Segment Information

12 Months Ended

Sep. 30, 2019

Note 22 — Segment Information

Our operations comprise four reportable segments generally based upon products or services sold, geographic location and regulatory environment: (1) AmeriGas Propane; (2) UGI International; (3) Midstream & Marketing; and (4) UGI Utilities.

AmeriGas Propane derives its revenues principally from the sale of propane and related equipment and supplies to retail customers in all 50 states. UGI International derives its revenues principally from the distribution of LPG to retail customers in France and in northern, central and eastern European countries. In addition, UGI International derives revenue from natural gas marketing businesses in France, Belgium and the United Kingdom and a natural gas and electricity marketing business in the Netherlands. Midstream & Marketing derives its revenues principally from the sale of natural gas, liquid fuels and electricity as well as revenues and fees from storage, pipeline transportation, natural gas gathering and natural gas production activities primarily in the Mid-Atlantic region of the U.S. Midstream & Marketing also derives revenues from the sale of electricity through PJM, a regional electricity transmission organization in the eastern U.S., and, to a lesser extent, also from contracting services provided by HVAC to customers in portions of eastern and central Pennsylvania. UGI Utilities derives its revenues principally from the sale and distribution of natural gas to customers in eastern and central Pennsylvania and, to a lesser extent, from the sale and distribution of electricity in two northeastern Pennsylvania counties. The accounting policies of our reportable segments are the same as those described in Note 2.

During the fourth quarter of Fiscal 2019, the measurement of segment profit used by our CODM was revised to exclude certain items that are now included in Corporate & Other (in addition to net gains and losses on commodity and certain foreign currency derivative instruments not associated with current-period transactions, which had previously been excluded). The revision to our segment profit measures aligns with the financial information utilized by our CODM in evaluating our reportable segments’ performance and allocating resources. Fiscal 2018 and Fiscal 2017 amounts have been recast to reflect the change in segment measure of profit. Also during the fourth quarter of Fiscal 2019, principally as a result of the AmeriGas Merger and the CMG Acquisition and related transactions, our CODM began evaluating the performance of all of our reportable segments based upon earnings before interest expense and income taxes, excluding the items noted above.

In addition to the items described above, Corporate & Other includes the net expenses of UGI’s captive general liability insurance company, UGI’s corporate headquarters facility and UGI’s unallocated corporate and general expenses as well as interest expense on debt incurred by UGI Corporation that is not allocated. Corporate & Other assets principally comprise cash and cash equivalents of UGI and its captive insurance company, and UGI corporate headquarters’ assets.

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. The amounts of revenues and long-lived assets associated with our operations in France represent approximately 20% and 10% of the respective consolidated amounts.



	Total			Elim- inations				AmeriGas Propane			UGI International			Midstream & Marketing				UGI Utilities			Corporate & Other (a)
2019
Revenues from external customers	$	7,320.4		$	—			$	2,682.0		$	2,372.2		$	1,281.1			$	980.7		$	4.4
Intersegment revenues	$	—		$	(305.4	)	(b)	$	—		$	—		$	234.6			$	67.9		$	2.9
Cost of sales	$	4,323.1		$	(301.7	)	(b)	$	1,191.3		$	1,416.4		$	1,241.2			$	481.3		$	294.6
Operating income (loss)	$	617.1		$	0.5			$	404.0		$	228.9		$	105.0			$	224.2		$	(345.5	)
Income from equity investees	9.1			—				—			—			9.1			(c)	—			—
Loss on extinguishments of debt	(6.1		)	—				—			—			—				—			(6.1		)
Other non-operating income, net	38.2			—				—			5.4			—				1.5			31.3
Earnings (losses) before interest expense and income taxes	658.3			0.5				404.0			234.3			114.1				225.7			(320.3		)
Interest expense	(257.8		)	—				(167.4		)	(25.0		)	(9.0		)		(49.6		)	(6.8		)
Income tax (expense) benefit	(92.6		)	(0.2		)		(25.7		)	(64.6		)	(27.1		)		(42.9		)	67.9
Noncontrolling interests’ net (income) loss	(51.7		)	—				(142.7		)	0.1			—				—			90.9
Net income (loss) attributable to UGI	$	256.2		$	0.3			$	68.2		$	144.8		$	78.0			$	133.2		$	(168.3	)
Depreciation and amortization	$	448.1		$	(0.2	)		$	179.4		$	123.8		$	51.4			$	92.8		$	0.9
Total assets	$	13,346.6		$	(352.8	)		$	4,095.3		$	2,975.2		$	2,744.5			$	3,559.5		$	324.9
Short-term borrowings	$	796.3		$	—			$	328.0		$	210.9		$	91.4			$	166.0		$	—
Capital expenditures (including the effects of accruals)	$	707.6		$	—			$	107.3		$	106.4		$	137.7			$	355.3		$	0.9
Investments in equity investees	$	189.6		$	—			$	—		$	11.6		$	178.0			$	—		$	—
Goodwill	$	3,456.4		$	—			$	2,003.0		$	929.8		$	341.5			$	182.1		$	—

