Annual Report — [x] Reg. S-K Item 405 — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K405 Form 10-K Fiscal Year Ended September 30, 2001 52 208K
2: EX-10.34(A) Amendments Dated 10/11/01-9/99 Guarantee Agmts. 12 29K
3: EX-13 Pages 13-47 of the 2001 Annual Report 71± 312K
4: EX-21 Subsiadiaries of the Registrant 2± 10K
5: EX-23 Consent of Arthur Andersen LLP 1 6K
10-K405 — Form 10-K Fiscal Year Ended September 30, 2001
Document Table of Contents
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
Commission file number 1-11071
UGI CORPORATION
(Exact name of registrant as specified in its charter)
[Download Table]
Pennsylvania 23-2668356
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
460 North Gulph Road, King of Prussia, PA 19406 (Address of
principal executive offices) (Zip Code)
(610) 337-1000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
[Download Table]
Name of each Exchange
Title of Class on which registered
Common Stock, without par value New York Stock Exchange, Inc.
Philadelphia Stock Exchange, Inc.
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS) AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [ ].
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. [ X ]
The aggregate market value of UGI Corporation Common Stock held by nonaffiliates
of the registrant on November 30, 2001 was $789,940,796.
At November 30, 2001 there were 27,339,684 shares of UGI Corporation Common
Stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Annual Report to
Shareholders for the year ended September 30, 2001 are incorporated by reference
into Parts I and II of this Form 10-K. Portions of the Proxy Statement for the
Annual Meeting of Shareholders to be held on February 26, 2002 are incorporated
by reference into Part III of this Form 10-K.
TABLE OF CONTENTS
[Enlarge/Download Table]
PART I BUSINESS PAGE
Items 1 and 2 Business and Properties........................................... 2
AmeriGas Propane Business......................................... 2
Utility Operations................................................ 11
UGI Enterprises, Inc.............................................. 20
- Domestic Businesses........................... 20
- International Businesses...................... 20
Item 3 Legal Proceedings................................................. 23
Item 4 Submission of Matters to a Vote of
Security Holders.................................................. 25
PART II SECURITIES AND FINANCIAL INFORMATION
Item 5 Market for Registrant's Common Equity
and Related Stockholder Matters................................... 25
Item 6 Selected Financial Data........................................... 27
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations..................... 28
Item 7A Quantitative and Qualitative Disclosures About Market Risk........ 28
Item 8 Financial Statements and Supplementary Data....................... 28
Item 9 Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure................ 28
PART III UGI MANAGEMENT AND SECURITY HOLDERS
Item 10 Directors and Executive Officers of the Registrant................ 29
Item 11 Executive Compensation............................................ 29
Item 12 Security Ownership of Certain Beneficial
Owners and Management............................................. 29
Item 13 Certain Relationships and Related Transactions.................... 29
PART IV ADDITIONAL EXHIBITS, SCHEDULES AND REPORTS
Item 14 Exhibits, Financial Statement Schedules
and Reports on Form 8-K........................................... 32
Signatures........................................................ 40
Index to Financial Statements and
Financial Statement Schedules..................................... F-2
(i)
PART I: BUSINESS
ITEMS 1 AND 2. BUSINESS AND PROPERTIES
UGI Corporation is a distributor and marketer of energy products and
services. We have two primary business lines: we are a domestic and
international distributor of propane, and we are also a provider of natural gas,
electricity and related services through regulated distribution utilities as
well as through unregulated electric generation, commodity marketing and heating
and cooling installation and service businesses.
We conduct our domestic propane distribution business through
AmeriGas Partners, L.P., ("AmeriGas Partners" or the "Partnership"), which is
the nation's largest retail propane distributor. AmeriGas Partners conducts its
business through its direct and indirect subsidiaries, AmeriGas Propane, L.P.
and AmeriGas Eagle Propane, L.P. (together, the "Operating Partnership").
AmeriGas Eagle Propane, L.P. has a less-than-one percent minority limited
partner. The Partnership's sole general partner is our subsidiary, AmeriGas
Propane, Inc. ("AmeriGas Propane" or the "General Partner"). The common units of
AmeriGas Partners, which represent limited partner interests in a Delaware
limited partnership, are traded on the New York Stock Exchange under the symbol
"APU." We have a 50.7% ownership interest in the Partnership; the remaining
interest is publicly held. See Note 1 to the Company's Consolidated Financial
Statements.
Our subsidiary UGI Utilities, Inc. ("UGI Utilities," or "Utilities")
owns and operates a natural gas distribution utility and an electric
distribution utility in eastern Pennsylvania. Utilities is the successor to a
business founded in 1882. It serves 277,000 natural gas customers and 61,000
electric customers. In response to state deregulation legislation, effective
October 1, 1999, Utilities' transferred its electric generation assets to a
non-utility subsidiary, UGI Development Company ("UGID"). UGID contributed
certain electric generation assets to a non-utility generation joint venture
with a subsidiary of Allegheny Energy, Inc. in December 2000.
UGI Enterprises, Inc. ("Enterprises") conducts domestic and
international energy-related businesses through subsidiaries. UGI Energy
Services, Inc. markets natural gas, oil and electricity in the Mid-Atlantic
region under the trade name GASMARK(R). UGI HVAC Enterprises, Inc. operates a
heating and cooling installation and service business in the Mid-Atlantic
region. Enterprises conducts its international propane distribution business
through operating companies and equity investments. It owns FLAGA GmbH, the
largest retail propane distributor in Austria and one of the largest suppliers
in the Czech Republic and Slovakia. In March 2001, Enterprises acquired a 20%
interest in Antargaz, one of the largest distributors of propane in France.
Enterprises also has an equity interest in a propane import and distribution
joint venture in China. We expect Enterprises to continue to evaluate and
develop new related and complementary business opportunities for us.
UGI was incorporated in Pennsylvania in 1991. UGI Corporation is not
subject to regulation by the Pennsylvania Public Utility Commission ("PUC"). It
is also exempt from registration as a holding company and not otherwise subject
to the Public Utility Holding Company Act of 1935, except for Section 9(a)(2),
which regulates the acquisition of voting securities of an electric or gas
utility company. Our executive offices are located at 460 North Gulph Road, King
of Prussia,
-2-
Pennsylvania 19406, and our telephone number is (610) 337-1000. In this report,
the terms "Company" and "UGI," as well as the terms "our," "we," and "its," are
sometimes used as abbreviated references to UGI Corporation or, collectively,
UGI Corporation and its consolidated subsidiaries. Similarly, the terms
"AmeriGas Partners" and the "Partnership" are sometimes used as abbreviated
references to AmeriGas Partners, L.P. or, collectively, AmeriGas Partners, L.P.
and its subsidiaries, including the Operating Partnership.
Business Strategy
In July 1999, following a comprehensive study, we announced our
intention to refocus our strategic direction on growing our existing natural
gas, electric and propane businesses while seeking additional related and
complementary growth opportunities. We are employing our core competencies from
our existing businesses, as well as using our national scope, extensive asset
base and access to customers, to accelerate growth in related and complementary
businesses, both domestic and international. During fiscal year 2001, we
completed a number of transactions in pursuit of this strategy.
AMERIGAS PROPANE BUSINESS
Our domestic propane distribution business is conducted through
AmeriGas Partners. Upon completion of the Columbia Propane acquisition described
below, we became the largest retail propane distributor in the United States,
based on retail volume. The Partnership operates from over 700 district
locations in 46 states. AmeriGas Propane manages the Partnership. Although our
consolidated financial statements include 100% of the Partnership's revenues,
assets and liabilities, our net income reflects only our majority interest in
the income or loss of the Partnership, due to the publicly-owned limited partner
interest. See Note 1 to the Company's Consolidated Financial Statements.
On August 21, 2001, AmeriGas Propane, L.P. acquired the propane
distribution businesses of Columbia Energy Group for approximately $202 million
in cash. These businesses were conducted through Columbia Propane Corporation
and its 99% owned subsidiary, Columbia Propane, L.P. Prior to the acquisition,
Columbia Propane, based in Richmond, Virginia, was the seventh largest retail
propane marketer in the United States, selling approximately 308 million gallons
annually from 186 locations in 29 states. Following the acquisition, Columbia
Propane, L.P. changed its name to AmeriGas Eagle Propane, L.P. and Columbia
Propane Corporation changed its name to AmeriGas Eagle Propane, Inc. Both
entities do business under the trade name AmeriGas(R). AmeriGas Propane, L.P.
owns more than 99% of AmeriGas Eagle Propane, L.P. and an unaffiliated third
party retains the remaining interest. See Note 2 to the Company's Consolidated
Financial Statements.
General Industry Information
Propane is separated from crude oil during the refining process and
also extracted from natural gas or oil wellhead gas at processing plants.
Propane is normally transported and stored in a
-3-
liquid state under moderate pressure or refrigeration for economy and ease of
handling in shipping and distribution. When the pressure is released or the
temperature is increased, it is usable as a flammable gas. Propane is colorless
and odorless; an odorant is added to allow its detection. Propane is clean
burning, producing negligible amounts of pollutants when properly consumed.
The primary customers for propane are residential, commercial,
agricultural, motor fuel and industrial users to whom natural gas is not readily
available. Propane is typically more expensive than natural gas, competitive
with fuel oil when operating efficiencies are taken into account and, in most
areas, cheaper than electricity on an equivalent energy basis.
PRODUCTS, SERVICES AND MARKETING
As of September 30, 2001, the Partnership distributed propane to
approximately 1.3 million customers from over 700 district locations. The
Partnership's operations are located primarily in the East Coast, Southeast,
Midwest, Mountain Central and West Coast regions of the United States. The
Partnership also sells, installs and services propane appliances, including
heating systems. In certain markets, the Partnership also installs and services
propane fuel systems for motor vehicles. Typically, district locations are found
in suburban and rural areas where natural gas is not available. Districts
generally consist of an office, appliance showroom, warehouse and service
facilities, with one or more 18,000 to 30,000 gallon storage tanks on the
premises. As part of its overall transportation and distribution infrastructure,
the Partnership operates as an interstate carrier in 48 states throughout the
United States. It is also licensed as a carrier in Canada.
The Partnership sells propane primarily to five markets:
residential, commercial/industrial, motor fuel, agricultural and wholesale.
Approximately 74% of the Partnership's fiscal year 2001 sales (based on gallons
sold) were to retail accounts and approximately 26% were to wholesale customers.
Sales to residential customers in fiscal 2001 represented approximately 41% of
retail gallons sold, industrial/commercial customers 37%, motor fuel customers
14%, and agricultural customers 8%. Residential customers represented 51% of the
Partnership's total propane margin. No single customer accounts for 1% or more
of the Partnership's consolidated revenues.
In the residential market, which includes both conventional and
manufactured housing, propane is used primarily for home heating, water heating
and cooking purposes. Commercial users, which include motels, hotels,
restaurants and retail stores, generally use propane for the same purposes as
residential customers. The PPX Prefilled Propane Xchange program ("PPX (R)")
enables consumers to exchange their empty 20-pound propane grill cylinders for
filled cylinders at various retail locations such as home center and convenience
stores. Sales of our PPX (R) grill cylinders to retailers are included in the
commercial/industrial market. Industrial customers use propane to fire furnaces,
as a cutting gas and in other process applications. Other industrial customers
are large-scale heating accounts and local gas utility customers who use propane
as a supplemental fuel to meet peak load deliverability requirements. As a motor
fuel, propane is burned in internal combustion engines that power over-the-road
vehicles, forklifts and stationary engines. Agricultural uses include tobacco
curing, chicken brooding and crop drying. In its wholesale operations, the
Partnership principally sells propane to large industrial end-users and other
propane distributors.
-4-
Retail deliveries of propane are usually made to customers by means
of bobtail and rack trucks. Propane is pumped from the bobtail truck, which
generally holds 2,400 to 3,000 gallons of propane, into a stationary storage
tank on the customer's premises. The Partnership owns most of these storage
tanks and leases them to its customers. The capacity of these tanks ranges from
approximately 100 gallons to approximately 1,200 gallons.
The Partnership also delivers propane to retail customers in
portable cylinders with capacities of 4 to 24 gallons. Some of these deliveries
are made to the customer's location, where empty cylinders are either picked up
for replenishment or filled in place. The Partnership continues to expand its
PPX (R) program. At September 30, 2001, PPX (R) was available at
approximately 16,500 retail locations throughout the country, including
approximately 2,200 locations from Columbia Propane's cylinder exchange
business.
