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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, 2000
Commission file number 1-11071
UGI CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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:
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. [ ]
The aggregate market value of UGI Corporation Common Stock held by nonaffiliates
of the registrant on December 1, 2000 was $630,716,648.
At December 8, 2000 there were 27,024,689 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, 2000 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 27, 2001 are incorporated
by reference into Part III of this Form 10-K.
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TABLE OF CONTENTS
PART I BUSINESS PAGE
Items 1 and 2 Business and Properties.................................................... 1
AmeriGas Propane Business.................................................. 2
Utility Operations......................................................... 9
UGI Enterprises, Inc....................................................... 17
- Domestic Businesses ....................................... 17
- International Businesses .................................. 17
Item 3 Legal Proceedings.......................................................... 19
Item 4 Submission of Matters to a Vote of
Security Holders........................................................... 21
PART II SECURITIES AND FINANCIAL INFORMATION
Item 5 Market for Registrant's Common Equity
and Related Stockholder Matters............................................ 21
Item 6 Selected Financial Data.................................................... 23
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations.............................. 24
Item 7A Quantitative and Qualitative Disclosures About Market Risk................. 24
Item 8 Financial Statements and Supplementary Data................................ 24
Item 9 Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure......................... 24
PART III UGI MANAGEMENT AND SECURITY HOLDERS
Item 10 Directors and Executive Officers of the Registrant......................... 25
Item 11 Executive Compensation..................................................... 25
Item 12 Security Ownership of Certain Beneficial
Owners and Management...................................................... 25
Item 13 Certain Relationships and Related Transactions............................. 25
PART IV ADDITIONAL EXHIBITS, SCHEDULES AND REPORTS
Item 14 Exhibits, Financial Statement Schedules
and Reports on Form 8-K.................................................... 28
Signatures................................................................. 34
Index to Financial Statements and
Financial Statement Schedules.............................................. F-2
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PART I: BUSINESS
ITEMS 1 AND 2. BUSINESS AND PROPERTIES
UGI Corporation is a holding company that operates propane
distribution, gas and electric utility, energy marketing and related businesses
through subsidiaries.
Our majority-owned subsidiary, AmeriGas Partners, L.P., a Delaware
limited partnership ("AmeriGas Partners" or the "Partnership"), conducts one of
the nation's largest retail propane distribution businesses through its 98.99%
owned subsidiary AmeriGas Propane, L.P. (the "Operating Partnership"). We have
been in the retail propane distribution business for over 40 years, operating
through various subsidiaries. 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, are traded on the New York Stock Exchange under the symbol
"APU." We have a 55.5% combined ownership interest in the Partnership and the
Operating Partnership. The remaining interest is publicly held.
Our subsidiary UGI Utilities, Inc. ("Utilities") owns and operates a
natural gas distribution utility and an electric distribution utility in eastern
Pennsylvania. In response to state deregulation legislation, effective October
1, 1999, Utilities' transferred its electric generation assets to its
non-utility subsidiary, UGI Development Company ("UGID"). UGID contributed
certain of its generation assets to a joint venture with a subsidiary of
Allegheny Energy, Inc. in December 2000. Utilities is the successor to a
business founded in 1882. It serves 272,000 natural gas customers and 61,000
electric customers.
Our subsidiary UGI Enterprises, Inc. ("Enterprises") conducts domestic
and international businesses through subsidiaries. The domestic businesses
include retail gas and electric marketing, a retailer of hearth, spa and grill
products, Hearth USA(TM), and a heating, ventilation and air-conditioning
business. In September 1999, Enterprises acquired FLAGA GmbH, the largest retail
propane distributor in Austria. Enterprises also has two international
energy-related joint ventures. 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 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, 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
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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 2000, we completed four transactions in pursuit of this strategy.
AMERIGAS PROPANE BUSINESS
Our domestic propane distribution business is conducted through
AmeriGas Partners. The Partnership is one of the largest retail propane
distributors in the United States, based on fiscal year 2000 retail volume of
771 million gallons. The Partnership operates from approximately 550 district
locations in 45 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.
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 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. Several states
have adopted or are considering proposals that would substantially deregulate
the generation portion of the electric utility industry and thereby permit
retail electric customers to choose their electric supplier. While proponents of
electric utility deregulation believe that competition will ultimately reduce
the cost of electricity, we are unable to predict whether, or the extent to
which, the price of electricity may drop. Therefore, we cannot predict the
ultimate impact that electric utility deregulation may have on propane's
existing competitive price advantage over electricity.
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PRODUCTS, SERVICES AND MARKETING
As of September 30, 2000, the Partnership distributed propane to
approximately 968,000 customers from approximately 550 district locations. The
Partnership's operations are located primarily in the Northeast, Southeast,
Great Lakes 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 75%
of the Partnership's 2000 fiscal year sales (based on gallons sold) were to
retail accounts and approximately 25% were to wholesale customers. Sales to
residential customers in fiscal 2000 represented approximately 40% of retail
gallons sold, industrial/commercial customers 37%, motor fuel customers 15%, and
agricultural customers 8%. Residential customers represented 49% 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 and crop drying. In its wholesale operations, the Partnership principally
sells propane to large industrial end-users and other propane distributors.
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 30 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, 2000, PPX(R) was available at
approximately 10,700 retail locations throughout the country.
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PROPANE SUPPLY AND STORAGE
Supplies of propane from the Partnership's sources historically have
been readily available. During the year ended September 30, 2000, the
Partnership purchased approximately 65% of its propane from 10 suppliers,
including Enterprise Products Operating LP (approximately 18%), the BP companies
(approximately 17%) and Dynegy (approximately 13%). 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 2001. If supply from major sources were
interrupted, however, the cost of procuring product might be materially higher
and, at least on a short-term basis, margins could be affected. Aside from
Enterprise Products Operating LP, the BP companies and Dynegy, no single
supplier provided more than 10% of the Partnership's total propane supply in
fiscal year 2000. 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 2000 were on a contractual basis under 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, Rhode Island 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 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."
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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.
