falsedesktopUGI2020-12-31000088461421000011{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "\tPage\nGlossary of Terms and Abbreviations\t1\nPart I Financial Information\t\nItem 1. Financial Statements (unaudited)\t\nCondensed Consolidated Balance Sheets as of December 31 2020 September 30 2020 and December 31 2019\t5\nCondensed Consolidated Statements of Income for the three months ended December 31 2020 and 2019\t6\nCondensed Consolidated Statements of Comprehensive Income for the three months ended December 31 2020 and 2019\t7\nCondensed Consolidated Statements of Cash Flows for the three months ended December 31 2020 and 2019\t8\nCondensed Consolidated Statements of Changes in Equity for the three months ended December 31 2020 and 2019\t9\nNotes to Condensed Consolidated Financial Statements\t10\nItem 2. Management's Discussion and Analysis of Financial Condition and Results of Operations\t31\nItem 3. Quantitative and Qualitative Disclosures About Market Risk\t44\nItem 4. Controls and Procedures\t46\nPart II Other Information\t\nItem 1A. Risk Factors\t47\nItem 6. Exhibits\t47\nSignatures\t49\n", "q10k_tbl_1": "\tDecember 31 2020\tSeptember 30 2020\tDecember 31 2019\nASSETS\t\t\t\nCurrent assets:\t\t\t\nCash and cash equivalents\t416\t336\t333\nRestricted cash\t30\t21\t96\nAccounts receivable (less allowances for doubtful accounts of $46 $42 and $36 respectively)\t1030\t652\t1011\nAccrued utility revenues\t61\t14\t80\nIncome taxes receivable\t85\t80\t0\nInventories\t279\t241\t248\nDerivative instruments\t94\t44\t28\nPrepaid expenses and other current assets\t185\t155\t151\nTotal current assets\t2180\t1543\t1947\nProperty plant and equipment (less accumulated depreciation of $3822 $3698 and $3490 respectively)\t7054\t6960\t6784\nGoodwill\t3564\t3518\t3483\nIntangible assets net\t667\t677\t703\nUtility regulatory assets\t392\t395\t386\nDerivative instruments\t37\t38\t32\nOther assets\t831\t854\t951\nTotal assets\t14725\t13985\t14286\nLIABILITIES AND EQUITY\t\t\t\nCurrent liabilities:\t\t\t\nCurrent maturities of long-term debt\t21\t53\t28\nShort-term borrowings\t568\t347\t870\nAccounts payable\t637\t475\t598\nDerivative instruments\t43\t64\t113\nOther current liabilities\t828\t816\t782\nTotal current liabilities\t2097\t1755\t2391\nLong-term debt\t6012\t5981\t5828\nDeferred income taxes\t693\t640\t563\nDerivative instruments\t56\t59\t47\nOther noncurrent liabilities\t1421\t1413\t1452\nTotal liabilities\t10279\t9848\t10281\nCommitments and contingencies (Note 7)\t\t\t\nEquity:\t\t\t\nUGI Corporation stockholders' equity:\t\t\t\nUGI Common Stock without par value (authorized - 450000000 shares; issued - 209545847 209514044 and 209310342 shares respectively)\t1419\t1416\t1398\nRetained earnings\t3139\t2908\t2798\nAccumulated other comprehensive loss\t(79)\t(147)\t(163)\nTreasury stock at cost\t(42)\t(49)\t(37)\nTotal UGI Corporation stockholders' equity\t4437\t4128\t3996\nNoncontrolling interests\t9\t9\t9\nTotal equity\t4446\t4137\t4005\nTotal liabilities and equity\t14725\t13985\t14286\n", "q10k_tbl_2": "\tThree Months Ended December 31\t\n\t\t2020\t\t\t\t2019\t\t\nRevenues\t\t1932\t\t\t\t2007\t\t\nCosts and expenses:\t\t\t\t\t\t\t\t\nCost of sales (excluding depreciation and amortization shown below)\t\t833\t\t\t\t1008\t\t\nOperating and administrative expenses\t\t489\t\t\t\t511\t\t\nDepreciation and amortization\t\t124\t\t\t\t119\t\t\nOther operating income net\t\t(16)\t\t\t\t(8)\t\t\n\t\t1430\t\t\t\t1630\t\t\nOperating income\t\t502\t\t\t\t377\t\t\nIncome from equity investees\t\t7\t\t\t\t7\t\t\nOther non-operating expense net\t\t(19)\t\t\t\t(12)\t\t\nInterest expense\t\t(78)\t\t\t\t(84)\t\t\nIncome before income taxes\t\t412\t\t\t\t288\t\t\nIncome tax expense\t\t(109)\t\t\t\t(76)\t\t\nNet income attributable to UGI Corporation\t\t303\t\t\t\t212\t\t\nEarnings per common share attributable to UGI Corporation stockholders:\t\t\t\t\t\t\t\t\nBasic\t\t1.45\t\t\t\t1.01\t\t\nDiluted\t\t1.44\t\t\t\t1.00\t\t\nWeighted-average common shares outstanding (thousands):\t\t\t\t\t\t\t\t\nBasic\t\t208774\t\t\t\t209439\t\t\nDiluted\t\t209640\t\t\t\t211258\t\t\n", "q10k_tbl_3": "\tThree Months Ended December 31\t\n\t\t2020\t\t\t\t2019\t\t\nNet income attributable to UGI Corporation\t\t303\t\t\t\t212\t\t\nOther comprehensive income:\t\t\t\t\t\t\t\t\nNet gains on derivative instruments (net of tax of $0 and $(2) respectively)\t\t0\t\t\t\t6\t\t\nReclassifications of net losses on derivative instruments (net of tax of $(2) and $0 respectively)\t\t5\t\t\t\t1\t\t\nForeign currency adjustments (net of tax of $12 and $7 respectively)\t\t63\t\t\t\t47\t\t\nOther comprehensive income\t\t68\t\t\t\t54\t\t\nComprehensive income attributable to UGI Corporation\t\t371\t\t\t\t266\t\t\n", "q10k_tbl_4": "\tThree Months Ended December 31\t\n\t2020\t2019\nCASH FLOWS FROM OPERATING ACTIVITIES\t\t\nNet income attributable to UGI Corporation\t303\t212\nAdjustments to reconcile net income attributable to UGI Corporation to net cash provided by operating activities:\t\t\nDepreciation and amortization\t124\t119\nDeferred income tax expense net\t25\t5\nProvision for uncollectible accounts\t8\t8\nChanges in unrealized gains and losses on derivative instruments\t(96)\t27\nIncome from equity investees\t(7)\t(7)\nOther net\t12\t(8)\nNet change in:\t\t\nAccounts receivable and accrued utility revenues\t(415)\t(432)\nInventories\t(34)\t(16)\nUtility deferred fuel and power costs net of changes in unsettled derivatives\t4\t5\nAccounts payable\t187\t183\nDerivative instruments collateral