PROPANE SUPPLY AND STORAGE
Supplies of propane from the Partnership's sources historically have
been readily available. During the year ended September 30, 2001, the
Partnership purchased approximately 81% of its propane from 10 suppliers,
including Dynegy, Inc. (approximately 22%), Enterprise Products Operating LP
(approximately 21%), and BP (approximately 15%). The availability of propane
supply is dependent upon, among other things, the severity of winter weather and
the price and availability of competing fuels such as natural gas and heating
oil. Although no assurance can be given that supplies of propane will be readily
available in the future, management currently expects to be able to secure
adequate supplies during fiscal year 2002. If supply from major sources were
interrupted, however, the cost of procuring replacement supplies and
transporting those supplies from alternative locations might be materially
higher and, at least on a short-term basis, margins could be affected. Aside
from Dynegy, Enterprise Products and BP, no single supplier provided more than
10% of the Partnership's total propane supply in fiscal year 2001. In certain
market areas, however, some suppliers provide 70% to 80% of the Partnership's
requirements. Disruptions in supply in these areas could also have an adverse
impact on the Partnership's margins.
The Partnership has over 200 sources of supply, and it also makes
purchases on the spot market. The Partnership purchases its propane supplies
from domestic and international suppliers. Over 90% of propane purchases by the
Partnership in fiscal year 2001 were on a contractual basis. These contracts are
generally one- or two-year agreements subject to annual review. More than 90% of
those contracts provided for pricing based upon posted prices at the time of
delivery or the current prices established at major storage points such as Mont
Belvieu, Texas, or Conway, Kansas. In addition, some agreements provided maximum
and minimum seasonal purchase volume guidelines. The percentage of contract
purchases, and the amount of supply contracted for at fixed prices, will vary
from year to year as determined by the General Partner. The Partnership uses a
number of interstate pipelines, as well as railroad tank cars, delivery trucks
and barges, to transport propane from suppliers to storage and distribution
facilities. The Partnership stores propane at facilities in Arizona,
Pennsylvania, Virginia and several other states.
Because the Partnership's profitability is sensitive to changes in
wholesale propane costs, the Partnership generally seeks to pass on increases in
the cost of propane to customers. There is no
-5-
assurance, however, that the Partnership will always be able to pass on product
cost increases fully, particularly when product costs rise rapidly. Product cost
increases can be triggered by periods of severe cold weather, supply
interruptions, or other unforeseen events. The General Partner has adopted
supply acquisition and product price risk management practices to reduce the
effect of price volatility on product costs. These practices currently include
the use of summer storage, forward purchases and derivative commodity
instruments such as options and propane price swaps. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Market Risk Disclosures."
-6-
The following graph shows the average prices of propane on the
propane spot market during the last five fiscal years at Mont Belvieu, Texas and
Conway, Kansas, two major storage areas.
Average Propane Spot Market Prices
[AVERAGE PROPANE SPOT MARKET PRICES LINE GRAPH]
LP History
[Download Table]
Mont Belvieu Conway
1996 October Avg. Oct-96 51.57 51.53
1996 November Avg. Nov-96 58.05 63.41
1996 December Avg. Dec-96 61.04 84.29
1997 January Avg. Jan-97 47.45 63.39
1997 February Avg. Feb-97 38.71 39.02
1997 March Avg. Mar-97 38.50 37.26
1997 April Avg. Apr-97 34.88 35.26
1997 May Avg. May-97 35.31 36.48
1997 June Avg. Jun-97 34.43 35.86
1997 July Avg. Jul-97 34.91 34.63
1997 August Avg. Aug-97 37.03 36.53
1997 September Avg. Sep-97 38.68 37.95
1997 October Avg. Oct-97 39.83 37.32
1997 November Avg. Nov-97 35.95 35.00
1997 December Avg. Dec-97 33.57 31.36
1998 January Avg. Jan-98 30.07 28.21
1998 February Avg. Feb-98 29.79 28.32
1998 March Avg. Mar-98 27.39 27.84
1998 April Avg. Apr-98 29.06 29.47
1998 May Avg. May-98 27.42 27.82
1998 June Avg. Jun-98 24.42 24.84
1998 July Avg. Jul-98 24.54 24.55
1998 August Avg. Aug-98 24.12 23.87
1998 September Avg. Sep-98 24.83 24.04
1998 October Avg. Oct-98 25.72 24.57
1998 November Avg. Nov-98 24.79 23.20
1998 December Avg. Dec-98 20.89 18.72
1999 January Avg. Jan-99 21.75 19.61
1999 February Avg. Feb-99 22.43 20.58
1999 March Avg. Mar-99 24.10 23.40
1999 April Avg. Apr-99 28.26 27.58
1999 May Avg. May-99 28.31 26.88
1999 June Avg. Jun-99 30.95 28.68
1999 July Avg. Jul-99 37.26 34.62
1999 August Avg. Aug-99 40.51 37.56
1999 September Avg. Sep-99 43.18 42.40
1999 October Avg. Oct-99 45.46 43.39
1999 November Avg. Nov-99 43.44 38.78
1999 December Avg. Dec-99 42.83 35.10
2000 January Avg. Jan-00 56.11 42.32
2000 February Avg. Feb-00 59.72 47.26
2000 March Avg. Mar-00 51.13 47.65
2000 April Avg. Apr-00 46.88 43.64
2000 May Avg. May-00 51.31 50.81
2000 June Avg. Jun-00 55.47 56.22
2000 July Avg. Jul-00 54.88 56.29
2000 August Avg. Aug-00 58.54 63.52
2000 September Avg. Sep-00 64.21 70.95
2000 October Avg. Oct-00 61.82 64.05
2000 November Avg. Nov-00 60.71 60.45
2000 December Avg. Dec-00 77.63 79.75
2001 January Avg. Jan-01 77.27 83.03
2001 February Avg. Feb-01 59.39 63.03
2001 March Avg. Mar-01 54.94 57.12
2001 April Avg. Apr-01 54.37 60.26
2001 May Avg. May-01 51.20 56.90
2001 June Avg. Jun-01 43.17 47.70
2001 July Avg. Jul-01 38.87 43.27
2001 August Avg. Aug-01 41.54 45.71
2001 September Avg. Sep-01 41.67 46.53
COMPETITION
Propane competes with other sources of energy, some of which are
less costly for equivalent energy value. Propane distributors compete for
customers against suppliers of electricity, fuel oil and natural gas,
principally on the basis of price, service, availability and portability.
Electricity is a major competitor of propane, but propane generally enjoys a
competitive price advantage over electricity for space heating, water heating
and cooking. Fuel oil is also a major competitor of propane and is generally
less expensive than propane. Operating efficiencies and other factors such as
air quality and environmental advantages, however, generally make propane
competitive with fuel oil as a heating source. Furnaces and appliances that burn
propane will not operate on fuel oil, and vice versa, and, therefore, a
conversion from one fuel to the other requires the installation of new
equipment. Propane serves as an alternative to natural gas in rural and suburban
areas where natural gas is unavailable or portability of product is required.
Natural gas is generally a less expensive source of energy than propane,
although in areas where natural gas is available, propane
-7-
is used for certain industrial and commercial applications and as a standby fuel
during interruptions in natural gas service. The gradual expansion of the
nation's natural gas distribution systems has resulted in the availability of
natural gas in some areas that previously depended upon propane. However,
natural gas pipelines are not present in many regions of the country where
propane is sold for heating and cooking purposes.
The domestic propane retail distribution business is highly
competitive. The Partnership competes in this business with other large propane
marketers, including other full-service marketers, and thousands of small
independent operators. In recent years, some rural electric cooperatives and
fuel oil distributors have expanded their businesses to include propane
distribution and the Partnership competes with them as well. The ability to
compete effectively depends on supplying customer service, maintaining
competitive retail prices and controlling operating expenses.
Competition can intensify in response to a variety of factors,
including significantly warmer-than-normal weather, higher prices resulting from
extraordinary increases in the cost of propane, and recessionary economic
factors. The Partnership may experience greater than normal customer losses in
certain years when competitive conditions reflect any of these factors.
In the motor fuel market, propane competes with gasoline and diesel
fuel. When gasoline prices are high relative to propane, propane competes
effectively. Wholesale propane distribution is a highly competitive, low margin
business. Propane sales to other retail distributors and large-volume,
direct-shipment industrial end users are price sensitive and frequently involve
a competitive bidding process.
PROPERTIES
As of September 30, 2001, the Partnership owned approximately 75% of
its district locations. In addition, the Partnership subleases three one-million
barrel underground storage caverns in Arizona to store propane and butane for
itself and third parties. The Partnership also leases a 600,000 barrel
refrigerated, above-ground storage facility in California, which could be used
in connection with waterborne imports or exports of propane or butane. The
California facility, which the Partnership operates, is currently subleased to
several refiners for the storage of butane. In Virginia, the Partnership has a
50% indirect equity interest in a 476,000 barrel refrigerated, above-ground
import terminal.
The transportation of propane requires specialized equipment. The
trucks and railroad tank cars utilized for this purpose carry specialized steel
tanks that maintain the propane in a liquefied state. As of September 30, 2001,
the Partnership operated a fleet of approximately 158 transport trucks,
approximately 40% of which were leased. It owned approximately 320 transport
trailers and leased 260 railroad tank cars. In addition, the Partnership fleet
included approximately 3,200 bobtail and rack trucks, and approximately 2,200
other delivery and service vehicles. The vehicle fleet is 65% leased. Other
assets owned at September 30, 2001 included approximately 1.2 million stationary
storage tanks with typical capacities of 100 to 1,000 gallons and approximately
1.9 million portable propane cylinders with typical capacities of 4 to 100
gallons. The Partnership also
-8-
owned more than 9,000 large volume tanks which are used for its own storage
requirements. AmeriGas Propane, L.P. has debt secured by liens and mortgages on
its real and personal property. AmeriGas Propane, L.P. owns approximately 70% of
the Partnership's property, plant and equipment.
TRADE NAMES, TRADE AND SERVICE MARKS
The Partnership markets propane principally under the
"AmeriGas(R)," "America's Propane Company(R)" and "PPX Prefilled Propane
Xchange(R)" trade names and related service marks. UGI owns, directly or
indirectly, all the right, title and interest in the "AmeriGas" and related
trade and service marks. The General Partner owns all right, title and interest
in the "America's Propane Company" and "PPX Prefilled Propane Xchange" trade
names and related service marks. The Partnership has an exclusive (except for
use by UGI, AmeriGas, Inc. and the General Partner), royalty-free license to use
these names and trade and service marks. UGI and the General Partner each have
the option to terminate its respective license agreement (on 12 months prior
notice in the case of UGI), without penalty, if the General Partner is removed
as general partner of the Partnership other than for cause. If the General
Partner ceases to serve as the general partner of the Partnership for cause, the
General Partner has the option to terminate its license agreement upon payment
of a fee equal to the fair market value of the licensed trade names. UGI has a
similar termination option, however, UGI must provide 12 months prior notice in
addition to paying the fee.
SEASONALITY
Because many customers use propane for heating purposes, the
Partnership's retail sales volume is seasonal, with approximately 59% of the
Partnership's fiscal year 2001 retail sales volume and approximately 85% of its
earnings before interest expense, income taxes, depreciation and amortization
occurring during the five-month peak heating season from November through March.
As a result of this seasonality, sales are concentrated in the Partnership's
first and second fiscal quarters (October 1 through March 31). Cash receipts are
greatest during the second and third fiscal quarters when customers pay for
propane purchased during the winter heating season.
Sales volume for the Partnership traditionally fluctuates from
year-to-year in response to variations in weather, prices, competition, customer
mix and other factors, such as conservation efforts and general economic
conditions. For historical information on national weather statistics, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
GOVERNMENT REGULATION
The Partnership is subject to various federal, state and local
environmental, safety and transportation laws and regulations governing the
storage, distribution and transportation of propane. These laws include, among
others, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA" or, the
"Superfund Law"), the Clean Air Act, the Occupational Safety and Health Act, the
Emergency Planning and Community Right to Know Act, the Clean Water Act and
comparable state statutes.
-9-
CERCLA imposes joint and several liability on certain classes of persons
considered to have contributed to the release or threatened release of a
"hazardous substance" into the environment without regard to fault or the
legality of the original conduct. Propane is not a hazardous substance within
the meaning of federal and state environmental laws. However, the Partnership
owns and operates real property where such hazardous substances may exist. See
Notes 1 and 13 to the Company's Consolidated Financial Statements.
