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 August 1, 2016. |
UGI Utilities, Inc. | ||
August 2, 2016 | By: | /s/ Kirk R. Oliver |
Name: | Kirk R. Oliver | |
Title: | Vice President - Financial Strategy |
EXHIBIT NO. | DESCRIPTION |
99.1 | Press Release of UGI Corporation, the parent of UGI Utilities, Inc., dated August 1, 2016. |
Contact: | 610-337-1000 | For Immediate Release: | ||
Will Ruthrauff, ext. 6571 | August 1, 2016 | |||
Shelly Oates, ext. 3202 |
• | GAAP net income of $60.7 million, or $0.34 per diluted share, compared to $9.6 million, or $0.05 per diluted share in the prior year |
• | Adjusted net income of $40.0 million, or $0.23 per diluted share, compared to $12.4 million, or $0.07 per diluted share in the prior year |
• | Sunbury pipeline now under construction |
• | Received FERC draft Environmental Impact Statement for the PennEast pipeline on July 22nd |
• | Joint settlement petition filed for UGI Gas base rate case on June 30th |
UGI Reports Strong Fiscal 2016 Third Quarter Earnings | Page 2 |
For the fiscal quarter ended June 30, | 2016 | 2015 | Increase (Decrease) | ||||||||||||
Revenues | $ | 446.7 | $ | 478.0 | $ | (31.3 | ) | (6.5 | )% | ||||||
Total margin (b) | $ | 275.9 | $ | 266.6 | $ | 9.3 | 3.5 | % | |||||||
Operating and administrative expenses | $ | 217.2 | $ | 223.3 | $ | (6.1 | ) | (2.7 | )% | ||||||
Partnership Adjusted EBITDA | $ | 64.6 | $ | 48.9 | $ | 15.7 | 32.1 | % | |||||||
Operating income | $ | 18.3 | $ | 0.8 | $ | 17.5 | N.M. | ||||||||
Retail gallons sold | 202.8 | 202.2 | 0.6 | 0.3 | % | ||||||||||
Degree days - % (warmer) than normal | (7.5 | )% | (12.3 | )% | |||||||||||
Capital expenditures | $ | 18.7 | $ | 20.7 | $ | (2.0 | ) | (9.7 | )% |
• | Retail gallons sold were comparable to the prior year as temperatures were warmer than normal and slightly colder than the prior year. |
• | Total margin increased primarily reflecting higher retail propane unit margin. |
• | Operating and administrative expenses decreased primarily reflecting lower employee compensation and benefits expenses and lower vehicle fuel costs, partially offset by higher self insured casualty and liability expenses. |
• | Partnership Adjusted EBITDA increased principally reflecting the higher total margin and lower operating expenses. |
For the fiscal quarter ended June 30, | 2016 | 2015 | Increase (Decrease) | ||||||||||||
Revenues | $ | 395.5 | $ | 346.8 | $ | 48.7 | 14.0 | % | |||||||
Total margin (b) | $ | 215.8 | $ | 137.1 | $ | 78.7 | 57.4 | % | |||||||
Operating and administrative expenses | $ | 154.9 | $ | 117.0 | $ | 37.9 | 32.4 | % | |||||||
Operating income (loss) | $ | 33.5 | $ | (0.3 | ) | $ | 33.8 | N.M. | |||||||
Income (loss) before income taxes | $ | 27.7 | $ | (16.9 | ) | $ | 44.6 | N.M. | |||||||
Finagaz acquisition and transition expenses | $ | 4.5 | $ | 4.9 | $ | (0.4 | ) | (8.2 | )% | ||||||
Loss on extinguishment of debt | $ | — | $ | 10.3 | $ | (10.3 | ) | N.M. | |||||||
Adjusted income (loss) before income taxes | $ | 32.2 | $ | (1.7 | ) | $ | 33.9 | N.M. | |||||||
Retail gallons sold | 169.9 | 151.5 | 18.4 | 12.1 | % | ||||||||||
Degree days - % (warmer) than normal | |||||||||||||||
UGI France | (5.6 | )% | (23.7 | )% | |||||||||||
Capital Expenditures | $ | 25.9 | $ | 20.5 | $ | 5.4 | 26.3 | % |
• | Results for the current quarter include the full-period 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, the effect of colder weather in our legacy UGI France operations. 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 higher unit margins and volume in our legacy business. |
