<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 10-K/A
AMENDMENT NO. 1
TO
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1998
Commission file number 1-11071
UGI CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Pennsylvania 23-2668356
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
460 North Gulph Road, King of Prussia, PA 19406
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(610) 337-1000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF CLASS ON WHICH REGISTERED
Common Stock, without par value New York Stock Exchange, Inc.
Philadelphia Stock Exchange, Inc.
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
-----------------------------------
The undersigned registrant hereby amends its Annual Report on Form 10-K for
the fiscal year ended September 30, 1998 to include the financial statements
required by Form 11-K with respect to the UGI Utilities, Inc. Savings Plan and
the AmeriGas Propane, Inc. Savings Plan, as set forth herein:
PART II: SECURITIES AND FINANCIAL INFORMATION
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The Financial Statements
and Financial Statement Schedules incorporated by reference or
included in this report are as follows:
<PAGE> 2
UGI CORPORATION AND SUBSIDIARIES
FINANCIAL INFORMATION
FOR INCLUSION IN ANNUAL REPORT ON FORM 10-K
YEAR ENDED SEPTEMBER 30, 1998
Title F-1
<PAGE> 3
UGI CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The consolidated financial statements and supplementary data of UGI Corporation
and subsidiaries, together with the report thereon of Arthur Andersen LLP dated
November 13, 1998, listed in the following index, are included in UGI's 1998
Annual Report to Shareholders and are incorporated in this Form 10-K Annual
Report by reference. With the exception of the pages listed in this index and
information incorporated in Items 1, 2, 5, 7 and 8, the 1998 Annual Report to
Shareholders is not to be deemed filed as part of this Report.
<TABLE>
<CAPTION>
Reference
------------------------------------
Annual
Report to
Form 10-K Shareholders
(page) (page)
------------- --------------
<S> <C> <C>
Reports of Independent Public Accountants:
On Consolidated Financial Statements 43
On Financial Statement Schedules F-4
On Consolidated Financial Statements and Financial
Statement Schedule F-5
Report of Independent Public Accountants on the Consolidated Financial
Statements of AmeriGas Propane, Inc. and subsidiaries for the
fiscal year ended September 30, 1996 F-6
Financial Statements:
Consolidated Balance Sheets, September 30,
1998 and 1997 24 to 25
For the years ended September 30, 1998, 1997 and 1996:
Consolidated Statements of Income 23
Consolidated Statements of Cash Flows 26
Consolidated Statements of Stockholders'
Equity 27
</TABLE>
F-2
<PAGE> 4
UGI CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES (CONTINUED)
<TABLE>
<CAPTION>
Reference
------------------------------------
Annual
Report to
Form 10-K Shareholders
(page) (page)
------------- --------------
<S> <C> <C>
Notes to Consolidated Financial
Statements 28 to 42
Supplementary Data (unaudited):
Quarterly Data for the years ended
September 30, 1998 and 1997 42
Financial Statements for the UGI Utilities, Inc.
Savings Plan F-7 to F-26
Financial Statements for the AmeriGas Propane, Inc.
Savings Plan F-27 to F-47
Financial Statement Schedules:
For the years ended September 30, 1998, 1997 and 1996:
I - Condensed Financial
Information of Registrant
(Parent Company) S-1 to S-3
II - Valuation and Qualifying
Accounts S-4 to S-5
</TABLE>
We have omitted all other financial statement schedules because the required
information is either (1) not present; (2) not present in amounts sufficient to
require submission of the schedule; or (3) the information required is included
elsewhere in the financial statements or related notes.
F-3
<PAGE> 5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders of
UGI Corporation:
We have audited, in accordance with generally accepted auditing standards, the
consolidated financial statements included in UGI Corporation's annual report to
shareholders for the year ended September 30, 1998, incorporated by reference in
this Form 10-K, and have issued our report thereon dated November 13, 1998. Our
audits were made for the purpose of forming an opinion on those consolidated
financial statements taken as a whole. The schedules listed in the Index on
pages F-2 and F-3 are the responsibility of UGI Corporation's management and are
presented for purposes of complying with the Securities and Exchange
Commission's rules and are not part of the basic financial statements. The
information for the years ended September 30, 1998 and 1997 included on these
schedules has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, fairly state in all material
respects the financial data required to be set forth therein in relation to the
basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Chicago, Illinois
November 13, 1998
F-4
<PAGE> 6
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
UGI Corporation
We have audited the accompanying consolidated statements of income,
stockholders' equity and cash flows of UGI Corporation and subsidiaries for the
year ended September 30, 1996. We have also audited the related financial
statement schedules for the year ended September 30, 1996 listed in the index on
pages F-2 and F-3 inclusive, of this Form 10-K. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial statement schedules based
on our audit. We did not audit the consolidated financial statements of AmeriGas
Propane, Inc. and subsidiaries, for the year ended September 30, 1996, which
statements reflect total revenues constituting 65 percent of the related
consolidated totals. Those statements were audited by other auditors whose
report has been furnished to us, and our opinion, insofar as it relates to the
amounts included for AmeriGas Propane, Inc. and subsidiaries for those periods,
is based solely on the report of the other auditors.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit and the report of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audit and the report of the other auditors, the
consolidated financial statements and financial statement schedules referred to
above present fairly, in all material respects, the consolidated results of
operations and cash flows of UGI Corporation and subsidiaries for the year ended
September 30, 1996, in conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania
November 22, 1996
F-5
<PAGE> 7
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of AmeriGas Propane, Inc.:
We have audited the consolidated balance sheet of AmeriGas Propane, Inc. (a
Pennsylvania corporation and a wholly owned subsidiary of AmeriGas, Inc.) and
subsidiaries as of September 30, 1996, and the related consolidated statements
of operations, stockholder's equity and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
AmeriGas Propane, Inc. and subsidiaries as of September 30, 1996, and the
results of their operations and their cash flows for the year then ended, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
November 22, 1996
F-6
<PAGE> 8
UGI UTILITIES, INC.
