0000884614-17-000008.txt : 20170502 0000884614-17-000008.hdr.sgml : 20170502 20170502085849 ACCESSION NUMBER: 0000884614-17-000008 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 29 CONFORMED PERIOD OF REPORT: 20170502 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20170502 DATE AS OF CHANGE: 20170502 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UGI CORP /PA/ CENTRAL INDEX KEY: 0000884614 STANDARD INDUSTRIAL CLASSIFICATION: GAS & OTHER SERVICES COMBINED [4932] IRS NUMBER: 232668356 STATE OF INCORPORATION: PA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11071 FILM NUMBER: 17803133 BUSINESS ADDRESS: STREET 1: 460 N GULPH RD STREET 2: P O BOX 858 CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 BUSINESS PHONE: 6103371000 MAIL ADDRESS: STREET 1: 460 NORTH GULPH ROAD CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 FORMER COMPANY: FORMER CONFORMED NAME: NEW UGI CORP DATE OF NAME CHANGE: 19600201 8-K 1 ugimar2017er8k.htm 8-K Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 1, 2017
 
 
UGI Corporation
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
Pennsylvania
1-11071
23-2668356
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
 
 
 
460 No. Gulph Road, King of Prussia, Pennsylvania
 
19406
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: 610 337-7000
Not Applicable
Former name or former address, if changed since last report
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b of this chapter).
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨





Item 2.02 Results of Operations and Financial Condition.
On May 1, 2017, UGI Corporation (the “Company”) issued a press release announcing financial results for the Company for the fiscal quarter ended March 31, 2017. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On May 2, 2017, the Company will hold a live Internet Audio Webcast of its conference call to discuss its financial results for the fiscal quarter ended March 31, 2017.
Presentation materials containing certain historical and forward-looking information relating to the Company (the “Presentation Materials”) have been made available on the Company’s website. A copy of the Presentation Materials is furnished as Exhibit 99.2 to this report and is incorporated herein by reference in this Item 7.01. All information in Exhibit 99.2 is presented as of the particular dates referenced therein, and the Company does not undertake any obligation to, and disclaims any duty to, update any of the information provided.
In accordance with General Instruction B.2 of Form 8-K, the information in this report, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and will not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in that filing.

Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are being furnished herewith:
 
99.1
Press Release of UGI Corporation dated May 1, 2017.
99.2
Presentation of UGI Corporation dated May 2, 2017.






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
UGI Corporation
 
 
 
May 2, 2017
By:
/s/ G. Gary Garcia
 
Name:
G. Gary Garcia
 
Title:
Treasurer







EXHIBIT INDEX
The Following Exhibits Are Furnished:
 
 
 
EXHIBIT
NO.
DESCRIPTION
99.1
Press Release of UGI Corporation dated May 1, 2017.
99.2
Presentation of UGI Corporation dated May 2, 2017.




EX-99.1 2 ugimar2017ex991.htm EXHIBIT 99.1 Exhibit



Exhibit 99.1




 
 
 
 
 
Contact:
  
610-337-1000
  
For Immediate Release:
 
  
Will Ruthrauff, ext. 6571
  
May 1, 2017
 
  
Shelly Oates, ext. 3202
  
 


UGI Reports Second Quarter Earnings

Recent Highlights
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

VALLEY FORGE, Pa., May 1 - UGI Corporation (NYSE: UGI) today reported GAAP net income attributable to UGI of $219.9 million, or $1.24 per diluted share, for the fiscal quarter ended March 31, 2017, compared to $233.2 million, or $1.33 per diluted share, for the fiscal quarter ended March 31, 2016. Adjusted net income attributable to UGI was $231.8 million, or $1.31 per diluted share, compared to $216.2 million, or $1.24 per diluted share, for the quarters ended March 31, 2017 and 2016, respectively. Adjusted net income excludes the impact of unrealized gains and losses on commodity and certain foreign currency derivative instruments, integration expenses associated with the Finagaz acquisition, and a loss on an early extinguishment of debt.

