.2 | ) | ||||||||||||||||
Loss on extinguishments of debt | (22.1 | ) | — | (55.3 | ) | — | (104.2 | ) | — | |||||||||||||||
(Losses) gains on foreign currency contracts, net | (1.2 | ) | — | 0.1 | — | 0.1 | — | |||||||||||||||||
Interest expense: | ||||||||||||||||||||||||
AmeriGas Propane | (40.0 | ) | (40.8 | ) | (80.0 | ) | (81.8 | ) | (162.3 | ) | (162.5 | ) | ||||||||||||
UGI International (b) | (4.8 | ) | (6.5 | ) | (9.6 | ) | (13.0 | ) | (21.0 | ) | (35.8 | ) | ||||||||||||
Midstream & Marketing | (0.7 | ) | (0.5 | ) | (1.3 | ) | (1.3 | ) | (2.1 | ) | (2.3 | ) | ||||||||||||
UGI Utilities | (10.3 | ) | (9.3 | ) | (20.3 | ) | (18.8 | ) | (39.1 | ) | (38.6 | ) | ||||||||||||
Corporate & Other, net (a) | — | (0.2 | ) | — | (0.3 | ) | (0.4 | ) | (0.7 | ) | ||||||||||||||
Total interest expense | (55.8 | ) | (57.3 | ) | (111.2 | ) | (115.2 | ) | (224.9 | ) | (239.9 | ) | ||||||||||||
Income before income taxes | 436.4 | 558.1 | 815.1 | 805.6 | 719.5 | 730.3 | ||||||||||||||||||
Income tax expense (c) | (124.6 | ) | (150.1 | ) | (212.4 | ) | (229.7 | ) | (203.9 | ) | (222.8 | ) | ||||||||||||
Net income including noncontrolling interests | 311.8 | 408.0 | 602.7 | 575.9 | 515.6 | 507.5 | ||||||||||||||||||
Deduct net income attributable to noncontrolling interests, principally in AmeriGas Partners, L.P. | (91.9 | ) | (174.8 | ) | (152.1 | ) | (228.1 | ) | (48.1 | ) | (159.3 | ) | ||||||||||||
Net income attributable to UGI Corporation | $ | 219.9 | $ | 233.2 | $ | 450.6 | $ | 347.8 | $ | 467.5 | $ | 348.2 | ||||||||||||
Earnings per share attributable to UGI shareholders: | ||||||||||||||||||||||||
Basic | $ | 1.27 | $ | 1.35 | $ | 2.60 | $ | 2.01 | $ | 2.69 | $ | 2.01 | ||||||||||||
Diluted | $ | 1.24 | $ | 1.33 | $ | 2.55 | $ | 1.99 | $ | 2.64 | $ | 1.99 | ||||||||||||
Weighted Average common shares outstanding (thousands): | ||||||||||||||||||||||||
Basic | 173,624 | 172,619 | 173,567 | 172,733 | 173,568 | 172,979 | ||||||||||||||||||
Diluted | 177,136 | 174,845 | 176,976 | 174,953 | 177,135 | 175,247 | ||||||||||||||||||
Supplemental information: | ||||||||||||||||||||||||
Net income (loss) attributable to UGI Corporation: | ||||||||||||||||||||||||
AmeriGas Propane | $ | 32.0 | $ | 39.3 | $ | 48.6 | $ | 57.9 | $ | 33.9 | $ | 54.5 | ||||||||||||
UGI International | 79.3 | 66.7 | 167.6 | 113.1 | 166.1 | 96.1 | ||||||||||||||||||
Midstream & Marketing | 50.2 | 45.8 | 80.1 | 70.4 | 96.8 | 93.1 | ||||||||||||||||||
UGI Utilities | 65.1 | 63.2 | 109.4 | 86.6 | 120.2 | 89.3 | ||||||||||||||||||
Corporate & Other (a) | (6.7 | ) | 18.2 | 44.9 | 19.8 | 50.5 | 15.2 | |||||||||||||||||
Total net income attributable to UGI Corporation | $ | 219.9 | $ | 233.2 | $ | 450.6 | $ | 347.8 | $ | 467.5 | $ | 348.2 |
Three Months Ended March 31, | Six Months Ended March 31, | Twelve Months Ended March 31, | |||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
Adjusted net income attributable to UGI Corporation: | |||||||||||||||||||||||||
Net income attributable to UGI Corporation | $ | 219.9 | $ | 233.2 | $ | 450.6 | $ | 347.8 | $ | 467.5 | $ | 348.2 | |||||||||||||
Net losses (gains) on commodity derivative instruments not associated with current period transactions (net of tax of $1.5, $12.9, $34.8, $14.4, $33.9 and $13.6, respectively) (1) (2) | 3.1 | (22.4 | ) | (49.1 | ) | (26.0 | ) | (53.0 | ) | (23.8 | ) | ||||||||||||||
Unrealized losses on foreign currency derivative instruments (net of tax of $(0.5), $0.0, $0.1, $0.0, $0.1 and $0.0, respectively) (2) | 0.8 | — | — | — | — | — | |||||||||||||||||||
Integration expenses associated with Finagaz (net of tax of $(2.3), $(3.2), $(5.1), $(4.1), $(11.5) and $(8.4), respectively) (2) | 4.4 | 5.4 | 9.7 | 6.8 | 20.2 | 13.9 | |||||||||||||||||||
Loss on extinguishments of debt (net of tax of $(2.3), $0.0, $(5.7), $0.0, $(10.8) and $(5.7), respectively) (2) (3) | 3.6 | — | 8.9 | — | 16.8 | 4.6 | |||||||||||||||||||
Impact from change in French tax rate | — | — | (27.4 | ) | — | — | — | ||||||||||||||||||
Adjusted net income attributable to UGI Corporation | $ | 231.8 | $ | 216.2 | $ | 392.7 | $ | 328.6 | $ | 451.5 | $ | 342.9 | |||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | Twelve Months Ended March 31, | |||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
Adjusted diluted earnings per share: | |||||||||||||||||||||||||
UGI Corporation earnings per share - diluted | $ | 1.24 | $ | 1.33 | $ | 2.55 | $ | 1.99 | $ | 2.64 | $ | 1.99 | |||||||||||||
Net losses (gains) on commodity derivative instruments not associated with current period transactions | 0.02 | (0.12 | ) | (0.28 | ) | (0.15 | ) | (0.29 | ) | (0.14 | ) | ||||||||||||||
Unrealized losses on foreign currency derivative instruments (1) | 0.01 | — | — | — | — | — | |||||||||||||||||||
Integration expenses associated with Finagaz | 0.02 | 0.03 | 0.05 | 0.04 | 0.11 | 0.08 | |||||||||||||||||||
Loss on extinguishments of debt | 0.02 | — | 0.05 | — | 0.09 | 0.03 | |||||||||||||||||||
Impact from change in French tax rate | — | — | (0.15 | ) | — | — | — | ||||||||||||||||||
Adjusted diluted earnings per share | $ | 1.31 | $ | 1.24 | $ | 2.22 | $ | 1.88 | $ | 2.55 | $ | 1.96 | |||||||||||||
(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 March 31, 2016 is included in interest expense on the Report of Earnings. |