SAVINGS PLAN
FINANCIAL STATEMENTS
for the years ended September 30, 1998 and 1997
F-7
<PAGE> 9
UGI UTILITIES, INC.
SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS: Page(s)
-------
Report of Independent Public Accountants F-9
Financial Statements:
Statements of Net Assets Available for Benefits at
September 30, 1998 and 1997 F-10 to F-11
Statements of Changes in Net Assets Available for
Benefits for the years ended September 30, 1998
and 1997 F-12 to F-13
Notes to Financial Statements F-14 to F-24
Item 27a - Schedule of Assets Held for Investment Purposes -
September 30, 1998 F-25
Item 27d - Schedule of Reportable Transactions for the year
ended September 30, 1998 F-26
F-8
<PAGE> 10
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Retirement Committee of
UGI Utilities, Inc.:
We have audited the accompanying statements of net assets available for benefits
of the UGI Utilities, Inc. Savings Plan (the "Plan") as of September 30, 1998
and 1997, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements and the
supplemental schedules referred to below are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements and supplemental schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
September 30, 1998 and 1997 and the changes in net assets available for benefits
for the years then ended, in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for purposes
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The Fund Information in the statements
of net assets available for benefits and the statements of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for benefits and changes in net assets
available for benefits of each fund. The supplemental schedules and Fund
Information have been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
Arthur Andersen LLP
Chicago, Illinois
March 19, 1999
F-9
<PAGE> 11
UGI UTILITIES, INC. SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
September 30, 1998
<TABLE>
<CAPTION>
Participant Directed
-----------------------------------------------------------------------------
Fidelity Fidelity Fidelity UGI
Fixed Equity Fidelity Cash Intermediate Common
Income Income Magellan Reserves Bond Stock
TOTAL Fund Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Trust investments (Note 3) $40,084,418 $ 1,985,693 $ 9,856,218 $12,361,716 $ 3,053,522 $ 849,079 $ 2,434,427
Loans to participants 1,333,525
Employers' contributions receivable 1,064,821 230,527 288,833 24,854 25,610 70,048
----------- ----------- ----------- ----------- ----------- ------------ -----------
Net assets available for benefits $42,482,764 $ 1,985,693 $10,086,745 $12,650,549 $ 3,078,376 $ 874,689 $ 2,504,475
=========== =========== =========== =========== =========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
--------------------------------------------------------------------------------------
Fidelity
Managed Fidelity Fidelity
Income U.S. Equity Growth Fidelity Other
Portfolio II Index Fidelity Company Overseas Investment Participant
Fund Fund Fund Fund Fund Funds Loans
------------ ----------- ---------- --------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Trust investments (Note 3) $ 5,278,268 $1,607,693 $1,346,425 $ 895,539 $ 415,838
Loans to participants $1,333,525
Employers' contributions receivable 209,995 68,372 59,975 45,613 24,922 $ 16,072(1)
------------ ----------- ---------- --------- --------- ---------- -----------
Net assets available for benefits $ 5,488,263 $1,676,065 $1,406,400 $ 941,152 $ 440,760 $ 16,072 $1,333,525
============ =========== ========== ========= ========= ========== ===========
</TABLE>
(1) Amount represents employers' contribution receivable which was allocated to
new investment funds established effective October 1, 1998. See Note 1.
The accompanying notes are an integral part of these financial statements.