deposits received\t13\t20\nOther current assets\t(43)\t(8)\nOther current liabilities\t70\t10\nNet cash provided by operating activities\t151\t118\nCASH FLOWS FROM INVESTING ACTIVITIES\t\t\nExpenditures for property plant and equipment\t(187)\t(182)\nAcquisitions of businesses and assets net of cash and restricted cash acquired\t(12)\t0\nOther net\t10\t6\nNet cash used by investing activities\t(189)\t(176)\nCASH FLOWS FROM FINANCING ACTIVITIES\t\t\nDividends on UGI Common Stock\t(69)\t(68)\nIssuances of long-term debt net of issuance costs\t0\t15\nRepayments of long-term debt and finance leases\t(36)\t(31)\nIncrease in short-term borrowings\t165\t51\nReceivables Facility net borrowings\t56\t22\nIssuances of UGI Common Stock\t4\t1\nRepurchases of UGI Common Stock\t0\t(23)\nNet cash provided (used) by financing activities\t120\t(33)\nEffect of exchange rate changes on cash cash equivalents and restricted cash\t7\t9\nCash cash equivalents and restricted cash increase (decrease)\t89\t(82)\nCASH CASH EQUIVALENTS AND RESTRICTED CASH\t\t\nCash cash equivalents and restricted cash at end of period\t446\t429\nCash cash equivalents and restricted cash at beginning of period\t357\t511\nCash cash equivalents and restricted cash increase (decrease)\t89\t(82)\n", "q10k_tbl_5": "\tThree Months Ended December 31\t\n\t\t2020\t\t\t\t2019\t\t\nCommon stock without par value\t\t\t\t\t\t\t\t\nBalance beginning of period\t\t1416\t\t\t\t1397\t\t\nCommon Stock issued in connection with employee and director plans net of tax withheld\t\t1\t\t\t\t0\t\t\nEquity-based compensation expense\t\t2\t\t\t\t2\t\t\nOther\t\t0\t\t\t\t(1)\t\t\nBalance end of period\t\t1419\t\t\t\t1398\t\t\nRetained earnings\t\t\t\t\t\t\t\t\nBalance beginning of period\t\t2908\t\t\t\t2653\t\t\nLosses on common stock transactions in connection with employee and director plans\t\t(3)\t\t\t\t0\t\t\nNet income attributable to UGI Corporation\t\t303\t\t\t\t212\t\t\nCash dividends on UGI Common Stock ($0.33 and $0.325 respectively)\t\t(69)\t\t\t\t(68)\t\t\nOther\t\t0\t\t\t\t1\t\t\nBalance end of period\t\t3139\t\t\t\t2798\t\t\nAccumulated other comprehensive income (loss)\t\t\t\t\t\t\t\t\nBalance beginning of period\t\t(147)\t\t\t\t(217)\t\t\nNet gains on derivative instruments\t\t0\t\t\t\t6\t\t\nReclassification of net losses on derivative instruments\t\t5\t\t\t\t1\t\t\nForeign currency adjustments\t\t63\t\t\t\t47\t\t\nBalance end of period\t\t(79)\t\t\t\t(163)\t\t\nTreasury stock\t\t\t\t\t\t\t\t\nBalance beginning of period\t\t(49)\t\t\t\t(16)\t\t\nCommon Stock issued in connection with employee and director plans net of tax withheld\t\t7\t\t\t\t2\t\t\nRepurchases of UGI Common Stock\t\t0\t\t\t\t(23)\t\t\nBalance end of period\t\t(42)\t\t\t\t(37)\t\t\nTotal UGI stockholders' equity\t\t4437\t\t\t\t3996\t\t\nNoncontrolling interests\t\t\t\t\t\t\t\t\nBalance beginning of period\t\t9\t\t\t\t10\t\t\nOther\t\t0\t\t\t\t(1)\t\t\nBalance end of period\t\t9\t\t\t\t9\t\t\nTotal equity\t\t4446\t\t\t\t4005\t\t\n", "q10k_tbl_6": "\tDecember 31 2020\tDecember 31 2019\tSeptember 30 2020\tSeptember 30 2019\nCash and cash equivalents\t416\t333\t336\t447\nRestricted cash\t30\t96\t21\t64\nCash cash equivalents and restricted cash\t446\t429\t357\t511\n", "q10k_tbl_7": "\tThree Months Ended December 31\t\n\t\t2020\t\t\t\t2019\t\t\nDenominator (thousands of shares):\t\t\t\t\t\t\t\t\nWeighted-average common shares outstanding - basic\t\t208774\t\t\t\t209439\t\t\nIncremental shares issuable for stock options and awards (a)\t\t866\t\t\t\t1819\t\t\nWeighted-average common shares outstanding - diluted\t\t209640\t\t\t\t211258\t\t\n", "q10k_tbl_8": "Three Months Ended December 31 2020\tTotal\tEliminations (a)\tAmeriGas Propane\tUGI International\tMidstream & Marketing\tUGI Utilities\tCorporate & Other\nRevenues from contracts with customers:\t\t\t\t\t\t\t\nUtility:\t\t\t\t\t\t\t\nCore Market:\t\t\t\t\t\t\t\nResidential\t165\t0\t0\t0\t0\t165\t0\nCommercial & Industrial\t60\t0\t0\t0\t0\t60\t0\nLarge delivery service\t40\t0\t0\t0\t0\t40\t0\nOff-system sales and capacity releases\t15\t(14)\t0\t0\t0\t29\t0\nOther\t4\t(1)\t0\t0\t0\t5\t0\nTotal Utility\t284\t(15)\t0\t0\t0\t299\t0\nNon-Utility:\t\t\t\t\t\t\t\nLPG:\t\t\t\t\t\t\t\nRetail\t1055\t0\t572\t483\t0\t0\t0\nWholesale\t59\t0\t19\t40\t0\t0\t0\nEnergy Marketing\t380\t(26)\t0\t155\t251\t0\t0\nMidstream:\t\t\t\t\t\t\t\nPipeline\t45\t0\t0\t0\t45\t0\t0\nPeaking\t2\t(36)\t0\t0\t38\t0\t0\nOther\t2\t0\t0\t0\t2\t0\t0\nElectricity Generation\t4\t0\t0\t0\t4\t0\t0\nOther\t72\t0\t56\t16\t0\t0\t0\nTotal Non-Utility\t1619\t(62)\t647\t694\t340\t0\t0\nTotal revenues from contracts with customers\t1903\t(77)\t647\t694\t340\t299\t0\nOther revenues (b)\t29\t(1)\t19\t6\t1\t1\t3\nTotal revenues\t1932\t(78)\t666\t700\t341\t300\t3\n", "q10k_tbl_9": "Three Months Ended December 31 2019\tTotal\tEliminations (a)\tAmeriGas Propane\tUGI International\tMidstream & Marketing\tUGI Utilities\tCorporate & Other\nRevenues from contracts with customers:\t\t\t\t\t\t\t\nUtility:\t\t\t\t\t\t\t\nCore Market:\t\t\t\t\t\t\t\nResidential\t184\t0\t0\t0\t0\t184\t0\nCommercial & Industrial\t68\t0\t0\t0\t0\t68\t0\nLarge delivery service\t41\t0\t0\t0\t0\t41\t0\nOff-system sales and capacity releases\t17\t(14)\t0\t0\t0\t31\t0\nOther\t4\t(1)\t0\t0\t0\t5\t0\nTotal Utility\t314\t(15)\t0\t0\t0\t329\t0\nNon-Utility:\t\t\t\t\t\t\t\nLPG:\t\t\t\t\t\t\t\nRetail\t1094\t0\t631\t463\t0\t0\t0\nWholesale\t66\t0\t22\t44\t0\t0\t0\nEnergy Marketing\t363\t(26)\t0\t124\t265\t0\t0\nMidstream:\t\t\t\t\t\t\t\nPipeline\t43\t0\t0\t0\t43\t0\t0\nPeaking\t4\t(38)\t0\t0\t42\t0\t0\nOther\t2\t0\t0\t0\t2\t0\t0\nElectricity