Common Stock and Equity Based Compensation

12 Months Ended

Sep. 30, 2011

Common Stock and Equity-Based Compensation [Abstract]

Common Stock and Equity-Based Compensation

Note 13 — Common Stock and Equity-Based Compensation

UGI Common Stock share activity for Fiscal 2009, Fiscal 2010 and Fiscal 2011 follows:

	Issued		Treasury			Outstanding
Balance, September 30, 2008		115,247,694		(7,386,732	)		107,860,962
Issued:
Employee and director plans		13,600		776,074			789,674
Dividend reinvestment plan		—		96,071			96,071
Balance, September 30, 2009		115,261,294		(6,514,587	)		108,746,707
Issued:
Employee and director plans		139,000		1,390,207			1,529,207
Dividend reinvestment plan		—		97,673			97,673
Balance, September 30, 2010		115,400,294		(5,026,707	)		110,373,587
Issued:
Employee and director plans		106,800		1,263,065			1,369,865
Dividend reinvestment plan		—		92,570			92,570
Balance, September 30, 2011		115,507,094		(3,671,072	)		111,836,022

Equity-Based Compensation

The Company grants equity-based awards to employees and non-employee directors comprising UGI stock options, grants of UGI stock-based equity instruments and grants of AmeriGas Partners Common Unit-based equity instruments as further described below. We recognized total pre-tax equity-based compensation expense of $15.6 ($10.3 after-tax), $13.2 ($8.7 after-tax) and $17.6 ($11.4 after-tax) in Fiscal 2011, Fiscal 2010 and Fiscal 2009, respectively.

UGI Equity-Based Compensation Plans and Awards. Under the UGI Corporation 2004 Omnibus Equity Compensation Plan Amended and Restated as of December 5, 2006 (the “OECP”), we may grant options to acquire shares of UGI Common Stock, stock appreciation rights (“SARs”), UGI Units (comprising “Stock Units” and “UGI Performance Units”) and other equity-based awards to key employees and non-employee directors. The exercise price for options may not be less than the fair market value on the grant date. Awards granted under the OECP may vest immediately or ratably over a period of years, and stock options can be exercised no later than ten years from the grant date. In addition, the OECP provides that awards of UGI Units may also provide for the crediting of dividend equivalents to participants’ accounts. Except in the event of retirement, death or disability, each grant, unless paid, will terminate when the participant ceases to be employed. There are certain change of control and retirement eligibility conditions that, if met, generally result in accelerated vesting or elimination of further service requirements.

Under the OECP, awards representing up to 15,000,000 shares of UGI Common Stock may be granted. The maximum number of shares that may be issued pursuant to grants other than stock options or SARs is 3,200,000. Dividend equivalents on UGI Unit awards to employees will be paid in cash. Dividend equivalents on non-employee director awards are accumulated in additional Stock Units. UGI Unit awards granted to employees and non-employee directors are settled in shares of Common Stock and cash. UGI Unit awards granted to Antargaz employees are settled in shares of Common Stock. With respect to UGI Performance Unit awards, the actual number of shares (or their cash equivalent) ultimately issued, and the actual amount of dividend equivalents paid, is generally dependent upon the achievement of market performance goals and service conditions. It is our practice to issue treasury shares to satisfy substantially all option exercises and UGI Unit awards. We do not expect to repurchase shares for such purposes during Fiscal 2012.

