Slide 1: 2014 Q3 Earnings Conference Call
July 30, 2014 2014 Q3 Earnings Conference Call July 30, 2014
Slide 2: About This Presentation
July 30, 2014 2 This presentation 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.
Slide 3: Presenters
July 30, 2014 John Walsh President & CEO, UGI Kirk Oliver Chief Financial Officer, UGI Jerry Sheridan President & CEO, AmeriGas
Slide 4: 2014 Q3 Results
July 30, 2014 4 2014 Q3 Results * See reconciliation in appendix 36% increase in Adjusted EPS* Adjusted Net Income* attributable to UGI rose to $17.1 million in Q3 of FY 2014 vs. $12.4 million in prior-year period $0.11 $0.15 $0.00 $0.04 $0.08 $0.12 $0.16 2013 2014 Adjusted EPS*
Slide 5: Operational Highlights: Midstream & Marketing, Gas Utility
July 30, 2014 5 Operational Highlights Midstream & Marketing • Marcellus asset network serving strong natural gas demand across the region • Producer and consumer recognition of “infrastructure gap” Gas Utility • Expect to add a record 18,000 new residential and commercial customers in FY14 • GETgas
Slide 6: Operational Highlights: AmeriGas, UGI International
July 30, 2014 6 Operational Highlights AmeriGas • AmeriGas Cylinder Exchange (ACE) – volume growth up ~ 8% YTD • National Accounts volumes up 11% in Q3 year-over-year UGI International • Strong performance despite significantly warmer weather in Q3 and YTD • Continued focus on unit margin management
Slide 7: Kirk Oliver, Chief Financial Officer
July 30, 2014 Kirk Oliver Chief Financial Officer
Slide 8: Q3 Weather vs. Normal
July 30, 2014 8 Q3 Weather vs. Normal (W A R M E R ) COL D E R (W A R M E R ) -9.3% 0.5% -19.8% 19.7% -15.5% -7.2% -6.3% -7.1% -20.0% -10.0% 0.0% 10.0% 20.0% 2014 Q3 2013 Q3 AmeriGas Antargaz Flaga Utility
Slide 9: AmeriGas
July 30, 2014 9 AmeriGas VOLUME Warmer weather MARGIN Higher unit margins OPEX Transition expenses Higher payroll & benefits Vehicle and equipment repairs Advertising related to spring marketing programs General Insurance Total Margin Opex includes all operating expenses, net of miscel
Slide 10: UGI International
July 30, 2014 10 UGI International VOLUME Significantly warmer weather MARGIN Weather impact on customer mix OPEX Increased costs at Flaga from BP Poland acquisition Total Margin * Opex includes all operating expenses, net of miscellaneous income. Total Margin represents total revenues less to
Slide 11: Gas Utility
July 30, 2014 11 Gas Utility MARGIN Weather slightly colder than prior year period Higher core market and large firm delivery margins OPEX Higher maintenance expenses Total Margin * Opex includes all operating expenses, net of miscellaneous income. Total Margin represents total revenues less t
Slide 12: Midstream & Marketing
July 30, 2014 12 Midstream & Marketing MARGIN Higher capacity management, storage, and gathering margin Higher gas marketing margin Higher electric generation margin Continued benefit from locational basis difference OPEX Expanded natural gas gathering assets Total Margin * Excludes impact
Slide 13: Liquidity and Guidance Update
July 30, 2014 13 Liquidity and Guidance Update Total AmeriGas UGI International Utilities Midstream Corporate & Other Cash on Hand $438.4 $14.7 $147.0 $28.5 $14.1 $234.1 Revolving Credit Facilities $525.0 $134.2 $300.0 $240.0 NA Accounts Receivable Facility NA NA NA 41.4 NA Drawn on Facilities 92.5
Slide 14: Dividend Increase, Stock Split and Guidance
July 30, 2014 14 Dividend Increase, Stock Split and Guidance Dividend Increase • 10.6% in quarterly dividend from $0.2950 to ~ $0.3263 on a pre-split basis • Strikes balance between income and growth Stock Split • Three-for-two stock split for shareholders of record on August 22, 2014 Affirmed adjus
Slide 15: Jerry Sheridan, CEO of AmeriGas