All states in which the Partnership operates have adopted fire
safety codes that regulate the storage and distribution of propane. In some
states these laws are administered by state agencies, and in others they are
administered on a municipal level. The Partnership conducts training programs to
help ensure that its operations are in compliance with applicable governmental
regulations. With respect to general operations, National Fire Protection
Association Pamphlets No. 54 and No. 58, which establish a set of rules and
procedures governing the safe handling of propane, or comparable regulations,
have been adopted as the industry standard in a majority of the states in which
the Partnership operates. The Partnership maintains various permits under
environmental laws that are necessary to operate certain of its facilities, some
of which may be material to the operations of the Partnership. Management
believes that the procedures currently in effect at all of its facilities for
the handling, storage and distribution of propane are consistent with industry
standards and are in compliance in all material respects with applicable
environmental, health and safety laws.
With respect to the transportation of propane by truck, the
Partnership is subject to regulations promulgated under the Federal Motor
Carrier Safety Act. These regulations cover the transportation of hazardous
materials and are administered by the United States Department of Transportation
("DOT"). The Natural Gas Safety Act of 1968 required the DOT to develop and
enforce minimum safety regulations for the transportation of gases by pipeline.
The DOT's pipeline safety code applies to, among other things, a propane gas
system which supplies 10 or more customers from a single source and a propane
gas system any portion of which is located in a public place. The code requires
operators of all gas systems to provide training and written instructions for
employees, establish written procedures to minimize the hazards resulting from
gas pipeline emergencies, and keep records of inspections and testing.
EMPLOYEES
The Partnership does not directly employ any persons responsible for
managing or operating the Partnership. The General Partner provides these
services and is reimbursed for its direct and indirect costs and expenses,
including all compensation and benefit costs. At September 30, 2001, the General
Partner had approximately 6,300 employees, including approximately 300 temporary
and part-time employees. UGI also performs certain financial and administrative
services for the General Partner on behalf of the Partnership and is reimbursed
by the Partnership for its direct and indirect costs and expenses.
-10-
UTILITY OPERATIONS
Our utility business is conducted by UGI Utilities, Inc., a wholly
owned subsidiary. Utilities operates its business through two divisions, the gas
division ("Gas Utility") and the electric division ("Electric Utility"). The
business conducted by each of these divisions is described below.
GAS UTILITY
NATURAL GAS CHOICE AND COMPETITION ACT
On June 22, 1999, Pennsylvania's Natural Gas Choice and Competition
Act ("Gas Competition Act") was signed into law. The purpose of the Gas
Competition Act was to provide all natural gas consumers in Pennsylvania with
the ability to purchase their gas supplies from the supplier of their choice.
Under the Gas Competition Act, natural gas distribution companies ("NGDCs") like
Gas Utility may continue to sell gas to customers, and such sales of gas, as
well as distribution services provided by NGDCs, continue to be subject to price
regulation by the Pennsylvania Public Utility Commission ("PUC").
Generally, Pennsylvania NGDCs will serve as the supplier of last
resort for all residential and small commercial and industrial customers unless
the PUC approves another supplier of last resort. The Gas Competition Act
requires energy marketers seeking to serve customers of NGDCs to accept
assignment of a portion of the NGDC's interstate pipeline capacity and storage
contracts at contract rates, thus avoiding the creation of stranded costs.
On October 1, 1999, Gas Utility filed its restructuring plan with
the PUC pursuant to the Gas Competition Act. On June 29, 2000, the PUC entered
its order ("Gas Restructuring Order") approving Gas Utility's restructuring plan
substantially as filed. Gas Utility designed its restructuring plan to ensure
reliability of gas supply deliveries to Gas Utility on behalf of residential and
small commercial customers. In addition, the plan changed Gas Utility's base
rates for firm customers. It also changed the calculation of purchased gas cost
rates. See "Utility Regulation and Rates."
Since October 1, 2000, all of Gas Utility's customers have had the
option to purchase their gas supplies from an alternative gas supplier. Large
commercial and industrial customers of Gas Utility have been able to purchase
their gas from other suppliers since 1982. During fiscal year 2001, no third
party supplier qualified to serve any residential or small commercial customer
in Gas Utility's service territory. Management believes neither the Gas
Competition Act nor the Gas Restructuring Order will have a material adverse
impact on the Company's financial condition or results of operations.
-11-
SERVICE AREA; REVENUE ANALYSIS
Gas Utility distributes natural gas to approximately 277,000
customers in portions of 14 eastern and southeastern Pennsylvania counties
through its distribution system of approximately 4,600 miles of gas mains. The
service area consists of approximately 3,000 square miles and includes the
cities of Allentown, Bethlehem, Easton, Harrisburg, Hazleton, Lancaster, Lebanon
and Reading, Pennsylvania. Located in Gas Utility's service area are major
production centers for basic industries such as specialty metals, aluminum and
glass. For the fiscal years ended September 30, 2001, 2000 and 1999, revenues of
Gas Utility accounted for approximately 20%, 20% and 25%, respectively, of our
total consolidated revenues.
System throughput (the total volume of gas sold to or transported
for customers within Gas Utility's distribution system) for the 2001 fiscal year
was approximately 77.3 billion cubic feet ("bcf"). System sales of gas accounted
for approximately 45% of system throughput, while gas transported for commercial
and industrial customers (who bought their gas from others) accounted for
approximately 55% of system throughput. Based on industry data for 1999,
residential customers account for approximately 33% of total system throughput
by local gas distribution companies in the United States. By contrast, for the
2001 fiscal year, Gas Utility's residential customers represented 26% of its
total system throughput.
SOURCES OF SUPPLY AND PIPELINE CAPACITY
Gas Utility meets its service requirements by utilizing a diverse
mix of natural gas purchase contracts with producers and marketers, and storage
and transportation service contracts. These arrangements enable Gas Utility to
purchase gas from Gulf Coast, Mid-Continent, Appalachian and Canadian sources.
For the transportation and storage function, Utilities has agreements with a
number of pipeline companies, including Texas Eastern Transmission Corporation,
Columbia Gas Transmission Corporation and Transcontinental Gas Pipeline
Corporation.
GAS SUPPLY CONTRACTS
During fiscal year 2001, Gas Utility purchased approximately 37 bcf
of natural gas for sale to customers. Approximately 92% of the volumes purchased
were supplied under agreements with nine major suppliers of natural gas. The
remaining 8% of gas purchased was supplied by 30 producers and marketers. Gas
supply contracts are generally no longer than one year.
SEASONAL VARIATION
Because many of its customers use gas for heating purposes, Gas
Utility's sales are seasonal. Approximately 61% of fiscal year 2001 throughput
and approximately 71% of earnings before interest expense, income taxes,
depreciation and amortization occurred during the winter season from November
through March.
-12-
COMPETITION
Natural gas is a fuel that competes with electricity and oil, and to
a lesser extent, with propane and coal. Competition among these fuels is
primarily a function of their comparative price and the relative cost and
efficiency of fuel utilization equipment. Electric utilities in Gas Utility's
service area are seeking new load, primarily in the new construction market.
Fuel oil dealers compete for customers in all categories, including industrial
customers. Gas Utility responds to this competition with marketing efforts
designed to retain and grow its customer base.
In substantially all of its service territory, Gas Utility is the
only regulated gas distribution utility having the right, granted by the PUC or
by law, to provide gas distribution services. Under the Gas Competition Act,
retail customers may purchase their natural gas from a supplier other than Gas
Utility. Commercial and industrial customers in Gas Utility's service territory
have been able to do this since 1982. Gas Utility will provide transportation
services for residential and small commercial retail customers who purchase
natural gas from others, however, as of December 1, 2001, no marketer had
qualified to serve those customers.
Many of Gas Utility's commercial and industrial customers have the
ability to switch to an alternate fuel at any time and, therefore, are served on
an interruptible basis under rates which are competitively priced with respect
to their alternate fuel. Gas Utility's profitability from these customers,
therefore, is affected by the difference, or "spread," between the customers'
delivered cost of gas and the customers' delivered alternate fuel cost. See
"Utility Regulation and Rates - Gas Utility Rates." Commercial and industrial
customers representing 17% of total system throughput have locations which
afford them the option, although none has exercised it, of seeking
transportation service directly from interstate pipelines, thereby bypassing Gas
Utility. The majority of customers in this group are served under transportation
contracts having three- to twenty-year terms. Included in these two groups are
Utilities' ten largest customers in terms of annual volume. All of these
customers have contracts with Utilities, eight of which extend into fiscal year
2004. No single customer represents, or is anticipated to represent, more than
1% of the total revenues of Gas Utility.
OUTLOOK FOR GAS SERVICE AND SUPPLY
Gas Utility anticipates having adequate pipeline capacity and
sources of supply available to it to meet the full requirements of all firm
customers on its system through fiscal year 2002. Supply mix is diversified,
market priced, and delivered pursuant to a number of long- and short-term firm
transportation and storage arrangements, including transportation contracts held
by some of Utilities' larger customers.
During fiscal year 2001, Gas Utility supplied transportation service
to two major cogeneration installations and two utility generation sites. Gas
Utility continues to pursue opportunities to supply natural gas to electric
generation projects located in its service territory. Gas Utility also continues
to seek new residential, commercial and industrial customers for both firm and
interruptible service. In the residential market sector, Gas Utility connected
approximately
-13-
8,300 residential heating customers during fiscal year 2001, a 5% increase from
the previous year. Of those new customers, new home construction accounted for
over 6,000 heating customers. Customers converting from other energy sources,
primarily oil, and existing non-heating gas customers who have added gas heating
systems to replace other energy sources, accounted for the balance of the
additions. The number of new commercial and industrial customers was over 1,000.
Utilities continues to monitor and participate extensively in
rulemaking and individual rate and tariff proceedings before the Federal Energy
Regulatory Commission ("FERC") affecting the rates and the terms and conditions
under which Gas Utility transports and stores natural gas. Among these
proceedings are those arising out of certain FERC orders and/or pipeline filings
which relate to (i) the pricing of pipeline services in a competitive energy
marketplace; (ii) the flexibility of the terms and conditions of pipeline
service tariffs and contracts; and (iii) pipelines' requests to increase their
base rates, or change the terms and conditions of their storage and
transportation services.
Gas Utility's objective in negotiations with interstate pipeline and
natural gas suppliers, and in litigation before regulatory agencies, is to
assure availability of supply, transportation and storage alternatives to serve
market requirements at the lowest cost possible, taking into account the need
for security of supply. Consistent with that objective, Gas Utility negotiates
the terms of firm transportation capacity on all pipelines serving Gas Utility,
arranges for appropriate storage and peak-shaving resources, negotiates with
producers for competitively priced gas purchases and aggressively participates
in regulatory proceedings related to transportation rights and costs of service.
ELECTRIC UTILITY
ELECTRICITY GENERATION CUSTOMER CHOICE AND COMPETITION ACT
On January 1, 1997, Pennsylvania's Electricity Generation Customer
Choice and Competition Act ("ECC Act") became effective. The ECC Act permits all
Pennsylvania retail electric customers to choose their electric generation
supplier. Pursuant to the Act, all electric utilities were required to file
restructuring plans with the PUC which, among other things, included unbundled
prices for electric generation, transmission and distribution and a competitive
transition charge (CTC) for the recovery of "stranded costs" which would be paid
by all customers receiving distribution service. Stranded costs generally are
electric generation-related costs that traditionally would be recoverable in a
regulated environment but may not be recoverable in a competitive electric
generation market. Under the ECC Act, Electric Utility generally may not
increase prices for electric generation as long as stranded costs are being
recovered through the CTC. In accordance with the restructuring proceedings
discussed below, Utilities expects to collect a CTC from commercial and
industrial customers until September 2002 and from all other distribution
customers until May 2003. Under the ECC Act, Electric Utility remains obligated
to provide energy at the capped rates to customers who do not choose alternate
suppliers. Electric Utility will continue to be the only regulated electric
utility having the right, granted by the PUC or by law, to distribute electric
energy in its service territory.
-14-
On June 19, 1998, the PUC entered its Opinion and Order (the
"Restructuring Order") in Electric Utility's restructuring proceeding under the
ECC Act. The Restructuring Order authorized Electric Utility to recover from its
customers approximately $32.5 million in stranded costs (on a full revenue
requirements basis, which includes all income and gross receipts taxes) over a
four-year period which commenced January 1, 1999 through a CTC, together with
carrying charges on unrecovered balances of 7.94%. Electric Utility's
recoverable stranded costs include approximately $8.7 million for the
termination of a 1993 power purchase agreement with Foster Wheeler Penn
Resources, Inc., an independent power producer. Since January 1, 1999, all of
Electric Utility's customers have been permitted to select an alternative
electric generation supplier. Customers choosing another supplier currently
receive an average generation "shopping credit" (developed from system-wide
generation rates) of 4.3 cents per kilowatt hour ("kwh"), which will remain in
effect until recovery of the CTC is complete.
