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 August 2, 2017. |
UGI Utilities, Inc. | ||
August 3, 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 August 2, 2017. |
Contact: | 610-337-1000 | For Immediate Release: | ||
Will Ruthrauff, ext. 6571 | August 2, 2017 | |||
Shelly Oates, ext. 3202 |
• | GAAP net loss attributable to UGI of $19.0 million, or $0.11 per diluted share, compared to net income of $60.7 million, or $0.34 per diluted share in the prior year |
• | Adjusted net income attributable to UGI of $16.6 million, or $0.09 per diluted share, compared to $40.0 million, or $0.23 per diluted share in the prior year |
• | Joint settlement petition for UGI PNG base rate case filed on June 30th |
UGI Reports Third Quarter Earnings | Page 2 |
For the fiscal quarter ended June 30, | 2017 | 2016 | Increase (Decrease) | ||||||||||||
Revenues | $ | 467.5 | $ | 446.7 | $ | 20.8 | 4.7 | % | |||||||
Total margin (a) | $ | 270.0 | $ | 275.9 | $ | (5.9 | ) | (2.1 | )% | ||||||
Partnership operating and administrative expenses | $ | 227.4 | $ | 217.2 | $ | 10.2 | 4.7 | % | |||||||
Operating income | $ | 4.6 | $ | 18.3 | $ | (13.7 | ) | (74.9 | )% | ||||||
Partnership Adjusted EBITDA | $ | 58.4 | $ | 64.6 | $ | (6.2 | ) | (9.6 | )% | ||||||
Retail gallons sold | 195.0 | 202.8 | (7.8 | ) | (3.8 | )% | |||||||||
Heating degree days - % (warmer) than normal | (11.7 | )% | (7.5 | )% | |||||||||||
Capital expenditures | $ | 20.9 | $ | 18.7 | $ | 2.2 | 11.8 | % |
• | Retail gallons sold decreased due to temperatures that were 11.7% warmer than normal and 4.6% warmer than the prior year. Temperatures in the critical month of April were 17.1% warmer than normal and 10.6% warmer than the prior year. |
• | Total margin decreased primarily reflecting the decrease in retail volumes sold, partially offset by slightly higher retail unit margin. |
• | Partnership operating and administrative expenses were higher than the prior year reflecting a $7.5 million environmental accrual associated with the site of a former manufactured gas plant, a settlement with one of AmeriGas' insurance carriers ($5.5 million), partially offset by lower group insurance expenses ($2.2 million). |
• | Partnership Adjusted EBITDA decreased principally reflecting the lower total margin. |
For the fiscal quarter ended June 30, | 2017 | 2016 | Increase (Decrease) | ||||||||||||
Revenues | $ | 351.3 | $ | 395.5 | $ | (44.2 | ) | (11.2 | )% | ||||||
Total margin (a) | $ | 173.1 | $ | 215.8 | $ | (42.7 | ) | (19.8 | )% | ||||||
Operating and administrative expenses | $ | 141.1 | $ | 154.9 | $ | (13.8 | ) | (8.9 | )% | ||||||
Operating income | $ | 0.5 | $ | 33.5 | $ | (33.0 | ) | (98.5 | )% | ||||||
(Loss) income before income taxes | $ | (5.2 | ) | $ | 27.7 | $ | (32.9 | ) | (118.8 | )% | |||||
Finagaz integration expenses | $ | 7.0 | $ | 4.5 | $ | 2.5 | 55.6 | % | |||||||
Adjusted income before income taxes | $ | 1.8 | $ | 32.2 | $ | (30.4 | ) | (94.4 | )% | ||||||
Retail gallons sold | 158.6 | 169.9 | (11.3 | ) | (6.7 | )% | |||||||||
Heating degree days - % (warmer) than normal | (13.7 | )% | (6.1 | )% | |||||||||||
Capital expenditures | $ | 19.1 | $ | 25.9 | $ | (6.8 | ) | (26.3 | )% |
• | Total retail gallons sold were lower than the prior year, principally reflecting the effects of weather that was approximately 13.7% warmer than normal and 8.1% warmer than the prior-year period. |
• | Total margin was lower than the prior year primarily due to lower average retail unit margins and the lower volume. |
• | Operating expenses decreased primarily due to lower expenses in France reflecting expense synergies associated with the Finagaz acquisition, lower maintenance and logistics expenses, and the translation effects of weaker currencies, offset in part by higher integration expenses. |
