UGI Corporation · NYSE:UGI
UGI — American Gas Association Financial Forum 2013
48 slides from UGI's conference presentation, May 2013
Slide 1: American Gas Association
American Gas Association May 5-7, 2013 May 5-7, 2013 1
Slide 2: About This Presentation
About This Presentation This presentation Thi t ti contains t i certain t i forward-looking f d l ki statements t t t that th t managementt 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
Slide 3: About UGI Corporation
About UGI Corporation UGI Corporation is a distributor and marketer of energy products and services including natural gas, propane, butane, and electricity. UGI Corporation (NYSE: UGI) Domestic Propane* International Midstream and Utilities Propane p Marketing g (NYSE APU) (NYSE: 100+ local brand na
Slide 4: About UGI Corporation
About UGI Corporation UGI operates in 50 states and 16 European countries A iG also AmeriGas l operates t in i Hawaii and Alaska Domestic International Midstream & UGI U Utilities ili i Propane Propane Marketing May 5-7, 2013 4
Slide 5: Why Invest in UGI?
Why Invest in UGI? Significant Cash Generation n UGI? ? Diversification vest in Growth and Why Inv Income W Strong Track Record May 5-7, 2013 5
Slide 6: Why Invest in UGI? Significant Cash Generation
Why Invest in UGI? Significant Cash Generation n UGI? ? UGI generates over $125 million of free cash flow Diversification vest in annually for reinvestment This is after satisfying all Growth and Why Inv subsidiaries’ debt service, Income ongoing capex, and paying our dividend W Strong Track Record
Slide 7: Why Invest in UGI? Diversification
Why Invest in UGI? Significant Cash UGI provides diversified Generation exposure p to n UGI? ? • Commodities • Geographies • Customer Segments Diversification vest in • Supply S l Chain Ch i While benefiting from the common attributes our Growth and Why Inv businesses share Income This Diversificati
Slide 8: Why Invest in UGI? Growth and Income
Why Invest in UGI? Significant Cash Generation n UGI? ? UGI is a balanced growth Diversification and income investment vest in We are committed to Growth and delivering 6% to 10% EPS Why Inv Income growth and 4% annual dividend growth W Strong Track Record May 5-7, 2013 8
Slide 9: Why Invest in UGI? Strong Track Record
Why Invest in UGI? Significant Cash UGI has a strong track Generation n UGI? ? record of meeting or exceeding our commitments to shareholders: Diversification vest in • 13.7% 13 7% EPS growth* • 7% dividend growth* • Successful capital Growth and Why Inv reinvestment Income • 128 years of uninterrup
Slide 10: Why Invest in UGI?
Why Invest in UGI? Significant Cash Generation n UGI? ? Diversification vest in Growth and Why Inv Income W Strong Track Record May 5-7, 2013 10
Slide 11: Total Shareholder Return
Total Shareholder Return 1 Year Total Return 3 Year Total Return 5 Year Total Return 50.0% 20.0% 16.0% 40.0% 16.0% 12.0% 30 0% 30.0% 12 0% 12.0% 8.0% 20.0% 8.0% 4.0% 10.0% 4.0% 0.0% 0.0% 0.0% UGI S&P 500 S&P 500 S&P 400 UGI S&P 500 S&P 500 S&P 400 UGI S&P 500 S&P 500 S&P 400 Utilities Midcap Utiliti
Slide 12: Business Unit Overview: UGI Utilities
Business Unit Overview: UGI Utilities May 5-7, 2013 12
Slide 13: UGI Utilities: Overview
UGI Utilities: Overview Pennsylvania’s largest gas utility • 45 of the 67 PA counties served • ~600,000 gas customers • Service provided in 709 PA municipalities • ~60,000 60 000 electric l t i customers t Attractive and growing service areas • Gas G Utility Utilit customer t growth th off ~2% 2% ii
Slide 14: UGI Utilities: Growth Initiatives
UGI Utilities: Growth Initiatives Annual Gas Customer Additions Customer Growth 14,000 3.5% • In 2012 UGI Gas achieved +2% net 12,000 3.0% customer growth 10 000 10,000 2 5% 2.5% • Focused on customer conversions 8,000 2.0% from oil and other fuels • Estimate >250,000 250,000 potential 6,000 1.5% cu
Slide 15: UGI Corporation AmeriGas
UGI CORPORATION AmeriGas
Slide 16: AmeriGas: Overview
AmeriGas: Overview AmeriGas provides service to all 50 states 8,500+ Employees 2,000 Locations 2+ million Customers Market share ((%)) 1 1+ billion 1.1+ Propane gallons sold annually 65 60.7 15 15 1 15.1 Largest player in a fragmented industry with 15% market share 10 8.9 7.2 5 3.2 2.4 09 0.9 0.8 0.
