EXHIBIT 99.1
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
EIN # 51-0375688 PLAN NUMBER 001
FINANCIAL STATEMENTS
for the years ended December 31, 2004 and 2003
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
Page(s)
-------
Report of Independent Registered Public Accounting Firm 2
Financial Statements:
Statements of Net Assets Available for Benefits at
December 31, 2004 and 2003 3
Statements of Changes in Net Assets Available for
Benefits for the years ended December 31, 2004
and 2003 4
Notes to Financial Statements 5 to 16
Item 4(i) - Schedule of Assets (Held at End of Year) 17 to 18
All other schedules to be filed with the Department of Labor in accordance with
the Employee Retirement Income Security Act of 1974 are not applicable and have
been omitted.
-1-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and Plan Administrator of
UGI HVAC Enterprises, Inc. Savings Plan
We have audited the accompanying statements of net assets available for benefits
of UGI HVAC Enterprises, Inc. Savings Plan as of December 31, 2004 and 2003, and
the related statements of changes in net assets available for benefits for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of UGI HVAC
Enterprises, Inc. Savings Plan as of December 31, 2004 and 2003, and changes in
its net assets available for benefits for the years then ended, in conformity
with accounting principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
at end of year is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
Cogen Sklar LLP
Bala Cynwyd, Pennsylvania
June 21, 2005
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
-------------------------
2004 2003
----------- -----------
Investments (Note 3) $ 9,372,253 $ 7,580,700
Loans to participants 273,959 186,402
Receivables:
Participants' contributions receivable 116,009 91,460
Employers' contributions receivable 34,985 30,630
----------- -----------
Net assets available for benefits $ 9,797,206 $ 7,889,192
=========== ===========
See accompanying notes to financial statements.
-3-
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended
December 31,
-------------------------
2004 2003
----------- ----------
Participants' contributions $ 1,075,751 $ 951,216
Employers' contributions 325,128 296,475
Rollover contributions 227,926 378,312
Transfers of participant balances 11,066 -
Investment income:
Dividends 223,622 109,466
Net appreciation in value of investments 675,152 1,366,158
Distributions to participants (640,067) (286,053)
Loan administration fees (2,513) (1,733)
Other, primarily interest on loans 11,949 13,462
----------- ----------
Net increase 1,908,014 2,827,303
Net assets available for benefits - beginning of year 7,889,192 5,061,889
----------- ----------
Net assets available for benefits - end of year $ 9,797,206 $7,889,192
=========== ==========
See accompanying notes to financial statements.
-4-
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following brief description of the UGI HVAC Enterprises, Inc. Savings Plan
(the "Plan") provides general information on the provisions of the Plan in
effect on December 31, 2004 and during the periods 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 ("ERISA"). The Plan is administered by
the UGI Enterprises, Inc. Retirement Committee ("Plan Administrator") whose
members are appointed by the Board of Directors of the Company.
CONTRIBUTIONS. A participant may elect to contribute to the Plan on a before-tax
basis through payroll reduction an amount equal to from 1% to 50%, in whole
percentages, of eligible compensation. In addition, a participant may elect to
contribute to the Plan on an after-tax basis through payroll deduction an amount
equal to from 1% to 15%, in whole percentages, of eligible compensation,
provided that the combination of before-tax and after-tax contributions does not
exceed 50% of eligible compensation. Calendar year before-tax and after-tax
contribution amounts are subject to limits prescribed by the Internal Revenue
Code ("IRC") and the Plan, respectively. For the 2004 and 2003 Plan Years, the
IRC before-tax contribution limits were $13,000 and $12,000, respectively.
After-tax contributions are subject to limits set by the Plan and Section 402(g)
of the IRC. A participant may increase the rate of, or reduce or suspend, his or
her before-tax or after-tax contributions four times per year by contacting the
Plan's record keeper, Fidelity Institutional Retirement Services Company
("FIRSCO").
The plan allows for "catch-up contributions." The catch-up contribution
provision allows certain employees to make before-tax contributions over and
above the IRS and Plan limits. In order to be eligible to make catch-up
contributions, employees must be at least 50 years of age and must be
contributing the IRC or Plan limit. The maximum catch-up contribution for the
2004 and 2003 Plan Years was $3,000 and $2,000, respectively, which amount shall
increase $1,000 per year through 2006. Catch-up contributions are not eligible
for the Employers' matching contribution (as described below).
During 2003, the Company acquired Devault Refrigeration Services, Inc. Plan
participants who were enrolled in the Devault Refrigeration Services, Inc. 401-K
Profit Sharing Plan and Trust and became eligible to participate in the UGI HVAC
Enterprises, Inc. Plan were permitted to rollover their before-tax account
balances into the Plan. Before-tax balances include before-tax contributions,
company match, any before-tax monies previously rolled into the Devault 401-K
-5-
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
Profit Sharing Plan and Trust, and investment earnings on all contributions,
including earnings on after-tax contributions.
The Plan also accepts on behalf of any employee (i) the entire amount of cash
received as a distribution from another qualified trust forming part of a plan
described in section 401(a) of the IRC or from a "rollover" individual
retirement plan described in section 408 of the IRC, but only if the deposit
qualifies as a tax-free rollover as defined in section 402 or (ii) a direct
transfer from another plan qualified under Section 401(a) of the IRC. The Plan
accepts after-tax rollover contributions.
For each month during a Plan year, the Employers may, at their discretion, make
a contribution to the Plan equal to 50% of participant before-tax and after-tax
contributions, up to a total of 5% of compensation (as defined in the Plan
document) for each participant who has made before-tax and/or after-tax
contributions during the month. The Employers' contributions for the years ended
December 31, 2004 and 2003 were invested in accordance with participant
investment elections in effect on the dates of the contributions.
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.
INVESTMENT FUNDS. A participant may elect to have his or her funds invested in
one or more investment funds. Generally, participants may transfer amounts
between funds at any time with no limit. Participants may change their
investment elections for future contributions at any time. Fidelity Management
Trust Company is the Plan's Trustee for all investment assets of the Plan and
qualifies as a party in interest. References to "Fidelity" below refer
to investment funds managed by Fidelity Management and Research Company ("FMR").
Following are brief descriptions of the investment options available to
participants and the strategies and objectives of each fund.
Money Market Fund
- - Fidelity Cash Reserves Fund
This fund is an unaffiliated registered investment company mutual fund that
invests in U.S. dollar-denominated money market securities and repurchase
agreements, and may enter into reverse repurchase agreements. The fund's
objective is to provide as high a level of current income as is consistent with
the preservation of capital and liquidity.
-6-
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
Managed Income Fund
- - Fidelity Managed Income Portfolio II Fund
This fund is an unaffiliated commingled pool whose investments principally
comprise investment contracts issued by insurance companies and financial
institutions and certain types of fixed income securities. The fund's objective
is to preserve principal while earning interest income.
Income Funds
- - Fidelity Intermediate Bond Fund
This fund is an unaffiliated registered investment company mutual fund which
normally invests in investment-grade bonds while normally maintaining a
dollar-weighted average maturity between three and ten years. The fund's
objective is to provide a high level of current income.
- - Fidelity Capital & Income Fund
This fund is an unaffiliated registered investment company mutual fund that
invests mainly in equity and debt securities, including defaulted securities,
with an emphasis on lower-quality debt securities. The fund invests in companies
in troubled or uncertain financial condition and in domestic and foreign
issuers. The fund's objective is to provide income and capital growth.
- - Fidelity U.S. Bond Index Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in bonds included in the Lehman Brothers Aggregate Bond
Index. The fund's objective is to provide investment results that correspond to
the total returns of bonds in the Lehman Brothers Aggregate Bond Index.
Balanced Funds
- - Fidelity Balanced Fund
- - Fidelity Puritan Fund
These funds are unaffiliated registered investment company mutual funds that
invest in stocks and other equity securities and in bonds and other debt
securities. The funds seek income and capital growth.
-7-
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
Growth and Income Funds
- - Fidelity Spartan U.S. Equity Index Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks included in the Standard and Poor's 500
Index ("S&P 500") a widely recognized, unmanaged index of 500 U.S. common
stocks. The fund's objective is to match the total return of the S&P 500.
- - Fidelity Equity Income Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in income-producing equity securities. The fund's objective
is to provide reasonable income while considering the potential for capital
appreciation.
- - Fidelity Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks. The fund may also invest a portion of
assets in bonds, including lower-quality debt securities. The fund seeks
long-term capital growth.
- - Fidelity Growth & Income Portfolio
This fund is an unaffiliated registered investment company mutual fund that
normally invests a majority of total assets in common stocks with a focus on
those that pay current dividends and show potential for capital appreciation.
The fund may also invest in bonds. The fund seeks high total return through a
combination of current income and capital appreciation.
- - Fidelity Equity Income II Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in income-producing equity securities. The fund seeks
reasonable income and the potential for capital appreciation.
- - Fidelity Real Estate Investment Portfolio
This fund is an unaffiliated registered investment company mutual fund that
principally invests in equity securities of companies principally engaged in the
real estate industry. The fund seeks above-average income and long-term capital
growth consistent with reasonable risk.
-8-
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
Growth Funds
- - Fidelity Magellan Fund
This fund is an unaffiliated registered investment company mutual fund that
invests primarily in common stocks of domestic and foreign issuers. The fund
seeks capital appreciation.
- - Fidelity Growth Company Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks of domestic and foreign issuers that are
expected to have above-average growth potential. The fund seeks capital
appreciation.
- - Fidelity OTC Portfolio
This fund is an unaffiliated registered investment company mutual fund that
principally invests in securities traded on the over-the-counter ("OTC") market.
The fund seeks capital appreciation.
- - Fidelity Capital Appreciation Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks of domestic and foreign issuers. The fund
seeks capital appreciation.
- - Fidelity Blue Chip Growth Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks of well-known and established companies.
The fund invests in securities of domestic and foreign issuers. The fund seeks
growth of capital over the long term.
- - Fidelity Low-Priced Stock Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in low-priced common stocks. The fund seeks capital
appreciation.
- - Fidelity Small Cap Independence Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks of domestic and foreign issuers with small
market capitalizations. The fund seeks capital appreciation.
-9-
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
- - Fidelity Value Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks of companies that possess valuable fixed
assets or that are believed to be undervalued in relation to the issuing
company's assets, earnings, or growth potential. The fund seeks capital
appreciation.
International Funds
- - Fidelity Overseas Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in foreign securities. The fund invests primarily in common
stocks and seeks long-term growth of capital.
- - Fidelity Worldwide Fund
This fund is an unaffiliated registered investment company mutual fund that
invests primarily in common stocks issued anywhere in the world. The fund seeks
growth of capital.
- - Fidelity International Discovery Fund (formerly Fidelity International Growth
& Income Fund)
This fund is an unaffiliated registered investment company mutual fund that
principally invests in foreign securities including common stocks with a focus
on those that pay current dividends and have the potential for capital
appreciation. The fund seeks capital growth and current income.
Fidelity Freedom
- - Fidelity Freedom Income Fund
- - Fidelity Freedom 2000 Fund
- - Fidelity Freedom 2010 Fund
- - Fidelity Freedom 2020 Fund
- - Fidelity Freedom 2030 Fund
- - Fidelity Freedom 2040 Fund
These funds are unaffiliated registered investment company mutual funds that
invest in a combination of underlying Fidelity funds according to an asset
allocation strategy that becomes increasingly conservative over time as each
fund's target retirement date approaches. When each of these target retirement
date funds matches the asset allocation of the Fidelity Freedom Income fund
(approximately five to ten years after the respective fund's target retirement
date), it is expected that each fund will be combined with the Fidelity Freedom
Income Fund. These funds' investment objectives are to achieve high current
income and capital appreciation.
