UGI Corporation · NYSE:UGI
UGI — Merger or Acquisition (April 2019)
23 slides from UGI's merger presentation, Apr 2, 2019
Slide 1: UGI/APU Transaction
UGI/APU TRANSACTION April 2, 2019
Slide 2: About This Presentation
About This Presentation All statements in this presentation (and oral statements made regarding the subjects of this communication) other than historical facts are forward-looking statements. The safe harbor provisions under Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Slide 3: Legal Disclaimer
Legal Disclaimer No Offer or Solicitation This presentation is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities pursuant to the proposed transaction or otherwise, nor shall there be any sale of securities in any jurisdict
Slide 4: Transaction Summary
Transaction Summary • UGI Corp (NYSE: UGI) has executed a definitive agreement to acquire the 69.2 million common units of AmeriGas Partners, L.P. (NYSE: APU) not already owned by UGI for a total transaction value of approximately $4.6 billion1 • AmeriGas unitholders will receive 0.500 shares of UGI
Slide 5: Conclusion of 120-day Strategic Review
Conclusion of 120-day Strategic Review Debt/EBITDA Distribution Coverage 6.0 1.4 Long-Term Target 1.2 5.0 UGI CORPORATION 5 1.0 Long-Term Target 4.0 0.8 3.0 0.6 2.0 0.4 FY14 FY15 FY16 FY17 FY 18 FY14 FY15 FY16 FY17 FY18 Transaction supports a strong and stable AmeriGas for the long term
Slide 6: Compelling Long-Term Value
Compelling Long-Term Value • Strong business with exceptional cash flow • Expected to increase UGI’s cash flow1 per share by over 15% for FY20 on a fully consolidated basis • Over $200 million in additional annual free cash flow to UGI UGI CORPORATION • Funds growth opportunities across the business
Slide 7: UGI Corporation's Strategy
UGI Corporation’s Strategy ✓ Build businesses of scale Be the preferred provider in all markets • Leverage our position as the last link in energy distribution • Protect and enhance our brands ✓ Leverage successful programs and services across the UGI CORPORATION 7 Capitalize on synergies and levera
Slide 8: Outperformance Driven by Cadence of Disciplined Investments
Outperformance Driven by Cadence of Disciplined Investments 2450 Total Shareholder Return CAGR (as of 12/31/18) Manning LNG Project Sunbury Pipeline project 1 Year 5 Year 10 Year 20 Year Finagaz acquisition nearly doubles volume in France 1950 UGI Corp 15.9% 16.7% 15.8% 16.3% Union Dale S&P 500 -4.4
Slide 9: Cash Engine Drives Future EPS and Dividend Growth
Cash Engine Drives Future EPS and Dividend Growth $1.1 - $1.4 Billion Base Business & Cash from Operations UGI Dividends Regulatory 62% Propane and Share 38% Nat Gas Earnings Growth Free Cash Flow increases Repurchase over $200 million UGI CORPORATION 9 Investment Capital Capital and M&A $150M - $20
Slide 10: Portfolio Mix Remains Balanced
Portfolio Mix Remains Balanced 2018 Adjusted EPS1 2018 Pro Forma Adjusted EPS1 UGI CORPORATION 10 46% 44% 54% 56% Propane = 46% Propane = 56% 1Adjusted EPS is a non-GAAP measure. Excludes Corporate & Other.
Slide 11: Record Capital Deployment
Record Capital Deployment CAPEX expected to increase to ~$900 million in FY20 Capital Expenditures: 2018-2022 Capital Expenditures: 2013-2017 $3.7 Billion $2.6 Billion UGI CORPORATION 11 30% 36% 64% 70% Natural Gas LPG Natural Gas LPG
Slide 12: Cash Flow Compared to Peers Doubles on Pro Forma Basis
Cash Flow Compared to Peers Doubles on Pro Forma Basis 36% 10 Year Free Cash Flow(1) / 10 Year EBITDA S&P Utilities Index – Multi-Utilities 15% 11% 8% 7% UGI CORPORATION 2% 12 -1% -11% -20% -22% -32% UGI Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 (1) UGI Free Cash Flow =
Slide 13: UGI to Increase Dividend by 25%
UGI to Increase Dividend by 25% • Two part increase • $0.16 increase to next quarterly dividend and an additional $0.10 following the closing of the transaction $1.40 7.1% CAGR $1.302 $1.20 Above 4% Long-Term Target Dividends per Share1 $1.00 $1.04 $1.00 $0.95 UGI CORPORATION $0.91 13 $0.80 $0.87 $0
Slide 14: Benefits to AmeriGas Investors
Benefits to AmeriGas Investors • Provides unitholders a substantial premium to the value of their units • Enables unitholders to share in the value of UGI, which has a diversified asset portfolio and a history of meeting long-term commitments to shareholders including 6% - 10% annual earnings growth
Slide 15: Guidance Update
Guidance Update UGI • UGI is updating FY19 guidance for Adjusted EPS to $2.40 - $2.601 from $2.75 - $2.95 • Significantly warmer-than-normal winter weather in our European markets • Limited weather volatility during 2019 heating season negatively impacted our capacity management business • UGI remai
Slide 16: Summary
Summary • AmeriGas 120-day strategic review concluded • Transaction provides unitholders an immediate 13.5% premium to the value of their units and an opportunity to share in the value of UGI UGI CORPORATION • Accretive to UGI beginning in FY20 16 • Increases cash flow to UGI to support growth inves
Slide 17: Q&A
Q&A
Slide 18: Appendix
Appendix
Slide 19: UGI Supplemental Footnotes
UGI Supplemental Footnotes • Management uses “Adjusted Earnings per Share,“ “Free Cash Flow“ and “Adjusted EBITDA,” all of which are non-GAAP financial measures, when evaluating UGI’s and AmeriGas’ overall performance. For the periods presented, Adjusted Earnings per Share is earnings per share afte
Slide 20: AmeriGas Supplemental Footnotes
AmeriGas Supplemental Footnotes • EBITDA and Adjusted EBITDA are not measures of performance or financial condition under GAAP. Management believes EBITDA and Adjusted EBITDA are meaningful non-GAAP financial measures used by investors to compare the Partnership's operating performance with that of
Slide 21: Transaction Value
Transaction Value ($69.2MM x 0.500) X $55.39 = $1.92BN Equity Converted AmeriGas units times UGI’s current stock price + + Cash $7.63 X 69.2MM = $528MM Cash consideration for each common unit of AmeriGas + UGI CORPORATION + 21 Debt $2.9BN X 0.74 = $2.15BN = Proportion of total debt related to 74% ow
Slide 22: UGI Corporation Free Cash Flow
UGI Corporation Free Cash Flow ($ in millions) Year Ended September 30, 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Net Cash Provided By Operating Activities $ 178.5 $ 141.9 $ 132.7 $ 203.5 $ 247.5 $ 249.1 $ 260.7 $ 437.7 $ 279.4 $ 456.2 $ 464.4 Less: Expenditures for property, plant, and
Slide 23: 2018 UGI Corporation Adjusted EPS by Segment
2018 UGI Corporation Adjusted EPS by Segment UGI CORPORATION 23