(UGI CORPORATION LOGO) NEWS
Box 858 Valley Forge Pennsylvania 19482 (610-337-1000)
Contact: 610-337-1000 For Immediate Release:
Robert W. Krick, ext. 3645 April 26, 2006
Brenda A. Blake, ext. 3202
UGI REPORTS SECOND QUARTER RESULTS, AFFIRMS GUIDANCE
VALLEY FORGE, Pa., April 26 - UGI Corporation (NYSE: UGI) today reported net
income for the second quarter of fiscal 2006 ended March 31, 2006 of $104.0
million, or $0.98 per diluted share, compared to net income of $117.3 million,
or $1.12 per diluted share, for the second quarter of fiscal 2005.
Lon R. Greenberg, chairman and chief executive officer of UGI, said, "The
benefits of our geographic and business diversification were evident once again
in the recent quarter. Our domestic propane distribution, utility, energy
marketing and generation businesses performed admirably despite experiencing
exceptionally warm weather. However, our international propane distribution
businesses benefited from colder than normal weather. Due to the favorable
weather, Antargaz performed better than our expectations, albeit at a lower
level of earnings compared to the prior year quarter, when Antargaz provided
higher earnings due to higher than normal unit margins and a strengthening euro.
Although we still face the challenge of mitigating the impact of high energy
prices on our customers and our businesses, we continue to expect earnings of
$1.55 to $1.60 per share for the full fiscal year."
UGI's domestic propane distributor, AmeriGas Partners, L.P. (NYSE:APU),
contributed $25.8 million to income for the quarter, excluding the loss on the
early extinguishment of debt of $4.6 million, compared to $27.0 million last
year. Net income for the recent quarter, including the loss on the early
extinguishment of debt, was $21.2 million. For the three months ended March 31,
2006, retail volumes sold declined to 341.4 million gallons from 378.8 million
gallons sold in the prior-year period. Weather nationally was 12.1% warmer than
normal during the recent quarter compared to weather that was 4.9% warmer than
normal in the prior-year period, according to the National Oceanic and
Atmospheric Administration. Operating and administrative expenses increased
during the quarter due to higher vehicle fuel costs, higher employee
compensation and benefits expenses and increased bad debt expense partially
offset by a favorable net adjustment in reserves for general insurance,
litigation and medical claims, mainly reflecting an improvement in claims
history. "Effective margin management and expense control could not overcome the
effects of extremely warm winter weather and customer conservation," noted
Greenberg.
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UGI REPORTS SECOND QUARTER RESULTS, AFFIRMS GUIDANCE PAGE 2
For the three months ended March 31, 2006, total operating income at Antargaz
decreased to $74.0 from $96.0 million in the prior year quarter primarily due to
lower total margin as a result of a stronger U.S. dollar and lower unit margins.
Antargaz sold 125.4 million retail gallons of liquefied petroleum gases (LPG) in
the 2006 period, virtually unchanged from the same period in 2005. Antargaz
experienced higher than normal unit margins in 2005 that reflected a decline in
LPG product costs coupled with a strengthening euro. Weather in France was
approximately 7% colder than normal in the recent quarter compared to
approximately 4% colder than normal in the 2005 quarter.
Flaga, UGI's Austrian-based LPG distributor sold 9.8 million retail gallons of
LPG while experiencing weather that was 11.8% colder than normal compared to 9.9
million retail gallons and weather that was 3.2% colder than normal in the
prior-year quarter. "During the quarter we completed the previously-announced
transaction with Progas that not only increased our presence in Austria, but
also created a platform for growth in central and eastern Europe by the
formation of our joint venture. The joint venture has increased our presence in
the Czech Republic and Slovakia, and provided us access to Hungary, Poland and
Romania," continued Greenberg.
International Propane's net income decreased to $45.0 million from net income of
$47.0 million in the prior-year quarter. Net income for International Propane in
the prior-year quarter included an additional tax provision of $10.5 million to
account for the intended repatriation of income of prior periods from Antargaz.
During the quarter, the monthly average currency exchange rate was $1.20 per
euro compared to $1.31 per euro in the prior year quarter.
