þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Pennsylvania (State or other jurisdiction of incorporation or organization) |
23-2668356 (I.R.S. Employer Identification No.) |
PAGES | ||||||||
Part I Financial Information |
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Item 1. Financial Statements (unaudited) |
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1 | ||||||||
2 | ||||||||
3 | ||||||||
4 - 16 | ||||||||
17 - 26 | ||||||||
26 - 28 | ||||||||
29 | ||||||||
30 | ||||||||
30 | ||||||||
31 | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32 |
- i -
December 31, | September 30, | December 31, | ||||||||||
2007 | 2007 | 2006 | ||||||||||
ASSETS |
||||||||||||
Current assets |
||||||||||||
Cash and cash equivalents |
$ | 212.3 | $ | 251.8 | $ | 124.4 | ||||||
Restricted cash |
19.7 | 12.8 | 25.1 | |||||||||
Short-term investments (at cost, which approximates fair value) |
| | 4.2 | |||||||||
Accounts receivable (less allowances for doubtful accounts of
$36.3, $37.7 and $38.6, respectively) |
903.1 | 459.8 | 645.0 | |||||||||
Accrued utility revenues |
82.1 | 17.9 | 58.1 | |||||||||
Inventories |
393.6 | 359.5 | 340.8 | |||||||||
Deferred income taxes |
17.3 | 9.6 | 52.1 | |||||||||
Income taxes recoverable |
| 7.8 | | |||||||||
Utility regulatory assets |
14.6 | 14.8 | | |||||||||
Derivative financial instruments |
36.9 | 20.3 | 12.0 | |||||||||
Prepaid expenses and other current assets |
17.9 | 19.3 | 10.4 | |||||||||
Total current assets |
1,697.5 | 1,173.6 | 1,272.1 | |||||||||
Property, plant and equipment, at cost (less accumulated depreciation and
amortization of $1,416.3, $1,387.2, and $1,284.2, respectively) |
2,419.0 | 2,397.4 | 2,249.2 | |||||||||
Goodwill |
1,513.6 | 1,498.8 | 1,443.1 | |||||||||
Intangible assets (less accumulated amortization of $90.2, $84.2 and $67.7, respectively) |
171.7 | 173.1 | 164.6 | |||||||||
Utility regulatory assets |
90.6 | 89.0 | 73.8 | |||||||||
Investments in equity investees |
66.0 | 63.9 | 60.5 | |||||||||
Other assets |
109.7 | 106.9 | 113.8 | |||||||||
Total assets |
$ | 6,068.1 | $ | 5,502.7 | $ | 5,377.1 | ||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||
Current liabilities |
||||||||||||
Current maturities of long-term debt |
$ | 14.4 | $ | 14.7 | $ | 32.0 | ||||||
UGI Utilities bank loans |
257.0 | 190.0 | 250.0 | |||||||||
AmeriGas Propane bank loans |
67.0 | | | |||||||||
Other bank loans |
9.7 | 8.9 | 9.4 | |||||||||
Accounts payable |
714.1 | 420.8 | 524.8 | |||||||||
Other current liabilities |
415.8 | 423.1 | 391.6 | |||||||||
Total current liabilities |
1,478.0 | 1,057.5 | 1,207.8 | |||||||||
Long-term debt |
2,052.5 | 2,038.8 | 1,986.3 | |||||||||
Deferred income taxes |
522.4 | 506.4 | 505.9 | |||||||||
Deferred investment tax credits |
6.3 | 6.4 | 6.7 | |||||||||
Other noncurrent liabilities |
391.9 | 379.5 | 360.1 | |||||||||
Total liabilities |
4,451.1 | 3,988.6 | 4,066.8 | |||||||||
Commitments and contingencies (note 6) |
||||||||||||
Minority interests, principally in AmeriGas Partners |
213.7 | 192.2 | 152.3 | |||||||||
Common Stockholders Equity |
||||||||||||
Common Stock, without par value (authorized - 300,000,000 shares;
issued - 115,152,994 shares) |
833.9 | 831.6 | 810.8 | |||||||||
Retained earnings |
556.7 | 497.5 | 413.1 | |||||||||
Accumulated other comprehensive income |
77.2 | 57.7 | 5.0 | |||||||||
1,467.8 | 1,386.8 | 1,228.9 | ||||||||||
Treasury stock, at cost |
(64.5 | ) | (64.9 | ) | (70.9 | ) | ||||||
Total common stockholders equity |
1,403.3 | 1,321.9 | 1,158.0 | |||||||||
Total liabilities and stockholders equity |
$ | 6,068.1 | $ | 5,502.7 | $ | 5,377.1 | ||||||
- 1 -
Three Months Ended | ||||||||
December 31, | ||||||||
2007 | 2006 | |||||||
Revenues |
$ | 1,764.7 | $ | 1,463.2 | ||||
Costs and expenses: |
||||||||
Cost of sales |
1,242.0 | 994.4 | ||||||
Operating and administrative expenses |
286.7 | 261.2 | ||||||
Utility taxes other than income taxes |
4.5 | 4.6 | ||||||
Depreciation and amortization |
44.9 | 41.7 | ||||||
Other income, net |
(9.6 | ) | (6.0 | ) | ||||
1,568.5 | 1,295.9 | |||||||
Operating income |
196.2 | 167.3 | ||||||
Loss from equity investees |
(0.7 | ) | | |||||
Interest expense |
(36.1 | ) | (36.0 | ) | ||||
Income before income taxes and minority interests |
159.4 | 131.3 | ||||||
Income taxes |
(48.5 | ) | (38.1 | ) | ||||
Minority interests, principally in AmeriGas Partners |
(30.9 | ) | (31.3 | ) | ||||
Net income |
$ | 80.0 | $ | 61.9 | ||||
Earnings Per Common Share: |
||||||||
Basic |
$ | 0.75 | $ | 0.58 | ||||
Diluted |
$ | 0.74 | $ | 0.58 | ||||
Average common shares outstanding (millions): |
||||||||
Basic |
106.981 | 105.930 | ||||||
Diluted |
108.318 | 107.573 | ||||||
Dividends declared per common share |
$ | 0.1850 | $ | 0.1763 | ||||
- 2 -
Three Months Ended | ||||||||
December 31, | ||||||||
2007 | 2006 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net income |
