[UGI CORPORATION LETTERHEAD]
Contact: 610-337-1000 For Immediate Release:
Robert W. Krick, ext. 3645 November 15, 2006
Brenda A. Blake, ext. 3202
UGI REPORTS RESULTS FOR FISCAL 2006
VALLEY FORGE, Pa., November 15 - UGI Corporation (NYSE: UGI) today reported net
income of $176.2 million, or $1.65 per diluted share, for its fiscal year ended
September 30, 2006, compared to $187.5 million, or $1.77 per diluted share, for
the fiscal year ended September 30, 2005. Prior year results include higher
earnings at Antargaz due to unusually high unit margins and a weaker dollar. For
the quarter ended September 30, 2006, the company recorded a seasonal loss of
$0.04 per diluted share compared to a loss of $0.08 per diluted share for the
same period in 2005.
Lon R. Greenberg, chairman and chief executive officer of UGI, said, "The recent
addition of UGI Penn Natural Gas to the UGI family is another step in our
commitment to provide long-term shareholder value. We remain committed to our
annual objectives of 6% to 10% growth in earnings per share and 4% dividend
increases. We expect UGI Penn Natural Gas to be accretive to earnings in fiscal
2007 and, assuming more normal winter weather, we expect to report consolidated
earnings of approximately $1.75 to $1.85 per diluted share for fiscal 2007."
UGI's domestic propane distributor, AmeriGas Propane, contributed $25.1 million
to net income for the year, compared to $17.6 million in fiscal 2005. Current
year and prior year results include after-tax losses on the early extinguishment
of debt of $4.6 million and $9.4 million, respectively. For the twelve months
ended September 30, 2006, retail propane volumes sold decreased almost 6% to 975
million gallons from 1.035 billion gallons in the prior year principally due to
warmer weather and price-induced customer conservation. Nationally, weather was
10% warmer than normal in fiscal 2006 compared to weather that was almost 7%
warmer than normal in the prior-year, according to the National Oceanic and
Atmospheric Administration. Total margin increased $32.2 million mainly due to
higher average propane unit margins and higher fees in response to increases in
operating expenses. Operating and administrative expenses rose primarily as a
result of higher vehicle fuel and lease expenses, higher compensation and
benefits expenses, and higher maintenance and repair expenses. Operating income
increased to $184.1 million in fiscal 2006 from $168.1 million in fiscal 2005.
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UGI REPORTS RESULTS FOR FISCAL 2006 PAGE 2
International Propane's net income in fiscal 2006 decreased to $67.1 million
from $99.4 million in fiscal 2005 due to the aforementioned impact of lower unit
margins and currency translation changes as well as lower sales volumes. Fiscal
2006 results include lower interest expense related to a refinancing and a
one-time benefit of $7.8 million resulting from a lower estimate of income taxes
to be paid on foreign earnings to be repatriated. Fiscal 2005 results also
benefited from $14.2 million related to non-income tax matters. For the twelve
months ended September 30, 2006, weather in International Propane's service
territories based upon heating degree days was comparable to the prior year.
During the fiscal year, the monthly average translation rate was $1.23 per euro
compared to $1.27 per euro during fiscal 2005. Antargaz sold approximately 315
million retail gallons of liquefied petroleum gases (LPG) compared to 338
million retail gallons in 2005 primarily due to the late onset of winter
weather, lower agricultural volumes sold and customer conservation. Flaga's
results, including its equity participation in its joint venture, were
comparable to the prior year. As previously announced, during 2006 Flaga entered
into a joint venture to distribute LPG in portions of central and eastern
Europe.
Net income from Gas Utility, which includes the results of UGI Penn Natural Gas
as of August 24, 2006 declined in fiscal year 2006 to $38.1 million from $39.3
million in fiscal year 2005 on weather that was approximately 9% warmer than
normal versus weather that was 2% warmer than normal in the prior year.
Throughput in the Gas Utility declined to 82.6 billion cubic feet in 2006 versus
84.7 billion cubic feet in 2005 primarily due to warmer weather and customer
conservation caused by higher natural gas prices mitigated by throughput from
UGI Penn Natural Gas operations and customer growth. Gas Utility total margin
increased $6.1 million in fiscal 2006 largely as a result of higher average
interruptible delivery service unit margins partially offset by lower retail
core-market margin. Operating expenses increased as the addition of UGI Penn
Natural Gas operating expenses, along with higher uncollectible and customer
assistance expenses, more than offset lower stock-based compensation and system
maintenance expenses. Operating income for the year increased $2.6 million to
$84.2 million.
Net income from Electric Utility decreased to $10.5 million in fiscal 2006 from
$11.5 million in fiscal 2005. Sales declined almost 2% to 1,005 gigawatt-hours
in fiscal 2006 mainly as a result of warmer heating-season weather compared to
last year. Operating income decreased $0.9 million to $20.7 million primarily
due to lower sales and higher per-unit purchased power costs.