UGI Stock Option Awards. Stock option transactions under the OECP and predecessor plans for Fiscal 2009, Fiscal 2010 and Fiscal 2011 follow:

								Weighted
				Weighted		Total		Average
				Average		Intrinsic		Contract Term
	Shares			Option Price		Value		(Years)
Shares under option — September 30, 2008		6,652,245		$	21.71	$	30.9		6.6
Granted		1,411,200		$	24.65
Cancelled		(87,334	)	$	25.81
Exercised		(474,618	)	$	13.30	$	6.0
Shares under option — September 30, 2009		7,501,493		$	22.74	$	23.2		6.4
Granted		1,394,300		$	24.37
Cancelled		(62,501	)	$	25.12
Exercised		(1,276,247	)	$	18.09	$	11.7
Shares under option — September 30, 2010		7,557,045		$	23.81	$	36.2		6.5
Granted		1,443,558		$	31.55
Cancelled		(235,437	)	$	27.79
Exercised		(1,091,987	)	$	20.95	$	11.4
Shares under option — September 30, 2011		7,673,179		$	25.55	$	15.1		6.2
Options exercisable — September 30, 2009		4,744,054		$	21.00
Options exercisable — September 30, 2010		4,706,376		$	22.99
Options exercisable — September 30, 2011		4,879,784		$	24.15	$	12.7		5.2
Non-vested options — September 30, 2011		2,793,395		$	27.99	$	2.4		8.0

Cash received from stock option exercises and associated tax benefits were $22.9 and $3.8, $23.1 and $4.3, and $6.3 and $2.2 in Fiscal 2011, Fiscal 2010 and Fiscal 2009, respectively. As of September 30, 2011, there was $3.6 of unrecognized compensation cost associated with unvested stock options that is expected to be recognized over a weighted-average period of 2.1 years.

The following table presents additional information relating to stock options outstanding and exercisable at September 30, 2011:

	Range of exercise prices
	Under		$20.00 -		$25.01 -		Over
	$20.00		$25.00		$30.00		$30.00
Options outstanding at September 30, 2011:
Number of options		336,300		3,539,727		2,456,694		1,340,458
Weighted average remaining contractual life (in years)		1.9		6.0		5.7		8.7
Weighted average exercise price	$	15.42	$	23.05	$	27.24	$	31.59
Options exercisable at September 30, 2011:
Number of options		336,300		2,351,093		2,124,391		68,000
Weighted average exercise price	$	15.42	$	22.44	$	27.19	$	31.74

UGI Stock Option Fair Value Information. The per share weighted-average fair value of stock options granted under our option plans was $5.40 in Fiscal 2011, $4.49 in Fiscal 2010 and $4.13 in Fiscal 2009. These amounts were determined using a Black-Scholes option pricing model which values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock, expected dividend payments and the risk-free interest rate over the expected life of the option. The expected life of option awards represents the period of time during which option grants are expected to be outstanding and is derived from historical exercise patterns. Expected volatility is based on historical volatility of the price of UGI’s Common Stock. Expected dividend yield is based on historical UGI dividend rates. The risk free interest rate is based on U.S. Treasury bonds with terms comparable to the options in effect on the date of grant.

The assumptions we used for valuing option grants during Fiscal 2011, Fiscal 2010 and Fiscal 2009 are as follows:

	2011			2010			2009
Expected life of option	5.75 years			5.75 years			5.75 years
Weighted average volatility		24.3	%		24.0	%		23.7	%
Weighted average dividend yield		3.4	%		3.3	%		3.0	%
Expected volatility		23.8% - 24.3	%		24.0	%		20.3% - 23.7	%
Expected dividend yield		3.1% - 3.4	%		3.3% - 3.4	%		2.9% - 3.2	%
Risk free rate		1.2% - 2.4	%		1.7% - 3.1	%		1.7% - 3.0	%

UGI Unit Awards. UGI Stock Unit and UGI Performance Unit awards entitle the grantee to shares of UGI Common Stock or cash once the service condition is met and, with respect to UGI Performance Unit awards, subject to market performance conditions. UGI Performance Unit grant recipients are awarded a target number of Performance Units. The number of UGI Performance Units ultimately paid at the end of the performance period (generally three-years) may be higher or lower than the target amount, or even zero, based on UGI’s Total Shareholder Return (“TSR”) percentile rank relative to companies in the Standard & Poor’s Utilities Index for grants prior to January 1, 2011 and the Russell Midcap Utility Index (excluding telecommunication companies) for grants on or after January 1, 2011 (“UGI comparator group”). Based on the TSR percentile rank, grantees may receive 0% to 200% of the target award granted. If UGI’s TSR ranks below the 40th percentile compared to the UGI comparator group, the employee will not be paid. At the 40th percentile, the employee will be paid an award equal to 50% of the target award; at the 50th percentile, 100%; and at the 100th percentile, 200%. The actual amount of the award is interpolated between these percentile rankings. Dividend equivalents are paid in cash only on UGI Performance Units that eventually vest.