Electric Utility estimates that its power generation rates will
remain capped for commercial and industrial customers until September 2002 and
for all other customers until May 2003. Because Electric Utility has
discontinued regulatory accounting, which permitted it to adjust customer
charges to reflect changes in Electric Utility's power costs, quarterly results
have been, and future results are likely to be, more volatile than they were
prior to deregulation, due in large part to seasonal variations in such costs.
Results will also be affected by the number of customers who choose to purchase
their power from other suppliers during any given time period.
SERVICE AREA; REVENUE ANALYSIS
Electric Utility supplies electric service to approximately 61,400
customers in portions of Luzerne and Wyoming Counties in northeastern
Pennsylvania through a system consisting of approximately 2,100 miles of
transmission and distribution lines and 14 transmission substations. For fiscal
year 2001, about 51% of sales volume came from residential customers, 32% from
commercial customers and 9% from industrial customers. Non-tariff sales of
electricity and miscellaneous income accounted for 8% of sales volume.
Electricity transported for customers who purchased their power from others
pursuant to the ECC Act represented approximately 2% of fiscal year 2001 sales
volume. For the 2001, 2000 and 1999 fiscal years, revenues of Electric Utility
accounted for approximately 3%, 5% and 5%, respectively, of our total
consolidated revenues.
SOURCES OF SUPPLY
Effective October 1, 1999, Utilities transferred its electric
generation assets to its non-utility subsidiary, UGI Development Company
("UGID"). These generation assets consisted principally of Utilities' Hunlock
generating station ("Hunlock Station"), located near Kingston, Pennsylvania and
its 1.11% interest in the Conemaugh generating station ("Conemaugh Station"),
located near Johnstown, Pennsylvania. Effective December 8, 2000, UGID entered
into a partnership with a subsidiary of Allegheny Energy, Inc. for the purpose
of owning and operating electric generation facilities. UGID contributed Hunlock
Station, coal inventory and $6 million to the partnership and Allegheny
contributed a 44 megawatt gas combustion electric generator. UGID has the right
to purchase half the output of the partnership's generation at cost.
-15-
During fiscal year 2001, Electric Utility purchased approximately 30% of its
energy requirements from UGID. Electric Utility has contracts in place or
control over generation representing most of its expected on-peak energy
requirements for fiscal year 2002. It plans to meet the balance of its energy
needs with short-term contracts and spot market purchases.
Electric Utility distributes both electricity that it purchases from
others (including UGID) and electricity that customers purchase from other
suppliers. At September 30, 2001, alternate suppliers served customers
representing less than 2% of system load. Electric Utility expects to continue
to provide energy to the great majority of its customers.
ENVIRONMENTAL FACTORS
The operation of Hunlock Station complies with the air quality
standards of the Pennsylvania Department of Environmental Resources ("DER") with
respect to stack emissions. Under the Federal Water Pollution Control Act, UGID
has a permit from the DER to discharge water from Hunlock Station into the North
Branch of the Susquehanna River. The Federal Clean Air Act Amendments of 1990
(the "Clean Air Act Amendments") impose emissions limitations for certain
compounds, including sulfur dioxide and nitrous oxides. Both the Conemaugh
Station and the Hunlock Station are in material compliance with these emission
standards.
SEASONALITY
Sales and distribution of electricity for residential heating
purposes accounted for approximately 21% of the total sales of Electric Utility
during fiscal year 2001. Electricity competes with natural gas, oil, propane and
other heating fuels in this use. Approximately 54% of volume occurred during the
six coldest months of fiscal year 2001 (November through April), demonstrating
modest seasonality favoring winter due to the use of electricity for residential
heating purposes.
UTILITY REGULATION AND RATES
PENNSYLVANIA PUBLIC UTILITY COMMISSION JURISDICTION
Utilities' gas and electric utility operations, which exclude
electric generation, are subject to regulation by the PUC as to rates, terms and
conditions of service, accounting matters, issuance of securities, contracts and
other arrangements with affiliated entities, and various other matters. As noted
earlier, effective October 1, 1999, Utilities contributed its electric
generation assets to UGID. UGID has FERC authority to sell power at market-based
rates. Generally, UGID is not subject to regulation by the PUC.
FERC ORDERS 888 AND 889
In April 1996, FERC issued Orders No. 888 and 889, which established
rules for the use of electric transmission facilities for wholesale
transactions. FERC has also asserted jurisdiction over
-16-
the transmission component of electric retail choice transactions. In compliance
with these orders, the PJM Interconnection, LLC ("PJM"), of which Utilities is a
member, has filed an open access transmission tariff with the FERC establishing
transmission rates and procedures for transmission within the PJM control area.
Under the PJM tariff and associated agreements, Electric Utility is entitled to
receive certain revenues when its transmission facilities are used by third
parties.
GAS UTILITY RATES
The Gas Restructuring Order included an increase in firm,
core-market base rates, effective October 1, 2000. The increase, calculated in
accordance with the Gas Competition Act, was designed to generate approximately
$16.7 million in additional annual revenues. The Order also provided that Gas
Utility reduce its purchased gas cost rates by an annualized amount of $16.7
million for the first 14 months following the base rate increase.
Beginning December 1, 2001, Gas Utility must reduce its purchased
gas cost rates by an amount equal to the margin it receives from customers
served under interruptible rates to the extent they use capacity contracted for
by Gas Utility for core-market customers. As a result of these changes in its
regulated rates, Gas Utility expects that the risk to operating results
associated with year- to- year fluctuations in interruptible revenues will be
mitigated and that operating results will be more sensitive to heating season
weather and less sensitive to the market prices of alternative fuel than in the
past.
BASE RATES
As stated above, Gas Utility's current base rates went into effect
October 1, 2000 pursuant to The Gas Restructuring Order. See Note 2 to the
Company's Consolidated Financial Statements.
PURCHASED GAS COST RATES
Gas Utility's gas service tariff contains Purchased Gas Cost ("PGC")
rates which provide for annual increases or decreases in the rate per thousand
cubic feet ("mcf") which Gas Utility charges for natural gas sold by it, to
reflect Utilities' projected cost of purchased gas. PGC rates may also be
adjusted quarterly, or monthly, to reflect purchased gas costs. Each proposed
annual PGC rate is required to be filed with the PUC six months prior to its
effective date. During this period the PUC holds hearings to determine whether
the proposed rate reflects a least-cost fuel procurement policy consistent with
the obligation to provide safe, adequate and reliable service. After completion
of these hearings, the PUC issues an order permitting the collection of gas
costs at levels which meet that standard. The PGC mechanism also provides for an
annual reconciliation. Utilities has two PGC rates. PGC (1) is applicable to
small, firm, core market customers consisting of the residential and small
commercial and industrial classes; PGC (2) is applicable to firm, contractual,
high-load factor customers served on three separate rates. In addition,
residential customers maintaining a high load factor may qualify for the PGC (2)
rate. The Gas Restructuring Order provided for initial adjustments to Gas
Utility's PGC rates as described above, as well as ongoing adjustments,
commencing December 1, 2001, to reflect margins, if any, from interruptible
rate customers who do not obtain their own pipeline capacity.
-17-
ELECTRIC UTILITY RATES
Electric Utility's rates for electric generation are capped through
approximately September 2002 for commercial and industrial customers and
approximately May 2003 for all other customers. See "Electricity Generation
Customer Choice and Competition Act." The ECC Act obligates Electric Utility to
act as "provider of last resort" to customers who do not choose alternate
generation suppliers. Electric Utility is actively participating in the
regulatory process to ensure that Electric Utility recovers all its costs of
providing generation when the rate cap period ends.
STATE TAX SURCHARGE CLAUSES
Utilities' gas and electric service tariffs contain state tax
surcharge clauses. The surcharges are recomputed whenever any of the tax rates
included in their calculation are changed. These clauses protect Utilities from
the effect of increases in most of the Pennsylvania taxes to which it is
subject, however, any increase in Electric Utility's state tax surcharge is
generally subject to the rate caps discussed above.
UTILITY FRANCHISES
Utilities holds certificates of public convenience issued by the PUC
and certain "grandfather rights" predating the adoption of the Pennsylvania
Public Utility Code and its predecessor statutes which it believes are adequate
to authorize it to carry on its business in substantially all the territory to
which it now renders gas and electric service. Under applicable Pennsylvania
law, Utilities also has certain rights of eminent domain as well as the right to
maintain its facilities in streets and highways in its territories.
OTHER GOVERNMENT REGULATION
In addition to regulation by the PUC, the gas and electric utility
operations of Utilities are subject to various federal, state and local laws
governing environmental matters, occupational health and safety, pipeline safety
and other matters. Certain of Utilities' activities involving the interstate
movement of natural gas, the transmission of electricity, transactions with
non-utility generators of electricity, like UGID, and other matters, are also
subject to the jurisdiction of FERC.
Utilities is subject to the requirements of the federal Resource
Conservation and Recovery Act, CERCLA and comparable state statutes with respect
to the release of hazardous substances on property owned or operated by
Utilities. See ITEM 3. "LEGAL PROCEEDINGS - Environmental
Matters-Manufactured Gas Plants." The electric generation activities of
Utilities are also subject to the Clean Air Act Amendments, the Federal Water
Pollution Control Act and comparable state statutes and regulations. See
"UTILITY OPERATIONS - Electric Utility - Environmental Factors."
-18-
EMPLOYEES
At September 30, 2001, Utilities and its subsidiaries had
approximately 1,100 employees.
-19-
UGI ENTERPRISES, INC.
UGI Enterprises, Inc. is a wholly owned subsidiary of UGI that was
formed in 1994. Through its subsidiaries, Enterprises develops energy-related
businesses for us in the United States and abroad as described below.
DOMESTIC BUSINESSES
NATURAL GAS AND ELECTRICITY MARKETING
UGI Energy Services, Inc. ("Energy Services"), conducts an energy
marketing business under the trade names GASMARK(R) and POWERMARK(R)
("GASMARK"). GASMARK(R) sells natural gas directly to approximately 4,000
commercial and industrial customers in the Mid-Atlantic region through the
transportation systems of 15 utility systems. Energy Services also sells
electricity to over 200 commercial and industrial customers in Pennsylvania.
During fiscal year 2001, GASMARK(R) significantly increased its size by
acquiring the gas marketing operations of PG Energy, a unit of Southern Union
Corp., and Conectiv Energy. These acquisitions added approximately 900 customers
to GASMARK(R) customer base and increased its natural gas sales volume over
50%.
HVAC SERVICE
UGI HVAC Enterprises, Inc. ("HVAC") was acquired by Enterprises in
September 2000. HVAC conducts a heating, ventilation and air-conditioning
service business serving portions of Utilities' gas service area and adjacent
market areas, including portions of northern Delaware. It serves more than
70,000 customers in residential, commercial and new construction markets. During
fiscal year 2001, HVAC generated over $38 million in revenues and employed over
300 people.
RETAIL HEARTH PRODUCTS
Enterprises opened its first Hearth USA(TM) retail store in
September 1999. The store was the nation's first large-scale retailer of hearth,
grill and spa products together with installation services. In September 2001,
after evaluating prospects for Hearth USA(TM) in light of the weak retail
environment and the amount of capital required to expand beyond the pilot
phrase, we committed to close the two Hearth USA(TM) stores and cease all
operations by the end of October 2001. See Note 15 to the Company's Consolidated
Financial Statements.
INTERNATIONAL BUSINESSES
FLAGA GMBH
In September 1999, subsidiaries of Enterprises acquired all of the
stock of Flaga GmbH, a privately-held company founded in 1947. FLAGA distributes
propane, butane and
-20-
propane/butane mix ("LPG") in Austria, the Czech Republic and Slovakia for
residential, commercial and autogas applications. During fiscal year 2001, FLAGA
distributed approximately 36.3 million gallons of LPG. FLAGA operates from 6
distribution locations in Austria, 1 in the Czech Republic and 2 in Slovakia. In
addition, FLAGA has 7 sales offices in the Czech Republic. As of September 30,
2001, FLAGA had a total of 350 employees of which 166 were located in Austria,
161 in the Czech Republic and 23 in Slovakia.
FLAGA has the largest propane distribution market position in
Austria with an estimated 30% market share, serving residential and commercial
customers. Residential customers generally commit to prepaid tank rental
agreements. Competition for new customer installations is based on the terms and
conditions of tank leases as well as on product prices. Much of FLAGA's Austrian
cylinder business is conducted through approximately 600 neighborhood resellers
with whom FLAGA has a long business relationship.
