UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
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| ý | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2019
OR
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| ¨ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number: 001-11071
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| A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: |
UGI HVAC ENTERPRISES, INC. SAVINGS PLAN
ONE UGI DRIVE
DENVER, PA 17517
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| B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
UGI CORPORATION
460 NORTH GULPH ROAD
KING OF PRUSSIA, PENNSYLVANIA 19406
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
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| Page(s) |
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| Report of Independent Registered Public Accounting Firm | 1 |
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| Financial Statements: | |
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| Statements of Net Assets Available for Benefits at December 31, 2019 and 2018 | 2 |
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| Statements of Changes in Net Assets Available for Benefits for the years ended December 31, 2019 and 2018 | 3 |
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| Notes to Financial Statements | 4 - 9 |
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| Schedule H, Line Item 4(a) — Schedule of Delinquent Participant Contributions | 10 |
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| Schedule H, Line Item 4(i) — Schedule of Assets (Held at End of Year) | 11 |
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| Signatures | 12 |
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| Exhibit Index | 13 |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Participants and Administrator of
UGI HVAC Enterprises, Inc. Savings Plan
Opinion on the Financial Statements
We have audited the accompanying statements of net assets available for benefits of the UGI HVAC Enterprises, Inc. Savings Plan (the “Plan”) as of December 31, 2019 and 2018, and the related statements of changes in net assets available for benefits for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2019 and 2018, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Supplemental Information
The supplemental schedules, Schedule H, Line 4(a) - Schedule of Delinquent Participant Contributions and Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year), as of or for the year ended December 31, 2019 have been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.
/s/ Baker Tilly Virchow Krause, LLP
We have served as the Plan’s auditor since 2019.
Philadelphia, Pennsylvania
June 24, 2020
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
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| | | December 31, |
| | | 2019 | | 2018 |
| ASSETS: | | | | |
| Investments (Note 3) | | $ | 19,725,487 |
| | $ | 17,175,334 |
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| Notes receivable from participants | | 189,073 |
| | 237,305 |
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| Total assets | | 19,914,560 |
| | 17,412,639 |
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| LIABILITIES: | | | | |
| Accrued administrative expenses | | 5,460 |
| | 5,250 |
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| Excess contributions payable | | — |
| | 12,505 |
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| Total liabilities | | 5,460 |
| | 17,755 |
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| Net assets available for benefits | | $ | 19,909,100 |
| | $ | 17,394,884 |
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See accompanying notes to financial statements.
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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| | | Year Ended December 31, |
| | | 2019 | | 2018 |
| Additions: | | | | |
| Participants’ contributions | | $ | 903,221 |
| | $ | 790,722 |
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| Employers’ contributions | | 367,903 |
| | 260,672 |
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| Participants’ rollover contributions | | 281,569 |
| | 663,577 |
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| Investment income: | | | | |
| Dividends and interest | | 220,360 |
| | 203,833 |
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| Net appreciation in fair value of investments | | 2,871,560 |
| | — |
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| Interest on notes receivable from participants | | 12,864 |
| | 12,044 |
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| Total additions | | 4,657,477 |
| | 1,930,848 |
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| Deductions: | | | | |
| Investment loss: | | | | |
| Net depreciation in fair value of investments | | — |
| | (616,606 | ) |
| Distributions to participants | | (1,456,267 | ) | | (2,285,811 | ) |
| Net transfers of participants’ balances | | (660,128 | ) | | (461,666 | ) |
| Administrative fees | | (26,866 | ) | | (23,520 | ) |
| Total deductions | | (2,143,261 | ) | | (3,387,603 | ) |
| Net increase (decrease) | | 2,514,216 |
| | (1,456,755 | ) |
| Net assets available for benefits — beginning of year | | 17,394,884 |
| | 18,851,639 |
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| Net assets available for benefits — end of year | | $ | 19,909,100 |
| | $ | 17,394,884 |
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See accompanying notes to financial statements.