John L. Walsh, president and chief executive officer of UGI, commented, "This quarter demonstrated the increasing resilience and strength of our business, as well as the benefits of our investments in Europe, as the company delivered strong results despite a heating season that was warmer than normal in all of our businesses. Our Midstream and Marketing and Utility businesses generated higher adjusted earnings than the prior year despite weather that was warmer than last year, and significantly warmer than normal. These results reflect our investments in projects that are less dependent on weather, a focus on operational efficiency, and the impact of an increase in UGI Gas base rates that went into effect in October 2016. Our International business continued to deliver outstanding results and generated $11.6 million higher adjusted net income than the prior year, an increase of 16%. AmeriGas delivered solid results despite facing exceedingly warm temperatures in the quarter as well as average LPG prices that were 85% higher than the prior year period."

Walsh continued, "We were pleased to receive the Final Environmental Impact Statement from the Federal Energy Regulatory Commission (FERC) on April 7th. This represented the culmination of nearly three years of analysis and confirmed that the pipeline can be constructed without significant impact to the environment. Reaching this milestone is the last step before the FERC Commissioners' decision with regard to a Certificate of Public Convenience and Necessity for this critical infrastructure project."

"Based on the results of the first half of the year, and in particular the exceedingly warm weather we have experienced, we are expecting full year adjusted EPS to be at the lower end, or slightly below, our guidance range of $2.30 to $2.45."







UGI Reports Second Quarter Earnings
  
Page 2

Segment Performance (millions, except where otherwise indicated)
AmeriGas Propane1:
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.
N.M. — Variance is not meaningful.
1 UGI, through subsidiaries, is the sole General Partner and owns 26% of AmeriGas Partners, L.P.

UGI International:
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
)%
Base-currency results are translated into U.S. dollars based upon exchange rates experienced during the reporting periods. During the 2017 period, the euro was approximately 3% weaker versus the U.S. dollar, and the British pound sterling was approximately 12% weaker, compared with the prior-year period. The effects of the weaker currencies did not negatively impact UGI International net income due to gains on foreign currency contracts.
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

Midstream & Marketing:
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.

UGI Utilities:
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

About UGI
UGI is a distributor and marketer of energy products and services. Through subsidiaries, UGI operates natural gas and electric utilities in Pennsylvania, distributes propane both domestically and internationally, manages midstream energy and electric generation assets in Pennsylvania, and engages in energy marketing in ten states and the District of Columbia. UGI, through subsidiaries, is the sole General Partner and owns 26% of AmeriGas Partners, L.P. (NYSE:APU), the nation's largest retail propane distributor.

UGI Corporation will hold a live Internet Audio Webcast of its conference call to discuss fiscal 2017 second quarter earnings and other current activities at 9:00 AM ET on Tuesday, May 2, 2017. Interested parties may listen to the audio webcast both live and in replay on the Internet at http://www.ugicorp.com/investor-relations/events-and-presentations/default.aspx or at the company website http://www.ugicorp.com under Investor Relations. A telephonic replay will be available from 12:00 PM ET on May 2 through 11:59 PM ET on May 9. The replay may be accessed at (855) 859-2056, and internationally at (404) 537-3406, conference ID 5910598.


Comprehensive information about UGI Corporation is available on the Internet at http://www.ugicorp.com.

This press release contains certain forward-looking statements that management believes to be reasonable as of today’s date only. Actual results may differ significantly because of risks and uncertainties that are difficult to predict and many of which are beyond management’s control. You should read UGI’s Annual Report on Form 10-K for a more extensive list of factors that could affect results. Among them are adverse weather conditions, cost volatility and availability of all energy products, including propane, natural gas, electricity and fuel oil, increased customer conservation measures, the impact of pending and future legal proceedings, liability for uninsured claims and for claims in excess of insurance coverage, domestic and international political, regulatory and economic conditions in the United States and in foreign countries, including the current conflicts in the Middle East, and foreign currency exchange rate fluctuations (particularly the euro), changes in Marcellus Shale gas production, the availability, timing and success of our acquisitions, commercial initiatives and investments to grow our business, our ability to successfully integrate acquired businesses and achieve anticipated synergies, and the interruption, disruption, failure, malfunction, or breach of our information technology systems, including due to cyber-attack. UGI undertakes no obligation to release revisions to its forward-looking statements to reflect events or circumstances occurring after today.