[PLOT POINTS FOR AVERAGE PROPANE SPOT MARKET PRICES]
LP History for Mt Be
Mont Belvieu Conway
1995 October Avg. Oct-95 30.946 32.7784
1995 November Avg. Nov-95 30.9531 32.7406
1995 December Avg. Dec-95 35.3219 38.1719
1996 January Avg. Jan-96 36 36.2415
1996 February Avg. Feb-96 40.8563 37.7688
1996 March Avg. Mar-96 37.2292 36.0119
1996 April Avg. Apr-96 35.5744 34.1071
1996 May Avg. May-96 34.9233 34.4773
1996 June Avg. Jun-96 34.925 36.3531
1996 July Avg. Jul-96 35.6339 37.2679
1996 August Avg. Aug-96 38.4403 37.9773
1996 September Avg. Sep-96 47.0156 44.7844
1996 October Avg. Oct-96 51.5734 51.5272
1996 November Avg. Nov-96 58.0493 63.4112
1996 December Avg. Dec-96 61.0446 84.2917
1997 January Avg. Jan-97 47.4545 63.392
1997 February Avg. Feb-97 38.7105 39.0197
1997 March Avg. Mar-97 38.5 37.2563
1997 April Avg. Apr-97 34.875 35.2614
1997 May Avg. May-97 35.3095 36.4762
1997 June Avg. Jun-97 34.4286 35.8631
1997 July Avg. Jul-97 34.9063 34.6278
1997 August Avg. Aug-97 37.0268 36.5268
1997 September Avg. Sep-97 38.6786 37.9524
1997 October Avg. Oct-97 39.8261 37.3207
1997 November Avg. Nov-97 35.9479 35.0035
1997 December Avg. Dec-97 33.571 31.3636
1998 January Avg. Jan-98 30.0656 28.2063
1998 February Avg. Feb-98 29.7862 28.3237
1998 March Avg. Mar-98 27.3892 27.8381
1998 April Avg. Apr-98 29.0565 29.4702
1998 May Avg. May-98 27.4188 27.8231
1998 June Avg. Jun-98 24.4205 24.8409
1998 July Avg. Jul-98 24.5398 24.5483
1998 August Avg. Aug-98 24.1161 23.8661
1998 September Avg. Sep-98 24.8304 24.0417
1998 October Avg. Oct-98 25.7188 24.5682
1998 November Avg. Nov-98 24.7862 23.2007
1998 December Avg. Dec-98 20.8949 18.7188
1999 January Avg. Jan-99 21.7467 19.6086
1999 February Avg. Feb-99 22.4342 20.5822
1999 March Avg. Mar-99 24.1005 23.4022
1999 April Avg. Apr-99 28.2619 27.5774
1999 May Avg. May-99 28.3063 26.8813
1999 June Avg. Jun-99 30.9517 28.679
1999 July Avg. Jul-99 37.2619 34.622
1999 August Avg. Aug-99 40.5085 37.5597
1999 September Avg. Sep-99 43.1786 42.4048
1999 October Avg. Oct-99 45.4554 43.3899
1999 November Avg. Nov-99 43.4406 38.7781
1999 December Avg. Dec-99 42.8304 35.1012
2000 January Avg. Jan-00 56.1086 42.3191
2000 February Avg. Feb-00 59.7219 47.2625
2000 March Avg. Mar-00 51.1277 47.6495
2000 April Avg. Apr-00 46.875 43.6414
2000 May Avg. May-00 51.3068 50.8068
2000 June Avg. Jun-00 55.4716 56.2244
2000 July Avg. Jul-00 54.875 56.2862
2000 August Avg. Aug-00 58.5408 63.5245
2000 September Avg. Sep-00 64.20945 70.9466
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. As
previously stated, we are unable to predict the ultimate impact that
deregulation of electric generation may have on propane's current competitive
price advantage. Since the 1970s, many new homes have been built to use
electrical heating systems and appliances. 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 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.
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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. Based on the most
recent annual survey by the American Petroleum Institute, the 1998 domestic
retail market for propane (annual sales for other than chemical uses) was
approximately 9.5 billion gallons and, based on LP-GAS magazine rankings, 1999
sales volume of the ten largest propane companies (including AmeriGas Partners)
represented approximately 41% of domestic retail sales. Management believes the
Partnership's 2000 retail volume represents approximately 8% of the domestic
retail market. 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, 2000, the Partnership owned approximately 83% 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 Rhode Island, the Partnership
leases storage with a 400,000 barrel capacity.
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, 2000,
the Partnership operated a fleet of approximately 165 transport trucks,
approximately 40% of which were leased. It owned approximately 320 transport
trailers and leased 270 railroad tank cars. In addition, the Partnership fleet
included approximately 2,600 bobtail and rack trucks, and approximately 1,800
other delivery and service vehicles. The vehicle fleet is 62% leased. Other
assets owned at September 30, 2000 included approximately 1.0 million stationary
storage tanks with typical capacities of 100 to 1,000 gallons and approximately
1.3 million portable propane cylinders with typical capacities of 4 to 100
gallons. The Partnership also owned more than 2,200 large volume tanks which are
used for its own storage requirements. Most of the Partnership's debt is secured
by liens and mortgages on the Partnership's real and personal property.
TRADE NAMES, TRADE AND SERVICE MARKS
The Partnership markets propane principally under the "AmeriGas(R),"
"America's Propane
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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 55% of the
Partnership's fiscal year 2000 retail sales volume and approximately 83% 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. 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 11 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
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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"). During
1999, the Research and Special Programs Administration ("RSPA"), a division of
the DOT, issued new regulations applicable to cargo tanks used to transport
propane and procedures for loading propane on and off cargo tanks. Specific
provisions include, among other things, revised attendance requirements for
unloading propane and new requirements for emergency discharge control
equipment, such as remote control devices that enable the driver to stop the
unloading process at a distance from the vehicle and passive systems that will
shut down loading and unloading without human intervention. The Partnership is
in compliance with the new regulations and is evaluating the equipment that is
being developed to comply with the passive systems requirements that will become
effective in July 2001.
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, 2000, the General
Partner had 4,874 employees, including 311 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.
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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 is 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, local gas distribution companies ("LDCs") like Gas Utility may
continue to sell gas to customers, and such sales of gas, as well as
distribution services provided by LDCs, continue to be subject to price
regulation by the Pennsylvania Public Utility Commission ("PUC").
Generally, Pennsylvania LDCs 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 LDCs to accept assignment of a
portion of the LDC'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. Gas Utility designed its restructuring
plan to ensure reliability of gas supply deliveries to Gas Utility on behalf of
residential and small commercial customers. The plan also provides for recovery
of costs associated with existing pipeline capacity and gas supply contracts. In
addition, the plan changes Gas Utility's base rates for firm customers. It also
changes the calculation of purchased gas cost rates. See "Utility Regulation and
Rates." The effect of these two changes is to lessen the financial impact of
volatility in revenues associated with customers who have the ability to switch
to another fuel and are served under "interruptible rates." On June 29, 2000,
the PUC entered its order ("Gas Restructuring Order") approving Gas Utility's
restructuring plan substantially as filed.