2018 (d)(e)
Revenues from external customers	$	7,651.2		$	—			$	2,823.0		$	2,683.8		$	1,149.1			$	998.5		$	(3.2	)
Intersegment revenues	$	—		$	(370.8	)	(b)	$	—		$	—		$	272.6			$	93.9		$	4.3
Cost of sales	$	4,074.9		$	(366.6	)	(b)	$	1,314.7		$	1,620.1		$	1,090.8			$	522.9		$	(107.0	)
Operating income (loss)	$	1,064.7		$	0.3			$	422.2		$	247.9		$	175.1			$	239.9		$	(20.7	)	(d)
Income (loss) from equity investees	4.3			—				—			(0.5		)	4.8			(c)	—			—
Other non-operating income (expense), net	15.6			—				—			(7.0		)	(1.2		)		(2.4		)	26.2
Earnings before interest expense and income taxes	1,084.6			0.3				422.2			240.4			178.7				237.5			5.5



	Total			Elim- inations				AmeriGas Propane			UGI International			Midstream & Marketing				UGI Utilities			Corporate & Other (a)
Interest expense	(230.1		)	—				(163.1		)	(21.1		)	(2.4		)		(42.9		)	(0.6		)
Income tax (expense) benefit	(32.1		)	(1.4		)		(30.5		)	(69.2		)	(49.6		)		(53.7		)	172.3
Noncontrolling interests’ net (income) loss	(103.7		)	—				(152.3		)	3.0			—				—			45.6
Net income (loss) attributable to UGI	$	718.7		$	(1.1	)		$	76.3		$	153.1		$	126.7			$	140.9		$	222.8
Depreciation and amortization	$	455.1		$	(0.3	)		$	185.8		$	140.6		$	43.5			$	84.6		$	0.9
Total assets	$	11,980.9		$	(125.3	)		$	3,933.9		$	3,279.0		$	1,328.9			$	3,266.6		$	297.8
Short-term borrowings	$	424.9		$	—			$	232.0		$	1.4		$	2.0			$	189.5		$	—
Capital expenditures (including the effects of accruals)	$	597.0		$	—			$	101.3		$	111.4		$	43.1			$	338.5		$	2.7
Investments in equity investees	$	87.6		$	—			$	—		$	12.8		$	74.8			$	—		$	—
Goodwill	$	3,160.4		$	—			$	2,003.0		$	963.7		$	11.6			$	182.1		$	—