UGI CORPORATION
REPORT OF EARNINGS
(Millions of dollars, except per share)
(Unaudited)
 
 
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


(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) UGI International interest expense for the twelve months ended March 31, 2016 includes costs of $10.3 million associated with an extinguishment of debt.
(c) Income tax expense for the six and twelve months ended March 31, 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.






UGI CORPORATION
REPORT OF EARNINGS
(Millions of dollars, except per share)
(Unaudited)

Non-GAAP Financial Measures - Adjusted Net Income Attributable to UGI and Adjusted Diluted Earnings Per Share

Management uses "adjusted net income attributable to UGI" and "adjusted diluted earnings per share," both of which are non-GAAP financial measures, when evaluating UGI's overall performance. For the periods presented, adjusted net income attributable to UGI is net income attributable to UGI Corporation after excluding net after-tax gains and losses on commodity and certain foreign currency derivative instruments not associated with current period transactions (principally comprising changes in unrealized gains and losses on derivative instruments), Finagaz integration expenses, losses associated with extinguishments of debt and the impact on net deferred tax liabilities from a change in French corporate income tax rate. Volatility in net income at UGI can occur as a result of gains and losses on commodity and certain foreign currency derivative instruments not associated with current period transactions but included in earnings in accordance with U.S. generally accepted accounting principles ("GAAP").

Non-GAAP financial measures are not in accordance with, or an alternative to, GAAP and should be considered in addition to, and not as a substitute for, the comparable GAAP measures. Management believes that these non-GAAP measures provide meaningful information to investors about UGI’s performance because they eliminate the impact of (1) gains and losses on commodity and certain foreign currency derivative instruments not associated with current-period transactions and (2) other significant discrete items that can affect the comparison of period-over-period results.

The following table reconciles net income attributable to UGI Corporation, the most directly comparable GAAP measure, to adjusted net income attributable to UGI Corporation, and reconciles diluted earnings per share, the most comparable GAAP measure, to adjusted diluted earnings per share, to reflect the adjustments referred to above:
 
 
 
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.


EX-99.2 3 fy17q2slidesugivfinal.htm EXHIBIT 99.2 fy17q2slidesugivfinal
1 Fiscal 2017 Second Quarter Results John Walsh President & CEO, UGI Kirk Oliver Chief Financial Officer, UGI Jerry Sheridan President & CEO, AmeriGas


 
2 About This Presentation This presentation contains certain forward-looking statements that management believes to be reasonable as of today’s date only. Actual results may differ significantly because of risks and uncertainties that are difficult to predict and many of which are beyond management’s control. You should read UGI’s Annual Report on Form 10-K for a more extensive list of factors that could affect results. Among them are adverse weather conditions, cost volatility and availability of all energy products, including propane, natural gas, electricity and fuel oil, increased customer conservation measures, the impact of pending and future legal proceedings, liability for uninsured claims and for claims in excess of insurance coverage, domestic and international political, regulatory and economic conditions in the United States and in foreign countries, including the current conflicts in the Middle East, and foreign currency exchange rate fluctuations (particularly the euro), changes in Marcellus Shale gas production, the availability, timing and success of our acquisitions, commercial initiatives and investments to grow our business, our ability to successfully integrate acquired businesses and achieve anticipated synergies, and the interruption, disruption, failure, malfunction, or breach of our information technology systems, including due to cyber- attack. UGI undertakes no obligation to release revisions to its forward-looking statements to reflect events or circumstances occurring after today. In addition, this presentation uses certain non-GAAP financial measures. Please see the appendix for reconciliations of these measures to the most comparable GAAP financial measure. UGI Corporation | Fiscal 2017 Second Quarter Results