• | Operating income and income before taxes decreased reflecting the lower total margin partially offset by the lower operating and administrative expenses. |
UGI Reports Third Quarter Earnings | Page 3 |
For the fiscal quarter ended June 30, | 2017 | 2016 | Increase (Decrease) | ||||||||||||
Revenues | $ | 222.8 | $ | 166.0 | $ | 56.8 | 34.2 | % | |||||||
Total margin (a) | $ | 33.4 | $ | 41.9 | $ | (8.5 | ) | (20.3 | )% | ||||||
Operating and administrative expenses | $ | 23.1 | $ | 22.7 | $ | 0.4 | 1.8 | % | |||||||
Operating income | $ | 2.8 | $ | 11.3 | $ | (8.5 | ) | (75.2 | )% | ||||||
Income before income taxes | $ | 3.3 | $ | 10.9 | $ | (7.6 | ) | (69.7 | )% | ||||||
Heating degree days - % (warmer) colder than normal | (22.9 | )% | 4.3 | % | |||||||||||
Capital expenditures | $ | 21.7 | $ | 36.3 | $ | (14.6 | ) | (40.2 | )% |
• | Temperatures across Midstream & Marketing's service territory were 22.9% warmer than normal and 26.1% warmer than the prior year. |
• | Revenues increased reflecting higher natural gas revenues partially offset by lower capacity management revenues; the increase in natural gas revenues principally reflects the effects of higher volumes due to customer growth. |
• | Total margin decreased principally reflecting lower capacity management total margin ($8.4 million) due to higher fixed demand charges and lower HVAC total margin, partially offset by higher peaking and storage margin. |
• | Operating income and income before taxes decreased primarily reflecting the decrease in total margin, higher depreciation expenses, and slightly higher total operating and administrative expenses, partially offset by other income largely attributable to allowance for funds used during construction ("AFUDC") associated with pipeline expenditures. |
For the fiscal quarter ended June 30, | 2017 | 2016 | Increase (Decrease) | ||||||||||||
Revenues | $ | 146.6 | $ | 140.3 | $ | 6.3 | 4.5 | % | |||||||
Total margin (a) | $ | 93.6 | $ | 94.8 | $ | (1.2 | ) | (1.3 | )% | ||||||
Operating and administrative expenses | $ | 52.0 | $ | 46.1 | $ | 5.9 | 12.8 | % | |||||||
Operating income | $ | 27.7 | $ | 29.8 | $ | (2.1 | ) | (7.0 | )% | ||||||
Income before income taxes | $ | 17.5 | $ | 20.7 | $ | (3.2 | ) | (15.5 | )% | ||||||
Gas Utility system throughput - billions of cubic feet | |||||||||||||||
Core market | 8.7 | 10.3 | (1.6 | ) | (15.5 | )% | |||||||||
Total | 46.5 | 43.6 | 2.9 | 6.7 | % | ||||||||||
Gas Utility heating degree days - % (warmer) colder than normal | (21.2 | )% | 11.9 | % | |||||||||||
Capital expenditures | $ | 79.1 | $ | 56.5 | $ | 22.6 | 40.0 | % |
• | Gas Utility service territory experienced temperatures that were approximately 21.2% warmer than normal and nearly 30% warmer than the prior year; weather in the important month of April was 43.6% 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 the warmer weather. |
• | Total margin decreased primarily reflecting lower Gas Utility total margin from core market customers due to lower core market throughput, partially offset by the increase in UGI Gas base rates, and higher large firm delivery service margin. |
• | Operating and administrative expenses were higher than the prior year primarily due to higher customer accounts and slightly higher distribution and other operating expenses. |
• | Operating income decreased reflecting the lower total margin, higher operating expenses and higher depreciation and amortization expenses, partially offset by a $5.8 million environmental insurance settlement. |
