Contact: 610-337-1000 For Release: April 26, 2005
Robert W. Krick, ext. 3141 Immediate
Brenda Blake, ext. 3202
UGI REPORTS HIGHER SECOND QUARTER RESULTS; AFFIRMS FISCAL YEAR GUIDANCE
VALLEY FORGE, Pa., April 26- UGI Corporation (NYSE: UGI) reported that its net
income for the second quarter of fiscal 2005 ended March 31, 2005 rose to $117.3
million, or $2.23 per diluted share, compared to $67.1 million, or $1.48 per
diluted share for the second quarter of fiscal 2004. Average fully diluted
shares outstanding were 16% higher in the recent quarter.
Lon R. Greenberg, chairman and chief executive officer of UGI, said, "The
improvement in our earnings this quarter primarily reflects the impact of full
ownership of Antargaz as well as higher operating income from all of our
business units other than AmeriGas, which experienced warmer than normal
weather. We are pleased to report improved earnings in light of the high level
of energy commodity costs and the adverse effect thereof on customer
conservation. While we expect to face the challenges posed by the high energy
cost environment for the remainder of our fiscal year, we continue to expect to
report fiscal year earnings of $3.45 to $3.55 per diluted share." The forecasted
results do not include a loss on extinguishment of debt of up to $0.18 per
diluted share due to an expected refinancing of long-term debt of AmeriGas on
May 3.
UGI's net income from its domestic propane unit, AmeriGas Propane, declined to
$27.0 million in the fiscal 2005 quarter compared to $30.8 million last year.
For the three months ended March 31, 2005, retail volumes sold declined to 378.8
million gallons from 403.9 million gallons sold in the prior-year period.
Weather was approximately 5% warmer than normal during the recent quarter
compared to weather that was 1.5% warmer than normal in the prior-year period,
according to the National Oceanic and Atmospheric Administration.
The lower retail sales volumes experienced in this quarter reflect warmer than
normal winter weather and price-induced customer conservation resulting from
higher retail selling prices driven by historically high propane product costs.
The average wholesale propane cost per gallon at Mt. Belvieu, Texas, a major
supply point, during the quarter rose 17% over the prior year. Operating and
administrative expenses declined during the quarter mainly reflecting the
implementation of warm weather action plans that will continue for the remainder
of the fiscal year. Lower personnel and vehicle repair expenses were partially
offset by the impact of higher vehicle fuel and lease expenses.
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UGI REPORTS HIGHER SECOND QUARTER RESULTS; AFFIRMS FISCAL YEAR GUIDANCE PAGE 2
International Propane net income increased to $47.0 million in the
recently-completed quarter from $2.9 million last year. Results for the recent
quarter reflect full ownership of Antargaz compared to last year's results that
included UGI's then-existing 20% ownership interest. Results for the prior-year
quarter reflect a $9.1 million loss on the settlement of contracts for the
forward purchase of euros used to fund the acquisition of the remainder of
Antargaz. Antargaz sold approximately 127 million gallons of liquefied petroleum
gases (LPG) while experiencing weather that was 3.8% colder than normal during
the 2005 three-month period compared to 123 million gallons sold on essentially
normal weather in the same period in 2004. "Antargaz continued to benefit during
the quarter from unusually high unit margins primarily reflecting lower product
costs. We expect Antargaz to return to a more normal level of unit margins later
this year," noted Greenberg. Flaga, UGI's LPG distribution business
headquartered in Austria, sold approximately 10.8 million gallons of LPG, up 9%
over the prior-year period. Weather in the Flaga service territory was
approximately 4% colder than the prior year. Income from equity investees
declined in the 2005 period due to the absence of our equity investment in
Antargaz.
At UGI Utilities' Gas Utility, net income improved to $26.7 million for the
quarter ended March 31, 2005 compared to $25.6 million for the fiscal 2004
quarter principally reflecting the absence of costs related to a
previously-reported settlement of a regulatory claim. Weather in the service
territory was 5.7% colder than normal for the recent quarter versus 2.7% colder
than normal in the prior-year quarter. As in the first 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. Total operating and administrative expenses
in the quarter were virtually unchanged from a year ago.
Net income from UGI Utilities' Electric Utility improved slightly to $3.9
million in the recently completed quarter from $3.4 million in the prior-year
quarter primarily because of modestly higher electric generation rates on
similar kilowatt-hour sales. Weather in the service territory was over 7% colder
than normal in the recent quarter compared to 5.5% colder than normal last year.
Net income from Energy Services increased to $8.3 million in the fiscal 2005
second quarter from $4.3 million in the comparable fiscal 2004 quarter
principally due to increased margin reflecting higher sales volumes at higher
average unit margins partially offset by higher operating expenses primarily
resulting from the previously-reported acquisition of Atlantic Energy, owner of
a propane import and storage facility in Virginia. Results from our regional
heating and cooling business units improved slightly.
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.
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UGI REPORTS HIGHER SECOND QUARTER RESULTS; AFFIRMS FISCAL YEAR GUIDANCE PAGE 3
UGI will host its second quarter FY 2005 earnings conference call on Wednesday,
April 27, 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
1-888-203-1112, passcode 9551284 (International replay 719-457-0820, passcode
9551284) through May 3, 2005.