 
3 Second Quarter Recap John Walsh President & CEO, UGI


 
4 Q2 Earnings Recap • Solid results despite a warmer than normal heating season in all four of our businesses • Results reflect our investments in projects that are less dependent on weather, and focus on operational efficiency • Expecting full year adjusted EPS to be at the lower end, or slightly below our guidance range of $2.30 to $2.451, well above FY16 FY17-Q2 FY16-Q2 FY16-Q2 FY17-Q2 FY16-Q2 International AmeriGas Midstream & Marketing Gas Utility colder warmer colder warmer colder warmer colder warmer -13.3% -11.7% -6.2% -7.4% -30.0% -10.7% -11.7% -9.7% 5.0% warmer 3.3% warmer 1.3% colder 2.9% warmer VERSUS PRIOR YEAR FY17-Q2 -10.1% -14.6% FY17-Q2 FY16-Q2 warmer colder $1.24 $1.31 FY16 - Q2 FY17 - Q2 Adjusted EPS1 UGI Corporation | Fiscal 2017 Second Quarter Results 1 Adjusted Earnings Per Share is a non-GAAP measure. See Appendix for reconciliation. Because we are unable to predict certain potentially material items affecting diluted earnings per share on a GAAP basis, principally mark-to-market gains and losses on commodity derivative instruments and Finagaz integration expenses, we cannot reconcile 2017 adjusted diluted earnings per share, a non-GAAP measure, to diluted earnings per share, the most directly comparable GAAP measure, in reliance on the “unreasonable efforts” exception set forth in SEC rules.


 
5 Q2 Market Recap UGI Corporation | Fiscal 2017 Second Quarter Results • Completed construction of $60 million Manning LNG liquefaction facility • Gas Utility added 3,400 new residential heating and commercial customers, year-to-date total of 8,000 • Filed a $21.7 million rate case for our UGI Penn Natural Gas (PNG) utility • Increased volumes for ACE and National Accounts despite warm weather • UGI International seeing benefits of Finagaz and other smaller acquisitions


 
6 Second Quarter Financial Review Kirk Oliver Chief Financial Officer, UGI


 
7 FY16-Q2 FY17-Q2 Net income attributable to UGI Corporation (GAAP) $233.2 $ 219.9 Net losses (gains) on commodity derivative instruments1 (22.4) 3.1 Unrealized losses on foreign currency derivative instruments1 - 0.8 Loss on extinguishment of debt1 - 3.6 Integration expenses associated with Finagaz1 5.4 4.4 Adjusted net income attributable to UGI Corporation $216.2 $231.8 Q2 Adjusted Earnings FY16-Q2 FY17-Q2 UGI Corporation - Diluted Earnings Per Share (GAAP) $1.33 $1.24 Net losses (gains) on commodity derivative instruments (0.12) 0.02 Unrealized losses on foreign currency derivative instruments2 - 0.01 Loss on extinguishment of debt - 0.02 Integration expenses associated with Finagaz 0.03 0.02 Adjusted diluted earnings per share $1.24 $1.31 1 Income taxes associated with pre-tax adjustments determined using statutory business unit tax rates. 2 Includes the effects of rounding ($ millions) UGI Corporation | Fiscal 2017 Second Quarter Results


 
8 $0.50 $1.50 Q2 FY16 AmeriGas UGI International Midstream & Marketing UGI Utilities Corp & Other Q2 FY17 $1.24 $(0.02) $0.06 $0.02 $0.01 $0.00 $1.31 Q2 Results Recap Solid results across all business units despite warmer than normal temperatures A d ju st ed E P S Adjusted EPS is a non-GAAP measure. See appendix for reconciliation. UGI Corporation | Fiscal 2017 Second Quarter Results 1 Includes ($0.01) Corporate & Other $0.22 $0.20 $0.41 $0.47 $0.26 $0.28 $0.36 $0.37 Q2-FY16 Q2-FY17 $1.311 $1.241 AmeriGas UGI International Midstream & Marketing UGI Utilities 1.3% colder 2.9% warmer 5.0% warmer 3.3% warmer Adjusted EPS


 
9 FY16-Q2 FY17-Q2 Adjusted EBITDA $295.4 Retail Volume (20.5) Wholesale and Other Total Margin (1.0) Operating and Administrative Expenses (1.5) Other Income and Expense, net (1.2) Adjusted EBITDA $271.2 • Volume down 6% primarily due to weather • Total margin decreased primarily reflecting the reduction in retail volumes sold, partially offset by slightly higher unit margins • Operating and administrative expenses increased slightly, primarily reflecting higher vehicle fuel costs that were offset by strong cost management Financial Results – AmeriGas FY16-Q2 FY17-Q2 colder warmer -13.3% -11.7% Weather versus normal 2.9% warmer than prior year Adjusted EBITDA is a non-GAAP measure. See appendix for reconciliation. ($ millions) Total margin UGI Corporation | Fiscal 2017 Second Quarter Results