The fair value of UGI Stock Units on the grant date is equal to the market price of UGI Stock on the grant date. Under GAAP, UGI Performance Units are equity awards with a market-based condition which, if settled in shares, results in the recognition of compensation cost over the requisite employee service period regardless of whether the market-based condition is satisfied. The fair values of UGI Performance Units are estimated using a Monte Carlo valuation model. The fair value associated with the target award is accounted for as equity and the fair value of the award over the target, as well as all dividend equivalents, is accounted for as a liability. The expected term of the UGI Performance Unit awards is three years based on the performance period. Expected volatility is based on the historical volatility of UGI Common Stock over a three-year period. The risk-free interest rate is based on the yields on U.S. Treasury bonds at the time of grant. Volatility for all companies in the UGI comparator group is based on historical volatility.

The following table summarizes the weighted average assumptions used to determine the fair value of UGI Performance Unit awards and related compensation costs:

	Grants Awarded in Fiscal
	2011			2010			2009
Risk free rate		1.0	%		1.7	%		1.0	%
Expected life	3 years			3 years			3 years
Expected volatility		27.6	%		28.0	%		27.1	%
Dividend yield		3.2	%		3.3	%		3.2	%

The weighted-average grant date fair value of UGI Performance Unit awards was estimated to be $35.19 for Units granted in Fiscal 2011, $22.51 for Units granted in Fiscal 2010 and $27.91 for Units granted in Fiscal 2009.

The following table summarizes UGI Unit award activity for Fiscal 2011:

	Total					Vested					Non-Vested
				Weighted					Weighted					Weighted
				Average					Average					Average
	Number of			Grant Date		Number of			Grant Date		Number of			Grant Date
	UGI			Fair Value		UGI			Fair Value		UGI			Fair Value
	Units			(per Unit)		Units			(per Unit)		Units			(per Unit)
September 30, 2010		930,493		$	22.99		570,835		$	21.27		359,658		$	25.71
UGI Performance Units:
Granted		223,525		$	35.19		—		$	—		223,525		$	35.19
Forfeited		(77,906	)	$	30.18		—		$	—		(77,906	)	$	30.18
Vested		—		$	—		198,749		$	28.84		(198,749	)	$	28.84
Unit awards paid		(185,374	)	$	30.17		(185,374	)	$	30.17		—		$	—
Performance criteria not met		—		$	—		—		$	—		—		$	—
UGI Stock Units:
Granted(a)		61,945		$	33.31		—		$	—		61,945		$	33.31
Forfeited		(30,600	)	$	34.88		—		$	—		(30,600	)	$	34.88
Vested		—		$	—		36,545		$	30.54		(36,545	)	$	30.54
Unit awards paid		(21,800	)	$	26.37		(21,800	)	$	26.37		—		$	—
September 30, 2011		900,283		$	24.13		598,955		$	21.41		301,328		$	29.56

(a) Generally, shares granted under UGI Stock Unit awards are paid approximately 70% in shares. UGI Stock Unit awards granted in Fiscal 2010 and Fiscal 2009 were 27,060 and 52,767, respectively.