2017 (e)
Revenues from external customers	$	6,120.7		$	—			$	2,453.5		$	1,877.5		$	943.0			$	847.5		$	(0.8	)
Intersegment revenues	$	—		$	(222.7	)	(b)	$	—		$	—		$	178.2			$	40.1		$	4.4
Cost of sales	$	2,837.3		$	(218.3	)	(b)	$	1,002.9		$	935.3		$	856.7			$	367.3		$	(106.6	)
Operating income	$	1,010.0		$	0.3			$	355.3		$	234.3		$	139.4			$	232.7		$	48.0
Income from equity investees	4.3			—				—			—			4.3			(c)	—			—
Loss on extinguishments of debt	(59.7		)	—				—			—			—				—			(59.7		)
Other non-operating (expense) income, net	(29.7		)	—				—			1.2			(0.2		)		(4.4		)	(26.3		)
Earnings (losses) before interest expense and income taxes	924.9			0.3				355.3			235.5			143.5				228.3			(38.0		)
Interest expense	(223.5		)	—				(160.2		)	(20.6		)	(2.1		)		(40.2		)	(0.4		)
Income tax (expense) benefit	(177.6		)	(0.2		)		(32.5		)	(58.9		)	(54.5		)		(72.1		)	40.6
Noncontrolling interests’ net (income) loss	(87.2		)	—				(108.4		)	(0.2		)	—				—			21.4
Net income attributable to UGI	$	436.6		$	0.1			$	54.2		$	155.8		$	86.9			$	116.0		$	23.6
Depreciation and amortization	$	416.3		$	(0.2	)		$	190.5		$	117.4		$	35.4			$	72.3		$	0.9
Total assets	$	11,582.2		$	(51.5	)		$	4,069.4		$	3,132.0		$	1,165.5			$	2,994.0		$	272.8
Short-term borrowings	$	366.9		$	—			$	140.0		$	17.9		$	39.0			$	170.0		$	—
Capital expenditures (including the effects of accruals)	$	624.3		$	—			$	98.1		$	90.3		$	117.5			$	317.7		$	0.7
Investments in equity investees	$	59.1		$	—			$	—		$	8.1		$	51.0			$	—		$	—
Goodwill	$	3,107.2		$	—			$	2,001.3		$	912.2		$	11.6			$	182.1		$	—

(a)

Corporate & Other includes specific items attributable to our reportable segments that are not included in the segment profit measures used by our CODM in assessing our reportable segments’ performance or allocating resources. The following table presents such pre-tax gains (losses) which have been included in Corporate & Other, and the reportable segments to which they relate, for Fiscal 2019, Fiscal 2018 and Fiscal 2017:



	Location on Income Statement	AmeriGas Propane			UGI International			Midstream & Marketing
2019
Net losses on commodity derivative instruments not associated with current-period transactions	Revenue / Cost of sales	$	(116.8	)	$	(142.5	)	$	(31.0	)
Unrealized gains on foreign currency derivative instruments	Other non-operating income (expense), net	$	—		$	32.2		$	—
Loss on extinguishments of debt	Loss on extinguishment of debt	$	—		$	(6.1	)	$	—
AmeriGas Merger expenses	Operating and administrative expenses	$	(6.3	)	$	—		$	—
Acquisition and integration expenses associated with the CMG Acquisition	Operating and administrative expenses	$	—		$	—		$	(15.6	)
LPG business transformation costs	Operating and administrative expenses	$	(14.5	)	$	(9.3	)	$	—

2018
Net gains (losses) on commodity derivative instruments not associated with current-period transactions	Revenue / Cost of sales	$	12.5		$	92.9		$	(1.5	)
Unrealized gains on foreign currency derivative instruments	Other non-operating income (expense), net	$	—		$	28.9		$	—
Integration expenses associated with Finagaz	Operating and administrative expenses	$	—		$	(30.5	)	$	—
Impairment of Partnership tradenames and trademarks	Impairment of Partnership tradenames and trademarks	$	(75.0	)	$	—		$	—

2017
Net gains on commodity derivative instruments not associated with current-period transactions	Revenue / Cost of sales	$	31.1		$	19.0		$	55.7
Unrealized losses on foreign currency derivative instruments	Other non-operating income (expense), net	$	—		$	(23.8	)	$	—
Loss on extinguishments of debt	Loss on extinguishment of debt	$	(59.7	)	$	—		$	—
Integration expenses associated with Finagaz	Operating and administrative expenses	$	—		$	(39.9	)	$	—


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


(c)	Includes AFUDC associated with PennEast (see Note 2). Fiscal 2019 also includes income from Pennant subsequent to the CMG Acquisition (see Note 5).

(d)

Fiscal 2018 results include impacts from the TCJA in the U.S. See Notes 7 and 9 for additional information. For Fiscal 2018, the remeasurement impacts from the TCJA and, for UGI International, the December 2017 French Finance Bills, were allocated from each of AmeriGas Propane, UGI International, Midstream & Marketing and UGI Utilities to Corporate & Other in amounts of $112.9, $4.0, $70.1 and $8.0, respectively. For Fiscal 2017, the remeasurement impact from the December 2016 French Finance Bills of $29.0 was allocated from UGI International to Corporate & Other.

(e)

Segment information recast to reflect the changes adopted during the fourth quarter of Fiscal 2019 in the segment measure of profit used by our CODM to evaluate the performance of our reportable segments.