 
10 FY16-Q2 FY17-Q2 Income Before Taxes $105.0 Total Margin (0.1) Operating and Administrative Expenses 6.8 Depreciation and Amortization 0.7 Interest Expense 1.7 Other Income and Expense, net 2.1 Income Before Taxes $116.2 Integration Expenses 8.6 6.7 Adjusted Income Before Taxes $113.6 $122.9 • Total margin was flat with the prior year as higher retail sales were offset by slightly lower average retail bulk and cylinder unit margins • Operating expenses decreased primarily reflecting lower integration expenses and the translation effects of weaker currencies • Other income increased primarily due to the absence of a $2.1 million loss recorded in the prior year associated with interest rate hedge ineffectiveness. Financial Results – UGI International Weather versus normal -6.2% -7.4% 1.3% colder than prior year ($ millions) Adjusted Income Before Taxes is a non-GAAP measure. UGI Corporation | Fiscal 2017 Second Quarter Results FY16-Q2 FY17-Q2 colder warmer -7.4% -6.2


 
11 FY16-Q2 FY17-Q2 Income Before Taxes $ 77.3 Total Margin 4.8 Operating and Administrative Expenses (0.4) Depreciation and Amortization (1.1) Interest Expense (0.2) Other Income and Expenses, net 3.4 Income Before Taxes $83.8 • Despite warmer temperatures, total margin increased principally reflecting an increased demand for peaking services, higher prices for pipeline capacity, and slightly higher natural gas marketing margin • These margin increases were partially offset by lower electric generation margin due to lower generation volumes • Operating expenses increased slightly due to higher wages and benefits partially offset by electricity generation operating and maintenance expenses • Other income increased primarily due to income from allowance for funds used during construction (AFUDC) related to the PennEast and Sunbury pipeline projects Financial Results – Midstream & Marketing FY16-Q2 FY17-Q2 colder warmer -10.1% -14.6% Weather versus normal 5.0% warmer than prior year ($ millions) UGI Corporation | Fiscal 2017 Second Quarter Results


 
12 FY16-Q2 FY17-Q2 Income Before Taxes $105.2 Total Margin 11.0 Operating and Administrative Expenses (8.7) Depreciation and Amortization (0.7) Interest Expense (1.0) Other Income and Expense, net 0.3 Income Before Taxes $106.1 Financial Results – Utilities FY16-Q2 FY17-Q2 colder warmer -11.7% -9.7% Gas Utility weather versus normal 3.3% warmer than prior year ($ millions) • Core market throughput was flat year-over-year while total throughput increased 13.5% due to higher large firm delivery service volumes associated with a new natural gas-fired generation facility • Total margin increased primarily reflecting higher UGI Gas base rates and higher large firm delivery service margin • Operating and administrative expenses were higher than the prior year largely due to a prior-year one-time expense credit related to IT development costs previously expensed. UGI Corporation | Fiscal 2017 Second Quarter Results


 
13 2012 – 2017 Comparison UGI Corporation | Fiscal 2017 Second Quarter Results $ 1.32 $ 0.07 $ 0.37 $ 0.27 $ 0.14 $ 0.05 $ 2.22 YTD 2012 AmeriGas UGI International Midstream & Marketing UGI Utilities Corp & other YTD 2017 $2.50 $2.00 $1.50 $1.00 $0.50 $- Adjusted EPS Adjusted EPS is a non-GAAP measure. See appendix for reconciliation.


 
A me riGa s Second Quarter Recap Jerry Sheridan President & CEO, AmeriGas


 
15 • The quarter ended 13% warmer than normal and 3% warmer than last year • 2nd warmest Q2 on record • Retail volume sold in the quarter was 363 million gallons, 6% below last year • Unit margins up 2% despite increased propane costs • Operating expenses essentially flat despite 23% increase in diesel fuel prices • Revising fiscal year guidance EBITDA guidance range to $550 million to $580 million Adjusted EBITDA is a non-GAAP measure. See appendix for reconciliation. Q2 Earnings Recap $295.4 $271.2 FY16 - Q2 FY17 - Q2 Adjusted EBITDA1 UGI Corporation | Fiscal 2017 Second Quarter Results