$ | 80.0 | $ | 61.9 | ||||
Reconcile to
net cash from operating activities: |
||||||||
Depreciation and amortization |
44.9 | 41.7 | ||||||
Minority
interests, principally in AmeriGas Partners |
30.9 | 31.3 | ||||||
Deferred income taxes, net |
8.7 | 1.7 | ||||||
Other, net |
13.3 | 16.2 | ||||||
Net change in: |
||||||||
Accounts receivable and accrued utility revenues |
(511.4 | ) | (301.2 | ) | ||||
Inventories |
(33.3 | ) | 1.1 | |||||
Deferred fuel costs |
2.6 | (0.3 | ) | |||||
Accounts payable |
289.1 | 147.1 | ||||||
Other current assets and liabilities |
(7.4 | ) | 0.4 | |||||
Net cash used by operating activities |
(82.6 | ) | (0.1 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Expenditures for property, plant and equipment |
(51.8 | ) | (53.8 | ) | ||||
Acquisitions of businesses, net of cash acquired |
1.2 | (0.1 | ) | |||||
Net proceeds from disposals of assets |
3.9 | 1.8 | ||||||
Increase in restricted cash |
(6.9 | ) | (10.9 | ) | ||||
Other, net |
(2.1 | ) | (3.6 | ) | ||||
Net cash used by investing activities |
(55.7 | ) | (66.6 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Dividends on UGI Common Stock |
(19.7 | ) | (18.7 | ) | ||||
Distributions on AmeriGas Partners publicly held Common Units |
(19.7 | ) | (18.7 | ) | ||||
Issuances of debt |
| 0.1 | ||||||
Repayments of debt |
(0.8 | ) | (1.1 | ) | ||||
Increase in UGI Utilities bank loans |
67.0 | 34.0 | ||||||
Increase in AmeriGas Propane bank loans |
67.0 | | ||||||
Other bank loans increase (decrease) |
0.6 | (0.4 | ) | |||||
Issuances of UGI Common Stock |
1.6 | 5.8 | ||||||
Other |
| 1.5 | ||||||
Net cash provided by financing activities |
96.0 | 2.5 | ||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH |
2.8 | 2.4 | ||||||
Cash and cash equivalents decrease |
$ | (39.5 | ) | $ | (61.8 | ) | ||
Cash and cash equivalents: |
||||||||
End of period |
$ | 212.3 | $ | 124.4 | ||||
Beginning of period |
251.8 | 186.2 | ||||||
Decrease |
$ | (39.5 | ) | $ | (61.8 | ) | ||
- 3 -
1. | Basis of Presentation |
|
UGI Corporation (UGI) is a holding company that, through subsidiaries and joint-venture
affiliates, distributes and markets energy products and related services. In the United
States, we own and operate (1) a retail propane distribution business; (2) natural gas and
electric distribution utilities; (3) electricity generation facilities; and (4) energy
marketing and related businesses. Internationally, we distribute liquefied petroleum gases
(LPG) in France, central and eastern Europe and China. We refer to UGI and its
consolidated subsidiaries collectively as the Company or we. |
||
We conduct a national propane distribution business through AmeriGas Partners, L.P.
(AmeriGas Partners) and its principal operating subsidiaries AmeriGas Propane, L.P.
(AmeriGas OLP) and AmeriGas OLPs subsidiary, AmeriGas Eagle Propane, L.P. (Eagle OLP).
AmeriGas Partners, AmeriGas OLP and Eagle OLP are Delaware limited partnerships. UGIs
wholly owned second-tier subsidiary AmeriGas Propane, Inc. (the General Partner) serves as
the general partner of AmeriGas Partners and AmeriGas OLP. AmeriGas OLP and Eagle OLP
(collectively referred to as the Operating Partnerships) comprise the largest retail
propane distribution business in the United States serving residential, commercial,
industrial, motor fuel and agricultural customers from locations in 46 states. We refer to
AmeriGas Partners and its subsidiaries together as the Partnership and the General Partner
and its subsidiaries, including the Partnership, as AmeriGas Propane. At December 31,
2007, the General Partner and its wholly owned subsidiary Petrolane Incorporated
(Petrolane) collectively held a 1% general partner interest and 42.9% limited partner
interest in AmeriGas Partners, and an effective 44.5% ownership interest in AmeriGas OLP and
Eagle OLP. Our limited partnership interest in AmeriGas Partners comprises 24,691,209
AmeriGas Partners Common Units (Common Units). The remaining 56.1% interest in AmeriGas
Partners comprises 32,301,993 publicly held Common Units representing limited partner
interests. |
||
Our wholly owned subsidiary UGI Enterprises, Inc. (Enterprises) through subsidiaries (1)
conducts an LPG distribution business in France; (2) conducts LPG distribution businesses
and participates in an LPG joint-venture business, Zentraleuropa LPG Holding (ZLH), in
central and eastern Europe (collectively, Flaga); and (3) participates in an LPG
joint-venture business in the Nantong region of China. Our LPG distribution business in
France is conducted through Antargaz, a subsidiary of AGZ Holding (AGZ), and its operating
subsidiaries (collectively, Antargaz). We refer to our foreign operations collectively as
International Propane. |
||
Our natural gas and electric distribution utility businesses are conducted through our
wholly owned subsidiary, UGI Utilities, Inc. and its subsidiary, UGI Penn Natural Gas, Inc.
