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Common Stock and Equity-Based Compensation | 12 Months Ended
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Sep. 30, 2019
Share-based Payment Arrangement [Abstract] |
Common Stock and Equity-Based Compensation | Note 14 — Common Stock and Equity-Based Compensation Common Stock On January 25, 2018, UGI’s Board of Directors approved an extension of the Company’s share repurchase program, which authorizes the repurchase of up to 8,000,000 shares of UGI Corporation Common Stock over a four-year period. Pursuant to these authorizations, during Fiscal 2019, Fiscal 2018 and Fiscal 2017, the Company purchased and placed in treasury stock 300,000, 1,200,000 and 900,000 shares at a total cost of $16.9, $59.8 and $43.3, respectively. UGI Common Stock share activity for Fiscal 2017, Fiscal 2018 and Fiscal 2019 follows:
| Issued |  | Treasury |  | Outstanding
Balance at September 30, 2016 | 173,894,141 |  |  | (933,692 | ) |  | 172,960,449 |
Issued: |  |  |  |  |
Employee and director plans | 93,550 |  |  | 1,051,704 |  |  | 1,145,254 |
Sale of reacquired common stock |  |  | 50,000 |  |  | 50,000 |
Repurchases of common stock | — |  |  | (900,000 | ) |  | (900,000 | )
Reacquired common stock – employee and director plans | — |  |  | (111,966 | ) |  | (111,966 | )
Balance at September 30, 2017 | 173,987,691 |  |  | (843,954 | ) |  | 173,143,737 |
Issued: |  |  |  |  |
Employee and director plans | 155,306 |  |  | 1,804,712 |  |  | 1,960,018 |
Repurchases of common stock | — |  |  | (1,200,000 | ) |  | (1,200,000 | )
Reacquired common stock – employee and director plans | — |  |  | (154,780 | ) |  | (154,780 | )
Balance at September 30, 2018 | 174,142,997 |  |  | (394,022 | ) |  | 173,748,975 |
Issued: |  |  |  |  |
Employee and director plans | 548,285 |  |  | 430,847 |  |  | 979,132 |
AmeriGas Merger | 34,612,847 |  |  | — |  |  | 34,612,847 |
Sale of reacquired common stock | — |  |  | 15,759 |  |  | 15,759 |
Repurchases of common stock | — |  |  | (300,000 | ) |  | (300,000 | )
Reacquired common stock – employee and director plans | — |  |  | (51,924 | ) |  | (51,924 | )
Balance at September 30, 2019 | 209,304,129 |  |  | (299,340 | ) |  | 209,004,789 |
Equity-Based Compensation The Company grants equity-based awards to employees and non-employee directors comprising UGI stock options, UGI Common Stock-based equity instruments and, prior to the AmeriGas Merger, AmeriGas Partners Common Unit-based equity instruments as further described below. We recognized total pre-tax equity-based compensation expense of $18.1 ($13.2 after-tax), $22.5 ($15.7 after-tax) and $19.3 ($11.8 after-tax) in Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively. UGI Equity-Based Compensation Plans and Awards. Under the UGI Corporation 2013 OICP, we may grant options to acquire shares of UGI Common Stock, SARs, UGI Units (comprising “Stock Units” and “UGI Performance Units”), other equity-based awards and cash to employees and non-employee directors. The exercise price for options may not be less than the fair market value on the grant date. Awards granted under the 2013 OICP may vest immediately or ratably over a period of years, and stock options can be exercised no later than ten years from the grant date. In addition, the 2013 OICP provides that awards of UGI Units may also provide for the crediting of dividend equivalents to participants’ accounts. Except in the event of retirement, death or disability, each unvested grant will terminate when the participant ceases to be employed. There are certain change of control and retirement eligibility conditions that, if met, generally result in accelerated vesting or elimination of further service requirements. Under the 2013 OICP, awards representing up to 21,750,000 shares of UGI Common Stock may be granted. Dividend equivalents on UGI Unit Awards to employees will be paid in cash. Dividend equivalents on non-employee director awards are accumulated in additional Stock Units. UGI Unit Awards granted to employees and non-employee directors are settled in shares of UGI Common Stock and cash. Substantially all UGI Unit Awards granted to UGI France employees are settled