 
16 Growth Initiatives UGI Corporation | Fiscal 2017 Second Quarter Results Cylinder Exchange • Modest increase in volume despite the warmer weather • Over 1,250 new locations year-to-date National Accounts • Volume up 5% primarily due to new accounts Acquisitions • Completed two small scale acquisitions and anticipate closing on 3 additional deals in the next few months


 
17 UGI Corporation | Fiscal 2017 Second Quarter Results Refinancing • Issued $525 million of 5.75% notes due May 2027 • Tendered for $378 million of 7.00% May 2022 notes • Redeeming remaining $102.5 million of 7.00% May 2022 notes • Completes refinancing of all long-term debt • No significant debt maturities until 2024 • Average interest rates have been reduced by over 100 basis points Distribution • 1% increase distribution to $3.80 annually • 13th consecutive year increasing distribution Maintaining A Strong Balance Sheet


 
18 Conclusion and Q&A John Walsh President & CEO, UGI


 
19 Clear Path to Growth • Sunbury pipeline providing service to UGI and will begin serving power generation facility in August • Receive Final Environmental Impact Statement for PennEast last month; continue to target end of 2018 for in-service • LNG projects remain core focus • Manning liquefaction on-line • Steelton vaporization and storage on-stream by end of the year MIDSTREAM & MARKETING INTERNATIONAL • Organic growth across service territory and effective expense controls • Performance of Finagaz acquisition has been outstanding UGI UTILITIES • Company awaiting final order from PA PUC authorizing an increase to the DSIC cap from 5.0% to 7.5% for PNG and CPG • Reduces regulatory lag • PNG rate case in process • Deploying record amounts of capital • Capital deployed will exceed $1.1 billion over next four years AMERIGAS • Continuing to invest in customer service tools to enhance the customer experience and efficiency • Refinancing complete at attractive rates UGI Corporation | Fiscal 2017 Second Quarter Results


 
20 APPENDIX


 
21 • Management uses "adjusted net income attributable to UGI" and "adjusted diluted earnings per share," both of which are non-GAAP financial measures, when evaluating UGI's overall performance. For the periods presented, adjusted net income attributable to UGI is net income attributable to UGI Corporation after excluding net after-tax gains and losses on commodity and certain foreign currency derivative instruments not associated with current period transactions (principally comprising changes in unrealized gains and losses on derivative instruments), Finagaz integration expenses, losses associated with extinguishments of debt and the impact on net deferred tax liabilities from a change in French corporate income tax rate. Volatility in net income at UGI can occur as a result of gains and losses on commodity and certain foreign currency derivative instruments not associated with current period transactions but included in earnings in accordance with U.S. generally accepted accounting principles ("GAAP"). • Non-GAAP financial measures are not in accordance with, or an alternative to, GAAP and should be considered in addition to, and not as a substitute for, the comparable GAAP measures. Management believes that these non-GAAP measures provide meaningful information to investors about UGI’s performance because they eliminate the impact of (1) gains and losses on commodity and certain foreign currency derivative instruments not associated with current-period transactions and (2) other significant discrete items that can affect the comparison of period-over-period results. • The following table reconciles net income attributable to UGI Corporation, the most directly comparable GAAP measure, to adjusted net income attributable to UGI Corporation, and reconciles diluted earnings per share, the most comparable GAAP measure, to adjusted diluted earnings per share, to reflect the adjustments referred to above: UGI Supplemental Footnotes UGI Corporation | Fiscal 2017 Second Quarter Results