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
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| 1. | Description of the Plan |
The following description of the UGI HVAC Enterprises, Inc. Savings Plan (the “Plan”) is provided for general information purposes only. Unless otherwise noted, such description provides general information on the provisions of the Plan on December 31, 2019 and 2018 and for the years then ended covered by the financial statements. More complete information is included in the Plan document.
General. The Plan is a defined contribution plan which covers employees of UGI HVAC Enterprises, Inc. (the “Company”) and certain affiliated companies (collectively, “the Employers”). The Company is a wholly owned subsidiary of UGI Enterprises, Inc. (“Enterprises”). Enterprises is a wholly owned subsidiary of UGI Corporation (“UGI”). Employees of the Employers are eligible upon hire to participate in the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Plan is administered by the UGI Utilities, Inc. Retirement Committee (“Plan Administrator”) whose members are appointed by the Pension Committee of the UGI Board of Directors.
Contributions. Generally a participant may elect to contribute to the Plan in an amount ranging from 1% to 50%, in whole percentages, of eligible compensation on a before-tax basis, on an after-tax basis to a Roth 401(k), or a combination of both. After-tax basis contributions, including Roth 401(k) contributions are not to exceed 30% of the participant's total deferral provided that the combination of before-tax and after-tax contributions does not exceed 50% of eligible compensation. Calendar year contribution amounts are subject to limits prescribed by the Internal Revenue Code (“IRC”) and the Plan, respectively. For the 2019 and 2018 Plan Years, the IRC before-tax and Roth 401(k) contribution limits were $19,000 and $18,500, respectively. Participants may also contribute amounts representing distributions from other qualified defined benefit or contribution plans.
The Plan allows for “catch-up contributions,” a provision which allows employees that have attained age 50 before the end of the Plan Year and are contributing at the IRC or Plan limit to make before-tax and Roth 401(k) contributions over and above the IRC and Plan limits. The maximum catch-up contribution for both the 2019 and 2018 Plan Years was $6,000. Catch-up contributions are not eligible for the Employers’ matching contribution.
For each pay period during a Plan year, the Employers could, at their discretion, make a contribution to the Plan equal to 60% of participant before-tax and after-tax contributions, up to a total of 6% and 5% in Plan Year 2019 and Plan Year 2018, respectively, of eligible compensation (as defined in the Plan document) for each participant who had made before-tax and/or after-tax contributions.
All contributions are invested in accordance with participant investment elections in effect on the dates of the contributions.
Participant Accounts. Each participant's account is credited with the participant's contributions and the Employers' contributions as well as allocations of Plan earnings. Participants are charged with an allocation of administrative expenses, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account.
A participant may elect to have his or her funds invested in one or more investment options. The Plan currently offers investments in selected mutual funds, UGI Common Stock, common collective trust funds, a collective investment trust fund and Brokerage Link, a self-directed brokerage account that includes mutual funds and share of classes available in the Plan. Generally, participants may transfer amounts between funds at any time with no limit. Fidelity Management Trust Company is the Plan’s Trustee for all investment assets of the Plan and qualifies as a party in interest. The Statements of Changes in Net Assets Available for Benefits reflects certain administrative fees paid by Plan Participants to Fidelity Institutional Retirement Services Co. ("FIRSCO") from Plan assets (see “Administrative Expenses” below). FIRSCO invests funds received from contributions investment sales, interest and dividend income and makes distribution payments to participants. Effective January 10, 2018, investments in UGI Common Stock are generally limited to 25% of a participant's account balance.
Vesting. A participant is immediately fully vested in the portion of his or her account attributable to participant contributions as well as matching contributions made by the Employers.