Effective October 1, 2000, all of Gas Utility's customers have 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. 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.
SERVICE AREA; REVENUE ANALYSIS
Gas Utility distributes natural gas to approximately 272,000 customers
in portions of 14 eastern and southeastern Pennsylvania counties through its
distribution system of approximately 4,500 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
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industries such as specialty metals, aluminum and glass. For the fiscal years
ended September 30, 2000, 1999 and 1998, revenues of Gas Utility accounted for
approximately 20%, 25% and 24%, 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 2000 fiscal year was
approximately 79.7 billion cubic feet ("bcf"). System sales of gas accounted for
approximately 40% of system throughput, while gas transported for commercial and
industrial customers (who bought their gas from others) accounted for
approximately 60% 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
2000 fiscal year, Gas Utility's residential customers represented 23% 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, storage and
transportation services from pipeline companies, and its own propane-air and
liquefied natural gas peak-shaving facilities. Purchases of natural gas in the
spot market are also made to reduce costs and manage storage inventory levels.
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 the 2000 fiscal year, Gas Utility purchased approximately 31.5
bcf of natural gas for sale to customers. Approximately 87% of the volumes
purchased were supplied under agreements with ten major suppliers of natural
gas. The remaining 13% of gas purchased was supplied by producers and marketers
under other arrangements, including multi-month agreements at spot prices. In
fiscal year 2001, Gas Utility will continue to obtain necessary gas supplies
under contracts no longer than 12 months in duration.
SEASONAL VARIATION
Because many of its customers use gas for heating purposes, Gas
Utility's sales are seasonal. Approximately 58% of fiscal year 2000 throughput
and approximately 71% of earnings before interest expense, income taxes,
depreciation and amortization occurred during the winter season from November
through March.
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. Competition with
fuel oil dealers is focused on industrial customers. Gas Utility responds to
this competition with marketing efforts designed to retain and grow its customer
base.
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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 distribution services. Under the Gas Competition Act, retail
customers now have the option to 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 for over 15 years. Gas Utility will
provide transportation services for residential and small commercial retail
customers who purchase natural gas from others, however, as of October 1, 2000,
no marketers had completed the requirements to serve those customers.
Commercial and industrial customers representing approximately 44% of
Gas Utility's transportation system throughput (27% of transportation revenues)
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 margins from these customers,
therefore, are affected by the difference, or "spread," between the customers'
delivered cost of gas and the customers' delivered alternate fuel cost. In
addition, other customers representing 30% of transportation system throughput
(17% of transportation revenues) 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 the latter 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, seven 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 2001. 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. Gas Utility also operates propane air and liquefied
natural gas facilities to meet winter peak service requirements.
During fiscal year 2000, Gas Utility supplied transportation service to
three 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
7,968 residential heating customers during fiscal year 2000, a 12% increase from
the previous year. Of those new customers, new home construction accounted for a
record 6,261 heating customers, an increase of approximately 10% from the prior
year. 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 total
number of new commercial and industrial customers was 1,226.
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'
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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's rates for transmission
and distribution services provided through June 30, 2001 are capped at levels in
effect on January 1, 1997. In addition, 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 all distribution
customers until December 31, 2002. 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.
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 3.67 cents per kilowatt hour ("kwh"), which will remain in
effect through December 31, 2000. The shopping credit will increase to 4.3 cents
per kwh in calendar years 2001 and 2002.
As noted above, Electric Utility's power generation rates are capped
until December 31,
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2002. 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 61,000
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 2000, about 52% of sales volume came from residential customers, 35% from
commercial customers and 13% from industrial customers. Electricity transported
for customers who purchased their power from others pursuant to the ECC Act
represented approximately 5% of this sales volume. For the 2000, 1999 and 1998
fiscal years, revenues of Electric Utility accounted for approximately 4%, 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. These two coal-fired stations provided
approximately 50% of Electric Utility's energy requirements during fiscal year
2000. 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. Electric Utility has contracts in place or
control over generation representing in the aggregate approximately 90% of its
expected on-peak energy requirements for fiscal year 2001. 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, 2000, alternate suppliers served approximately 3% 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.
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SEASONALITY
Sales and distribution of electricity for residential heating purposes
accounted for approximately 20% of the total sales of Electric Utility during
fiscal year 2000. Electricity competes with natural gas, oil, propane and other
heating fuels in this use. Approximately 53% of volume occurred during the six
coldest months of fiscal year 2000 (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 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 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 provides that Gas Utility must reduce
its purchased gas cost rates by $16.7 million in the first year of the base rate
increase. As a result, customers who purchase their gas from Gas Utility will
not be affected by the increase in base rates for twelve months.
Beginning in fiscal year 2002, Gas Utility must reduce its purchased
gas cost rates by an amount equal to the revenues it receives from customers
served under interruptible rates who do not obtain their own pipeline capacity.
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. Due to the required allocation of
interruptible revenues under the Gas Restructuring Order, beginning with fiscal
year 2001, Gas Utility operating results are expected to be more sensitive to
heating season weather and less sensitive to the market prices of alternative
fuel than in the past.
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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 provides for a one-time adjustment to Gas
Utility's PGC rates as described above, as well as ongoing adjustments to
reflect revenues, if any, from interruptible rate customers who do not obtain
their own pipeline capacity.
ELECTRIC UTILITY RATES
Electric Utility's rates for transmission and distribution services
provided through June 30, 2001 are capped at levels in effect on January 1,
1997. Its rates for electric generation are capped through December 2002. 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 for establishing rules to ensure that
Electric Utility recovers all its costs of providing generation when the rate
cap period ends in December 2002.
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
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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."
EMPLOYEES
At September 30, 2000, Utilities and its subsidiaries had 1,120
employees.
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UGI ENTERPRISES, INC.
UGI Enterprises, Inc. is a wholly owned subsidiary of UGI that was
formed in 1994. Through its subsidiaries, Enterprises is developing the domestic
and international businesses described below.
DOMESTIC BUSINESSES
NATURAL GAS AND ELECTRICITY MARKETING
In 1995, the gas marketing business previously conducted by a
subsidiary of Utilities was transferred to UGI Energy Services, Inc. ("Energy
Services"), a wholly owned subsidiary of Enterprises. Energy Services conducts
this business under the trade name GASMARK(R). GASMARK(R) sells natural
gas directly to approximately 3,000 commercial and industrial customers in the
Mid-Atlantic region through the transportation systems of 16 utility systems.