(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 Third Quarter Earnings | Page 4 |
Three Months Ended June 30, | Nine Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||
AmeriGas Propane | $ | 467.5 | $ | 446.7 | $ | 2,008.3 | $ | 1,918.3 | $ | 2,401.8 | $ | 2,336.5 | |||||||||||
UGI International | 351.3 | 395.5 | 1,511.1 | 1,552.4 | 1,827.5 | 1,931.5 | |||||||||||||||||
Midstream & Marketing | 222.8 | 166.0 | 916.3 | 691.7 | 1,091.2 | 885.1 | |||||||||||||||||
UGI Utilities | 146.6 | 140.3 | 768.0 | 660.3 | 876.2 | 770.5 | |||||||||||||||||
Corporate & Other (a) | (34.7 | ) | (17.7 | ) | (196.9 | ) | (113.2 | ) | (213.7 | ) | (131.3 | ) | |||||||||||
Total revenues | $ | 1,153.5 | $ | 1,130.8 | $ | 5,006.8 | $ | 4,709.5 | $ | 5,983.0 | $ | 5,792.3 | |||||||||||
Operating income (loss): | |||||||||||||||||||||||
AmeriGas Propane | $ | 4.6 | $ | 18.3 | $ | 373.8 | $ | 398.3 | $ | 331.8 | $ | 388.5 | |||||||||||
UGI International | 0.5 | 33.5 | 210.4 | 230.1 | 186.9 | 225.0 | |||||||||||||||||
Midstream & Marketing | 2.8 | 11.3 | 134.6 | 132.0 | 149.3 | 150.4 | |||||||||||||||||
UGI Utilities | 27.7 | 29.8 | 226.3 | 192.6 | 234.6 | 195.8 | |||||||||||||||||
Corporate & Other (a) | (38.4 | ) | 62.8 | 31.5 | 123.6 | (14.6 | ) | 110.3 | |||||||||||||||
Total operating (loss) income | (2.8 | ) | 155.7 | 976.6 | 1,076.6 | 888.0 | 1,070.0 | ||||||||||||||||
Income (loss) from equity investees | 0.9 | — | 3.0 | (0.1 | ) | 2.9 | (0.2 | ) | |||||||||||||||
Loss on extinguishments of debt | (4.4 | ) | (37.1 | ) | (59.7 | ) | (37.1 | ) | (71.5 | ) | (37.1 | ) | |||||||||||
Losses on foreign currency contracts, net | (16.2 | ) | — | (16.1 | ) | — | (16.1 | ) | — | ||||||||||||||
Interest expense: | |||||||||||||||||||||||
AmeriGas Propane | (40.6 | ) | (40.9 | ) | (120.6 | ) | (122.7 | ) | (162.0 | ) | (163.1 | ) | |||||||||||
UGI International | (5.6 | ) | (5.8 | ) | (15.2 | ) | (18.8 | ) | (20.8 | ) | (25.0 | ) | |||||||||||
Midstream & Marketing | (0.3 | ) | (0.4 | ) | (1.6 | ) | (1.7 | ) | (2.0 | ) | (2.2 | ) | |||||||||||
UGI Utilities | (10.2 | ) | (9.1 | ) | (30.5 | ) | (27.9 | ) | (40.2 | ) | (37.8 | ) | |||||||||||
Corporate & Other, net (a) | (0.1 | ) | (0.2 | ) | (0.1 | ) | (0.5 | ) | (0.3 | ) | (0.7 | ) | |||||||||||
Total interest expense | (56.8 | ) | (56.4 | ) | (168.0 | ) | (171.6 | ) | (225.3 | ) | (228.8 | ) | |||||||||||
(Loss) income before income taxes | (79.3 | ) | 62.2 | 735.8 | 867.8 | 578.0 | 803.9 | ||||||||||||||||
Income tax benefit (expense) (b) | 17.1 | (33.6 | ) | (195.3 | ) | (263.3 | ) | (153.2 | ) | (251.9 | ) | ||||||||||||
Net (loss) income including noncontrolling interests | (62.2 | ) | 28.6 | 540.5 | 604.5 | 424.8 | 552.0 | ||||||||||||||||
Add net loss (deduct net income) attributable to noncontrolling interests, principally in AmeriGas Partners, L.P. | 43.2 | 32.1 | (108.9 | ) | (196.0 | ) | (37.0 | ) | (152.7 | ) | |||||||||||||
Net (loss) income attributable to UGI Corporation | $ | (19.0 | ) | $ | 60.7 | $ | 431.6 | $ | 408.5 | $ | 387.8 | $ | 399.3 | ||||||||||
Earnings (loss) per share attributable to UGI shareholders: | |||||||||||||||||||||||
Basic | $ | (0.11 | ) | $ | 0.35 | $ | 2.49 | $ | 2.36 | $ | 2.23 | $ | 2.31 | ||||||||||
Diluted | $ | (0.11 | ) | $ | 0.34 | $ | 2.44 | $ | 2.33 | $ | 2.19 | $ | 2.28 | ||||||||||
Weighted Average common shares outstanding (thousands): | |||||||||||||||||||||||
Basic | 173,742 | 173,395 | 173,625 | 172,954 | 173,654 | 173,029 | |||||||||||||||||
Diluted | 173,742 | 175,974 | 177,125 | 175,260 | 177,198 | 175,319 | |||||||||||||||||
Supplemental information: | |||||||||||||||||||||||
Net income (loss) attributable to UGI Corporation: | |||||||||||||||||||||||