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
Notes Receivable from Participants. Generally, at the time a loan is to be made, the amount of all loans to be outstanding may not exceed the lesser of (a) 50% of a participant’s vested account balance or (b) $50,000 less the highest balance of all loans during the prior twelve month period. The minimum loan amount is $1,000. Each loan bears interest at a rate determined in accordance with generally prevailing market conditions for similar types of loans plus 1%. At December 31, 2019, interest rates on loans outstanding ranged from 4.25% to 9.00%. The amount of the loan withdrawn from participant accounts is allocated in proportion to the value of the participant's salary deferral and rollover account balances in each investment fund. Repayments, including interest, are made in equal installments through payroll deductions and are allocated to participant accounts in accordance with current investment elections. No loan may have a final maturity in excess of five years except that, if the loan is used to purchase a principal residence for the participant, the loan may have a final maturity of up to ten years. Participants are not permitted to have more than two loans outstanding at any time.
Payment of Benefits. The Plan benefit of a participant who terminates employment for any reason other than death shall be equal to the proceeds of liquidation of 100% of the balance of his or her account. Participants may elect to receive their interest in UGI Common Stock in the form of shares of UGI Corporation Common Stock. Where the amount to be distributed exceeds $1,000, no distribution shall be made to any Plan participant prior to his or her normal retirement age (as defined in the Plan document) or age 70 1/2 unless the participant elects to receive such distribution. Where the amount to be distributed does not exceed $1,000, a Plan participant’s benefit will be distributed as soon as practicable after the participant becomes entitled to receive a distribution. A participant who continues to work past age 70 1/2 will receive a mandatory required distribution upon termination of employment.
Additionally, hardship withdrawals and certain in-service withdrawals are permitted subject to Plan provisions.
Administrative Expenses. Administrative expenses of the Plan are chargeable to the Plan unless paid for by the Employers. Other than the plan fees described below, the Employers currently pay such expenses, which are excluded from these financial statements. During Plan Year 2019 and Plan Year 2018, each active Plan account was assessed a quarterly recordkeeping fee of $15.00. This fee is automatically deducted in the month following the end of each quarter and remitted to FIRSCO. Loan administration and withdrawal fees are paid by Plan participants. Investment related expenses are included in net appreciation (depreciation) of the fair value of investments.
Voting Rights of UGI Common Stock Participants. A participant has the right to instruct the trustee of the Plan how to vote, at each meeting of shareholders, all shares of UGI Corporation Common Stock (including fractional shares) represented by the value of the participant’s interest in UGI Common Stock. A participant also has the right to direct the trustee of the Plan whether or not to tender shares in response to a tender offer.
Plan Amendments. The Company may amend the Plan at any time for any reason by written action of its Board of Directors. However, amendments required to comply with the IRC to maintain compliance with current laws or regulations or to correct errors or omissions in the Plan document may be made by the UGI Utilities, Inc. Retirement Committee without Board approval.
Plan Termination. Although it has not expressed any intent to do so, the Company has the right to terminate the Plan in whole or in part at any time for any reason.
Use of Estimates and Basis of Accounting. The accompanying financial statements are prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”). GAAP requires the Plan Administrator to make estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein. Actual results could differ from those estimates.
Investment Valuation and Income Recognition. Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Plan Administrator determines the Plan's valuation policies utilizing information provided by the investment advisers and custodians. Refer to Note 3 for the fair value measurement disclosures associated with the Plan’s investments.
Purchases and sales of securities are recorded on a trade-date basis. Interest earned on investments is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Net appreciation (depreciation) includes the Plan's gains and losses on investments purchased and sold as well as held during the year.
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
Distributions are made to Plan participants based upon the fair value of each participant's investment account (except for distributions from UGI Common Stock, to the extent not all shares are sold on the same date) as of the dates of the distribution. Distributions to participants are recorded when paid.
Transfers of Participants’ Balances. Transfers of participant balances represent amounts transferred to or from the AmeriGas Propane, Inc. Savings Plan and the UGI Utilities, Inc. Savings Plan, which are affiliated plans.
Notes Receivable from Participants. Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Interest income on notes receivable is recorded on an accrual basis. Related fees are recorded as administrative expenses and are expensed when they are incurred. As of December 31, 2019, the Plan's allowance for credit losses on notes receivable from participants was $20,210. There were no allowances for credit losses recorded as of December 31, 2018.