During Fiscal 2011, Fiscal 2010 and Fiscal 2009, the Company paid UGI Performance Unit and UGI Stock Unit awards in shares and cash as follows:

	2011		2010		2009
UGI Performance Unit awards:
Number of original awards granted		197,917		193,983		163,450
Fiscal year granted		2008		2007		2006
Payment of awards:
Shares of UGI Common Stock issued		142,494		123,169		117,847
Cash paid	$	7.5	$	2.6	$	3.1
UGI Stock Unit awards:
Number of original awards granted		22,400		—		88,449
Payment of awards:
Shares of UGI Common Stock issued		17,545		—		58,376
Cash paid	$	0.2	$	—	$	0.8

During Fiscal 2011, Fiscal 2010 and Fiscal 2009, we granted UGI Unit awards representing 285,470, 231,710 and 269,017 shares, respectively, having weighted-average grant date fair values per Unit of $34.78, $22.69 and $27.26, respectively.

As of September 30, 2011, there was a total of approximately $6.6 of unrecognized compensation cost associated with 900,283 UGI Unit awards outstanding that is expected to be recognized over a weighted-average period of 1.9 years. The total fair values of UGI Units that vested during Fiscal 2011, Fiscal 2010 and Fiscal 2009 were $6.8, $5.0 and $7.6, respectively. As of September 30, 2011 and 2010, total liabilities of $6.0 and $8.7, respectively, associated with UGI Unit awards are reflected in “Employee compensation and benefits accrued” and “Other noncurrent liabilities” in the Consolidated Balance Sheets.

At September 30, 2011, 2,618,351 shares of Common Stock were available for future grants under the OECP, of which up to 1,437,297 may be issued pursuant to future grants other than stock options or SARs.

AmeriGas Partners Equity-Based Compensation Plans and Awards. Under the AmeriGas Propane, Inc. 2010 Long-Term Incentive Plan on Behalf of AmeriGas Partners, L.P. (“2010 Propane Plan”), the General Partner may award to employees and non-employee directors grants of Common Units, performance units, options, phantom units, unit appreciation rights and other Common Unit-based awards. The total aggregate number of Common Units that may be issued under the Plan is 2,800,000. The exercise price for options may not be less than the fair market value on the date of grant. Awards granted under the 2010 Propane Plan may vest immediately or ratably over a period of years, and options can be exercised no later than ten years from the grant date. In addition, the 2010 Propane Plan provides that Common Unit-based awards may also provide for the crediting of Common Unit distribution equivalents to participants’ accounts.

The 2010 Propane Plan succeeded the AmeriGas Propane, Inc. 2000 Long-Term Incentive Plan (“2000 Propane Plan”) which expired on December 31, 2009, and replaced the AmeriGas Propane, Inc. Discretionary Long-Term Incentive Plan for Non-Executive Key Employees (“Nonexecutive Propane Plan”). Under the 2000 Propane Plan, the General Partner could award to key employees the right to receive Common Units (comprising performance units), or cash equivalent to the fair market value of such Common Units. In addition, the 2000 Propane Plan authorizes the crediting of Common Unit distribution equivalents to participants’ accounts. Under the Nonexecutive Propane Plan, the General Partner could grant awards to key employees who did not participate in the 2000 Propane Plan. Generally, awards under the Nonexecutive Propane Plan vest at the end of a three-year period and are paid in Common Units and cash. No additional grants will be made under the 2000 Propane Plan and the Nonexecutive Propane Plan.

Recipients of performance unit awards under the 2010 Propane Plan and the 2000 Propane Plan (“AmeriGas Performance Units”) are awarded a target number of AmeriGas Performance Units. The number of AmeriGas Performance Units ultimately paid at the end of the performance period (generally three years) may be higher or lower than the target amount based upon AmeriGas Partners’ Total Unitholder Return (“TUR”) percentile rank relative to entities in a peer group. Percentile rankings and payout percentages are generally the same as those used for the UGI Performance Unit awards. Any Common Unit distribution equivalents earned are paid in cash. Generally, except in the event of retirement, death or disability, each grant, unless paid, will terminate when the participant ceases to be employed by the General Partner. There are certain change of control and retirement eligibility conditions that, if met, generally result in accelerated vesting or elimination of further service requirements.