F - 10
<PAGE> 12
UGI UTILITIES, INC. SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
September 30, 1997
<TABLE>
<CAPTION>
Participant Directed
-----------------------------------------------------------------------------
Fidelity Fidelity Fidelity UGI
Fixed Equity Fidelity Cash Intermediate Common
Income Income Magellan Reserves Bond Stock
TOTAL Fund Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Trust investments (Note 3) $36,744,193 $ 4,407,963 $ 9,691,206 $10,856,466 $ 3,020,671 $ 558,240 $ 2,766,116
Loans to participants 1,149,746
Employers' contributions receivable 988,310 235,085 270,011 36,672 18,097 70,233
----------- ----------- ----------- ----------- ----------- ------------ -----------
Net assets available for benefits $38,882,249 $ 4,407,963 $ 9,926,291 $11,126,477 $ 3,057,343 $ 576,337 $ 2,836,349
=========== =========== =========== =========== =========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
-----------------------------------------------------------------------------
Fidelity
Managed Fidelity Fidelity
Income U.S. Equity Growth Fidelity
Portfolio II Index Fidelity Company Overseas Participant
Fund Fund Fund Fund Fund Loans
------------- ------------ ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Trust investments (Note 3) $ 3,238,410 $ 760,750 $640,847 $ 585,598 $ 217,926
Loans to participants $1,149,746
Employers' contributions receivable 224,489 40,928 38,291 40,001 14,503
------------- ------------ ---------- ---------- ---------- ------------
Net assets available for benefits $ 3,462,899 $ 801,678 $679,138 $ 625,599 $ 232,429 $1,149,746
============= ============ ========== ========== ========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F - 11
<PAGE> 13
UGI UTILITIES, INC. SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
For the Year Ended September 30, 1998
<TABLE>
<CAPTION>
Participant Directed
--------------------------------------------------------------------------------
Fidelity Fidelity Fidelity UGI
Fixed Equity Fidelity Cash Intermediate Common
Income Income Magellan Reserves Bond Stock
TOTAL Fund Fund Fund Fund Fund Fund
------------ ------------ ------------ ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Participants' contributions $ 4,045,619 $ 916,323 $ 1,125,648 $ 160,577 $104,964 $ 291,562
Employers' contributions 1,064,821 230,527 288,833 24,854 25,610 70,048
Investment income:
Interest 118,381 118,381
Dividends 2,325,606 608,049 835,775 156,697 45,035 141,842
Net appreciation (depreciation)
in value of investments (1,531,066) (621,701) (374,256) 20,503 (408,247)
Other 106,039 (2,598) 20,731 33,707 6,078 1,571 7,881
Transfers of participants'
balances, net (173,836) (2,436,555) (462,071) 266,772 (52,022) 111,204 (297,832)
------------ ------------ ------------ ------------ ----------- ------------ -----------
5,955,564 (2,320,772) 691,858 2,176,479 296,184 308,887 (194,746)
Less - Distributions to participants 2,355,049 101,498 531,404 652,407 275,151 10,535 137,128
------------ ------------ ------------ ------------ ----------- ------------ -----------
Net additions (deductions) 3,600,515 (2,422,270) 160,454 1,524,072 21,033 298,352 (331,874)
Net assets available for benefits-
beginning of year 38,882,249 4,407,963 9,926,291 11,126,477 3,057,343 576,337 2,836,349
------------ ------------ ------------ ------------ ----------- ------------ -----------
Net assets available for benefits-
end of year $42,482,764 $ 1,985,693 $10,086,745 $12,650,549 $3,078,376 $874,689 $2,504,475
============ ============ ============ ============ =========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
---------------------------------------------------------------------------------------
Fidelity
Managed Fidelity Fidelity
Income U.S. Equity Growth Fidelity Other
Portfolio II Index Fidelity Company Overseas Investment Participant
Fund Fund Fund Fund Fund Funds Loans
------------ ----------- ----------- --------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Participants' contributions $ 698,201 $ 279,276 $ 193,872 $185,717 $ 89,479
Employers' contributions 209,995 68,372 59,975 45,613 24,922 $ 16,072(1)
Investment income:
Interest
Dividends 303,894 35,117 113,477 72,019 13,701
Net appreciation (depreciation)
in value of investments 44,760 (58,226) (68,683) (65,216)
Other 27,986 3,323 2,628 3,143 1,589
Transfers of participants'
balances, net 1,294,290 500,690 458,735 81,711 144,847 $ 216,395
------------ ----------- ----------- --------- --------- ---------- -----------
2,534,366 931,538 770,461 319,520 209,322 16,072 216,395
Less - Distributions to participants 509,002 57,151 43,199 3,967 991 32,616
------------ ----------- ----------- --------- --------- ---------- -----------
Net additions (deductions) 2,025,364 874,387 727,262 315,553 208,331 16,072 183,779
Net assets available for benefits-
beginning of year 3,462,899 801,678 679,138 625,599 232,429 1,149,746
------------ ----------- ----------- --------- --------- ---------- -----------
Net assets available for benefits-
end of year $ 5,488,263 $1,676,065 $1,406,400 $941,152 $440,760 $ 16,072 $1,333,525
============ =========== =========== ========= ========= ========== ===========
</TABLE>
(1) Amount represents employers' contribution receivable which was allocated to
new investment funds established effective October 1, 1998. See Note 1.