 
22 UGI Adjusted Net Income and EPS UGI Corporation | Fiscal 2017 Second Quarter Results Three Months Ended March 31, 2017 Total AmeriGas Propane UGI International Midstream & Marketing UGI Utilities Corporate & Other Adjusted net income attributable to UGI Corporation: Net income (loss) attributable to UGI Corporation 219.9$ $ 32.0 $ 79.3 $ 50.2 $ 65.1 $ (6.7) Net losses (gains) on commodity derivative instruments not associated with current period transactions (net of tax of $1.5)(a) 3.1 - - - - 3.1 Unrealized losses on foreign currency derivative instruments (net of tax of $(0.5))(a) 0.8 - - - - 0.8 Loss on extinguishment of debt (net of tax of $2.3) (a) 3.6 3.6 - - - - Integration expenses associated with Finagaz (net of tax of $(2.3))(a) 4.4 - 4.4 - - - Adjusted net income (loss) attributable to UGI Corporation 231.8$ 35.6$ 83.7$ 50.2$ 65.1$ (2.8)$ Adjusted diluted earnings per share: UGI Corporation earnings (loss) per share - diluted 1.24$ $ 0.18 $ 0.45 $ 0.28 $ 0.37 $ (0.04) Net losses (gains) on commodity derivative instruments not associated with current period transactions 0.02 - - - - 0.02 Unrealized losses on foreign currency derivative instruments (b) 0.01 - - - - 0.01 Loss on extinguishment of debt 0.02 0.02 - - - - Integration expenses associated with Finagaz 0.02 - 0.02 - - - Adjusted diluted earnings (loss) per share 1.31$ $ 0.20 $ 0.47 $ 0.28 $ 0.37 $ (0.01) Three Months Ended March 31, 2016 Total AmeriGas Propane UGI International Midstream & Marketing UGI Utilities Corporate & Other Adjusted net income attributable to UGI Corporation: Net income attributable to UGI Corporation 233.2$ $ 39.3 $ 66.7 $ 45.8 $ 63.2 $ 18.2 Net gains on commodity derivative instruments not associated with current period transactions (net of tax of $12.9) (a) (22.4) - - - - (22.4) Integration expenses associated with Finagaz (net of tax of $(3.2)) (a) 5.4 - 5.4 - - - Adjusted net income (loss) attributable to UGI Corporation 216.2$ 39.3$ 72.1$ 45.8$ 63.2$ (4.2)$ Adjusted diluted earnings per share: UGI Corporation earnings per share - diluted 1.33$ $ 0.22 $ 0.38 $ 0.26 $ 0.36 $ 0.11 Net gains on commodity derivative instruments not associated with current period transactions (b) (0.12) - - - - (0.12) Integration expenses associated with Finagaz 0.03 - 0.03 - - - Adjusted diluted earnings (loss) per share 1.24$ $ 0.22 $ 0.41 $ 0.26 $ 0.36 $ (0.01) (a) Income taxes associated with pre-tax adjustments determined using statutory business unit tax rates. (b) Includes effects of rounding.


 
23 UGI Adjusted Net Income and EPS UGI Corporation | Fiscal 2017 Second Quarter Results Six Months Ended March 31, 2017 Total AmeriGas Propane UGI International Midstream & Marketing UGI Utilities Corporate & Other Adjusted net income attributable to UGI Corporation: Net income attributable to UGI Corporation 450.6$ $ 48.6 $ 167.6 $ 80.1 $ 109.4 $ 44.9 Net gains on commodity derivative instruments not associated with current period transactions (net of tax of $34.8) (a) (49.1) - - - - (49.1) Loss on extinguishments of debt (net of tax of $(5.7)) (a) 8.9 8.9 - - - - Integration expenses associated with Finagaz (net of tax of $(5.1))(a) 9.7 - 9.7 - - - Impact from change in French tax rate (27.4) - (27.4) - - - Adjusted net income (loss) attributable to UGI Corporation 392.7$ 57.5$ 149.9$ 80.1$ 109.4$ (4.2)$ Adjusted diluted earnings per share: UGI Corporation earnings per share - diluted 2.55$ $ 0.27 $ 0.95 $ 0.45 $ 0.62 $ 0.26 Net gains on commodity derivative instruments not associated with current period transactions (0.28) - - - - (0.28) Loss on extinguishments of debt 0.05 0.05 - - - - Integration expenses associated with Finagaz 0.05 - 0.05 - - - Impact from change in French tax rate (0.15) - (0.15) - - - Adjusted diluted earnings (loss) per share 2.22$ $ 0.32 $ 0.85 $ 0.45 $ 0.62 $ (0.02) Six Months Ended March 31, 2012 Total AmeriGas Propane UGI International Midstream & Marketing UGI Utilities Corporate & Other Adjusted net income attributable to UGI Corporation: Net income (loss) attributable to UGI Corporation 211.1$ $ 37.7 $ 81.1 $ 30.0 $ 81.6 $ (19.3) Net losses on commodity derivative instruments not associated with current period transactions (net of taxes of ($5.5)) (a) 7.8 - - - - 7.8 Loss on extinguishments of debt (net of tax of $1.5) (a) 2.1 2.1 - - - - Integration expenses associated with Heritage (net of tax of $1.6) (a) 2.1 2.1 - - - - Adjusted net income (loss) attributable to UGI Corporation 223.1$ 41.9$ 81.1$ 30.0$ 81.6$ (11.5)$ Adjusted diluted earnings per share: UGI Corporation earnings per share - diluted 1.24$ $ 0.22 $ 0.48 $ 0.18 $ 0.48 $ (0.12) Net losses on commodity derivative instruments not associated with current period transactions 0.05 - - - - 0.05 Loss on extinguishments of debt 0.01 0.01 - - - - Integration expenses associated with Heritage 0.01 0.01 - - - - Adjusted diluted earnings (loss) per share 1.31$ $ 0.25 $ 0.48 $ 0.18 $ 0.48 $ (0.07) (a) Income taxes associated with pre-tax adjustments determined using statutory business unit tax rates.


