UGI Corporation · NYSE:UGI
UGI — Q2 FY2018 Earnings Presentation
30 slides from UGI's earnings presentation, May 3, 2018
Slide 1: Fiscal Second Quarter Results
Fiscal Second Quarter Results May 3, 2018 John L. Walsh President & CEO, UGI Corporation Kirk R. Oliver Chief Financial Officer, UGI Corporation Jerry E. Sheridan President & CEO, AmeriGas Partners 1
Slide 2: About This Presentation
About This Presentation 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
Slide 3: Second Quarter Recap
Second Quarter Recap John L. Walsh President & CEO, UGI 3
Slide 4: Second Quarter Summary
Second Quarter Summary Q2 2018 Weather Versus: Normal • Record GAAP and Adjusted EPS 0.5% warmer 2.2% colder 1.9% warmer 2.2% warmer • All four business units posted higher UGI Midstream & Gas year-over-year results AmeriGas International Marketing Utility • Weather approximately normal; slightly Q2
Slide 5: Q2 Earnings Recap
Q2 Earnings Recap Adjusted EPS +29% $1.69 • Tax rate changes in the U.S. and France contributed $0.19, net, to adjusted EPS $1.31 • Excluding the benefits of tax reform, adjusted EPS was $1.50, a 15% increase over prior year, and a record Q2 result Q2 2017 Q2 2018 UGI Corporation | Fiscal 2018 Secon
Slide 6: Second Quarter Overview
Second Quarter Overview • Working with PennEast property owners and have obtained 97% survey permission in PA and 50% in NJ • LNG investments continued to perform very well as peaking and power generation demand across New England and the Mid-Atlantic remains high • Gas Utility has added nearly 8,60
Slide 7: Second Quarter Financial Review
Second Quarter Financial Review Kirk R. Oliver Chief Financial Officer, UGI 7
Slide 8: Q2 Adjusted Earnings
Q2 Adjusted Earnings ($ millions, except per share amounts) Q2 2017 Q2 2018 Net income attributable to UGI Corporation (GAAP) $219.9 $276.0 Net losses on commodity derivative instruments1,3 3.1 15.7 Unrealized losses on foreign currency derivative instruments1 0.8 1.3 Integration expenses associated
Slide 9: Adjusted EPS
Q2 Results Recap A return to near normal weather helped support a 29% increase to Adjusted EPS $1.75 $0.14 $1.69 ($0.02) Adjusted EPS $0.15 $1.692 $0.08 $0.03 Adjusted EPS $1.31 $1.311 $0.51 UGI Utilities $0.37 $0.43 Midstream & $0.28 Marketing 14.2% 6.3% 14.3% 10.8% colder colder colder colder UGI
Slide 10: Financial Results – AmeriGas
Financial Results – AmeriGas Weather versus normal ($ millions) Q2 2017 Q2 2018 colder Adjusted EBITDA $271.2 Retail Margin 45.8 Total margin Wholesale and Other Total Margin 3.0 Partnership Operating and Administrative Expenses (11.5) Q2 2017 Q2 2018 Other Income and Expense, net 1.0 (0.5)% (12.9)%
Slide 11: Financial Results – UGI International
Financial Results – UGI International ($ millions) Q2 2017 Q2 2018 Weather versus Income Before Taxes $116.2 normal Total Margin 60.9 colder Operating and Administrative Expenses (39.9) Depreciation and Amortization (7.3) Interest Expense (0.4) 2.2% Other Income and Expense, net (12.0) Income Before
Slide 12: Financial Results – Midstream & Marketing
Financial Results – Midstream & Marketing ($ millions) Q2 2017 Q2 2018 Weather versus normal Income Before Taxes $ 83.8 colder Total Margin 32.7 Operating and Administrative Expenses (4.4) Depreciation and Amortization (2.0) Other Income and Expenses, net (2.5) Q2 2017 Q2 2018 Income Before Taxes $1
Slide 13: Financial Results – Utilities
Financial Results – Utilities Gas Utility ($ millions) Q2 2017 Q2 2018 weather versus Income Before Taxes $106.1 normal colder Total Margin 30.4 Operating and Administrative Expenses (8.1) Depreciation and Amortization (3.4) Interest Expense (0.8) Q2 2017 Q2 2018 Other Income and Expense, net (0.2)
Slide 14: 2013 – 2018 Adjusted EPS Growth
2013 – 2018 Adjusted EPS Growth First Half 2013 and 2018 periods both experienced approximately normal weather +69% Total 11% CAGR $2.70 +51% Total $0.28 benefit from 9% CAGR tax reform $2.42 $1.60 First Half 2013 First Half 2018 UGI Corporation | Fiscal 2018 Second Quarter Results Adjusted EPS is a