The accompanying notes are an integral part of these financial statements.
F - 12
<PAGE> 14
UGI UTILITIES, INC. SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
Participant Directed
-------------------------------------------------------------------------------
Fidelity Fidelity Fidelity UGI
Fixed Equity Fidelity Cash Intermediate Common
Income Income Magellan Reserves Bond Stock
TOTAL Fund Fund Fund Fund Fund Fund
------------ ------------ ---------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Participants' contributions $ 2,856,432 $ 296 $ 631,171 $ 797,428 $ 124,475 $ 61,994 $ 224,609
Employers' contributions 988,310 235,085 270,011 36,672 18,097 70,233
Investment income:
Interest 290,535 290,535
Dividends 1,333,527 468,812 300,106 168,173 33,003 135,772
Net appreciation in
value of investments 5,397,064 2,029,913 2,618,194 7,711 416,924
Other 85,644 2,707 16,335 25,829 2,725 716 5,117
Transfers of participants'
balances, net (293,614) (2,705,141) 250,179 (1,791,901) (307,293) (65,478) (128,585)
------------ ------------ ---------- ------------ ------------ ------------ ------------
10,657,898 (2,411,603) 3,631,495 2,219,667 24,752 56,043 724,070
Less - Distributions to participants 1,967,127 600,688 296,895 252,959 264,765 22,402 126,761
------------ ------------ ---------- ------------ ------------ ------------ ------------
Net additions (deductions) 8,690,771 (3,012,291) 3,334,600 1,966,708 (240,013) 33,641 597,309
Net assets available for benefits-
beginning of year 30,191,478 7,420,254 6,591,691 9,159,769 3,297,356 542,696 2,239,040
------------ ------------ ---------- ------------ ------------ ------------ ------------
Net assets available for benefits-
end of year $38,882,249 $ 4,407,963 $9,926,291 $11,126,477 $ 3,057,343 $ 576,337 $ 2,836,349
============ ============ ========== ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
----------------------------------------------------------------------
Fidelity
Managed Fidelity Fidelity
Income U.S. Equity Growth Fidelity
Portfolio II Index Fidelity Company Overseas Participant
Fund Fund Fund Fund Fund Loans
------------ ----------- -------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Participants' contributions $ 756,986 $ 67,827 $ 72,180 $ 89,650 $ 29,816
Employers' contributions 224,489 40,928 38,291 40,001 14,503
Investment income:
Interest
Dividends 175,949 10,658 25,090 10,374 5,590
Net appreciation in
value of investments 120,615 90,550 85,884 27,273
Other 27,966 1,296 1,000 1,493 460
Transfers of participants'
balances, net 2,597,944 584,131 442,501 385,296 149,723 $ 295,010
------------ ----------- -------- --------- --------- -----------
3,783,334 825,455 669,612 612,698 227,365 295,010
Less - Distributions to participants 346,939 34,106 3,893 2,178 592 14,949
------------ ----------- -------- --------- --------- -----------
Net additions (deductions) 3,436,395 791,349 665,719 610,520 226,773 280,061
Net assets available for benefits-
beginning of year 26,504 10,329 13,419 15,079 5,656 869,685
------------ ----------- -------- --------- --------- -----------
Net assets available for benefits-
end of year $ 3,462,899 $ 801,678 $679,138 $ 625,599 $ 232,429 $1,149,746
============ =========== ======== ========= ========= ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F - 13
<PAGE> 15
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following brief description of the UGI Utilities, Inc. Savings Plan (Plan)
provides general information on the provisions of the Plan in effect on
September 30, 1998 and during the periods covered by the financial statements.
More complete information is included in the Plan document.
GENERAL. The Plan is a defined contribution plan covering employees of UGI
Utilities, Inc. (UGI Utilities), its holding company parent UGI Corporation
(UGI), and certain affiliated companies (collectively, the Employers). Effective
October 1, 1997, employees of the Employers are eligible upon hire to
participate in the Plan. Prior to October 1, 1997, the Plan covered employees of
the Employers having a minimum of one year of eligible service, as defined in
the Plan document. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). The Plan is administered by the
UGI Utilities Retirement Committee (Plan Administrator) whose members are
appointed by the Board of Directors of UGI Utilities.
