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 November 8, 2017. |
UGI Utilities, Inc. | ||
November 9, 2017 | By: | /s/ G. Gary Garcia |
Name: | G. Gary Garcia | |
Title: | Assistant Treasurer |
EXHIBIT NO. | DESCRIPTION |
Press Release of UGI Corporation, the parent of UGI Utilities, Inc., dated November 8, 2017. |
• | GAAP EPS of $2.46 per diluted share and adjusted EPS of $2.29 per diluted share |
• | Record results despite warmer-than-normal weather in all service territories |
• | Issued adjusted diluted EPS guidance of $2.45 - $2.65 for the fiscal year ending September 30, 2018 |
• | UGI Utilities executed a record $318 million of capital investment, implemented increased base rates at UGI Gas, settled a base rate case for UGI PNG that went into effect last month, added over 14,000 residential heating and commercial customers, and installed a new customer information management system that will unify all four utilities and streamline operations. |
• | Midstream & Marketing completed construction of the Sunbury pipeline under budget and ahead of schedule, completed construction and placed into service its Manning LNG liquefaction plant, began construction of its Steelton LNG vaporization and storage facility, and received its Final Environmental Impact Statement (FEIS) from the FERC for the PennEast pipeline. |
• | UGI International launched an energy marketing business in the U.K., acquired an energy marketing and services business in the Netherlands, made substantial progress toward the full integration of the Finagaz cylinder and bulk business, and, in October 2017, acquired an LPG distribution business in northern and central Italy, marking its entrance into the country. |
• | AmeriGas completed five acquisitions, delivered record operating results in its ACE and National Accounts programs, reduced its average interest rate on long-term debt by more than 100 basis points through refinancings, and increased its distribution for the 13th consecutive year. UGI is excited about the growth opportunities of AmeriGas and has provided a standby equity commitment to fund up to $225 million so that AmeriGas can continue to pursue growth should it experience another significantly warmer than normal winter. |
• | UGI Corporation increased its dividend for the 30th consecutive year. |
For the year ended September 30, | 2017 | 2016 | Increase (Decrease) | ||||||||||||
Revenues | $ | 2,453.5 | $ | 2,311.8 | $ | 141.7 | 6.1 | % | |||||||
Total margin (a) | $ | 1,450.6 | $ | 1,447.0 | $ | 3.6 | 0.2 | % | |||||||
Partnership operating and administrative expenses | $ | 915.1 | $ | 928.8 | $ | (13.7 | ) | (1.5 | )% | ||||||
Operating income | $ | 355.3 | $ | 356.3 | $ | (1.0 | ) | (0.3 | )% | ||||||
Partnership Adjusted EBITDA | $ | 551.3 | $ | 543.0 | $ | 8.3 | 1.5 | % | |||||||
Retail gallons sold | 1,046.9 | 1,065.5 | (18.6 | ) | (1.7 | )% | |||||||||
Heating degree days - % (warmer) than normal | (13.5 | )% | (15.0 | )% | |||||||||||
Capital expenditures | $ | 98.1 | $ | 101.7 | $ | (3.6 | ) | (3.5 | )% |
• | Retail gallons sold decreased slightly, primarily due to warm weather in the critical heating months of January and February, a period that was 9% warmer than the prior year. |
• | Total margin increased primarily reflecting higher margin from ancillary sales and services partially offset by lower retail total margin due to lower volumes. |