Excess Contributions Payable. Amounts payable to participants for contributions in excess of amounts allowed by the IRS are recorded as a liability with a corresponding reduction to participants' contributions. The Plan distributed the Plan Year 2019 and Plan Year 2018 excess contributions to the applicable participants prior to March 15, 2020 and March 15, 2019, respectively.
Risks and Uncertainties. The investments of the separate investment funds are subject to various risks including interest rate, credit and overall market volatility. The degree and concentration of these risks vary by fund. The Plan’s exposure to credit losses in the event of nonperformance of investments is limited to the carrying value of such investments. Due to the level of risk associated with the separate investment funds, it is reasonably possible that changes in risk in the near term could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits and the Statements of Changes in Net Assets Available for Benefits.
Concentration of Investments. As of December 31, 2019 and 2018, the Plan had investments of $4,942,014, and $6,751,546, respectively, that were concentrated in two and three funds, respectively.
Delinquent Participant Contributions. For the year ended December 31, 2019, the Company did not remit certain participant contributions to the Plan on a timely basis as defined by the Department of Labor's Rules and Regulations for Reporting and Delinquent Participant Contributions Disclosure under ERISA. Untimely remittances identified on the Schedule H, Line 4(a) - Schedule of Delinquent Participant Contributions, which totaled $273, will be corrected through the Department of Labor Voluntary Fiduciary Correction Program in 2020. The Plan has evaluated the lost earnings resulting from the delay in these participant contributions which were not deemed to be material.
Accounting Standard Adopted. In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2018-13, ���Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The Plan adopted the new guidance effective January 1, 2019. The guidance regarding removing and modifying disclosures was adopted on a retrospective basis and the guidance regarding new disclosures was adopted on a prospective basis. The adoption did not have a material impact on the Plan's financial statement disclosures.
Subsequent Events. On March 27, 2020 the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") was signed into law in the U.S. to provide certain relief to plan sponsors and plan participants as a result of the COVID-19 pandemic. The Plan has voluntarily adopted the following provisions of the CARES Act effective for the 2020 Plan Year:
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| – | Waiver of required minimum distributions; |
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| – | Waiver of 10% early withdrawal penalty on distributions; |
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| – | Ability of participants to delay loan repayments through December 31, 2020. |
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| 3. | Fair Value Measurements |
The Plan applies fair value measurements in accordance with GAAP. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.
GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). A level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Plan uses the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad categories:
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| • | Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access; |
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
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| • | Level 2 - Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. |
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| • | Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
The asset or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs.
The following are descriptions of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2019 and 2018.
Mutual funds: Valued at the closing price reported on the active market on which the individual security is traded.
Brokerage Link: Fidelity Brokerage Link accounts are reflected at their fair value of associated investments which include mutual funds, money market funds, and cash and held by the Plan participants in their individual self-directed brokerage accounts. Based upon closing prices as reported by the funds, these funds are required to publish this NAV and to transact at that price.
Collective investment trust fund: Valued at the NAV of units of the collective trusts. The NAVs, as provided by the trustee, are used as a practical expedient to estimate fair value. The NAVs are based on the fair values of the underlying investments held by the funds less their liabilities. Participant transactions (purchases and sales) may occur daily. Were the Plan to initiate a full redemption of the collective trusts, the investment advisor reserves the right to temporarily delay withdrawal from the trusts in order to ensure that securities liquidations will be carried out in an orderly business manner.
Common collective trust funds: Valued at the NAV of units of the collective trusts. The NAVs, as provided by the trustee, are used as a practical expedient to estimate fair value. The NAVs are based on the fair values of the underlying investments held by the funds less their liabilities. Participant transactions (purchases and sales) may occur daily. Were the Plan to initiate a full redemption of the collective trusts, the investment advisor reserves the right to temporarily delay withdrawal from the trusts in order to ensure that securities liquidations will be carried out in an orderly business manner.