CONTRIBUTIONS. Effective October 1, 1997, a participant may elect to contribute
to the Plan on a before-tax basis through payroll reduction an amount equal to
from 1% to 15%, in whole percentages, of eligible compensation. Prior to October
1, 1997, a participant could elect to contribute to the Plan on a before-tax
basis through payroll reduction an amount equal to from 1% to 6%, in whole
percentages, of eligible compensation. In addition, a participant may elect to
contribute to the Plan on an after-tax basis through payroll deduction an amount
equal to from 1% to 6%, in whole percentages, of eligible compensation provided
that the combination of before-tax and after-tax contributions does not exceed
15% of eligible compensation during the 1998 Plan year, or 10% of eligible
compensation during the 1997 Plan year. Calendar year before-tax and after-tax
contribution amounts are subject to limits prescribed by the Internal Revenue
Code (IRC). A participant may increase the rate of his or her before-tax or
after-tax contributions at any time. A participant may reduce or suspend his or
her before-tax or after-tax contributions at any time by filing a written
request with the Plan Administrator. A participant will at all times be fully
(100%) vested in the portion of his or her account attributable to participant
contributions.
Effective October 1, 1997, the Plan also accepts on behalf of any employee,
whether or not he or she has met the requirements for participation in the Plan,
(i) the entire amount of cash received as a distribution from another qualified
trust forming part of a plan described in section 401(a) of the IRC or from a
"rollover" individual retirement plan described in section 408 of the IRC, or
(ii) a direct transfer from another plan qualified under Section 401(a) of the
IRC.
For each Plan year, each of the Employers may, at their discretion, make a
contribution to the Plan equal to a percentage of participant before-tax and
after-tax contributions, up to a total of 6% of compensation for each eligible
participant. In order to be entitled to the Employers'
F-14
<PAGE> 16
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
contribution, a participant must (i) have completed a year of service, and (ii)
either (A) be actively employed by any of the Employers, or on a qualifying
leave of absence, on the last day of the Plan year or (B) have retired, become
disabled (as defined in the Plan), or died while an employee during the Plan
year. Employers' contributions for the 1998 and 1997 Plan years, which were made
in October 1998 and October 1997, respectively, were invested in accordance with
participant investment elections in effect on the dates of the contributions.
A participant is fully vested in the portion of his or her account attributable
to Employers' contributions upon the earlier of (i) the completion of five years
of service or (ii) the attainment of normal retirement age, total disability (as
defined by the Plan document) or death while in the employ of the Employers or
an affiliated company. For Plan purposes, a participant will attain normal
retirement age on the later of his or her 65th birthday or the fifth anniversary
of his or her date of hire.
A participant who terminates employment before he or she is fully vested will
forfeit nonvested amounts attributable to the Employers' contributions. These
forfeited amounts remain in the Plan and are available to reduce future Employer
contributions. For the 1998 and 1997 Plan years, forfeitures of $25,146 and
$5,000, respectively, were used to reduce the Employers' contributions. During
the 1998 and 1997 Plan years, $22,283 and $6,728, respectively, were forfeited
from participants' accounts. As of September 30, 1998 and 1997, there were $744
and $943, respectively, of forfeitures remaining in the Plan.
INVESTMENT FUNDS. A participant may elect to have his or her funds invested in
one or more of the following funds:
- Fixed Income Fund
This fund consists of three-year guaranteed investment
contracts with insurance companies. The 1996 Plan year
contract was placed with New York Life Insurance Company.
The 1995 Plan year contract was placed with John Hancock
Mutual Life Insurance Company. The investment objective of
the fund is to provide a fixed rate of investment return
guaranteed by the insurance companies for a specified period
of time. The 1996 and 1995 Plan year contracts matured on
September 30, 1998 and 1997, respectively. Effective October
1, 1996, contributions to the Fixed Income Fund were
discontinued. Participant account balances in the Fixed
Income Fund are liquidated and reinvested in accordance with
participant elections (or, if an election is not made, the
default fund described below) as the guaranteed investment
contracts mature.
F-15
<PAGE> 17
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
- Fidelity Equity Income Fund
This fund is an unaffiliated registered investment company
mutual fund whose investments comprise principally
income-producing equity securities and whose investment
objective is to achieve reasonable income and capital
appreciation.
- Fidelity Magellan Fund
This fund is an unaffiliated registered investment company
mutual fund whose investments comprise principally equity
securities of domestic, foreign, and multinational issuers
and whose investment objective is to achieve capital
appreciation over an extended period of time.
- Fidelity Cash Reserves Fund
This fund is an unaffiliated registered investment company
mutual fund whose investments comprise high-quality,
short-term certificates of deposit, repurchase agreements,
commercial paper or other similar short-term investments and
whose investment objective is to achieve current income
while maintaining a stable share price.
- Fidelity Intermediate Bond Fund
This fund is an unaffiliated registered investment company
mutual fund whose investments comprise investment-grade
fixed income obligations including U.S. Government and
corporate bonds and mortgage-backed securities with average
maturities of three to ten years and whose investment
objective is to achieve high current income.
- UGI Common Stock Fund
This fund invests principally in shares of UGI Corporation
Common Stock. Participants in the fund do not individually
own specific shares of UGI Corporation Common Stock but
rather own units in the fund that invests in such shares.