Energy Services also sells electricity to over 200 commercial and industrial
customers in Pennsylvania. During fiscal year 2000, GASMARK(R) acquired the
gas marketing operations of two large regional energy marketers. These
acquisitions doubled GASMARK(R)'s customer base.
RETAIL HEARTH PRODUCTS
In September 1999, Enterprises opened the first Hearth USA(TM) retail
store in Rockville, Maryland. Hearth USA(TM) is the nation's first large-scale
retailer to offer a wide selection of hearth, grill and spa products together
with installation services. A second store opened in the Washington, DC area
during fiscal year 2000. Enterprises expects to refine the Hearth retail concept
further prior to scheduling openings in other markets.
HVAC SERVICE
Effective September 1, 2000, a subsidiary of Enterprises acquired a
heating, ventilation and air-conditioning service business serving portions of
Utilities' gas service area and adjacent market areas, including portions of
northern Delaware. In the prior year, this business generated over $40 million
in annual revenues and employed over 450 people.
INTERNATIONAL BUSINESSES
ENERGY-RELATED JOINT VENTURES
During 1996, Enterprises formed a partnership with affiliates of Energy
Transportation Group, Inc. ("ETG") and North American World Trade, Ltd. to
develop, build and operate a liquefied petroleum gas ("LPG") import project in
Romania. ETG has extensive experience in the transportation of liquefied natural
gas, and North American World Trade, Ltd. is a consulting firm with Romanian
expertise. The joint venture is known as Black Sea LPG Romania, S.A. The
Romanian partners in this venture are Regia Autonoma a Gazelor Naturale "Romgaz"
Medias, the Romanian national gas utility; Regia Autonoma de Electricitate
"Renel", the Romanian national electric utility; and Rompetrol, S.A., a
privately-held energy services company. The economic climate in Romania in
recent years has slowed project development.
During 1998, Enterprises formed ChinaGas Partners, L.P. ("ChinaGas")
with affiliates of
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ETG 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. At September
30, 2000, retail sales of propane represented over 25% of Port Company total
sales. 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%.
PROPANE DISTRIBUTION
In September 1999, subsidiaries of Enterprises acquired all of the
stock of FLAGA GmbH, a privately-held company founded in 1947. FLAGA is the
largest retail propane distributor in Austria and a leading distributor in the
Czech Republic. FLAGA operates from 7 distribution locations in Austria, 8 in
the Czech Republic and 2 in Slovakia. FLAGA marketed approximately 39 million
gallons of propane in fiscal year 2000. Its assets totaled approximately $108
million at September 30, 2000.
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
2000, 1999 and 1998 fiscal years appears in Note 17 to the Consolidated
Financial Statements contained in our 2000 Annual Report and is incorporated in
this Report by reference.
EMPLOYEES
At September 30, 2000, UGI and its subsidiaries had 6,966 employees.
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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
Prior to the general availability of natural gas, in the 1800s through
the mid-1900s, most gas for lighting and heating nationwide was manufactured
from combustibles such as coal, oil and coke. 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
manufactured gas plants.
Utilities and its former subsidiaries owned and operated a number of
manufactured gas plants. Between 1882 and 1953, Utilities owned the stock of
subsidiary gas companies in Pennsylvania and elsewhere and also operated the
businesses of some gas companies under agreement. By the mid-1930s, Utilities
was one of the largest public utility holding companies in the country. Pursuant
to the requirements of the Public Utility Holding Company Act of 1935, Utilities
divested all of its utility operations other than those which now constitute the
Gas Utility and the Electric Utility.
Utilities has been notified of several sites outside Pennsylvania on
which (i) gas plants were formerly operated by it or owned or operated by its
former subsidiaries and (ii) either environmental agencies or private parties
are investigating the extent of environmental contamination or performing
environmental remediation. Utilities is currently litigating two claims against
it relating to out-of-state sites.
At one such site, in July 1993, Public Service Electric and Gas Company
("PSE&G") joined Utilities as a third-party defendant in the civil action
Fishbein Family Partnership v. PPG Industries, Inc., et al 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 Halladay Street gas plant
operated from approximately 1884 until 1950. PSE&G has asserted that Utilities
is liable for that portion of the costs associated with operations of the plant
between 1886 and 1940. PPG Industries, Inc. is also a defendant in the action
for costs associated with chemical contamination at the site unrelated to gas
plant operations. To date, that action has focused on the chemical contamination
allegedly associated with PPG Industries' activities and the third-party action
against Utilities has been stayed. Investigations of the site conducted to date
are insufficient to establish the extent of environmental remediation necessary,
if any. Hence, Utilities is unable to estimate the total cost of cleanup
associated with manufactured gas plant wastes at this site.
Management believes that Utilities should not have significant
liability in those instances in which a former subsidiary operated a
manufactured gas plant because Utilities generally is not legally liable for the
obligations of its subsidiaries. Under certain circumstances, however, a court
could find a parent company liable for environmental damage caused by a
subsidiary company when the parent company either (i) itself operated the
facility causing the environmental damage or (ii) otherwise so controlled the
subsidiary that the subsidiary's separate corporate form should be
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disregarded. There could be, therefore, significant future costs of an uncertain
amount associated with environmental damage caused by manufactured gas plants
that Utilities owned or directly operated, or that were owned or operated by
former subsidiaries of Utilities, if a court were to conclude that the
subsidiary's separate corporate form should be disregarded. See also Notes 1 and
11 to the Company's Consolidated Financial Statements.
Utilities has identified 40 sites in Pennsylvania where either (i)
Utilities formerly conducted some manufactured gas operations or (ii) Utilities
owns or at one time owned the site. Most of the sites are no longer owned by
Utilities and there have been no manufactured gas operations at any of the sites
since at least the early 1950s. Utilities or other parties are currently
conducting or have completed investigative and remedial activities at eleven of
the 40 sites. Based on the 1995 settlement agreement with the PUC relating to
Gas Utilities' 1995 base rate increase filing, rate relief will be permitted for
certain remediation expenditures on environmentally contaminated sites located
in Pennsylvania. Because of this, Utilities does not expect its costs for
Pennsylvania sites to be material to its results of operations.
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. See Note 11 to the Company's Consolidated Financial
Statements.
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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 2000.