in shares of UGI Common Stock and do not accrue dividend equivalents. With respect to UGI Performance Unit awards, the actual number of shares (or their cash equivalent) ultimately issued, and the actual amount of dividend equivalents paid, is generally dependent upon the achievement of market performance goals and service conditions. Beginning in Fiscal 2019, we began issuing shares of UGI Common Stock to satisfy substantially all option exercises and UGI Unit Awards. Prior to Fiscal 2019, we issued treasury shares to satisfy substantially all option exercises and UGI Unit Awards. Stock options may be net exercised whereby shares equal to the option price and the grantee’s applicable payroll tax withholding are withheld from the number of shares payable (“net exercise”). We record shares withheld pursuant to a net exercise as shares reacquired. Pursuant to the AmeriGas Merger Agreement, all holders of AmeriGas Partners equity-based compensation awards received replacement awards comprising UGI cash-settled restricted stock units. See discussion below under “AmeriGas Partners Equity-Based Compensation Plans and Awards” for additional information. UGI Stock Option Awards. Stock option transactions under equity-based compensation plans during Fiscal 2017, Fiscal 2018 and Fiscal 2019 follow:
| Shares |  | Weighted - Average Option Price |  | Total Intrinsic Value |  | Weighted - Average Contract Term (Years)
Shares under option — September 30, 2016 | 8,488,451 |  |  | $ | 26.68 |  |  | $ | 157.6 |  |  | 6.6
Granted | 1,343,800 |  |  | $ | 46.51 |  |  |  |  |
Canceled | (60,236 | ) |  | $ | 41.86 |  |  |  |  |
Exercised | (990,267 | ) |  | $ | 21.40 |  |  | $ | 26.7 |  |  |
Shares under option — September 30, 2017 | 8,781,748 |  |  | $ | 30.20 |  |  | $ | 146.7 |  |  | 6.3
Granted | 1,401,400 |  |  | $ | 47.85 |  |  |  |  |
Canceled | (152,017 | ) |  | $ | 42.14 |  |  |  |  |
Expired | (1,666 | ) |  | $ | 35.80 |  |  |  |  |
Exercised | (1,832,396 | ) |  | $ | 26.00 |  |  | $ | 44.5 |  |  |
Shares under option — September 30, 2018 | 8,197,069 |  |  | $ | 33.93 |  |  | $ | 176.6 |  |  | 6.2
Granted | 1,197,100 |  |  | $ | 53.27 |  |  |  |  |
Canceled | (123,012 | ) |  | $ | 48.69 |  |  |  |  |
Expired | (13,699 | ) |  | $ | 47.49 |  |  |  |  |
Exercised | (779,353 | ) |  | $ | 25.75 |  |  | $ | 22.8 |  |  |
Shares under option — September 30, 2019 | 8,478,105 |  |  | $ | 37.18 |  |  | $ | 114.9 |  |  | 5.9
Options exercisable — September 30, 2017 | 5,973,668 |  |  | $ | 25.53 |  |  |  |  |
Options exercisable — September 30, 2018 | 5,498,330 |  |  | $ | 28.63 |  |  |  |  |
Options exercisable — September 30, 2019 | 5,963,530 |  |  | $ | 32.02 |  |  | $ | 109.3 |  |  | 4.9
Options not exercisable — September 30, 2019 | 2,514,575 |  |  | $ | 49.43 |  |  | $ | 5.6 |  |  | 7.4
Cash received from stock option exercises and associated tax benefits were $19.5 and $5.1, $43.4 and $12.6, and $17.7 and $9.6 in Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively. As of September 30, 2019, there was $8.3 of unrecognized compensation cost associated with unvested stock options that is expected to be recognized over a weighted-average period of 2.0 years. The following table presents additional information relating to stock options outstanding and exercisable at September 30, 2019:
| Range of exercise prices
| Under $30.00 |  | $30.00 – $35.00 |  | $35.01 – $40.00 |  | $40.01 – $45.00 |  | Over $45.00
Options outstanding at September 30, 2019: |  |  |  |  |  |  |  |  |
Number of options | 2,879,501 |  |  | 1,094,763 |  |  | 870,115 |  |  | 81,593 |  |  | 3,552,133 |
Weighted average remaining contractual life (in years) | 3.1 |  |  | 6.1 |  |  | 5.3 |  |  | 7.1 |  |  | 8.3 |
Weighted average exercise price | $ | 23.24 |  |  | $ | 33.66 |  |  | $ | 37.81 |  |  | $ | 44.42 |  |  | $ | 49.25 |
Options exercisable at September 30, 2019: |  |  |  |  |  |  |  |  |
Number of options | 2,879,501 |  |  | 995,313 |  |  | 870,115 |  |  | 76,593 |  |  | 1,142,008 |
Weighted average exercise price | $ | 23.24 |  |  | $ | 33.65 |  |  | $ | 37.81 |  |  | $ | 44.48 |  |  | $ | 47.48 |
