Bob Beard UGI Utilities. October 17,

Transcription

1 Bob Beard UGI Utilities October 17,

2 Agenda Keys to Success Service Territory Financial Performance Customer Growth Infrastructure Management Looking Forward October 17,

3 Keys to Success Operations Focus on fundamentals and safe, efficient operations Growth Growth core heating customers by 1-2% annually in current economic environment Service Remain a leader in customer satisfaction Regulation Proactive engagement with our regulatory, legislative, and municipal stakeholders October 17,

4 Utilities History UGI operates three natural gas utilities and one electric utility each separately regulated: UGI Utilities UGI Gas in operation for over 130 years Acquired UGI Penn Natural Gas in 2006 Acquired UGI Central Penn Gas in 2008 UGI Utilities Electric (UGI Electric) since 1925 October 17,

5 Service Territory October 17,

6 Service Territory Pennsylvania s largest gas utility 45 of the 67 PA counties served Service provided in 6 of the top 10 PA population centers Service provided in 709 PA municipalities Wide range of customer opportunities ~600,000 gas customers adjacent to the Marcellus Shale region ~60,000 electric customers Attractive and growing service areas Gas Utility customer growth of ~2% in 2012 UGI System covers 28% of the total square miles in PA Approximately 12,000 miles of main October 17,

7 Strong Financial Performance $ in millions EBITDA $ $ $ $ $ D&A (40.9) (41.2) (51.1) (53.5) (52.6) EBIT Interest (42.3) (39.1) (43.9) (42.3) (42.7) Taxes (48.6) (50.0) (46.8) (56.9) (63.5) Net Income $ 74.2 $ 74.0 $ 78.7 $ 90.3 $ Dividends $ 40.0 $ 68.8 $ 61.2 $ 74.0 $ 99.5 Debt / EBITDA 3.5x 2.9x 3.6x 2.7x 2.4x EBITDA / Interest 4.9x 5.2x 5.0x 5.7x 6.2x October 17,

8 Conservative Financial Management Investment-grade credit ratings: A3 / A Low leverage: Debt-to-total-capitalization under 50% Favorable debt maturity profile $40 MM maturing in FY12 repaid $133 MM maturing in FY13 refinancing is largely hedged Strong liquidity $300 MM working capital facility through October 31, 2015 Over $290 MM of available liquidity at September 30, 2012 October 17,

9 Focus on Customer Growth In 2012 UGI Gas achieved +1.9% net customer growth Focused on customer conversions from oil and other fuels Historical growth was from new housing market Annual Natural Gas Savings over Oil $1,485 $1,553 Estimate that ~500,000 potential customers in proximity to UGI s mains $922 $517 $860 The vast majority of conversions are oil customers within 75 to 100 feet of our mains October 17,

10 Historical Growth: Residential Annual Residential Gas Customer Additions October 17,

11 Historical Growth: Commercial Record success in commercial conversions in 2012 Launching new fall campaign targeted at small businesses Multiple large C&I conversions in 2012 and scheduled for 2013 Increased interest in NGV fleets 34 Commercial Customer Conversions 5,794 4,845 4,007 4,095 3,402 2,985 2,232 1, October 17,

12 Infrastructure Management UGI Pipeline System 15% Cast Iron / Bare Steel 85% Contemporary Ahead of other PA Utilities: 73% avg. UGI has an aggressive capital replacement plan 531 miles of cast iron and bare steel pipe replaced in last 10 years October 17,

13 UGI has proposed replacement of all cast iron main within 14 years and all bare steel main within 30 years We have accelerated our spending and rate of replacement in infrastructure over the last 5 years Replacement Investment ($MM) Infrastructure Management October 17,

14 Constructive Regulatory Environment Base rate cases are generally settled in less than 9 months Distribution System Improvement Charge (DSIC) approved in 2012 provides a quarterly surcharge to recover cost of infrastructure updates o o Proactive communications with regulators Uses a fully forecasted test year of capital spending and expenses Water companies in PA already had DSIC eligibility All universal service (customer assistance) programs allow for full cost recovery Fixed monthly customer charges help to reduce the reliance on heating degree days PNG and CPG environmental and MGP-related costs are fully recoverable October 17,

15 Looking Forward We are driving earnings growth through: Customer growth Investments in infrastructure Operational productivity Continued addition of Marcellus shale gas into our distribution system October 17,

16 Questions? October 17,

17 Appendix October 17,

18 UGI Reconciliation of Adjusted EPS to GAAP EPS UGI Corporation EPS Reconciliation Year GAAP Net Income $ 75.5 $ 98.9 $ $ $ $ $ $ $ $ Adjustments: Loss on early extinguishment of debt at AmeriGas $ (0.2) $ (0.9) $ (9.4) $ (4.6) $ (10.3) Loss from discontinuance of cash flow hedge accounting at AmeriGas $ (3.3) Gain on sale of 50% ownership of Energy Venture $ 5.3 Gains from sale of AmeriGas storage terminals $ 12.5 $ 10.4 Gain from sale of Atlantic Energy LLC - UGI Energy Services $ 17.2 Adjusted Net Income $ 75.7 $ 99.8 $ $ $ $ $ $ $ $ GAAP EPS $ 0.90 $ 1.14 $ 1.15 $ 1.77 $ 1.65 $ 1.89 $ 1.99 $ 2.36 $ 2.36 $ 2.06 Adjusted EPS $ 0.90 $ 1.15 $ 1.15 $ 1.86 $ 1.64 $ 1.78 $ 1.99 $ 2.27 $ 2.21 $ 2.18 Diluted Shares Outstanding October 17,

19 Investor Relations: Hugh Gallagher (x1029) Simon Bowman (x3645) October 17,