Note 21 — Segment Information

Our operations comprise six reportable segments generally based upon products or services sold, geographic location and regulatory environment. As more fully described below, effective October 1, 2015, the composition of our UGI Utilities (formerly Gas Utility) and Energy Services reportable segments changed to include certain operating segments previously reflected in Corporate & Other. Our reportable segments comprise: (1) AmeriGas Propane; (2) an international LPG segment comprising UGI France; (3) an international LPG segment principally comprising Flaga and AvantiGas; (4) UGI Utilities; (5) Energy Services; and (6) Electric Generation. We refer to both international segments together as “UGI International” and Energy Services and Electric Generation together as “Midstream & Marketing.”

AmeriGas Propane derives its revenues principally from the sale of propane and related equipment and supplies to retail customers in all 50 states. UGI France derives its revenues principally from the distribution of LPG to retail customers in France and, to a lesser extent, Belgium, the Netherlands and Luxembourg, and also from the marketing of natural gas in France and Belgium. Flaga & Other derives its revenues principally from the distribution of LPG to customers in northern, central and eastern Europe and the United Kingdom. UGI Utilities derives its revenues principally from the sale and distribution of natural gas to customers in eastern, northeastern and central Pennsylvania and, to a lesser extent, from the sale and distribution of electricity in two northeastern Pennsylvania counties. Energy Services derives its revenues principally from the sale of natural gas and, to a lesser extent, electricity, LPG and fuel oil as well as revenues and fees from storage, pipeline transportation and natural gas production activities primarily in the Mid-Atlantic and Northeast regions of the U.S. Energy Services also derives its revenues from contracting services provided by HVAC to customers located primarily in the Mid-Atlantic region of the U.S. Electric Generation derives its revenues principally from the sale of electricity through PJM, a regional electricity transmission organization in the eastern U.S.

As a result of changes in the composition of information reported to our chief operating decision maker (“CODM”) associated with our regulated utility operations, effective October 1, 2015, we began including our Electric Utility operating segment with our Gas Utility operating segment which we collectively refer to as “UGI Utilities.” Also, as a result of changes in segment management and reporting for HVAC, effective October 1, 2015, we began including our HVAC operating segment with our Energy Services operating segment. Previously, Electric Utility and HVAC, neither of which met the quantitative thresholds for presentation as a reportable segment under GAAP, were reflected in “Corporate & Other” in our segment information. In accordance with GAAP, prior-year amounts have been restated to reflect these changes.

The accounting policies of our reportable segments are the same as those described in Note 2. We evaluate AmeriGas Propane’s performance principally based upon the Partnership’s earnings before interest expense, income taxes, depreciation and amortization as adjusted for the effects of gains and losses on commodity derivative instruments not associated with current-period transactions and other gains and losses that competitors do not necessarily have (“Partnership Adjusted EBITDA”). Although we use Partnership Adjusted EBITDA to evaluate AmeriGas Propane’s profitability, it should not be considered as an alternative to net income (as an indicator of operating performance) or as an alternative to cash flow (as a measure of liquidity or ability to service debt obligations) and is not a measure of performance or financial condition under GAAP. Our definition of Partnership Adjusted EBITDA may be different from that used by other companies.

We evaluate the performance of our other reportable segments principally based upon their income before income taxes as adjusted for gains and losses on commodity derivative instruments not associated with current-period transactions. Net gains and losses on commodity derivative instruments not associated with current-period transactions are reflected in Corporate & Other because the Company’s CODM does not consider such items when evaluating the financial performance of our operating segments.

No single customer represents more than ten percent of our consolidated revenues. In addition, all of our reportable segments’ revenues, other than those of UGI International, are derived from sources within the United States, and all of our reportable segments’ long-lived assets, other than those of UGI International, are located in the United States.