UGI Stock Option Fair Value Information. The per share weighted-average fair value of stock options granted under our option plans was $8.70 in Fiscal 2019, $7.51 in Fiscal 2018 and $7.62 in Fiscal 2017. These amounts were determined using a Black-Scholes option pricing model that values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock, expected dividend payments and the risk-free interest rate over the expected life of the option. The expected life of option awards represents the period of time during which option grants are expected to be outstanding and is derived from historical exercise patterns. Expected volatility is based on historical volatility of the price of UGI’s Common Stock. Expected dividend yield is based on historical UGI dividend rates. The risk free interest rate is based on U.S. Treasury bonds with terms comparable to the options in effect on the date of grant. The assumptions we used for valuing option grants during Fiscal 2019, Fiscal 2018 and Fiscal 2017 are as follows:
| 2019 |  | 2018 |  | 2017
Expected life of option | 6 years |  | 6 years |  | 5.75 years
Weighted average volatility | 17.2% |  | 17.5% |  | 19.8%
Weighted average dividend yield | 1.8% |  | 2.1% |  | 2.1%
Expected volatility | 17.2% |  | 17.5% |  | 19.8%
Expected dividend yield | 1.8% |  | 2.1% |  | 2.1%
Risk free rate | 1.5% – 2.6% |  | 2.2% – 2.9% |  | 1.8% – 2.1%
UGI Unit Awards. UGI Stock Unit and UGI Performance Unit awards entitle the grantee to shares of UGI Common Stock or cash once the service condition is met and, with respect to UGI Performance Unit awards, subject to market performance conditions. UGI Performance Unit grant recipients are awarded a target number of UGI Performance Units. The number of UGI Performance Units ultimately paid at the end of the performance period (generally three years) may be higher or lower than the target amount, or even zero, based on UGI’s TSR percentile rank relative to the UGI comparator group. Grantees may receive 0% to 200% of the target award granted. For such grants, if UGI’s TSR ranks below the 25th percentile compared to the UGI comparator group, the employee will not be paid. At the 25th percentile, the employee will be paid an award equal to 25% of the target award; at the 40th percentile, 70%; at the 50th percentile, 100%; and at the 90th percentile and above, 200%. The actual amount of the award is interpolated between these percentile rankings. Dividend equivalents are paid in cash only on UGI Performance Units that eventually vest. The fair value of UGI Stock Units on the grant date is equal to the market price of UGI Stock on the grant date plus the fair value of dividend equivalents if applicable. Under GAAP, UGI Performance Units are equity awards with a market-based condition which, if settled in shares, result in the recognition of compensation cost over the requisite employee service period regardless of whether the market-based condition is satisfied. The fair values of UGI Performance Units are estimated using a Monte Carlo valuation model. The fair value associated with the target award is accounted for as equity and the fair value of the award over the target, as well as all dividend equivalents, is accounted for as a liability. The expected term of the UGI Performance Unit awards is three years based on the performance period. Expected volatility is based on the historical volatility of UGI Common Stock over a three-year period. The risk-free interest rate is based on the yields on U.S. Treasury bonds at the time of grant. Volatility for all companies in the UGI comparator groups is based on historical volatility. The following table summarizes the weighted-average assumptions used to determine the fair value of UGI Performance Unit awards and related compensation costs:
| Grants Awarded in Fiscal Year
| 2019 |  | 2018 |  | 2017
Risk free rate | 2.5% |  | 2.0% |  | 1.5%
Expected life | 3 years |  | 3 years |  | 3 years
Expected volatility | 17.7% |  | 18.9% |  | 18.9%
Dividend yield | 1.9% |  | 2.1% |  | 2.1%
The weighted-average grant date fair value of UGI Performance Unit awards was estimated to be $55.40 for Units granted in Fiscal 2019, $55.26 for Units granted in Fiscal 2018 and $50.91 for Units granted in Fiscal 2017. The following table summarizes UGI Unit award activity for Fiscal 2019:
| UGI Units |  | Weighted-Average Grant-Date Fair Value (per Unit)
Total UGI Units at September 30, 2018 (a) | 959,718 |  |  | $ | 32.38 |
UGI Performance Units: |  |  |
Granted | 128,910 |  |  | $ | 55.40 |
Forfeited | (13,102 | ) |  | $ | 53.29 |
Unit awards paid | (144,521 | ) |  | $ | 34.62 |
UGI Stock Units: |  |  |
Granted (b) | 29,784 |  |  | $ | 55.39 |
Forfeited | (4,900 | ) |  | $ | 51.22 |
Unit awards paid | (62,069 | ) |  | $ | 25.12 |
Total UGI Units at September 30, 2019 (a) | 893,820 |  |  | $ | 36.39 |
(a) | Total UGI Units includes UGI Stock Units issued to non-employee directors, which vest on the grant date, and UGI Performance Units and UGI Stock Units issued to retirement-eligible employees that vest on an accelerated basis. Total vested restricted units at September 30, 2019 and September 30, 2018 were 616,319 and 660,795, respectively.
(b) | Generally, shares granted under UGI Stock Unit awards are paid approximately 70% in shares. UGI Stock Unit awards granted in Fiscal 2018 and Fiscal 2017 were 52,314 and 42,079, respectively.
During Fiscal 2019, Fiscal 2018 and Fiscal 2017, the Company paid UGI Performance Unit and UGI Stock Unit awards in shares and cash as follows:
| 2019 |  | 2018 |  | 2017
UGI Performance Unit awards: |  |  |  |  |
Number of original awards granted, net of forfeitures | 144,521 |  |  | 136,621 |  |  | 178,450 |
Performance period beginning January 1: | 2016 |  |  | 2015 |  |  | 2014 |
Payment of awards: |  |  |  |  |
Shares of UGI Common Stock issued, net of shares withheld for taxes | 116,950 |  |  | 69,680 |  |  | 138,985 |
Cash paid | $ | 9.9 |  |  | $ | 1.6 |  |  | $ | 10.9 |
UGI Stock Unit awards: |  |  |  |  |
Number of original awards granted, net of forfeitures | 50,985 |  |  | 39,680 |  |  | 43,699 |
Payment of awards: |  |  |  |  |
Shares of UGI Common Stock issued, net of shares withheld for taxes | 43,479 |  |  | 29,095 |  |  | 15,990 |
Cash paid | $ | 1.0 |  |  | $ | 0.6 |  |  | $ | 0.3 |
During Fiscal 2019, Fiscal 2018 and Fiscal 2017, we granted UGI Unit awards representing 158,694, 196,114 and 185,379 shares, respectively, having weighted-average grant date fair values per Unit of $55.40, $53.36 and $50.08, respectively. As of September 30, 2019, there was a total of approximately $7.6 of unrecognized compensation cost associated with 893,820 UGI Unit awards outstanding that is expected to be recognized over a weighted-average period of 1.9 years. The total grant-date fair values of UGI Units that vested during Fiscal 2019, Fiscal 2018 and Fiscal 2017 were $4.9, $7.3 and $7.1, respectively. As of September 30, 2019 and 2018, total liabilities of $10.2 and $18.8, respectively, associated with UGI Unit awards are reflected in “Employee compensation and benefits accrued” and “Other noncurrent liabilities” on the Consolidated Balance Sheets. At September 30, 2019, 8,700,734 shares of Common Stock were available for future grants under the 2013 OICP, which includes the number of AmeriGas Common Units available for grant under the 2010 Propane Plan that were converted to UGI Units as further described below. AmeriGas Partners Equity-Based Compensation Plans and Awards. Prior to the AmeriGas Merger, under the 2010 Propane Plan on behalf of AmeriGas Partners, L.P., the General Partner could award to employees and non-employee directors of the General Partner grants of AmeriGas Partners Units (comprising “AmeriGas Stock Units” and “AmeriGas Performance Units”), options, phantom units, unit appreciation rights and other Common Unit-based awards that, depending on the award, vested immediately or ratable over a period of time. Under the terms of the 2010 Propane Plan, each unvested grant generally terminated when the participant ceased to be employed (except in the event of retirement, death or disability, as defined). The 2010 Propane Plan also defined certain change of control and retirement eligibility conditions that, if met, generally resulted in accelerated vesting or elimination of further service requirements. Participants were eligible to receive Common Unit distribution equivalents under the terms of certain awards (ultimately paid in cash only on