July 30, 2014 Jerry Sheridan CEO of AmeriGas
Slide 16: Q3 Adjusted EBITDA
July 30, 2014 16 Q3 Adjusted EBITDA * See appendix for Adjusted EBITDA reconciliation $69.0 $55.1 $0 $10 $20 $30 $40 $50 $60 $70 $80 2 0 1 3 Q 3 2 0 1 4 Q 3 Adjusted EBITDA*, $ Millions
Slide 17: Operational Highlights
July 30, 2014 17 Operational Highlights • Adjusted EBITDA was $55.1MM compared to $69MM in prior-year period • Warmer weather led to a 4% decrease in retail volume • Retail margins expanded with inflation • Unusual winter led to higher operating expenses • Affirmed EBITDA guidance for FY14 of $660 t
Slide 18: Growth Initiatives
July 30, 2014 18 National Accounts • Volume up 11% in Q3 versus last year AmeriGas Cylinder Exchange (ACE) • Volume growth up 4% in Q3 and ~ 8% YTD • Added over 1,000 new locations YTD • Now 48,000 distribution locations nationwide Growth Initiatives
Slide 19: Strategic Milestones: Earnings Power and Strong Balance Sheet
July 30, 2014 19 Earnings Power • Earnings have nearly doubled from just three years ago • 2014 YTD EBITDA through Q3 approximately equal to full- year 2013 EBITDA Strong Balance Sheet • Leverage Ratio ~ 3.6x • Distribution coverage > 1.2x ETP secondary offering • Completed offering of 8.5MM units,
Slide 20: John Walsh, President & CEO
July 30, 2014 John Walsh President & CEO
Slide 21: Strategic Milestones
July 30, 2014 21 Strategic Milestones Total LPG distribution business • Reached agreement in principle to acquire Total’s LPG business in France for €400 - €450 million • Distributed 265 retail gallons of LPG in 2013 Temple LNG Expansion • Increase liquefaction capacity by 50% Auburn Loop • Construc
Slide 22: In Conclusion
July 30, 2014 22 In Conclusion Strong Q3 performance despite warmer than normal weather across most of our service territories Significant growth opportunities across all four business segments in 2015FY and beyond Combination of dividend increase and stock split reflects our board’s confidence in t
Slide 23: Q&A
July 30, 2014 Q&A
Slide 24: Appendix
July 30, 2014 Appendix
Slide 25: UGI Supplemental Information: Footnotes
July 30, 2014 25 UGI Supplemental Information: Footnotes Management uses "adjusted net income attributable to UGI" and "adjusted diluted earnings per share," both of which are non-GAAP financial measures, when evaluating UGI's overall performance. Adjusted net income attributable to UGI is net inc
Slide 26: Adjusted EPS to GAAP EPS Reconciliation
July 30, 2014 26 Adjusted EPS to GAAP EPS Reconciliation Three Months Ended Nine Months Ended June 30, June 30, 2014 2013 Adjusted diluted earnings per share: UGI Corporation earnings per share - diluted 0.18$ 0.08$ Net (gains) losses on Midstream & Marketing's derivative instruments not associated
Slide 27: Adjusted Net Income to GAAP EPS Reconciliation
July 30, 2014 27 Adjusted Net Income to GAAP EPS Reconciliation Three Months Ended Nine Months Ended June 30, June 30, 2014 2013 Adjusted net income attributable to UGI Corporation: Net income attributable to UGI Corporation 20.6$ 9.1$ Net (gains) losses on Midstream & Marketing's derivative instrum
Slide 28: AmeriGas Supplemental Information: Footnotes
July 30, 2014 28 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
Slide 29: AmeriGas Partners EBITDA Reconciliation
July 30, 2014 29 AmeriGas Partners EBITDA Reconciliation 2014 2013 Net (loss) attributable to AmeriGas Partners, L.P. (37,761)$ (34,595)$ Income tax expense (benefit) 847 (59) Interest expense 41,328 41,247 Depreciation 37,069 41,738 Amortization 10,788 10,775 EBITDA 52,271$ 59,106$ Heritage Propane
Slide 30: Investor Relations
July 30, 2014 Investor Relations: 610-337-1000 Daniel Platt (x1029) pllattd@ugicorp.com