Ugi Corporation · NYSE:UGI
Ugi — Merger or Acquisition (July 2019)
16 slides from Ugi's merger presentation, Jul 3, 2019
Slide 1: Acquisition of Columbia Midstream Group, LLC
Acquisition of Columbia Midstream Group, LLC July 3, 2019
Slide 2: About This Presentation
About This Presentation All statements in this presentation (and oral statements made regarding the subjects of this communication) other than historical facts are forward-looking statements. The safe harbor provisions under Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Slide 3: Transaction Summary
Transaction Summary Transaction Structure UGI Energy Services, LLC (“UGIES”), a wholly-owned subsidiary of UGI Corporation (NYSE: UGI), will acquire Columbia Midstream Group (“CMG”), a wholly-owned subsidiary of TC Energy, for $1.275 billion in cash, subject to customary adjustments at closing UGIES
Slide 4: UGI Corporation's Strategy
UGI Corporation’s Strategy This transaction is in-line with our overall strategy ✓ Build businesses of scale Be the preferred provider in all markets ✓ Leverage our position as the last link in energy distribution ✓ Protect and enhance our brands ✓ Leverage successful programs and services across th
Slide 5: Grow and Deliver Value
Grow and Deliver Value Establishes scaled Adds significant scale and scope of operations to UGI’s existing natural gas midstream platform for midstream business in the Appalachian Basin growth Expands base of quality business partners and customers Provides UGI with a full suite of midstream service
Slide 6: Rich History of Successful Acquisitions and Integrations
Rich History of Successful Acquisitions and Integrations 3450 Total Shareholder Return CAGR (as of 3/31/19) 2950 1 Year 5 Year 10 Year 20 Year Finagaz acquisition nearly doubles UGI Corp 26.8% 17.7% 16.5% 18.5% volume in France 2450 S&P 500 8.8% 10.8% 15.9% 6.0% S&P 500 Utilities 17.7% 10.5% 12.7% 7
Slide 7: CMG Assets
CMG Assets Initial Length Diameter Capacity System Asset Type In-service (miles) (in) (‘000 MMBtu/d) Big Pine Dry gas gathering 2013 67 20, 24 ~425 East Washington Infield gathering 2015 21 8, 12, 16 ~300 Gibraltar Dry gas gathering 2017 25 36 ~1,000 Majorsville Wet gas gathering 2010 46 16, 20 ~350
Slide 8: Significant footprint in the Appalachian Basin
Significant footprint in the Appalachian Basin TL-94&96 Auburn Marshlands TGP Union Dale Texas Creek Transco (Leidy) Ponderosa Pennant Sunbury Big Pine Mt. Bethel TGP TETCO Penn East (Under Development) Majorsville E. Washington Storage TETCO Gas Processing Power Plant Gibraltar LNG Peaking Facility
Slide 9: Strategic Platform Underpinned by Long-Term Contracts
Strategic Platform Underpinned by Long-Term Contracts High quality assets with long-term fee-based contracts in one of North America’s most prolific regions Five recently constructed assets enhance our existing gathering business and bring UGI into processing, treating, and liquids handling services
Slide 10: UGIES: Increasing Fee-Based Income
UGIES: Increasing Fee-Based Income 2013 Margin1 39% 61% Fee-Based Margin All Other Margin Anticipated pro forma 2023 Margin 19% 81% Fee-Based Margin All Other Margin 1Margin is a non-GAAP measure. Please see appendix for reconciliation. UGI CORPORATION 10
Slide 11: Rebalancing Portfolio Mix
Rebalancing Portfolio Mix Natural Gas expected to be a larger part of earnings composition in future years as 70% of planned Capex is for the Natural Gas businesses Based on current outlook, LPG and Natural Gas will contribute equally to earnings by 2024 2020 Pro Forma Adjusted EPS 1 AmeriGas and CM
Slide 12: Summary
Summary Transaction adds stable, visible cash flows underpinned by long-term take-or-pay contracts and acreage dedications with well-capitalized producers who hold some of the best acreage in the Appalachian Basin CMG complements UGI’s existing footprint in north-central and eastern PA and creates a
Slide 13: Q&A
Q&A
Slide 14: Appendix
Appendix
Slide 15: UGI Supplemental Footnotes
UGI Supplemental Footnotes Management uses “Adjusted Earnings per Share” which is a non-GAAP financial measure, when evaluating UGI’s overall performance. For the periods presented, Adjusted Earnings per Share is earnings per share after excluding net after-tax gains and losses on commodity and cert
Slide 16: Midstream & Marketing Total Margin
Midstream & Marketing Total Margin ($ in millions) Year Ended September 30, 2013 2014 2015 2016 2017 2018 Total Revenues $ 1,122.8 $ 1,473.7 $ 1,181.4 $ 876.6 $ 1,121.2 $ 1,421.7 Total Cost of Sales (927.3) (1,149.8) (872.4) (612.2) (856.7) (1,090.8) Net Margin $ 195.5 $ 323.9 $ 309.0 $ 264.4 $ 264.