AmeriGas Propane | $ | (1.4 | ) | $ | (4.5 | ) | $ | 47.2 | $ | 53.4 | $ | 37.0 | $ | 52.4 | |||||||||
UGI International | (2.0 | ) | 19.2 | 165.6 | 132.3 | 144.9 | 125.2 | ||||||||||||||||
Midstream & Marketing | 3.0 | 6.8 | 83.1 | 77.2 | 93.0 | 88.2 | |||||||||||||||||
UGI Utilities | 10.7 | 12.6 | 120.1 | 99.2 | 118.3 | 94.6 | |||||||||||||||||
Corporate & Other (a) | (29.3 | ) | 26.6 | 15.6 | 46.4 | (5.4 | ) | 38.9 | |||||||||||||||
Total net (loss) income attributable to UGI Corporation | $ | (19.0 | ) | $ | 60.7 | $ | 431.6 | $ | 408.5 | $ | 387.8 | $ | 399.3 |
(a) | Corporate & Other includes, among other things, net gains and (losses) on commodity and certain foreign currency derivative instruments not associated with current-period transactions and the elimination of certain intercompany transactions. |
(b) | Income tax expense for the nine and twelve months ended June 30, 2017 includes the beneficial impact of a $27.4 million adjustment to net deferred income tax liabilities associated with a change in the French income tax rate and an income tax settlement refund of $6.7 million, plus interest, in France. |
Three Months Ended June 30, | Nine Months Ended June 30, | Twelve Months Ended June 30, | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Adjusted net income attributable to UGI Corporation: | ||||||||||||||||||||||||
Net (loss) income attributable to UGI Corporation | $ | (19.0 | ) | $ | 60.7 | $ | 431.6 | $ | 408.5 | $ | 387.8 | $ | 399.3 | |||||||||||
Net losses (gains) on commodity derivative instruments not associated with current-period transactions (net of tax of ($12.6), $18.0, $22.2, $32.4, $3.3 and $29.2, respectively) (1)(2) | 19.8 | (29.6 | ) | (29.3 | ) | (55.6 | ) | (3.6 | ) | (48.5 | ) | |||||||||||||
Unrealized losses on foreign currency derivative instruments (net of tax of $(5.5), $0.0, $(5.6), $0.0, $(5.6) and $0.0, respectively) (2) | 10.5 | — | 10.5 | — | 10.5 | — | ||||||||||||||||||
Loss on extinguishments of debt (net of tax of $(0.4), $(3.9), $(6.1), $(3.9), $(7.3) and $(3.9), respectively) (2) | 0.7 | 6.1 | 9.6 | 6.1 | 11.4 | 6.1 | ||||||||||||||||||
Integration expenses associated with Finagaz (net of tax of $(2.4), $(1.7), $(7.5), $(5.9), $(12.2) and $(8.3), respectively) (2) | 4.6 | 2.8 | 14.3 | 9.6 | 22.0 | 13.6 | ||||||||||||||||||
Impact from change in French tax rate | — | — | (27.4 | ) | — | (27.4 | ) | — | ||||||||||||||||
Adjusted net income attributable to UGI Corporation | $ | 16.6 | $ | 40.0 | $ | 409.3 | $ | 368.6 | $ | 400.7 | $ | 370.5 | ||||||||||||
Adjusted diluted earnings per share (3): | ||||||||||||||||||||||||
UGI Corporation (loss) earnings per share - diluted | $ | (0.11 | ) | $ | 0.34 | $ | 2.44 | $ | 2.33 | $ | 2.19 | $ | 2.28 | |||||||||||
Net losses (gains) on commodity derivative instruments not associated with current-period transactions (1) | 0.10 | (0.16 | ) | (0.17 | ) | (0.31 | ) | (0.02 | ) | (0.28 | ) | |||||||||||||
Unrealized losses on foreign currency derivative instruments | 0.06 | — | 0.06 | — | 0.06 | — | ||||||||||||||||||
Loss on extinguishments of debt (1) | 0.01 | 0.03 | 0.05 | 0.03 | 0.06 | 0.03 | ||||||||||||||||||
Integration expenses associated with Finagaz | 0.03 | 0.02 | 0.08 | 0.05 | 0.12 | 0.08 | ||||||||||||||||||
Impact from change in French tax rate | — | — | (0.15 | ) | — | (0.15 | ) | — | ||||||||||||||||
Adjusted diluted earnings per share | $ | 0.09 | $ | 0.23 | $ | 2.31 | $ | 2.10 | $ | 2.26 | $ | 2.11 |
(2) | Income taxes associated with pre-tax adjustments determined using statutory business unit tax rates. |
(3) | Adjusted diluted earnings per share for the three months ended June 30, 2017 are based upon fully diluted shares of 177.298 million. |