Net income from the Gas Utility decreased to $21.5 million for the quarter ended
March 31, 2006 compared to $26.7 million for the 2005 quarter on weather that
was 13.0% warmer than normal versus weather that was 2.7% colder than normal in
the prior year quarter. Operating income decreased to $39.9 million from $48.6
million as a result of weather-induced lower throughput and higher operating
expenses offset partially by year-over-year customer growth. Operating expenses
increased primarily due to increased environmental reserves, higher stock-based
incentive compensation and higher low-income customer assistance expenses.
Net income from Electric Utility decreased to $1.5 million in the second fiscal
quarter of 2006 from $3.9 million in the prior-year quarter primarily due to
4.9% lower kilowatt-hour sales as a result of warmer weather, increased
purchased power costs and higher operating expenses. Weather in the Electric
Utility service territory was approximately 9% warmer than normal in the recent
quarter compared to approximately 7% colder than normal in the same quarter of
2005.
Energy Services' fiscal second quarter net income increased to $15.4 million
from $8.3 million in the same period of fiscal 2005 primarily reflecting a $5.3
million after-tax gain on the sale of its 50% ownership in Hunlock Creek Energy
Ventures in March 2006. Improved margins on lower commodity sales volumes and
higher electric generation margins were offset partially by higher operating
expenses. "As a result of the termination of our electric generation joint
venture, we now own all of the 48 megawatt coal-fired generation capacity at our
facility in northeastern Pennsylvania," concluded Greenberg.
UGI is a holding company with propane marketing, utility and energy marketing
subsidiaries. Through subsidiaries, UGI owns 44% of AmeriGas Partners, L. P.
(NYSE: APU), the nation's largest retail propane marketer, and owns Antargaz,
one of the largest LPG distributors in France.
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UGI REPORTS SECOND QUARTER RESULTS, AFFIRMS GUIDANCE PAGE 3
UGI will host its second quarter FY 2006 earnings conference call on Wednesday,
April 26, 2006, at 4:00 PM ET. Interested parties may listen to a live audio
broadcast of the conference call at
http://www.shareholder.com/ugi/medialist.cfm. A telephonic replay of the call
can be accessed approximately one hour after the completion of the call at
1-888-203-1112, passcode 3047237; (International replay 719-457-0820, passcode
3047237) through midnight, Friday April 28, 2006.
The financial table appended to this news release can be viewed directly at
HTTP://WWW.SHAREHOLDER.COM/UGI/2Q06FINANCIALTABLE.PDF.
Comprehensive information about UGI Corporation is available on the Internet at
HTTP://WWW.UGICORP.COM.
This press release contains certain forward-looking statements which management
believes to be reasonable as of today's date only. Actual results may differ
significantly because of risks and uncertainties that are difficult to predict
and many of which are beyond management's control. Among them are adverse
weather conditions, price volatility and availability of all energy products,
including propane, natural gas, electricity and fuel oil, increased customer
conservation measures, domestic and international economic and political
conditions and currency exchange rates. You should read UGI's Annual Report on
Form 10-K for a more extensive list of factors that could affect results. UGI
undertakes no obligation to release revisions to its forward-looking statements
to reflect events or circumstances occurring after today.