awards that vested). Effective with the AmeriGas Merger, all outstanding AmeriGas Stock Units and AmeriGas Performance Units were canceled and converted to cash-settled restricted stock units relating to UGI Common Stock (see “Impact of AmeriGas Merger on AmeriGas Unit Awards” below). AmeriGas Stock Unit and AmeriGas Performance Unit awards entitled the grantee to AmeriGas Partners Common Units or cash once the service condition was met and, with respect to AmeriGas Performance Units, subject to market performance conditions or actual net customer acquisition and retention performance (as defined in the applicable awards). Recipients were awarded a target number of AmeriGas Performance Units, and the number of AmeriGas Performance Units ultimately paid at the end of the performance period (generally three years) could have been higher or lower than the target number, or it may have been zero. For that portion of Performance Unit awards whose ultimate payout was based upon market-based conditions (“AmeriGas TUR Performance Units”), the number of awards ultimately paid was based upon AmeriGas Partners’ TUR percentile rank relative to entities in the Tortoise MLP Group for those awards granted on or after January 1, 2019, and AmeriGas Partners’ TUR percentile rank relative to entities in the Alerian MLP Group with certain awards subject to modification as described below for those awards granted prior to January 1, 2019. AmeriGas TUR Performance Unit awards provided various performance target tiers ranging from 0% to 200%, with 0% payment when the AmeriGas Partners’ TUR was below the 25th percentile and up to 200% payment at the 90th percentile or above. The actual amount of the award was interpolated between the percentile rankings of each performance target tier. For AmeriGas TUR Performance Unit awards granted on or after January 1, 2015, but prior to January 1, 2019, the number of AmeriGas TUR Performance Units ultimately paid was based upon AmeriGas Partner’s TUR percentile rank relative to entities in the Alerian MLP Group (0% to 200% as described above) as modified by AmeriGas Partners’ performance relative to the Propane MLP Group. Such modification ranged from 70% to 130%, but in no event did the amount ultimately paid, after such modification, exceed 200% of the target award. Pursuant to the terms of the AmeriGas Merger Agreement, the performance periods for AmeriGas TUR Performance Units outstanding immediately prior to the AmeriGas Merger ended on August 20, 2019, the last trading day of the Common Units prior to the completion of the AmeriGas Merger. Under GAAP, AmeriGas TUR Performance Units awards were recorded as equity awards to the extent they were to be settled in Common Units. This resulted in the recognition of compensation cost equal to the fair value of such award estimated using a Monte Carlo valuation model, over the requisite employee service period regardless of whether the market-based conditions were satisfied. The fair value associated with the target awards, which were to be paid in Common Units, was accounted for as equity and the fair value of the award over the target, as well as all Common Unit distribution equivalents, which were to be paid in cash, was accounted for as a liability. For purposes of valuing AmeriGas TUR Performance Unit awards, expected volatility was based on the historical volatility of Common Units over a three-year period. The risk-free interest rate was based on the rates on U.S. Treasury bonds at the time of grant. Volatility for all entities in the peer group was based on historical volatility. The expected term of the AmeriGas TUR Performance Unit awards was three years based on the performance period. AmeriGas Performance Unit awards whose ultimate payout was based upon net customer acquisition and retention performance measures were recorded as expense if it became probable that all or a portion of the award would be paid. The fair value associated with the target award was the market price of the Common Units on the date of grant and was accounted for as equity. The fair value of the award over the target, as well as all Common Unit distribution equivalents, which were to be paid in cash, was accounted for as a liability. The following table summarizes the weighted-average assumptions used to determine the fair value of AmeriGas Performance Unit awards subject to market-based conditions and related compensation costs:
| Grants Awarded in Fiscal Year
| 2019 |  | 2018 |  | 2017
Risk-free rate | 2.5% |  | 2.0% |  | 1.5%
Expected life | 3 years |  | 3 years |  | 3 years
Expected volatility | 22.4% |  | 21.1% |  | 21.7%
Dividend yield | 12.5% |  | 8.2% |  | 7.8%
The General Partner granted awards under the 2010 Propane Plan representing 133,098, 84,811 and 67,563 Common Units in Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively, having weighted-average grant date fair values per Common Unit subject to award of $30.58, $50.05 and $52.37, respectively. The following table summarizes AmeriGas Common Unit-based award activity for Fiscal 2019:
| AmeriGas Partners Common Units |  | Weighted-Average Grant-Date Fair Value (per Unit)
Total Units at September 30, 2018 (a) | 236,762 |  |  | $ | 47.12 |
AmeriGas Performance Units: |  |  |
Granted | 79,980 |  |  | $ | 30.23 |
Forfeited | (42,916 | ) |  | $ | 46.83 |
Awards paid | (17,133 | ) |  | $ | 43.02 |
Performance criteria not met | (29,394 | ) |  | $ | 34.27 |
AmeriGas Stock Units: |  |  |
Granted | 53,118 |  |  | $ | 31.10 |
Forfeited | (800 | ) |  | $ | 45.30 |
Awards paid | (16,056 | ) |  | $ | 40.98 |
Total Units at the date of AmeriGas Merger (a) | 263,561 |  |  | $ | 40.89 |
Units converted to UGI cash-settled restricted units | (263,561 | ) |  | $ | (40.89 | )
Total Units at September 30, 2019 | — |  |  | $ | — |
(a) | Total units includes AmeriGas Stock Units issued to non-employee directors, which vested on the grant date, and AmeriGas Performance Units and AmeriGas Stock Units issued to retirement-eligible employees that vest on an accelerated basis. Total vested restricted units at September 30, 2018 were 71,148.
During Fiscal 2019, Fiscal 2018 and Fiscal 2017, the Partnership paid AmeriGas Performance Unit and AmeriGas Stock Unit awards in Common Units and cash as follows:
| 2019 |  | 2018 |  | 2017
AmeriGas Performance Unit awards: |  |  |  |  |
Number of Common Units subject to original awards granted, net of forfeitures | 52,495 |  |  | 65,525 |  |  | 53,800 |
Performance periods beginning in fiscal year: | 2016 |  |  | 2015 |  |  | 2014 |
Payment of awards: |  |  |  |  |
AmeriGas Partners Common Units issued, net of units withheld for taxes | 10,902 |  |  | 13,164 |  |  | 29,489 |
Cash paid | $ | 0.8 |  |  | $ | 1.2 |  |  | $ | 2.9 |
AmeriGas Stock Unit awards: |  |  |  |  |
Number of Common Units subject to original awards granted, net of forfeitures | 20,585 |  |  | 14,811 |  |  | 32,658 |
Payment of awards: |  |  |  |  |
AmeriGas Partners Common Units issued, net of units withheld for taxes | 9,706 |  |  | 5,322 |  |  | 3,932 |
Cash paid | $ | 0.2 |  |  | $ | 0.1 |  |  | $ | 0.1 |
The total grant-date fair values of AmeriGas Unit awards that vested during Fiscal 2019, Fiscal 2018 and Fiscal 2017 were $0.9, $2.2 and $2.1, respectively. As of September 30, 2018, total liabilities of $2.3 associated with Common Unit-based awards are reflected in “Employee compensation and benefits accrued” and “Other noncurrent liabilities” on the Consolidated Balance Sheet. Impact of AmeriGas Merger on AmeriGas Unit Awards. Effective with the AmeriGas Merger on August 21, 2019, each outstanding award of AmeriGas Stock Units and AmeriGas Performance Units, including awards subject to market performance conditions, was canceled and converted into a number of cash-settled restricted stock units relating to UGI Common Stock determined by multiplying the number of such AmeriGas Unit awards by 0.6378. With respect to outstanding AmeriGas TUR Performance Units, the number of such awards canceled and converted to UGI restricted stock units was determined by multiplying the target number of such awards times the performance multiplier as determined based upon a shortened performance period ending August 20, 2019, the last full trading day of the Common Units prior to the AmeriGas Merger. In accordance with the AmeriGas Merger Agreement, the resulting number of cash-settled restricted