• | Partnership operating and administrative expenses decreased largely due to lower uninsured litigation and general insurance expenses and lower group medical insurance expenses, partially offset by higher vehicle and bad debt expenses and a $7.5 million environmental accrual related to a legacy acquisition. |
• | Partnership Adjusted EBITDA increased principally reflecting lower operating and administrative expenses excluding the environmental accrual and slightly higher total margin, partially offset by lower other operating income. |
For the year ended September 30, | 2017 | 2016 | Increase (Decrease) | ||||||||||||
Revenues | $ | 1,877.5 | $ | 1,868.8 | $ | 8.7 | 0.5 | % | |||||||
Total margin (a) | $ | 942.2 | $ | 965.0 | $ | (22.8 | ) | (2.4 | )% | ||||||
Operating and administrative expenses | $ | 626.2 | $ | 639.7 | $ | (13.5 | ) | (2.1 | )% | ||||||
Operating income | $ | 195.7 | $ | 206.6 | $ | (10.9 | ) | (5.3 | )% | ||||||
Income before income taxes | $ | 175.0 | $ | 182.0 | $ | (7.0 | ) | (3.8 | )% | ||||||
Finagaz integration expenses | $ | 39.9 | $ | 27.9 | $ | 12.0 | 43.0 | % | |||||||
Adjusted income before income taxes | $ | 214.9 | $ | 209.9 | $ | 5.0 | 2.4 | % | |||||||
Retail gallons sold | 827.9 | 820.5 | 7.4 | 0.9 | % | ||||||||||
Heating degree days - % (warmer) than normal | (4.5 | )% | (12.9 | )% | |||||||||||
Capital expenditures | $ | 90.3 | $ | 99.9 | $ | (9.6 | ) | (9.6 | )% |
• | Total retail gallons sold increased slightly as the effects of weather that was colder than the prior year were substantially offset by the absence of volume associated with the lower-margin autogas business in Poland that the company exited in 2016. |
• | Total margin was lower primarily due to currency translation effects of a weaker British pound sterling and euro and slightly lower bulk and cylinder retail margins due to the absence of a significant margin parachute experienced in the prior year. |
• | Operating expenses decreased primarily reflecting operating synergies from Finagaz integration activities and, to a much lesser extent, currency translation effects. |
• | The decrease in operating income primarily reflects the lower total margin and higher depreciation and amortization expenses, partially offset by the lower operating and administrative expenses. |
For the year ended September 30, | 2017 | 2016 | Increase (Decrease) | ||||||||||||
Revenues | $ | 1,121.2 | $ | 866.6 | $ | 254.6 | 29.4 | % | |||||||
Total margin (a) | $ | 264.5 | $ | 264.4 | $ | 0.1 | — | % | |||||||
Operating and administrative expenses | $ | 95.6 | $ | 90.9 | $ | 4.7 | 5.2 | % | |||||||
Operating income | $ | 139.2 | $ | 146.7 | $ | (7.5 | ) | (5.1 | )% | ||||||
Income before income taxes | $ | 141.4 | $ | 144.6 | $ | (3.2 | ) | (2.2 | )% | ||||||
Heating degree days - % (warmer) colder than normal | (14.5 | )% | (17.8 | )% | |||||||||||
Capital expenditures | $ | 117.5 | $ | 140.4 | $ | (22.9 | ) | (16.3 | )% |
• | Total margin was approximately equal to the prior year primarily reflecting higher peaking, natural gas gathering and natural gas marketing total margin offset by lower capacity management and electricity generation total margin. |
• | Operating and administrative expenses increased reflecting higher wage and benefits expense, partially offset by lower operating and maintenance expenses at our electricity generating facilities. |