(UGIPNG). UGI Utilities, Inc. owns and operates (1) natural gas distribution utilities in
eastern and northeastern Pennsylvania (UGI Gas and PNG Gas, respectively) and (2) an
electric distribution utility in northeastern Pennsylvania (Electric Utility). UGI Gas and
PNG Gas (collectively, Gas Utility) and Electric Utility are subject to regulation by the
Pennsylvania Public Utility Commission (PUC). The term UGI Utilities is used as an
abbreviated reference to UGI Utilities, Inc. or UGI Utilities, Inc. and its subsidiaries
including UGIPNG. |
- 4 -
Through other subsidiaries, Enterprises also conducts an energy marketing business primarily
in the eastern United States (collectively, Energy Services). Energy Services wholly
owned subsidiary, UGI Development Company (UGID), owns and operates a 48-megawatt
coal-fired electric generation station located in northeastern Pennsylvania and owns an
approximate 6% interest in a 1,711-megawatt coal-fired electric generation station located
in western Pennsylvania. In addition, Energy Services wholly owned subsidiary UGI Asset
Management, Inc., through its subsidiary Atlantic Energy, Inc. (collectively, Asset
Management) owns a propane storage terminal located in Chesapeake, Virginia. Through other
Enterprises and UGI Utilities subsidiaries, we own and operate heating, ventilation,
air-conditioning, refrigeration and electrical contracting services businesses in the Middle
Atlantic states (HVAC/R). |
||
Our condensed consolidated financial statements include the accounts of UGI and its
controlled subsidiary companies, which, except for the Partnership, are majority owned, and
are together referred to as we or the Company. We eliminate all significant
intercompany accounts and transactions when we consolidate. We report the publics limited
partner interests in the Partnership and the outside ownership interest in a subsidiary of
Antargaz as minority interests. Entities in which we own 50 percent or less and in which we
exercise significant influence over operating and financial policies are accounted for by
the equity method. |
||
The accompanying condensed consolidated financial statements are unaudited and have been
prepared in accordance with the rules and regulations of the U.S. Securities and Exchange
Commission (SEC). They include all adjustments which we consider necessary for a fair
statement of the results for the interim periods presented. Such adjustments consisted only
of normal recurring items unless otherwise disclosed. The September 30,
2007 condensed consolidated balance sheet data was derived from audited financial statements
but does not include all disclosures required by accounting principles generally accepted in
the United States of America. These financial statements should be read in conjunction with
the financial statements and related notes included in our Annual Report on Form 10-K for
the year ended September 30, 2007 (Companys 2007 Annual Report). Due to the seasonal
nature of our businesses, the results of operations for interim periods are not necessarily
indicative of the results to be expected for a full year. |
||
Restricted Cash. Restricted cash represents those cash balances in our natural gas and
electricity futures brokerage accounts which are restricted from withdrawal. |
||
Earnings Per Common Share. Basic earnings per share reflect the weighted-average number of
common shares outstanding. Diluted earnings per share include the effects of dilutive stock
options and common stock awards. |
- 5 -
Shares used in computing basic and diluted earnings per share are as follows: |
Three Months Ended | ||||||||
December 31, | ||||||||
2007 | 2006 | |||||||
Denominator (millions of shares): |
||||||||
Average common shares
outstanding for basic computation |
106.981 | 105.930 | ||||||
Incremental shares issuable for stock
options and awards |
1.337 | 1.643 | ||||||
Average common shares outstanding for
diluted computation |
108.318 | 107.573 | ||||||
Three Months Ended | ||||||||
December 31, | ||||||||
2007 | 2006 | |||||||
Net income |
$ | 80.0 | $ | 61.9 | ||||
Other comprehensive income |
19.5 | 8.8 | ||||||
Comprehensive income |
$ | 99.5 | $ | 70.7 | ||||
- 6 -
- 7 -
2. | Intangible Assets |
|
The Companys intangible assets comprise the following: |
December 31, | September 30, | December 31, | ||||||||||
2007 | 2007 | 2006 | ||||||||||
Goodwill (not subject to amortization) |
$ | 1,513.6 | $ | 1,498.8 | $ | 1,443.1 | ||||||
Other intangible assets: |
||||||||||||
Customer relationships, noncompete
agreements and other |
$ | 212.3 | $ | 208.9 | $ | 187.4 | ||||||
Trademark (not subject to amortization) |
49.6 | 48.4 | 44.9 | |||||||||
Gross carrying amount |
261.9 | 257.3 | 232.3 | |||||||||
Accumulated amortization |
(90.2 | ) | (84.2 | ) | (67.7 | ) | ||||||
Net carrying amount |
$ | 171.7 | $ | 173.1 | $ | 164.6 | ||||||
The increases in goodwill and other intangible assets during the three months ended December
31, 2007 principally reflects the effects of foreign currency translation. Amortization
expense of intangible assets was $4.6 and $4.1 for the three months ended December 31, 2007
and 2006, respectively. No amortization is included in cost of sales in the Condensed
Consolidated Statements of Income. Our expected aggregate amortization expense of intangible
assets for the next five fiscal years is as follows: fiscal 2008 $17.6; fiscal 2009 -
$16.9; fiscal 2010 $15.4; fiscal 2011 $14.8; fiscal 2012 $14.7. |
- 8 -
3. | Segment Information |
|
We have organized our business units into six reportable segments generally based upon
products sold, geographic location (domestic or international) or regulatory environment.
Our reportable segments are: (1) AmeriGas Propane; (2) an international LPG segment
comprising Antargaz; (3) an international LPG segment comprising Flaga and our international
propane equity investments (Other); (4) Gas Utility; (5) Electric Utility; and (6) Energy
Services. We refer to both international segments collectively as International Propane. |
||
The accounting policies of the six segments disclosed are the same as those described in
Note 1, Organization and Significant Accounting Policies, in the Companys 2007 Annual
Report. We evaluate AmeriGas Propanes performance principally based upon the Partnerships
earnings before interest expense, income taxes, depreciation and amortization (Partnership
EBITDA). Although we use Partnership EBITDA to evaluate AmeriGas Propanes 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
accounting principles generally accepted in the United States of America. The Companys
definition of Partnership EBITDA may be different from that used by other companies. We
evaluate the performance of our International Propane, Gas Utility, Electric Utility and
Energy Services segments principally based upon their income before
income taxes.
|
- 9 -
Reportable Segments | ||||||||||||||||||||||||||||||||||||
AmeriGas | Gas | Electric | Energy | International Propane | Corporate | |||||||||||||||||||||||||||||||
Total | Elims. | Propane | Utility | Utility | Services | Antargaz | Other (a) | & Other (b) | ||||||||||||||||||||||||||||
