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UGI Corp. Reports Operating Results (10-Q)

February 04, 2011 | About:
10qk

10qk

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UGI Corp. (UGI) filed Quarterly Report for the period ended 2010-12-31.

Ugi Corp has a market cap of $3.52 billion; its shares were traded at around $31.88 with a P/E ratio of 13.4 and P/S ratio of 0.6. The dividend yield of Ugi Corp stocks is 3.2%. Ugi Corp had an annual average earning growth of 9.4% over the past 10 years. GuruFocus rated Ugi Corp the business predictability rank of 3-star.Hedge Fund Gurus that owns UGI: Stanley Druckenmiller of Duquesne Capital Management, LLC, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns UGI: Diamond Hill Capital of Diamond Hill Capital Management Inc, Chuck Royce of Royce& Associates, Mario Gabelli of GAMCO Investors.
This is the annual revenues and earnings per share of UGI over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of UGI.


Highlight of Business Operations:

Retail propane revenues increased $42.9 million during the 2010 three-month period reflecting higher average retail sales prices ($66.0 million) partially offset by lower retail volumes sold ($23.1 million). Wholesale propane revenues decreased $3.5 million principally reflecting lower wholesale volumes sold ($10.4 million) partially offset by higher wholesale selling prices ($6.9 million). Average wholesale propane prices at Mont Belvieu, Texas, a major supply location in the U.S., were approximately 15% higher during the 2010 three-month period compared with average wholesale propane prices during the 2009 three-month period. Other revenues from ancillary sales and services increased $4.2 million in the 2010 three-month period. Total cost of sales increased $45.7 million, to $435.3 million, principally reflecting the previously mentioned higher 2010 wholesale propane product costs.

Total margin was $2.1 million lower in the 2010 three-month period primarily due to lower total retail margin ($4.6 million) and, to a much lesser extent, lower wholesale margin partially offset by an increase in margin from fee income and ancillary sales and services ($3.8 million). The lower total retail margin reflects the effects of the lower retail volumes sold ($9.7 million) partially offset by the effects of slightly higher average retail unit margins ($5.1 million).

Operating income in the 2010 three-month period decreased $11.0 million reflecting the previously mentioned decrease in EBITDA ($9.7 million) and slightly higher depreciation and amortization expense associated with fixed assets acquired or placed in service during the past year ($1.3 million). Partnership interest expense was $1.1 million lower in the 2010 three-month period principally reflecting lower interest expense on lower long-term debt outstanding principally resulting from the July 2010 repayment of $80 million of AmeriGas OLP Series E First Mortgage Notes.

International Propane euro base-currency operating income increased €11.1 million reflecting the previously mentioned higher total margin (€15.5 million) and the reversal of the nontaxable reserve at Antargaz associated with the French Competition Authority Matter (€7.1 million). These increases were partially offset by higher euro base-currency operating and administrative expenses (€10.1 million) principally operating and administrative expenses at Flaga associated with acquired businesses including incremental acquisition integration costs. On a U.S. dollar basis, operating income increased $10.1 million reflecting the greater U.S. dollar total margin ($8.3 million) and the reserve reversal associated with the French Competition Authority Matter ($9.4 million) offset in part by higher U.S. dollar denominated operating and administrative expenses at Flaga associated with acquired businesses. Euro base-currency income before income taxes was €10.9 million higher than in the prior-year period reflecting the €11.1 million increase in operating income. In U.S. dollars, income before income taxes increased $10.5 million reflecting the previously mentioned higher U.S. dollar-denominated operating income.

Gas Utility revenues decreased $6.7 million during the 2010 three-month period principally reflecting a decline in revenues from retail core market customers ($19.7 million) partially offset by an $11.5 million increase in low-margin off-system sales. The decrease in core market revenues principally resulted from lower average purchased gas cost (“PGC”) rates resulting from lower natural gas prices. Under Gas Utility’s PGC recovery mechanisms, Gas Utility records the cost of gas associated with sales to retail core-market customers at amounts included in PGC rates. The difference between actual gas costs and the amounts included in rates is deferred on the balance sheet as a regulatory asset or liability and represents amounts to be collected from or refunded to customers in a future period. As a result of this PGC recovery mechanism, increases or decreases in the cost of gas associated with retail core-market customers have no direct effect on retail core-market margin. Gas Utility’s cost of gas was $194.9 million in the 2010 three-month period compared with $209.8 million in the prior-year period reflecting the lower average PGC rates.

Gas Utility operating income during the 2010 three-month period increased $11.4 million principally reflecting the previously mentioned increase in total margin ($8.2 million) and lower operating and administrative costs ($2.4 million). The $11.5 million increase in income before income taxes reflects the previously mentioned increase in Gas Utility operating income ($11.4 million).

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