• | Operating income decreased reflecting the higher operating and administrative expenses as well as higher depreciation expense associated with the expansion of our pipeline and peaking assets. |
• | The decrease in income before income taxes reflects lower operating income partially offset by AFUDC income associated with our equity investment in the PennEast pipeline. |
For the year ended September 30, | 2017 | 2016 | Increase (Decrease) | ||||||||||||
Revenues | $ | 887.6 | $ | 768.5 | $ | 119.1 | 15.5 | % | |||||||
Total margin (a) | $ | 515.6 | $ | 473.9 | $ | 41.7 | 8.8 | % | |||||||
Operating and administrative expenses | $ | 212.4 | $ | 192.7 | $ | 19.7 | 10.2 | % | |||||||
Operating income | $ | 228.3 | $ | 200.9 | $ | 27.4 | 13.6 | % | |||||||
Income before income taxes | $ | 188.1 | $ | 163.3 | $ | 24.8 | 15.2 | % | |||||||
Gas Utility system throughput - billions of cubic feet | |||||||||||||||
Core market | 70.4 | 66.2 | 4.2 | 6.3 | % | ||||||||||
Total | 243.1 | 212.4 | 30.7 | 14.5 | % | ||||||||||
Gas Utility Heating degree days - % (warmer) than normal | (11.1 | )% | (13.6 | )% | |||||||||||
Capital expenditures | $ | 317.7 | $ | 262.5 | $ | 55.2 | 21.0 | % |
• | Gas Utility core market throughput increased reflecting temperatures that were 2.6% colder than the prior year, but 11.1% warmer than normal and growth in the number of customers. |
• | Total margin increased primarily reflecting an increase in UGI Gas base rates that went into effect on October 19, 2016, higher large firm delivery service total margin, and the higher core market throughput. |
• | Operating and administrative expenses increased primarily reflecting higher pension, employee benefits, and customer accounts expenses in addition to the absence of IT system capitalization adjustments that reduced expenses in the prior year. |
• | Operating income increased primarily due to the increase in total margin, as well as higher other income due to a $5.8 million environmental insurance settlement, the absence of a charge in the prior year related to environmental matters, and lower interest on purchased gas cost overcollections. |
($ millions, except per share) Unaudited | Three Months Ended September 30, | Twelve Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenues: | ||||||||||||||||
AmeriGas Propane | $ | 445.2 | $ | 393.5 | $ | 2,453.5 | $ | 2,311.8 | ||||||||
UGI International | 366.4 | 316.4 | 1,877.5 | 1,868.8 | ||||||||||||
Midstream & Marketing | 204.9 | 174.3 | 1,121.2 | 866.6 | ||||||||||||
UGI Utilities | 119.6 | 108.2 | 887.6 | 768.5 | ||||||||||||
Corporate & Other (a) | (22.2 | ) | (16.2 | ) | (219.1 | ) | (130.0 | ) | ||||||||
Total revenues | $ | 1,113.9 | $ | 976.2 | $ | 6,120.7 | $ | 5,685.7 | ||||||||
Operating income (loss): | ||||||||||||||||
AmeriGas Propane | $ | (18.5 | ) | $ | (42.0 | ) | $ | 355.3 | $ | 356.3 | ||||||
UGI International | (14.7 | ) | (23.5 | ) | 195.7 | 206.6 | ||||||||||
Midstream & Marketing | 4.6 | 14.7 | 139.2 | 146.7 | ||||||||||||
UGI Utilities | 2.0 | 8.3 | 228.3 | 200.9 | ||||||||||||
Corporate & Other (a) | 54.2 | (46.1 | ) | 85.7 | 77.5 | |||||||||||
Total operating income (loss) | 27.6 | (88.6 | ) | 1,004.2 | 988.0 | |||||||||||
Income (loss) from equity investees | 1.3 | (0.1 | ) | 4.3 | (0.2 | ) | ||||||||||