The Czech market for LPG, which currently represents about 35% of
FLAGA's total volume, is growing approximately 4 to 6% per year. FLAGA entered
the Czech market in 1994 when it purchased a portion of the formerly state-run
LPG company from the Czech government as part of its privatization plan. FLAGA's
main facility in the Czech Republic is its cylinder filling and repair plant in
Hustopece, located in the southeast quadrant of the Czech Republic. FLAGA
estimates its market share in the Czech Republic at approximately 18%, ranking
it third in the country.
CHINAGAS PARTNERS
During 1998, Enterprises formed ChinaGas Partners, L.P. ("ChinaGas")
with affiliates of Energy Transportation Group, Inc. to develop, build and
operate LPG projects in the People's Republic of China. On October 28, 1998,
ChinaGas and its wholly owned subsidiary together acquired 50% of the shares of
an existing Chinese company known as the Nantong Huayang LPG Port Co., Ltd.
("Port Company") which operates an integrated LPG business, including an import
terminal and distribution business, serving the provinces along the lower and
middle reaches of the Yangtze River. By acquiring local distributors and
integrating them with existing operations we are adding retail sales to the Port
Company's operations. The other shareholders in the Port Company are China
National Chemical Supply & Sales Corporation and two of its affiliates. Our
effective ownership interest in the Port Company is 25%.
ANTARGAZ
In March 2001, UGI France, Inc., together with Paribas Affaires
Industrielles ("PAI") and Medit Mediterranea GPL, S.r.l. ("Medit"), acquired the
stock of Elf Antargaz, S.A. ("Antargaz"), one of the largest distributors of LPG
in France. We acquired an approximate 20% interest, PAI an approximate 68%
interest, Medit an approximate 10% interest and certain members of Antargaz
management, the remaining interest. PAI is a leading private equity fund manager
in Europe with strong management and financial skills and Medit is a supplier of
logistics services to the LPG industry in Europe, primarily Italy. Antargaz
sells approximately 350 to 400 million gallons of LPG annually. Due, in part, to
our membership on the Board of Directors of Antargaz,
-21-
we believe we have significant influence over the company's operating and
financial policies.
Antargaz has an approximate 25% market share in France. The French
LPG market is characterized by modest growth, about 1% per year, and stable
marketing conditions. Antargaz serves nearly one million customers using a
logistical system that includes ten major import/storage facilities, 30 bulk
storage depots and 16 cylinder filling plants. Antargaz's customer base consists
of residential, commercial, agricultural and motor fuel accounts who use LPG for
space heating, cooking, water heating, process heat and transportation.
BUSINESS SEGMENT INFORMATION
The table stating the amounts of revenues, operating income (loss)
and identifiable assets attributable to each of UGI's business segments for the
2001, 2000 and 1999 fiscal years appears in Note 19 to the Consolidated
Financial Statements contained in our 2001 Annual Report to Shareholders and is
incorporated in this Report by reference.
EMPLOYEES
At September 30, 2001, UGI and its subsidiaries had approximately
8,300 employees.
-22-
ITEM 3. LEGAL PROCEEDINGS
With the exception of the matters set forth below, no material legal
proceedings are pending involving UGI, any of its subsidiaries, or any of their
properties, and no such proceedings are known to be contemplated by governmental
authorities.
ENVIRONMENTAL MATTERS - MANUFACTURED GAS PLANTS
In the late 1800s through the mid-1900s, UGI Utilities and its
former subsidiaries owned and operated a number of manufactured gas plants
("MGPs") prior to the general availability of natural gas. Some constituents of
coal tars and other residues of the manufactured gas process are today
considered hazardous substances under the Superfund Law and may be present on
the sites of former MGPs. Between 1882 and 1953, UGI Utilities owned the stock
of subsidiary gas companies in Pennsylvania and elsewhere and also operated the
business of some gas companies under agreement. Pursuant to the requirements of
the Public Utility Holding Company Act of 1935, UGI Utilities divested all of
its utility operations other than those which now constitute Gas Utility and
Electric Utility.
UGI Utilities does not expect its costs for investigation and
remediation of hazardous substances at Pennsylvania MGP sites to be material to
its results of operations because UGI Utilities is currently permitted to
include in rates, through future base rate proceedings, prudently incurred
remediation costs associated with such sites. UGI Utilities has been notified of
several sites outside Pennsylvania on which (1) MGPs were formerly operated by
it or owned or operated by its former subsidiaries and (2) either environmental
agencies or private parties are investigating the extent of environmental
contamination or performing environmental remediation. UGI Utilities is
currently litigating two claims against it relating to out-of-state sites.
Fishbein Family Partnership v. PPG Industries, Inc., et al. In July
1993, Public Service Electric and Gas Company ("PSE&G") joined Utilities as a
third-party defendant in a civil action in the United States District Court for
the District of New Jersey, seeking damages as a result of contamination
relating to the former manufactured gas plant operations at Halladay Street in
Jersey City, New Jersey. The case principally involved claims by the Fishbein
Family Partnership against PPG Industries, Inc. for damages associated with
chemical contamination unrelated to gas plant operations. In November 2001, the
parties agreed voluntarily to dismiss all claims by and against PSE&G without
prejudice. Thus, all claims against Utilities will be dismissed, although they
could be re-instituted in the future.
Consolidated Edison Company of New York v. UGI Utilities, Inc. On
September 20, 2001, Consolidated Edison Company of New York ("ConEd") filed suit
against UGI Utilities, Inc. in the United States District Court for the Southern
District of New York, seeking contribution from Utilities for an allocated share
of response costs associated with investigating and assessing gas plant related
contamination at former manufactured gas plant sites in eleven communities in
Westchester County, New York. The complaint alleges that Utilities "owned and
operated" the
-23-
plants prior to 1904. The complaint also seeks a declaration that Utilities is
responsible for an allocated percentage of future investigative and remedial
costs at the sites. ConEd has not stated the amount of the costs it has incurred
to date and has provided no information on which Utilities could make an
estimate. Utilities is currently investigating its involvement at these sites.
EnergyNorth Natural Gas, Inc. v. UGI Utilities, Inc. By letter dated
October 26, 2000, EnergyNorth Natural Gas, Inc. ("EnergyNorth") notified
Utilities that it has filed suit in the United States District Court for the
District of New Hampshire, seeking contribution from Utilities for response and
remediation costs associated with contamination on the site of a former
manufactured gas plant allegedly operated by former subsidiaries of Utilities.
EnergyNorth has not stated the amount of the costs and has provided no
information on which Utilities could make an estimate. Utilities is currently
investigating its involvement with this site and is actively defending the suit.
Management believes that under applicable law UGI Utilities should
not be liable in those instances in which a former subsidiary operated an MGP.
There could be, however, significant future costs of an uncertain amount
associated with environmental damage caused by MGPs outside Pennsylvania that
UGI Utilities directly operated, or that were owned or operated by former
subsidiaries of UGI Utilities, if a court were to conclude that the subsidiary's
separate corporate form should be disregarded.
RELATED MATTER
UGI Utilities, Inc. v. Insurance Co. of North America, et. al. On
February 11, 1999, UGI Utilities, Inc. filed suit in the Court of Common Pleas
of Montgomery County, Pennsylvania against more than fifty insurance companies,
including Insurance Services, Ltd. (AEGIS). The complaint alleges that the
defendants breached contracts of insurance by failing to indemnify Utilities for
certain environmental costs. To date, Utilities has recovered a significant
portion of its claims through settlements with most of the defendants, including
AEGIS. The court has not yet set a date for trial of the claims against the
remaining defendants.
-24-
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the
last fiscal quarter of fiscal year 2001.
EXECUTIVE OFFICERS
Information regarding our executive officers is included in Part III
of this Report and is incorporated in Part I by reference.
PART II: SECURITIES AND FINANCIAL INFORMATION
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
Our Common Stock is traded on the New York and Philadelphia stock
exchanges under the symbol "UGI." The following table sets forth the high and
low sales prices for the Common Stock on the New York Stock Exchange Composite
Transactions tape as reported in The Wall Street Journal for each full quarterly
period within the two most recent fiscal years:
[Download Table]
2001 FISCAL YEAR HIGH LOW
4th Quarter $29.480 $25.120
3rd Quarter 27.900 24.200
2nd Quarter 25.375 22.500
1st Quarter 26.312 21.375
[Download Table]
2000 FISCAL YEAR HIGH LOW
4th Quarter $24.313 $20.563
3rd Quarter 22.625 19.750
2nd Quarter 22.313 18.188
1st Quarter 24.000 19.125
-25-
DIVIDENDS
Quarterly dividends on our Common Stock were paid in the 2001 and
2000 fiscal years as follows:
[Download Table]
2001 FISCAL YEAR AMOUNT
4th Quarter $0.4000
3rd Quarter 0.3875
2nd Quarter 0.3875
1st Quarter 0.3875
[Download Table]
2000 FISCAL YEAR AMOUNT
4th Quarter $0.3875
3rd Quarter 0.375
2nd Quarter 0.375
1st Quarter 0.375
HOLDERS
On November 30, 2001, UGI had 10,627 holders of record of Common
Stock.
-26-
ITEM 6. SELECTED FINANCIAL DATA
[Enlarge/Download Table]
Year Ended
September 30,
------------------------------------------------------------------
2001 2000 1999 1998 1997
---------- ---------- ---------- ---------- ----------
(Millions of dollars, except per share amounts)
FOR THE PERIOD:
INCOME STATEMENT DATA:
Revenues $ 2,468.1 $ 1,761.7 $ 1,383.6 $ 1,439.7 $ 1,642.0
========== ========== ========== ========== ==========
Income before accounting changes $ 52.0 $ 44.7 $ 55.7 $ 40.3 $ 52.1
Cumulative effect of accounting changes (a) 4.5 -- -- -- --
---------- ---------- ---------- ---------- ----------
Net income (b) $ 56.5 $ 44.7 $ 55.7 $ 40.3 $ 52.1
========== ========== ========== ========== ==========
Earnings per common share - basic
Income before accounting changes $ 1.91 $ 1.64 $ 1.74 $ 1.22 $ 1.58
Cumulative effect of accounting changes, net 0.17 -- -- -- --
---------- ---------- ---------- ---------- ----------
Net income - basic $ 2.08 $ 1.64 $ 1.74 $ 1.22 $ 1.58
========== ========== ========== ========== ==========
Earnings per common share - diluted
Income before accounting changes $ 1.90 $ 1.64 $ 1.74 $ 1.22 $ 1.57
Cumulative effect of accounting changes, net 0.16 -- -- -- --
---------- ---------- ---------- ---------- ----------
Net income - diluted (b) $ 2.06 $ 1.64 $ 1.74 $ 1.22 $ 1.57
========== ========== ========== ========== ==========
Cash dividends declared per common share $ 1.575 $ 1.525 $ 1.47 $ 1.45 $ 1.43
========== ========== ========== ========== ==========
AT PERIOD END:
BALANCE SHEET DATA:
Total assets $ 2,550.2 $ 2,275.8 $ 2,140.5 $ 2,074.6 $ 2,151.7
========== ========== ========== ========== ==========
Capitalization:
Debt:
Bank loans - AmeriGas Propane $ -- $ 30.0 $ 22.0 $ 10.0 $ 28.0
Bank loans - UGI Utilities 57.8 100.4 87.4 68.4 67.0
Bank loans - other 10.0 4.3 11.6 -- --
Long-term debt
(including current maturities):
AmeriGas Propane 1,005.9 857.2 744.7 709.0 691.1
UGI Utilities 208.5 172.9 180.0 187.2 169.3
Other 80.8 85.5 91.6 8.2 8.6
---------- ---------- ---------- ---------- ----------
Total debt 1,363.0 1,250.3 1,137.3 982.8 964.0
---------- ---------- ---------- ---------- ----------
Minority interests in AmeriGas Partners 246.2 177.1 209.9 236.5 266.5
UGI Utilities preferred stock subject
to mandatory redemption 20.0 20.0 20.0 20.0 35.2
Common stockholders' equity 255.6 247.2 249.2 367.1 376.1
---------- ---------- ---------- ---------- ----------
Total capitalization $ 1,884.8 $ 1,694.6 $ 1,616.4 $ 1,606.4 $ 1,641.8
========== ========== ========== ========== ==========
RATIO OF CAPITALIZATION:
Total debt 72.3% 73.8% 70.4% 61.2% 58.7%
Minority interest 13.1% 10.5% 13.0% 14.7% 16.3%
UGI Utilities preferred stock 1.1% 1.2% 1.2% 1.2% 2.1%
Common stockholders' equity 13.5% 14.5% 15.4% 22.9% 22.9%
---------- ---------- ---------- ---------- ----------
100.0% 100.0% 100.0% 100.0% 100.0%
========== ========== ========== ========== ==========
(a) Includes cumulative effect of accounting changes associated with (1)
the Partnership's changes in accounting for tank fee revenue and
tank installation costs and (2) the Company's adoption of Statement
of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (see Notes 1 and 3 to
Consolidated Financial Statements).