Revenues |
$ | 1,764.7 | $ | (58.7 | ) | $ | 748.2 | $ | 326.7 | $ | 31.9 | $ | 365.3 | $ | 313.1 | $ | 15.3 | $ | 22.9 | |||||||||||||||||
Cost of sales |
$ | 1,242.0 | $ | (57.5 | ) | $ | 506.3 | $ | 236.8 | $ | 17.7 | $ | 331.4 | $ | 186.1 | $ | 8.7 | $ | 12.5 | |||||||||||||||||
Segment profit: |
||||||||||||||||||||||||||||||||||||
Operating income |
$ | 196.2 | $ | (0.2 | ) | $ | 74.0 | $ | 50.1 | $ | 7.4 | $ | 23.7 | $ | 37.7 | $ | 1.4 | $ | 2.1 | |||||||||||||||||
Loss from equity investees |
(0.7 | ) | | | | | | (0.2 | ) | (0.5 | ) | | ||||||||||||||||||||||||
Interest expense |
(36.1 | ) | | (18.2 | ) | (10.4 | ) | (0.5 | ) | | (6.3 | ) | (0.7 | ) | | |||||||||||||||||||||
Minority interests |
(30.9 | ) | | (30.5 | ) | | | | (0.4 | ) | | | ||||||||||||||||||||||||
Income before income taxes |
$ | 128.5 | $ | (0.2 | ) | $ | 25.3 | $ | 39.7 | $ | 6.9 | $ | 23.7 | $ | 30.8 | $ | 0.2 | $ | 2.1 | |||||||||||||||||
Depreciation and amortization |
$ | 44.9 | $ | (0.1 | ) | $ | 19.8 | $ | 9.3 | $ | 0.9 | $ | 1.7 | $ | 11.9 | $ | 1.0 | $ | 0.4 | |||||||||||||||||
Partnership EBITDA (c) |
$ | 93.1 | ||||||||||||||||||||||||||||||||||
Segment assets (at period end) |
$ | 6,068.1 | $ | (349.9 | ) | $ | 1,866.3 | $ | 1,655.1 | $ | 110.7 | $ | 357.2 | $ | 1,799.5 | $ | 207.5 | $ | 421.7 | |||||||||||||||||
Investments in equity investees (at period end) |
$ | 66.0 | $ | | $ | | $ | | $ | | $ | | $ | | $ | 66.0 | $ | | ||||||||||||||||||
Goodwill (at period end) |
$ | 1,513.6 | $ | (4.0 | ) | $ | 643.8 | $ | 162.3 | $ | | $ | 11.8 | $ | 645.3 | $ | 47.4 | $ | 7.0 | |||||||||||||||||
Reportable Segments | ||||||||||||||||||||||||||||||||||||
AmeriGas | Gas | Electric | Energy | International Propane | Corporate | |||||||||||||||||||||||||||||||
Total | Elims. | Propane | Utility | Utility | Services | Antargaz | Other (a) | & Other (b) | ||||||||||||||||||||||||||||
Revenues |
$ | 1,463.2 | $ | (42.6 | ) | $ | 616.6 | $ | 274.4 | $ | 24.9 | $ | 344.2 | $ | 215.3 | $ | 11.1 | $ | 19.3 | |||||||||||||||||
Cost of sales |
$ | 994.4 | $ | (41.6 | ) | $ | 388.7 | $ | 193.8 | $ | 12.2 | $ | 318.7 | $ | 105.0 | $ | 5.9 | $ | 11.7 | |||||||||||||||||
Segment profit: |
||||||||||||||||||||||||||||||||||||
Operating income (loss) |
$ | 167.3 | $ | (0.4 | ) | $ | 75.3 | $ | 38.2 | $ | 6.2 | $ | 15.2 | $ | 33.0 | $ | 0.1 | $ | (0.3 | ) | ||||||||||||||||
Interest expense |
(36.0 | ) | | (18.0 | ) | (10.8 | ) | (0.7 | ) | | (5.6 | ) | (0.5 | ) | (0.4 | ) | ||||||||||||||||||||
Minority interests |
(31.3 | ) | | (31.3 | ) | | | | | | | |||||||||||||||||||||||||
Income (loss) before income taxes |
$ | 100.0 | $ | (0.4 | ) | $ | 26.0 | $ | 27.4 | $ | 5.5 | $ | 15.2 | $ | 27.4 | $ | (0.4 | ) | $ | (0.7 | ) | |||||||||||||||
Depreciation and amortization |
$ | 41.7 | $ | (0.1 | ) | $ | 18.6 | $ | 9.3 | $ | 0.9 | $ | 1.8 | $ | 10.1 | $ | 0.8 | $ | 0.3 | |||||||||||||||||
Partnership EBITDA (c) |
$ | 93.1 | ||||||||||||||||||||||||||||||||||
Segment
assets (at period end) |
$ | 5,377.1 | $ | (345.8 | ) | $ | 1,657.0 | $ | 1,603.2 | $ | 106.5 | $ | 300.9 | $ | 1,498.4 | $ | 192.5 | $ | 364.4 | |||||||||||||||||
Investments in equity investees (at period end) |
$ | 60.5 | $ | | $ | | $ | | $ | | $ | | $ | | $ | 60.5 | $ | | ||||||||||||||||||
Goodwill (at period end) |
$ | 1,443.1 | $ | (4.0 | ) | $ | 619.1 | $ | 182.9 | $ | | $ | 11.8 | $ | 583.6 | $ | 42.9 | $ | 6.8 | |||||||||||||||||
(a) | International Propane-Other principally comprises Flaga, including its
central and eastern European joint-venture business ZLH, and our joint-venture
business in China. |
|
(b) | Corporate & Other results principally comprise UGI Enterprises HVAC/R
operations, net expenses of UGIs captive general liability insurance company
and UGI Corporations unallocated corporate and general expenses, interest
income and, beginning January 1, 2007, UGI Utilities HVAC operations.
Corporate & Other assets principally comprise cash, short-term investments and
an intercompany loan. The intercompany interest associated with the
intercompany loan is removed in the segment presentation. |
|
(c) | The following table provides a reconciliation of Partnership EBITDA to
AmeriGas Propane operating income: |
Three months ended December 31, | 2007 | 2006 | ||||||
Partnership EBITDA |
$ | 93.1 | $ | 93.1 | ||||
Depreciation and amortization |
(19.8 | ) | (18.6 | ) | ||||
Minority interests (i) |
0.7 | 0.8 | ||||||
Operating income |
$ | 74.0 | $ | 75.3 | ||||
(i) | Principally represents the General Partners 1.01%
interest in AmeriGas OLP. |
- 10 -
4. | Energy Services Accounts Receivable Securitization Facility |
|
Energy Services has a $200 receivables purchase facility (Receivables Facility) with an
issuer of receivables-backed commercial paper expiring in April 2009, although the
Receivables Facility may terminate prior to such date due to the terminations of commitments
of the Receivables Facility back-up purchasers. Under the Receivables Facility, Energy
Services transfers, on an ongoing basis and without recourse, its trade accounts receivable
to its wholly owned, special purpose subsidiary, Energy Services Funding Corporation
(ESFC), which is consolidated for financial statement purposes. ESFC, in turn, has sold,
and subject to certain conditions, may from time to time sell, an undivided interest in some
or all of the receivables to a commercial paper conduit of a major bank. ESFC was created
and has been structured to isolate its assets from creditors of Energy Services and its
affiliates, including UGI. This two-step transaction is accounted for as a sale of
receivables following the provisions of SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities. Energy Services
continues to service, administer and collect trade receivables on behalf of the commercial
paper issuer and ESFC. |
||
During the three months ended December 31, 2007 and 2006, Energy Services sold trade
receivables totaling $315.1 and $299.7, respectively, to ESFC. During the three months
ended December 31, 2007 and 2006, ESFC sold an aggregate $51.4 and $150.0, respectively, of
undivided interests in its trade receivables to the commercial paper conduit. At December
31, 2007, the outstanding balance of ESFC trade receivables was $130.9 which is net of $2.9
that was sold to the commercial paper conduit and removed from the balance sheet. At
December 31, 2006, the outstanding balance of ESFC trade receivables was $84.7 which is net
of $49.5 that was sold to the commercial paper conduit and removed from the balance sheet. |
||
In addition, a major bank has committed to issue up to $50 of standby letters of credit,
secured by cash or marketable securities (LC Facility) to Energy Services. At December
31, 2007, there were no letters of credit outstanding. Energy Services expects to fund the
collateral requirements with borrowings under its Receivables Facility. The LC Facility is
currently scheduled to expire in April 2008. |
||
5. | Defined Benefit Pension and Other Postretirement Plans |
|
We sponsor two defined benefit pension plans for employees of UGI, UGI Utilities, UGIPNG,