Under GAAP, AmeriGas Performance Units are equity awards with a market-based condition which, if settled in Common Units, results in the recognition of compensation cost over the requisite employee service period regardless of whether the market-based condition is satisfied. The fair values of AmeriGas Performance Units are estimated using a Monte Carlo valuation model. The fair value associated with the target award and the award above the target, if any, which will be paid in Common Units, is accounted for as equity and the fair value of all Common Unit distribution equivalents, which will be paid in cash, is accounted for as a liability. The expected term of the AmeriGas Performance Unit awards is three years based on the performance period. Expected volatility is based on the historical volatility of Common Units over a three-year period. The risk-free interest rate is based on the rates on U.S. Treasury bonds at the time of grant. Volatility for all limited partnerships in the peer group is based on historical volatility.

The following table summarizes the weighted-average assumptions used to determine the fair value of AmeriGas Performance Unit awards and related compensation costs:

	Grants Awarded in Fiscal
	2011			2010			2009
Risk-free rate		1.0	%		1.7	%		1.0	%
Expected life	3 years			3 years			3 years
Expected volatility		34.6	%		35.0	%		32.0	%
Dividend yield		5.8	%		6.8	%		9.1	%

The General Partner granted awards under the 2010 Propane Plan representing 49,287, 57,750 and 60,200 Common Units in Fiscal 2011, Fiscal 2010 and Fiscal 2009, respectively, having weighted-average grant date fair values per Common Unit subject to award of $53.19, $41.39 and $31.94, respectively. At September 30, 2011, 2,747,263 Common Units were available for future award grants under the 2010 Propane Plan.

The following table summarizes AmeriGas Common Unit-based award activity for Fiscal 2011:

	Total					Vested					Non-Vested
	Number of					Number of					Number of
	AmeriGas					AmeriGas					AmeriGas
	Partners			Weighted		Partners			Weighted		Partners			Weighted
	Common			Average		Common			Average		Common			Average
	Units			Grant Date		Units			Grant Date		Units			Grant Date
	Subject			Fair Value		Subject			Fair Value		Subject			Fair Value
	to Award			(per Unit)		to Award			(per Unit)		to Award			(per Unit)
September 30, 2010		146,600		$	37.05		53,851		$	37.14		92,749		$	37.00
Granted		49,287		$	53.19		—		$	—		49,287		$	53.19
Forfeited		(2,967	)	$	35.41		—		$	—		(2,967	)	$	35.41
Vested		—		$	—		46,351		$	39.88		(46,351	)	$	39.88
Awards paid		(37,564	)	$	38.75		(37,564	)	$	38.75		—		$	—
September 30, 2011		155,356		$	41.79		62,638		$	38.20		92,718		$	44.22

During Fiscal 2011, Fiscal 2010 and Fiscal 2009, the Partnership paid AmeriGas Common Unit-based awards in Common Units and cash as follows:

	2011		2010		2009
Number of Common Units subject to original Awards granted		41,064		49,650		38,350
Fiscal year granted		2008		2007		2006
Payment of Awards:
AmeriGas Partners Common Units issued		35,787		42,121		36,437
Cash paid	$	1.2	$	1.2	$	0.9

As of September 30, 2011, there was a total of approximately $2.6 of unrecognized compensation cost associated with 155,356 Common Units subject to award that is expected to be recognized over a weighted-average period of 1.8 years. The total fair value of Common Unit-based awards that vested during Fiscal 2011, Fiscal 2010 and Fiscal 2009 was $2.0, $2.0 and $1.6, respectively. As of September 30, 2011 and 2010, total liabilities of $1.2 and $1.3 associated with Common Unit-based awards are reflected in “Employee compensation and benefits accrued” and “Other noncurrent liabilities” in the Consolidated Balance Sheets.