• | The increase in operating income primarily reflects the higher total margin, partially offset by increased operating, administrative, and depreciation expenses associated with Finagaz. |
UGI Reports Strong Fiscal 2016 Third Quarter Earnings | Page 3 |
For the fiscal quarter ended June 30, | 2016 | 2015 | Increase (Decrease) | ||||||||||||
Revenues | $ | 140.3 | $ | 143.5 | $ | (3.2 | ) | (2.2 | )% | ||||||
Total margin (b) | $ | 94.8 | $ | 88.6 | $ | 6.2 | 7.0 | % | |||||||
Operating and administrative expenses | $ | 46.1 | $ | 54.0 | $ | (7.9 | ) | (14.6 | )% | ||||||
Operating income | $ | 29.8 | $ | 20.2 | $ | 9.6 | 47.5 | % | |||||||
Income before income taxes | $ | 20.7 | $ | 10.3 | $ | 10.4 | 101.0 | % | |||||||
Gas Utility System throughput - billions of cubic feet | |||||||||||||||
Core market | 10.3 | 8.9 | 1.4 | 15.7 | % | ||||||||||
Total | 43.6 | 38.6 | 5.0 | 13.0 | % | ||||||||||
Gas Utility Degree days - % colder (warmer) than normal | 11.9 | % | (17.2 | )% | |||||||||||
Capital expenditures | $ | 56.5 | $ | 43.3 | $ | 13.2 | 30.5 | % |
• | Our Gas Utility service territory experienced temperatures that were approximately 11.9% colder than normal and 38.0% colder than the prior year. |
• | Core market throughput increased reflecting the effects of the colder spring weather. |
• | Total margin increased primarily reflecting higher Gas Utility total margin from core customers resulting from the higher throughput and slightly higher total margin from delivery service customers. |
• | Operating and administrative expenses decreased primarily reflecting lower distribution system and customer account expenses. |
• | Operating income increased reflecting higher total margin and the decrease in operating and administrative expenses, partially offset by a decrease in other income as the prior year included incremental income from construction services and the sale of Utility's HVAC business. |
For the fiscal quarter ended June 30, | 2016 | 2015 | Increase (Decrease) | ||||||||||||
Revenues | $ | 166.2 | $ | 203.1 | $ | (36.9 | ) | (18.2 | )% | ||||||
Total margin (b) | $ | 41.9 | $ | 49.8 | $ | (7.9 | ) | (15.9 | )% | ||||||
Operating and administrative expenses | $ | 22.7 | $ | 23.2 | $ | (0.5 | ) | (2.2 | )% | ||||||
Operating income | $ | 11.3 | $ | 19.5 | $ | (8.2 | ) | (42.1 | )% | ||||||
Income before income taxes | $ | 10.9 | $ | 19.0 | $ | (8.1 | ) | (42.6 | )% | ||||||
Capital expenditures | $ | 36.3 | $ | 28.8 | $ | 7.5 | 26.0 | % |
• | Total margin decreased principally reflecting lower capacity management and electric generation total margin, partially offset by higher natural gas total margin. |
• | The lower capacity management margin reflects lower prices for pipeline capacity as the current year period experienced less volatility in capacity values between Marcellus and non-Marcellus delivery points. |
• | The lower electric generation margin reflects lower power prices and lower production volumes due to planned outages. |
• | Operating and administrative expenses were slightly lower principally reflecting lower operating expenses associated with our HVAC business partially offset by higher electric generation maintenance expenses. |
(a) | Due to the forward looking nature of full year adjusted diluted earnings per share, we are unable to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure. Management is unable to project certain reconciling items, in particular mark-to-market gains (losses) on commodity derivative instruments for future periods, due to market volatility. |