-10-
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
Employer Stock Fund
- - UGI Common Stock Fund
The UGI Common Stock Fund invests principally in shares of UGI Corporation
Common Stock. Participants in the fund do not individually own shares of UGI
Corporation Common Stock but rather own units in a fund that invests in such
shares and in short-term investments. The UGI common Stock Plan was added
January 1, 2003.
The value of a unit in the UGI Common Stock Fund was initially set at $10.00 and
is recalculated daily by dividing the fair value of the fund's assets
(comprising shares of UGI Corporation Common Stock and temporary cash
investments) by the total number of units outstanding. Generally, participant
requests to redeem units from the UGI Common Stock Fund are processed on the day
received if such request is received by Fidelity before the close of the New
York Stock Exchange and provided that there are sufficient short-term
investments in the fund for liquidity. In such case, the participant will
receive the net asset value, or closing price for the units, calculated using
the closing price for UGI Corporation Common Stock on the New York Stock
Exchange for that day. However, on days of unusually heavy requests for sale,
the UGI Common Stock Fund may not have sufficient short-term investments for
liquidity. In such case, requests to sell units received before the close of the
New York Stock Exchange may not be processed on that day at that date's closing
price but may be suspended until sufficient liquidity is restored. Units will be
redeemed generally on a first-in, first-out basis at the closing price for the
processing date. Loans, withdrawals and distributions from the UGI Common Stock
Fund will be given priority over exchanges with other funds.
DISTRIBUTIONS. 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 the UGI Common Stock Fund in the form of shares of UGI
Corporation Common Stock. Where the amount to be distributed exceeds $5,000, no
distribution shall be made to any Plan participant prior to his or her normal
retirement age (as defined in the Plan document) unless the participant elects
to receive such distribution. Where the amount to be distributed does not exceed
$5,000, 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 distribution
upon termination of employment.
DEATH. If a participant dies prior to receiving a distribution of his or her
account, the participant's designated beneficiary shall be entitled to receive a
lump-sum distribution of the proceeds of liquidation of 100% of the balance
credited to the participant's account. Generally, the beneficiary may request a
distribution of the participant's account balance as soon as practicable
following the date of the participant's death. The beneficiary of a participant
who is married at the time of the participant's death will be the participant's
spouse, unless the participant designated another
-11-
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
beneficiary and the spouse consented to such designation in accordance with
procedures specified by the Plan document.
WITHDRAWALS. Generally, a participant may withdraw up to 50% of the balance of
his or her Voluntary Participant Contribution Account, as defined in the Plan
document. However, the withdrawal must be in an amount of at least $500. A
participant may withdrawal up to 100% of the balance of his or her Rollover
Account, as defined in the Plan document, at any time. No more than one
withdrawal in any calendar year is permitted from each of the Voluntary
Participant Contribution Account and Rollover Account portions of a
participant's account.
A participant may withdraw before-tax contributions (but not earnings
attributable thereto) only on account of financial hardship resulting from (a)
medical expenses as defined in section 213(d) of the IRC; (b) educational
expenses for the next twelve months of post-secondary education of the
participant, or his or her spouse, children or dependents; (c) foreclosure on a
primary residence; or (d) costs directly related to the purchase of a primary
residence. A hardship withdrawal will be permitted if the Plan Administrator
determines that (i) the withdrawal is on account of an immediate and heavy
financial need of the participant and (ii) the withdrawal is necessary to
satisfy such financial need.
LOAN PROVISION. The Plan includes an employee loan provision. 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 before-tax and rollover account
balances, or (b) $50,000 less the excess of the highest balance of all loans
during the prior twelve month period. Each loan bears interest at a rate
determined in accordance with generally prevailing market conditions for similar
types of loans. The minimum loan amount is $1,000. The amount of the loan
withdrawn from a participant's account 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. No participant shall be permitted to have more than two loans outstanding
at any one time.
ADMINISTRATIVE EXPENSES. Administrative expenses of the Plan are chargeable to
the Plan unless paid for by the Employers. The Employers currently pay such
expenses. Loan administration and withdrawal fees are paid by participants.
Mutual fund expenses are paid to fund managers from mutual fund assets.
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.
-12-
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
PLAN AMENDMENT. The Company may amend the Plan at any time for any reason by
written action of its Board of Directors. Amendments required to comply with
applicable legal requirements, however, may be made by The Retirement Committee
without Board approval.
VOTING RIGHTS OF UGI COMMON STOCK FUND 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 the UGI Common
Stock Fund. 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.
2. ACCOUNTING POLICIES
The accompanying financial statements are prepared on the accrual basis of
accounting.
The Plan's investments in registered investment company mutual funds are valued
at quoted market prices, which represent the net asset value of shares held by
the Plan. Investment contracts included in the Fidelity Managed Income Portfolio
II fund, an unaffiliated commingled pool, are carried at contract value which
represents deposits plus accrued interest. The Plan Administrator believes
contract value approximates fair value. Shares of UGI Corporation Common Stock
included in the UGI Common Stock Fund are reflected at fair value based on
quoted market prices.
Dividend income is recorded on the record date. Interest earned on investments
is recorded on the accrual basis. Purchases and sales of securities are recorded
on a trade date basis.
The Plan presents in the Statement of Changes in Net Assets Available for
Benefits the net appreciation (depreciation) in fair value of investments which
consists of realized gains or losses and unrealized appreciation (depreciation)
in the fair value of those investments.
Distributions are made to Plan participants based upon the fair value of each
participant's investment account (except for investments of the Managed Income
Fund for which distributions are based upon contract value) as of the dates of
the distribution. Distributions to participants are recorded when paid.
Transfers of participant balances represent amounts transferred to or from the
AmeriGas Propane, Inc. Savings Plan and the UGI Utilities, Inc. Savings Plan,
affiliate plans.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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 these estimates.
-13-
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. TRUST INVESTMENTS
The components of trust investments by fund at December 31, 2004 and 2003 are as
follows:
December 31,
2004 2003
--------- ---------
Fidelity Cash Reserves (shares -- 303,191 and 242,481, respectively) $ 303,191 $ 242,481
--------- ---------
Fidelity Managed Income Portfolio II (shares -- 128,959 and 101,216, respectively) 128,959 101,216
--------- ---------
Fidelity Intermediate Bond Fund (shares -- 10,217 and 8,941, respectively) 107,483 95,314
--------- ---------
Fidelity Capital & Income Fund (shares -- 16,068 and 16,625, respectively) 136,098 133,999
--------- ---------
Fidelity U.S. Bond Index Fund (shares -- 14,028 and 12,565, respectively) 156,267 140,607
--------- ---------
Fidelity Spartan U.S. Equity Index Fund (shares -- 5,599 and 4,611, respectively) 239,959 181,706
--------- ---------
Fidelity Equity Income Fund (shares -- 1,337 and 1,123, respectively) 70,544 55,860
--------- ---------
Fidelity Fund (shares -- 3,262 and 2,479, respectively) 97,464 69,621
--------- ---------
Fidelity Growth & Income Portfolio (shares -- 7,387 and 6,268, respectively) 282,267 223,328
--------- ---------
Fidelity Equity Income Fund II (shares -- 13,592 and 11,569, respectively) 326,351 263,533
--------- ---------
Fidelity Real Estate Investment Portfolio (shares --12,168 and 10,034, respectively) 359,441 237,898
--------- ---------
Fidelity Balanced Fund (shares -- 8,285 and 8,340, respectively) 147,643 139,688
--------- ---------
Fidelity Puritan Fund (shares -- 9,800 and 7,337, respectively) 185,709 135,516
--------- ---------
Fidelity Magellan Fund (shares -- 7,859 and 8,801, respectively) 815,720 * 860,167 *
--------- ---------
Fidelity Growth Company Fund (shares -- 13,213 and 11,669, respectively) 740,854 * 584,279 *
--------- ---------
Fidelity OTC Portfolio (shares -- 9,555 and 9,694, respectively) 331,448 314,766
--------- ---------
Fidelity Capital Appreciation Fund (shares -- 5,000 and 4,027, respectively) 130,152 98,713
--------- ---------
Fidelity Blue Chip Growth Fund (shares -- 17,955 and 16,347, respectively) 748,919 * 647,841 *
--------- ---------
Fidelity Low-Priced Stock Fund (shares -- 15,262 and 10,393, respectively) 614,280 * 363,536
--------- ---------
Fidelity Small Cap Independence Fund (shares -- 8,240 and 7,280, respectively) 162,493 130,602
--------- ---------
Fidelity Value Fund (shares -- 2,791 and 1,032, respectively) 198,960 64,044
--------- ---------
Fidelity Overseas Fund (shares -- 1,830 and 1,529, respectively) 64,758 48,069
--------- ---------
-14-
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. TRUST INVESTMENTS (CONTINUED)
December 31,
2004 2003
----------- ------------
Fidelity Worldwide Fund (shares -- 7,521 and 6,882, respectively) 137,252 112,662
----------- ------------
Fidelity International Discovery Fund (shares -- 6,905 and 5,244, respectively) 194,715 125,432
----------- ------------
Fidelity Freedom Income Fund (shares -- 711 and 2,546, respectively) 8,018 28,236
----------- ------------
Fidelity Freedom 2000 Fund (shares -- 6,510 and 6,202, respectively) 78,639 73,063
----------- ------------
Fidelity Freedom 2010 Fund (shares -- 40,583 and 34,177, respectively) 552,738 * 444,981 *
----------- ------------
Fidelity Freedom 2020 Fund (shares -- 51,878 and 50,241, respectively) 724,218 * 654,132 *
----------- ------------
Fidelity Freedom 2030 Fund (shares -- 62,234 and 51,764, respectively) 876,261 * 670,348 *
----------- ------------
Fidelity Freedom 2040 Fund (shares -- 33,546 and 29,920, respectively) 277,424 226,192
----------- ------------
UGI Common Stock Fund
UGI Corporation Unitized Stock Fund (units -- 10,976 and 8,544, respectively) 172,765 112,010
Dividends receivable 1,263 860
----------- ------------
174,028 112,870
----------- ------------
Total trust investments - fair value, except for group annuity contracts
included in the Fidelity Managed Income Portfolio II Fund
which are carried at contract value $ 9,372,253 $ 7,580,700
=========== ============
Total trust investments - cost $ 8,908,465 $ 7,827,731
=========== ============
* - Investment represents five percent or more of the net assets available for
benefits.
The net appreciation in fair value of investments during the years ended
December 31, 2004 and 2003 by major investment category follows:
Year Year
Ended Ended
December 31, December 31,
2004 2003
------------ ------------
Registered investment company mutual funds $ 647,061 $ 1,351,620
UGI Common Stock Fund 28,090 14,538
------------ ------------
Total net appreciation in fair value $ 675,152 $ 1,366,158
============ ============
-15-
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
During the 2004 Plan Year the Plan purchased, at market prices, 2,157 shares of
UGI Corporation Common Stock directly from UGI Corporation for $73,657.
The investments of the separate investment funds are exposed to various risks
such as interest rate, market and credit risk. The degree and concentration of
these risks vary by fund. 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.
4. FEDERAL INCOME TAX STATUS
On December 6, 2002, the Internal Revenue Service issued a favorable
determination letter concerning the qualified status of the Plan in effect as of
November 27, 2002 under Section 401(a) of the IRC. 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.
5. SUBSEQUENT EVENT
The Company performed a review of the Plan's investment strategies,
funds offered and fund expenses and determined that a simplified core group of
funds combined with a self-directed brokerage option would help participants
achieve their investment objectives at lower costs. As a result of that review,
effective June 1, 2005, 26 of the 31 investment fund options offered at
December 31, 2004, were discontinued. Eleven new fund options and a
self-directed brokerage option were added effective February 1, 2005.