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:
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
1999 FISCAL YEAR HIGH LOW
4th Quarter $24.688 $19.750
3rd Quarter 21.000 16.563
2nd Quarter 24.375 15.000
1st Quarter 25.750 21.625
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DIVIDENDS
Quarterly dividends on our Common Stock were paid in the 2000 and 1999
fiscal years as follows:
2000 FISCAL YEAR AMOUNT
4th Quarter $0.3875
3rd Quarter 0.375
2nd Quarter 0.375
1st Quarter 0.375
1999 FISCAL YEAR AMOUNT
4th Quarter $0.365
3rd Quarter 0.365
2nd Quarter 0.365
1st Quarter 0.365
HOLDERS
On December 1, 2000, UGI had 11,049 holders of record of Common Stock.
-22-
25
ITEM 6. SELECTED FINANCIAL DATA
Year Ended
September 30,
----------------------------------------------------------
2000 1999 1998 1997 1996
--------- --------- --------- --------- ---------
(Millions of dollars, except per share amounts)
FOR THE PERIOD:
INCOME STATEMENT DATA:
Revenues $ 1,761.7 $ 1,383.6 $ 1,439.7 $ 1,642.0 $ 1,557.6
========= ========= ========= ========= =========
Net income $ 44.7 $ 55.7 $ 40.3 $ 52.1 $ 39.5
========= ========= ========= ========= =========
Earnings per common share - diluted (a) $ 1.64 $ 1.74 $ 1.22 $ 1.57 $ 1.19
========= ========= ========= ========= =========
Cash dividends declared per common share $ 1.525 $ 1.47 $ 1.45 $ 1.43 $ 1.41
========= ========= ========= ========= =========
AT PERIOD END:
BALANCE SHEET DATA:
Total assets $ 2,278.8 $ 2,140.5 $ 2,074.6 $ 2,151.7 $ 2,133.0
========= ========= ========= ========= =========
Capitalization:
Debt:
Bank loans - AmeriGas Propane $ 30.0 $ 22.0 $ 10.0 $ 28.0 $ 15.0
Bank loans - UGI Utilities 100.4 87.4 68.4 67.0 50.5
Bank loans - other 4.3 11.6 - - -
Long-term debt
(including current maturities):
AmeriGas Propane 857.2 744.7 709.0 691.1 692.5
UGI Utilities 172.9 180.0 187.2 169.3 174.8
Other 85.5 91.6 8.2 8.6 9.0
--------- --------- --------- --------- ---------
Total debt 1,250.3 1,137.3 982.8 964.0 941.8
========= ========= ========= ========= =========
Minority interest in AmeriGas Partners 177.1 209.9 236.5 266.5 284.4
UGI Utilities preferred stock subject
to mandatory redemption 20.0 20.0 20.0 35.2 35.2
Common stockholders' equity 247.2 249.2 367.1 376.1 377.6
--------- --------- --------- --------- ---------
Total capitalization $ 1,694.6 $ 1,616.4 $ 1,606.4 $ 1,641.8 $ 1,639.0
========= ========= ========= ========= =========
RATIO OF CAPITALIZATION:
Total debt 73.8% 70.4% 61.2% 58.7% 57.5%
Minority interest 10.5% 13.0% 14.7% 16.3% 17.4%
UGI Utilities preferred stock 1.2% 1.2% 1.2% 2.1% 2.1%
Common stockholders' equity 14.5% 15.4% 22.9% 22.9% 23.0%
--------- --------- --------- --------- ---------
100.0% 100.0% 100.0% 100.0% 100.0%
========= ========= ========= ========= =========
(a) Basic earnings per share was $1.58 in 1997. For all other periods
presented, basic earnings per share was the same as diluted earnings
per share.
-23-
26
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 2000 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 page 20 of
the UGI 2000 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.
-24-
27
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:
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
NAME AGE POSITION
---- --- --------
Lon R. Greenberg 50 Chairman, Director, President
and Chief Executive Officer
Eugene V.N. Bissell 47 President and Chief Executive
Officer, AmeriGas Propane, Inc.
Robert J. Chaney 58 President and Chief Executive
Officer, UGI Utilities, Inc.
Brendan P. Bovaird 52 Vice President and General Counsel
Bradley C. Hall 47 Vice President - New Business Development
Anthony J. Mendicino 52 Vice President - Finance
and Chief Financial Officer
-25-
28
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.
Mr. Greenberg is also a director on the Mellon PSFS Advisory Board.
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.
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).
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
-26-
29
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.
-27-
30
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):
-28-
31
- ---------------------------------------------------------------------------------------------------------------------------------
INCORPORATION BY REFERENCE
- ---------------------------------------------------------------------------------------------------------------------------------
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
- ---------------------------------------------------------------------------------------------------------------------------------
3.1 (Second) Amended and Restated Articles of UGI Amendment No. 1 on 3.(3)(a)
Incorporation of the Company Form 8 to Form 8-B
(4/10/92)
3.2 Bylaws of UGI as in effect since October UGI Form 10-K (9/30/98) 3.2
27, 1998
- ---------------------------------------------------------------------------------------------------------------------------------
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 UGI Registration 4.3
18, 2000, between the Company and Mellon Statement No.
Bank, N.A., successor to Mellon Bank (East) 333-49080
N.A., as Rights Agent, and Assumption
Agreement dated April 7, 1992
- ---------------------------------------------------------------------------------------------------------------------------------
4.2 The description of the Company's Common UGI Form 8-B/A (4/17/96) 3.(4)
Stock contained in 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 AmeriGas Partners, Form 10-Q 10.8
among The Prudential Insurance Company of L.P.
America, Metropolitan Life Insurance (3/31/95)
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, AmeriGas Partners, Form 10-K (9/30/97) 4.5
1997 to Note Agreement dated as of April L.P.
12, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
4.6 Second Amendment dated as of September 15, AmeriGas Partners, Form 10-K (9/30/98) 4.6
1998 to Note Agreement dated as of April L.P.
12, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
4.7 Third Amendment dated as of March 23, 1999 AmeriGas Partners, Form 10-Q (3/31/99) 10.2
to Note Agreement dated as of April 12, 1995 L.P.
- ---------------------------------------------------------------------------------------------------------------------------------
4.8 Fourth Amendment dated as of March 16, 2000 AmeriGas Partners, Form 10-Q (6/30/00) 10.2
to Note Agreement dated as of April 12, 1995 L.P.