(b) | 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 Strong Fiscal 2016 Third Quarter Earnings | Page 4 |
Three Months Ended June 30, | Nine Months Ended June 30, | Twelve Months Ended June 30, | ||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
AmeriGas Propane | $ | 446.7 | $ | 478.0 | $ | 1,918.3 | $ | 2,467.1 | $ | 2,336.5 | $ | 3,027.3 | ||||||||||||
UGI International | 395.5 | 346.8 | 1,552.4 | 1,429.4 | 1,931.5 | 1,862.5 | ||||||||||||||||||
UGI Utilities | 140.3 | 143.5 | 660.3 | 931.4 | 770.5 | 1,052.8 | ||||||||||||||||||
Midstream & Marketing | 166.2 | 203.1 | 692.3 | 974.8 | 887.1 | 1,205.0 | ||||||||||||||||||
Corporate & Other (a) | (17.9 | ) | (23.3 | ) | (113.8 | ) | (194.4 | ) | (133.3 | ) | (227.9 | ) | ||||||||||||
Total revenues | $ | 1,130.8 | $ | 1,148.1 | $ | 4,709.5 | $ | 5,608.3 | $ | 5,792.3 | $ | 6,919.7 | ||||||||||||
Operating income (loss): | ||||||||||||||||||||||||
AmeriGas Propane | $ | 18.3 | $ | 0.8 | $ | 398.3 | $ | 437.4 | $ | 388.5 | $ | 437.7 | ||||||||||||
UGI International | 33.5 | (0.3 | ) | 230.1 | 117.9 | 225.0 | 107.9 | |||||||||||||||||
UGI Utilities | 29.8 | 20.2 | 192.6 | 238.5 | 195.8 | 241.4 | ||||||||||||||||||
Midstream & Marketing | 11.3 | 19.5 | 132.0 | 164.2 | 150.3 | 179.7 | ||||||||||||||||||
Corporate & Other (a) | 62.8 | 15.9 | 123.6 | (116.5 | ) | 110.4 | (134.6 | ) | ||||||||||||||||
Total operating income | 155.7 | 56.1 | 1,076.6 | 841.5 | 1,070.0 | 832.1 | ||||||||||||||||||
Loss from equity investees | — | — | (0.1 | ) | (1.1 | ) | (0.2 | ) | (1.1 | ) | ||||||||||||||
Loss on extinguishments of debt | (37.1 | ) | — | (37.1 | ) | — | (37.1 | ) | — | |||||||||||||||
Interest expense: | ||||||||||||||||||||||||
AmeriGas Propane | (40.9 | ) | (40.3 | ) | (122.7 | ) | (122.4 | ) | (163.1 | ) | (163.0 | ) | ||||||||||||
UGI International (b) | (5.8 | ) | (16.6 | ) | (18.8 | ) | (29.0 | ) | (25.0 | ) | (36.1 | ) | ||||||||||||
UGI Utilities | (9.1 | ) | (9.9 | ) | (27.9 | ) | (31.2 | ) | (37.8 | ) | (41.7 | ) | ||||||||||||
Midstream & Marketing | (0.4 | ) | (0.5 | ) | (1.7 | ) | (1.6 | ) | (2.6 | ) | (2.2 | ) | ||||||||||||
Corporate & Other, net (a) | (0.2 | ) | (0.2 | ) | (0.5 | ) | (0.5 | ) | (0.3 | ) | (0.5 | ) | ||||||||||||
Total interest expense | (56.4 | ) | (67.5 | ) | (171.6 | ) | (184.7 | ) | (228.8 | ) | (243.5 | ) | ||||||||||||
Income (loss) before income taxes | 62.2 | (11.4 | ) | 867.8 | 655.7 | 803.9 | 587.5 | |||||||||||||||||
Income tax expense | (33.6 | ) | (4.5 | ) | (263.3 | ) | (189.2 | ) | (251.9 | ) | (181.0 | ) | ||||||||||||
Net income (loss) including noncontrolling interests | 28.6 | (15.9 | ) | 604.5 | 466.5 | 552.0 | 406.5 | |||||||||||||||||
Add net loss (deduct net income) attributable to noncontrolling interests, principally in AmeriGas Partners, L.P. | 32.1 | 25.5 | (196.0 | ) | (176.3 | ) | (152.7 | ) | (136.1 | ) | ||||||||||||||
Net income attributable to UGI Corporation | $ | 60.7 | $ | 9.6 | $ | 408.5 | $ | 290.2 | $ | 399.3 | $ | 270.4 | ||||||||||||
Earnings per share attributable to UGI shareholders: | ||||||||||||||||||||||||
Basic | $ | 0.35 | $ | 0.06 | $ | 2.36 | $ | 1.68 | $ | 2.31 | $ | 1.56 | ||||||||||||
Diluted | $ | 0.34 | $ | 0.05 | $ | 2.33 | $ | 1.65 | $ | 2.28 | $ | 1.54 | ||||||||||||
Weighted Average common shares outstanding (thousands): | ||||||||||||||||||||||||
Basic | 173,395 | 173,136 | 172,954 | 173,060 | 173,029 | 173,012 | ||||||||||||||||||
Diluted | 175,974 | 175,580 | 175,260 | 175,665 | 175,319 | 175,693 | ||||||||||||||||||