The value of a unit in the UGI Common Stock Fund was
initially set at $10.00 and is recalculated daily by
dividing the fair value of the fund's assets (comprising
shares of UGI Corporation Common Stock and temporary cash
investments) by the total number of units outstanding. The
UGI Common Stock Fund holds a small cash position in order
to allow participants to perform certain transactions on a
daily basis without having to wait for the purchase or sale
of UGI Common Stock to settle. During the 1998 Plan year and
the period November 8, 1996 (the date the fund was initially
unitized) to September 30,
F-16
<PAGE> 18
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
1997, the range of high and low unit values were $12.76 and
$9.12, and $11.68 and $9.05, respectively.
- Fidelity Managed Income Portfolio II Fund
This fund is an unaffiliated commingled pool whose
investments comprise principally guaranteed investment
contracts offered by insurance companies and financial
institutions and whose investment objective is to provide a
fixed rate of investment return guaranteed by the insurance
company or financial institution for a specified period of
time, generally between one and seven years.
- Fidelity U. S. Equity Index Fund
This fund is an unaffiliated registered investment company
mutual fund whose investments comprise principally U.S.
equity securities that broadly represent the U.S. stock
market as measured by the Standard & Poor's Composite Index
of 500 Stocks (S&P 500) and whose investment objective is to
track the performance of the S&P 500.
- Fidelity Fund
This fund is an unaffiliated registered investment company
mutual fund whose investments comprise principally equity
and fixed income securities of domestic and foreign issuers
and whose investment objective is to achieve long-term
capital appreciation and current income.
- Fidelity Growth Company Fund
This fund is an unaffiliated registered investment company
mutual fund whose investments comprise principally equity
securities of companies with above average potential for
growth and whose investment objective is to achieve capital
appreciation over an extended period of time.
- Fidelity Overseas Fund
This fund is an unaffiliated registered investment company
mutual fund whose investments comprise principally equity
securities of foreign issuers and whose investment objective
is to achieve capital appreciation over an extended period
of time.
Effective October 1, 1998, twenty additional fund options were established by
the Plan. Because the Employers' contributions for the 1998 Plan year were made
subsequent to September 30,
F-17
<PAGE> 19
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
1998, a portion of such contributions were allocated to these funds in
accordance with then-existing participant investment elections as follows:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Puritan Fund $ 208
Fidelity Growth and Income Portfolio 98
Fidelity Value Fund --
Fidelity OTC Portfolio 218
Fidelity Real Estate Investment Portfolio 83
Fidelity Balanced Fund 213
Fidelity International Growth and Income Fund 255
Fidelity Blue Chip Growth Fund 4,193
Fidelity Low-Priced Stock Fund --
Fidelity Worldwide Fund --
Fidelity Equity Income II Fund 115
Fidelity Small Cap Selector Fund 685
Fidelity U.S. Bond Index Fund 1,305
Fidelity Freedom Income Fund 2,461
Fidelity Freedom 2000 Fund 3,306
Fidelity Freedom 2010 Fund 82
Fidelity Freedom 2020 Fund 2,677
Fidelity Freedom 2030 Fund 173
Fidelity Capital Appreciation Fund --
Fidelity Capital and Income Fund --
-------
$16,072
=======
</TABLE>
Effective November 15, 1996, participants may transfer amounts between funds
(excluding transfers from the Fixed Income Fund prior to the expiration of the
investment contracts) at any time with no limit. Prior to November 15, 1996,
participants could transfer amounts between funds (excluding the Fixed Income
Fund prior to the expiration of the investment contracts) at any time during a
calendar quarter, limited to once each quarter. Participants may change their
investment elections for future contributions at any time. In the absence of a
participant's Fixed Income Fund reinvestment election, during the 1998 and 1997
Plan years all amounts were reinvested in the Fidelity Managed Income Portfolio
II Fund.
Fidelity Management Trust Company is the Plan's trustee for all investment
assets except for investment assets of the Fixed Income Fund for which Mellon
Bank, N.A. is the Plan's trustee.
DISTRIBUTIONS. The Plan benefit of a participant who terminates employment as a
result of retirement, death or total disability, as defined by the Plan
document, shall be equal to the proceeds of liquidation of 100% of the balance
of his or her account. Participants may elect to receive their interest in the
UGI Common Stock Fund in the form of shares of UGI Corporation
F-18
<PAGE> 20
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
Common Stock. The Plan benefit of a participant who terminates employment for
reasons other than retirement, death or total disability shall be equal to the
proceeds of liquidation of the vested portion of his or her account. Where the
amount to be distributed exceeds $3,500, no distribution shall be made to any
Plan participant prior to his or her normal retirement age (as defined above)
unless the participant elects to receive such distribution. Where the amount to
be distributed does not exceed $3,500, a Plan participant's benefit will be
distributed as soon as practicable after the participant's termination of
employment.
