[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 July 26, 2006
Brenda A. Blake, ext. 3202
UGI REPORTS THIRD QUARTER RESULTS, PROVIDES GUIDANCE
VALLEY FORGE, Pa., July 26 - UGI Corporation (NYSE: UGI) today reported net
income for the third quarter of fiscal 2006 ended June 30, 2006 of $18.7
million, or $0.18 per diluted share, compared to net income for the third
quarter of fiscal 2005 of $0.7 million or $0.01 per diluted share. The results
for the recently-completed quarter include a one-time benefit of $0.05 per
diluted share resulting from a lower estimate of income taxes to be paid on
foreign earnings to be repatriated and the results for last year's quarter
included a loss of $0.09 per diluted share resulting from the previously
reported early extinguishment of debt.
Lon R. Greenberg, chairman and chief executive officer of UGI, said, "All of our
businesses were negatively impacted by the extremely warm weather in the third
quarter. Notwithstanding the warmer weather, our focus on executing our
strategies produced operating income comparable to last year. At the same time,
our earnings reflect the benefit of lower interest expense resulting from the
actions we took to refinance our debt. Despite the challenging environment we
faced this year, we expect to report net income 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 an improved seasonal net loss of $4.1 million for the quarter,
compared to a loss of $5.1 million excluding the loss on the early
extinguishment of debt of $9.4 million last year. The net loss for the
prior-year quarter, including the loss on the early extinguishment of debt, was
$14.5 million. For the three months ended June 30, 2006, retail volumes sold
declined to 171.1 million gallons from 181.9 million gallons sold in the
prior-year period. Weather nationally was 21.9% 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 $3.8 million
during the quarter due to higher vehicle fuel and lease costs, higher employee
compensation and benefits expense and increased bad debt expenses partially
offset by favorable net adjustments in reserves for general insurance, mainly
reflecting continued improvement in claims history.
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UGI REPORTS THIRD QUARTER RESULTS, PROVIDES GUIDANCE PAGE 2
For the three months ended June 30, 2006, International Propane contributed net
income of $13.1 million compared to net income of $6.4 million in the prior year
period, principally as a result of the lower estimate of taxes on earnings to be
repatriated. Antargaz sold 54.0 million gallons of liquefied petroleum gases
(LPG) compared to 59.2 million gallons in the prior year period. Weather in
Antargaz' service territory was approximately 22% warmer than normal in the
current fiscal year period compared to weather that was approximately 20% warmer
than normal in the same period in 2005. Flaga consolidated volumes declined
compared to the prior year quarter due primarily to the absence of volumes from
Flaga's Czech Republic and Slovakia businesses that were contributed in February
to our central European joint venture, which is now reported on an equity basis.
Total operating income at International Propane decreased to $11.6 from $13.2
million in the prior year quarter due to lower total margin as a result of the
previously-noted lower volumes partially offset by lower consolidated operating
expenses primarily due to the absence of the Czech Republic and Slovakia
businesses. Operating expenses also were adversely affected by expenses
associated with the closing of two filling centers at Antargaz. The monthly
average currency exchange rate was $1.26 per euro during both the 2006 and 2005
three-month periods.
Net income from the Gas Utility decreased to $0.8 million for the quarter ended
June 30, 2006 compared to $2.3 million for the 2005 quarter on weather that was
13.5% warmer than normal versus weather that was 3.5% warmer than normal in the
prior year quarter. Operating income decreased to $6.6 million from $7.7 million
primarily as a result of lower throughput due to warmer weather and customer
conservation, lower fee income and higher depreciation expenses.
"Notwithstanding year-over-year customer growth in our gas utility service area,
extremely warm weather and high natural gas prices continued to adversely affect
our operating performance," continued Greenberg.
The Electric Utility contributed net income of $2.7 million in both the third
fiscal quarter of 2006 and 2005. Kilowatt-hour sales were comparable to the
prior year period and slightly higher operating income was offset by higher
interest expense.
Energy Services' fiscal third quarter net income increased slightly to $6.4
million from $6.3 million in the prior-year period. Operating income decreased
slightly due to higher costs associated with electric generation partially
offset by a decrease in bad debt expense.
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 THIRD QUARTER RESULTS, PROVIDES GUIDANCE PAGE 3
UGI will host its third quarter FY 2006 earnings conference call on Wednesday,
July 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 4258637; (International replay 719-457-0820, passcode
4258637) through midnight, Friday, July 28, 2006.
