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Acquisition of Totalgaz | 6 Months Ended
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Mar. 31, 2016
Business Combinations [Abstract] |
Acquisition of Totalgaz | Note 15 — Acquisition of Totalgaz On May 29, 2015 (the “Acquisition Date”), UGI, through its wholly owned indirect subsidiary, France SAS, acquired all of the outstanding shares of Totalgaz SAS, a retail distributor of LPG in France. In November 2015, France SAS received €1.1 ($1.2) of cash as a result of the completion of the final working capital amount. The Totalgaz Acquisition nearly doubles our retail LPG distribution business in France and is consistent with our growth strategies, one of which is to grow our core business through acquisitions. The Company has accounted for the Totalgaz Acquisition using the acquisition method. At March 31, 2016, the allocation of the purchase price is substantially complete except for the valuation of certain liabilities associated with cylinder deposits and amounts related to deferred income tax assets and liabilities. These amounts are preliminary pending the obtaining of additional information. The Company expects to obtain additional information during the measurement period under GAAP of up to one year from the Acquisition Date as necessary to determine the final allocation of the purchase price. Accordingly, the fair value estimates presented below relating to these items are subject to change. The components of the Totalgaz purchase price allocation are as follows:
Assets acquired: |
Cash | $ | 86.8 |
Accounts receivable (a) | 170.3 |
Prepaid expenses and other current assets | 11.0 |
Property, plant and equipment | 375.6 |
Intangible assets (b) | 91.3 |
Other assets | 21.4 |
Total assets acquired | $ | 756.4 |
Liabilities assumed: |
Accounts payable | 109.2 |
Other current liabilities | 103.5 |
Deferred income taxes | 115.8 |
Other noncurrent liabilities | 117.5 |
Total liabilities assumed | $ | 446.0 |
Goodwill | 186.2 |
Net consideration transferred (including working capital adjustments) | $ | 496.6 |
(a) | Approximates the gross contractual amounts of receivables acquired.
(b) | Comprises $79.3 of customer relationships and $12.0 of tradenames.
The excess of the purchase price for the Totalgaz Acquisition over the preliminary fair values of the assets acquired and liabilities assumed has been reflected as goodwill, assigned to the UGI France reportable segment, and results principally from anticipated synergies and value creation resulting from the Company’s combined LPG businesses in France. The goodwill is not deductible for income tax purposes. The Company recognized $7.2 and $11.0 of direct transaction-related costs associated with the Totalgaz Acquisition during the three and six months ended March 31, 2015, respectively, which are reflected primarily in operating and administrative expenses on the Condensed Consolidated Statements of Income. The following table presents unaudited pro forma revenues, net income attributable to UGI Corporation and earnings per share data for the three and six months ended March 31, 2015 as if the Totalgaz Acquisition had occurred on October 1, 2014. The unaudited pro forma consolidated information reflects the historical results of Totalgaz SAS and its subsidiaries after giving effect to adjustments directly attributable to the transaction, including depreciation, amortization, interest expense, intercompany eliminations and related income tax effects. The unaudited pro forma net income also reflects the effects of the issuance of the €600 term loan under France SAS’s 2015 Senior Facilities Agreement and the associated repayment of the term loan outstanding under Antargaz’ 2011 Senior Facilities Agreement as if such transactions had occurred on October 1, 2014.
| Three Months Ended March 31, 2015 |  | Six Months Ended March 31, 2015
| As Reported |  | Pro Forma Adjusted |  | As Reported |  | Pro Forma Adjusted
Revenues | $ | 2,455.6 |  |  | $ | 2,601.8 |  |  | $ | 4,460.2 |  |  | $ | 4,786.3 |
Net income attributable to UGI Corporation | $ | 246.5 |  |  | $ | 287.3 |  |  | $ | 280.6 |  |  | $ | 333.9 |
Earnings per common share attributable to UGI Corporation stockholders: |  |  |  |  |  |  |
Basic | $ | 1.42 |  |  | $ | 1.66 |  |  | $ | 1.62 |  |  | $ | 1.93 |
Diluted | $ | 1.40 |  |  | $ | 1.64 |  |  | $ | 1.60 |  |  | $ | 1.90 |
The unaudited pro forma consolidated information is not necessarily indicative of the results that would have occurred had the Totalgaz Acquisition occurred on the date indicated nor are they necessarily indicative of future operating results. In connection with the Totalgaz Acquisition, the Company agreed with the French Competition Authority (the “FCA”) to divest certain assets and investments of Totalgaz SAS and certain assets of Antargaz located in France no later than August 15, 2016. Following the closing of the Totalgaz Acquisition, two competitors in the French LPG distribution market challenged the decision of the FCA. The competitors’ request for interim measures suspending the effectiveness of the agreed remedies was denied by the supreme administrative court (conseil d’etat). Proceedings on the merits are continuing. While UGI cannot predict the final outcome of these proceedings at this time, we believe the FCA and the Company have strong defenses to the claims and intend to vigorously defend against them. For additional information regarding the Totalgaz Acquisition, see Note 4 to the Company’s 2015 Annual Report.

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