A participant who continues to work past age 70-1/2 may elect to defer
distribution until he terminates employment. In all other cases, distributions
must be made or commence by April 1 of the calendar year following the year in
which the participant attains age 70-1/2.
DEATH. If a participant dies prior to receiving a distribution of his or her
account, the participant's designated beneficiary shall be entitled to receive a
lump-sum distribution of the proceeds of liquidation of 100% of the balance
credited to the participant's account. Generally, the account will be
distributed to the beneficiary as soon as practicable following the date of
death. The beneficiary of a participant who is married at the time of the
participant's death will be the participant's spouse, unless the participant
designated another beneficiary and the spouse consented to such designation in
accordance with procedures specified by the Plan document.
WITHDRAWALS. Generally, a participant may withdraw up to 50% of the balance of
his or her account attributable to after-tax contributions (including after-tax
contributions that were matched by the Employer) at any time. However, the
withdrawal must be in an amount of at least $250. If any portion of the amount
withdrawn is attributable to Employer contributions, the participant's
participation in the Plan will be suspended for the three-month period following
the withdrawal. No more than one withdrawal in any calendar year is permitted
from each of the matched and unmatched portions of a participant's after-tax
contribution account.
A participant may withdraw before-tax contributions (and earnings attributable
thereto credited as of December 31, 1988) and effective October 1, 1997,
rollover contributions, only on account of financial hardship resulting from (a)
medical expenses; (b) educational expenses; (c) foreclosure on a primary
residence; or (d) purchase of a primary residence. A hardship withdrawal will be
permitted if the Plan Administrator determines that (i) the withdrawal is on
account of an immediate and heavy financial need of the participant and (ii) the
withdrawal is necessary to satisfy such financial need.
While a participant is still employed by any of the Employers, withdrawals of
amounts attributable to Employer's contributions and post-1988 earnings on
participant before-tax contributions, are not permitted.
LOAN PROVISION. The Plan includes an employee loan provision. Generally, at the
time a loan is to be made, the amount of all loans to be outstanding may not
exceed the lesser of (a) 50% of a
F-19
<PAGE> 21
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
participant's before-tax and rollover account balances, or (b) $50,000 less the
highest balance of any loan during the prior twelve-month period. Each loan
bears interest at a rate determined in accordance with generally prevailing
market conditions for similar types of loans. The minimum loan amount is $500.
The amount of the loan withdrawn from a participant's account is allocated in
proportion to the value of the participant's salary deferral and rollover
account balances in each investment fund. Repayments, including interest, are
made in equal installments through payroll deductions and are allocated to
participant accounts in accordance with current investment elections. No loan
may have a final maturity in excess of five years except that, if the loan is
used to purchase a principal residence for the participant, the loan may have a
final maturity of up to ten years. No participant shall be permitted to have
more than two loans outstanding at any one time.
ADMINISTRATIVE EXPENSES. All administrative expenses of the Plan are chargeable
to the Plan unless paid for by the Employers. The Employers currently pay such
expenses. Mutual fund expenses are paid to fund managers from mutual fund
assets.
PLAN TERMINATION. Although it has not expressed any intent to do so, UGI
Utilities has the right to terminate the Plan in whole or in part at any time
for any reason. In the event of a complete or partial termination of the Plan,
the affected participants will become fully vested in their account balances.
PLAN AMENDMENT. UGI Utilities may amend the Plan at any time for any reason by
written action of its Board of Directors. Amendments required to comply with
applicable legal requirements, however, may be made by an officer of the Company
without Board approval.
VOTING RIGHTS OF UGI COMMON STOCK FUND PARTICIPANTS. A participant has the right
to instruct the trustee of the Plan how to vote, at each meeting of
shareholders, all shares of UGI Corporation Common Stock (including fractional
shares) represented by the value of the participant's interest in the UGI Common
Stock Fund, and a pro rata portion of unvoted shares. A participant also has the
right to direct the trustee of the Plan whether or not to tender shares in
response to a tender offer.
2. ACCOUNTING POLICIES
Investments, other than contracts with insurance companies, are recorded at fair
value generally based upon quoted market prices. The contracts with insurance
companies included in the Fixed Income Fund approximate fair value and represent
amounts on deposit with insurance companies plus accrued interest.
Dividend income is recorded on the record date. Interest earned on investments
is recorded on the accrual basis. Purchases and sales of securities are recorded
on a trade date basis.
F-20
<PAGE> 22
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
The Plan presents in the Statement of Changes in Net Assets Available for
Benefits the net appreciation (depreciation) in fair value of investments which
consists of realized gains or losses and unrealized appreciation (depreciation)
in the fair value of those investments.
Distributions are made to Plan participants based upon the fair value of each
participant's investment account (except for investments of the Fixed Income
Fund for which distributions are based upon contract value) as of the date of
the distribution.
