EX-99.2 3 d780617dex992.htm EX-99.2

Exhibit 99.2

UGI ENERGY SERVICES, LLC

AND SUBSIDIARIES

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

for the three and six months ended March 31, 2019 and 2018

(Unaudited)

UGI ENERGY SERVICES, LLC AND SUBSIDIARIES

TABLE OF CONTENTS

|  | Pages |
Financial Statements (unaudited): |  |  |  |
Condensed Consolidated Balance Sheets as of March 31, 2019 and 2018 |  |  | 3 |
Condensed Consolidated Statements of Income and Comprehensive Income for the three and six months ended March 31, 2019 and 2018 |  |  | 4 |
Condensed Consolidated Statements of Cash Flows for the three and six months ended March 31, 2019 and 2018 |  |  | 5 |

UGI ENERGY SERVICES, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(unaudited)

(Thousands of dollars)

|  | March 31, 2019 |  |  | March 31, 2018 |
ASSETS |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 51,511 |  |  | $ | 64,106 |
Restricted cash |  |  | 3,598 |  |  |  | 8,982 |
Accounts receivable (less allowances for doubtful accounts of $ 1,242 and $ 1,342, respectively) |  |  | 207,032 |  |  |  | 149,910 |
Inventories |  |  | 14,077 |  |  |  | 14,953 |
Derivative instruments |  |  | 11,159 |  |  |  | 4,408 |
Prepaid expenses and other current assets |  |  | 4,694 |  |  |  | 3,749 |
Total current assets |  |  | 292,071 |  |  |  | 246,108 |
Property, plant and equipment: |  |  |  |  |  |  |  |
Gross property, plant and equipment |  |  | 1,272,376 |  |  |  | 1,151,892 |
Accumulated depreciation |  |  | (230,099 | ) |  |  | (187,870 | )
Net property, plant and equipment |  |  | 1,042,277 |  |  |  | 964,022 |
Goodwill |  |  | 11,919 |  |  |  | 5,583 |
Intangible assets, net |  |  | 20,597 |  |  |  | 13,840 |
Derivative instruments |  |  | 3,795 |  |  |  | 581 |
Investment in equity method investee |  |  | 81,080 |  |  |  | 67,547 |
Other assets |  |  | 23,964 |  |  |  | 28,972 |
Total assets |  | $ | 1,475,703 |  |  | $ | 1,326,653 |
LIABILITIES AND EQUITY |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Current capital lease obligations |  | $ | 132 |  |  | $ | 126 |
Short-term borrowings |  |  | — |  |  |  | 10,000 |
Accounts payable |  |  | 168,072 |  |  |  | 100,427 |
Employee compensation and benefits accrued |  |  | 10,862 |  |  |  | 10,349 |
Derivative instruments |  |  | 4,050 |  |  |  | 8,130 |
Other current liabilities |  |  | 47,206 |  |  |  | 60,045 |
Total current liabilities |  |  | 230,322 |  |  |  | 189,077 |
Long-term capital lease obligations |  |  | 269 |  |  |  | 401 |
Deferred income taxes |  |  | 149,649 |  |  |  | 115,348 |
Derivative instruments |  |  | 4,781 |  |  |  | 7,270 |
Other noncurrent liabilities |  |  | 9,159 |  |  |  | 9,444 |
Total liabilities |  |  | 394,180 |  |  |  | 321,540 |
Member’s equity |  |  | 1,081,523 |  |  |  | 1,005,113 |
Total liabilities and equity |  | $ | 1,475,703 |  |  | $ | 1,326,653 |

3

UGI ENERGY SERVICES, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(unaudited)

(Thousands of dollars)

|  | Three Months Ended |  |  | Six Months Ended |
|  | March 31, |  |  | March 31, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Revenues |  | $ | 535,554 |  |  | $ | 556,864 |  |  | $ | 980,914 |  |  | $ | 873,108 |
Costs and expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of sales |  |  | 435,230 |  |  |  | 408,833 |  |  |  | 802,002 |  |  |  | 652,420 |
Operating and administrative expenses |  |  | 24,932 |  |  |  | 22,699 |  |  |  | 48,713 |  |  |  | 43,074 |
Depreciation and amortization |  |  | 11,325 |  |  |  | 10,592 |  |  |  | 22,565 |  |  |  | 20,491 |
Other operating (income) expense, net |  |  | (471 | ) |  |  | 1,633 |  |  |  | (944 | ) |  |  | 21 |
|  |  | 471,016 |  |  |  | 443,757 |  |  |  | 872,336 |  |  |  | 716,006 |
Operating income |  |  | 64,538 |  |  |  | 113,107 |  |  |  | 108,578 |  |  |  | 157,102 |
Income from equity method investee |  |  | 1,610 |  |  |  | 2,367 |  |  |  | 3,081 |  |  |  | 2,019 |
Other non-operating income (expense), net |  |  | 51 |  |  |  | (18 | ) |  |  | 69 |  |  |  | (1,097 | )
Interest expense |  |  | (488 | ) |  |  | (713 | ) |  |  | (941 | ) |  |  | (1,635 | )
Income before income taxes |  |  | 65,711 |  |  |  | 114,743 |  |  |  | 110,787 |  |  |  | 156,389 |
Income tax (expense) benefit |  |  | (18,035 | ) |  |  | (33,296 | ) |  |  | (30,073 | ) |  |  | 28,894 |
Net income and comprehensive income |  | $ | 47,676 |  |  | $ | 81,447 |  |  | $ | 80,714 |  |  | $ | 185,283 |