														Midstream & Marketing					UGI International
	Total			Elim- inations				AmeriGas Propane			UGI Utilities			Energy Services			Electric Generation		UGI France			Flaga & Other			Corporate & Other (b)
2016
Revenues	$	5,685.7		$	(143.9	)	(c)	$	2,311.8		$	768.5		$	813.8		$	62.8	$	1,344.7		$	524.1		$	3.9
Cost of sales	$	2,437.5		$	(141.5	)	(c)	$	864.8		$	289.8		$	583.7		$	28.5	$	597.6		$	306.2		$	(91.6	)
Operating income	$	988.0		$	0.2			$	356.3		$	200.9		$	141.8		$	4.9	$	166.1		$	40.5		$	77.3
Loss from equity investees	$	(0.2	)	$	—			$	—		$	—		$	—		$	—	$	(0.2	)	$	—		$	—
Loss on extinguishments of debt	$	(48.9	)	$	—			$	(48.9	)	$	—		$	—		$	—	$	—		$	—		$	—
Interest expense	$	(228.9	)	$	—			$	(164.1	)	$	(37.6	)	$	(2.1	)	$	—	$	(20.8	)	$	(3.6	)	$	(0.7	)
Income before income taxes	$	710.0		$	0.2			$	143.3		$	163.3		$	139.7		$	4.9	$	145.1		$	36.9		$	76.6
Net income attributable to UGI	$	364.7		$	0.1			$	43.2		$	97.4		$	83.5		$	3.6	$	84.2		$	27.4		$	25.3
Depreciation and amortization	$	400.9		$	(0.2	)		$	190.0		$	67.3		$	17.1		$	13.5	$	90.5		$	21.9		$	0.8
Noncontrolling interests’ net income (loss)	$	124.1		$	—			$	75.9		$	—		$	—		$	—	$	(0.1	)	$	0.1		$	48.2
Partnership Adjusted EBITDA (a)								$	543.0
Total assets	$	10,847.2		$	(136.6	)		$	4,071.8		$	2,743.1		$	765.6		$	272.6	$	2,338.8		$	526.3		$	265.6



														Midstream & Marketing					UGI International
	Total			Elim- inations				AmeriGas Propane			UGI Utilities			Energy Services			Electric Generation		UGI France				Flaga & Other			Corporate & Other (b)
Short-term borrowings	$	291.7		$	—			$	153.2		$	112.5		$	25.5		$	—	$	0.4			$	0.1		$	—
Capital expenditures	$	604.6		$	—			$	101.7		$	262.5		$	136.8		$	3.6	$	75.8			$	24.1		$	0.1
Investments in equity investees	$	25.9		$	—			$	—		$	—		$	17.4		$	—	$	4.6			$	3.9		$	—
Goodwill	$	2,989.0		$	—			$	1,978.3		$	182.1		$	11.6		$	—	$	723.2			$	93.8		$	—

2015 (e)
Revenues	$	6,691.1		$	(231.4	)	(c)	$	2,885.3		$	1,041.6		$	1,105.5		$	75.9	$	1,122.2			$	686.3		$	5.7
Cost of sales	$	3,736.5		$	(227.6	)	(c)	$	1,340.0		$	510.8		$	840.2		$	32.2	$	628.0			$	492.0		$	120.9
Operating income (loss)	$	834.9		$	(0.9	)		$	427.6		$	241.7		$	169.6		$	13.0	$	75.9			$	36.9		$	(128.9	)
Loss from equity investees	$	(1.2	)	$	—			$	—		$	—		$	—		$	—	$	(1.2	)		$	—		$	—
Interest expense	$	(241.9	)	$	—			$	(162.8	)	$	(41.1	)	$	(2.1	)	$	—	$	(31.6	)	(d)	$	(3.6	)	$	(0.7	)
Income (loss) before income taxes	$	591.8		$	(0.9	)		$	264.8		$	200.6		$	167.5		$	13.0	$	43.1			$	33.3		$	(129.6	)
Net income (loss) attributable to UGI	$	281.0		$	(0.6	)		$	61.0		$	121.1		$	97.9		$	9.6	$	27.5			$	25.2		$	(60.7	)
Depreciation and amortization	$	374.1		$	—			$	194.9		$	63.5		$	15.5		$	12.5	$	63.7			$	23.2		$	0.8
Noncontrolling interests’ net income (loss)	$	133.0		$	—			$	167.9		$	—		$	—		$	—	$	—			$	(0.1	)	$	(34.8	)
Partnership Adjusted EBITDA (a)								$	619.2
Total assets	$	10,514.2		$	(90.4	)		$	4,128.4		$	2,506.0		$	687.6		$	282.0	$	2,331.8			$	529.1		$	139.7
Short-term borrowings	$	189.9		$	—			$	68.1		$	71.7		$	49.5		$	—	$	0.1			$	0.5		$	—
Capital expenditures	$	475.4		$	—			$	102.0		$	197.7		$	71.3		$	16.7	$	65.0			$	22.5		$	0.2
Investments in equity investees	$	16.2		$	—			$	—		$	—		$	6.4		$	—	$	6.0			$	3.8		$	—
Goodwill	$	2,953.4		$	—			$	1,956.0		$	182.1		$	11.6		$	—	$	721.4			$	82.3		$	—