and certain of UGIs other wholly
owned subsidiaries (Pension Plans). We also provide postretirement health care benefits to
certain retirees and a limited number of active employees, and postretirement life insurance
benefits to nearly all domestic active and retired employees. In addition, Antargaz
employees are covered by certain defined benefit pension and postretirement plans. |
- 11 -
Net periodic pension expense and other postretirement benefit costs include the following
components: |
Other | ||||||||||||||||
Pension Benefits | Postretirement Benefits | |||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Service cost |
$ | 1.5 | $ | 1.6 | $ | 0.1 | $ | 0.1 | ||||||||
Interest cost |
4.9 | 4.7 | 0.3 | 0.3 | ||||||||||||
Expected return on assets |
(6.1 | ) | (5.9 | ) | (0.2 | ) | (0.2 | ) | ||||||||
Amortization of: |
||||||||||||||||
Transition obligation |
| | | 0.1 | ||||||||||||
Prior service cost (benefit) |
| 0.1 | (0.1 | ) | (0.1 | ) | ||||||||||
Actuarial loss |
| 0.3 | | 0.1 | ||||||||||||
Net benefit cost |
0.3 | 0.8 | 0.1 | 0.3 | ||||||||||||
Change in
regulatory assets and liabilities |
| | 0.8 | 0.7 | ||||||||||||
Net expense |
$ | 0.3 | $ | 0.8 | $ | 0.9 | $ | 1.0 | ||||||||
Pension Plans assets are held in trust and consist principally of equity and fixed income
mutual funds. The Company does not believe it will be required to make any contributions to
the Pension Plans during the year ending September 30, 2008 for ERISA funding purposes and
Antargaz does not expect to make any material contributions to fund its pension or other
postretirement benefits during fiscal 2008. Pursuant to orders previously issued by the
PUC, UGI Utilities has established a Voluntary Employees Beneficiary Association (VEBA)
trust to fund and pay UGI Gas and Electric Utilitys postretirement health care and life
insurance benefits referred to above by depositing into the VEBA the annual amount of
postretirement benefit costs determined under SFAS No. 106, Employers Accounting for
Postretirement Benefits Other Than Pensions. The difference between the annual amount
calculated and the amount included in UGI Gas and Electric Utilitys rates is deferred for
future recovery from, or refund to, ratepayers. Amounts contributed to the VEBA by UGI
Utilities were not material during the three months ended December 31, 2007, nor are they
expected to be material for the year ending September 30, 2008. |
||
We also sponsor unfunded and non-qualified supplemental executive retirement income plans.
We recorded pre-tax expense
for these plans of $0.6 for each of the three-month periods ended December 31, 2007 and
2006. |
||
6. | Commitments and Contingencies |
|
On August 21, 2001, AmeriGas Partners, through AmeriGas OLP, acquired the propane
distribution businesses of Columbia Energy Group (the 2001 Acquisition) pursuant to the
terms of a purchase agreement (the 2001 Acquisition Agreement) by and among Columbia
Energy Group (CEG), Columbia Propane Corporation (Columbia Propane), Columbia Propane,
L.P. (CPLP), CP Holdings, Inc. (CPH, and together with Columbia Propane and CPLP, the
Company Parties), AmeriGas Partners, AmeriGas OLP and the General Partner (together with
AmeriGas Partners and AmeriGas OLP, the Buyer Parties). As a result of the 2001
Acquisition, AmeriGas OLP acquired all of the stock of Columbia Propane and CPH and
substantially all of the partnership interests of CPLP. Under the terms of an earlier
acquisition agreement (the 1999 Acquisition Agreement), the Company Parties agreed to
indemnify the former general partners of National Propane Partners, L.P. (a predecessor
company of the Columbia Propane businesses) and an affiliate (collectively, National
General Partners) against certain income tax and other losses that they may sustain as a
result of the 1999 acquisition by CPLP of National Propane Partners, L.P. (the 1999
Acquisition) or the operation of the business after the 1999 Acquisition (National
Claims). At December 31, 2007, the potential amount payable under this indemnity by the
Company Parties was approximately $58.0. These indemnity obligations will expire on the date
that CPH acquires the remaining outstanding partnership interest of CPLP, which is expected
to occur on or after July 19, 2009. Under the terms of the 2001 Acquisition Agreement, CEG
agreed to indemnify the Buyer Parties and the Company Parties against any losses that they
sustain under the 1999 Acquisition Agreement and related agreements (Losses), including
National Claims, to the extent such claims are based on acts or omissions of CEG or the
Company Parties prior to the 2001 Acquisition. The Buyer Parties agreed to indemnify CEG
against Losses, including National Claims, to the extent such claims are based on acts or
omissions of the Buyer Parties or the Company Parties after the 2001 Acquisition. CEG and
the Buyer Parties have agreed to apportion certain losses resulting from National Claims to
the extent such losses result from the 2001 Acquisition itself. |
- 12 -
Samuel and Brenda Swiger and their son (the Swigers) sustained personal injuries and
property damage as a result of a fire that occurred when propane that leaked from an
underground line ignited. In July 1998, the Swigers filed a class action lawsuit
against AmeriGas Propane, L.P. (named incorrectly as UGI/AmeriGas, Inc.), in the Circuit
Court of Monongalia County, West Virginia, in which they sought to recover an unspecified
amount of compensatory and punitive damages and attorneys fees, for themselves and on
behalf of persons in West Virginia for whom the defendants had installed propane gas lines,
resulting from the defendants alleged failure to install underground propane lines at
depths required by applicable safety standards. In 2003, AmeriGas OLP settled the individual
personal injury and property damage claims of the Swigers. In 2004, the court granted the
plaintiffs motion to include customers acquired from Columbia Propane in August 2001 as
additional potential class members and the plaintiffs amended their complaint to name
additional parties pursuant to such ruling. Subsequently, in March 2005, AmeriGas OLP filed
a crossclaim against CEG, former owner of Columbia Propane, seeking indemnification for
conduct undertaken by Columbia Propane prior to AmeriGas OLPs acquisition. Class counsel
has indicated that the class is seeking compensatory damages in excess of $12 plus punitive
damages, civil penalties and attorneys fees. We believe we have good defenses to the claims
of the class members and intend to defend against the remaining claims in this lawsuit. |
||
The French tax authorities levy taxes on legal entities and individuals regularly operating
a business in France which are commonly referred to collectively as business tax. The
amount of business tax charged annually is generally dependent upon the value of certain of
the entitys tangible fixed assets. Changes in the French governments interpretation of
the tax laws or in the tax laws themselves could either adversely or favorably affect our