Slide 17: AmeriGas: Overview
AmeriGas: Overview Customer Base • Unmatched geographic coverage • Customer density = efficiency 29% • Advantage in acquisitions, serving multi- multi 44% Commercial/ state customers Residential Industrial • Geographic and end-use diversity 13% • Counter-seasonal business (ACE) 5% 9% Motor Fuel and
Slide 18: AmeriGas: Growth Initiatives
AmeriGas: Growth Initiatives S Strategic G Growth Initiatives The AmeriGas Advantage • Leverage extensive distribution network and national footprint National Accounts • Dedicated D di t d customer t service/billing i /billi team t • Service multiple locations; one bill • Counter seasonal summer bus
Slide 19: International
International May 5-7, 2013 19
Slide 20: International: Overview
International: Overview Brand France, Belgium, Netherlands, Luxembourg, Austria, Poland, Countries C t i off operation ti Czech C h Republic, R bli Hungary, H Slovakia, Sl ki Romania, R i Switzerland, S it l d Norway, Sweden, Denmark, Finland, U.K. ~ 600 million (retail) Approx volume (gallons) ~ 80
Slide 21: International: Growth Initiatives
International: Growth Initiatives ORGANIC GROWTH: • Heating Oil to LPG conversions • Penetration of new LPG markets in UU.K. K • Residential customer growth in Poland • Commercial bulk business in Poland and Scandinavia • Expand natural gas marketing segment ACQUISITION GROWTH: • Pursue opportunitie
Slide 22: Midstream & Marketing
Midstream & Marketing May 5-7, 2013 22
Slide 23: Midstream & Marketing: Overview
Midstream & Marketing: Overview Marketing Midstream Generation Natural Gas Pipelines and Generation • ~ 100 Bcf Gathering • Hunlock: 125 • > 30,000 MWs combined locations Storage – 15 Bcf cycle l • 33 LDCs • Conemaugh: 102 Peaking MWs coal‐fired Power • 1.25 Bcf LNG • > 2 MM MWhrs MWh Storage Capaci
Slide 24: Midstream & Marketing: Overview
Midstream & Marketing: Overview Marketing Midstream Generation 55% of historical 32% of historical 13% of historical EBIT EBIT EBIT ~50% of future >40% of future <5% of future EBIT EBIT EBIT • Uniquely positioned to link population centers to Marcellus supply • Growth opportunities leverage UGI’s ex
Slide 25: Commodity Marketing
Commodity Marketing We supply ~ 100 bcf of gas and over 2 MM MWhrs of power to 40,000 commercial and industrial facilities throughout the Mid-Atlantic region Strategy Target small and medium-size businesses that value our services (hedging, management of energy requirements) Characteristics • Little
Slide 26: Commodity Marketing
Commodity Marketing C i t t disciplined Consistent, di i li d approachh results i steady lt in t d earnings growth through numerous disruptive events 22% warmer Commodity Marketing Margin (thousands) than normal winter Commodity $80,000 spike to Katrina/Rita ~$13/Dth and price spikes drop to ~$3/Dth
Slide 27: Midstream
Midstream Erie Potter Warren McKean Tioga Bradford Susquehanna Crawford Wayne Forest Wyoming Venango Elk Cameron Sullivan Mercer Lycoming Pike Clinton Clarion Jefferson Luzerne Lawrence Monroe Clearfield Union Butler Centre Carbon Armstrong North Umberland Beaver Sn der Snyder Indiana Schuylkill All