Supplemental information: | ||||||||||||||||||||||||
Net income (loss) attributable to UGI Corporation: | ||||||||||||||||||||||||
AmeriGas Propane | $ | (4.5 | ) | $ | (2.4 | ) | $ | 53.4 | $ | 62.0 | $ | 52.4 | $ | 58.6 | ||||||||||
UGI International | 19.2 | (9.9 | ) | 132.3 | 59.8 | 125.2 | 41.5 | |||||||||||||||||
UGI Utilities | 12.6 | 7.3 | 99.2 | 125.7 | 94.6 | 121.5 | ||||||||||||||||||
Midstream & Marketing | 6.8 | 11.7 | 77.2 | 96.5 | 88.0 | 106.6 | ||||||||||||||||||
Corporate & Other (a) | 26.6 | 2.9 | 46.4 | (53.8 | ) | 39.1 | (57.8 | ) | ||||||||||||||||
Total net income attributable to UGI Corporation | $ | 60.7 | $ | 9.6 | $ | 408.5 | $ | 290.2 | $ | 399.3 | $ | 270.4 |
Three Months Ended June 30, | Nine Months Ended June 30, | Twelve Months Ended June 30, | ||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
Adjusted net income attributable to UGI Corporation: | ||||||||||||||||||||||||||
Net income attributable to UGI Corporation | $ | 60.7 | $ | 9.6 | $ | 408.5 | $ | 290.2 | $ | 399.3 | $ | 270.4 | ||||||||||||||
Net (gains) losses on commodity derivative instruments not associated with current period transactions (net of tax of $18.0, $2.4, $32.4, $(27.7), $29.2 and $(32.2), respectively) (1) (2) | (29.6 | ) | (4.9 | ) | (55.6 | ) | 46.2 | (48.5 | ) | 52.8 | ||||||||||||||||
Acquisition and integration expenses associated with Finagaz (net of tax of $(1.7), $(1.8), $(5.9), $(5.3), $(8.3) and $(7.5), respectively) (2) | 2.8 | 3.1 | 9.6 | 10.9 | 13.6 | 15.2 | ||||||||||||||||||||
Loss on extinguishments of debt (net of tax of $(3.9), $(5.7), $(3.9), $(5.7), $(3.9) and $(5.7), respectively) (2) (3) | 6.1 | 4.6 | 6.1 | 4.6 | 6.1 | 4.6 | ||||||||||||||||||||
Adjusted net income attributable to UGI Corporation | $ | 40.0 | $ | 12.4 | $ | 368.6 | $ | 351.9 | $ | 370.5 | $ | 343.0 | ||||||||||||||
Three Months Ended June 30, | Nine Months Ended June 30, | Twelve Months Ended June 30, | ||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
Adjusted diluted earnings per share: | ||||||||||||||||||||||||||
UGI Corporation earnings per share - diluted | $ | 0.34 | $ | 0.05 | $ | 2.33 | $ | 1.65 | $ | 2.28 | $ | 1.54 | ||||||||||||||
Net (gains) losses on commodity derivative instruments not associated with current period transactions (1) | (0.16 | ) | (0.03 | ) | (0.31 | ) | 0.26 | (0.28 | ) | 0.29 | ||||||||||||||||
Acquisition and integration expenses associated with Finagaz | 0.02 | 0.02 | 0.05 | 0.06 | 0.08 | 0.09 | ||||||||||||||||||||
Loss on extinguishments of debt | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | ||||||||||||||||||||
Adjusted diluted earnings per share | $ | 0.23 | $ | 0.07 | $ | 2.10 | $ | 2.00 | $ | 2.11 | $ | 1.95 | ||||||||||||||
(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) Associated loss on extinguishment of debt in the three, nine and twelve months ended June 30, 2015 is included in interest expense on the report of Earnings. |
Three Months Ended June 30, | |||||||||
2016 | 2015 | ||||||||
Adjusted net income (loss) attributable to UGI Corporation - UGI International: | |||||||||
Net income (loss) attributable to UGI Corporation - UGI International | $ | 19.2 | $ | (9.9 | ) | ||||
Acquisition and integration expenses associated with Finagaz (net of tax of $(1.7) and $(1.8), respectively) | 2.8 | 3.1 | |||||||
Loss associated with extinguishment of debt (net of tax of $(5.7)) | — | 4.6 | |||||||
Adjusted net income (loss) attributable to UGI Corporation - UGI International | $ | 22.0 | $ | (2.2 | ) |