-16-
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
ITEM 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2004
----------------------------------------------
Number of
Shares or Fair Value/
Principal Contract
NAME OF ISSUER AND TITLE OF ISSUE Amount Cost Value %(2)
- ---------------------------------------- ------------ -------- ----------- ------
FIDELITY CASH RESERVES FUND (3) 303,191 shrs $303,191 $ 303,191 100.00%
-------- ----------- ------
FIDELITY MANAGED INCOME
PORTFOLIO II FUND (3) 128,959 shrs 128,959 128,959 100.00%
-------- ----------- ------
FIDELITY INTERMEDIATE BOND FUND (3) 10,217 shrs 107,686 107,483 100.00%
-------- ----------- ------
FIDELITY CAPITAL & INCOME FUND (3) 16,068 shrs 116,331 136,098 100.00%
-------- ----------- ------
FIDELITY U.S. BOND INDEX FUND (3) 14,028 shrs 153,280 156,267 100.00%
-------- ----------- ------
FIDELITY SPARTAN U.S. EQUITY
INDEX FUND (3) 5,599 shrs 232,788 239,959 100.00%
-------- ----------- ------
FIDELITY EQUITY INCOME FUND (3) 1,337 shrs 64,000 70,544 100.00%
-------- ----------- ------
FIDELITY FUND (3) 3,262 shrs 95,943 97,464 100.00%
-------- ----------- ------
FIDELITY GROWTH & INCOME
PORTFOLIO (3) 7,387 shrs 286,290 282,267 100.00%
-------- ----------- ------
FIDELITY EQUITY INCOME II FUND (3) 13,592 shrs 318,101 326,351 100.00%
-------- ----------- ------
FIDELITY REAL ESTATE INVESTMENT
PORTFOLIO (3) 12,168 shrs 249,534 359,441 100.00%
-------- ----------- ------
FIDELITY BALANCED FUND (3) 8,285 shrs 127,888 147,643 100.00%
-------- ----------- ------
FIDELITY PURITAN FUND (3) 9,800 shrs 177,424 185,709 100.00%
-------- ----------- ------
FIDELITY MAGELLAN FUND (1) (3) 7,859 shrs 838,064 815,720 100.00%
-------- ----------- ------
FIDELITY GROWTH COMPANY FUND (1) (3) 13,213 shrs 770,155 740,854 100.00%
-------- ----------- ------
FIDELITY OTC PORTFOLIO (3) 9,555 shrs 380,035 331,448 100.00%
-------- ----------- ------
FIDELITY CAPITAL APPRECIATION FUND (3) 5,000 shrs 107,834 130,152 100.00%
-------- ----------- ------
FIDELITY BLUE CHIP GROWTH FUND (1) (3) 17,955 shrs 816,377 748,919 100.00%
-------- ----------- ------
FIDELITY LOW-PRICED STOCK FUND (1) (3) 15,262 shrs 442,594 614,280 100.00%
-------- ----------- ------
FIDELITY SMALL CAP INDEPENDENCE FUND (3) 8,240 shrs 135,908 162,493 100.00%
-------- ----------- ------
FIDELITY VALUE FUND (3) 2,791 shrs 173,380 198,960 100.00%
-------- ----------- ------
FIDELITY OVERSEAS FUND (3) 1,830 shrs 58,804 64,758 100.00%
-------- ----------- ------
FIDELITY WORLDWIDE FUND (3) 7,521 shrs 126,874 137,252 100.00%
-------- ----------- ------
-17-
UGI HVAC ENTERPRISES, INC.
SAVINGS PLAN
ITEM 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR) (CONTINUED)
December 31, 2004
------------------------------------------------
Number of
Shares or Fair Value/
Principal Contract
NAME OF ISSUER AND TITLE OF ISSUE Amount Cost Value %(2)
- ----------------------------------- ------------- ---------- ----------- ------
FIDELITY INTERNATIONAL DISCOVERY
FUND (3) 6,905 shrs 149,546 194,715 100.00%
---------- ----------- ------
FIDELITY FREEDOM INCOME FUND (3) 711 shrs 7,911 8,018 100.00%
---------- ----------- ------
FIDELITY FREEDOM 2000 FUND (3) 6,510 shrs 79,012 78,639 100.00%
---------- ----------- ------
FIDELITY FREEDOM 2010 FUND (1) (3) 40,583 shrs 542,546 552,738 100.00%
---------- ----------- ------
FIDELITY FREEDOM 2020 FUND (1) (3) 51,878 shrs 716,261 724,218 100.00%
---------- ----------- ------
FIDELITY FREEDOM 2030 FUND (1) (3) 62,234 shrs 804,152 876,261 100.00%
---------- ----------- ------
FIDELITY FREEDOM 2040 FUND (3) 33,546 shrs 259,402 277,424 100.00%
---------- ----------- ------
UGI COMMON STOCK FUND (3)
UGI Corporation Unitized Stock Fund 10,976 units 136,932 172,765 99.27%
Dividends receivable $ 1,263 1,263 1,263 0.73%
---------- ----------- ------
138,195 174,028 100.00%
---------- ----------- ------
PARTICIPANT LOANS
Loan principal outstanding
(5.00% - 10.50%)(3)(4) - 273,959 100.00%
---------- ----------- ------
Total-all funds $8,908,465 $ 9,646,212
========== ===========
- ---------------
(1) Investment represents 5% or more of the net assets available for benefits.
(2) Percentages represent percentage of fair value of each fund.
(3) Party in interest.
(4) Range of interest rates for loans outstanding as of December 31, 2004.
-18-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
EIN #23-2786294 PLAN NUMBER 002
FINANCIAL STATEMENTS
for the years ended December 31, 2004 and 2003
AMERIGAS PROPANE, INC.
SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
Page(s)
-------
Report of Independent Registered Public Accounting Firm 2
Financial Statements:
Statements of Net Assets Available for Benefits at
December 31, 2004 and 2003 3
Statements of Changes in Net Assets Available for Benefits
for the years ended December 31, 2004 and 2003 4
Notes to Financial Statements 5 - 17
Item 4(i) - Schedule of Assets (Held at End of Year) 18 - 19
All other schedules to be filed with the Department of Labor in accordance with
the Employee Retirement Income Security Act of 1974 are not applicable and have
been omitted.
-1-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and Plan Administrator of
AmeriGas Propane, Inc. Savings Plan
We have audited the accompanying statements of net assets available for benefits
of AmeriGas Propane, Inc. Savings Plan as of December 31, 2004 and 2003, and the
related statements of changes in net assets available for benefits for the years
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of AmeriGas
Propane, Inc. Savings Plan as of December 31, 2004 and 2003, and changes in its
net assets available for benefits for the years then ended, in conformity with
accounting principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
at end of year is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
Cogen Sklar LLP
Bala Cynwyd, Pennsylvania
June 21, 2005
AMERIGAS PROPANE, INC.
SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
2004 2003
------------- -------------
Investments (Note 3) $ 181,382,040 $ 166,719,629
Loans to participants 4,446,501 4,118,818
------------- -------------
Net assets available for benefits $ 185,828,541 $ 170,838,447
============= =============
See accompanying notes to financial statements.
-3-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31,
2004 2003
------------ ------------
Participants' contributions $ 10,260,599 $ 9,304,430
Participants' rollover contributions 811,025 497,305
Company contributions 6,586,607 5,996,318
Investment income:
Dividends 4,632,295 3,444,863
Net appreciation in value of investments 10,449,299 24,758,756
Administration fees (49,630) (39,148)
Other, primarily interest on loans 226,487 262,588
Net transfers of participants' balances (415,447) (81,857)
Distributions to participants (17,511,141) (15,073,018)
------------ ------------
Net increase 14,990,094 29,070,237
Net assets available for benefits -
beginning of year 170,838,447 141,768,210
------------ ------------
Net assets available for benefits -
end of year $185,828,541 $170,838,447
============ ============
See accompanying notes to financial statements.
-4-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following brief description of the AmeriGas Propane, Inc. Savings Plan
(Plan) provides general information on the provisions of the Plan in effect on
December 31, 2004 and during the periods covered by the financial statements.
More complete information is included in the Plan document.
GENERAL. The Plan is a defined contribution plan covering employees of AmeriGas
Propane, Inc. (a Pennsylvania corporation, hereinafter referred to as "the
Company"). Employees are eligible upon hire to participate in the Plan. The Plan
also holds assets of certain defined contribution pension plans that were
terminated in prior years and were merged into the Plan. Such assets include
what is referred to as the "Pension Account" and "Predecessor Pension Rollover
Account" and do not impact the general provisions of the Plan. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA). The Plan is administered by the AmeriGas Propane, Inc. Benefits
Committee (Plan Administrator), whose members are appointed by the President of
the Company and subject to approval by the Compensation/Pension Committee of the
Company's Board of Directors.
CONTRIBUTIONS. A participant may elect to contribute to the Plan on a before-tax
basis through payroll reduction an amount equal to from 1% to 50%, in whole
percentages, of eligible compensation. Calendar year contribution amounts are
subject to limits prescribed by the Internal Revenue Code (IRC). For the 2004
and 2003 Plan Years, the IRC before-tax contribution limits were $13,000 and
$12,000, respectively. A participant may increase, reduce or suspend his or her
contributions at any time by contacting Fidelity Institutional Retirement
Services Co. (FIRSCO).
The Plan allows for "catch-up contributions". The catch-up contribution
provision allows certain employees to make before-tax contributions over and
above the IRS and Plan limits. In order to be eligible to make catch-up
contributions, employees must be at least 50 years of age and must be
contributing the IRC or Plan limit. The maximum catch-up contribution for the
2004 Plan Year and 2003 Plan Year was $3,000 and $2,000, respectively, which
amount shall increase $1,000 per year through 2006. Catch-up contributions are
not eligible for the Company matching contribution (as described below).
The Plan also accepts on behalf of any employee (i) the entire amount of cash
received as a distribution from another qualified trust forming part of a plan
described in Section 401(a) of the IRC or from a "rollover" individual
retirement plan described in Section 408 of the IRC, but only if the deposit
qualifies as a tax free rollover as defined in section 402 or (ii) a direct
transfer from another plan qualified under Section 401(a) of the IRC. The Plan
accepts rollovers from after-tax contributions.
Generally the Company shall contribute to the Plan an amount equal to 100% of
contributions made by each eligible participant for each payroll period up to a
total of 5% of the participant's eligible compensation for each such payroll
period. A participant will be eligible to receive matching contributions after
he or she has completed a year of service as defined in the Plan document.
-5-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS(Continued)
The Company may also make profit-sharing contributions for each Plan year, out
of its net profits, as shall be determined by its Board of Directors, in its
sole discretion, to all eligible participants. A participant will be eligible to
receive profit sharing contributions if he or she (i) has completed one year of
service; (ii) was not eligible to participate in the AmeriGas Propane, Inc.
Supplemental Executive Retirement Plan as of the last day of a Plan year; and
(iii) either (a) remained in the employ of the Company through the end of the
Plan year as of which such contribution is to be allocated; (b) retired,
experienced total disability (as defined in the Plan document), or died while in
service during the Plan year; or (c) was on an excused absence (as defined in
the Plan document) at the end of the Plan year. Subject to certain limitations,
the profit sharing contribution to be credited to a participant's account shall
be allocated as of the last day of the Plan year by dividing the total amount of
such contribution by the number of eligible Plan participants. No such amounts
were contributed to the Plan in respect of the 2004 Plan Year or the 2003 Plan
Year.
Any participant who (i) satisfies the eligibility requirements described in the
immediately preceding paragraph; (ii) was a participant in the former Retirement
Income Plan for Employees of AP Propane, Inc. as of December 31, 1988; and (iii)
had attained the age of 50 as of that date, is entitled to an additional
contribution as of the last day of each Plan year as follows:
Age as of Percentage of
December 31, 1988 Eligible Compensation
- ---------------- ---------------------
50 to 54 2%
55 to 59 3%
60 and over 4%
All contributions are invested in accordance with participant investment
elections in effect on the dates of the contributions.