Slide 28: Midstream: Growth Initiatives
Midstream: Growth Initiatives • Link supply to markets by leveraging UGI’s existing pipeline infrastructure • Build new pipeline capacity from prolific Marcellus areas to market centers in PA and beyond • Integrate pipeline infrastructure with other midstream assets such as storage, peaking, power g
Slide 29: In Conclusion
In Conclusion May 5-7, 2013 29
Slide 30: The Growth and Income Engine
The Growth and Income “Engine” IIncome-producing d i businesses b i generatet cash h for f growth th opportunities and dividends Cash flow Dividends Base business earnings growth $250 MM- $125 MM- 3-4% 3 4% $290 MM* $140 MM* Organic investment and M&A1 Incremental earnings growth $125 MM- 3-6% $150
Slide 31: Growth Opportunities
Growth Opportunities M lti l growth Multiple th initiatives i iti ti to t achieve hi our goall off 6-10% 6 10% earnings i growth and 4% dividend growth National Accounts Gas Acquisitions gathering / pipelines Cylinder Natural gas exchange peaking/LNG Natural gas Energy marketingg g marketing Organic
Slide 32: Why Invest in UGI?
Why Invest in UGI? Significant Cash Generation n UGI? vest in ? Diversification Growth and Why Inv Income W Strong Track Record May 5-7, 2013 32
Slide 33: Total Shareholder Return
Total Shareholder Return 1 Year Total Return 3 Year Total Return 5 Year Total Return 50.0% 20.0% 16.0% 40.0% 16.0% 12.0% 30 0% 30.0% 12 0% 12.0% 8.0% 20.0% 8.0% 4.0% 10.0% 4.0% 0.0% 0.0% 0.0% UGI S&P 500 S&P 500 S&P 400 UGI S&P 500 S&P 500 S&P 400 UGI S&P 500 S&P 500 S&P 400 Utilities Midcap Utiliti
Slide 34: Appendix
—« GI CORPORATION UGI BALANCED DIVERSIFIED DISCIPLINED INNOVATIVE STRATEGIC
Slide 35: UGI Summary Financial Information
UGI Summary Financial Information Year Ended September 30, (millions of dollars) 2012 2011 2010 2009 2008 Income Statement Revenues $ 6,519.2 $ 6,091.3 $ 5,591.4 $ 5,737.8 $ 6,648.2 Cost of sales (4,111.2) (4,010.9) (3,584.0) (3,670.6) (4,744.6) Total Margin 2 408 0 2,408.0 2 080 4 2,080.4 2 007 4 2
Slide 36: UGI EPS Reconciliation
UGI EPS Reconciliation Year Ended September 30, 30 (millions of dollars, except where otherwise indicated) 2012 2011 2010 2009 2008 GAAP Net Income $ 199.4 $ 232.9 $ 261.0 $ 258.5 $ 215.5 Adjustments: Acquisition and transition expenses $ (13.3) (13 3) Loss on early extinguishment of debt at AmeriGa
Slide 37: AmeriGas Propane
AmeriGas Propane Year Ended September 30, (millions of dollars, except where otherwise indicated) 2012 2011 2010 2009 2008 Income Statement - AmeriGas Propane Revenues $ 2,921.6 $ 2,538.0 $ 2,320.3 $ 2,260.1 $ 2,815.2 Cost of sales (1,719.7) (1,605.3) (1,395.1) (1,316.5) (1,908.3) Total Margin 1,201
Slide 38: AmeriGas Supplemental Information: Footnotes
AmeriGas Supplemental Information: Footnotes The enclosed supplemental information contains a reconciliation of Earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA to Net Income. EBITDA and Adjusted EBITDA are not measures of performance o
Slide 39: AmeriGas Propane EBITDA Reconciliation