results of operations. |
||
From the late 1800s through the mid-1900s, UGI Utilities and its former subsidiaries owned
and operated a number of manufactured gas plants (MGPs) prior to the general availability
of natural gas. Some constituents of coal tars and other residues of the manufactured gas
process are today considered hazardous substances under the Superfund Law and may be present
on the sites of former MGPs. Between 1882 and 1953, UGI Utilities owned the stock of
subsidiary gas companies in Pennsylvania and elsewhere and also operated the businesses of
some gas companies under agreement. Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, UGI Utilities divested all of its utility operations other than
those which now constitute UGI Gas and Electric Utility by the early 1950s. At December 31,
2007, neither the Companys undiscounted amount nor its accrued liability for environmental
investigation and cleanup costs was material. |
- 13 -
UGI Utilities does not expect its costs for investigation and remediation of hazardous
substances at Pennsylvania MGP sites to be material to its results of operations because UGI
Gas is currently permitted to include in rates, through future base rate proceedings, a
five-year average of such prudently incurred remediation costs. In accordance with the terms
of the PNG base rate case order which became effective December 2, 2006, site-specific
environmental investigation and remediation costs associated with PNG Gas incurred prior to
December 2, 2006 are amortized as removal costs over five-year periods. Such costs incurred
after December 1, 2006 are expensed as incurred. |
||
As a result of the acquisition of PG Energy by UGI Utilities wholly-owned subsidiary,
UGIPNG, UGIPNG became party to a Multi-Site Remediation Consent Order and Agreement between
PG Energy and the Pennsylvania Department of Environmental Protection dated March 31, 2004
(Multi-Site Agreement). The Multi-Site Agreement requires UGIPNG to perform annually a
specified level of activities associated with environmental investigation and remediation
work at 11 currently owned properties on which MGP-related facilities were operated
(Properties). Under the Multi-Site Agreement, environmental expenditures, including costs
to perform work on the Properties, are capped at $1.1 in any calendar year. Costs related to
investigation and remediation of one property formerly owned by UGIPNG are also included in
this cap. The Multi-Site Agreement terminates in 2019 but may be terminated by either party
effective at the end of any two-year period beginning with the original effective date. |
||
UGI Utilities has been notified of several sites outside Pennsylvania on which private
parties allege MGPs were formerly owned or operated by it or owned or operated by its former
subsidiaries. Such parties are investigating the extent of environmental contamination or
performing environmental remediation. UGI Utilities is currently litigating four claims
against it relating to out-of-state sites. We accrue environmental investigation and cleanup
costs when it is probable that a liability exists and the amount or range of amounts can be
reasonably estimated. |
||
Management believes that under applicable law UGI Utilities should not be liable in those
instances in which a former subsidiary owned or operated an MGP. There could be, however,
significant future costs of an uncertain amount associated with environmental damage caused
by MGPs outside Pennsylvania that UGI Utilities directly operated, or that were owned or
operated by former subsidiaries of UGI Utilities if a court were to conclude that (1) the
subsidiarys separate corporate form should be disregarded or (2) UGI Utilities should be
considered to have been an operator because of its conduct with respect to its subsidiarys MGP. |
- 14 -
South Carolina Electric & Gas Company v. UGI Utilities, Inc. On September 22, 2006, South
Carolina Electric & Gas Company (SCE&G), a subsidiary of SCANA Corporation, filed a
lawsuit against UGI Utilities in the District Court of South Carolina seeking contribution
from UGI Utilities for past and future remediation costs related to the operations of a
former MGP located in Charleston, South Carolina. SCE&G asserts that the plant operated from
1855 to 1954 and alleges that UGI Utilities controlled operations of the plant from 1910 to
1926 and is liable for 47% of the costs associated with the site. SCE&G asserts that it has
spent approximately $22 in remediation costs and $26 in third-party claims relating to the
site and estimates that future remediation costs could be as high as $2.5. SCE&G further
asserts that it has received a demand from the United States Justice Department for natural
resource damages. UGI Utilities is defending the suit. |
||
City of Bangor, Maine v. Citizens Communications Company. In April 2003, Citizens
Communications Company (Citizens) served a complaint naming UGI Utilities as a third-party
defendant in a civil action pending in the United States District Court for the District of
Maine. In that action, the plaintiff, City of Bangor, Maine (City) sued Citizens to
recover environmental response costs associated with MGP wastes generated at a plant
allegedly operated by Citizens predecessors at a site on the Penobscot River. Citizens
subsequently joined UGI Utilities and ten other third-party defendants alleging that the
third-party defendants are responsible for an equitable share of costs Citizens may be
required to pay to the City for cleaning up tar deposits in the Penobscot River. Citizens
alleges that UGI Utilities and its predecessors owned and operated the plant from 1901 to
1928. Studies conducted by the City and Citizens suggest that it could cost up to $18 to
clean up the river. Citizens third-party claims have been stayed pending a resolution of
the Citys suit against Citizens, which was tried in September 2005. Maines Department of
Environmental Protection (DEP) informed UGI Utilities in March 2005 that it considers UGI
Utilities to be a potentially responsible party for costs incurred by the State of Maine
related to gas plant contaminants at this site. On June 27, 2006, the court issued an order
finding Citizens responsible for 60% of the cleanup costs. On February 14, 2007, Citizens
and the City entered into a settlement agreement pursuant to which Citizens agreed to pay
$7.6 in exchange for a release of its liabilities. UGI Utilities believes that it has good
defenses to any claim that the DEP may bring to recover its costs, and is defending the
Citizens suit. |
||
Consolidated Edison Company of New York v. UGI Utilities, Inc. On September 20, 2001,
Consolidated Edison Company of New York (ConEd) filed suit against UGI Utilities in the
United States District Court for the Southern District of New York, seeking contribution
from UGI Utilities for an allocated share of response costs associated with investigating
and assessing gas plant related contamination at former MGP sites in Westchester County, New
York. The complaint alleges that UGI Utilities owned and operated the MGPs prior to 1904.