A participant will at all times be fully (100%) vested in the portion of his or
her account attributable to the following sources: (i) Predecessor Account; (ii)
Predecessor Pension Rollover Account; (iii) Rollover/Dollar Builder Account;
(iv) Rollover ESOP Account; (v) Salary Deferral Account; (vi) the Voluntary
Participant Contribution Account; and (vii) the After-Tax Rollover Account, each
as defined in the Plan document. A participant is vested in the portion of his
or her account attributable to Company contributions as follows: 25% after two
years of service; 50% after three years of service; 75% after four years of
service; and 100% after five years of service. In addition, a participant is
fully vested in the portion of his or her account attributable to Company
contributions upon the attainment of normal retirement age (as defined in the
Plan document), total disability (as defined in the Plan document) or death
while in the employ of the Company or an affiliated company. For Plan purposes,
a participant will attain normal retirement age on the later of his or her 65th
birthday or the fifth anniversary of his or her date of hire.
A participant who terminates employment before he or she is fully vested will
forfeit nonvested amounts attributable to Company contributions. These forfeited
amounts remain in the Plan and are
-6-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS(Continued)
available to reduce future Company contributions. For the 2004 Plan Year and
2003 Plan Year, forfeitures of $194,482 and $128,845, respectively, were used to
reduce Company contributions. During the 2004 Plan Year and 2003 Plan Year,
$238,222 and $164,421, respectively, were forfeited from participant accounts.
As of December 31, 2004 and 2003, there were $163,349 and $122,046,
respectively, of forfeitures remaining in the Plan.
INVESTMENT FUNDS. A participant may elect to have his or her funds invested in
one or more investment funds. Generally, participants may transfer amounts
between funds at any time with no limit. Participants may change their
investment elections for future contributions at any time. Fidelity Management
Trust Company is the Plan's trustee for all investment assets of the Plan and
qualifies as a party in interest. References to "Fidelity" below refer
to investment funds managed by Fidelity Management and Research Company (FMR).
Following are brief descriptions of the investment options available to
participants and the strategies and objectives of each fund.
Money Market Fund
- - Fidelity Cash Reserves Fund
This fund is an unaffiliated registered investment company mutual fund that
invests in U.S. dollar-denominated money market securities and repurchase
agreements, and may enter into reverse repurchase agreements. The fund's
objective is to provide as high a level of current income as is consistent with
the preservation of capital and liquidity.
Managed Income Fund
- - Fidelity Managed Income Portfolio II Fund
This fund is an unaffiliated commingled pool whose investments principally
comprise investment contracts issued by insurance companies and financial
institutions and certain types of fixed income securities. The fund's objective
is to preserve principal while earning interest income.
Income Funds
- - Fidelity Intermediate Bond Fund
This fund is an unaffiliated registered investment company mutual fund which
normally invests in investment-grade bonds while normally maintaining a
dollar-weighted average maturity between three and ten years. The fund's
objective is to provide a high level of current income.
- - Fidelity Capital & Income Fund
This fund is an unaffiliated registered investment company mutual fund that
invests mainly in equity and debt securities, including defaulted securities,
with an emphasis on lower-quality debt
-7-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS(Continued)
securities. The fund invests in companies in troubled or uncertain financial
condition and in domestic and foreign issuers. The fund's objective is to
provide income and capital growth.
- - Fidelity U.S. Bond Index Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in bonds included in the Lehman Brothers Aggregate Bond
Index. The fund's objective is to provide investment results that correspond to
the total returns of bonds in the Lehman Brothers Aggregate Bond Index.
Balanced Funds
- - Fidelity Balanced Fund
- - Fidelity Puritan Fund
These funds are unaffiliated registered investment company mutual funds that
invest in stocks and other equity securities and in bonds and other debt
securities. The funds seek income and capital growth.
Growth and Income Funds
- - Fidelity Spartan U.S. Equity Index Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks included in the Standard and Poor's 500
Index (S&P 500) a widely recognized, unmanaged index of 500 U.S. common stocks.
The fund's objective is to match the total return of the S&P 500.
- - Fidelity Equity Income Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in income-producing equity securities. The fund's objective
is to provide reasonable income while considering the potential for capital
appreciation.
- - Fidelity Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks. The fund may also invest a portion of
assets in bonds, including lower-quality debt securities. The fund seeks
long-term capital growth.
- - Fidelity Growth & Income Portfolio
This fund is an unaffiliated registered investment company mutual fund that
normally invests a majority of total assets in common stocks with a focus on
those that pay current dividends and show
-8-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS(Continued)
potential for capital appreciation. The fund may also invest in bonds. The fund
seeks high total return through a combination of current income and capital
appreciation.
- - Fidelity Equity Income II Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in income-producing equity securities. The fund seeks
reasonable income and the potential for capital appreciation.
- - Fidelity Real Estate Investment Portfolio
This fund is an unaffiliated registered investment company mutual fund that
principally invests in equity securities of companies principally engaged in the
real estate industry. The fund seeks above-average income and long-term capital
growth consistent with reasonable risk.
Growth Funds
- - Fidelity Magellan Fund
This fund is an unaffiliated registered investment company mutual fund that
invests primarily in common stocks of domestic and foreign issuers. The fund
seeks capital appreciation.
- - Fidelity Growth Company Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks of domestic and foreign issuers that are
expected to have above-average growth potential. The fund seeks capital
appreciation.
- - Fidelity OTC Portfolio
This fund is an unaffiliated registered investment company mutual fund that
principally invests in securities traded on the over-the-counter (OTC) market.
The fund seeks capital appreciation.
- - Fidelity Capital Appreciation Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks of domestic and foreign issuers. The fund
seeks capital appreciation.
- - Fidelity Blue Chip Growth Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks of well-known and established companies.
The fund invests in securities of domestic and foreign issuers. The fund seeks
growth of capital over the long term.
-9-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS(Continued)
- - Fidelity Low-Priced Stock Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in low-priced common stocks. The fund seeks capital
appreciation.
- - Fidelity Small Cap Independence Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks of domestic and foreign issuers with small
market capitalizations. The fund seeks capital appreciation.
- - Fidelity Value Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks of companies that possess valuable fixed
assets or that are believed to be undervalued in relation to the issuing
company's assets, earnings, or growth potential. The fund seeks capital
appreciation.
International Funds
- - Fidelity Overseas Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in foreign securities. The fund invests primarily in common
stocks and seeks long-term growth of capital.
- - Fidelity Worldwide Fund
This fund is an unaffiliated registered investment company mutual fund that
invests primarily in common stocks issued anywhere in the world. The fund seeks
growth of capital.
- - Fidelity International Discovery Fund (formerly Fidelity International Growth
& Income Fund)
This fund is an unaffiliated registered investment company mutual fund that
principally invests in foreign securities including common stocks with a focus
on those that pay current dividends and have the potential for capital
appreciation. The fund seeks capital growth and current income.
Fidelity Freedom Funds
- - Fidelity Freedom Income Fund
- - Fidelity Freedom 2000 Fund
- - Fidelity Freedom 2010 Fund
- - Fidelity Freedom 2020 Fund
- - Fidelity Freedom 2030 Fund
- - Fidelity Freedom 2040 Fund
-10-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS(Continued)
These funds are unaffiliated registered investment company mutual funds that
invest in a combination of underlying Fidelity funds according to an asset
allocation strategy that becomes increasingly conservative over time as each
fund's target retirement date approaches. When each of these target retirement
date funds matches the asset allocation of the Fidelity Freedom Income fund
(approximately five to ten years after the respective fund's target retirement
date), it is expected that each fund will be combined with the Fidelity Freedom
Income Fund. These funds' investment objectives are to achieve high current
income and capital appreciation.
Employer Stock Fund
- - UGI Common Stock Fund
This fund invests principally in shares of UGI Corporation Common Stock.
Participants in the fund do not individually own specific shares of UGI
Corporation Common Stock but rather own units in the fund that invests in such
shares and short-term investments. The value of a unit in the UGI Common Stock
Fund was initially set at $10.00 and is recalculated daily by dividing the fair
value of the fund's assets (comprising shares of UGI Corporation Common Stock
and temporary cash investments) by the total number of units outstanding.
Generally, participant requests to redeem units from the UGI Common Stock Fund
are processed on the day received if such request is received by Fidelity before
the close of the New York Stock Exchange and provided that there are sufficient
short-term investments in the fund for liquidity. In such case, the participant
will receive the closing price for the units calculated using the closing price
for UGI Corporation Common Stock on the New York Stock Exchange for that day.
However, on days of unusually heavy requests for sale, the UGI Common Stock Fund
may not have sufficient short-term investments for liquidity. In such case,
requests to sell units received before the close of the New York Stock Exchange
may not be processed on that day at that date's closing price but may be
suspended until sufficient liquidity is restored. Units will be redeemed
generally on a first-in, first-out basis at the closing price for the processing
date. Loans, withdrawals and distributions from the UGI Common Stock Fund will
be given priority over exchanges with other funds.
DISTRIBUTIONS. The Plan benefit of a participant who terminates employment as a
result of retirement, death or total disability, as defined by the Plan
document, 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 the
UGI Common Stock Fund in the form of shares of UGI Corporation Common Stock. The
Plan benefit of a participant who terminates employment for reasons other than
retirement, death or total disability shall be equal to the proceeds of
liquidation of the vested portion of his or her account.
Distributions will generally be made in the form of a lump sum. If the value of
a participant's account exceeds $5,000 and the participant is married, the
participant's Pension Account and Predecessor Pension Rollover Account will be
distributed in the form of a joint and survivor annuity. Under a joint and
survivor annuity, the participant will receive a monthly benefit for his or her
lifetime and upon the participant's death, the participant's surviving spouse,
if any, will receive a monthly benefit equal to
-11-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS(Continued)
50% of the benefit the participant was receiving. If the value of the
participant's account exceeds $5,000 and the participant is not married, the
participant's Pension Account and Predecessor Pension Rollover Account will be
distributed in the form of a single life annuity. In lieu of a joint and
survivor annuity or a single life annuity, a participant may generally elect to
receive his or her Pension Account and Predecessor Pension Rollover Account in
the form of (i) a lump sum; (ii) a single life annuity; (iii) a joint and
survivor annuity with 50% or 100% of the participant's monthly payments
continuing, after the participant's death, for the life of the participant's
beneficiary; or (iv) installments over 5 or 10 years, as elected by the
participant. Any such election will be subject to spousal consent, if
applicable.
Where the amount to be distributed exceeds $5,000, no distribution shall be made
to any Plan participant prior to his or her normal retirement age unless the
participant elects to receive such distribution. Where the amount to be
distributed does not exceed $5,000 a Plan participant's benefit will be
distributed as soon as practicable after the participant becomes entitled to
receive a distribution from the Plan.
A participant who continues to work past age 70-1/2 will receive a distribution
upon termination of employment. Otherwise, distributions must generally be made
as soon as practicable after the participant reaches the normal retirement age
as defined above.
DEATH. If a participant dies prior to receiving a distribution of his or her
account, the participant's designated beneficiary shall be entitled to receive a
lump-sum distribution of the proceeds of liquidation of 100% of the vested
portion of his or her account. Generally, the beneficiary may request a
distribution of the participant's account balance as soon as practicable
following the date of the participant's death. The beneficiary of a participant
who is married at the time of the participant's death will be the participant's
spouse, unless the participant designated another beneficiary and the spouse
consented to such designation in accordance with procedures specified by the
Plan document.
Death benefits are generally paid in the form of a lump sum. Death benefits
payable to a spouse from the Pension Account and the Predecessor Pension
Rollover Account are paid in the form of a single life annuity unless the spouse
elects a lump sum distribution.
WITHDRAWALS. Generally, a participant may withdraw up to 50% of the balance of
his or her account attributable to previously permitted after-tax contributions
(including after-tax contributions that were matched by the Company) at any
time. However, the withdrawal must be in an amount of at least $250. No more
than one withdrawal is permitted in any calendar year.