The Plan holds investments in Vanguard Target Retirement Trusts ("Vanguard Trusts"). The Vanguard Trusts are common collective trust funds sponsored and maintained by Vanguard Fiduciary Trust Company. The Vanguard Trusts invest in Vanguard mutual funds using an asset allocation strategy designed for investors planning to retire or leave the workforce in or within a few years of the target year. The underlying mutual funds that the Vanguard Trusts held may have included the Vanguard Total Stock Market Index Fund, Vanguard Total Bond Market II Index Fund, Vanguard Total International Stock Index Fund, Vanguard Total International Bond Index Fund and Vanguard Short-Term Inflation-Protected Securities Fund, among others. Each of the Vanguard Trusts’ indirect stock holdings (through its mutual fund holdings) consisted substantially of large-capitalization U.S. stocks and, to a lesser extent, mid- and small-cap U.S. stocks and international stocks. Each of the Vanguard Trusts’ indirect bond holdings through its mutual fund holdings consisted of a diversified mix of investment-grade taxable U.S. government, U.S. government agency and corporate bonds, international bonds as well as inflation-protected and mortgage-backed securities.
The trustee, Vanguard Fiduciary Trust Company, generally determines the fair values of the Vanguard Trusts’ units each day the New York Stock Exchange is open for trading. The underlying investments of the Vanguard Trusts are valued based on quoted market prices as substantially all of these underlying investments have active markets. The values of the Vanguard Trusts are determined based upon the values of these underlying investments held for benefit of the Vanguard Trusts.
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
The following table presents the Plan’s investments that are measured at fair value on a recurring basis, for each hierarchy level, as of December 31, 2019 and 2018:
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| | | December 31, 2019 | | | | |
| | | Fair Value Measurement Using Input Types | | | | |
| | | Level 1 | | Level 2 | | Level 3 | | Other | | Total |
| Mutual funds | | $ | 5,307,920 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 5,307,920 |
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| UGI Common Stock | | 1,980,920 |
| | — |
| | — |
| | — |
| | 1,980,920 |
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| Brokerage Link | | 235,727 |
| | — |
| | — |
| | — |
| | 235,727 |
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| Common collective trust funds (a) | | — |
| | — |
| | — |
| | 9,731,472 |
| | 9,731,472 |
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| Collective investment trust fund (a) | | — |
| | — |
| | — |
| | 2,469,448 |
| | 2,469,448 |
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| Total investments measured at fair value | | $ | 7,524,567 |
| | $ | — |
| | $ | — |
| | $ | 12,200,920 |
| | $ | 19,725,487 |
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| | | | | | | | | | | | | | | | | | | | |
| | | December 31, 2018 | | | | |
| | | Fair Value Measurement Using Input Types | | | | |
| | | Level 1 | | Level 2 | | Level 3 | | Other | | Total |
| Mutual funds | | $ | 4,621,430 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 4,621,430 |
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| UGI Common Stock | | 2,782,948 |
| | — |
| | — |
| | — |
| | 2,782,948 |
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| Brokerage Link | | 181,405 |
| | — |
| | — |
| | — |
| | 181,405 |
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| Common collective trust funds (a) | | — |
| | — |
| | — |
| | 7,961,805 |
| | 7,961,805 |
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| Collective investment trust fund (a) | | — |
| | — |
| | — |
| | 1,627,746 |
| | 1,627,746 |
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| Total investments measured at fair value | | $ | 7,585,783 |
| | $ | — |
| | $ | — |
| | $ | 9,589,551 |
| | $ | 17,175,334 |
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(a) Assets measured at NAV per share (or its equivalent), and therefore excluded from the fair value hierarchy, and also presented as "Other".
