Slide 1: 2014 Q2 Earnings Conference Call
May 8, 2014 2014 Q2 Earnings Conference Call May 8, 2014
Slide 2: About This Presentation
May 8, 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. Y
Slide 3: Presenters: John Walsh, Kirk Oliver, Jerry Sheridan
May 8, 2014 John Walsh President & CEO, UGI Kirk Oliver Chief Financial Officer, UGI Jerry Sheridan President & CEO, AmeriGas
Slide 4: 2014 Q2 Results
May 8, 2014 4 2014 Q2 Results $1.51 $1.90 $0.90 $1.10 $1.30 $1.50 $1.70 $1.90 $2.10 2 0 1 3 2 0 1 4 Adjusted EPS* * See reconciliation in appendix 26% increase in Adjusted EPS FY14 Adjusted EPS guidance increased to $2.95 - $3.05 from $2.60-$2.70
Slide 5: Operational Highlights
May 8, 2014 5 Operational Highlights Results reflect both weather-induced volatility and heightened natural gas demand • Cold weather in January accentuated local volatility in the Northeast and Mid-Atlantic regions • Increasingly high level of natural gas demand continued to strain existing infrast
Slide 6: Strategic Milestones
May 8, 2014 6 Strategic Milestones • Auburn II pipeline exceeded expected throughput • Gas Utility customer additions YTD are running 10% ahead of last year’s record pace • Gas Utility is on-schedule to meet our cast iron/bare steel replacement commitments • Supply and field service teams at AmeriGa
Slide 7: Q2 Weather vs Normal
May 8, 2014 7 Q2 Weather vs Normal 8.1% -1.5% -16.5% 10.1% -18.1% 5.1% 19.3% 1.9% -20% -10% 0% 10% 20% 2014 Q2 2013 Q2 AmeriGas Antargaz Flaga Utility (W A R M E R ) COL D E R (W A R M E R )
Slide 8: AmeriGas
May 8, 2014 8 AmeriGas VOLUME Colder weather MARGIN Higher volumes due to colder weather Higher unit margins OPEX Supply issues Distribution-related expenses Uncollectible accounts expense Synergies Total Margin 284.8 11.5 31.1 (5.3) (20.6) 1.7 $180 $200 $220 $240 $260 $280 $300 $320 2
Slide 9: UGI International
May 8, 2014 9 UGI International VOLUME Warmer weather MARGIN Warmer weather Incremental margin from BP Poland acquisition OPEX Lower costs due to lower volumes sold Incremental opex from BP Poland acquisition (23.0) 2.5 0.1 2.5 0.1 $0 $10 $20 $30 $40 $50 $60 $70 $80 2 0 1 3 Q 2 LPG V o lu
Slide 10: Gas Utility
May 8, 2014 10 Gas Utility MARGIN Colder weather Higher throughput due to increased demand Customer additions OPEX Higher uncollectible accounts and maintenance expense Lower pension and benefits expense Total Margin 96.4 126.1 22.9 6.5 (1.5) 0.9 0.9 $40 $60 $80 $100 $120 $140 2 0 1 3 Q 2
Slide 11: Midstream & Marketing
May 8, 2014 11 Midstream & Marketing MARGIN Higher capacity management, peaking, and incremental margin from Auburn II Higher gas marketing margin Higher electric generation margin Slightly lower power marketing margin OPEX Higher natural gas gathering expenses Higher uncollectible accou
Slide 12: Q2 Basis Differentials
May 8, 2014 12 Q2 Basis Differentials (W A R M E R ) Spot Price Comparison Location – Texas Eastern Zone M-3 0 2 4 6 8 10 12 14 16 18 1-Jan 8-Jan 15-Jan 22-Jan 29-Jan 5-Feb 12-Feb 19-Feb 26-Feb 5-Mar 12-Mar 19-Mar 26-Mar 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 Fiscal 2012 Pre-recession Value
Slide 13: Q2 Basis Differentials
May 8, 2014 13 Q2 Basis Differentials (W A R M E R ) Spot Price Comparison Location – Texas Eastern Zone M-3 0 10 20 30 40 50 60 70 80 90 1-J a n 8-J a n 1 5 -J a n 2 2 -J a n 2 9 -J a n 5- F e b 1 2 -F e b 1 9 -F e b 2 6 -F e b 5- M a r 1 2 -M a r 1 9 -M a r 2 6 -M a r 2007-08 2008-09 2009-10 2010-
Slide 14: Liquidity, Guidance, and Dividend Update
May 8, 2014 14 Liquidity, Guidance, and Dividend Update Total AmeriGas Int'l Propane Utilities Midstream Corporate / Other Cash on Hand $493.6 $38.5 $205.9 $14.2 $20.3 $214.8 Revolving Credit Facilities $525.0 $134.9 $300.0 $240.0 NA Accounts Receivable Facility NA NA NA 99.0 NA Drawn on Facilities