A participant may withdraw once per calendar year up to 100% of amounts
attributable to participation in certain "predecessor plans" and rollover
contributions from other 401(a) or individual retirement plan accounts, however
the amount must be at least $500 or, if less, the total value of the applicable
account.
A participant may withdraw before-tax contributions (and earnings attributable
thereto credited as of December 31, 1988) only on account of financial hardship
resulting from (i) medical expenses as
-12-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS(Continued)
defined in section 213(d) of the IRC; (ii) educational expenses for the next
twelve months of post-secondary education of the participant, or his or her
spouse, children or dependents; (iii) foreclosure on a primary residence; or
(iv) costs directly related to the purchase of a primary residence. A hardship
withdrawal will be permitted if the Plan Administrator determines that (i) the
withdrawal is on account of an immediate and heavy financial need of the
participant and (ii) the withdrawal is necessary to satisfy such financial need.
While a participant is still employed by the Company, withdrawals of amounts
attributable to Company contributions, and post-1988 earnings on participant
before-tax contributions, are not permitted.
LOAN PROVISION. The Plan includes an employee loan provision. Generally, at the
time a loan is to be made, the amount of all loans to be outstanding may not
exceed the lesser of (i) 50% of a participant's before-tax and rollover account
balances, or (ii) $50,000 less the highest balance of any loan during the prior
twelve-month period. Each loan bears interest at a rate determined in accordance
with generally prevailing market conditions for similar types of loans. The
minimum loan amount is $1,000. The amount of the loan withdrawn from a
participant's account 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. No
participant shall be permitted to have more than two loans outstanding at any
one time.
ADMINISTRATIVE EXPENSES. Administrative expenses of the Plan are chargeable to
the Plan unless paid for by the Company. The Company currently pays such
expenses. Loan administration fees are paid by participants. Mutual fund
expenses are paid to fund managers from mutual fund assets.
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. In the event of a complete or partial termination of the Plan, the
affected participants will become fully vested in their account balances.
PLAN AMENDMENT. The Company may amend the Plan at any time for any reason by
written action of its Board of Directors. 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, however, may be made by an officer of
the Company without Board approval.
VOTING RIGHTS OF UGI COMMON STOCK FUND 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 the UGI Common
Stock Fund. 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.
-13-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS(Continued)
2. ACCOUNTING POLICIES
The accompanying financial statements are prepared on the accrual basis of
accounting.
The Plan's investments in registered investment company mutual funds are valued
at quoted market prices which represent the net asset value of shares held by
the Plan. Investment contracts included in the Fidelity Managed Income Portfolio
II Fund, an unaffiliated commingled pool, are carried at contract value which
represents deposits plus accrued interest. The Plan Administrator believes
contract value approximates fair value. Shares of UGI Common Stock included in
the UGI Common Stock Fund are reflected at fair value based upon quoted market
prices.
Dividend income is recorded on the record date. Interest earned on investments
is recorded on the accrual basis. Purchases and sales of securities are recorded
on a trade date basis.
The Plan presents in the Statements of Changes in Net Assets Available for
Benefits the net appreciation (depreciation) in fair value of investments which
consists of realized gains or losses and unrealized appreciation (depreciation)
in the fair value of those investments.
Distributions are made to Plan participants based upon the fair value of each
participant's investment account (except for investments of the Managed Income
Fund for which distributions are based upon contract value and except for
distributions from the UGI Common Stock Fund, to the extent not all shares are
sold on the same date) as of the dates of distribution. Distributions to
participants are recorded when paid.
Transfers of participant balances represent amounts transferred to or from the
UGI Utilities, Inc. Savings Plan and the UGI HVAC Enterprises, Inc. Savings
Plan, which are affiliate plans.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires the Plan Administrator to make
estimates and assumptions that affect the reported amount of net assets
available for benefits and changes therein. Actual results could differ from
these estimates.
-14-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. TRUST INVESTMENTS
The components of trust investments by fund at December 31, 2004 and 2003 are as
follows:
December 31,
2004 2003
------------ ------------
Fidelity Cash Reserves Fund (shares -- 19,527,941 and 20,420,462 respectively) $ 19,527,941 * $ 20,420,462 *
------------ ------------
Fidelity Managed Income Portfolio II Fund (shares -- 22,592,046 and
20,555,141, respectively) 22,592,046 * 20,555,141 *
------------ ------------
Fidelity Intermediate Bond Fund (shares -- 553,721 and 549,013, respectively) 5,825,147 5,852,479
------------ ------------
Fidelity Capital and Income Fund (shares -- 74,661 and 66,879, respectively) 632,376 539,043
------------ ------------
Fidelity U.S. Bond Index Fund (shares -- 128,114 and 163,569, respectively) 1,427,193 1,830,332
------------ ------------
Fidelity Balanced Fund (shares -- 164,817 and 142,575, respectively) 2,937,045 2,388,123
------------ ------------
Fidelity Puritan Fund (shares -- 70,698 and 63,300, respectively) 1,339,730 1,169,152
------------ ------------
Fidelity Spartan U.S. Equity Index Fund (shares -- 138,041 and 130,443, respectively) 5,916,438 5,140,760
------------ ------------
Fidelity Equity Income Fund (shares -- 468,504 and 472,291, respectively) 24,727,665 * 23,496,496 *
------------ ------------
Fidelity Fund (shares -- 151,935 and 159,855, respectively) 4,539,833 4,488,719
------------ ------------
Fidelity Growth & Income Portfolio (shares -- 64,840 and 58,674, respectively) 2,477,522 2,090,544
------------ ------------
Fidelity Equity Income II Fund (shares -- 33,702 and 28,704, respectively) 809,196 653,887
------------ ------------
Fidelity Real Estate Investment Portfolio (shares -- 94,019 and 70,862, respectively) 2,777,310 1,680,139
------------ ------------
Fidelity Magellan Fund (shares -- 337,939 and 355,004, respectively) 35,074,682 * 34,698,111 *
------------ ------------
Fidelity Growth Company Fund (shares -- 179,945 and 185,336, respectively) 10,089,488 * 9,279,781 *
------------ ------------
Fidelity OTC Portfolio (shares -- 50,865 and 49,824, respectively) 1,764,492 1,617,792
------------ ------------
Fidelity Capital Appreciation Fund (shares -- 42,228 and 35,138, respectively) 1,099,191 861,228
------------ ------------
Fidelity Blue Chip Growth Fund (shares -- 70,889 and 63,537, respectively) 2,956,795 2,517,964
------------ ------------
Fidelity Low-Priced Stock Fund (shares -- 89,116 and 66,514, respectively) 3,586,904 2,326,643
------------ ------------
Fidelity Small Cap Independence Fund (shares -- 31,566 and 24,922, respectively) 622,485 447,103
------------ ------------
-15-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
3. TRUST INVESTMENTS (CONTINUED)
December 31,
2004 2003
------------ ------------
Fidelity Value Fund (shares -- 31,509 and 23,334, respectively) 2,246,251 1,448,347
------------ ------------
Fidelity Overseas Fund (shares -- 64,876 and 65,393, respectively) 2,295,298 2,055,309
------------ ------------
Fidelity Worldwide Fund (shares --17,920 and 14,920, respectively) 327,044 244,248
------------ ------------
Fidelity International Discovery Fund (shares -- 44,834 and 34,247, respectively) 1,264,318 819,194
------------ ------------
Fidelity Freedom Income Fund (shares -- 14,205 and 17,866, respectively) 160,089 198,139
------------ ------------
Fidelity Freedom 2000 Fund (shares -- 78,569 and 28,506, respectively) 949,111 335,805
------------ ------------
Fidelity Freedom 2010 Fund (shares -- 252,136 and 258,789, respectively) 3,434,088 3,369,434
------------ ------------
Fidelity Freedom 2020 Fund (shares -- 326,768 and 248,968, respectively) 4,561,677 3,241,561
------------ ------------
Fidelity Freedom 2030 Fund (shares -- 145,520 and 138,653, respectively) 2,048,926 1,795,558
------------ ------------
Fidelity Freedom 2040 Fund (shares -- 22,512 and 14,790, respectively) 186,172 111,816
------------ ------------
UGI Common Stock Fund
UGI Corporation Unitized Stock Fund (units -- 509,691 and 512,466, respectively) 13,088,867 * 10,956,530 *
Dividends receivable 96,720 89,789
------------ ------------
13,185,587 11,046,319
------------ ------------
Total trust investments - fair value, except for group annuity contracts
included in the Fidelity Managed Income Portfolio II Fund which
are carried at contract value $181,382,040 $166,719,629
============ ============
Total trust investments - cost $165,383,895 $159,571,242
============ ============
* - Investment represents five percent or more of net assets available for
benefits.
The net appreciation in fair value of investments during the years ended
December 31, 2004 and 2003 by major investment category follows:
Year ended December 31,
2004 2003
------------ ------------
Registered investment company mutual funds $ 8,266,964 $ 22,036,341
UGI Common Stock Fund 2,182,335 2,722,415
------------ ------------
Total net appreciation in fair value $ 10,449,299 $ 24,758,756
============ ============
-16-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
During the 2004 Plan Year and 2003 Plan Year, the Plan purchased, at market
prices, 34,882 and 32,603 shares of UGI Corporation Common Stock directly from
UGI Corporation for $1,199,480 and $1,095,686, respectively.
The investments of the separate investment funds are exposed to various risks
such as interest rate, market and credit risk. The degree and concentration of
these risks vary by fund. 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 in the amounts
reported in the Statements of Net Assets Available for Benefits and the
Statements of Changes in Net Assets Available for Benefits.
4. FEDERAL INCOME TAX STATUS
On December 6, 2002, the Internal Revenue Service issued a favorable
determination letter concerning the qualified status of the Plan in effect as of
November 27, 2002 under Section 401(a) of the IRC. 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 Company 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.
5. SUBSEQUENT EVENT
The Company performed a review of the Plan's investment strategies,
funds offered, and fund expenses and determined that a simplified core group of
funds combined with a self-directed brokerage option would help participants
achieve their investment objectives at lower costs. As a result of that review,
effective June 1, 2005, 26 of the 31 investment fund options offered at
December 31, 2004 were discontinued and 11 new fund options and a self-directed
brokerage option were added effective Feburary 1, 2005.
