UGI Corporation (“UGI”) is a holding company that, through subsidiaries and affiliates, distributes, stores, transports and markets energy products and related services. In the United States, we (1) are the general partnerown and own limited partner interests inoperate (1) a retail propane marketing and distribution business; (2) own and operate natural gas and electric distribution utilities; and (3) own and operate an energy marketing, midstream infrastructure, storage, natural gas gathering, natural gas production, electricity generation and energy services business. In Europe, we market and distribute propane and other liquefied petroleum gases (“LPG”)LPG and market energy products and services. We refer to UGI and its consolidated subsidiaries collectively as “the Company,” “we” or “us.”

We conduct a domestic propane marketing and distribution business through AmeriGas Partners, L.P. (“AmeriGas Partners”).Partners. AmeriGas Partners is a publicly traded limited partnership that conducts a national propane distribution business through its principal operating subsidiary, AmeriGas Propane, L.P. (“AmeriGas OLP”).OLP. AmeriGas Partners and AmeriGas OLP are Delaware limited partnerships. UGI’s wholly owned second-tier subsidiary, AmeriGas Propane, Inc. (the “General Partner”), serves as the general partnerGeneral Partner of AmeriGas PartnersPartners. On August 21, 2019, we completed the AmeriGas Merger pursuant to which we issued 34,612,847 shares of UGI Common Stock and AmeriGas OLP. We referpaid $528.9 in cash to acquire all of the outstanding Common Units in AmeriGas Partners andnot already held by UGI or its subsidiaries, togetherwith the Partnership surviving as a wholly owned subsidiary of UGI. Prior to the “Partnership” andAmeriGas Merger, UGI controlled the Partnership through its ownership of the General Partner, and its subsidiaries, including the Partnership, as “AmeriGas Propane.” At December 31, 2017, the General Partnerwhich held a 1% general partner interest (which included IDRs) and a 25.3% limited partner interestapproximately 25.5% of the outstanding Common Units in AmeriGas Partners, and held an effective 27.0% ownership interest in AmeriGas OLP. Our limited partnership interest in AmeriGas Partners comprises AmeriGas Partners Common Units (“Common Units”). The remaining 73.7% interest in AmeriGas Partners comprises Common UnitsIDRs held by the public. The General Partner also holds incentive distribution rights that entitleprior to the AmeriGas Merger entitled it to receive distributions from AmeriGas Partners in excess of its 1% general partner interest under certain circumstances as further described in Note 14 of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017 (the “Company’s 2017 Annual Report”).circumstances. Incentive distributions received by the General Partner during the three months ended December 31, 20172018 were $11.3.

UGI International, through subsidiaries and 2016 were $11.3 and $10.4, respectively.

UGI Energy Services LLC (“Energy Services, LLC”), a wholly owned subsidiary of Enterprises, conducts, directly and through subsidiaries, energy marketing, midstream transmission, liquefied natural gas (“LNG”),LNG storage, natural gas gathering and processing, natural gas production, electricity generation and energy services businesses primarily in the Mid-Atlantic region of the U.S. Energy Services, LLC’s wholly owned subsidiary, UGI Development Company (“UGID”), eastern Ohio and the panhandle of West Virginia. UGID owns all or a portion of electricity generation facilities principally located in Pennsylvania. A first-tier subsidiary of Enterprises also conducts heating, ventilation, air-conditioning, refrigeration and electrical contracting businesses in portions of eastern and central Pennsylvania (“HVAC”). Energy Services LLC and its subsidiaries’ storage, LNG and portions of its midstream transmission operations are subject to regulation by the Federal Energy Regulatory Commission (“FERC”). We refer to the businesses of Energy Services, LLC and its subsidiaries and HVAC as “Midstream & Marketing.”FERC.

UGI Utilities Inc. (“UGI Utilities”) conductsdirectly owns and operates Gas Utility, a natural gas distribution utility business (“Gas Utility”) directly and through its wholly owned subsidiaries, UGI Penn Natural Gas, Inc. (“PNG”) and UGI Central Penn Gas, Inc. (“CPG”). UGI Utilities, PNG and CPG own and operate natural gas distribution utilities in eastern and central Pennsylvania and in a portion of one1 Maryland county. UGI Utilities also owns and operates an electric distribution utility in northeastern Pennsylvania (“Electric Utility”). UGI Utilities’ natural gas distribution utility is referred to as “UGI Gas.” Gas Utility is subject to regulation by the Pennsylvania Public Utility Commission (“PUC”)PAPUC and the FERC and, with respect to a small service territory in one1 Maryland county, the Maryland Public Service Commission.MDPSC. UGI Utilities also owns and operates Electric Utility, an electric distribution utility located in northeastern Pennsylvania. Electric Utility is subject to regulation by the PUC. UGI Utilities is used herein as an abbreviated reference to UGI Utilities, Inc. or, collectively, UGI Utilities, Inc.PAPUC and its subsidiaries.the FERC.