Generation\t9\t0\t0\t0\t9\t0\t0\nOther\t80\t0\t59\t12\t9\t0\t0\nTotal Non-Utility\t1661\t(64)\t712\t643\t370\t0\t0\nTotal revenues from contracts with customers\t1975\t(79)\t712\t643\t370\t329\t0\nOther revenues (b)\t32\t(1)\t18\t8\t3\t0\t4\nTotal revenues\t2007\t(80)\t730\t651\t373\t329\t4\n", "q10k_tbl_10": "\tDecember 31 2020\tSeptember 30 2020\tDecember 31 2019\nNon-utility LPG and natural gas\t181\t164\t164\nGas Utility natural gas\t19\t20\t24\nMaterials supplies and other\t79\t57\t60\nTotal inventories\t279\t241\t248\n", "q10k_tbl_11": "\tDecember 31 2020\tSeptember 30 2020\tDecember 31 2019\nRegulatory assets (a):\t\t\t\nIncome taxes recoverable\t126\t124\t121\nUnderfunded pension and postretirement plans\t172\t175\t175\nEnvironmental costs\t59\t61\t58\nRemoval costs net\t24\t26\t27\nOther\t14\t11\t10\nTotal regulatory assets\t395\t397\t391\nRegulatory liabilities (a):\t\t\t\nPostretirement benefit overcollections\t13\t13\t14\nDeferred fuel and power refunds\t24\t29\t6\nState tax benefits - distribution system repairs\t28\t28\t26\nPAPUC Temporary Rates Order\t5\t7\t25\nExcess federal deferred income taxes\t272\t274\t278\nOther\t4\t2\t2\nTotal regulatory liabilities\t346\t353\t351\n", "q10k_tbl_12": "Three Months Ended December 31\t2020\t2019\nService cost\t3\t3\nInterest cost\t5\t6\nExpected return on assets\t(10)\t(10)\nAmortization of:\t\t\nActuarial loss\t4\t4\nNet cost\t2\t3\n", "q10k_tbl_13": "\tAsset (Liability)\t\t\t\n\tLevel 1\tLevel 2\tLevel 3\tTotal\nDecember 31 2020:\t\t\t\t\nDerivative instruments:\t\t\t\t\nAssets:\t\t\t\t\nCommodity contracts\t60\t111\t0\t171\nForeign currency contracts\t0\t14\t0\t14\nLiabilities:\t\t\t\t\nCommodity contracts\t(58)\t(14)\t0\t(72)\nForeign currency contracts\t0\t(25)\t0\t(25)\nInterest rate contracts\t0\t(50)\t0\t(50)\nNon-qualified supplemental postretirement grantor trust investments (a)\t46\t0\t0\t46\nSeptember 30 2020:\t\t\t\t\nDerivative instruments:\t\t\t\t\nAssets:\t\t\t\t\nCommodity contracts\t68\t39\t0\t107\nForeign currency contracts\t0\t32\t0\t32\nLiabilities:\t\t\t\t\nCommodity contracts\t(54)\t(64)\t0\t(118)\nForeign currency contracts\t0\t(14)\t0\t(14)\nInterest rate contracts\t0\t(55)\t0\t(55)\nNon-qualified supplemental postretirement grantor trust investments (a)\t42\t0\t0\t42\nDecember 31 2019:\t\t\t\t\nDerivative instruments:\t\t\t\t\nAssets:\t\t\t\t\nCommodity contracts\t26\t20\t0\t46\nForeign currency contracts\t0\t40\t0\t40\nInterest rate contracts\t0\t3\t0\t3\nLiabilities:\t\t\t\t\nCommodity contracts\t(77)\t(110)\t0\t(187)\nForeign currency contracts\t0\t(4)\t0\t(4)\nInterest rate contracts\t0\t(7)\t0\t(7)\nNon-qualified supplemental postretirement grantor trust investments (a)\t42\t0\t0\t42\n", "q10k_tbl_14": "\tDecember 31 2020\tSeptember 30 2020\tDecember 31 2019\nCarrying amount\t6078\t6081\t5906\nEstimated fair value\t6581\t6504\t6249\n", "q10k_tbl_15": "\t\t\tNotional Amounts (in millions)\t\t\nType\tUnits\tSettlements Extending Through\tDecember 31 2020\tSeptember 30 2020\tDecember 31 2019\nCommodity Price Risk:\t\t\t\t\t\nRegulated Utility Operations\t\t\t\t\t\nGas Utility NYMEX natural gas futures and option contracts\tDekatherms\tOctober 2021\t16\t22\t15\nNon-utility Operations\t\t\t\t\t\nLPG swaps\tGallons\tSeptember 2023\t719\t846\t772\nNatural gas futures forward basis swap options and pipeline contracts\tDekatherms\tMay 2025\t342\t339\t358\nElectricity long forward and futures contracts\tKilowatt hours\tDecember 2024\t4719\t4517\t4145\nElectricity short forward and futures contracts\tKilowatt hours\tDecember 2024\t97\t188\t556\nInterest Rate Risk:\t\t\t\t\t\nInterest rate swaps\tEuro\tOctober 2022\t€ 300\t€ 300\t€ 300\nInterest rate swaps\tUSD\tJuly 2024\t1306\t1344\t1354\nForeign Currency Exchange Rate Risk:\t\t\t\t\t\nForward foreign currency exchange contracts\tUSD\tSeptember 2023\t457\t511\t431\nNet investment hedge forward foreign exchange contracts\tEuro\tOctober 2024\t€ 173\t€ 173\t€ 173\n", "q10k_tbl_16": "\tDecember 31 2020\tSeptember 30 2020\tDecember 31 2019\nDerivative assets:\t\t\t\nDerivatives designated as hedging instruments:\t\t\t\nForeign currency contracts\t8\t17\t14\nInterest rate contracts\t0\t0\t3\n\t8\t17\t17\nDerivatives subject to PGC and DS mechanisms:\t\t\t\nCommodity contracts\t1\t7\t0\nDerivatives not designated as hedging instruments:\t\t\t\nCommodity contracts\t170\t100\t46\nForeign currency contracts\t6\t15\t26\n\t176\t115\t72\nTotal derivative assets - gross\t185\t139\t89\nGross amounts offset in the balance sheet\t(48)\t(57)\t(27)\nCash collateral received\t(6)\t0\t(2)\nTotal derivative assets - net\t131\t82\t60\nDerivative liabilities:\t\t\t\nDerivatives designated as hedging instruments:\t\t\t\nInterest rate contracts\t(50)\t(55)\t(7)\nDerivatives subject to PGC and DS mechanisms:\t\t\t\nCommodity contracts\t(2)\t0\t(3)\nDerivatives not designated as hedging instruments:\t\t\t\nCommodity contracts\t(70)\t(118)\t(184)\nForeign currency contracts\t(25)\t(14)\t(4)\n\t(95)\t(132)\t(188)\nTotal derivative liabilities - gross\t(147)\t(187)\t(198)\nGross amounts offset in the balance sheet\t48\t57\t27\nCash collateral pledged\t0\t7\t11\nTotal derivative liabilities - net\t(99)\t(123)\t(160)\n", "q10k_tbl_17": "Three Months Ended December 31:\t\t\t\t\t\n\tGain (Loss) Recognized in AOCI\t\tLoss Reclassified from AOCI into Income\t\tLocation of Loss Reclassified from AOCI into Income\nCash Flow Hedges:\t2020\t2019\t2020\t2019\nInterest rate contracts\t0\t8\t(7)\t(1)\tInterest