-17-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
ITEM 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2004
------------------------------------------------------
Number of
Shares or Fair Value/
Principal Contract
NAME OF ISSUER AND TITLE OF ISSUE Amount Cost Value %(2)
- ------------------------------------------- --------------- ------------ ------------ ------
FIDELITY CASH RESERVES FUND (1) (3) 19,527,941 shrs $ 19,527,941 $ 19,527,941 100.00%
------------ ------------ ------
FIDELITY MANAGED INCOME
PORTFOLIO II FUND (1) (3) 22,592,046 shrs 22,592,046 22,592,046 100.00%
------------ ------------ ------
FIDELITY INTERMEDIATE BOND FUND (3) 553,721 shrs 5,729,732 5,825,147 100.00%
------------ ------------ ------
FIDELITY CAPITAL AND INCOME FUND (3) 74,661 shrs 602,797 632,376 100.00%
------------ ------------ ------
FIDELITY U.S. BOND INDEX FUND (3) 128,114 shrs 1,417,784 1,427,193 100.00%
------------ ------------ ------
FIDELITY BALANCED FUND (3) 164,817 shrs 2,561,575 2,937,045 100.00%
------------ ------------ ------
FIDELITY PURITAN FUND (3) 70,698 shrs 1,264,170 1,339,730 100.00%
------------ ------------ ------
FIDELITY SPARTAN U.S. EQUITY INDEX FUND (3) 138,041 shrs 5,320,288 5,916,438 100.00%
------------ ------------ ------
FIDELITY EQUITY INCOME FUND (1) (3) 468,504 shrs 21,231,434 24,727,665 100.00%
------------ ------------ ------
FIDELITY FUND (3) 151,935 shrs 4,636,552 4,539,833 100.00%
------------ ------------ ------
FIDELITY GROWTH & INCOME
PORTFOLIO (3) 64,840 shrs 2,370,533 2,477,522 100.00%
------------ ------------ ------
FIDELITY EQUITY INCOME II FUND (3) 33,702 shrs 752,117 809,196 100.00%
------------ ------------ ------
FIDELITY REAL ESTATE INVESTMENT
PORTFOLIO (3) 94,019 shrs 2,034,222 2,777,310 100.00%
------------ ------------ ------
FIDELITY MAGELLAN FUND (1) (3) 337,939 shrs 32,024,895 35,074,682 100.00%
------------ ------------ ------
FIDELITY GROWTH COMPANY FUND (1) (3) 179,945 shrs 10,067,564 10,089,488 100.00%
------------ ------------ ------
FIDELITY OTC PORTFOLIO (3) 50,865 shrs 2,321,875 1,764,492 100.00%
------------ ------------ ------
FIDELITY CAPITAL APPRECIATION FUND (3) 42,228 shrs 997,861 1,099,191 100.00%
------------ ------------ ------
FIDELITY BLUE CHIP GROWTH FUND (3) 70,889 shrs 3,109,827 2,956,795 100.00%
------------ ------------ ------
FIDELITY LOW PRICED STOCK FUND (3) 89,116 shrs 2,768,086 3,586,904 100.00%
------------ ------------ ------
FIDELITY SMALL CAP INDEPENDENCE FUND (3) 31,566 shrs 523,596 622,485 100.00%
------------ ------------ ------
FIDELITY VALUE FUND (3) 31,509 shrs 1,786,321 2,246,251 100.00%
------------ ------------ ------
FIDELITY OVERSEAS FUND (3) 64,876 shrs 2,086,613 2,295,298 100.00%
------------ ------------ ------
-18-
AMERIGAS PROPANE, INC.
SAVINGS PLAN
Item 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR) (continued)
December 31, 2004
------------------------------------------------------
Number of
Shares or Fair Value/
Principal Contract
NAME OF ISSUER AND TITLE OF ISSUE Amount Cost Value % (2)
- ----------------------------------------- --------------- ------------- ------------- -------
FIDELITY WORLDWIDE FUND (3) 17,920 shrs 283,367 327,044 100.00%
------------- ------------- ------
FIDELITY INTERNATIONAL DISCOVERY FUND (3) 44,834 shrs 1,028,973 1,264,318 100.00%
------------- ------------- ------
FIDELITY FREEDOM INCOME FUND (3) 14,205 shrs 156,597 160,089 100.00%
------------- ------------- ------
FIDELITY FREEDOM 2000 FUND (3) 78,569 shrs 933,130 949,111 100.00%
------------- ------------- ------
FIDELITY FREEDOM 2010 FUND (3) 252,136 shrs 3,298,504 3,434,088 100.00%
------------- ------------- ------
FIDELITY FREEDOM 2020 FUND (3) 326,768 shrs 4,429,444 4,561,677 100.00%
------------- ------------- ------
FIDELITY FREEDOM 2030 FUND (3) 145,520 shrs 1,841,978 2,048,926 100.00%
------------- ------------- ------
FIDELITY FREEDOM 2040 FUND (3) 22,512 shrs 163,105 186,172 100.00%
------------- ------------- ------
UGI COMMON STOCK FUND (1) (3)
UGI Corporation Unitized Stock Fund 509,691 units 7,424,248 13,088,867 99.27%
Dividends receivable $ 96,720 96,720 96,720 0.73%
------------- ------------- ------
7,520,968 13,185,587 100.00%
------------- ------------- ------
PARTICIPANT LOANS
Loan principal outstanding (4.75% - 10.5%) (3) (4) - 4,446,501 100.00%
------------- ------------- ------
Total - all funds $ 165,383,895 $ 185,828,541
============= =============
- ----------------------
(1) Investment represents 5% or more of the net assets available for benefits.
(2) Percentages represent percentage of fair value / contract value of each
fund.
(3) Party in interest.
(4) Range of interest rates for loans outstanding as of December 31, 2004
-19-
UGI UTILITIES, INC.
SAVINGS PLAN
EIN #23-1174060 PLAN NUMBER 008
FINANCIAL STATEMENTS
for the years ended December 31, 2004 and 2003
UGI UTILITIES, INC.
SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
Page(s)
-------
Report of Independent Registered Public Accounting Firm 2
Financial Statements:
Statements of Net Assets Available for Benefits at
December 31, 2004 and 2003 3
Statements of Changes in Net Assets Available for Benefits
for the years ended December 31, 2004 and 2003 4
Notes to Financial Statements 5 to 17
Item 4(i) - Schedule of Assets (Held at End of Year) 18 to 19
All other schedules to be filed with the Department of Labor in accordance with
the Employee Retirement Income Security Act of 1974 are not applicable and have
been omitted.
-1-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and Plan Administrator of
UGI Utilities, Inc. Savings Plan
We have audited the accompanying statements of net assets available for benefits
of UGI Utilities, Inc. Savings Plan as of December 31, 2004 and 2003, and the
related statements of changes in net assets available for benefits for the years
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of UGI Utilities,
Inc. Savings Plan as of December 31, 2004 and 2003, and changes in its net
assets available for benefits for the years then ended, in conformity with
accounting principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
at end of year is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
Cogen Sklar LLP
Bala Cynwyd, Pennsylvania
June 21, 2005
UGI UTILITIES, INC.
SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
-------------------------
2004 2003
----------- -----------
Investments (Note 3) $82,513,700 $71,424,505
Loans to participants 2,090,308 2,032,114
Employers' contributions receivable 1,455,381 1,401,005
----------- -----------
Net assets available for benefits $86,059,389 $74,857,624
=========== ===========
See accompanying notes to financial statements.
-3-
UGI UTILITIES, INC.
SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31,
2004 2003
------------ -----------
Participants' contributions $ 4,864,414 $ 4,587,043
Rollover contributions 782,759 206,130
Employers' contributions 1,443,769 1,401,005
Investment income:
Dividends 2,227,441 1,554,924
Net appreciation in value of investments 5,366,261 11,429,214
Other, primarily interest on loans 104,622 108,572
Net transfers of participants' balances 404,380 81,857
Distributions to participants (3,991,881) (1,551,073)
------------ -----------
Net increase 11,201,765 17,817,672
Net assets available for benefits - beginning of year 74,857,624 57,039,952
------------ -----------
Net assets available for benefits - end of year $ 86,059,389 $74,857,624
============ ===========
See accompanying notes to financial statements.
-4-
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following brief description of the UGI Utilities, Inc. Savings Plan (the
Plan) provides general information on the provisions of the Plan in effect on
December 31, 2004 and during the periods covered by the financial statements.
More complete information is included in the Plan document.
GENERAL. The Plan is a defined contribution plan covering employees of UGI
Utilities, Inc. (UGI Utilities), its holding company parent UGI Corporation
(UGI), and certain affiliated companies (collectively, the Employers). 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
(ERISA). The Plan is administered by the UGI Utilities, Inc. Retirement
Committee (Plan Administrator) whose members are appointed by the Board of
Directors of UGI Utilities.
CONTRIBUTIONS. A participant may elect to contribute to the Plan on a before-tax
basis through payroll reduction an amount equal to from 1% to 50%, in whole
percentages, of eligible compensation. In addition, a participant may elect to
contribute to the Plan on an after-tax basis through payroll deduction an amount
equal to from 1% to 6%, in whole percentages, of eligible compensation, provided
that the combination of before-tax and after-tax contributions does not exceed
50% of eligible compensation. Calendar year before-tax and after-tax
contribution amounts are subject to limits prescribed by the Internal Revenue
Code (IRC) and the Plan, respectively. For the 2004 and 2003 Plan Years, the IRC
before-tax contribution limits were $13,000 and $12,000, respectively. For each
of the 2004 and 2003 Plan Years, the after-tax contribution limit set by the
Plan was $12,300 and $12,000, respectively. A participant may increase the rate
of, or reduce or suspend his or her before-tax or after-tax contributions at any
time by contacting Fidelity Institutional Retirement Services Co. (FIRSCO).
The Plan allows for "catch-up contributions." The catch-up contribution
provision allows certain employees to make before-tax contributions over and
above the IRS and Plan limits. In order to be eligible to make catch-up
contributions, employees must be at least 50 years of age and must be
contributing the IRC or Plan limit. The maximum catch-up contribution for the
2004 and 2003 Plan Years was $3,000 and $2,000, respectively, which amount shall
increase $1,000 per year through 2006. Catch-up contributions are not eligible
for the Employers' matching contribution (as described below).
A participant will at all times be fully (100%) vested in the portion of his or
her account attributable to participant contributions.
The Plan also accepts on behalf of any employee (i) the entire amount of cash
received as a distribution from another qualified trust forming part of a plan
described in section 401(a) of the IRC or from a "rollover" individual
retirement plan described in section 408 of the IRC, but only if the deposit
qualifies as a tax-free rollover as defined in section 402 or (ii) a direct
transfer from another plan qualified under Section 401(a) of the IRC. The Plan
accepts after-tax rollover contributions.
-5-
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
For each Plan Year, each of the Employers may, at their discretion, make a
contribution to the Plan equal to a percentage of participant before-tax and
after-tax contributions, up to a total of 6% of compensation (as defined in the
Plan document) for each eligible participant. In order to be entitled to the
Employers' contribution, a participant must either (i) be actively employed by
any of the Employers, or on an excused leave of absence (as defined in the Plan
document) on the last day of the Plan year or (ii) have retired, become disabled
(as defined in the Plan), or died while an employee during the Plan year.
Employers' contributions for the 2004 Plan Year and the 2003 Plan Year, which
were made in January 2005 and January 2004, respectively, were invested in
accordance with participant investment elections in effect on the dates of the
contributions.
A participant is fully vested in the portion of his or her account attributable
to Employers' matching contributions as follows: 25% after two years of service;
50% after three years of service; 75% after four years of service; and 100%
after five years of service. In addition, a participant is fully vested in the
portion of his or her account attributable to Company contributions upon the
attainment of normal retirement age (as defined in the Plan document), total
disability (as defined by the Plan document) or death while in the employ of the
Employers or an affiliated company. For Plan purposes, a participant will attain
normal retirement age on the later of his or her 65th birthday or the fifth
anniversary of his or her date of hire.
A participant who terminates employment before he or she is vested will forfeit
nonvested amounts attributable to the Employers' contributions. These forfeited
amounts remain in the Plan and are available to reduce future Employer
contributions. In the 2004 and 2003 Plan Years, forfeitures of $13,144 and
$11,785, respectively, were used to reduce the Employers' contributions. During
the 2004 Plan Year and the 2003 Plan Year, $15,925 and $11,787, respectively,
were forfeited from participants' accounts. As of December 31, 2004 and 2003,
there were $18,812 and $17,642, respectively, of forfeitures remaining in the
Plan.
INVESTMENT FUNDS. A participant may elect to have his or her funds invested in
one or more investment funds. Generally, participants may transfer amounts
between funds at any time with no limit. Participants may change their
investment elections for future contributions at any time. Fidelity Management
Trust Company is the Plan's trustee for all investment assets of the Plan and
qualifies as a party in interest. References to "Fidelity" below refer
to investment funds managed by Fidelity Management and Research Company (FMR).
Following are brief descriptions of the investment options available to
participants and the strategies and objectives of each fund.
Money Market Fund
- - Fidelity Cash Reserves Fund
This fund is an unaffiliated registered investment company mutual fund that
invests in U.S. dollar-denominated money market securities and repurchase
agreements, and may enter into reverse repurchase agreements. The fund's
objective is to provide as high a level of current income as is consistent with
the preservation of capital and liquidity.