2014 (e)
Revenues	$	8,277.3		$	(321.3	)	(c)	$	3,712.9		$	1,086.9		$	1,388.6		$	85.1	$	1,295.5			$	1,026.9		$	2.7
Cost of sales	$	5,175.7		$	(317.7	)	(c)	$	2,107.1		$	562.9		$	1,110.2		$	39.6	$	848.1			$	809.9		$	15.6
Operating income (loss)	$	1,005.6		$	0.2			$	472.0		$	246.4		$	178.7		$	18.1	$	79.1			$	38.4		$	(27.3	)
Loss from equity investees	$	(0.1	)	$	—			$	—		$	—		$	—		$	—	$	(0.1	)		$	—		$	—
Interest expense	$	(237.7	)	$	—			$	(165.6	)	$	(38.5	)	$	(2.9	)	$	—	$	(25.1	)		$	(4.9	)	$	(0.7	)
Income (loss) before income taxes	$	767.8		$	0.2			$	306.4		$	207.9		$	175.8		$	18.1	$	53.9			$	33.5		$	(28.0	)
Net income (loss) attributable to UGI	$	337.2		$	—			$	63.0		$	124.1		$	104.1		$	12.6	$	20.6			$	27.7		$	(14.9	)
Depreciation and amortization	$	362.9		$	—			$	197.2		$	59.2		$	13.5		$	10.7	$	54.5			$	27.1		$	0.7
Noncontrolling interests’ net income (loss)	$	195.4		$	—			$	195.8		$	—		$	—		$	—	$	(0.4	)		$	—		$	—
Partnership Adjusted EBITDA (a)								$	664.8
Total assets	$	10,062.6		$	(86.5	)		$	4,351.4		$	2,352.1		$	601.5		$	277.7	$	1,656.8			$	643.6		$	266.0
Short-term borrowings	$	210.8		$	—			$	109.0		$	86.3		$	7.5		$	—	$	—			$	8.0		$	—
Capital expenditures	$	436.4		$	—			$	113.9		$	164.2		$	69.2		$	15.6	$	50.2			$	23.0		$	0.3
Investments in equity investees	$	0.6		$	—			$	—		$	—		$	—		$	—	$	—			$	0.6		$	—
Goodwill	$	2,833.4		$	—			$	1,945.1		$	182.1		$	12.6		$	—	$	601.2			$	92.4		$	—


(a)	The following table provides a reconciliation of Partnership Adjusted EBITDA to AmeriGas Propane income before income taxes:



	2016			2015			2014
Partnership Adjusted EBITDA	$	543.0		$	619.2		$	664.8
Depreciation and amortization	(190.0		)	(194.9		)	(197.2		)
Interest expense	(164.1		)	(162.8		)	(165.6		)
Loss on extinguishments of debt	(48.9		)	—			—
Noncontrolling interests (i)	3.3			3.3			4.4
Income before income taxes	$	143.3		$	264.8		$	306.4


(i)	Principally represents the General Partner’s 1.01% interest in AmeriGas OLP.

(b)

Corporate & Other results principally comprise (1) revenues and expenses of UGI’s captive general liability insurance company and UGI’s corporate headquarters facility and (2) UGI Corporation’s unallocated corporate and general expenses and interest income. In addition, Corporate & Other results also include the effects of net pre-tax gains and (losses) on commodity derivative instruments not associated with current-period transactions (including such amounts attributable to noncontrolling interests) totaling $91.6, $(119.1) and $(18.0) in Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. Corporate & Other assets principally comprise cash and cash equivalents of UGI and its captive insurance company; UGI corporate headquarters’ assets; and our investment in a private equity partnership. Through March 2014, Corporate & Other also had an intercompany loan. The intercompany loan interest is removed in the segment presentation.


(c)	Represents the elimination of intersegment transactions principally among Midstream & Marketing, UGI Utilities and AmeriGas Propane.


(d)	UGI France interest expense includes pre-tax costs of $10.3 associated with an extinguishment of debt (see Note 5).


(e)	Restated to reflect (1) the current-year changes in the presentation of our UGI Utilities and Energy Services reportable segments and (2) the adoption of new accounting guidance related to debt issuance costs (see Note 2 and Note 3).