(b) Pro forma net income and diluted earnings per share after applying
retroactively the Partnership's changes in accounting for tank
installation costs and tank fee revenue are as follows: 2000 - $44.6
and $1.64; 1999 - $55.9 and $1.75; 1998 - $39.7 and $1.20; 1997 -
$51.8 and $1.56, respectively.
27
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and
Results of Operations, entitled "Financial Review" and contained on pages 13
through 23 of UGI's 2001 Annual Report to Shareholders, is incorporated in this
report by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
"Quantitative and Qualitative Disclosures About Market Risk" are
contained in Management's Discussion and Analysis of Financial Condition and
Results of Operations under the caption "Market Risk Disclosures" on pages 21
and 22 of the UGI 2001 Annual Report to Shareholders and are incorporated in
this Report by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Financial Statements and Financial Statement Schedules referred
to in the Index contained on pages F-2 and F-3 of this Report are incorporated
in this Report by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
-28-
PART III: UGI MANAGEMENT AND SECURITY HOLDERS
ITEMS 10 THROUGH 13.
In accordance with General Instruction G(3), and except as set forth
below, the information required by Items 10, 11, 12 and 13 is incorporated in
this Report by reference to the following portions of UGI's Proxy Statement,
which will be filed with the Securities and Exchange Commission by January 28,
2001:
[Download Table]
Captions of Proxy Statement
Information Incorporated by Reference
----------- --------------------------------
Item 10. Directors and Executive Election of Directors - Nominees
Officers of Registrant.
Item 11. Executive Compensation. Compensation of Executive Officers
Compensation of Directors
Item 12. Security Ownership of Securities Ownership of Management
Certain Beneficial
Owners and Management.
Item 13. Certain Relationships Compensation of Executive Officers -
and Related Transactions. Stock Ownership Policy and
Indebtedness of Management
The information concerning the Company's executive officers required
by Item 10 is set forth below.
EXECUTIVE OFFICERS
[Download Table]
NAME AGE POSITION
---- --- --------
Lon R. Greenberg 51 Chairman, Director, President
and Chief Executive Officer
Eugene V.N. Bissell 48 President and Chief Executive
Officer, AmeriGas Propane, Inc.
Robert J. Chaney 59 President and Chief Executive
Officer, UGI Utilities, Inc.
Brendan P. Bovaird 53 Vice President and General Counsel
-29-
[Download Table]
Bradley C. Hall 48 Vice President - New Business Development
Anthony J. Mendicino 53 Vice President - Finance
and Chief Financial Officer
All officers are elected for a one-year term at the organizational
meetings of the respective Boards of Directors held each year.
There are no family relationships between any of the officers or
between any of the officers and any of the directors.
Lon R. Greenberg
Mr. Greenberg was elected Chairman of UGI effective August 1, 1996,
having been elected Chief Executive Officer effective August 1, 1995. He was
elected Director and President of UGI and a Director of UGI Utilities in July
1994. He was elected a Director of AmeriGas Propane, Inc. in 1994 and has been
Chairman since 1996. He also served as President and Chief Executive Officer of
AmeriGas Propane (1996 to 2000). Mr. Greenberg was Senior Vice President - Legal
and Corporate Development (1989 to 1994), and also served as Vice President -
Legal and Corporate Development (1987 to 1989). Previously, he was Vice
President - Legal (1984 to 1987), General Counsel (1983 to 1994) and Secretary
(1982 to 1988). He joined the Company in 1980 as Corporate Development Counsel.
Eugene V.N. Bissell
Mr. Bissell is President and Chief Executive Officer of AmeriGas
Propane, Inc. (since July 2000), having served as Senior Vice President - Sales
and Marketing (1999 to 2000) and Vice President - Sales and Operations (1995 to
1999). Previously, he was Vice President - Distributors and Fabrication, BOC
Gases (1995), having been Vice President - National Sales (1993 to 1995) and
Regional Vice President Southern Region for Distributor and Cylinder Gases
Division, BOC Gases (1989 to 1993). From 1981 to 1987, Mr. Bissell held various
positions with the Company and its subsidiaries, including Director, Corporate
Development. Mr. Bissell is currently President-Elect and a member of the Board
of Directors of the National Propane Gas Association, the national trade
association of the propane industry.
Robert J. Chaney
Mr. Chaney is President and Chief Executive Officer of UGI
Utilities, Inc., (since March 1999). He previously served as Executive Vice
President (1998 to 1999), Vice President and General Manager - Gas Utility
Division (1991 to 1998) and Vice President - Rates and Energy Utilization - Gas
Utility Division (1981 to 1991).
-30-
Brendan P. Bovaird
Mr. Bovaird is Vice President and General Counsel of UGI (since
April 1995). He is also Vice President and General Counsel of UGI Utilities,
Inc., and AmeriGas Propane, Inc. (since April 1995). Mr. Bovaird previously
served as Division Counsel and Member of the Executive and Operations Committees
of Wyeth-Ayerst International Inc. (1992 to 1995) and Senior Vice President,
General Counsel and Secretary of Orion Pictures Corporation (1990 to 1991).
Bradley C. Hall
Mr. Hall was elected Vice President - New Business Development on
October 25, 1994, having been Vice President - Marketing and Rates, UGI
Utilities, Inc. Gas Division. He also serves as President of UGI Enterprises,
Inc. (since 1994). He joined the Company in 1982 and held various positions in
Gas Utility.
Anthony J. Mendicino
Mr. Mendicino was elected Vice President - Finance and Chief
Financial Officer on September 8, 1998. He previously served as President and
Chief Operating Officer (July 1997 to June 1998) and as Senior Vice President
(January 1997 to June 1997) of Eastwind Group, Inc., a holding company formed to
acquire and consolidate middle-market manufacturing businesses. Mr. Mendicino
was Senior Vice President and Chief Financial Officer and a director (1987 to
1996) of UTI Energy Corp., a diversified oil field service company. From 1981 to
1987 Mr. Mendicino held various positions with UGI, including Treasurer from
1984 to 1987.
-31-
PART IV: ADDITIONAL EXHIBITS, SCHEDULES AND REPORTS
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) DOCUMENTS FILED AS PART OF THIS REPORT:
(1), (2) The financial statements and financial
statement schedules incorporated by reference or
included in this report are listed in the accompanying
Index to Financial Statements and Financial Statement
Schedules set forth on pages F-2 through F-3 of this
report, which is incorporated herein by reference.
(3) LIST OF EXHIBITS:
The exhibits filed as part of this report are as follows
(exhibits incorporated by reference are set forth with
the name of the registrant, the type of report and
registration number or last date of the period for which
it was filed, and the exhibit number in such filing):
-32-
INCORPORATION BY REFERENCE
[Enlarge/Download Table]
EXHIBIT
NO. EXHIBIT REGISTRANT FILING EXHIBIT
-----------------------------------------------------------------------------------------------------------------------------------
3.1 (Second) Amended and Restated Articles of Incorporation of UGI Amendment No. 1 on Form 8 3.(3)(a)
the Company to Form 8-B (4/10/92)
3.2 Bylaws of UGI as in effect since October 27, 1998 UGI Form 10-K (9/30/98) 3.2
4 Instruments defining the rights of security holders,
including indentures. (The Company agrees to furnish to the
Commission upon request a copy of any instrument defining the
rights of holders of long-term debt not required to be filed
pursuant to Item 601(b)(4) of Regulation S-K)
4.1 Rights Agreement, as amended as of August 18, 2000, between UGI Registration Statement No 4.3
the Company and Mellon Bank, N.A., successor to Mellon Bank 333-49080
(East) N.A., as Rights Agent, and Assumption Agreement dated
April 7, 1992
4.2 The description of the Company's Common Stock contained in UGI Form 8-B/A (4/17/96) 3.(4)
the Company's registration statement filed under the
Securities Exchange Act of 1934, as amended
4.3 UGI's (Second) Amended and Restated Articles of Incorporation
and Bylaws referred to in 3.1 and 3.2 above
4.4 Note Agreement dated as of April 12, 1995 among The AmeriGas Form 10-Q (3/31/95) 10.8
Prudential Insurance Company of America, Metropolitan Life Partners, L.P.
Insurance Company, and certain other institutional investors
and AmeriGas Propane, L.P., New AmeriGas Propane, Inc. and
Petrolane Incorporated
4.5 First Amendment dated as of September 12, 1997 to Note AmeriGas Form 10-K (9/30/97) 4.5
Agreement dated as of April 12, 1995 ("1995 Note Agreement") Partners, L.P.
4.6 Second Amendment dated as of September 15, 1998 to 1995 Note AmeriGas Form 10-K (9/30/98) 4.6
Agreement Partners, L.P. Form 10-K (9/30/98) 4.6
4.7 Third Amendment dated as of March 23, 1999 to 1995 Note AmeriGas Form 10-Q (3/31/99) 10.2
Agreement Partners, L.P.
4.8 Fourth Amendment dated as of March 16, 2000 to 1995 Note AmeriGas Form 10-Q (6/30/00) 10.2
Agreement Partners, L.P.
4.9 Fifth Amendment dated as of August 1, 2001 to 1995 Note AmeriGas Form 10-K (9/30/01) 4.8
Agreement Partners, L.P.
-33-
INCORPORATION BY REFERENCE
[Enlarge/Download Table]
EXHIBIT
NO. EXHIBIT REGISTRANT FILING EXHIBIT
-----------------------------------------------------------------------------------------------------------------------------------
4.9 Second Amended and Restated Agreement of Limited Partnership AmeriGas Form 8-K (9/30/00) 1
of AmeriGas Partners, L.P. Partners, L.P.
4.10 Amended and Restated Agreement of Limited Partnership of AmeriGas Form 10-K (9/30/01) 3.8
AmeriGas Eagle Propane, L.P. dated July 19, 1999 Partners, L.P.
10.1 Service Agreement (Rate FSS) dated as of November 1, 1989 UGI Form 10-K (9/30/95) 10.5
between Utilities and Columbia, as modified pursuant to the
orders of the Federal Energy Regulatory Commission at Docket
No. RS92-5-000 reported at Columbia Gas Transmission Corp.,
64 FERCP. 61,060 (1993), order on rehearing, 64 FERCP. 61,365
(1993)
10.2 Service Agreement (Rate FTS) dated June 1, 1987 between Utilities Form 10-K (12/31/90) (10)o.
Utilities and Columbia, as modified by Supplement No. 1 dated
October 1, 1988; Supplement No. 2 dated November 1, 1989;
Supplement No. 3 dated November 1, 1990; Supplement No. 4
dated November 1, 1990; and Supplement No. 5 dated January 1,
1991, as further modified pursuant to the orders of the
Federal Energy Regulatory Commission at Docket No. RS92-5-000
reported at Columbia Gas Transmission Corp., 64 FERCP. 61,060
(1993), order on rehearing, 64 FERCP. 61,365 (1993)
10.3 Transportation Service Agreement (Rate FTS-1) dated November Utilities Form 10-K (12/31/90) (10)p.
1, 1989 between Utilities and Columbia Gulf Transmission
Company, as modified pursuant to the orders of the Federal
Energy Regulatory Commission in Docket No. RP93-6-000
reported at Columbia Gulf Transmission Co., 64 FERCP. 61,060
(1993), order on rehearing, 64 FERCP. 61,365 (1993)
10.4 Amended and Restated Sublease Agreement dated April 1, 1988 UGI Form 10-K (9/30/94) 10.35
between Southwest Salt Co. and AP Propane, Inc. (the
"Southwest Salt Co. Agreement")
10.5 Letter dated July 8, 1998 pursuant to Article 1, Section 1.2 UGI Form 10-K (9/30/99) 10.5
of the Southwest Salt Co. Agreement re: option to renew for
period of June 1, 2000 to May 31, 2005 and related extension
notice
-34-
INCORPORATION BY REFERENCE
[Enlarge/Download Table]
EXHIBIT
NO. EXHIBIT REGISTRANT FILING EXHIBIT
-----------------------------------------------------------------------------------------------------------------------------------
10.6** UGI Corporation Directors Deferred Compensation Plan Amended UGI Form 10-K (9/30/00) 10.6
and Restated as of January 1, 2000
10.7** UGI Corporation 1992 Stock Option and Dividend Equivalent UGI Form 10-Q (6/30/92) (10)ee
Plan, as amended May 19, 1992
10.8** UGI Corporation Annual Bonus Plan dated March 8, 1996 UGI Form 10-Q (6/30/96) 10.4
10.9** UGI Corporation Directors' Equity Compensation Plan Amended UGI Form 10-K (9/30/00) 10.9
and Restated as of January 1, 2000
10.10** UGI Corporation 1997 Stock Option and Dividend Equivalent Plan UGI Form 10-Q (3/31/97) 10.2
10.11** UGI Corporation 1992 Directors' Stock Plan UGI Form 10-Q (6/30/92) (10)ff
10.12** UGI Corporation Senior Executive Employee Severance Pay Plan UGI Form 10-K (9/30/97) 10.12
effective January 1, 1997
10.13** UGI Corporation 2000 Directors' Stock Option Plan UGI Form 10-K (9/30/99) 10.13
10.14** UGI Corporation 2000 Stock Incentive Plan UGI Form 10-Q (6/30/00) 10.1
10.15** 1997 Stock Purchase Loan Plan UGI Form 10-K (9/30/97) 10.16
10.16** UGI Corporation Supplemental Executive Retirement Plan UGI Form 10-Q (6/30/98) 10
Amended and Restated effective October 1, 1996
10.17** Summary of Terms of UGI Corporation 1999 Restricted Stock UGI Form 10-Q (6/30/99) 10
Awards
10.18 Amended and Restated Credit Agreement dated as of September AmeriGas Form 10-K (9/30/97) 10.1
15, 1997 among AmeriGas Propane, L.P., AmeriGas Propane, Partners, L.P.