The financial tables appended to this news release can be viewed directly at
HTTP://WWW.SHAREHOLDER.COM/UGI/2Q05/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, currency exchange rates and the
completion of a refinancing of AmeriGas debt. 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-06 ### 4/26/05
UGI CORPORATION
REPORT OF EARNINGS
(Millions, except per share)
(Unaudited)
Three Months Ended Six Months Ended Twelve Months Ended
March 31, March 31, March 31,
--------------------- --------------------- ---------------------
2005(a) 2004(a) 2005(a) 2004(a) 2005(a) 2004(a)
-------- -------- -------- -------- -------- --------
Revenues:
AmeriGas Propane $ 698.3 $ 687.7 $1,254.5 $1,147.9 $1,882.5 $1,705.7
International Propane 363.6 18.6 642.5 34.4 941.5 56.5
Gas Utility 255.9 243.5 417.1 392.8 584.7 547.7
Electric Utility 25.6 24.7 47.9 46.1 91.5 88.7
Energy Services 432.2 328.8 761.2 561.7 1,166.7 907.6
Corporate & Other 12.6 13.3 28.1 27.4 58.8 54.4
-------- -------- -------- -------- -------- --------
Total revenues $1,788.2 $1,316.6 $3,151.3 $2,210.3 $4,725.7 $3,360.6
======== ======== ======== ======== ======== ========
Operating income (loss):
AmeriGas Propane $ 117.9 $ 127.2 $ 176.5 $ 192.8 $ 159.7 $ 177.5
International Propane (b) 99.0 (6.3) 176.4 (4.5) 201.4 (5.4)
Gas Utility 48.6 46.5 76.7 75.9 80.9 83.4
Electric Utility 7.2 6.8 11.9 11.3 21.5 19.5
Energy Services 14.0 7.5 20.1 13.8 37.4 23.2
Corporate & Other 1.0 (0.1) 1.1 0.6 3.2 2.2
-------- -------- -------- -------- -------- --------
Total operating income 287.7 181.6 462.7 289.9 504.1 300.4
Income (loss) from equity investees (0.6) 8.4 (1.3) 12.6 (2.6) 11.0
Interest expense:
AmeriGas Propane (20.7) (21.2) (41.2) (42.3) (82.0) (84.9)
International Propane (8.0) (1.0) (16.5) (1.9) (32.2) (3.9)
Gas Utility (4.0) (3.9) (8.1) (8.0) (16.0) (16.2)
Electric Utility (0.5) (0.5) (1.0) (1.0) (2.0) (2.0)
Corporate and Other, net (0.1) (0.1) -- (0.2) (0.3) (0.3)
-------- -------- -------- -------- -------- --------
Total interest expense (33.3) (26.7) (66.8) (53.4) (132.5) (107.3)
Minority interests, principally in AmeriGas Partners (53.0) (55.6) (73.6) (78.3) (42.8) (47.6)
-------- -------- -------- -------- -------- --------
Income before income taxes and subsidiary
dividends on preferred shares subject to
mandatory redemption 200.8 107.7 321.0 170.8 326.2 156.5
Income tax expense (83.5) (40.6) (125.5) (64.9) (125.0) (57.8)
Dividends on UGI Utilities preferred shares
subject to mandatory redemption -- -- -- -- -- (0.4)
-------- -------- -------- -------- -------- --------
Net income $ 117.3 $ 67.1 $ 195.5 $ 105.9 $ 201.2 $ 98.3
======== ======== ======== ======== ======== ========
Earnings per share:
Basic $ 2.26 $ 1.51 $ 3.79 $ 2.43 $ 3.92 $ 2.27
======== ======== ======== ======== ======== ========
Diluted $ 2.23 $ 1.48 $ 3.72 $ 2.37 $ 3.85 $ 2.22
======== ======== ======== ======== ======== ========
Average common shares outstanding:
Basic 51.791 44.299 51.581 43.566 51.321 43.215
======== ======== ======== ======== ======== ========
Diluted 52.543 45.310 52.564 44.625 52.317 44.276
======== ======== ======== ======== ======== ========
Supplemental information:
Net income (loss):
AmeriGas Propane (c) $ 27.0 $ 30.8 $ 37.4 $ 43.7 $ 23.1 $ 26.5
International Propane (b) 47.0 2.9 94.2 7.7 99.8 4.7
Gas Utility 26.7 25.6 41.2 40.8 38.3 40.7
Electric Utility 3.9 3.4 6.4 5.8 11.6 10.2
Energy Services 8.3 4.3 11.9 8.0 22.1 13.4
Corporate & Other 4.4 0.1 4.4 (0.1) 6.3 2.8
-------- -------- -------- -------- -------- --------
Total net income $ 117.3 $ 67.1 $ 195.5 $ 105.9 $ 201.2 $ 98.3
======== ======== ======== ======== ======== ========
(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 $19.9
million and $14.9 million, respectively, in both the six and twelve months
ended March 31, 2005 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.