stock units relating to UGI Common Stock could be more, but not less, than the associated target number of AmeriGas TUR Performance Unit awards. These restricted stock units vest on the originally scheduled AmeriGas TUR Performance Unit award vesting dates with the only condition being employment with the Company at the time of vesting. With respect to AmeriGas Performance Unit awards whose payout was based upon net customer gain and retention performance, grantees’ target awards were canceled and converted to UGI cash-settled performance-based restricted units at a ratio of 0.6378:1. Grantees of such awards may ultimately receive from 0% to 200% of the replacement awards based upon actual net customer gain and retention performance over the original three-year performance period. The converted awards remain subject to the same terms, conditions and restrictions as applied to the corresponding AmeriGas Unit awards immediately prior to the conversion including vesting terms, forfeitures, and distribution equivalent rights except that distribution equivalent rights will be based upon UGI dividends subsequent to the conversion. Pursuant to the terms of the AmeriGas Unit conversions described above, effective on August 21, 2019, 137,472 AmeriGas Performance Units and 126,089 AmeriGas Stock Units were converted into 215,957 of cash-settled restricted stock units relating to UGI Common Stock. The UGI cash-settled restricted stock units issued as replacement awards, other than those issued to AmeriGas’ independent board directors who terminated their directorship effective with the AmeriGas Merger, have been accounted for as modifications in accordance with ASC 718 which contemplates an exchange of the original award for a new award. Since the modifications changed the fixed portion of the award from an equity to a cash-settled award, any compensation expense related to an increase in the fair value of the award between the original grant date and the modification date was accounted for as equity. All compensation expense on the replacement awards recognized subsequent to the modification will be accounted for as a liability. The AmeriGas independent board members who terminated their directorship on August 21, 2019, received a cash payment based upon the market price of UGI Common Stock on that date, plus accrued distribution equivalents, totaling $1.8. These payments were accounted for as settlements in accordance with ASC 718. All amounts accrued with respect to dividend equivalents relating to AmeriGas equity-compensation awards were carried over to the corresponding UGI replacement awards and will be paid, or forfeited, on the same terms and conditions as applied under the AmeriGas Unit awards. Holders of UGI replacement awards will receive a cash payment at the end of the performance period associated with such awards equal to the market price of UGI Common Stock plus any accumulated distribution or dividend equivalents, if applicable. As of September 30, 2019, there was a total of approximately $2.4 of unrecognized compensation cost associated with 212,896 UGI cash-settled restricted stock units that is expected to be recognized over a weighted-average period of 1.3 years. As of September 30, 2019, total liabilities of $4.6 associated with UGI cash-settled restricted stock units are reflected in “Employee compensation and benefits accrued” and “Other noncurrent liabilities” on the Consolidated Balance Sheet. UGI has assumed the obligations of the General Partner and the Partnership under the 2010 Propane Plan, and the 2010 Propane Plan was deemed amended to conform to all of the terms and form of the 2013 OICP and combined with the 2013 OICP. The number of Common Units that remain available for grant under the 2010 Propane Plan were converted to 1,420,949 UGI awards available for future grant and delivery based upon a conversion ratio of 0.6378:1. These available converted awards may be granted only to those individuals who were eligible to receive awards under the 2010 Propane Plan immediately before the AmeriGas Merger including any such eligible individuals hired after the AmeriGas Merger.

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