 
24 • The enclosed supplemental information contains a reconciliation of earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA to Net Income. • EBITDA and Adjusted EBITDA are not measures of performance or financial condition under accounting principles generally accepted in the United States ("GAAP"). Management believes EBITDA and Adjusted EBITDA are meaningful non-GAAP financial measures used by investors to compare the Partnership's operating performance with that of other companies within the propane industry. The Partnership's definitions of EBITDA and Adjusted EBITDA may be different from those used by other companies. • EBITDA and Adjusted EBITDA should not be considered as alternatives to net income (loss) attributable to AmeriGas Partners, L.P. Management uses EBITDA to compare year-over-year profitability of the business without regard to capital structure as well as to compare the relative performance of the Partnership to that of other master limited partnerships without regard to their financing methods, capital structure, income taxes or historical cost basis. Management uses Adjusted EBITDA to exclude from AmeriGas Partners’ EBITDA gains and losses that competitors do not necessarily have to provide additional insight into the comparison of year-over-year profitability to that of other master limited partnerships. In view of the omission of interest, income taxes, depreciation and amortization, gains and losses on commodity derivative instruments not associated with current-period transactions, and other gains and losses that competitors do not necessarily have from Adjusted EBITDA, management also assesses the profitability of the business by comparing net income attributable to AmeriGas Partners, L.P. for the relevant periods. Management also uses Adjusted EBITDA to assess the Partnership's profitability because its parent, UGI Corporation, uses the Partnership's Adjusted EBITDA to assess the profitability of the Partnership, which is one of UGI Corporation’s business segments. UGI Corporation discloses the Partnership's Adjusted EBITDA as the profitability measure for its domestic propane segment. AmeriGas Supplemental Footnotes UGI Corporation | Fiscal 2017 Second Quarter Results


 
25 AmeriGas EBITDA and Adjusted EBITDA UGI Corporation | Fiscal 2017 Second Quarter Results EBITDA and Adjusted EBITDA: FY16-Q2 FY17-Q2 Net income attributable to AmeriGas Partners, L.P. 245.9$ 135.1$ Income tax expense 0.3 0.6 Interest expense 40.8 40.0 Depreciation 36.5 34.4 Amortization 10.9 10.6 EBITDA 334.4 220.7 Add net losses (subtract net gains) on commodity derivative instruments not associated with current-period transactions (39.5) 28.6 Loss on extinguishment of debt - 22.1 Noncontrolling interest in net (losses) gains on commodity derivative instruments not associated with current-period transactions (a) 0.5 (0.2) Adjusted EBITDA 295.4$ 271.2$ Forecast Fiscal Year Ending September 30, 2017 (Low End) (High End) Adjusted EBITDA (estimate) $ 550,000 $ 580,000 Interest expense (estimate) 157,000 157,000 Income tax expense (estimate) 3,000 3,000 Depreciation (estimate) 139,000 139,000 Amortization (estimate) 43,000 43,000 Three Months Ended March 31,


 
26 Investor Relations: Will Ruthrauff 610-456-6571 ruthrauffw@ugicorp.com


 
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