The complaint also seeks a declaration that UGI Utilities is responsible for an allocated
percentage of future investigative and remedial costs at the sites. |
||
The trial court granted UGI Utilities motion for summary judgment and dismissed ConEds
complaint. The grant of summary judgment was entered April 1, 2004. ConEd appealed and on
September 9, 2005 a panel of the Second Circuit Court of Appeals affirmed in part and
reversed in part the decision of the trial court. The appellate panel affirmed the trial
courts decision dismissing claims that UGI Utilities was liable under CERCLA as an operator
of MGPs owned and operated by its former subsidiaries. The appellate panel reversed the
trial courts decision that UGI Utilities was released from liability at three sites where
UGI Utilities operated MGPs under lease. ConEd claims that the cost of remediation for the
three sites would be approximately $14. On October 7, 2005, UGI Utilities filed for
reconsideration of the panels order, which was denied by the Second Circuit Court of
Appeals on January 17, 2006. On April 14, 2006, Utilities filed a petition requesting that
the United States Supreme Court review the decision of the Second Circuit Court of Appeals.
On June 18, 2007, the United States Supreme Court denied UGI Utilities petition. The case
has now been remanded back to the trial court. UGI Utilities is defending the suit. |
- 15 -
Sag Harbor, New York Matter. By letter dated June 24, 2004, KeySpan Energy (KeySpan)
informed UGI Utilities that KeySpan has spent $2.3 and expects to spend another $11 to clean
up an MGP site it owns in Sag Harbor, New York. KeySpan believes that UGI Utilities is
responsible for approximately 50% of these costs as a result of UGI Utilities alleged
direct ownership and operation of the plant from 1885 to 1902. By letter dated June 6, 2006,
KeySpan reported that the New York Department of Environmental Conservation has approved a
remedy for the site that is estimated to cost approximately $10. KeySpan believes that the
cost could be as high as $20. UGI Utilities is in the process of reviewing the information
provided by KeySpan and is investigating this claim. |
||
Yankee Gas Services Company and Connecticut Light and Power Company v. UGI Utilities, Inc.
On September 11, 2006, UGI Utilities received a complaint filed by Yankee Gas Services
Company and Connecticut Light and Power Company, subsidiaries of Northeast Utilities,
(together the Northeast Companies) in the United States District Court for the District of
Connecticut seeking contribution from UGI Utilities for past and future remediation costs
related to MGP operations on thirteen sites owned by the Northeast Companies in nine cities
in the State of Connecticut. The Northeast Companies allege that UGI Utilities controlled
operations of the plants from 1883 to 1941. The Northeast Companies estimated that
remediation costs for all of the sites would total approximately $215 and asserted that UGI
Utilities is responsible for approximately $103 of this amount. Based on information
supplied by the Northeast Companies and UGI Utilities own investigation, UGI Utilities
believes that it may have operated one of the sites, Waterbury North, under lease for a
portion of its operating history. UGI Utilities is reviewing the Northeast Companies
estimate that remediation costs at Waterbury North could total $23. UGI Utilities is
defending the suit. |
||
In addition to these matters, there are other pending claims and legal actions arising in
the normal course of our businesses. We cannot predict with certainty the final results of
environmental and other matters. However, it is reasonably possible that some of them could
be resolved unfavorably to us and result in losses in excess of recorded amounts. We are
unable to estimate any possible losses in excess of recorded amounts. Although we currently
believe, after consultation with counsel, that damages or settlements, if any, recovered by
the plaintiffs in such claims or actions will not have a material adverse effect on our
financial position, damages or settlements could be material to our operating results or
cash flows in future periods depending on the nature and timing of future developments with
respect to these matters and the amounts of future operating results and cash flows. |
- 16 -
- 17 -
Three Months Ended | ||||||||
December 31, | ||||||||
2007 | 2006 | |||||||
(millions of dollars) | ||||||||
Net income (loss): |
||||||||
AmeriGas Propane (a) |
$ | 15.0 | $ | 15.4 | ||||
International Propane |
22.4 | 18.3 | ||||||
Gas Utility |
24.0 | 16.5 | ||||||
Electric Utility |
4.0 | 3.2 | ||||||
Energy Services |
13.9 | 9.0 | ||||||
Corporate & Other |
0.7 | (0.5 | ) | |||||
Total net income |
$ | 80.0 | $ | 61.9 | ||||
(a) | Amounts are net of minority interests in AmeriGas Partners, L.P. |
- 18 -
AmeriGas Propane: | Increase | |||||||||||||||
For the three months ended December 31, | 2007 | 2006 | (Decrease) | |||||||||||||
(Millions of dollars) | ||||||||||||||||
Revenues |
$ | 748.2 | $ | 616.6 | $ | 131.6 | 21.3 | % | ||||||||
Total margin (a) |
$ | 241.9 | $ | 227.9 | $ | 14.0 | 6.1 | % | ||||||||
Partnership EBITDA (b) |
$ | 93.1 | $ | 93.1 | $ | | 0.0 | % | ||||||||
Operating income |
$ | 74.0 | $ | 75.3 | $ | (1.3 | ) | (1.7 | )% | |||||||
Retail gallons sold (millions) |
279.1 | 282.9 | (3.8 | ) | (1.3 | )% | ||||||||||
Degree days % (warmer)
than normal (c) |
(7.2 | )% | (8.6 | )% | | |
(a) | Total margin represents total revenues less total cost of sales. |
|
(b) | Partnership EBITDA (earnings before interest expense, income taxes and depreciation and
amortization) 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 accounting principles generally accepted in the United States of America.