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”).SEC. They include all adjustments that we consider

These financial statements should be read in conjunction with the financial statements and related notes included in the Company’s 20172019 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.

Certain of our derivative instruments qualify and are designated and qualify as cash flow hedges and from time to time we also enter into net investment hedges. For cash flow hedges, changes in the fair values of the derivative instruments are recorded in accumulated other comprehensive income (loss) (“AOCI”),AOCI, to the extent effective at offsetting changes in the hedged item, until earnings are affected by the hedged item. We discontinue cash flow hedge accounting if occurrence of the forecasted transaction is determined to be no longer probable. Hedge accounting is also discontinued for derivatives that cease to be highly effective. GainsWe do not designate our commodity and losses oncertain foreign currency derivative instruments as hedges under GAAP. Changes in the fair values of these derivative instruments are reflected in net investment hedges that relate to our foreign operations are included in AOCI until such foreign net investment is sold or liquidated. Unrealized gainsincome. Gains and losses on substantially all of the commodity derivative instruments used by UGI Utilities (for which NPNS has not been elected) are included in regulatory assets or liabilities because it is probable such gains or losses will be recoverable from, or refundable to, customers.

Cash flows from derivative instruments, other than net investment hedges and certain cross-currency swaps if any, are included in cash flows from operating activities on the Condensed Consolidated Statements of Cash Flows. Cash flows fromand net investment hedges, if any, are included in cash flows from investingoperating activities on the Condensed Consolidated Statements of Cash Flows. Cash flows from the interest portion of our cross-currency hedges, if any, are included in cash flowflows from operating activities while cash flows from the currency portion of such hedges, if any, are included in cash flowflows from financing activities.

For a more detailed description of the derivative instruments we use, our accounting for derivatives, our objectives for using them and other information, see Note 13.

Contract liabilities arise when payment from a customer is received before the performance obligations have been satisfied and lease liabilities.

The Company has accounted for the CMG Acquisition using the acquisition method. At December 31, 2019, the allocation of the purchase price is substantially complete but remains preliminary pending the completion of our third-party valuation report and with regard to the identification and resolution of certain pre-acquisition contingencies and disputes. These amounts are preliminary pending the receipt of additional information. The purchase price allocation will be finalized once these items have been resolved. Accordingly, the fair value estimates presented below relating to these items are subject to change within the measurement period not to exceed one year from the date of acquisition.

The impact of the new guidance using an integrated approach which includes evaluating differences inCMG Acquisition on a pro forma basis as if the amount and timing of revenue recognition from applying the requirements of the new guidance, reviewing its accounting policies and practices, and assessing the need for changes to its processes, accounting systems and design of internal controls. The Company has completed the assessment of a significant number of its contracts with customers under the new guidance to determine the effect of the adoption of the new guidance. Although the Company has not completed its assessment of the impact of the new guidance, the Company does not expect its adoption will have a material impactCMG Acquisition had occurred on its consolidated financial statements. The Company continues to monitor developments associated with certain utility industry specific guidance for possible impacts on the recognition of revenue by UGI Utilities.

At December 31, 2017,2019, UGI Utilities was a party to five3 principal storage contract administrative agreements (“SCAAs”) which haveSCAAs with terms of up to three years. Pursuant to the SCAAs, UGI Utilities has, among other things, released certain natural gas storage and transportation contracts for the terms of the SCAAs. UGI Utilities also transferred certain associated natural gas storage inventories upon commencement of the SCAAs, will receive a transfer of storage inventories at the end of the SCAAs, and makes payments associated with refilling storage inventories during the terms of the SCAAs. The historical cost of natural gas storage inventories released under the SCAAs, which represents a portion of Gas Utility’s total natural gas storage inventories, and any exchange receivable (representing amounts of natural gas inventories used by the other parties to the agreement but not yet replenished for which UGI Utilities has the rights), are included in the caption “Gas Utility natural gas” in the table above.

As of December 31, 2017,2019 and September 30, 2019, all of UGI Utilities hadUtilities’ SCAAs were with Energy Services, LLC, the effects of which are eliminated in consolidation, and with a non-affiliate.consolidation. The carrying value of gas storage inventories released under the SCAAs with the non-affiliatenon-affiliates at December 31, 2017, September 30, 2017 and December 31, 2016,2018 comprising 1.8 billion cubic feet (“bcf”), 2.3 bcf and 1.9 bcf of natural gas was $5.1, $6.7 and $4.8, respectively.$4.6.