4

UGI ENERGY SERVICES, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(Thousands of dollars)

|  | Three Months Ended |  |  | Six Months Ended |
|  | March 31, |  |  | March 31, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 47,676 |  |  | $ | 81,447 |  |  | $ | 80,714 |  |  | $ | 185,283 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 11,325 |  |  |  | 10,592 |  |  |  | 22,565 |  |  |  | 20,491 |
Deferred income taxes, net |  |  | 3,460 |  |  |  | 1,551 |  |  |  | 4,198 |  |  |  | (79,106 | )
Changes in unrealized gains and losses on derivative instruments |  |  | (11,578 | ) |  |  | (5,704 | ) |  |  | (13,396 | ) |  |  | 5,387 |
Other, net |  |  | (2,937 | ) |  |  | (2,548 | ) |  |  | (2,136 | ) |  |  | (4,372 | )
Net change in: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | 16,073 |  |  |  | 10,013 |  |  |  | (95,042 | ) |  |  | (69,788 | )
Inventories |  |  | 8,637 |  |  |  | 4,912 |  |  |  | 10,763 |  |  |  | 7,589 |
Accounts payable |  |  | (35,115 | ) |  |  | (12,228 | ) |  |  | 76,382 |  |  |  | 46,750 |
Other current assets |  |  | (571 | ) |  |  | (2,193 | ) |  |  | (568 | ) |  |  | (1,366 | )
Other current liabilities |  |  | 2,554 |  |  |  | 30,512 |  |  |  | 19,462 |  |  |  | 51,296 |
Net cash provided by operating activities |  |  | 39,524 |  |  |  | 116,354 |  |  |  | 102,942 |  |  |  | 162,164 |
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Expenditures for property, plant and equipment |  |  | (32,538 | ) |  |  | (4,975 | ) |  |  | (56,408 | ) |  |  | (17,709 | )
Acquisitions of businesses and assets |  |  | (20,000 | ) |  |  | — |  |  |  | (35,000 | ) |  |  | (55,000 | )
Increase in equity method investments |  |  | (1,816 | ) |  |  | (4,678 | ) |  |  | (2,205 | ) |  |  | (13,673 | )
Other |  |  | — |  |  |  | 10 |  |  |  | 58 |  |  |  | 100 |
Net cash used by investing activities |  |  | (54,354 | ) |  |  | (9,643 | ) |  |  | (93,555 | ) |  |  | (86,282 | )
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Decrease in bank loans |  |  | (10,000 | ) |  |  | (35,000 | ) |  |  | — |  |  |  | — |
Receivables Facility net repayments |  |  | — |  |  |  | (55,000 | ) |  |  | (2,000 | ) |  |  | (29,000 | )
Dividends paid |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2,000 | )
Other |  |  | (34 | ) |  |  | (32 | ) |  |  | (67 | ) |  |  | (63 | )
Net cash used by financing activities |  |  | (10,034 | ) |  |  | (90,032 | ) |  |  | (2,067 | ) |  |  | (31,063 | )
Cash, cash equivalents and restricted cash (decrease) increase |  | $ | (24,864 | ) |  | $ | 16,679 |  |  | $ | 7,320 |  |  | $ | 44,819 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash, cash equivalents and restricted cash at end of period |  | $ | 55,109 |  |  | $ | 73,088 |  |  | $ | 55,109 |  |  | $ | 73,088 |
Cash, cash equivalents and restricted cash at beginning of period |  |  | 79,973 |  |  |  | 56,409 |  |  |  | 47,789 |  |  |  | 28,269 |
Cash, cash equivalents and restricted cash (decrease) increase |  | $ | (24,864 | ) |  | $ | 16,679 |  |  | $ | 7,320 |  |  | $ | 44,819 |

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