Segment Information

9 Months Ended

Jun. 30, 2019

Note 16 — Segment Information

Our operations comprise four reportable segments generally based upon products or services sold, geographic location and regulatory environment: (1) AmeriGas Propane; (2) UGI International; (3) Midstream & Marketing; and (4) UGI Utilities.

Corporate & Other principally comprise net expenses of UGI’s captive general liability insurance company and UGI’s corporate headquarters facility, and UGI’s unallocated corporate and general expenses and interest income. In addition, Corporate & Other includes net gains and losses on commodity and certain foreign currency derivative instruments not associated with current-period transactions (including such amounts attributable to noncontrolling interests) because such items are excluded from profit measures evaluated by our CODM in assessing our reportable segments’ performance or allocating resources. Corporate & Other assets principally comprise cash and cash equivalents of UGI and its captive insurance company, and UGI corporate headquarters’ assets.

The accounting policies of our reportable segments are the same as those described in Note 2, “Summary of Significant Accounting Policies,” in the Company’s 2018 Annual Report. We evaluate AmeriGas Propane’s performance principally based upon Partnership Adjusted EBITDA. Although we use Partnership Adjusted EBITDA to evaluate AmeriGas Propane’s profitability, it should not be considered as an alternative to net income (as an indicator of operating performance) or as an alternative to cash flow (as a measure of liquidity or ability to service debt obligations) and is not a measure of performance or financial condition under GAAP. Our definition of Partnership Adjusted EBITDA may be different from that used by other companies. Our CODM evaluates the performance of our other reportable segments principally based upon their income before income taxes excluding gains and losses on commodity and certain foreign currency derivative instruments not associated with current-period transactions, as previously mentioned.



Three Months Ended June 30, 2019	Total			Eliminations				AmeriGas Propane			UGI International			Midstream & Marketing				UGI Utilities			Corporate & Other (b)
Revenues	$	1,363.7		$	—			$	478.7		$	486.6		$	239.3			$	153.0		$	6.1
Intersegment revenues	$	—		$	(39.6	)	(c)	$	—		$	—		$	28.0			$	10.9		$	0.7
Cost of sales	$	781.4		$	(38.5	)	(c)	$	210.3		$	278.5		$	225.4			$	61.0		$	44.7
Segment profit:
Operating income (loss)	$	9.6		$	0.2			$	(3.0	)	$	27.5		$	2.7			$	20.4		$	(38.2	)
Income from equity investees	1.5			—				—			—			1.5			(d)	—			—
Other non-operating income (expense), net	0.7			—				—			1.2			0.1				0.4			(1.0		)
Interest expense	(60.5		)	—				(41.6		)	(5.8		)	(0.7		)		(12.4		)	—
(Loss) income before income taxes	$	(48.7	)	$	0.2			$	(44.6	)	$	22.9		$	3.6			$	8.4		$	(39.2	)
Partnership Adjusted EBITDA (a)								$	42.5
Noncontrolling interests’ net loss	$	(44.6	)	$	—			$	(42.1	)	$	(0.1	)	$	—			$	—		$	(2.4	)
Depreciation and amortization	$	109.9		$	(0.2	)		$	44.0		$	30.8		$	11.8			$	23.2		$	0.3
Capital expenditures (including the effects of accruals)	$	166.0		$	—			$	21.0		$	24.1		$	36.4			$	84.5		$	—



Three Months Ended June 30, 2018	Total			Eliminations				AmeriGas Propane				UGI International			Midstream & Marketing				UGI Utilities			Corporate & Other (b)
Revenues	$	1,440.9		$	—			$	528.4			$	533.6		$	229.6			$	150.3		$	(1.0	)
Intersegment revenues	$	—		$	(44.4	)	(c)	$	—			$	—		$	34.2			$	9.6		$	0.6
Cost of sales	$	732.5		$	(43.5	)	(c)	$	244.5			$	314.3		$	215.0			$	72.5		$	(70.3	)
Segment profit:
Operating income (loss) (f)	$	29.5		$	(0.3	)		$	(54.7	)	(e)	$	9.2		$	7.4			$	4.4		$	63.5
Income from equity investees	1.3			—				—				—			1.3			(d)	—			—
Other non-operating income (expense), net (f)	24.6			—				—				(0.7		)	—				(0.5		)	25.8
Interest expense	(56.5		)	—				(40.4		)		(5.5		)	(0.5		)		(10.0		)	(0.1		)
(Loss) income before income taxes	$	(1.1	)	$	(0.3	)		$	(95.1	)		$	3.0		$	8.2			$	(6.1	)	$	89.2
Partnership Adjusted EBITDA (a)								$	67.2
Noncontrolling interests’ net (loss) income	$	(64.1	)	$	—			$	(78.1	)		$	(0.8	)	$	—			$	—		$	14.8
Depreciation and amortization	$	118.8		$	(0.1	)		$	46.4			$	39.8		$	11.1			$	21.4		$	0.2
Capital expenditures (including the effects of accruals)	$	142.7		$	—			$	25.7			$	27.3		$	9.9			$	79.7		$	0.1