Management uses Partnership EBITDA as the primary measure of segment profitability for the
AmeriGas Propane segment (see Note 3 to the Condensed Consolidated Financial Statements). |
|
(c) | Deviation from average heating degree-days for the 30-year period 1971-2000 based upon
national weather statistics provided by the National Oceanic and Atmospheric Administration
(NOAA) for 335 airports in the United States, excluding Alaska. |
- 19 -
International Propane: | Increase | |||||||||||||||
For the three months ended December 31, | 2007 | 2006 | (Decrease) | |||||||||||||
(Millions of euros) | ||||||||||||||||
Revenues |
| 225.9 | | 174.0 | | 51.9 | 29.8 | % | ||||||||
Total margin (a) |
| 91.9 | | 88.8 | | 3.1 | 3.5 | % | ||||||||
Operating income |
| 26.8 | | 25.9 | | 0.9 | 3.5 | % | ||||||||
Income before income taxes |
| 21.3 | | 21.4 | | (0.1 | ) | (0.5 | )% | |||||||
(Millions of dollars) |
||||||||||||||||
Revenues |
$ | 328.4 | $ | 226.4 | $ | 102.0 | 45.1 | % | ||||||||
Total margin (a) |
$ | 133.6 | $ | 115.5 | $ | 18.1 | 15.7 | % | ||||||||
Operating income |
$ | 39.1 | $ | 33.1 | $ | 6.0 | 18.1 | % | ||||||||
Income before income taxes |
$ | 31.0 | $ | 27.0 | $ | 4.0 | 14.8 | % | ||||||||
Antargaz retail gallons sold |
98.1 | 80.2 | 17.9 | 22.3 | % | |||||||||||
Degree days % colder (warmer) than normal (b) |
6.3 | % | (21.7 | )% | | |
(a) | Total margin represents total revenues less total cost of sales. |
|
(b) | Deviation from average heating degree days for the 30-year period 1971-2000 at 34
locations in our French
service territory. |
- 20 -
Gas Utility: | ||||||||||||||||
For the three months ended December 31, | 2007 | 2006 | Increase | |||||||||||||
(Millions of dollars) | ||||||||||||||||
Revenues |
$ | 326.7 | $ | 274.4 | $ | 52.3 | 19.1 | % | ||||||||
Total margin (a) |
$ | 89.9 | $ | 80.6 | $ | 9.3 | 11.5 | % | ||||||||
Operating income |
$ | 50.1 | $ | 38.2 | $ | 11.9 | 31.2 | % | ||||||||
Income before income taxes |
$ | 39.7 | $ | 27.4 | $ | 12.3 | 44.9 | % | ||||||||
System throughput -
billions of cubic feet (bcf) |
39.5 | 33.4 | 6.1 | 18.3 | % | |||||||||||
Degree days
% (warmer) than normal (b) |
(6.3 | )% | (15.0 | )% | | |
(a) | Total margin represents total revenues less total cost of sales. |
|
(b) | Deviation from average heating degree days for the 30-year period 1975-2004 based upon
weather statistics provided by the National Oceanic and Atmospheric Administration (NOAA)
for airports located within Gas Utilitys service territory. |
- 21 -
Electric Utility: | ||||||||||||||||
For the three months ended December 31, | 2007 | 2006 | Increase | |||||||||||||
(Millions of dollars) | ||||||||||||||||
Revenues |
$ | 31.9 | $ | 24.9 | $ | 7.0 | 28.1 | % | ||||||||
Total margin (a) |
$ | 12.4 | $ | 11.4 | $ | 1.0 | 8.8 | % | ||||||||
Operating income |
$ | 7.4 | $ | 6.2 | $ | 1.2 | 19.4 | % | ||||||||
Income before income taxes |
$ | 6.9 | $ | 5.5 | $ | 1.4 | 25.5 | % | ||||||||
Distribution sales millions of
kilowatt hours (gwh) |
254.4 | 249.0 | 5.4 | 2.2 | % |
(a) | Total margin represents total revenues less total cost of sales and revenue-related taxes,
i.e. Electric Utility gross receipts taxes, of $1.8 million and $1.3 million during the
three-month periods ended December 31, 2007 and 2006, respectively. For financial statement
purposes, revenue-related taxes are included in Utility taxes other than income taxes on the
Condensed Consolidated Statements of Income. |
Energy Services: | ||||||||||||||||
For the three months ended December 31, | 2007 | 2006 | Increase | |||||||||||||
(Millions of dollars) | ||||||||||||||||
Revenues |
$ | 365.3 | $ | 344.2 | $ | 21.1 | 6.1 | % | ||||||||
Total margin (a) |
$ | 33.9 | $ | 25.5 | $ | 8.4 | 32.9 | % | ||||||||
Operating income |
$ | 23.7 | $ | 15.2 | $ | 8.5 | 55.9 | % | ||||||||
Income before income taxes |
$ | 23.7 | $ | 15.2 | $ | 8.5 | 55.9 | % |
(a) | Total margin represents total revenues less total cost of sales. |
- 22 -
- 23 -
- 24 -
- 25 -
- 26 -
- 27 -
Change in | ||||||||
(Millions of dollars) | Fair Value | Fair Value | ||||||
December 31, 2007: |
||||||||
Propane commodity price risk |
$ | 37.0 | $ | (15.6 | ) | |||
Natural gas commodity price risk |
0.1 | (8.8 | ) | |||||
Interest rate risk |
17.1 | (11.9 | ) | |||||
Foreign currency exchange rate risk |
(16.0 | ) | (24.8 | ) |
- 28 -
(a) | Evaluation of Disclosure Controls and Procedures |
|
The Companys management, with the participation of the Companys Chief Executive Officer
and Chief Financial Officer, evaluated the effectiveness of the Companys disclosure
controls and procedures as of the end of the period covered by this report. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the
Companys disclosure controls and procedures as of the end of the period covered by this
report were designed and functioning effectively to provide reasonable assurance that the
information required to be disclosed by the Company in reports filed under the Securities
Exchange Act of 1934, as amended, is (i) recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commissions rules and forms, and
(ii) accumulated and communicated to our management, including the Chief Executive Officer
and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. |
||
(b) | Change in Internal Control over Financial Reporting |
|
No change in the Companys internal control over financial reporting occurred during the
Companys most recent fiscal quarter that has materially affected, or is reasonably likely
to materially affect, the Companys internal control over financial reporting. |
- 29 -
Exhibit | ||||||||||
No. | Exhibit | Registrant | Filing | Exhibit | ||||||
3.1
|
Amendment No. 1, effective October 15, 2007, to the Third Amended and Restated Agreement of Limited Partnership of AmeriGas Partners, L.P., dated as of December 1, 2004 | AmeriGas Partners, L.P. | Form 8-K (10/15/07) | 3.1 | ||||||
31.1
|
Certification by the Chief Executive Officer relating to the Registrants Report on Form 10-Q for the quarter ended December 31, 2007, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||
31.2
|
Certification by the Chief Financial Officer relating to the Registrants Report on Form 10-Q for the quarter ended December 31, 2007, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||
32
|
Certification by the Chief Executive Officer and the Chief Financial Officer relating to the Registrants Report on Form 10-Q for the quarter ended December 31, 2007, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
- 30 -
UGI Corporation (Registrant) |
||||
Date: February 8, 2008 | By: | /s/ Peter Kelly | ||
Peter Kelly | ||||
Vice President-Finance and Chief Financial Officer | ||||
Date: February 8, 2008 | By: | /s/ Michael J. Cuzzolina | ||
Michael J. Cuzzolina | ||||
Vice President-Accounting and Financial Control and Chief Risk Officer |
- 31 -
31.1 | Certification by the Chief Executive Officer relating to the Registrants Report
on Form 10-Q for the quarter ended December 31, 2007, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002. |
|
31.2 | Certification by the Chief Financial Officer relating to the Registrants Report
on Form 10-Q for the quarter ended December 31, 2007, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002. |
|
32 | Certification by the Chief Executive Officer and the Chief Financial Officer
relating to the Registrants Report on Form 10-Q for the quarter ended December 31, 2007,
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |