Contact: 610-337-1000 For Release: January 26, 2005
Robert W. Krick, ext. 3141 Immediate
UGI REPORTS HIGHER FIRST QUARTER RESULTS
VALLEY FORGE, Pa., January 26 - UGI Corporation (NYSE: UGI) reported that its
net income for the first quarter of fiscal 2005 ended December 31, 2004 rose to
$69.2 million, or $1.32 per diluted share, compared to $38.8 million, or $0.88
per diluted share for the first quarter of fiscal 2004. The results for the
quarter include $5.9 million, or $0.11 per diluted share, arising from the
reversal by UGI's French subsidiary, Antargaz, of certain non-income tax
accruals related to a prior year. Average fully diluted shares outstanding were
19.7% higher in the recent quarter.
Lon R. Greenberg, chairman, president and chief executive officer of UGI, said,
"The improvement in our earnings this quarter reflects the significant
contribution to earnings from Antargaz. I am especially pleased with our results
given the difficult environment we faced. All of our energy distribution
business units experienced customer conservation due to high energy commodity
costs. In addition, our propane businesses encountered warmer than normal winter
weather. Despite these challenges, we continued to focus on growth and
operational excellence."
UGI's net income from its domestic propane distributor, AmeriGas Partners L. P.
(NYSE:APU), declined to $10.4 million in the fiscal 2005 quarter compared to
$12.9 million last year. For the three months ended December 31, 2004, retail
volumes sold declined to 296.8 million gallons from 304.5 million gallons sold
in the prior-year period. Weather was 8.0% warmer than normal during the recent
quarter compared to weather that was 7.4% warmer than normal in the prior-year
period, according to the National Oceanic and Atmospheric Administration.
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UGI REPORTS HIGHER FIRST QUARTER RESULTS PAGE 2
The lower retail sales volumes and higher operating expenses this quarter
reflect the dual challenges of significantly warmer weather and continued high
propane product costs. Operating and administrative expenses rose during the
quarter principally due to the impact of higher vehicle costs associated with
increased fuel prices and lease expenses, higher employee compensation costs and
higher general insurance expenses.
International Propane net income increased to $38.2 million in the
recently-completed quarter from $4.8 million last year. Results for the recent
quarter reflect full ownership of Antargaz compared to last year's results that
included UGI's then-current 20% ownership interest. Antargaz sold approximately
104 million gallons of liquefied petroleum gases (LPG) while experiencing
weather that was 3.3% warmer than normal during the 2004 three-month period
compared to 97 million gallons sold and weather that was 2.5% warmer than normal
in the same period in 2003. "Antargaz benefited from unusually high unit margins
toward the latter part of the quarter reflecting falling product costs and a
weaker dollar," noted Greenberg. The net income attributable to the reversal of
French tax accruals is included in International Propane results. Income from
equity investees declined in the 2004 period due to the absence of our equity
investment in Antargaz. Results for Flaga, UGI's LPG distribution business
headquartered in Austria, were modestly lower compared to the prior year on
significantly warmer weather than last year.
At UGI Utilities' Gas Utility, net income declined to $14.5 million for the
quarter ended December 31, 2004 compared to $15.2 million for the fiscal 2004
quarter. Weather in the service territory was essentially normal for the recent
quarter versus 3.8% warmer than normal in the prior-year quarter. Total margin
was virtually unchanged as lower margin from firm customers attributable to
customer conservation offset the effects of colder weather, customer growth and
increased margin from interruptible customers. Higher operating and
administrative expenses in the quarter ended December 31, 2004 were attributable
to greater uncollectibles expense partially offset by lower system maintenance
expense.
Net income from UGI Utilities' Electric Utility improved slightly to $2.5
million in the recently completed quarter from $2.4 million in the prior-year
quarter primarily because of modestly higher kilowatt-hour sales. Weather in the
service territory was essentially normal in the recent quarter compared to 1.7%
warmer than normal last year.
Net income from Energy Services declined slightly to $3.6 million in the fiscal
2005 first quarter from $3.7 million in the comparable fiscal 2004 quarter
principally due to higher operating expenses resulting from higher
uncollectibles expense partially offset by increased margin reflecting higher
sales volumes at slightly higher average unit margins. Results from our regional
heating and cooling business units were largely unchanged.
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UGI REPORTS HIGHER FIRST QUARTER RESULTS PAGE 3
Separately, UGI announced that for the three-year period ended December 31,
2004, the compound total return on UGI Common Stock was 31.9%, exceeding that of
every company in the S&P Utilities Index. As a result, employees who received
performance-contingent stock awards in early 2002 in accordance with UGI's
long-term compensation plan will receive a portion of the payout under the plan
in UGI Common Stock and will be deemed to have sold a portion of the shares to
UGI for cash to pay income taxes. The appropriate disclosure on Form 4 will be
filed later today with the Securities and Exchange Commission.
UGI is a holding company with propane marketing, utility and energy marketing
subsidiaries. Through subsidiaries, UGI owns 46% of AmeriGas Partners, L. P.
(NYSE: APU), the nation's largest retail propane marketer, and owns Antargaz,
one of the largest LPG distributors in France.
UGI will host its first quarter FY 2005 earnings conference call on Wednesday,
January 26, 2005, at 4:00 PM ET. Interested parties may listen to a live audio
broadcast of the conference call at
http://www.shareholder.com/ugi/medialist.cfm. A telephonic replay of the call
can be accessed approximately one hour after the completion of the call at
888/203-1112, passcode 7435500 (International replay 719/457-0820,
passcode7435500) through February 1, 2005.
The financial tables appended to this news release can be viewed directly at
HTTP://WWW.SHAREHOLDER.COM/UGI/1Q05/FINANCIALTABLE.PDF.
This press release contains certain forward-looking statements which management
believes to be reasonable as of today's date only. Actual results may differ
significantly because of risks and uncertainties that are difficult to predict
and many of which are beyond management's control. Among them are adverse
weather conditions, product cost volatility and availability of all energy
products, including propane, natural gas, electricity and fuel oil, domestic and
international economic and political conditions and currency exchange rates. You
should read UGI's Annual Report on Form 10-K for a more extensive list of
factors that could affect results. UGI undertakes no obligation to release
revisions to its forward-looking statements to reflect events or circumstances
occurring after today.
Comprehensive information about UGI Corporation is available on the Internet at
HTTP://WWW.UGICORP.COM.
C-02 ### 1/26/05
UGI CORPORATION
REPORT OF EARNINGS
(Millions, except per share)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------- --------------------------
2004(a) 2003(a) 2004(a) 2003(a)
---------- ---------- ---------- ----------
Revenues:
AmeriGas Propane $ 556.2 $ 460.2 $ 1,871.9 $ 1,643.6
International Propane 278.9 15.8 596.5 56.0
Gas Utility 161.2 149.3 572.3 544.1
Electric Utility 22.3 21.4 90.6 88.7
Energy Services 329.0 232.9 1,063.3 796.0
Corporate & Other 15.5 14.1 59.5 51.5
---------- ---------- ---------- ----------
Total revenues $ 1,363.1 $ 893.7 $ 4,254.1 $ 3,179.9
========== ========== ========== ==========
Operating income (loss):
AmeriGas Propane $ 58.6 $ 65.6 $ 169.0 $ 165.9
International Propane (b) 65.4 1.8 84.1 2.2
Gas Utility 28.1 29.4 78.8 92.0
Electric Utility 4.7 4.5 21.1 19.2
Energy Services 6.1 6.3 30.9 21.6
Corporate & Other 0.1 0.7 2.1 2.3
---------- ---------- ---------- ----------
Total operating income 163.0 108.3 386.0 303.2
Income (loss) from equity investees (0.7) 4.2 6.4 7.6
Loss on extinguishment of debt -- -- -- (3.0)
Interest expense:
AmeriGas Propane (20.5) (21.1) (82.5) (85.5)
International Propane (8.5) (0.9) (25.2) (3.9)
Gas Utility (4.1) (4.1) (15.9) (15.8)
Electric Utility (0.5) (0.5) (2.0) (2.2)
Corporate and Other, net 0.1 (0.1) (0.3) (0.3)
---------- ---------- ---------- ----------
Total interest expense (33.5) (26.7) (125.9) (107.7)
Minority interests, principally in AmeriGas Partners (20.6) (22.7) (45.4) (36.8)
---------- ---------- ---------- ----------
Income before income taxes and subsidiary
dividends on preferred shares subject to mandatory redemption 108.2 63.1 221.1 163.3
Income tax expense (39.0) (24.3) (79.1) (61.5)
Dividends on UGI Utilities preferred shares subject to
mandatory redemption -- -- -- (0.8)
---------- ---------- ---------- ----------
Net income $ 69.2 $ 38.8 $ 142.0 $ 101.0
========== ========== ========== ==========
Earnings per share:
Basic $ 1.35 $ 0.91 $ 2.87 $ 2.38
========== ========== ========== ==========
Diluted $ 1.32 $ 0.88 $ 2.81 $ 2.32
========== ========== ========== ==========
Average common shares outstanding:
Basic 51.374 42.839 49.454 42.509
========== ========== ========== ==========
Diluted 52.600 43.947 50.518 43.576
========== ========== ========== ==========
Supplemental information:
Net income (loss):
AmeriGas Propane (c) $ 10.4 $ 12.9 $ 26.9 $ 23.4
International Propane (b) 38.2 4.8 46.7 7.2
Gas Utility 14.5 15.2 37.2 45.6
Electric Utility 2.5 2.4 11.1 10.1
Energy Services 3.6 3.7 18.1 12.6
Corporate & Other -- (0.2) 2.0 2.1
---------- ---------- ---------- ----------
Total net income $ 69.2 $ 38.8 $ 142.0 $ 101.0
========== ========== ========== ==========
(a) UGI Corporation's results include Antargaz as an equity investee through
March 31, 2004 and a consolidated operation beginning April 1, 2004.
(b) International Propane's operating income and net income include $7.9
million and $5.9 million, respectively, in both the three and twelve
months ended December 31, 2004 due to the reversal of non-income tax
accruals related to a prior year.
(c) Amounts are net of minority interests in AmeriGas Partners, L.P.