expense\nNet Investment Hedges:\t\t\t\t\t\nForeign currency contracts\t(8)\t(4)\t\t\t\n\tGain (Loss) Recognized in Income\t\t\t\t\nDerivatives Not Designated as Hedging Instruments:\t2020\t2019\tLocation of Gain (Loss) Recognized in Income\t\t\nCommodity contracts\t3\t2\tRevenues\t\t\nCommodity contracts\t103\t(33)\tCost of sales\t\t\nCommodity contracts\t2\t0\tOperating and administrative expenses\t\t\nCommodity contracts\t5\t0\tOther operating income net\t\t\nForeign currency contracts\t(20)\t(11)\tOther non-operating expense net\t\t\nTotal\t93\t(42)\t\t\t\n", "q10k_tbl_18": "Three Months Ended December 31 2020\tPostretirement Benefit Plans\tDerivative Instruments\tForeign Currency\tTotal\nAOCI - September 30 2020\t(26)\t(54)\t(67)\t(147)\nOther comprehensive income before reclassification adjustments\t0\t0\t63\t63\nAmounts reclassified from AOCI\t0\t5\t0\t5\nOther comprehensive income attributable to UGI\t0\t5\t63\t68\nAOCI - December 31 2020\t(26)\t(49)\t(4)\t(79)\nThree Months Ended December 31 2019\tPostretirement Benefit Plans\tDerivative Instruments\tForeign Currency\tTotal\nAOCI - September 30 2019\t(26)\t(25)\t(166)\t(217)\nOther comprehensive income before reclassification adjustments\t0\t6\t47\t53\nAmounts reclassified from AOCI\t0\t1\t0\t1\nOther comprehensive income attributable to UGI\t0\t7\t47\t54\nAOCI - December 31 2019\t(26)\t(18)\t(119)\t(163)\n", "q10k_tbl_19": "Three Months Ended December 31 2020\tTotal\tEliminations\t\tAmeriGas Propane\tUGI International\tMidstream & Marketing\t\tUGI Utilities\tCorporate & Other (a)\nRevenues from external customers\t1932\t0\t\t666\t700\t279\t\t285\t2\nIntersegment revenues\t0\t(78)\t(b)\t0\t0\t62\t\t15\t1\nCost of sales\t833\t(77)\t(b)\t272\t383\t237\t\t132\t(114)\nOperating income\t502\t0\t\t141\t135\t52\t\t77\t97\nIncome from equity investees\t7\t0\t\t0\t0\t7\t(c)\t0\t0\nOther non-operating (expense) income net\t(19)\t0\t\t0\t1\t0\t\t1\t(21)\nEarnings before interest expense and income taxes\t490\t0\t\t141\t136\t59\t\t78\t76\nInterest expense\t(78)\t0\t\t(40)\t(7)\t(10)\t\t(14)\t(7)\nIncome before income taxes\t412\t0\t\t101\t129\t49\t\t64\t69\nDepreciation and amortization\t124\t0\t\t43\t33\t18\t\t29\t1\nCapital expenditures (including the effects of accruals)\t152\t0\t\t27\t29\t17\t\t79\t0\nAs of December 31 2020\t\t\t\t\t\t\t\t\t\nTotal assets\t14725\t(353)\t\t4471\t3564\t2851\t\t3959\t233\n", "q10k_tbl_20": "Three Months Ended December 31 2019\tTotal\tEliminations\t\tAmeriGas Propane\tUGI International\tMidstream & Marketing\t\tUGI Utilities\tCorporate & Other (a)\nRevenues from external customers\t2007\t0\t\t730\t651\t309\t\t314\t3\nIntersegment revenues\t0\t(80)\t(b)\t0\t0\t64\t\t15\t1\nCost of sales\t1008\t(79)\t(b)\t289\t368\t264\t\t151\t15\nOperating income (loss)\t377\t0\t\t165\t96\t55\t\t92\t(31)\nIncome from equity investees\t7\t0\t\t0\t0\t7\t(c)\t0\t0\nOther non-operating (expense) income net\t(12)\t0\t\t0\t4\t0\t\t0\t(16)\nEarnings (loss) before interest expense and income taxes\t372\t0\t\t165\t100\t62\t\t92\t(47)\nInterest expense\t(84)\t0\t\t(42)\t(7)\t(12)\t\t(14)\t(9)\nIncome (loss) before income taxes\t288\t0\t\t123\t93\t50\t\t78\t(56)\nDepreciation and amortization\t119\t0\t\t44\t31\t18\t\t26\t0\nCapital expenditures (including the effects of accruals)\t153\t0\t\t39\t20\t23\t\t71\t0\nAs of December 31 2019\t\t\t\t\t\t\t\t\t\nTotal assets\t14286\t(366)\t\t4609\t3243\t2860\t\t3711\t229\n", "q10k_tbl_21": "Adjusted net income attributable to UGI Corporation\tThree Months Ended December 31\t\n(Dollars in millions)\t\t2020\t\t\t\t2019\t\t\nAmeriGas Propane\t\t74\t\t\t\t91\t\t\nUGI International\t\t92\t\t\t\t73\t\t\nMidstream & Marketing\t\t35\t\t\t\t36\t\t\nUGI Utilities\t\t49\t\t\t\t61\t\t\nCorporate & Other (a)\t\t53\t\t\t\t(49)\t\t\nNet income attributable to UGI Corporation\t\t303\t\t\t\t212\t\t\nNet (gains) losses on commodity derivative instruments not associated with current-period transactions (net of tax of $31 and $(2) respectively)\t\t(85)\t\t\t\t10\t\t\nUnrealized losses on foreign currency derivative instruments (net of tax of $(5) and $(4) respectively)\t\t15\t\t\t\t11\t\t\nAcquisition and integration expenses associated with the CMG Acquisition (net of tax of $0 and $0 respectively)\t\t0\t\t\t\t1\t\t\nAcquisition expenses associated with the pending Mountaineer Acquisition (net of tax of $(1) and $0 respectively)\t\t1\t\t\t\t0\t\t\nBusiness transformation expenses (net of tax of $(4) and $(5) respectively)\t\t13\t\t\t\t12\t\t\nTotal adjustments (a) (b)\t\t(56)\t\t\t\t34\t\t\nAdjusted net income attributable to UGI Corporation\t\t247\t\t\t\t246\t\t\n\tThree Months Ended December 31\t\nAdjusted diluted earnings per share\t\t2020\t\t\t\t2019\t\t\nAmeriGas Propane\t\t0.35\t\t\t\t0.43\t\t\nUGI International\t\t0.44\t\t\t\t0.34\t\t\nMidstream & Marketing\t\t0.17\t\t\t\t0.17\t\t\nUGI Utilities\t\t0.23\t\t\t\t0.29\t\t\nCorporate & Other (a)\t\t0.25\t\t\t\t(0.23)\t\t\nEarnings per share - diluted\t\t1.44\t\t\t\t1.00\t\t\nNet (gains) losses on commodity derivative instruments not associated with current-period transactions\t\t(0.40)\t\t\t\t0.05\t\t\nUnrealized losses on foreign currency derivative instruments\t\t0.07\t\t\t\t0.06\t\t\nAcquisition and integration expenses associated with the CMG Acquisition\t\t0\t\t\t\t0\t\t\nAcquisition expenses associated with the pending Mountaineer Acquisition\t\t0.01\t\t\t\t0\t\t\nBusiness transformation expenses\t\t0.06\t\t\t\t0.06\t\t\nTotal adjustments (a)\t\t(0.26)\t\t\t\t0.17\t\t\nAdjusted earnings per share - diluted\t\t1.18\t\t\t\t1.17\t\t\n", "q10k_tbl_22": "For the three months ended December 31\t2020\t2019\tDecrease\t\n(Dollars in millions)\t\t\t\t\nRevenues\t666\t730\t(64)\t(9)%\nTotal margin (a)\t394\t441\t(47)\t(11)%\nOperating and administrative expenses\t221\t240\t(19)\t(8)%\nOperating income/earnings before interest expense and income taxes\t141\t165\t(24)\t(15)%\nRetail gallons sold (millions)\t276\t304\t(28)\t(9)%\nHeating degree days-% (warmer) colder than normal (b)\t(4.6)%\t4.0%\t0\t0\n", "q10k_tbl_23": "For the three months ended December 31\t2020\t2019\tIncrease (Decrease)\t\n(Dollars in millions)\t\t\t\t\nRevenues\t700\t651\t49\t8%\nTotal margin (a)\t317\t276\t41\t15%\nOperating and administrative expenses\t157\t151\t6\t4%\nOperating income\t135\t96\t39\t41%\nEarnings before interest expense and income taxes\t136\t100\t36\t36%\nLPG retail gallons sold (millions)\t236\t246\t(10)\t(4)%\nHeating degree days-% warmer than normal (b)\t(2.0)%\t(6.6)%\t0\t0\n", "q10k_tbl_24": "For the three months ended December 31\t2020\t2019\tDecrease\t\n(Dollars in millions)\t\t\t\t\nRevenues\t341\t373\t(32)\t(9)%\nTotal margin (a)\t104\t109\t(5)\t(5)%\nOperating and administrative expenses\t32\t35\t(3)\t(9)%\nOperating income\t52\t55\t(3)\t(5)%\nEarnings before interest expense and income taxes\t59\t62\t(3)\t(5)%\n", "q10k_tbl_25": "For the three months ended December 31\t2020\t2019\tIncrease (Decrease)\t\n(Dollars in millions)\t\t\t\t\nRevenues\t300\t329\t(29)\t(9)%\nTotal margin (a)\t167\t177\t(10)\t(6)%\nOperating and administrative expenses (a)\t60\t58\t2\t3%\nOperating income\t77\t92\t(15)\t(16)%\nEarnings before interest expense and income taxes\t78\t92\t(14)\t(15)%\nGas Utility system throughput-bcf\t\t\t\t\nCore market\t23\t26\t(3)\t(12)%\nTotal\t83\t85\t(2)\t(2)%\nElectric Utility distribution sales - gwh\t244\t246\t(2)\t(1)%\nGas Utility heating degree days-% (warmer) colder than normal (b)\t(9.8)%\t0.3%\t0\t0\n", "q10k_tbl_26": "\tDecember 31 2020\t\t\t\t\t\tSeptember 30 2020\n(Millions of dollars)\tAmeriGas Propane\tUGI International\tMidstream & Marketing\tUGI Utilities\tCorp & Other\tTotal\tTotal\nShort-term borrowings\t222\t1\t79\t266\t0\t568\t347\nLong-term debt (including current maturities):\t\t\t\t\t\t\t\nSenior notes\t2575\t428\t0\t975\t0\t3978\t3960\nTerm loans\t0\t366\t690\t146\t550\t1752\t1741\nOther long-term debt\t4\t24\t41\t2\t277\t348\t380\nUnamortized debt issuance costs\t(19)\t(6)\t(12)\t(5)\t(3)\t(45)\t(47)\nTotal long-term debt\t2560\t812\t719\t1118\t824\t6033\t6034\nTotal debt\t2782\t813\t798\t1384\t824\t6601\t6381\n", "q10k_tbl_27": "(Currency in millions)\tTotal Capacity\tBorrowings Outstanding\tLetters of Credit and Guarantees Outstanding\tAvailable Borrowing Capacity\nAs of December 31 2020\t\t\t\t\nAmeriGas OLP\t600\t222\t60\t318\nUGI International LLC (a)\t€ 300\t€ -\t€ -\t€ 300\nEnergy Services\t260\t4\t0\t256\nUGI Utilities\t350\t266\t0\t84\nUGI Corporation (b)\t300\t270\t0\t30\nAs of December 31 2019\t\t\t\t\nAmeriGas OLP\t600\t321\t63\t216\nUGI International LLC (a)\t€ 300\t€ 161\t€ -\t€ 139\nEnergy Services\t200\t20\t0\t180\nUGI Utilities\t350\t279\t0\t71\nUGI Corporation (b)\t300\t290\t0\t10\n", "q10k_tbl_28": "\tFor the three months ended\t\t\tFor the three months ended\t\t\n\tDecember 31 2020\t\t\tDecember 31 2019\t\t\n(Millions of dollars or euros)\tAverage\t\tPeak\tAverage\t\tPeak\nAmeriGas OLP\t224\t\t266\t322\t\t359\nUGI International LLC\t€\t0\t€ -\t€\t187\t€ 187\nEnergy Services\t14\t\t32\t41\t\t77\nUGI Utilities\t209\t\t275\t226\t\t281\nUGI Corporation\t273\t\t300\t294\t\t300\n", "q10k_tbl_29": "\tAsset (Liability)\t\n(Millions of dollars)\tFair Value\tChange in Fair Value\nDecember 31 2020\t\t\nCommodity price risk (1)\t100\t(123)\nInterest rate risk (2)\t(50)\t(7)\nForeign currency exchange rate risk (3)\t(11)\t(48)\n", "q10k_tbl_30": "Exhibit No.\tExhibit\tRegistrant\tFiling\tExhibit\n31.1\tCertification by the Chief Executive Officer relating to the Registrant's Report on Form 10-Q for the quarter ended December 31 2020 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\t\t\t\n31.2\tCertification by the Chief Financial Officer relating to the Registrant's Report on Form 10-Q for the quarter ended December 31 2020 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\t\t\t\n32\tCertification by the Chief Executive Officer and the Chief Financial Officer relating to the Registrant's Report on Form 10-Q for the quarter ended December 31 2020 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\t\t\t\n101.INS\tXBRL Instance - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document\t\t\t\n101.SCH\tXBRL Taxonomy Extension Schema\t\t\t\n101.CAL\tXBRL Taxonomy Extension Calculation Linkbase\t\t\t\n101.DEF\tXBRL Taxonomy Extension Definition Linkbase\t\t\t\n101.LAB\tXBRL Taxonomy Extension Labels Linkbase\t\t\t\n101.PRE\tXBRL Taxonomy Extension Presentation Linkbase\t\t\t\n104\tCover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)\t\t\t\n", "q10k_tbl_31": "31.1\tCertification by the Chief Executive Officer relating to the Registrant's Report on Form 10-Q for the quarter ended December 31 2020 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\n31.2\tCertification by the Chief Certification by the Chief Financial Officer relating to the Registrant's Report on Form 10-Q for the quarter ended December 31 2020 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\n32\tCertification by the Chief Executive Officer and the Chief Financial Officer relating to the Registrant's Report on Form 10-Q for the quarter ended December 31 2020 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n101.INS\tXBRL Instance - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document\n101.SCH\tXBRL Taxonomy Extension Schema\n101.CAL\tXBRL Taxonomy Extension Calculation Linkbase\n101.DEF\tXBRL Taxonomy Extension Definition Linkbase\n101.LAB\tXBRL Taxonomy Extension Labels Linkbase\n101.PRE\tXBRL Taxonomy Extension Presentation Linkbase\n104\tCover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)\n"}{"bs": "q10k_tbl_1", "is": "q10k_tbl_2", "cf": "q10k_tbl_4"}None