Loss on extinguishments of debt | — | (11.8 | ) | (59.7 | ) | (48.9 | ) | |||||||||
Losses on foreign currency contracts, net | (7.8 | ) | — | (23.9 | ) | — | ||||||||||
Interest expense: | ||||||||||||||||
AmeriGas Propane | (39.6 | ) | (41.4 | ) | (160.2 | ) | (164.1 | ) | ||||||||
UGI International | (5.4 | ) | (5.6 | ) | (20.6 | ) | (24.4 | ) | ||||||||
Midstream & Marketing | (0.5 | ) | (0.4 | ) | (2.1 | ) | (2.1 | ) | ||||||||
UGI Utilities | (9.7 | ) | (9.7 | ) | (40.2 | ) | (37.6 | ) | ||||||||
Corporate & Other, net (a) | (0.3 | ) | (0.2 | ) | (0.4 | ) | (0.7 | ) | ||||||||
Total interest expense | (55.5 | ) | (57.3 | ) | (223.5 | ) | (228.9 | ) | ||||||||
(Loss) income before income taxes | (34.4 | ) | (157.8 | ) | 701.4 | 710.0 | ||||||||||
Income tax benefit (expense) (b) | 17.7 | 42.1 | (177.6 | ) | (221.2 | ) | ||||||||||
Net (loss) income including noncontrolling interests | (16.7 | ) | (115.7 | ) | 523.8 | 488.8 | ||||||||||
Add net loss (deduct net income) attributable to noncontrolling interests, principally in AmeriGas Partners, L.P. | 21.7 | 71.9 | (87.2 | ) | (124.1 | ) | ||||||||||
Net income (loss) attributable to UGI Corporation | $ | 5.0 | $ | (43.8 | ) | $ | 436.6 | $ | 364.7 | |||||||
Earnings per share attributable to UGI shareholders: | ||||||||||||||||
Basic | $ | 0.03 | $ | (0.25 | ) | $ | 2.51 | $ | 2.11 | |||||||
Diluted | $ | 0.03 | $ | (0.25 | ) | $ | 2.46 | $ | 2.08 | |||||||
Weighted Average common shares outstanding (thousands): | ||||||||||||||||
Basic | 173,769 | 173,737 | 173,662 | 173,154 | ||||||||||||
Diluted | 177,175 | 173,737 | 177,159 | 175,572 | ||||||||||||
Supplemental information: | ||||||||||||||||
Net income (loss) attributable to UGI Corporation: | ||||||||||||||||
AmeriGas Propane | $ | (2.6 | ) | $ | (10.2 | ) | $ | 44.6 | $ | 43.2 | ||||||
UGI International | (7.0 | ) | (20.7 | ) | 158.6 | 111.6 | ||||||||||
Midstream & Marketing | 3.8 | 9.9 | 86.9 | 87.1 | ||||||||||||
UGI Utilities | (4.1 | ) | (1.8 | ) | 116.0 | 97.4 | ||||||||||
Corporate & Other (a) | 14.9 | (21.0 | ) | 30.5 | 25.4 | |||||||||||
Total net income (loss) attributable to UGI Corporation | $ | 5.0 | $ | (43.8 | ) | $ | 436.6 | $ | 364.7 |
(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 three months ended September 30, 2017 includes the beneficial impact of a $1.6 million adjustment to net deferred income tax liabilities associated with a change in the French income tax rate and a $7.6 million decrease in foreign tax credit valuation allowance. Income tax expense for the twelve months ended September 30, 2017 includes (1) the beneficial impact of a $29.0 million adjustment to net deferred income tax liabilities associated with a change in the French income tax rate; (2) $10.3 million of excess tax benefits on share-based payment awards; (3) a $7.6 million decrease in foreign tax credit valuation allowance; and;(4) an income tax settlement refund of $6.7 million, plus interest, in France. |
Fiscal Year Ended September 30, 2017 | AmeriGas Propane | UGI International | Midstream & Marketing | UGI Utilities | Corporate & Other | Total | ||||||||||||||||||
Adjusted net income attributable to UGI Corporation: | ||||||||||||||||||||||||
GAAP Net income attributable to UGI Corporation | $ | 44.6 | $ | 158.6 | $ | 86.9 | $ | 116.0 | $ | 30.5 | $ | 436.6 | ||||||||||||