Energy Services' fiscal year 2006 net income was $31.3 million compared with
$21.7 million in fiscal 2005 primarily reflecting the previously-reported $5.3
million after-tax gain on the sale of its 50% ownership in an electric
generation joint venture. Total margin increased as higher natural gas margins,
including winter storage and peaking services, exceeded the effects of lower
commodity sales volumes. Increases in expenses associated with electric
generation led to higher overall operating expenses. Operating income from
Energy Services increased to $53.1 million from $37.5 million.
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 RESULTS FOR FISCAL 2006 PAGE 3
UGI will host its fourth quarter FY 2006 earnings conference call on Wednesday,
November 15, 2006, at 4:00 PM ET. Interested parties may listen to a live audio
webcast 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 5934822 (International replay
719-457-0820, passcode 5934822) through November 17, 2006.
The financial tables appended to this news release can be viewed directly at
HTTP://WWW.SHAREHOLDER.COM/UGI/4Q06FINANCIALTABLE.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-15 ### 11/15/06
UGI CORPORATION
REPORT OF EARNINGS
(Millions, except per share)
(Unaudited)
Three Months Ended Twelve Months Ended
September 30, September 30,
----------------------------- -----------------------------
2006 2005 2006 2005
---------- ---------- ----------- -----------
Revenues:
AmeriGas Propane $ 391.8 $ 359.3 $ 2,119.3 $ 1,963.3
International Propane 128.4 139.5 945.5 943.9
Gas Utility 101.7 78.5 724.0 585.1
Electric Utility 25.8 26.2 98.0 96.1
Energy Services 255.4 303.2 1,414.3 1,355.0
Corporate & Other, net (a) (24.6) (100.6) (80.1) (54.7)
--------- --------- ---------- -----------
Total revenues $ 878.5 $ 806.1 $ 5,221.0 $ 4,888.7
========= ========= ========== ===========
Operating income (loss):
AmeriGas Propane $ (9.8) $ (10.0) $ 184.1 $ 168.1
International Propane (b) (2.4) 4.2 119.3 193.8
Gas Utility 2.0 (2.8) 84.2 81.6
Electric Utility 5.7 4.8 20.7 21.6
Energy Services 8.4 6.8 53.1 37.5
Corporate & Other, net (a) 2.5 (0.3) 6.3 0.4
--------- --------- ---------- -----------
Total operating income 6.4 2.7 467.7 503.0
Income (loss) from equity investees (1.0) (0.6) (2.2) (2.6)
Loss on extinguishment of debt - - (18.5) (33.6)
Interest expense:
AmeriGas Propane (17.9) (18.9) (74.1) (79.8)
International Propane (5.6) (7.2) (24.8) (31.5)
Gas Utility (7.4) (4.6) (21.8) (16.6)
Electric Utility (0.6) (0.2) (2.5) (1.7)
Corporate & Other, net (a) - (0.4) (0.4) (0.6)
--------- --------- ---------- -----------
Total interest expense (31.5) (31.3) (123.6) (130.2)
Income (loss) before income taxes and minority interests (26.1) (29.2) 323.4 336.6
Income tax benefit (expense) 6.5 4.7 (98.5) (119.2)
Minority interests, principally in AmeriGas Partners 15.6 15.8 (48.7) (29.9)
--------- --------- ---------- -----------
Net income (loss) $ (4.0) $ (8.7) $ 176.2 $ 187.5
========= ========= ========== ===========
Earnings (loss) per share:
Basic $ (0.04) $ (0.08) $ 1.67 $ 1.81
========= ========= ========== ===========
Diluted $ (0.04) $ (0.08) $ 1.65 $ 1.77
========= ========= ========== ===========
Average common shares outstanding:
Basic 105.697 104.888 105.455 103.877
========= ========= ========== ===========
Diluted 105.697 104.888 106.727 105.723
========= ========= ========== ===========
Supplemental information:
Net income (loss):
AmeriGas Propane (c) $ (6.9) $ (5.3) $ 25.1 $ 17.6
International Propane (b) (5.9) (1.2) 67.1 99.4
Gas Utility (2.6) (4.2) 38.1 39.3
Electric Utility 2.8 2.4 10.5 11.5
Energy Services 4.6 3.5 31.3 21.7
Corporate & Other, net (a) 4.0 (3.9) 4.1 (2.0)
--------- --------- ---------- -----------
Total net income (loss) $ (4.0) $ (8.7) $ 176.2 $ 187.5
========= ========= ========== ===========
(a) Corporate & Other includes the elimination of certain intercompany
transactions.
(b) International Propane's operating income and net income for the twelve
months ended September 30, 2005 include $18.8 million and $14.2 million,
respectively, associated with the resolution of certain non-income tax
contingencies related principally to prior years.
(c) Amounts are net of minority interests principally in AmeriGas Partners, L.P.