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UGI Reports Earnings For Fiscal 2012

Stocks in this article: UGI

Greenberg concluded, “We are optimistic about demonstrating the true earnings power of UGI in fiscal 2013. Although very early in the fiscal year, we are pleased that our businesses are performing well given the more normal seasonal weather patterns experienced in October. Assuming these weather patterns continue into the heating season, we are confident with our earnings guidance of $2.45 to $2.55 per diluted share for fiscal 2013. This guidance includes the after-tax impact of acquisition and transition costs of approximately $0.03 per share that are expected to be incurred at AmeriGas during the year.”

Segment Performance (Millions, except where otherwise indicated)

       
AmeriGas Propane:
For the fiscal year ended September 30,   2012   2011   Favorable (unfavorable)
Revenues $ 2,921.6 $ 2,538.0 $ 383.6 15.1 %
Total margin (a) $ 1,201.9 $ 932.7 $ 269.2 28.9 %
Operating income $ 170.3 $ 242.9 $ (72.6 ) (29.9 )%
Net income attributable to UGI Corporation $ 15.9 $ 39.9 $ (24.0 ) (60.2 )%
 
Retail gallons sold 1,017.5 874.2 143.3 16.4 %
Degree days - % (warmer) than normal (18.6 ) % (1.0 ) %
 
  • AmeriGas Propane fiscal 2012 results include the results of the Heritage Propane acquisition, which was completed on January 12, 2012.
  • Weather nationwide was 18.6% warmer than normal and 18.3% warmer than the prior year.
  • Retail gallons sold were 143.3 million gallons greater than in the prior year reflecting the acquisition of Heritage Propane partially offset by significantly warmer than normal weather experienced nationwide during the fiscal 2012 heating season.
  • Revenue increased by over 15%, reflecting the impact of the Heritage Propane acquisition offset by the volume-related decline associated with the warm weather.
  • Total margin increased, reflecting incremental total margin from the Heritage Propane acquisition offset by the impact of the significantly warmer weather during the heating season.
  • Operating income decreased, reflecting the higher total margin offset by a $268.1 million increase in operating and administrative expenses and a $74.4 million increase in depreciation and amortization expense principally associated with Heritage Propane.
       
International Propane:
For the fiscal year ended September 30,   2012   2011   Favorable
Revenues $ 1,946.0 $ 1,488.7 $ 457.3 30.7 %
Total margin (a) $ 620.2 $ 517.9 $ 102.3 19.8 %
Operating income $ 111.8 $ 86.1 $ 25.7 29.8 %
Net income attributable to UGI Corporation $ 65.1 $ 41.0 $ 24.1 58.8 %
 
Retail gallons sold 576.5 429.7 146.8 34.2 %
Degree days - % (warmer) than normal (1):
Antargaz (10.3

)%

(7.8

)%

Flaga (8.8

)%

(4.6

)%

 
(1)   For comparability, degree day information is presented for the legacy Antargaz and Flaga businesses as they existed in the prior year.
 
  • International Propane operating results in fiscal 2012 include the results of the Shell acquisition, which was completed in October 2011.
  • Temperatures at Flaga and Antargaz were 10.3% and 8.8% warmer than normal for the fiscal year, respectively.
  • Retail LPG gallons sold were higher than the prior year reflecting incremental volumes associated with the Shell acquisition (approximately 175 million retail gallons) partially offset by the effects of warmer and erratic weather during the fiscal 2012 heating season on volumes sold in our legacy International Propane businesses.
  • Operating income was $25.7 million higher principally reflecting incremental margin from the Shell acquisition offset by incremental operating, administrative, and depreciation expenses including acquisition integration costs.
  • Operating and administrative expenses include approximately $7 million of Shell acquisition transition expenses. Fiscal 2011 operating income included $9.4 million of other income from the nontaxable reversal at Antargaz of a reserve associated with a French Competition Authority matter.
  • The average euro-to-dollar translation rate was $1.30 for fiscal 2012 compared with $1.40 in fiscal 2011. This difference in exchange rates did not have a material impact on net income attributable to UGI.
       
Gas Utility:
For the fiscal year ended September 30,   2012   2011   Favorable (unfavorable)
Revenues $ 785.4 $ 1,026.4 $ (241.0 ) (23.5 )%
Total margin (a) $ 382.9 $ 415.8 $ (32.9 ) (7.9 )%
Operating income $ 172.2 $ 199.6 $ (27.4 ) (13.7 )%
Net income attributable to UGI Corporation $ 80.5 $ 99.3 $ (18.8 ) (18.9 )%
 
System throughput - billions of cubic feet ("bcf")
Core market 59.2 70.4 (11.2 ) (15.9 )%
Total 177.6 173.2 4.4 2.5 %
Degree days - % (warmer) colder than normal (16.3

)%

 

3.5 %
 
  • Weather was 16.3% warmer than normal and 18.7% warmer than the prior year.
  • The increase in total system throughput primarily reflects higher throughput to non-weather-sensitive low-margin interruptible customers. Throughput to core market customers declined, reflecting the effects of significantly warmer weather and lower firm delivery service volumes.
  • Total margin decreased primarily due to the decrease in core market margin resulting from the warm weather and lower firm delivery service total margin. Fiscal year 2012 total margin includes incremental margin from the August 2011 base rate increase at UGI Central Penn Gas.
  • Operating income decreased principally due to the decrease in total margin partially offset by lower operating and administrative expenses.
       
Midstream & Marketing:
For the fiscal year ended September 30,   2012   2011   (Unfavorable)
Revenues $ 853.0 $ 1,059.7 $ (206.7 ) (19.5 )%
Total margin (a) $ 128.5 $ 139.7 $ (11.2 ) (8.0 )%
Operating income $ 62.4 $ 82.9 $ (20.5 ) (24.7 )%
Net income attributable to UGI Corporation $ 36.4 $ 52.5 $ (16.1 ) (30.7 )%
 
  • Total revenues decreased primarily due to lower revenues from natural gas marketing activities ($211.6 million) resulting from lower natural gas prices and lower volumes sold due in large part to warmer weather, and, to a much lesser extent, lower electric generation and capacity management revenue.
  • Total margin decreased, as lower margin from natural gas marketing activities ($17.4 million), lower capacity management total margin ($5.8 million), and lower electric generation margin ($2.1 million) was partially offset by greater retail power, natural gas storage, and gas gathering total margin.
  • Operating income decreased reflecting the decrease in total margin ($11.2 million) and, to a lesser extent, greater operating, administrative and depreciation expenses associated with electric generation assets.

(a) Total margin represents total revenues less total cost of sales.

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