UGI Corporation (NYSE: UGI) reported financial results for the fiscal
quarter ended June 30, 2018.
HIGHLIGHTS
“Our teams did an excellent job this quarter and delivered another
period of strong results,” said John L. Walsh, president and chief
executive officer of UGI Corporation. “Excluding a $0.09 reserve related
to tax savings at the Utility, our third quarter adjusted EPS nearly
doubled our results from the prior-year period. We were pleased to see
that our recent investments such as UniverGas, DVEP, the Sunbury
Pipeline, and the Texas Creek gathering assets have all contributed
positively to earnings year to date. These investments align with our
core strategy, strengthen our foundation, and keep us well-positioned to
deliver long-term earnings growth.”
Based on the results of the first nine months of the fiscal year and
expectations for the fourth quarter, UGI continues to expect adjusted
EPS of $2.70 to $2.80 per diluted share for the fiscal year ending
September 30, 2018.1
KEY DRIVERS OF THIRD QUARTER RESULTS
1 See note on Guidance and Use of Forward-Looking Statements
on page 2
EARNINGS CALL and WEBCAST
UGI Corporation will hold a live Internet Audio Webcast of its
conference call to discuss third quarter earnings and other current
activities at 9:00 AM ET on Thursday, August 2, 2018. Interested parties
may listen to the audio webcast both live and in replay on the Internet
at http://www.ugicorp.com/investor-relations/events-and-presentations/default.aspx
or at the company website http://www.ugicorp.com
under Investor Relations. A telephonic replay will be available from
12:00 PM ET on August 2nd through 11:59 PM ET on August 9th. The replay
may be accessed at (855) 859-2056, and internationally at
1-404-537-3406, conference ID 3385959.
ABOUT UGI
UGI is a distributor and marketer of energy products and services.
Through subsidiaries, UGI operates natural gas and electric utilities in
Pennsylvania, distributes propane both domestically and internationally,
manages midstream energy and electric generation assets in Pennsylvania,
and engages in energy marketing primarily in the Mid-Atlantic region as
well as parts of Europe. UGI, through subsidiaries, is the sole General
Partner and owns 26% of AmeriGas Partners, L.P. (NYSE: APU), the
nation’s largest retail propane distributor.
Comprehensive information about UGI Corporation is available on the
Internet at http://www.ugicorp.com.
USE OF NON-GAAP MEASURES
Management uses “adjusted diluted earnings per share,” which is derived
from “adjusted net income attributable to UGI Corporation,” both of
which are non-GAAP financial measures, when evaluating UGI’s overall
performance. For the periods presented, adjusted net income attributable
to UGI Corporation is net income attributable to UGI Corporation after
excluding net after-tax gains and losses on commodity and certain
foreign currency derivative instruments not associated with
current-period transactions (principally comprising changes in
unrealized gains and losses on such derivative instruments), losses
associated with extinguishments of debt, Finagaz integration expenses,
the impact on net deferred tax liabilities from a change in the French
tax rate and U.S. tax reform legislation, and impairment of Partnership
tradenames and trademarks. Volatility in net income at UGI can occur as
a result of gains and losses on commodity and certain foreign currency
derivative instruments not associated with current-period transactions
but included in earnings in accordance with U.S. generally accepted
accounting principles (“GAAP”).
Non-GAAP financial measures are not in accordance with, or an
alternative to, GAAP and should be considered in addition to, and not as
a substitute for, the comparable GAAP measures. Management believes that
these non-GAAP measures provide meaningful information to investors
about UGI’s performance because they eliminate the impact of (1) gains
and losses on commodity and certain foreign currency derivative
instruments not associated with current-period transactions and (2)
other significant discrete items that can affect the comparison of
period-over-period results.
Tables beginning on page 6 reconcile net income attributable to UGI
Corporation, the most directly comparable GAAP measure, to adjusted net
income attributable to UGI Corporation, and diluted earnings per share,
the most comparable GAAP measure, to adjusted diluted earnings per
share, to reflect the adjustments referred to above.
NOTE ON GUIDANCE and USE OF FORWARD-LOOKING STATEMENTS
Because we are unable to predict certain potentially material items
affecting diluted earnings per share on a GAAP basis, principally
mark-to-market gains and losses on commodity and certain foreign
currency derivative instruments, Finagaz integration expenses and
impacts from tax reform in the U.S. and France, we cannot reconcile 2018
adjusted earnings per share guidance, a non-GAAP financial measure, to
diluted earnings per share, the most directly comparable GAAP measure,
in reliance on the “unreasonable efforts” exception set forth in SEC
rules.
This press release contains certain forward-looking statements that
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. You should read UGI’s Annual Report on Form 10-K for a more
extensive list of factors that could affect results. Among them are
adverse weather conditions, cost volatility and availability of all
energy products, including propane, natural gas, electricity and fuel
oil, increased customer conservation measures, the impact of pending and
future legal proceedings, continued analysis of recent tax legislation,
domestic and international political, regulatory and economic conditions
in the United States and in foreign countries, including the current
conflicts in the Middle East, and foreign currency exchange rate
fluctuations (particularly the euro), the timing of development of
Marcellus Shale gas production, the availability, timing and success of
our acquisitions, commercial initiatives and investments to grow our
business, our ability to successfully integrate acquired businesses and
achieve anticipated synergies, and the interruption, disruption,
failure, malfunction, or breach of our information technology systems,
including due to cyber-attack. UGI undertakes no obligation to release
revisions to its forward-looking statements to reflect events or
circumstances occurring after today.
SEGMENT RESULTS ($ in millions, except where otherwise indicated)
AmeriGas Propane1
1 UGI, through subsidiaries, is the sole General Partner and
owns 26% of AmeriGas Partners, L.P.
UGI International
Base-currency results are translated into U.S. dollars based upon
exchange rates experienced during the reporting periods. During the
third quarter, the euro and British pound sterling were approximately 7%
and 5% stronger, respectively, versus the U.S. dollar, compared with the
prior-year period. Although the stronger euro and British pound sterling
affects line item comparisons above, the beneficial impact of the
stronger currencies on net income was substantially offset by net losses
on foreign currency exchange contracts.
SEGMENT RESULTS ($ in millions, except where otherwise indicated)
Midstream & Marketing
UGI Utilities
Non-GAAP Financial Measures – Adjusted Net
Income Attributable to UGI and Adjusted Diluted Earnings Per Share
The following tables reconcile net income attributable to UGI
Corporation, the most directly comparable GAAP measure, to adjusted net
income attributable to UGI Corporation, and reconciles diluted earnings
per share, the most comparable GAAP measure, to adjusted diluted
earnings per share, to reflect the adjustments referred to previously:
AmeriGasPropane
UGIInternational
Midstream &Marketing
AmeriGasPropane
UGIInternational
Midstream &Marketing
Adjusted diluted earnings per share for the three months ended
June 30, 2017 are based upon fully diluted shares of 177.298
million.
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