The financial table appended to this news release can be viewed directly at
HTTP://WWW.SHAREHOLDER.COM/UGI/3Q06FINANCIALTABLE.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-09 ### 7/26/06
UGI CORPORATION
REPORT OF EARNINGS
(Millions, except per share)
(Unaudited)
<Table>
<Caption>
Three Months Ended Nine Months Ended Twelve Months Ended
June 30, June 30, June 30,
------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
---------- ---------- ---------- ---------- ---------- ----------
Revenues:
AmeriGas Propane $ 379.1 $ 349.5 $ 1,727.5 $ 1,604.0 $ 2,086.8 $ 1,916.9
International Propane 167.4 163.1 817.1 804.4 956.6 945.6
Gas Utility 106.3 89.5 622.3 506.6 700.8 576.5
Electric Utility 22.9 22.0 72.2 69.9 98.4 92.5
Energy Services 268.7 290.6 1,158.9 1,051.8 1,462.1 1,240.0
Corporate & Other (a) (25.3) 17.8 (55.5) 45.9 (156.1) 61.1
---------- ---------- ---------- ---------- ---------- ----------
Total revenues $ 919.1 $ 932.5 $ 4,342.5 $ 4,082.6 $ 5,148.6 $ 4,832.6
========== ========== ========== ========== ========== ==========
Operating income:
AmeriGas Propane $ 2.9 $ 1.6 $ 193.9 $ 178.1 $ 183.9 $ 165.3
International Propane (b) 11.6 13.2 121.7 189.6 125.9 200.3
Gas Utility 6.6 7.7 82.2 84.4 79.4 81.7
Electric Utility 5.2 4.9 15.0 16.8 19.8 20.9
Energy Services 10.4 10.6 44.7 30.7 51.5 37.8
Corporate & Other (a) 1.8 (0.4) 3.8 0.7 3.5 1.8
---------- ---------- ---------- ---------- ---------- ----------
Total operating income 38.5 37.6 461.3 500.3 464.0 507.8
Income (loss) from equity investees -- (0.7) (1.2) (2.0) (1.8) (2.7)
Loss on extinguishment of debt -- (33.6) (18.5) (33.6) (18.5) (33.6)
Interest expense:
AmeriGas Propane (17.9) (19.7) (56.2) (60.9) (75.1) (81.2)
International Propane (5.4) (7.8) (19.2) (24.3) (26.4) (31.7)
Gas Utility (4.7) (3.9) (14.4) (12.0) (19.0) (16.0)
Electric Utility (0.6) (0.5) (1.9) (1.5) (2.1) (1.9)
Corporate & Other, net (a) (0.5) (0.2) (0.4) (0.2) (0.8) (0.3)
---------- ---------- ---------- ---------- ---------- ----------
Total interest expense (29.1) (32.1) (92.1) (98.9) (123.4) (131.1)
Income before income taxes and
minority interests 9.4 (28.8) 349.5 365.8 320.3 340.4
Income tax (expense) benefit (2.1) 1.6 (105.0) (123.9) (100.3) (117.9)
Minority interests, principally
in AmeriGas Partners 11.4 27.9 (64.3) (45.7) (48.5) (28.9)
---------- ---------- ---------- ---------- ---------- ----------
Net income $ 18.7 $ 0.7 $ 180.2 $ 196.2 $ 171.5 $ 193.6
========== ========== ========== ========== ========== ==========
Earnings per share:
Basic $ 0.18 $ 0.01 $ 1.71 $ 1.89 $ 1.63 $ 1.87
========== ========== ========== ========== ========== ==========
Diluted $ 0.18 $ 0.01 $ 1.69 $ 1.86 $ 1.61 $ 1.84
========== ========== ========== ========== ========== ==========
Average common shares outstanding:
Basic 105.603 104.312 105.374 103.542 105.253 103.254
========== ========== ========== ========== ========== ==========
Diluted 106.850 106.024 106.585 105.422 106.680 105.178
========== ========== ========== ========== ========== ==========
Supplemental information:
Net income (loss):
AmeriGas Propane (c) $ (4.1) $ (14.5) $ 32.0 $ 22.9 $ 26.7 $ 15.6
International Propane (b) 13.1 6.4 73.0 100.6 71.8 102.1
Gas Utility 0.8 2.3 40.7 43.5 36.5 39.3
Electric Utility 2.7 2.7 7.7 9.1 10.1 11.1
Energy Services 6.4 6.3 26.7 18.2 30.2 22.4
Corporate & Other (a) (0.2) (2.5) 0.1 1.9 (3.8) 3.1
---------- ---------- ---------- ---------- ---------- ----------
Total net income $ 18.7 $ 0.7 $ 180.2 $ 196.2 $ 171.5 $ 193.6
========== ========== ========== ========== ========== ==========
</Table>
(a) Corporate & Other includes the elimination of certain intercompany
transactions.
(b) International Propane's operating income and net income for both the nine
and twelve month periods ended June 30, 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) Amounts are net of minority interests in AmeriGas Partners, L.P.