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Income Tax Reform | 9 Months Ended
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Jun. 30, 2018
Income Tax Disclosure [Abstract] |
Income Tax Reform | Note 5 — Income Tax Reform U.S. Tax Reform On December 22, 2017, the TCJA was enacted into law. Among the significant changes resulting from the law, the TCJA reduces the U.S. federal income tax rate from 35% to 21%, effective January 1, 2018, creates a territorial tax system with a one-time mandatory “toll tax” on previously un-repatriated foreign earnings, and allows for immediate capital expensing of certain qualified property. It also applies restrictions on the deductibility of interest expense, eliminates bonus depreciation for regulated utilities and applies a broader application of compensation limitations. In accordance with GAAP as determined by ASC 740, “Income Taxes,” we are required to record the effects of tax law changes in the period enacted. As further discussed below, our results for the three and nine months ended June 30, 2018, contain provisional estimates of the impact of the TCJA. Provisional amounts recorded in the quarter ended December 31, 2017, were adjusted in the quarters ended March 31, 2018 and June 30, 2018 to reflect the effects of items finalized by the filing of tax returns or by changes in estimates and judgments. In accordance with SEC Staff Accounting Bulletin (“SAB”) No. 118, we will adjust these provisional amounts as further information becomes available and as we refine our calculations. As permitted by SAB No. 118, these adjustments may occur during a reasonable “measurement period” not to exceed twelve months from the date of enactment. As a result of the TCJA, during the three and nine months ended June 30, 2018, we reduced our net deferred income tax liabilities by $0.8 and $389.6, respectively, due to the remeasuring of our existing federal deferred income tax assets and liabilities as of the date of the enactment of the TCJA on December 22, 2017, and as a result of adjusting prior provisional amounts during the quarter ended June 30, 2018. Because part of the reduction to our net deferred income taxes relates to UGI Utilities’ regulated utility plant assets, as further described below, most of UGI Utilities’ reduction in deferred income taxes is not being recognized immediately in income tax expense. Discrete deferred income tax adjustments recorded during the three and nine months ended June 30, 2018, which reduced (increased) income tax expense consisted primarily of the following items:
|  | Provisional amounts - Six months ended March 31, 2018 |  | Changes to provisional amounts - Three months ended June 30, 2018 |  | Provisional amounts - Nine months ended June 30, 2018
Reduction in net deferred tax liabilities in the U.S. from the reduction of the U.S. tax rate |  | $ | 180.3 |  |  | $ | 0.8 |  |  | $ | 181.1 |
Establishment of valuation allowances related to deferred tax assets impacted by TCJA |  | (7.6 | ) |  | — |  |  | (7.6 | )
Toll-tax on un-repatriated earnings |  | (1.4 | ) |  | — |  |  | (1.4 | )
Total discrete deferred income tax adjustments |  | $ | 171.3 |  |  | $ | 0.8 |  |  | $ | 172.1 |
Impact on earnings per share: |  |  |  |  |  |
Basic earnings per share |  | $ | 0.99 |  |  | $ | — |  |  | $ | 0.99 |
Diluted earnings per share |  | $ | 0.97 |  |  | $ | — |  |  | $ | 0.97 |
In order for UGI Utilities’ regulated utility plant assets to continue to be eligible for accelerated tax depreciation, current law requires that excess deferred federal income taxes resulting from the remeasurement of deferred taxes on regulated utility plant be amortized no more rapidly than over the remaining lives of the assets that gave rise to the excess deferred income taxes. As a result of the TCJA, in December 2017, UGI Utilities recorded a regulatory liability of $216.1 associated with excess deferred federal income taxes related to its regulated utility plant assets. This regulatory liability was increased, and a federal deferred income tax asset was recorded, in the amount of $87.8 to reflect the tax benefit generated by the amortization of the excess deferred federal income taxes. This regulatory liability is being amortized to income tax expense over the remaining lives of the assets that gave rise to the excess deferred income taxes. For further information on this regulatory liability, see Note 7. For the three and nine months ended June 30, 2018, we included the estimated impacts of the TCJA in determining our estimated annual effective income tax rate. We are subject to a blended federal tax rate of 24.5% for Fiscal 2018 because our fiscal year contains the effective date of the rate change from 35% to 21%. As a result, the U.S. federal income tax rate included in our estimated annual effective tax rate is based on the 24.5% blended rate for Fiscal 2018. For the three and nine months ended June 30, 2018, the effects of the tax law changes on current-period results (excluding the one-time impacts described above) decreased income tax expense by approximately $6.1 and $60.6, respectively. As further described in Note 7, on May 17, 2018, the PUC issued a Temporary Rates Order for all PUC-regulated utilities with regard to federal tax reform. Among other things, the Temporary Rates Order requires Pennsylvania utilities to establish a regulatory liability for tax benefits that accrued during the period January 1, 2018 through June 30, 2018, resulting from the change in the federal income tax rate from 35% to 21%. During the three months ended June 30, 2018, UGI Utilities reduced its combined utility revenues by $22.7 (which is in addition to a $1.4 reduction previously recorded in March 2018), and recorded a regulatory liability in an equal amount. The total reduction in revenues for the nine months ended June 30, 2018 of $24.1 reflects (1) $17.1 of tax benefits accrued during the period January 1, 2018 to June 30, 2018, plus (2) $7.0 to reflect tax benefits expected to be generated by the future amortization of the regulatory liability. Changes in French Corporate Income Tax Rates In December 2017, the French Parliament approved the Finance Bill for 2018 and the second amended Finance Bill for 2017 (collectively, the “December 2017 French Finance Bills”). One impact of the December 2017 French Finance Bills is an increase in the Fiscal 2018 corporate income tax rate in France from 34.4% to 39.4%. The December 2017 French Finance Bills also include measures to reduce the corporate income tax rate to 25.8%, effective for fiscal years starting after January 1, 2022 (Fiscal 2023). As a result of the December 2017 French Finance Bills, during the three months ended December 31, 2017, the Company reduced its net French deferred income tax liabilities and recognized an estimated deferred tax benefit of $17.3 to reflect the estimated impact of the previously mentioned corporate income tax rate reduction effective in Fiscal 2023. During the three months ended March 31, 2018 and June 30, 2018, this estimated deferred income tax benefit was reduced by $3.7 and $0.1, respectively, to a benefit of $13.5 (equal to $0.08 per basic and diluted share) for the nine months ended June 30, 2018. In addition, the Company’s estimated annual effective income tax rate used in determining income taxes for the nine months ended June 30, 2018, reflects the impact of the higher Fiscal 2018 income tax rate as a result of the December 2017 French Finance Bills, which (decreased) increased income tax expense for the three and nine months ended June 30, 2018, by approximately $(0.2) and $4.7, respectively. In December 2016, the French Parliament approved the Finance Bill for 2017 and amended the Finance Bill for 2016 (collectively, the “December 2016 French Finance Bills”). The December 2016 French Finance Bills, among other things, will reduce UGI France’s corporate income tax rate from the then-current 34.4% to 28.9%, effective for fiscal years starting after January 1, 2020 (Fiscal 2021). As a result of this future income tax rate reduction, during the three months ended December 31, 2016, the Company reduced its net French deferred income tax liabilities and recognized an estimated deferred tax benefit of $27.4 (equal to $0.15 per basic and diluted share).

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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