Net gains on commodity derivative instruments not associated with current-period transactions (net of tax of $31.9) (a) (b) | — | — | — | — | (51.2 | ) | (51.2 | ) | ||||||||||||||||
Unrealized losses on foreign currency derivative instruments (net of tax of $(9.9)) (a) | — | — | — | — | 13.9 | 13.9 | ||||||||||||||||||
Loss on extinguishments of debt (net of tax of $(6.1)) (a) | 9.6 | — | — | — | — | 9.6 | ||||||||||||||||||
Integration expenses associated with Finagaz (net of tax of $(13.7)) (a) | — | 26.2 | — | — | — | 26.2 | ||||||||||||||||||
Impact from change in French tax rate | — | (29.0 | ) | — | — | — | (29.0 | ) | ||||||||||||||||
Adjusted net income (loss) attributable to UGI Corporation | $ | 54.2 | $ | 155.8 | $ | 86.9 | $ | 116.0 | $ | (6.8 | ) | $ | 406.1 | |||||||||||
Adjusted diluted earnings per share: | ||||||||||||||||||||||||
UGI Corporation earnings per share – diluted (GAAP) | $ | 0.25 | $ | 0.89 | $ | 0.49 | $ | 0.66 | $ | 0.17 | $ | 2.46 | ||||||||||||
Net gains on commodity derivative instruments not associated with current-period transactions | — | — | — | — | (0.29 | ) | (0.29 | ) | ||||||||||||||||
Unrealized losses on foreign currency derivative instruments | — | — | — | — | 0.08 | 0.08 | ||||||||||||||||||
Loss on extinguishments of debt | 0.05 | — | — | — | — | 0.05 | ||||||||||||||||||
Integration expenses associated with Finagaz | — | 0.15 | — | — | — | 0.15 | ||||||||||||||||||
Impact from change in French tax rate | — | (0.16 | ) | — | — | — | (0.16 | ) | ||||||||||||||||
Adjusted diluted earnings (loss) per share | $ | 0.30 | $ | 0.88 | $ | 0.49 | $ | 0.66 | $ | (0.04 | ) | $ | 2.29 |
Fiscal Year Ended September 30, 2016 | AmeriGas Propane | UGI International | Midstream & Marketing | UGI Utilities | Corporate & Other | Total | ||||||||||||||||||
Adjusted net income attributable to UGI Corporation: | ||||||||||||||||||||||||
GAAP Net income attributable to UGI Corporation | $ | 43.2 | $ | 111.6 | $ | 87.1 | $ | 97.4 | $ | 25.4 | $ | 364.7 | ||||||||||||
Net gains on commodity derivative instruments not associated with current-period transactions (net of tax of $13.5) (a) (b) | — | — | — | — | (29.9 | ) | (29.9 | ) | ||||||||||||||||
Loss on extinguishments of debt (net of tax of $(5.0)) (a) | 7.9 | — | — | — | — | 7.9 | ||||||||||||||||||
Integration expenses associated with Finagaz (net of tax of $(10.6)) (a) | — | 17.3 | — | — | — | 17.3 | ||||||||||||||||||
Adjusted net income (loss) attributable to UGI Corporation | $ | 51.1 | $ | 128.9 | $ | 87.1 | $ | 97.4 | $ | (4.5 | ) | $ | 360.0 | |||||||||||
Adjusted diluted earnings per share: | ||||||||||||||||||||||||
UGI Corporation earnings per share – diluted (GAAP) | $ | 0.25 | $ | 0.64 | $ | 0.50 | $ | 0.55 | $ | 0.14 | $ | 2.08 | ||||||||||||
Net gains on commodity derivative instruments not associated with current-period transactions (b) | — | — | — | — | (0.17 | ) | (0.17 | ) | ||||||||||||||||
Loss on extinguishments of debt | 0.04 | — | — | — | — | 0.04 | ||||||||||||||||||
Integration expenses associated with Finagaz | — | 0.10 | — | — | — | 0.10 | ||||||||||||||||||
Adjusted diluted earnings (loss) per share | $ | 0.29 | $ | 0.74 | $ | 0.50 | $ | 0.55 | $ | (0.03 | ) | $ | 2.05 |
(a) | Income taxes associated with pre-tax adjustments determined using statutory business unit tax rates. |
(b) | Includes the effects of rounding. |