-6-
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
Managed Income Fund
- - Fidelity Managed Income Portfolio II Fund
This fund is an unaffiliated commingled pool whose investments principally
comprise investment contracts issued by insurance companies and financial
institutions and certain types of fixed income securities. The fund's objective
is to preserve principal while earning interest income.
Income Funds
- - Fidelity Intermediate Bond Fund
This fund is an unaffiliated registered investment company mutual fund which
normally invests in investment-grade bonds while normally maintaining a
dollar-weighted average maturity between three and ten years. The fund's
objective is to provide a high level of current income.
- - Fidelity Capital & Income Fund
This fund is an unaffiliated registered investment company mutual fund that
invests mainly in equity and debt securities, including defaulted securities,
with an emphasis on lower-quality debt securities. The fund invests in companies
in troubled or uncertain financial condition and in domestic and foreign
issuers. The fund's objective is to provide income and capital growth.
- - Fidelity U.S. Bond Index Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in bonds included in the Lehman Brothers Aggregate Bond
Index. The fund's objective is to provide investment results that correspond to
the total returns of bonds in the Lehman Brothers Aggregate Bond Index.
Balanced Funds
- - Fidelity Balanced Fund
- - Fidelity Puritan Fund
These funds are unaffiliated registered investment company mutual funds that
invest in stocks and other equity securities and in bonds and other debt
securities. The funds seek income and capital growth.
Growth and Income Funds
- - Fidelity Spartan U.S. Equity Index Fund
-7-
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks included in the Standard and Poor's 500
Index (S&P 500) a widely recognized, unmanaged index of 500 U.S. common stocks.
The fund's objective is to match the total return of the S&P 500.
- - Fidelity Equity Income Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in income-producing equity securities. The fund's objective
is to provide reasonable income while considering the potential for capital
appreciation.
- - Fidelity Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks. The fund may also invest a portion of
assets in bonds, including lower-quality debt securities. The fund seeks
long-term capital growth.
- - Fidelity Growth & Income Portfolio
This fund is an unaffiliated registered investment company mutual fund that
normally invests a majority of total assets in common stocks with a focus on
those that pay current dividends and show potential for capital appreciation.
The fund may also invest in bonds. The fund seeks high total return through a
combination of current income and capital appreciation.
- - Fidelity Equity Income II Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in income-producing equity securities. The fund seeks
reasonable income and the potential for capital appreciation.
- - Fidelity Real Estate Investment Portfolio
This fund is an unaffiliated registered investment company mutual fund that
principally invests in equity securities of companies principally engaged in the
real estate industry. The fund seeks above-average income and long-term capital
growth consistent with reasonable risk.
Growth Funds
- - Fidelity Magellan Fund
This fund is an unaffiliated registered investment company mutual fund that
invests primarily in common stocks of domestic and foreign issuers. The fund
seeks capital appreciation.
-8-
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
- - Fidelity Growth Company Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks of domestic and foreign issuers that are
expected to have above-average growth potential. The fund seeks capital
appreciation.
- - Fidelity OTC Portfolio
This fund is an unaffiliated registered investment company mutual fund that
principally invests in securities traded on the over-the-counter (OTC) market.
The fund seeks capital appreciation.
- - Fidelity Capital Appreciation Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks of domestic and foreign issuers. The fund
seeks capital appreciation.
- - Fidelity Blue Chip Growth Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks of well-known and established companies.
The fund invests in securities of domestic and foreign issuers. The fund seeks
growth of capital over the long term.
- - Fidelity Low-Priced Stock Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in low-priced common stocks. The fund seeks capital
appreciation.
- - Fidelity Small Cap Independence Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks of domestic and foreign issuers with small
market capitalizations. The fund seeks capital appreciation.
- - Fidelity Value Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in common stocks of companies that possess valuable fixed
assets or that are believed to be undervalued in relation to the issuing
company's assets, earnings, or growth potential. The fund seeks capital
appreciation.
-9-
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
International Funds
- - Fidelity Overseas Fund
This fund is an unaffiliated registered investment company mutual fund that
principally invests in foreign securities. The fund invests primarily in common
stocks and seeks long-term growth of capital.
- - Fidelity Worldwide Fund
This fund is an unaffiliated registered investment company mutual fund that
invests primarily in common stocks issued anywhere in the world. The fund seeks
growth of capital.
- - Fidelity International Discovery Fund (formerly Fidelity International Growth
& Income Fund)
This fund is an unaffiliated registered investment company mutual fund that
principally invests in foreign securities including common stocks with a focus
on those that pay current dividends and have the potential for capital
appreciation. The fund seeks capital growth and current income.
Fidelity Freedom Funds
- - Fidelity Freedom Income Fund
- - Fidelity Freedom 2000 Fund
- - Fidelity Freedom 2010 Fund
- - Fidelity Freedom 2020 Fund
- - Fidelity Freedom 2030 Fund
- - Fidelity Freedom 2040 Fund
These funds are unaffiliated registered investment company mutual funds that
invest in a combination of underlying Fidelity funds according to an asset
allocation strategy that becomes increasingly conservative over time as each
fund's target retirement date approaches. When each of these target retirement
date funds matches the asset allocation of the Fidelity Freedom Income fund
(approximately five to ten years after the respective fund's target retirement
date), it is expected that each fund will be combined with the Fidelity Freedom
Income Fund. These funds' investment objectives are to achieve high current
income and capital appreciation.
Employer Stock Fund
- - UGI Common Stock Fund
This fund invests principally in shares of UGI Corporation Common Stock.
Participants in the fund do not individually own specific shares of UGI
Corporation Common Stock but rather own units in the fund that invests in such
shares and short-term investments. The value of a unit in the UGI Common Stock
Fund was initially set at $10.00 and is recalculated daily by dividing the fair
value of the fund's assets (comprising shares of UGI Corporation Common Stock
and temporary cash
-10-
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
investments) by the total number of units outstanding. Generally, participant
requests to redeem units from the UGI Common Stock Fund are processed on the day
received if such request is received by Fidelity before the close of the New
York Stock Exchange and provided that there are sufficient short-term
investments in the fund for liquidity. In such case, the participant will
receive the net asset value, or closing price for the units, calculated using
the closing price for UGI Corporation Common Stock on the New York Stock
Exchange for that day. However, on days of unusually heavy requests for sale,
the UGI Common Stock Fund may not have sufficient short-term investments for
liquidity. In such case, requests to sell units received before the close of the
New York Stock Exchange may not be processed on that day at that date's closing
price but may be suspended until sufficient liquidity is restored. Units will be
redeemed generally on a first-in, first-out basis at the closing price for the
processing date. Loans, withdrawals and distributions from the UGI Common Stock
Fund will be given priority over exchanges with other funds.
DISTRIBUTIONS. The Plan benefit of a participant who terminates employment as a
result of retirement or total disability, as defined by the Plan document, 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 the UGI Common
Stock Fund in the form of shares of UGI Corporation Common Stock. The Plan
benefit of a participant who terminates employment for reasons other than
retirement or total disability shall be equal to the proceeds of liquidation of
the vested portion of his or her account. Where the amount to be distributed
exceeds $5,000, no distribution shall be made to any Plan participant prior to
his or her normal retirement age (as defined in the Plan document) unless the
participant elects to receive such distribution. Where the amount to be
distributed does not exceed $5,000, 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 distribution
upon termination of employment.
DEATH. If a participant dies prior to receiving a distribution of his or her
account, the participant's designated beneficiary shall be entitled to receive a
lump-sum distribution of the proceeds of liquidation of 100% of the vested
portion of his or her account. Generally, the beneficiary may request a
distribution of the participant's account balance as soon as practicable
following the date of the participant's death. The beneficiary of a participant
who is married at the time of the participant's death will be the participant's
spouse, unless the participant designated another beneficiary and the spouse
consented to such designation in accordance with procedures specified by the
Plan document.
WITHDRAWALS. Generally, a participant may withdraw up to 50% of the balance of
his or her account attributable to after-tax contributions (including after-tax
contributions that were matched by the Employer) at any time. However, the
withdrawal must be in an amount of at least $250. If any portion of the amount
withdrawn is attributable to contributions that were matched by the Employers,
the participant's participation in the Plan will be suspended for the
three-month period following the withdrawal. No more than one withdrawal in any
calendar year is permitted from each of the matched and unmatched portions of a
participant's after-tax contribution account.
-11-
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
A participant may withdraw before-tax contributions (and earnings attributable
thereto credited as of December 31, 1988) and rollover contributions, only on
account of financial hardship resulting from (i) medical expenses as defined in
section 213(d) of the IRC; (ii) educational expenses for the next twelve months
of post-secondary education of the participant, or his or her spouse, children
or dependents; (iii) foreclosure on a primary residence; or (iv) costs directly
related to the purchase of a primary residence. A hardship withdrawal will be
permitted if the Plan Administrator determines that (i) the withdrawal is on
account of an immediate and heavy financial need of the participant and (ii) the
withdrawal is necessary to satisfy such financial need. A participant's
participation in the Plan is suspended for the six-month period following a
hardship withdrawal.
While a participant is still employed by any of the Employers, withdrawals of
amounts attributable to Employer's contributions and post-1988 earnings on
participant before-tax contributions, are not permitted.
LOAN PROVISION. The Plan includes an employee loan provision. Generally, at the
time a loan is to be made, the amount of all loans to be outstanding may not
exceed the lesser of (i) 50% of a participant's before-tax and rollover account
balances, or (ii) $50,000 less the highest balance of any loan during the prior
twelve-month period. Each loan bears interest at a rate determined in accordance
with generally prevailing market conditions for similar types of loans. The
minimum loan amount is $1,000. The amount of the loan withdrawn from a
participant's account 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. No
participant shall be permitted to have more than two loans outstanding at any
one time.
-12-
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
ADMINISTRATIVE EXPENSES. Administrative expenses of the Plan are chargeable to
the Plan unless paid for by the Employers. The Employers currently pay such
expenses. Loan administration and withdrawal fees are paid by participants.
Mutual fund expenses are paid to fund managers from mutual fund assets.
PLAN TERMINATION. Although it has not expressed any intent to do so, UGI
Utilities has the right to terminate the Plan in whole or in part at any time
for any reason. In the event of a complete or partial termination of the Plan,
the affected participants will become fully vested in their account balances.
PLAN AMENDMENT. UGI Utilities may amend the Plan at any time for any reason by
written action of its Board of Directors. 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, however, may be made by the Retirement
Committee without Board approval.
VOTING RIGHTS OF UGI COMMON STOCK FUND 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 the UGI Common
Stock Fund. 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.
2. ACCOUNTING POLICIES
The accompanying financial statements are prepared on the accrual basis of
accounting.
The Plan's investments in registered investment company mutual funds are valued
at quoted market prices which represent the net asset value of shares held by
the Plan. Investment contracts included in the Fidelity Managed Income Portfolio
II fund, an unaffiliated commingled pool, are carried at contract value which
represents deposits plus accrued interest. The Plan Administrator believes
contract value approximates fair value. Shares of UGI Common Stock included in
the UGI Common Stock Fund are reflected at fair value based upon quoted market
prices.
Dividend income is recorded on the record date. Interest earned on investments
is recorded on the accrual basis. Purchases and sales of securities are recorded
on a trade date basis.
The Plan presents in the Statements of Changes in Net Assets Available for
Benefits the net appreciation in fair value of investments which consists of
realized gains or losses and unrealized appreciation in the fair value of those
investments.
Distributions are made to Plan participants based upon the fair value of each
participant's investment account (except for investments of the Managed Income
Fund for which distributions are based upon contract value) as of the dates of
the distribution. Distributions to participants are recorded when paid.
-13-
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
Transfers of participant balances represent amounts transferred to or from the
AmeriGas Propane, Inc. Savings Plan and the UGI HVAC Enterprises, Inc. Savings
Plan, affiliate plans.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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
these estimates.