Investments Measured Using the NAV per share Practical Expedient
The following tables summarize investments for which fair value is measured using the NAV per share practical expedient as of December 31, 2019 and 2018, respectively:
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| December 31, 2019 | Fair Value | Unfunded Commitments | Redemption Frequency (if currently eligible) | Redemption Notice Period |
| Common collective trust funds | $ | 9,731,472 |
| n/a | Daily | 30 days |
| Collective investment trust fund | $ | 2,469,448 |
| n/a | Daily | 30 days |
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| | | | | | |
| December 31, 2018 | Fair Value | Unfunded Commitments | Redemption Frequency (if currently eligible) | Redemption Notice Period |
| Common collective trust funds | $ | 7,961,805 |
| n/a | Daily | 30 days |
| Collective investment trust fund | $ | 1,627,746 |
| n/a | Daily | 30 days |
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| 4. | Related Party and Party-in-Interest Transactions |
Shares of UGI Corporation Common Stock are offered as an investment option to Plan participants. Additionally, the Plan issues notes to participants, which are secured by the participant’s account balances. These transactions qualify as party-in-interest
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
transactions, but are exempt from the prohibited transaction rules of ERISA and the IRC under statutory or governmental agency exemptions.
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| | | Plan Year |
| | | 2019 | | 2018 |
| Total sales at market value related to UGI Corporation Common Stock | | $ | 88,581 |
| | $ | 243,270 |
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| Total contributions into UGI Common Stock | | $ | 68,253 |
| | $ | 68,739 |
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| Shares held of UGI Corporation Common Stock | | 43,480 |
| | 51,912 |
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Certain of the Plan's investments are managed by Vanguard Fiduciary Trust Company, the trustee, and therefore, these transactions qualify as party-in-interest transactions. Fees incurred by the Plan for investment manager services are included in net appreciation (depreciation) in the fair value of the investments.
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| 5. | Federal Income Tax Status |
In November 2014, the IRS issued a favorable determination letter concerning the qualified status of the Plan as amended through January 16, 2014 under Section 401(a) of the IRC. The Plan has since been amended. The Plan Administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. No U.S. income taxes are required to be paid by the trust created under the Plan (the “Trust”) and participants are not taxed on Employers' contributions to the Trust or income earned by the Trust. When a participant, or his or her beneficiary or estate, receives a distribution under the Plan, the taxability of the value of such distribution depends on the form and time of payment.
GAAP requires plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan Administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2019, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan Administrator believes it is no longer subject to income tax examinations for years prior to 2016.
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
EIN # 51-0375688, PLAN # 001
Schedule H, Line 4(a)—SCHEDULE OF DELINQUENT PARTICIPANT CONTRIBUTIONS
YEAR ENDED DECEMBER 31, 2019
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| | | | | Total that Constitute Nonexempt Prohibited Transactions | | | | |
| Participant Contributions Transferred Late to the Plan (1) | | Contributions not Corrected | | Contributions Corrected Outside of VFCP | | Contributions Pending Correction in VFCP | | Total Fully Corrected Under VFCP and PTE 2002-51 |
| | $ | 273 |
| | | | $ | 273 |
| | | | $ | — |
| | | | $ | — |