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2020
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 1-11071
UGI CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania
23-2668356
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
460 North Gulph Road, King of Prussia, PA19406
(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:
Title of each class:
Trading Symbol(s):
Name of each exchange on which registered:
Common Stock, without par value
UGI
New York Stock Exchange
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. Yesý No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yesý No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
ý
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý
At January 31, 2021, there were 208,553,861 shares of UGI Corporation Common Stock, without par value, outstanding.
Terms and abbreviations used in this Form 10-Q are defined below:
UGI Corporation and Related Entities
AmeriGas OLP - AmeriGas Propane, L.P., the principal operating subsidiary of AmeriGas Partners
AmeriGas Partners - AmeriGas Partners, L.P., a Delaware limited partnership and an indirect wholly-owned subsidiary of UGI; also referred to as the “Partnership”
AmeriGas Propane - Reportable segment comprising AmeriGas Propane, Inc. and its subsidiaries, including AmeriGas Partners and AmeriGas OLP
AmeriGas Propane, Inc. - A wholly owned second-tier subsidiary of UGI and the general partner of AmeriGas Partners; also referred to as the “General Partner”
AvantiGas - AvantiGas Limited, an indirect wholly owned subsidiary of UGI International, LLC
Company - UGI and its consolidated subsidiaries collectively
DVEP - DVEP Investeringen B.V., an indirect wholly owned subsidiary of UGI International, LLC
Electric Utility - UGI Utilities’ regulated electric distribution utility
Energy Services - UGI Energy Services, LLC, a wholly owned second-tier subsidiary of UGI
ESFC - Energy Services Funding Corporation, a wholly owned subsidiary of Energy Services
Flaga - Flaga GmbH, an indirect wholly owned subsidiary of UGI International, LLC
Gas Utility - UGI Utilities’ regulated natural gas distribution business, comprising the natural gas utility businesses owned and operated by UGI Utilities
General Partner- AmeriGas Propane, Inc., the general partner of AmeriGas Partners
HVAC - UGI HVAC Enterprises, Inc., a wholly owned second-tier subsidiary of UGI, which was sold in September 2020
Midstream & Marketing - Reportable segment comprising Energy Services, UGID and, prior to its sale in September 2020, HVAC
Partnership - AmeriGas Partners and its consolidated subsidiaries, including AmeriGas OLP
Pennant - Pennant Midstream, LLC, a Delaware limited liability corporation
PennEast - PennEast Pipeline Company, LLC
UGI- UGI Corporation
UGI Appalachia - UGI Appalachia, LLC, a wholly owned subsidiary of Energy Services
UGI France - UGI France SAS (a Société par actions simplifiée), an indirect wholly owned subsidiary of UGI International, LLC
UGI International- Reportable segment principally comprising UGI’s foreign operations
UGI International, LLC- UGI International, LLC, a wholly owned second-tier subsidiary of UGI
UGI PennEast, LLC - A wholly owned subsidiary of Energy Services that holds a 20% membership interest in PennEast
UGI Utilities - UGI Utilities, Inc., a wholly owned subsidiary of UGI. Also a reportable segment of UGI comprising UGI Utilities, Inc. and its subsidiaries
UGID - UGI Development Company, a wholly owned subsidiary of Energy Services
UniverGas - UniverGas Italia S.r.l, an indirect wholly owned subsidiary of UGI International, LLC
Other Terms and Abbreviations
2019 three-month period -Three months ended December 31, 2019
2020 Annual Report -UGI Annual Report on Form 10-K for the fiscal year ended September 30, 2020
2020 three-month period -Three months ended December 31, 2020
AFUDC - Allowance for Funds Used During Construction
AOCI - Accumulated Other Comprehensive Income (Loss)
ASC - Accounting Standards Codification
ASC 606- ASC 606, “Revenue from Contracts with Customers”
ASU - Accounting Standards Update
Bcf - Billions of cubic feet
BIE - Pennsylvania Public Utility Commission Bureau of Investigation and Enforcement
CARES Act - Coronavirus Aid, Relief, and Economic Security Act
CDC - Centers for Disease Control and Prevention
CMG Acquisition - Acquisition of Columbia Midstream Group, LLC and Columbia Pennant, LLC on August 1, 2019 pursuant to the CMG Acquisition Agreements
CMG Acquisition Agreements - Agreements related to the CMG Acquisition comprising (1) a purchase and sale agreement related to the CMG acquisition, dated July 2, 2019, by and among Columbia Midstream & Minerals Group, LLC, Energy Services, UGI and TransCanada PipeLine USA Ltd., and (2) a purchase and sale agreement related to the Columbia Pennant, LLC acquisition, dated July 2, 2019, by and among Columbia Midstream & Minerals Group, LLC, Energy Services, and TransCanada PipeLine USA Ltd.