- ---------------------------------------------------------------------------------------------------------------------------------
-29-
32
- ---------------------------------------------------------------------------------------------------------------------------------
INCORPORATION BY REFERENCE
- ---------------------------------------------------------------------------------------------------------------------------------
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
- ---------------------------------------------------------------------------------------------------------------------------------
4.9 Second Amended and Restated Agreement of AmeriGas Partners, Form 8-K 1
Limited Partnership of AmeriGas Partners, L.P. (9/30/00)
L.P.
- ---------------------------------------------------------------------------------------------------------------------------------
10.1 Service Agreement (Rate FSS) dated as of UGI Form 10-K (9/30/95) 10.5
November 1, 1989 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 FERC Paragraph 61,060
(1993), order on rehearing, 64 FERC
Paragraph 61,365 (1993)
- ---------------------------------------------------------------------------------------------------------------------------------
10.2 Service Agreement (Rate FTS) dated June 1, Utilities Form 10-K (12/31/90) (10)o.
1987 between 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 FERC Paragraph 61,060
(1993), order on rehearing, 64 FERC
Paragraph 61,365 (1993)
- ---------------------------------------------------------------------------------------------------------------------------------
10.3 Transportation Service Agreement (Rate Utilities Form 10-K (12/31/90) (10)p.
FTS-1) dated November 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 FERC
Paragraph 61,060 (1993), order on rehearing,
64 FERC Paragraph 61,365 (1993)
- ---------------------------------------------------------------------------------------------------------------------------------
10.4 Amended and Restated Sublease Agreement UGI Form 10-K (9/30/94) 10.35
dated April 1, 1988 between Southwest Salt
Co. and AP Propane, Inc. (the "Southwest
Salt Co. Agreement")
- ---------------------------------------------------------------------------------------------------------------------------------
10.5 Letter dated July 8, 1998 pursuant to UGI Form 10-K (9/30/99) 10.5
Article 1, Section 1.2 of the Southwest
Salt Co. Agreement re: option to renew for
period of June 1, 2000 to May 31, 2005 and
related extension notice
- ---------------------------------------------------------------------------------------------------------------------------------
*10.6** UGI Corporation Directors Deferred
Compensation Plan Amended and Restated as
of January 1, 2000
- ---------------------------------------------------------------------------------------------------------------------------------
-30-
33
- ---------------------------------------------------------------------------------------------------------------------------------
INCORPORATION BY REFERENCE
- ---------------------------------------------------------------------------------------------------------------------------------
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
- ---------------------------------------------------------------------------------------------------------------------------------
10.7** UGI Corporation 1992 Stock Option and UGI Form 10-Q (6/30/92) (10)ee
Dividend Equivalent Plan, as amended May
19, 1992
- ---------------------------------------------------------------------------------------------------------------------------------
10.8** UGI Corporation Annual Bonus Plan dated UGI Form 10-Q (6/30/96) 10.4
March 8, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
*10.9** UGI Corporation Directors' Equity
Compensation Plan Amended and Restated as
of January 1, 2000
- ---------------------------------------------------------------------------------------------------------------------------------
10.10** UGI Corporation 1997 Stock Option and UGI Form 10-Q (3/31/97) 10.2
Dividend Equivalent Plan
- ---------------------------------------------------------------------------------------------------------------------------------
10.11** UGI Corporation 1992 Directors' Stock Plan UGI Form 10-Q (6/30/92) (10)ff
- ---------------------------------------------------------------------------------------------------------------------------------
10.12** UGI Corporation Senior Executive Employee UGI Form 10-K (9/30/97) 10.12
Severance Pay Plan effective January 1,
1997
- ---------------------------------------------------------------------------------------------------------------------------------
10.13** UGI Corporation 2000 Directors' Stock UGI Form 10-K (9/30/99) 10.13
Option Plan
- ---------------------------------------------------------------------------------------------------------------------------------
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 UGI Form 10-Q (6/30/98) 10
Retirement Plan Amended and Restated
effective October 1, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
10.17** Summary of Terms of UGI Corporation 1999 UGI Form 10-Q (6/30/99) 10
Restricted Stock Awards
- ---------------------------------------------------------------------------------------------------------------------------------
10.18 Amended and Restated Credit Agreement AmeriGas Form 10-K 10.1
dated as of September 15, 1997 among Partners, L.P.
AmeriGas Propane, L.P., AmeriGas Propane, (9/30/97)
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, AmeriGas Form 10-K (9/30/98) 10.2
1998 to Amended and Restated Credit Partners, L.P.
Agreement
- ---------------------------------------------------------------------------------------------------------------------------------
10.20 Second Amendment dated as of March 25, AmeriGas Form 10-Q (3/31/99) 10.1
1999 to Amended and Restated Credit Partners, L.P.
Agreement
- ---------------------------------------------------------------------------------------------------------------------------------
10.21 Third Amendment dated as of March 22, 2000 AmeriGas Form 10-Q (6/30/00) 10.3
to Amended and Restated Credit Agreement Partners, L.P.
- ---------------------------------------------------------------------------------------------------------------------------------
-31-
34
- ---------------------------------------------------------------------------------------------------------------------------------
INCORPORATION BY REFERENCE
- ---------------------------------------------------------------------------------------------------------------------------------
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
- ---------------------------------------------------------------------------------------------------------------------------------
10.22 Fourth Amendment dated as of June 6, 2000 AmeriGas Form 10-Q (6/30/00) 10.4
to Amended and Restated Credit Agreement Partners, L.P.
- ---------------------------------------------------------------------------------------------------------------------------------
10.23 Intercreditor and Agency Agreement dated as AmeriGas Form 10-Q (3/31/95) 10.2
of April 19, 1995 among AmeriGas Propane, Partners, L.P.
Inc., Petrolane Incorporated, 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.
- ---------------------------------------------------------------------------------------------------------------------------------
10.24 General Security Agreement dated as of AmeriGas Form 10-Q (3/31/95) 10.3
April 19, 1995 among AmeriGas Propane, Partners, L.P.
L.P., Bank of America National Trust and
Savings Association and Mellon Bank, N.A.
- ---------------------------------------------------------------------------------------------------------------------------------
10.25 Subsidiary Security Agreement dated as of AmeriGas Form 10-Q (3/31/95) 10.4
April 19, 1995 among AmeriGas Propane, Partners, L.P.