-14-
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. TRUST INVESTMENTS
The components of trust investments by fund at December 31, 2004 and 2003 are as
follows:
December 31,
2004 2003
----------- -----------
Fidelity Cash Reserves Fund (shares -- 4,034,108 and 3,781,926, respectively) $ 4,034,108 $ 3,781,926 *
----------- -----------
Fidelity Managed Income Portfolio II Fund (shares -- 11,309,472 and
11,548,528, respectively) 11,309,472 * 11,548,528 *
----------- -----------
Fidelity Intermediate Bond Fund (shares -- 132,993 and 128,626, respectively) 1,399,090 1,371,150
----------- -----------
Fidelity Capital & Income Fund (shares -- 71,593 and 51,054, respectively) 606,388 411,496
----------- -----------
Fidelity U.S. Bond Index Fund (shares -- 97,245 and 77,474, respectively) 1,083,311 866,930
----------- -----------
Fidelity Balanced Fund (shares -- 28,984 and 17,532, respectively) 516,488 293,660
----------- -----------
Fidelity Puritan Fund (shares -- 33,109 and 24,290, respectively) 627,407 448,629
----------- -----------
Fidelity Spartan U.S. Equity Index Fund (shares -- 77,875 and
75,279, respectively) 3,337,733 2,966,741
----------- -----------
Fidelity Equity Income Fund (shares -- 212,690 and 206,984, respectively) 11,225,752 * 10,297,436 *
----------- -----------
Fidelity Fund (shares -- 62,292 and 62,120, respectively) 1,861,291 1,744,317
----------- -----------
Fidelity Growth & Income Portfolio (shares -- 16,871 and 13,285, respectively) 644,633 473,341
----------- -----------
Fidelity Equity Income II Fund (shares -- 33,945 and 28,002, respectively) 815,030 637,877
----------- -----------
Fidelity Real Estate Investment Portfolio (shares -- 39,956 and 26,340, respectively) 1,180,313 624,515
----------- -----------
Fidelity Magellan Fund (shares -- 165,408 and 167,677, respectively) 17,167,665 * 16,388,791 *
----------- -----------
Fidelity Growth Company Fund (shares -- 57,023 and 65,456, respectively) 3,197,276 3,277,261
----------- -----------
Fidelity OTC Portfolio (shares -- 31,592 and 31,161, respectively) 1,095,938 1,011,812
----------- -----------
Fidelity Capital Appreciation Fund (shares -- 21,438 and 16,382, respectively) 558,031 401,520
----------- -----------
Fidelity Blue Chip Growth Fund (shares -- 30,057 and 28,264, respectively) 1,253,683 1,120,111
----------- -----------
Fidelity Low-Priced Stock Fund (shares -- 65,952 and 40,019, respectively) 2,654,578 1,399,875
----------- -----------
Fidelity Small Cap Independence Fund (shares -- 28,667 and 21,522, respectively) 565,304 386,105
----------- -----------
Fidelity Value Fund (shares -- 20,452 and 13,137, respectively) 1,457,991 815,442
----------- -----------
-15-
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. TRUST INVESTMENTS (CONTINUED)
December 31,
2004 2003
----------- -----------
Fidelity Overseas Fund (shares -- 33,149 and 28,763, respectively) 1,172,806 904,021
----------- -----------
Fidelity Worldwide Fund (shares -- 13,389 and 12,917, respectively) 244,346 211,453
----------- -----------
Fidelity International Discovery Fund (shares -- 16,935 and
10,469, respectively) 477,578 250,425
----------- -----------
Fidelity Freedom Income Fund (shares -- 10,706 and 7,148, respectively) 120,662 79,268
----------- -----------
Fidelity Freedom 2000 Fund (shares -- 6,025 and 7,039, respectively) 72,784 82,915
----------- -----------
Fidelity Freedom 2010 Fund (shares -- 156,434 and 76,780, respectively) 2,130,631 999,678
----------- -----------
Fidelity Freedom 2020 Fund (shares -- 76,232 and 54,644, respectively) 1,064,201 711,461
----------- -----------
Fidelity Freedom 2030 Fund (shares -- 21,064 and 17,883, respectively) 296,586 231,588
----------- -----------
Fidelity Freedom 2040 Fund (shares -- 10,038 and 5,445, respectively) 83,018 41,161
----------- -----------
UGI Common Stock Fund
UGI Corporation Unitized Stock Fund (units -- 395,936 and 354,193,
respectively) 10,183,467 * 7,579,722 *
Dividends receivable 76,139 65,350
----------- -----------
10,259,606 7,645,072
----------- -----------
Total trust investments - fair value, except for group annuity contracts
included in the Fidelity Managed Income Portfolio II Fund
which are carried at contract value $82,513,700 $71,424,505
=========== ===========
Total trust investments - cost $73,589,221 $67,483,984
=========== ===========
* - Investment represents five percent or more of the net assets available for
benefits.
The net appreciation in fair value of investments during the years ended
December 31, 2004 and 2003 by major investment category follows:
Year Year
Ended Ended
December 31, December 31,
2004 2003
------------ ------------
Registered investment company mutual funds $ 3,684,324 $ 9,349,586
UGI Common Stock Fund 1,681,937 2,079,628
------------ ------------
Total net appreciation in fair value $ 5,366,261 $ 11,429,214
============ ============
-16-
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
During the 2004 Plan Year and the 2003 Plan Year, the Plan purchased, at market
prices, 16,173 and 15,465 shares of UGI Corporation Common Stock directly from
UGI Corporation for $546,141 and $464,480, respectively.
The investments of the separate investment funds are exposed to various risks
such as interest rate, market and credit risk. The degree and concentration of
these risks vary by fund. 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.
4. FEDERAL INCOME TAX STATUS
On December 6, 2002, the Internal Revenue Service issued a favorable
determination letter concerning the qualified status of the Plan in effect as of
November 27, 2002 under Section 401(a) of the IRC. 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.
5. SUBSEQUENT EVENT
The Company performed a review of the Plan's investment strategies,
funds offered, and fund expenses and determined that a simplified core group of
funds combined with a self-directed brokerage option would help participants
achieve their investment objectives at lower costs. As a result of that review,
effective June 1, 2005, 26 of the 31 investment fund options offered at
December 31, 2004 were discontinued and 11 new fund options and a self-directed
brokerage option were added effective February 1, 2005.
-17-
UGI UTILITIES, INC. SAVINGS PLAN
ITEM 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2004
-------------------------------------------------
Number of
Shares or Fair Value/
Principal Contract
NAME OF ISSUER AND TITLE OF ISSUE Amount Cost Value % (2)
- ---------------------------------------- --------------- ----------- ----------- ------
FIDELITY CASH RESERVES FUND (3) 4,034,108 shrs $ 4,034,108 $ 4,034,108 100.00%
----------- ----------- ------
FIDELITY MANAGED INCOME
PORTFOLIO II FUND (1) (3) 11,309,472 shrs 11,309,472 11,309,472 100.00%
----------- ----------- ------
FIDELITY INTERMEDIATE BOND FUND (3) 132,993 shrs 1,384,483 1,399,090 100.00%
----------- ----------- ------
FIDELITY CAPITAL & INCOME FUND (3) 71,593 shrs 574,089 606,388 100.00%
----------- ----------- ------
FIDELITY U.S. BOND INDEX FUND (3) 97,245 shrs 1,075,820 1,083,311 100.00%
----------- ----------- ------
FIDELITY BALANCED FUND (3) 28,984 shrs 457,582 516,488 100.00%
----------- ----------- ------
FIDELITY PURITAN FUND (3) 33,109 shrs 591,867 627,407 100.00%
----------- ----------- ------
FIDELITY SPARTAN U.S. EQUITY
INDEX FUND (3) 77,875 shrs 3,017,850 3,337,733 100.00%
----------- ----------- ------
FIDELITY EQUITY INCOME FUND (1) (3) 212,690 shrs 9,609,294 11,225,752 100.00%
----------- ----------- ------
FIDELITY FUND (3) 62,292 shrs 1,908,067 1,861,291 100.00%
----------- ----------- ------
FIDELITY GROWTH & INCOME
PORTFOLIO (3) 16,871 shrs 619,911 644,633 100.00%
----------- ----------- ------
FIDELITY EQUITY INCOME II FUND (3) 33,945 shrs 714,024 815,030 100.00%
----------- ----------- ------
FIDELITY REAL ESTATE INVESTMENT
PORTFOLIO (3) 39,956 shrs 884,692 1,180,313 100.00%
----------- ----------- ------
FIDELITY MAGELLAN FUND (1) (3) 165,408 shrs 16,019,079 17,167,665 100.00%
----------- ----------- ------
FIDELITY GROWTH COMPANY FUND (3) 57,023 shrs 3,484,567 3,197,276 100.00%
----------- ----------- ------
FIDELITY OTC PORTFOLIO (3) 31,592 shrs 1,453,170 1,095,938 100.00%
----------- ----------- ------
FIDELITY CAPITAL APPRECIATION FUND (3) 21,438 shrs 494,734 558,031 100.00%
----------- ----------- ------
FIDELITY BLUE CHIP GROWTH FUND (3) 30,057 shrs 1,334,142 1,253,683 100.00%
----------- ----------- ------
FIDELITY LOW-PRICED STOCK FUND (3) 65,952 shrs 2,139,470 2,654,578 100.00%
----------- ----------- ------
FIDELITY SMALL CAP INDEPENDENCE FUND (3) 28,667 shrs 478,565 565,304 100.00%
----------- ----------- ------
FIDELITY VALUE FUND (3) 20,452 shrs 1,190,677 1,457,991 100.00%
----------- ----------- ------
FIDELITY OVERSEAS FUND (3) 33,149 shrs 1,082,285 1,172,806 100.00%
----------- ----------- ------
-18-
UGI UTILITIES, INC. SAVINGS PLAN
ITEM 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR) (CONTINUED)
December 31, 2004
------------------------------------------------
Number of
Shares or Fair Value/
Principal Contract
NAME OF ISSUER AND TITLE OF ISSUE Amount Cost Value % (2)
- ---------------------------------------- -------------- ----------- ----------- ------
FIDELITY WORLDWIDE FUND (3) 13,389 shrs 210,877 244,346 100.00%
----------- ----------- ------
FIDELITY INTERNATIONAL DISCOVERY FUND (3) 16,935 shrs 403,800 477,578 100.00%
----------- ----------- ------
FIDELITY FREEDOM INCOME FUND (3) 10,706 shrs 118,760 120,662 100.00%
----------- ----------- ------
FIDELITY FREEDOM 2000 FUND (3) 6,025 shrs 75,643 72,784 100.00%
----------- ----------- ------
FIDELITY FREEDOM 2010 FUND (3) 156,434 shrs 2,054,906 2,130,631 100.00%
----------- ----------- ------
FIDELITY FREEDOM 2020 FUND (3) 76,232 shrs 1,011,656 1,064,201 100.00%
----------- ----------- ------
FIDELITY FREEDOM 2030 FUND (3) 21,064 shrs 290,288 296,586 100.00%
----------- ----------- ------
FIDELITY FREEDOM 2040 FUND (3) 10,038 shrs 72,252 83,018 100.00%
----------- ----------- ------
UGI COMMON STOCK FUND (1) (3)
UGI Corporation Unitized Stock Fund 395,936 units 5,416,952 10,183,467 99.26%
Dividends receivable $ 76,139 76,139 76,139 0.74%
----------- ----------- ------
5,493,091 10,259,606 100.00%
----------- ----------- ------
PARTICIPANT LOANS
Loan principal outstanding (3)(4) - 2,090,308 100.00%
----------- ----------- ------
Total - all funds $73,589,221 $84,604,008
=========== ===========
- ----------------------
(1) Investment represents 5% or more of the net assets available for benefits.
(2) Percentages represent percentage of fair value of each fund.
(3) Party in interest.
(4) Interest rates on loans outstanding as of December 31, 2004 range from
5.00% to 10.50%.
-19-