COA - Consent Order and Agreement
CODM - Chief Operating Decision Maker as defined in ASC 280, “Segment Reporting”
Common Stock - shares of UGI common stock
COVID-19 - A novel strain of coronavirus disease discovered in 2019
DS - Default service
DSIC - Distribution System Improvement Charge
Eighth Circuit - United States Court of Appeals for the Eighth Circuit
Exchange Act - Securities Exchange Act of 1934, as amended
FASB - Financial Accounting Standards Board
FDIC - Federal Deposit Insurance Corporation
FERC - Federal Energy Regulatory Commission
Fiscal 2019 - The fiscal year ended September 30, 2019
Fiscal 2020 - The fiscal year ended September 30, 2020
Fiscal 2021 - The fiscal year ending September 30, 2021
Fiscal 2022 - The fiscal year ending September 30, 2022
GAAP - U.S. generally accepted accounting principles
GILTI - Global Intangible Low Taxed Income
Gwh - Millions of kilowatt hours
Hunlock - Hunlock Station, a 130-megawatt natural gas-fueled electricity generating station located near Wilkes-Barre, Pennsylvania
ICE - Intercontinental Exchange
IRC - Internal Revenue Code
IRPA - Interest rate protection agreement
IRS - Internal Revenue Services
IT - Information technology
LNG - Liquefied natural gas
LPG - Liquefied petroleum gas
MDPSC - Maryland Public Service Commission
MGP - Manufactured gas plant
Mountaineer - Mountaineer Gas Company a natural gas distribution company in West Virginia
Mountaineer Acquisition - Pending acquisition of Mountaintop Energy Holdings LLC, indirect parent of Mountaineer, pursuant to a definitive agreement signed on December 29, 2020
NOAA - National Oceanic and Atmospheric Administration
NOL - Net operating loss
NPNS - Normal purchase and normal sale
NYDEC - New York State Department of Environmental Conservation
NYMEX - New York Mercantile Exchange
PADEP - Pennsylvania Department of Environmental Protection
PAPUC - Pennsylvania Public Utility Commission
PGC - Purchased gas costs
PRP - Potentially Responsible Party
Receivables Facility - A receivables purchase facility of Energy Services with an issuer of receivables-backed commercial paper
Retail core-market - Comprises firm residential, commercial and industrial customers to whom UGI Utilities has a statutory obligation to provide service that purchase their natural gas from Gas Utility
Temporary Rates Order - Order issued by the PAPUC on March 15, 2018, that converted PAPUC approved rates of a defined group of large Pennsylvania public utilities into temporary rates for a period of not more than 12 months while the PAPUC reviewed effects of the TCJA
USD - U.S. dollar
Western Missouri District Court - The United States District Court for the Western District of Missouri
Notes to Condensed Consolidated Financial Statements
(unaudited)
(Currency in millions, except per share amounts and where indicated otherwise)
Note 1 — Nature of Operations
UGI is a holding company that, through subsidiaries and affiliates, distributes, stores, transports and markets energy products and related services. In the United States, we own and operate (1) a retail propane marketing and distribution business; (2) natural gas and electric distribution utilities; and (3) an energy marketing, midstream infrastructure, storage, natural gas gathering and processing, natural gas production, electricity generation and energy services businesses. In Europe, we market and distribute propane and other LPG and market other energy products and services.
We conduct a domestic propane marketing and distribution business through AmeriGas Partners. AmeriGas Partners conducts a national propane distribution business through its principal operating subsidiary, AmeriGas OLP.
UGI International, through subsidiaries and affiliates, conducts (1) an LPG distribution business throughout much of Europe and (2) an energy marketing business in France, Belgium, the Netherlands and the United Kingdom. These businesses are conducted principally through our subsidiaries, UGI France, Flaga, AvantiGas, DVEP and UniverGas.
Energy Services conducts, directly and through subsidiaries, energy marketing, including renewable natural gas, midstream transmission, LNG storage, natural gas gathering and processing, natural gas production, electricity generation and energy services businesses primarily in the Mid-Atlantic region of the U.S., eastern Ohio and the panhandle of West Virginia. UGID owns electricity generation facilities principally located in Pennsylvania. Energy Services and its subsidiaries’ storage, LNG and portions of its midstream transmission operations are subject to regulation by the FERC.
UGI Utilities directly owns and operates Gas Utility, a natural gas distribution utility business in eastern and central Pennsylvania and in a portion of one Maryland county. Gas Utility is subject to regulation by the PAPUC, the FERC, and, with respect to a small service territory in one Maryland county, the MDPSC. UGI Utilities also owns and operates Electric Utility, an electric distribution utility located in northeastern Pennsylvania. Electric Utility is subject to regulation by the PAPUC and the FERC.
Pending Acquisition of Mountaineer Gas Company
On December 29, 2020, UGI Corporation signed a definitive agreement to acquire Mountaineer, the largest natural gas distribution company in West Virginia for a preliminary purchase price of $540, which includes the assumption of approximately $140 of debt. Mountaineer serves nearly 215,000 customers across 50 of the state’s 55 counties. The pending acquisition is subject to customary regulatory and other closing conditions, including approval by the Public Service Commission of West Virginia and federal antitrust clearance, and is expected to close in the second half of calendar year 2021. UGI currently expects to finance the pending acquisition through the issuance of debt and/or equity-linked securities and existing liquidity.
Note 2 — Summary of Significant Accounting Policies
The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with the rules and regulations of the SEC. They include all adjustments that we consider necessary for a fair statement of the results for the interim periods presented. Such adjustments consisted only of normal recurring items unless otherwise disclosed. The September 30, 2020, Condensed Consolidated Balance Sheet was derived from audited financial statements but does not include all footnote disclosures from the annual financial statements.