| | | | $ | — |
| |
(1) Amount does not include participant loan repayments.
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
EIN # 51-0375688, PLAN # 001
Schedule H, Line 4(i)—SCHEDULE OF ASSETS (HELD AT END OF YEAR)
|
| | | | | | | | | | | | |
| | | December 31, 2019 |
| Name of Issuer and Title of Issue | | Number of Shares or Principal Amount | | Cost | | Current Value |
| Mutual Funds: | | | | | | |
| Fidelity U.S. Bond Index Fund (1) | | 45,291 shrs |
| | $ | 509,223 |
| | $ | 539,418 |
|
| Fidelity International Index Fund (1) | | 9,982 shrs |
| | 397,153 |
| | 428,824 |
|
| T. Rowe Price Equity Income Fund | | 12,863 shrs |
| | 373,820 |
| | 412,639 |
|
| PIMCO Total Return Fund Institutional Class | | 1,669 shrs |
| | 17,282 |
| | 17,255 |
|
| American Funds EuroPacific Growth Fund Class R-6 | | 774 shrs |
| | 39,939 |
| | 42,986 |
|
| Glenmede Small Cap Equity Portfolio Institutional Class | | 1,070 shrs |
| | 27,335 |
| | 29,264 |
|
| Vanguard Institutional Index Fund Institutional Class (1) | | 6,192 shrs |
| | 911,433 |
| | 1,797,094 |
|
| Vanguard Federal Money Market Fund (1) | | 693,171 shrs |
| | 693,171 |
| | 693,171 |
|
| Vanguard Extended Market Index Fund Institutional Class (1) | | 14,093 shrs |
| | 653,786 |
| | 1,347,269 |
|
| Total Mutual Funds | | | | 3,623,142 |
| | 5,307,920 |
|
| Assets in Fidelity Brokerage Link Accounts (1) | | Various (3) |
| | 193,275 |
| | 235,727 |
|
| Common Collective Trust Funds (1): | | | | | | |
| Vanguard Retirement Savings Trust III | | 489,585 shrs |
| | 489,585 |
| | 489,585 |
|
| Vanguard Target Retirement Income Trust II | | 3,002 shrs |
| | 85,401 |
| | 113,201 |
|
| Vanguard Target Retirement 2015 Trust II | | 20,290 shrs |
| | 535,096 |
| | 734,094 |
|
| Vanguard Target Retirement 2020 Trust II | | 9,533 shrs |
| | 294,681 |
| | 353,848 |
|
| Vanguard Target Retirement 2025 Trust II | | 53,176 shrs |
| | 1,401,357 |
| | 1,989,330 |
|
| Vanguard Target Retirement 2030 Trust II | | 41,710 shrs |
| | 1,364,143 |
| | 1,555,355 |
|
| Vanguard Target Retirement 2035 Trust II | | 65,050 shrs |
| | 1,855,355 |
| | 2,472,566 |
|
| Vanguard Target Retirement 2040 Trust II | | 7,553 shrs |
| | 234,139 |
| | 297,301 |
|
| Vanguard Target Retirement 2045 Trust II | | 24,162 shrs |
| | 692,337 |
| | 959,469 |
|
| Vanguard Target Retirement 2050 Trust II | | 6,724 shrs |
| | 211,387 |
| | 268,224 |
|
| Vanguard Target Retirement 2055 Trust II | | 4,539 shrs |
| | 208,327 |
| | 242,545 |
|
| Vanguard Target Retirement 2060 Trust II | | 5,110 shrs |
| | 179,305 |
| | 215,283 |
|
| Vanguard Target Retirement 2065 Trust II | | 1,567 shrs |
| | 36,780 |
| | 40,671 |
|
| Total Common Collective Trust Funds | | | | 7,587,893 |
| | 9,731,472 |
|
| Collective Investment Trust Fund: | | | | | | |
| Fidelity Growth Company Commingled Pool (1) | | 97,376 shrs |
| | 1,412,273 |
| | 2,469,448 |
|
| UGI Common Stock (1): | | | | | | |
| UGI Corporation Common Stock | | 43,480 shrs |
| | 1,196,289 |
| | 1,963,560 |
|
| Dividends receivable | | $ | 17,360 |
| | 17,360 |
| | 17,360 |
|
| | | | | 1,213,649 |
| | 1,980,920 |
|
| Participant Loans: | | | | | | |
| Loan principal outstanding (4.25% – 9.00%) (1) (2) | | | | — |
| | 189,073 |
|
| Total — all funds | | | | $ | 14,030,232 |
| | $ | 19,914,560 |
|
| |
| (2) | Range of interest rates for loans outstanding as of December 31, 2019. |
| |
| (3) | Various investments including mutual funds, money market funds and cash. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
|
| | | | | | |
| | | | | | | |
| | | | | UGI HVAC Enterprises, Inc. Savings Plan |
| | | | |
| Date: June 24, 2020 | | | | By: | | /s/ Annette Beissel |
| | | | | Name: | | Annette Beissel |
| | | | | Title: | | Senior Supervisor - Benefits and Retirement |
| | | | | | | of UGI Utilities, Inc. |
EXHIBIT INDEX
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| | | |
| | | |
| Exhibit No. | | Description |
| | |
| 23 |
| | |