Inc., Petrolane Incorporated, Bank of America National Trust
and Savings Association, as Agent, First Union National Bank,
as Syndication Agent and certain banks
10.19 First Amendment dated as of September 15, 1998 to Amended and AmeriGas Form 10-K (9/30/98) 10.2
Restated Credit Agreement Partners, L.P.
10.20 Second Amendment dated as of March 25, 1999 to Amended and AmeriGas Form 10-Q (3/31/99) 10.1
Restated Credit Agreement Partners, L.P.
-35-
INCORPORATION BY REFERENCE
[Enlarge/Download Table]
EXHIBIT
NO. EXHIBIT REGISTRANT FILING EXHIBIT
-----------------------------------------------------------------------------------------------------------------------------------
10.21 Third Amendment dated as of March 22, 2000 to Amended and AmeriGas Form 10-Q (6/30/00) 10.3
Restated Credit Agreement Partners, L.P.
10.22 Fourth Amendment dated as of June 6, 2000 to Amended and AmeriGas Form 10-Q (6/30/00) 10.4
Restated Credit Agreement Partners, L.P.
10.22(a) Fifth Amendment dated as of July 31, 2001 to Amended and AmeriGas Form 10-K (9/30/01) 10.6
Restated Credit Agreement Partners, L.P.
10.23 Intercreditor and Agency Agreement dated as of April 19, 1995 AmeriGas Form 10-Q (3/31/95) 10.2
among AmeriGas Propane, Inc., Petrolane Incorporated, Partners, L.P.
AmeriGas Propane, L.P., Bank of America National Trust and
Savings Association ("Bank of America") as Agent, Mellon
Bank, N.A. as Cash Collateral Sub-Agent, Bank of America as
Collateral Agent and certain creditors of AmeriGas Propane,
L.P.
10.23(a) First Amendment dated as of July 31, 2001 to Intercreditor AmeriGas Form 10-K (9/30/01) 10.8
and Agency Agreement dated as of April 19, 1995 Partners, L.P.
10.24 General Security Agreement dated as of April 19, 1995 among AmeriGas Form 10-Q (3/31/95) 10.3
AmeriGas Propane, L.P., Bank of America National Trust and Partners, L.P.
Savings Association and Mellon Bank, N.A.
10.24(a) First Amendment dated as of July 31, 2001 to General Security AmeriGas Form 10-K (9/30/01) 10.10
Agreement dated as of April 19, 1995 Partners, L.P.
10.25 Subsidiary Security Agreement dated as of April 19, 1995 AmeriGas . Form 10-Q (3/31/95) 10.4
among AmeriGas Propane, L.P., Bank of America National Trust Partners, L.P
and Savings Association as Collateral Agent and Mellon Bank,
N.A. as Cash Collateral Agent
10.25(a) First Amendment dated as of July 31, 2001 to Subsidiary AmeriGas Form 10-K (9/30/01) 10.12
Security Agreement dated as of April 19, 1995 Partners, L.P.
10.26 Restricted Subsidiary Guarantee dated as of April 19, 1995 by AmeriGas Form 10-Q (3/31/95) 10.5
AmeriGas Propane, L.P. for the benefit of Bank of America Partners, L.P.
National Trust and Savings Association, as Collateral Agent
10.27 Trademark License Agreement dated April 19, 1995 among UGI AmeriGas Form 10-Q (3/31/95) 10.6
Corporation, AmeriGas, Inc., AmeriGas Propane, Inc., AmeriGas Partners, L.P.
Partners, L.P. and AmeriGas Propane, L.P.
-36-
INCORPORATION BY REFERENCE
[Enlarge/Download Table]
EXHIBIT
NO. EXHIBIT REGISTRANT FILING EXHIBIT
-----------------------------------------------------------------------------------------------------------------------------------
10.28 Trademark License Agreement, dated April 19, 1995 among AmeriGas Form 10-Q (3/31/95) 10.7
AmeriGas Propane, Inc., AmeriGas Partners, L.P. and AmeriGas Partners, L.P.
Propane, L.P.
10.29 Stock Purchase Agreement dated May 27, 1989, as amended and Petrolane Registration 10.16(a)
restated July 31, 1989, between Texas Eastern Corporation and Incorporated/. Statement No.
QFB Partners AmeriGas, Inc 33-69450
10.30 Pledge Agreement dated September 1999 between Eastfield UGI Form 10-K (9/30/99) 10.28
International Holdings, Inc. and Reiffeisen Zentralbank
Osterreich Aktiengesellschaft ("RZB")
10.31 Pledge Agreement dated September 1999 between EuroGas UGI Form 10-K (9/30/99) 10.29
Holdings, Inc. and RZB
10.32 Form of Guarantee Agreement dated September 1999 between UGI UGI Form 10-K (9/30/99) 10.30
Corporation and RZB relating to loan amount of EURO 74 million
10.33 Form of Guarantee Agreement dated September 2000 between UGI UGI Form 10-K (9/30/00) 10.33
Corporation and RZB relating to loan amount of EURO 14.9
million
10.34 Form of Guarantee Agreement dated September 2000 between UGI UGI Form 10-K (9/30/00) 10.34
Corporation and RZB relating to loan amount of EURO 9 million
10.34(a) Amendments dated October 11, 2001 to September 1999 Guarantee
Agreements between UGI Corporation and RZB
10.35** Description of Change of Control arrangements for Messrs. UGI Form 10-K (9/30/99) 10.33
Greenberg, Bovaird and Mendicino
10.36** Description of Change of Control arrangement for Mr. Chaney UGI Form 10-K (9/30/99) 10.34
10.37** Description of Change of Control arrangement for Mr. Bissell AmeriGas Form 10-K (9/30/99) 10.31
Partners, L.P.
10.38** Consulting Services Agreement dated as of August 1, 2000 UGI Form 10-K (9/30/00) 10.38
between Stephen D. Ban and UGI Corporation
10.39** 1992 Non-Qualified Stock Option Plan, as amended UGI Form 10-K (9/30/00) 10.39
-37
INCORPORATION BY REFERENCE
[Enlarge/Download Table]
EXHIBIT
NO. EXHIBIT REGISTRANT FILING EXHIBIT
-----------------------------------------------------------------------------------------------------------------------------------
10.40 Service Agreement for comprehensive delivery service (Rate UGI Form 10-K (9/30/00) 10.40
CDS) dated February 23, 1998 between UGI Utilities, Inc. and
Texas Eastern Transmission Corporation
10.41 Service Agreement for comprehensive delivery service (Rate UGI Form 10-K (9/30/00) 10.41
CDS) dated February 23, 1999 between UGI Utilities, Inc. and
Texas Eastern Transmission Corporation
10.42 Purchase Agreement dated January 30, 2001 and Amended and AmeriGas Form 8-K 10.1
Restated on August 7, 2001 by and among Columbia Energy Partners, L.P. (8/8/01)
Group, Columbia Propane Corporation, Columbia Propane, L.P.,
CP Holdings, Inc., AmeriGas Propane, L.P., AmeriGas Partners,
L.P., and AmeriGas Propane, Inc.
10.43 Partnership Agreement of Hunlock Creek Energy Ventures dated Utilities Form 10-K (9/30/01) 10.24
December 8, 2001 by and between UGI Hunlock Development
Company and Allegheny Energy Supply Hunlock Creek LLC
10.44 Agreement by Petrolane Incorporated and certain of its Petrolane Form 10-K (9/23/94) 10.13
subsidiaries party thereto ("Subsidiaries") for the Sale of Incorporated
the Subsidiaries' Inventory and Assets to the Goodyear Tire &
Rubber Company and D.C.H., Inc., as Purchaser, dated as of
December 18. 1985
10.45 Purchase Agreement by and among Columbia Propane, L.P., CP National Form 8-K (4/19/99) 10.5
Holdings, Inc., Columbia Propane Corporation, National Propane
Propane Partners, L.P., National Propane Corporation, Partners, L.P.
National Propane SPG, Inc., and Triarc Companies, Inc. dated
as of April 5, 1999
10.46 Capital Contribution Agreement dated as of August 21, 2001 by AmeriGas Form 8-K (8/21/01) 10.2
and between Columbia Propane, L.P. and AmeriGas Propane, L.P. Partners, L.P.
acknowledged and agreed to by CP Holdings, Inc.
10.47 Promissory Note by National Propane L.P., a Delaware limited AmeriGas Form 10-K (9/30/01) 10.39
partnership in favor of Columbia Propane Corporation dated Partners, L.P.
July 19, 1999
10.48 Loan Agreement dated July 19, 1999, between National Propane, AmeriGas Form 10-K (9/30/01) 10.40
L.P. and Columbia Propane Corporation Partners, L.P.
-38-
INCORPORATION BY REFERENCE
[Enlarge/Download Table]
EXHIBIT
NO. EXHIBIT REGISTRANT FILING EXHIBIT
-----------------------------------------------------------------------------------------------------------------------------------
10.49 First Amendment dated August 21, 2001 to Loan Agreement dated AmeriGas Form 10-K (9/30/01) 10.41
July 19, 1999 between National Propane, L.P. and Columbia Partners, L.P.
Propane Corporation
10.50 Columbia Energy Group Payment Guaranty dated April 5, 1999 AmeriGas Form 10-K (9/30/01) 10.42
Partners, L.P.
10.51 Keep Well Agreement by and between AmeriGas Propane, L.P. and AmeriGas Form 10-K (9/30/01) 10.46
Columbia Propane Corporation dated August 21, 2001 Partners, L.P.
10.52 Management Services Agreement effective as of August 21, 2001 AmeriGas Form 10-K (9/30/01) 10.47
between AmeriGas Propane, Inc. and AmeriGas Eagle Holdings, Partners, L.P.
Inc., the general partner of AmeriGas Eagle Propane, L.P.
*13 Pages 13 through 47 of the 2001 Annual Report to Shareholders
*21 Subsidiaries of the Registrant
*23 Consent of Arthur Andersen LLP
* Filed herewith.
** As required by Item 14(a)(3), this exhibit is identified as a compensatory
plan or arrangement.
(b) REPORTS ON FORM 8-K:
The Company filed the following Current Reports on Form 8-K during
the fourth quarter of fiscal year 2001:
[Download Table]
Date Item Number(s) Content
---- -------------- -------
7/23/01 5 Advance notice of Webcast of regular earnings
conference call
8/21/01 2,7 Acquisition of the propane distribution
businesses of Columbia Propane Corporation
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized.
UGI CORPORATION
Date: December 11, 2001 By: Anthony J. Mendicino
--------------------------
Anthony J. Mendicino
Vice President - Finance
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below on December 11, 2001, by the following persons
on behalf of the Registrant in the capacities indicated.