L.P., Bank of America National Trust and
Savings Association as Collateral Agent and
Mellon Bank, N.A. as Cash Collateral Agent
- ---------------------------------------------------------------------------------------------------------------------------------
10.26 Restricted Subsidiary Guarantee dated as of AmeriGas Form 10-Q (3/31/95) 10.5
April 19, 1995 by AmeriGas Propane, L.P. Partners, L.P.
for the benefit of Bank of America National
Trust and Savings Association, as
Collateral Agent
- ---------------------------------------------------------------------------------------------------------------------------------
10.27 Trademark License Agreement dated April 19, AmeriGas Form 10-Q (3/31/95) 10.6
1995 among UGI Corporation, AmeriGas, Inc., Partners, L.P.
AmeriGas Propane, Inc., AmeriGas Partners,
L.P. and AmeriGas Propane, L.P.
- ---------------------------------------------------------------------------------------------------------------------------------
10.28 Trademark License Agreement, dated April AmeriGas Form 10-Q (3/31/95) 10.7
19, 1995 among AmeriGas Propane, Inc., Partners, L.P.
AmeriGas Partners, L.P. and AmeriGas
Propane, L.P.
- ---------------------------------------------------------------------------------------------------------------------------------
10.29 Agreement dated as of May 1, 1996 between AmeriGas Form 10-K (9/30/97) 10.2
TE Products Pipeline Company, L.P. and Partners, L.P.
AmeriGas Propane, L.P.
- ---------------------------------------------------------------------------------------------------------------------------------
10.30 Pledge Agreement dated September 1999 UGI Form 10-K (9/30/99) 10.28
between Eastfield International Holdings,
Inc. and Reiffeisen Zentralbank Osterreich
Aktiengesellschaft ("RZB")
- ---------------------------------------------------------------------------------------------------------------------------------
10.31 Pledge Agreement dated September 1999 UGI Form 10-K (9/30/99) 10.29
between EuroGas Holdings, Inc. and RZB
- ---------------------------------------------------------------------------------------------------------------------------------
-32-
35
- ---------------------------------------------------------------------------------------------------------------------------------
INCORPORATION BY REFERENCE
- ---------------------------------------------------------------------------------------------------------------------------------
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
- ---------------------------------------------------------------------------------------------------------------------------------
10.32 Form of Guarantee Agreement dated September UGI Form 10-K (9/30/99) 10.30
1999 between UGI Corporation and RZB
relating to loan amount of EURO 74 million
- ---------------------------------------------------------------------------------------------------------------------------------
*10.33 Form of Guarantee Agreement dated September
2000 between UGI Corporation and RZB relating
to loan amount of EURO 14.9 million
- ---------------------------------------------------------------------------------------------------------------------------------
*10.34 Form of Guarantee Agreement dated September
2000 between UGI Corporation and RZB relating
to loan amount of EURO 9 million
- ---------------------------------------------------------------------------------------------------------------------------------
10.35** Description of Change of Control UGI Form 10-K (9/30/99) 10.33
arrangements for Messrs. Greenberg, Bovaird
and Mendicino
- ---------------------------------------------------------------------------------------------------------------------------------
10.36** Description of Change of Control UGI Form 10-K (9/30/99) 10.34
arrangement for Mr. Chaney
- ---------------------------------------------------------------------------------------------------------------------------------
10.37** Description of Change of Control AmeriGas Form 10-K (9/30/99) 10.31
arrangement for Mr. Bissell Partners, L.P.
- ---------------------------------------------------------------------------------------------------------------------------------
*10.38** Consulting Services Agreement dated as of
August 1, 2000 between Stephen D. Ban and
UGI Corporation
- ---------------------------------------------------------------------------------------------------------------------------------
*10.39** 1992 Non-Qualified Stock Option Plan, as
amended
- ---------------------------------------------------------------------------------------------------------------------------------
*10.40 Service Agreement for comprehensive
delivery service (Rate CDS) dated February
23, 1998 between UGI Utilities, Inc. and
Texas Eastern Transmission Corporation
- ---------------------------------------------------------------------------------------------------------------------------------
*10.41 Service Agreement for comprehensive
delivery service (Rate CDS) dated February
23, 1999 between UGI Utilities, Inc. and
Texas Eastern Transmission Corporation
- ---------------------------------------------------------------------------------------------------------------------------------
*13 Pages 13 through 47 of 2000 Annual Report
to Shareholders
- ---------------------------------------------------------------------------------------------------------------------------------
*21 Subsidiaries of the Registrant
- ---------------------------------------------------------------------------------------------------------------------------------
*23 Consent of Arthur Andersen LLP
- ---------------------------------------------------------------------------------------------------------------------------------
*27 Financial Data Schedule
- ---------------------------------------------------------------------------------------------------------------------------------
* 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 no Current Reports on Form 8-K during the last
quarter of fiscal year 2000.
-33-
36
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 19, 2000 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 19, 2000, 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
-34-
37
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below on December 19, 2000, 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
David I. J. Wang Director
- ---------------------------
David I. J. Wang
-35-
38
UGI CORPORATION AND SUBSIDIARIES
FINANCIAL INFORMATION
FOR INCLUSION IN ANNUAL REPORT ON FORM 10-K
YEAR ENDED SEPTEMBER 30, 2000
F-1
39
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 10, 2000, listed in the following index, are included in UGI's 2000
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 2000 Annual Report to
Shareholders is not to be deemed filed as part of this Report.
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,
2000 and 1999 26 and 27
For the years ended September 30, 2000,
1999 and 1998:
Consolidated Statements of Income 25
Consolidated Statements of Cash Flows 28
Consolidated Statements of Stockholders'
Equity 29
Index F-2
40
UGI CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES (CONTINUED)
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, 2000 and 1999 46
Financial Statement Schedules:
For the years ended September 30, 2000,
1999 and 1998:
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
41
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,
2000, incorporated by reference in this Form 10-K, and have issued our report
thereon dated November 10, 2000. 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 10, 2000
F-4
42
UGI CORPORATION AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
BALANCE SHEETS
(Millions of dollars)
September 30,
2000 1999
-------------- --------------
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 1.1 $ 0.4
Accounts receivable 0.1 0.1
Deferred income taxes 0.2 0.2
Prepaid expenses and other current assets 0.3 0.3
-------------- --------------
Total current assets 1.7 1.0
Investments in subsidiaries 315.9 271.3
Other assets 2.4 2.2
-------------- --------------
Total assets $ 320.0 $ 274.5
============== ==============
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Current liabilities:
Accounts and notes payable $ 9.6 $ 11.1
Accrued liabilities 12.4 10.7
-------------- --------------
Total current liabilities 22.0 21.8
Noncurrent liabilities 50.3 3.5
Commitments and contingencies
Common stockholders' equity:
Common Stock, without par value (authorized - 100,000,000 shares;
issued - 33,198,731 shares) 394.5 394.8
Accumulated deficit (4.9) (8.2)
Accumulated other comprehensive income - 0.5
Unearned compensation - restricted stock (0.7) (1.7)
-------------- --------------
388.9 385.4
Less treasury stock, at cost (141.2) (136.2)
-------------- --------------
Total common stockholders' equity 247.7 249.2
-------------- --------------
Total liabilities and common stockholders' equity $ 320.0 $ 274.5
============== ==============
Commitments and Contingencies
In addition to the guarantees of FLAGA debt described in Note 3 to
Consolidated Financial Statements, UGI Corporation is authorized to guarantee up
to $30 million of supplier and customer obligations of its wholly owned
second-tier subsidiary UGI Energy Services, Inc., and $5 million of lease
obligations of its wholly owned second-tier subsidiary Hearth USA, Inc.