Slide 15: AmeriGas Second Quarter Recap
AmeriGas Second Quarter Recap AmeriGas Jerry E. Sheridan President & CEO, AmeriGas 15
Slide 16: AmeriGas Q2 2018 Earnings Recap
AmeriGas Q2 2018 Earnings Recap Adjusted EBITDA $309.5 • Volume up 10% on weather that was 14% colder than $185.1 ($ in millions) prior-year period $271.2 $551.2 • Weather was normal, but uneven for the quarter • Unit margins up slightly despite average costs at Mt. Belvieu that were 18% higher than
Slide 17: Growth Initiatives
Growth Initiatives Cylinder Exchange • Volume was up 15% vs. Q2 2017 • 6% increase in same store sales National Accounts • Volume was up 18% vs. Q2 2017 due to weather and new customers Acquisitions • Closed an acquisition in April; expected to add 3 million gallons annually • Pipeline remains stron
Slide 18: Trade Names and Distribution Update
Trade Names and Distribution Update Heritage Tradenames Distribution and Leverage Update • Recently completed a review of the operational • On April 23, Board of Directors approved a $0.95 tradenames acquired with the Heritage distribution; unchanged from prior quarter acquisition in 2012 • Holding
Slide 19: Investor Relations and Q&A; Conclusion
Investor Relations:and Q&A Conclusion Will Ruthrauff John L. Walsh Brendan Heck 610-456-6571 President & CEO, UGI 610-456-6608 ruthrauffw@ugicorp.com heckb@ugicorp.com 19
Slide 20: Key Growth Drivers
Key Growth Drivers Natural Gas Infrastructure LPG and International • Record natural gas demand in first two weeks of Q2 • AmeriGas scale continues to offer competitive highlighted the need for additional infrastructure advantage; National Accounts and ACE up 15%+ this quarter • Peak sendouts were 7
Slide 21: FY 2018 Guidance Update
FY 2018 Guidance Update Original FY18 Adjusted EPS Guidance Updated FY18 Adjusted EPS Guidance (November 9, 2017) (May 3, 2018) $2.45 – $2.65 $2.70 – $2.80 • Did not reflect impact of tax reform • Includes the benefit of tax reform (other than one-time items) • Reflects the strong underlying perform
Slide 22: Q&A
Q&A 22
Slide 23: Appendix
APPENDIX 23
Slide 24: UGI Supplemental Footnotes
UGI Supplemental 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. For the periods presented, adjusted net income attributable to UGI is net income
Slide 25: UGI Adjusted Net Income and EPS
UGI Adjusted Net Income and EPS Quarter Ended Marc h 3 1 , 2 0 1 8 AmeriGas UGI Midstream & Corporate & Total UGI Utilities ( Mi l l i ons of dol l a rs , except per s ha re) P ropane International Marketing O ther Adjusted net inc ome attributable to UGI Corporation: Net income (loss) attributable
Slide 26: UGI Adjusted Net Income and EPS
UGI Adjusted Net Income and EPS Midstream Quarter Ended Marc h 3 1 , 2 0 1 7 AmeriGas UGI Corporate Total & UGI Utilities ( Mi l l i ons of dol l a rs except per s ha re) P ropane International & O ther Marketing Adjusted net inc ome attributable to UGI Corporation: Net income (loss) attributable to
Slide 27: 2013 UGI Adjusted Net Income and EPS
2013 UGI Adjusted Net Income and EPS For the Six Months ended March 31, 2013 (Millions of dollars, except per share) 2013 Adjusted net income attributable to UGI Corporation: Net income attributable to UGI Corporation $ 283.2 Net unrealized gains on Midstream & Marketing's unsettled commodity deriva
Slide 28: AmeriGas Supplemental Footnotes
AmeriGas Supplemental 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 or financial c
Slide 29: AmeriGas EBITDA and Adjusted EBITDA
AmeriGas EBITDA and Adjusted EBITDA (Millions of dollars) Quarter Ended March 31, 2018 2017 EBITDA and Adjusted EBITDA Net income attributable to AmeriGas Partners $ 191.8 $ 135.1 Income tax expense (a) 0.6 0.6 Interest expense 41.0 40.0 Depreciation 35.6 34.4 Amortization 9.6 10.6 EBITDA 278.6 220.
Slide 30: Investor Relations
Investor Relations: Will Ruthrauff Brendan Heck 610-456-6571 610-456-6608 ruthrauffw@ugicorp.com heckb@ugicorp.com 30