SIGNATURE TITLE
--------- -----
Lon R. Greenberg Chairman, President
---------------------- and Chief Executive Officer
Lon R. Greenberg (Principal Executive Officer)
and Director
Anthony J. Mendicino Vice President - Finance
---------------------- and Chief Financial Officer
Anthony J. Mendicino (Principal Financial Officer
and Principal Accounting Officer)
Stephen D. Ban Director
----------------------
Stephen D. Ban
Thomas F. Donovan Director
----------------------
Thomas F. Donovan
-40-
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below on December 11, 2001, by the following persons
on behalf of the Registrant in the capacities indicated.
SIGNATURE TITLE
--------- -----
Richard C. Gozon Director
----------------------
Richard C. Gozon
Anne Pol Director
----------------------
Anne Pol
Marvin O. Schlanger Director
----------------------
Marvin O. Schlanger
James W. Stratton Director
----------------------
James W. Stratton
-41-
UGI CORPORATION AND SUBSIDIARIES
FINANCIAL INFORMATION
FOR INCLUSION IN ANNUAL REPORT ON FORM 10-K
YEAR ENDED SEPTEMBER 30, 2001
F - 1
UGI CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The consolidated financial statements and supplementary data of UGI Corporation
and subsidiaries, together with the report thereon of Arthur Andersen LLP dated
November 16, 2001, listed in the following index, are included in UGI's 2001
Annual Report to Shareholders and are incorporated in this Form 10-K Annual
Report by reference. With the exception of the pages listed in this index and
information incorporated in Items 1, 2, 5, 7 and 8, the 2001 Annual Report to
Shareholders is not to be deemed filed as part of this Report.
[Enlarge/Download Table]
Reference
---------------------------------
Annual
Report to
Form 10-K Shareholders
(page) (page)
------ ------
Reports of Independent Public Accountants:
On Consolidated Financial Statements 24
On Financial Statement Schedules F-4
Financial Statements:
Consolidated Balance Sheets, September 30,
2001 and 2000 26 to 27
For the years ended September 30, 2001, 2000 and 1999:
Consolidated Statements of Income 25
Consolidated Statements of Cash Flows 28
Consolidated Statements of Stockholders'
Equity 29
F-2
UGI CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES (CONTINUED)
[Enlarge/Download Table]
Reference
---------------------------------
Annual
Report to
Form 10-K Shareholders
(page) (page)
------ ------
Notes to Consolidated Financial
Statements 30 to 47
Supplementary Data (unaudited):
Quarterly Data for the years ended
September 30, 2001 and 2000 46
Financial Statement Schedules:
For the years ended September 30, 2001, 2000 and 1999:
I - Condensed Financial
Information of Registrant
(Parent Company) S-1 to S-3
II - Valuation and Qualifying
Accounts S-4 to S-5
Annual Reports on Form 10-K/A
Annual Reports on Form 10-K/A for the UGI Utilities, Inc. and AmeriGas
Propane, Inc. savings plans will be filed by amendment within the time
period specified by Rule 15d-21(b).
We have omitted all other financial statement schedules because the required
information is either (1) not present; (2) not present in amounts sufficient to
require submission of the schedule; or (3) the information required is included
elsewhere in the financial statements or related notes.
F-3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders of
UGI Corporation:
We have audited, in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements included in UGI
Corporation's annual report to shareholders for the year ended September 30,
2001, incorporated by reference in this Form 10-K, and have issued our report
thereon dated November 16, 2001. Our report on the financial statements includes
an explanatory paragraph with respect to the changes in the method of accounting
for tank installation costs and nonrefundable tank fees and the adoption of the
provisions of SFAS No. 133 as discussed in Notes 1 and 3 to the financial
statements. Our audits were made for the purpose of forming an opinion on those
consolidated financial statements taken as a whole. The schedules listed in the
Index on pages F-2 and F-3 are the responsibility of UGI Corporation's
management and are presented for purposes of complying with the Securities and
Exchange Commission's rules and are not part of the basic financial statements.
These schedules have been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, fairly state in
all material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Philadelphia, Pennsylvania
November 16, 2001
F-4
UGI CORPORATION AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
BALANCE SHEETS
(Millions of dollars)
[Enlarge/Download Table]
September 30,
ASSETS 2001 2000
------ ------- -------
Current assets:
Cash and cash equivalents $ 0.6 $ 1.1
Accounts and notes receivable 14.4 0.1
Deferred income taxes 0.2 0.2
Prepaid expenses and other current assets 0.4 0.3
------- -------
Total current assets 15.6 1.7
Investments in subsidiaries 300.8 315.9
Other assets 2.6 2.4
------- -------
Total assets $ 319.0 $ 320.0
======= =======
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Current liabilities:
Accounts and notes payable $ 10.3 $ 9.6
Accrued liabilities 1.2 12.4
------- -------
Total current liabilities 11.5 22.0
Noncurrent liabilities 51.4 50.3
Commitments and contingencies
Common stockholders' equity:
Common Stock, without par value (authorized - 100,000,000 shares;
issued - 33,198,731 shares) 395.0 394.5
Accumulated other comprehensive income (13.5) --
Retained earnings (accumulated deficit) 9.0 (4.9)
Unearned compensation - restricted stock -- (0.7)
------- -------
390.5 388.9
Less treasury stock, at cost (134.4) (141.2)
------- -------
Total common stockholders' equity 256.1 247.7
------- -------
Total liabilities and common stockholders' equity $ 319.0 $ 320.0
======= =======
Commitments and Contingencies:
In addition to the guarantees of FLAGA debt described in Note 5 to
Consolidated Financial Statements, UGI Corporation is authorized to guarantee up
to $100 million of supplier obligations of its wholly owned second-tier
subsidiary UGI Energy Services, Inc., and $4.4 million of lease obligations of
its wholly owned second-tier subsidiary Hearth USA, Inc.
S-1
UGI CORPORATION AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
STATEMENTS OF INCOME
(Millions of dollars, except per share amounts)
[Enlarge/Download Table]
Year Ended
September 30,
-------------------------------------------
2001 2000 1999
--------- --------- ---------
Revenues $ -- $ -- $ --
Costs and expenses:
Operating and administrative expenses 10.8 8.1 10.4
Other income, net (9.7) (8.4) (10.5)
--------- --------- ---------
1.1 (0.3) (0.1)
--------- --------- ---------
Operating income (loss) (1.1) 0.3 0.1
Interest expense on intercompany debt (2.4) (2.0) --
--------- --------- ---------
Income (loss) before income taxes (3.5) (1.7) 0.1
Income tax expense (benefit) (0.7) (1.1) 0.3
--------- --------- ---------
Loss before equity in income
of unconsolidated subsidiaries (2.8) (0.6) (0.2)
Equity in income before accounting changes
of unconsolidated subsidiaries 54.8 45.3 55.9
--------- --------- ---------
Income before equity in accounting changes
of unconsolidated subsidiaries 52.0 44.7 55.7
Equity in accounting changes
of unconsolidated subsidiaries 4.5 -- --
--------- --------- ---------
Net income $ 56.5 $ 44.7 $ 55.7
========= ========= =========
Earnings per common share:
Basic:
Income before accounting changes $ 1.91 $ 1.64 $ 1.74
Cumulative effect of accounting changes, net 0.17 -- --
--------- --------- ---------
Net income $ 2.08 $ 1.64 $ 1.74
========= ========= =========
Diluted:
Income before accounting changes $ 1.90 $ 1.64 $ 1.74
Cumulative effect of accounting changes, net 0.16 -- --
--------- --------- ---------
Net income $ 2.06 $ 1.64 $ 1.74
========= ========= =========
Average common shares outstanding (millions):
Basic 27.163 27.219 31.954
========= ========= =========
Diluted 27.373 27.255 32.016
========= ========= =========
S-2
UGI CORPORATION AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
STATEMENTS OF CASH FLOWS
(Millions of dollars)
[Enlarge/Download Table]
Year Ended
September 30,
-------------------------------------
2001 2000 1999
------- ------- -------
NET CASH PROVIDED BY OPERATING
ACTIVITIES (a) $ 108.3 $ 95.5 $ 178.0
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in unconsolidated subsidiaries (49.2) (95.8) (16.5)
Net advances to unconsolidated subsidiary (13.0) -- --
------- ------- -------
Net cash used by investing activities (62.2) (95.8) (16.5)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of dividends on Common Stock (53.2) (41.2) (47.9)
Issuance of intercompany long-term debt -- 47.5 --
Issuance of Common Stock 7.6 3.8 4.7
Repurchases of Common Stock (1.0) (9.1) (133.1)
------- ------- -------
Net cash used by financing activities (46.6) 1.0 (176.3)
------- ------- -------
Cash and cash equivalents increase (decrease) $ (0.5) $ 0.7 $ (14.8)
======= ======= =======
Cash and cash equivalents:
End of period $ 0.6 $ 1.1 $ 0.4
Beginning of period 1.1 0.4 15.2
------- ------- -------
Increase (decrease) $ (0.5) $ 0.7 $ (14.8)
======= ======= =======
(a) Includes dividends received from unconsolidated subsidiaries of $110.4,
$96.2 and $176.7 for the years ended September 30, 2001, 2000 and 1999,
respectively.
S-3
UGI CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(Millions of dollars)
[Enlarge/Download Table]
Charged
Balance at (credited) Balance at
beginning to costs and end of
of year expenses Other year
---------- ------------ ----------- -----------
YEAR ENDED SEPTEMBER 30, 2001
-----------------------------
Reserves deducted from assets in
the consolidated balance sheet:
Allowance for doubtful accounts $ 9.3 $ 18.3 $ (11.7)(1) $ 15.6
========== ===========
(0.3)(2)
Allowance for amortization of deferred
financing costs - AmeriGas Propane $ 8.8 $ 2.1 $ -- $ 10.9
========== ===========
Allowance for amortization of
other deferred costs - AmeriGas Propane $ 1.0 $ 0.1 $ -- $ 1.1
========== ===========
Other reserves:
Self-insured property and casualty liability $ 37.1 $ 17.2 $ (16.0)(3) $ 38.8
========== ===========
0.5 (2)
Insured property and casualty liability $ 2.1 $ (0.6) $ 1.5
========== ===========
Environmental, litigation and other $ 11.2 $ 0.5 $ (1.8)(3) $ 10.3
========== ===========
0.4 (2)
YEAR ENDED SEPTEMBER 30, 2000
-----------------------------
Reserves deducted from assets in
the consolidated balance sheet:
Allowance for doubtful accounts $ 8.0 $ 10.0 $ (8.9)(1) $ 9.3
========== ===========
0.2 (2)
Allowance for amortization of deferred
financing costs - AmeriGas Propane $ 7.1 $ 1.7 $ -- $ 8.8
========== ===========
Allowance for amortization of
other deferred costs - AmeriGas Propane $ 2.1 $ 0.4 $ (1.5)(2) $ 1.0
========== ===========
Other reserves:
Self-insured property and casualty liability $ 38.7 $ 14.1 $ (15.8)(3) $ 37.1
========== ===========
0.1 (2)
Insured property and casualty liability $ 5.1 $ (3.0) $ 2.1
========== ===========
Environmental, litigation and other $ 12.5 $ (1.3)(3) $ 11.2
========== ===========
S-4
UGI CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (CONTINUED)
(Millions of dollars)
[Enlarge/Download Table]
YEAR ENDED SEPTEMBER 30, 1999
-----------------------------
Reserves deducted from assets in
the consolidated balance sheet:
Allowance for doubtful accounts $ 7.9 $ 7.8 $ (7.9)(1) $ 8.0
========== ===========
0.2 (2)
Allowance for amortization of deferred
financing costs - AmeriGas Propane $ 5.4 $ 1.7 $ -- $ 7.1
========== ===========
Allowance for amortization of
other deferred costs - AmeriGas Propane $ 4.6 $ 1.0 $ (3.5)(2) $ 2.1
========== ===========
Other reserves:
Self-insured property and casualty liability $ 48.5 $12.9 $(22.9)(3) $ 38.7
========== ===========
0.2 (2)
Insured property and casualty liability $ 4.3 $ 0.8 $ 5.1
========== ===========
Environmental, litigation and other $ 13.9 $ (1.5)(3) $ 12.5
========== ===========
0.1 (2)
(1) Uncollectible accounts written off, net of recoveries.
(2) Other adjustments.
(3) Payments, net.
S-5
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
10.34(a) Amendments dated October 11, 2001 to September 1999 Guarantee
Agreements between UGI Corporation and RZB
13 Pages 13 to 47 of the 2001 Annual Report to Shareholders
21 Subsidiaries of the Registrant
23 Consent of Arthur Andersen LLP
Dates Referenced Herein and Documents Incorporated by Reference
↑Top
Filing Submission 0000893220-01-501035 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Tue., Apr. 30, 8:18:39.1am ET 