AmeriGas Propane EBITDA Reconciliation Y Year Ended E d d September S t b 30, 30 (millions of dollars) 2012 2011 2010 2009 2008 Net income attributable to AmeriGas Partners, L.P. $ 11.0 $ 138.5 $ 165.3 $ 224.6 $ 158.0 Income tax expense 1.9 0.4 3.2 2.6 1.7 Interest expense 142.6 63.5 65.1 70.4 72.9
Slide 40: International Propane
International Propane Y Year Ended E d d September S t b 30, 30 (millions of dollars, except where otherwise indicated) 2012 2011 2010 2009 2008 Income Statement - International Propane Revenues $ 1,946.0 $ 1,488.7 $ 1,059.5 $ 955.3 $ 1,124.8 Cost of sales (1,325.8) (970.8) (582.1) (429.5) (651.9) T
Slide 41: UGI Utilities
UGI Utilities Y Year Ended E d d September S t b 30, 30 (millions of dollars) 2012 2011 2010 2009 2008 Income Statement - UGI Utilities Revenues $ 884.3 $ 1,137.4 $ 1,169.5 $ 1,381.3 $ 1,289.1 Cost of sales (459.1) (678.5) (730.5) (944.8) (920.4) Total Margin 425.2 458.9 439.0 436.5 368.7 Operating
Slide 42: Midstream & Marketing
Midstream & Marketing Year Ended September 30, 30 (millions of dollars) 2012 2011 2010 2009 2008 Income Statement - Energy Services Revenues $ 859.4 $ 1,059.7 $ 1,145.9 $ 1,224.7 $ 1,619.5 Cost of sales (730 9) (730.9) (920 0) (920.0) (1 010 7) (1,010.7) (1 098 5) (1,098.5) (1 495 4) (1,495.4) Total
Slide 43: 2013 Guidance
EPS Growth: 6% to 10% REINVESTMENT OF $3.25 CASH: 2013 guidance Midstream investments $3 00 $3.00 Propane acquisitions ‐ Int’l & domestic Utility acquisitions $2.75 PROJECTS: $2.50 Auburn II, Storage enhancements, LNG 2013 guidancce expansion, gathering 2013 guidance e systems $2.25 2 $2.00 BASE GRO
Slide 44: Composition of Base Growth
Composition of Base Growth* .01 .09-.11 .02-.03 .04-.05 .01-.02 .01-.02 01 02 Utilities Generration Internattional eriGas Midstream & Baase growth ttarget BASE GROWTH of 3% to 4%: Marketing Utility conversions/growth, conversions/growth Ame AmeriGas EBITDA growth, Midstream & Marketing organic growt
Slide 45: AmeriGas Unit Margin Management
AmeriGas Unit Margin Management A long track record of exceptional margin management through volatile propane cost environments AmeriGas Margin History $1.80 $1.80 argins $1.60 $1.60 Avg. Mt. Belvie $1.40 $1.40 ne Unit Ma $1.20 $1.20 $1.00 $1.00 $0 80 $0.80 $0 80 $0.80 eu Cost Propan $0.60 $0.60 $0.
Slide 46: International Unit Margin Management
International Unit Margin Management Intl. Propane has demonstrated the ability to manage margins in various cost environments – this is a core strength of all of UGI’s Propane businesses Antargaz Margin History 700 € 700 € s (€/T) Avg. Platt’s C 600 € 600 € nit Margins 500 € 500 € Cost (€/T)) opane
Slide 47: FAQs
FAQs F Frequently tl Asked A k d Questions Q ti Is natural gas making significant inroads on areas traditionally served by heating oil? • Yes. Natural gas is less expensive and more convenient for consumers • Most conversions take p place within 75-100 feet from the main • A significant number of he
Slide 48: Investor Relations
Investor Relations: 610-337-7000 Simon Bowman (x3645) bowmans@ugicorp.com May 5-7, 2013 48