S-1
43
UGI CORPORATION AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
STATEMENTS OF INCOME
(Millions of dollars, except per share amounts)
Year Ended
September 30,
----------------------------------------------------
2000 1999 1998
---------- ---------- ----------
Revenues $ - $ - $ -
Costs and expenses:
Operating and administrative expenses 8.1 10.4 10.7
Other income, net (8.4) (10.5) (10.4)
---------- ---------- ----------
(0.3) (0.1) 0.3
---------- ---------- ----------
Operating income (loss) 0.3 0.1 (0.3)
Interest expense on intercompany debt (2.0) - -
---------- ---------- ----------
Income (loss) before income taxes (1.7) 0.1 (0.3)
Income tax expense (benefit) (1.1) 0.3 (0.1)
---------- ---------- ----------
Loss before equity in income
of unconsolidated subsidiaries (0.6) (0.2) (0.2)
Equity in income
of unconsolidated subsidiaries 45.3 55.9 40.5
---------- ---------- ----------
Net income $ 44.7 $ 55.7 $ 40.3
========== ========== ==========
Earnings per common share:
Basic $ 1.64 $ 1.74 $ 1.22
========== ========== ==========
Diluted $ 1.64 $ 1.74 $ 1.22
========== ========== ==========
Average common shares outstanding (millions):
Basic 27.219 31.954 32.971
========== ========== ==========
Diluted 27.255 32.016 33.123
========== ========== ==========
S-2
44
UGI CORPORATION AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
STATEMENTS OF CASH FLOWS
(Millions of dollars)
Year Ended
September 30,
----------------------------------------------------
2000 1999 1998
---------- ---------- ----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES (a) $ 95.5 $ 178.0 $ 77.8
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in unconsolidated subsidiaries (95.8) (16.5) (34.8)
Other - - 2.5
----------- ---------- ----------
Net cash used by investing activities (95.8) (16.5) (32.3)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of dividends on Common Stock (41.2) (47.9) (47.6)
Issuance of intercompany long-term debt 47.5 - -
Issuance of Common Stock 3.8 4.7 8.5
Repurchases of Common Stock (9.1) (133.1) (11.3)
----------- ---------- ----------
Net cash used by financing activities 1.0 (176.3) (50.4)
----------- ---------- ----------
Cash and cash equivalents increase (decrease) $ 0.7 $ (14.8) $ (4.9)
=========== ========== ==========
Cash and cash equivalents:
End of period $ 1.1 $ 0.4 $ 15.2
Beginning of period 0.4 15.2 20.1
----------- ---------- ----------
Increase (decrease) $ 0.7 $ (14.8) $ (4.9)
=========== ========== ==========
(a) Includes dividends received from unconsolidated subsidiaries of $96.2,
$176.7 and $77.6, respectively, for the years ended September 30, 2000,
1999 and 1998.
S-3
45
UGI CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(Millions of dollars)
Charged
Balance at (credited) Balance at
beginning to costs and end of
of year expenses Other year
---------- ------------ ----------- ----------
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
========== ==========
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) ==========
S-4
46
UGI CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (CONTINUED)
(Millions of dollars)
Charged
Balance at (credited) Balance at
beginning to costs and end of
of year expenses Other year
---------- ------------ ----------- ----------
YEAR ENDED SEPTEMBER 30, 1998
- -----------------------------
Reserves deducted from assets in
the consolidated balance sheet:
Allowance for doubtful accounts $ 11.3 $ 8.4 $ (11.8)(1) $ 7.9
========== ==========
Allowance for amortization of deferred
financing costs - AmeriGas Propane $ 3.8 $ 1.6 $ - $ 5.4
========== ==========
Allowance for amortization of
other deferred costs - AmeriGas Propane $ 3.9 $ 0.7 $ - $ 4.6
========== ==========
Other reserves:
Self-insured property and casualty liability $ 48.5 $ 11.7 $ (11.7)(3) $ 48.5
========== ==========
Insured property and casualty liability $ 1.8 $ 2.9 $ (0.4)(3) $ 4.3
========== ==========
Environmental, litigation and other $ 22.6 $ (4.0) $ (4.7)(3) $ 13.9
========== ==========
(1) Uncollectible accounts written off, net of recoveries.
(2) Other adjustments.
(3) Payments, net.
S-5
47
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
10.6 UGI Corporation Directors Deferred Compensation Plan Amended
and Restated as of January 1, 2000
10.9 UGI Corporation Directors Equity Compensation Plan Amended
and Restated as of January 1, 2000
10.33 Form of Guarantee Agreement dated September 2000 between UGI
Corporation and RZB relating to loan amount of EURO 14.9
million
10.34 Form of Guarantee Agreement dated September 2000 between UGI
Corporation and RZB relating to loan amount of EURO 9
million
10.38 Consulting Services Agreement dated as of August 1, 2000
between Stephen D. Ban and UGI Corporation
10.39 1992 Non-Qualified Stock Option Plan, as amended
10.40 Service Agreement dated February 23, 1998 between UGI
Utilities, Inc. and Texas Eastern Transmission Corporation
10.41 Service Agreement dated February 23, 1999 between UGI
Utilities, Inc. and Texas Eastern Transmission Corporation
13 Pages 13 to 47 of the 2000 Annual Report
21 Subsidiaries of the Registrant
23 Consent of Arthur Andersen LLP
27 Financial Data Schedule