C-07 ### 4/26/06
UGI CORPORATION
REPORT OF EARNINGS
(Millions, except per share)
(Unaudited)
Three Months Ended Six Months Ended Twelve Months Ended
March 31, March 31, March 31,
------------------------ ------------------------ ------------------------
2006 2005 2006 2005 2006 2005
---------- ---------- ---------- ---------- ---------- ----------
Revenues:
AmeriGas Propane $ 718.2 $ 698.3 $ 1,348.4 $ 1,254.5 $ 2,057.2 $ 1,882.5
International Propane 382.1 363.1 649.7 641.3 952.3 940.3
Gas Utility 296.2 255.9 516.0 417.1 684.0 584.7
Electric Utility 25.4 25.6 49.3 47.9 97.5 91.5
Energy Services 438.8 432.2 890.2 761.2 1,484.0 1,166.7
Corporate & Other (a) (15.2) 12.6 (30.2) 28.1 (113.0) 58.8
---------- ---------- ---------- ---------- ---------- ----------
Total revenues $ 1,845.5 $ 1,787.7 $ 3,423.4 $ 3,150.1 $ 5,162.0 $ 4,724.5
========== ========== ========== ========== ========== ==========
Operating income:
AmeriGas Propane $ 116.3 $ 117.9 $ 191.0 $ 176.5 $ 182.6 $ 159.7
International Propane (b) 76.5 99.0 110.1 176.4 127.5 201.4
Gas Utility 39.9 48.6 75.6 76.7 80.5 80.9
Electric Utility 3.3 7.2 9.8 11.9 19.5 21.5
Energy Services 26.1 14.0 34.3 20.1 51.7 37.4
Corporate & Other (a) 0.5 1.0 2.0 1.1 1.3 3.2
---------- ---------- ---------- ---------- ---------- ----------
Total operating income 262.6 287.7 422.8 462.7 463.1 504.1
Income (loss) from equity investees (0.6) (0.6) (1.2) (1.3) (2.5) (2.6)
Loss on extinguishment of debt (18.5) -- (18.5) -- (52.1)
Interest expense:
AmeriGas Propane (19.4) (20.7) (38.3) (41.2) (76.9) (82.0)
International Propane (5.7) (8.0) (13.8) (16.5) (28.8) (32.2)
Gas Utility (4.6) (4.0) (9.7) (8.1) (18.2) (16.0)
Electric Utility (0.8) (0.5) (1.3) (1.0) (2.0) (2.0)
Corporate & Other, net (a) 0.1 (0.1) 0.1 -- (0.5) (0.3)
---------- ---------- ---------- ---------- ---------- ----------
Total interest expense (30.4) (33.3) (63.0) (66.8) (126.4) (132.5)
Income before income taxes and minority
interests 213.1 253.8 340.1 394.6 282.1 369.0
Income tax expense (64.4) (83.5) (102.9) (125.5) (96.6) (125.0)
Minority interests, principally in
AmeriGas Partners (44.7) (53.0) (75.7) (73.6) (32.0) (42.8)
---------- ---------- ---------- ---------- ---------- ----------
Net income $ 104.0 $ 117.3 $ 161.5 $ 195.5 $ 153.5 $ 201.2
========== ========== ========== ========== ========== ==========
Earnings per share (c):
Basic $ 0.99 $ 1.13 $ 1.53 $ 1.90 $ 1.46 $ 1.96
========== ========== ========== ========== ========== ==========
Diluted $ 0.98 $ 1.12 $ 1.52 $ 1.86 $ 1.44 $ 1.92
========== ========== ========== ========== ========== ==========
Average common shares outstanding (c):
Basic 105.365 103.582 105.261 103.162 104.932 102.642
========== ========== ========== ========== ========== ==========
Diluted 106.401 105.086 106.472 105.128 106.783 104.634
========== ========== ========== ========== ========== ==========
Supplemental information:
Net income (loss):
AmeriGas Propane (d) $ 21.2 $ 27.0 $ 36.1 $ 37.4 $ 16.3 $ 23.1
International Propane (b) 45.0 47.0 59.9 94.2 65.1 99.8
Gas Utility 21.5 26.7 39.9 41.2 38.0 38.3
Electric Utility 1.5 3.9 5.0 6.4 10.1 11.6
Energy Services 15.4 8.3 20.3 11.9 30.1 22.1
Corporate & Other (a) (0.6) 4.4 0.3 4.4 (6.1) 6.3
---------- ---------- ---------- ---------- ---------- ----------
Total net income $ 104.0 $ 117.3 $ 161.5 $ 195.5 $ 153.5 $ 201.2
========== ========== ========== ========== ========== ==========
(a) Corporate & Other includes the elimination of certain intercompany
transactions.
(b) International Propane's operating income and net income for both the six and
twelve month periods ended March 31, 2005 include $19.9 million and $14.9
million, respectively, associated with the beneficial effects of the resolution
of certain non-income tax contingencies related principally to prior periods.
(c) Earnings per share and average common shares outstanding for all periods
reflect the effects of the Company's 2-for-1 common stock split distributed May
24, 2005 to shareholders of record on May 17, 2005.
(d) Amounts are net of minority interests in AmeriGas Partners, L.P.