Nine Months Ended June 30, 2019	Total			Eliminations				AmeriGas Propane			UGI International			Midstream & Marketing				UGI Utilities			Corporate & Other (b)
Revenues	$	6,170.0		$	—			$	2,270.5		$	1,980.5		$	1,055.4			$	856.4		$	7.2
Intersegment revenues	$	—		$	(276.0	)	(c)	$	—		$	—		$	213.7			$	59.8		$	2.5
Cost of sales	$	3,633.3		$	(272.9	)	(c)	$	1,024.0		$	1,171.8		$	1,052.2			$	438.5		$	219.7
Segment profit:
Operating income (loss)	$	716.1		$	0.2			$	410.0		$	212.7		$	95.1			$	217.3		$	(219.2	)
Income from equity investees	4.6			—				—			0.1			4.5			(d)	—			—
Loss on extinguishments of debt	(6.1		)	—				—			(6.1		)	—				—			—
Other non-operating income, net	17.6			—				—			5.0			0.1				1.2			11.3
Interest expense	(181.7		)	—				(126.2		)	(17.3		)	(1.7		)		(36.3		)	(0.2		)
Income (loss) before income taxes	$	550.5		$	0.2			$	283.8		$	194.4		$	98.0			$	182.2		$	(208.1	)
Partnership Adjusted EBITDA (a)								$	543.5
Noncontrolling interests’ net income (loss)	$	131.0		$	—			$	178.1		$	0.2		$	—			$	—		$	(47.3	)
Depreciation and amortization	$	330.0		$	(0.3	)		$	134.0		$	92.8		$	34.8			$	68.0		$	0.7
Capital expenditures (including the effects of accruals)	$	479.0		$	—			$	77.8		$	74.0		$	93.8			$	232.6		$	0.8
As of June 30, 2019
Total assets	$	12,018.9		$	(116.9	)		$	3,789.4		$	3,168.0		$	1,444.7			$	3,375.6		$	358.1
Short-term borrowings	$	380.2		$	—			$	248.5		$	0.7		$	55.0			$	76.0		$	—
Goodwill	$	3,159.1		$	—			$	2,003.0		$	956.2		$	17.8			$	182.1		$	—



Nine Months Ended June 30, 2018	Total			Eliminations				AmeriGas Propane				UGI International			Midstream & Marketing				UGI Utilities			Corporate & Other (b)
Revenues	$	6,378.1		$	—			$	2,356.0			$	2,227.4		$	915.6			$	880.3		$	(1.2	)
Intersegment revenues	$	—		$	(330.4	)	(c)	$	—			$	—		$	241.4			$	86.0		$	3.0
Cost of sales	$	3,430.1		$	(327.4	)	(c)	$	1,094.3			$	1,340.2		$	872.6			$	481.6		$	(31.2	)
Segment profit:
Operating income (f)	$	1,015.5		$	0.2			$	359.8		(e)	$	234.4		$	168.4			$	237.0		$	15.7
Income (loss) from equity investees	3.0			—				—				(0.3		)	3.3			(d)	—			—
Other non-operating income (expense), net (f)	4.1			—				—				(14.7		)	(1.2		)		(1.7		)	21.7
Interest expense	(172.8		)	—				(122.0		)		(16.3		)	(2.1		)		(32.0		)	(0.4		)
Income before income taxes	$	849.8		$	0.2			$	237.8			$	203.1		$	168.4			$	203.3		$	37.0
Partnership Adjusted EBITDA (a)								$	570.8
Noncontrolling interests’ net income (loss)	$	135.9		$	—			$	145.6			$	(2.3	)	$	—			$	—		$	(7.4	)
Depreciation and amortization	$	341.3		$	(0.2	)		$	139.0			$	106.9		$	32.0			$	62.9		$	0.7
Capital expenditures (including the effects of accruals)	$	381.3		$	—			$	72.9			$	75.1		$	25.5			$	206.5		$	1.3
As of June 30, 2018
Total assets	$	11,876.7		$	(74.2	)		$	3,932.7			$	3,232.5		$	1,316.5			$	3,194.0		$	275.2
Short-term borrowings	$	299.1		$	—			$	177.0			$	3.6		$	—			$	118.5		$	—
Goodwill	$	3,169.0		$	—			$	2,005.5			$	969.9		$	11.5			$	182.1		$	—

(a)The following table provides a reconciliation of Partnership Adjusted EBITDA to AmeriGas Propane income (loss) before income taxes:



	Three Months Ended June 30,						Nine Months Ended June 30,
	2019			2018			2019			2018
Partnership Adjusted EBITDA	$	42.5		$	67.2		$	543.5		$	570.8
Depreciation and amortization	(44.0		)	(46.4		)	(134.0		)	(139.0		)
Interest expense	(41.6		)	(40.4		)	(126.2		)	(122.0		)
Impairment of Partnership tradenames and trademarks	—			(75.0		)	—			(75.0		)
Merger expense	(1.8		)	—			(2.7		)	—
Noncontrolling interest (i)	0.3			(0.5		)	3.2			3.0
(Loss) income before income taxes	$	(44.6	)	$	(95.1	)	$	283.8		$	237.8


(i)	Principally represents the General Partner’s 1.01% interest in AmeriGas OLP.


(b)	Includes net pre-tax (losses) gains on commodity and certain foreign currency derivative instruments not associated with current-period transactions (including such amounts attributable to noncontrolling interests) totaling $(39.5) and $95.5 for the three months ended June 30, 2019 and 2018, respectively, and $(200.7) and $54.0 for the nine months ended June 30, 2019 and 2018, respectively.


(c)	Represents the elimination of intersegment transactions principally among Midstream & Marketing, UGI Utilities and AmeriGas Propane.


(d)	Represents AFUDC associated with our PennEast Pipeline equity investment.


(e)	Includes a pre-tax impairment charge of $75.0, as a result of a plan to discontinue the use of certain tradenames and trademarks primarily associated with the Partnership’s January 2012 acquisition of Heritage Propane (see Note 7).

(f)

Amounts reflect the reclassification of non-service income (expense) associated with our pension and other postretirement plans from “Operating and administrative expenses” to “Other non-operating income, net,” on the Condensed Consolidated Statements of Income as a result of the adoption of ASU No. 2017-07 (see Note 3).