These financial statements should be read in conjunction with the financial statements and related notes included in the Company’s 2020 Annual Report. Due to the seasonal nature of our businesses, the results of operations for interim periods are not necessarily indicative of the results to be expected for a full year.
Equity Method Investments. We account for privately held equity securities of entities without readily determinable fair values in which we do not have control, but have significant influence over operating and financial policies, under the equity method. Our equity method investments are primarily comprised of PennEast and Pennant.
Notes to Condensed Consolidated Financial Statements
(unaudited)
(Currency in millions, except per share amounts and where indicated otherwise)
UGI PennEast, LLC and four other members comprising wholly owned subsidiaries of Southern Company, New Jersey Resources, South Jersey Industries, and Enbridge, Inc., each hold a 20% membership interest in PennEast. In September 2019, a panel of the U.S. Court of Appeals for the Third Circuit ruled that New Jersey’s Eleventh Amendment immunity barred PennEast from bringing an eminent domain lawsuit in federal court, under the Natural Gas Act, against New Jersey or its agencies. The Third Circuit subsequently denied PennEast’s petition for rehearing en banc. PennEast also filed a petition for declaratory order with the FERC regarding interpretation of the Natural Gas Act; the FERC issued an order favorable to PennEast’s position on January 30, 2020. PennEast filed a petition for a writ of certiorari to seek U.S. Supreme Court review of the Third Circuit decision on February 18, 2020. On June 29, 2020, the U.S. Supreme Court invited the U.S. Solicitor General to file a brief in the case expressing the views of the U.S. On December 9, 2020, the U.S. Solicitor General filed a brief supporting PennEast’s petition for a writ of certiorari. On February 3, 2021, the U.S. Supreme Court issued an order granting PennEast’s petition for a writ of certiorari. The case will be set for argument in the April 2021 argument session. The ultimate outcome of these matters cannot be determined at this time, and could result in delays, additional costs, or the inability to move forward with the project, resulting in an impairment of all or a portion of our investment in PennEast.
Restricted Cash.Restricted cash principally represents those cash balances in our commodity futures brokerage accounts that are restricted from withdrawal.The following table provides a reconciliation of the total cash, cash equivalents and restricted cash reported on the Condensed Consolidated Balance Sheets to the corresponding amounts reported on the Condensed Consolidated Statements of Cash Flows.
December 31, 2020
December 31, 2019
September 30, 2020
September 30, 2019
Cash and cash equivalents
$
416
$
333
$
336
$
447
Restricted cash
30
96
21
64
Cash, cash equivalents and restricted cash
$
446
$
429
$
357
$
511
Earnings Per Common Share.Basic earnings per share attributable to UGI stockholders reflect the weighted-average number of common shares outstanding. Diluted earnings per share attributable to UGI stockholders include the effects of dilutive stock options and common stock awards.
Shares used in computing basic and diluted earnings per share are as follows:
Three Months Ended December 31,
2020
2019
Denominator (thousands of shares):
Weighted-average common shares outstanding — basic
208,774
209,439
Incremental shares issuable for stock options and awards (a)
866
1,819
Weighted-average common shares outstanding — diluted
209,640
211,258
(a)For the three months ended December 31, 2020 and 2019, there were 6,000 and 3,499 shares, respectively, associated with outstanding stock option awards that were excluded from the computation of diluted earnings per share above because their effect was antidilutive.
Derivative Instruments. Derivative instruments are reported on the Condensed Consolidated Balance Sheets at their fair values, unless the NPNS exception is elected. The accounting for changes in fair value depends upon the purpose of the derivative instrument, whether it is subject to regulatory ratemaking mechanisms or if it qualifies and is designated as a hedge for accounting purposes.
Certain of our derivative instruments qualify and are designated as cash flow hedges. For cash flow hedges, changes in the fair values of the derivative instruments are recorded in AOCI, to the extent effective at offsetting changes in the hedged item, until earnings are affected by the hedged item. We discontinue cash flow hedge accounting if occurrence of the forecasted transaction is determined to be no longer probable. Hedge accounting is also discontinued for derivatives that cease to be highly effective. We do not designate our commodity and certain foreign currency derivative instruments as hedges under GAAP. Changes in the fair values of these derivative instruments are reflected in net income. Gains and losses on substantially all of
Notes to Condensed Consolidated Financial Statements
(unaudited)
(Currency in millions, except per share amounts and where indicated otherwise)
the commodity derivative instruments used by UGI Utilities are included in regulatory assets or liabilities because it is probable such gains or losses will be recoverable from, or refundable to, customers. From time to time, we also enter into net investment hedges. Gains and losses on net investment hedges that relate to our foreign operations are included in the cumulative translation adjustment component in AOCI until such foreign net investment is substantially sold or liquidated.
Cash flows from derivative instruments, other than certain cross-currency swaps and net investment hedges, if any, are included in cash flows from operating activities on the Condensed Consolidated Statements of Cash Flows. Cash flows from the interest portion of our cross-currency hedges, if any, are included in cash flows from operating activities while cash flows from the currency portion of such hedges, if any, are included in cash flows from financing activities. Cash flows from net investment hedges, if any, are included in cash flows from investing activities on the Condensed Consolidated Statements of Cash Flows.
For a more detailed description of the derivative instruments we use, our accounting for derivatives, our objectives for using them and other information, see Note 10.
Use of Estimates.The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and costs. These estimates are based on management’s knowledge of current events, historical experience and various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may be different from these estimates and assumptions.
Reclassifications.Certain prior-period amounts have been reclassified to conform to the current-period presentation.
Note 3 — Accounting Changes
New Accounting Standard Adopted in Fiscal 2021
Credit Losses. In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” This ASU, as subsequently amended, requires entities to estimate lifetime expected credit losses for financial instruments not measured at fair value through net income, including trade and other receivables, net investments in leases, financial receivables, debt securities, and other financial instruments, which may result in earlier recognition of credit losses. Further, the new current expected credit loss model may affect how entities estimate their allowance for losses related to receivables that are current with respect to their payment terms. Effective October 1, 2020, the Company adopted this ASU, as updated, using a modified retrospective transition approach. The adoption of the new guidance did not have a material impact on our consolidated financial statements.
Accounting Standard Not Yet Adopted
Income Taxes. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by eliminating certain exceptions within the existing guidance for recognizing deferred taxes for equity method investments, performing intraperiod allocations and calculating income taxes in interim periods. Further, this ASU clarifies existing guidance related to, among other things, recognizing deferred taxes for goodwill and allocated taxes to members of a consolidated group. This new guidance is effective for the Company for interim and annual periods beginning October 1, 2021 (Fiscal 2022). Early adoption is permitted. The Company is in the process of assessing the impact on its financial statements from the adoption of the new guidance and determining the period in which the new guidance will be adopted.
Note 4 — Revenue from Contracts with Customers
The Company recognizes revenue when control of promised goods or services is transferred to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. See Note 4 in the Company’s 2020 Annual Report for additional information on our revenues from contracts with customers.