Slide 15: Jerry Sheridan CEO of AmeriGas
May 8, 2014 Jerry Sheridan CEO of AmeriGas
Slide 16: Q2 Adjusted EBITDA
May 8, 2014 16 Q2 Adjusted EBITDA $309.0 $331.2 $200 $220 $240 $260 $280 $300 $320 $340 2 0 1 3 Q 2 2 0 1 4 Q 2 Adjusted EBITDA*, $ Millions * See appendix for Adjusted EBITDA reconciliation FY14 Guidance updated to $660 MM - $675 MM
Slide 17: Operational Update: Operations
May 8, 2014 17 Operational Update Operations • Volume increased 2.3% versus last year’s second quarter on weather that was 9.7% colder than last year • Western states experienced much warmer weather than normal; Large parts of CA and AZ saw the warmest Jan-Mar period since 1895 • The West represents
Slide 18: Operational Update: Operations
May 8, 2014 18 Operational Update Operations • Supply shortages and a 51% increase in wholesale prices at Mt. Belvieu created a difficult operating environment for many of our locations • However, we redeployed significant assets and personnel in order to keep customers in gas. This includes our “Am
Slide 19: Operational Update: Growth Initiatives
May 8, 2014 19 Operational Update Growth Initiatives • AmeriGas Cylinder Exchange (ACE): Volume growth of 16% from the prior-year quarter • National Accounts: Added 22 new accounts year to date representing 2.2 million additional annual gallons • Acquisitions: Two small acquisitions closed year-to-d
Slide 20: John Walsh President & CEO
May 8, 2014 John Walsh President & CEO
Slide 21: Operational Update: Midstream and Gas Utility
May 8, 2014 21 Operational Update Midstream and Marketing • Significant potential for additional investment to address the midstream “infrastructure gap” • New phase for Auburn Gathering System announced; investment will nearly double the capacity and raise total capital invested in the project to r
Slide 22: Operational Update: AmeriGas and UGI International
May 8, 2014 22 Operational Update AmeriGas • Adjusted EBITDA up 7% despite significant operational challenges in the East and Midwest • Very strong performance in both ACE and National Accounts programs UGI International • Much warmer than expected • Weather in France was 16.5% warmer than normal •
Slide 23: In Conclusion
May 8, 2014 23 In Conclusion • Extraordinary weather, which is non-recurring, was the most significant factor in driving guidance revision • However, increased volatility due to “infrastructure gap” in Northeast and Mid-Atlantic was also an important factor • The “infrastructure gap” is likely to be
Slide 24: Q&A
May 8, 2014 Q&A
Slide 25: Appendix
May 8, 2014 Appendix
Slide 26: UGI Supplemental Information: Footnotes
May 8, 2014 26 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 incom
Slide 27: Adjusted EPS to GAAP EPS Reconciliation
May 8, 2014 27 Adjusted EPS to GAAP EPS Reconciliation Three Months Ended Six Months Ended March 31, March 31, 2014 2013 Adjusted diluted earnings per share: UGI Corporation earnings per share - diluted 1.84$ 1.57$ Adjust: Net unrealized (gains) losses on Midstream & Marketing's unsettled commodity
Slide 28: AmeriGas Supplemental Information: Footnotes
May 8, 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 o
Slide 29: AmeriGas Partners EBITDA Reconciliation
May 8, 2014 29 AmeriGas Partners EBITDA Reconciliation 2014 2013 Net income attributable to AmeriGas Partners, L.P. 240,103$ 213,208$ Income tax (benefit) expense (74) (52) Interest expense 42,046 41,776 Depreciation 38,353 37,607 Amortization 10,804 11,022 EBITDA 331,232$ 303,561$ Heritage Propane
Slide 30: Investor Relations Contact
May 8, 2014 Investor Relations: 610-337-1000 Simon Bowman (x3645) bowmans@ugicorp.com