Transfers of participant balances represent amounts directed by participants to
be transferred among investment funds, amounts transferred as a result of the
maturity of group annuity contracts, and those amounts transferred to or from
the AmeriGas Propane, Inc. Savings Plan, a related plan.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of net assets available for benefits and changes
therein. Actual results could differ from these estimates.
F-21
<PAGE> 23
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. TRUST INVESTMENTS
The components of trust investments by fund at September 30, 1998 and 1997 are
as follows:
<TABLE>
<CAPTION>
September 30,
1998 1997
----------- -----------
<S> <C> <C>
Fixed Income Fund
Group annuity contracts with insurance companies:
1996 Plan Year - 6.12% $ 1,985,693 $ 2,009,833
1995 Plan Year - 6.86% - 2,398,130
----------- -----------
1,985,693 4,407,963
----------- -----------
Fidelity Equity Income Fund (shares -- 1998 - 198,714; 1997 - 182,715) 9,856,218 9,691,206
----------- -----------
Fidelity Magellan Fund (shares -- 1998 - 126,761; 1997 - 108,728) 12,361,716 10,856,466
----------- -----------
Fidelity Cash Reserves Fund (shares -- 1998 - 3,053,522; 1997 - 3,020,671) 3,053,522 3,020,671
----------- -----------
Fidelity Intermediate Bond Fund (shares -- 1998 - 81,642; 1997 - 55,162) 849,079 558,240
----------- -----------
UGI Common Stock Fund
UGI Corporation Unitized Stock Fund (units -- 1998 - 241,341;
1997 - 230,823) 2,398,928 2,730,641
Dividends receivable 35,499 35,475
----------- -----------
2,434,427 2,766,116
----------- -----------
Fidelity Managed Income Portfolio II Fund (shares -- 1998 - 5,278,268;
1997 - 3,238,410) 5,278,268 3,238,410
----------- -----------
Fidelity U.S. Equity Index Fund (shares -- 1998 - 44,253; 1997 - 22,173) 1,607,693 760,750
----------- -----------
Fidelity Fund (shares -- 1998 - 44,881; 1997 - 21,227) 1,346,425 640,847
----------- -----------
Fidelity Growth Company Fund (shares -- 1998 - 19,883; 1997 - 11,757) 895,539 585,598
----------- -----------
Fidelity Overseas Fund (shares -- 1998 - 13,354; 1997 - 5,940) 415,838 217,926
----------- -----------
Total trust investments - fair value, except for group annuity contracts
which are carried at cost plus accrued interest $40,084,418 $36,744,193
=========== ===========
Total trust investments - cost $35,755,412 $29,926,254
=========== ===========
</TABLE>
F - 22
<PAGE> 24
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The numbers of Plan participants with account balances by investment option at
September 30, 1998 and 1997 were:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Fixed Income Fund:
1996 Plan Year contract 546 569
1995 Plan Year contract - 570
Fidelity Equity Income Fund 677 640
Fidelity Magellan Fund 779 701
Fidelity Cash Reserves Fund 464 498
Fidelity Intermediate Bond Fund 141 109
UGI Common Stock Fund 506 463
Fidelity Managed Income Portfolio II Fund 575 591
Fidelity U.S. Equity Index Fund 233 134
Fidelity Fund 212 122
Fidelity Growth Company Fund 181 129
Fidelity Overseas Fund 135 86
Participant loans 245 228
</TABLE>
The total number of Plan participants with account balances at September 30,
1998 and 1997 of 1,253 and 1,153, respectively, was less than the sum of the
numbers of participants shown in the schedule above because many participants
invest in more than one fund.
During the 1998 and 1997 Plan years, the Plan purchased, at market prices,
14,043 and 16,987 shares of UGI Corporation Common Stock directly from UGI for
$371,480 and $397,544, respectively.
The Plan's principal financial instruments subject to credit risk are the
investments of the separate investment funds. The degree and concentration of
credit risk varies by fund depending upon the type and diversity of investments.
The Schedule of Assets Held for Investment Purposes depicts the types of
investment funds available and the proportionate share of assets held in each
particular investment option.
4. FEDERAL INCOME TAX STATUS
On July 31, 1995, the Internal Revenue Service issued a favorable determination
letter concerning the qualified status of the Plan in effect as of September 30,
1994 under Section 401(a) of the IRC. The Plan has since been amended, however,
the Plan Administrator believes that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC. No U.S.
income taxes are required to be paid by the trust created under the Plan (the
Trust) and participants are not taxed on Employers' contributions to the Trust
or income earned by the Trust. When a participant, or his or her beneficiary or
estate, receives a distribution under the Plan, the taxability of the value of
such distribution depends on the form and time of payment.
F-23
<PAGE> 25
UGI UTILITIES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. CHANGE IN PLAN YEAR
The Pension Committee of UGI Utilities' Board of Directors approved a change to
the Plan's fiscal year from one ending on September 30 to one ending on December
31. The change in the Plan's fiscal year will result in a short Plan year for
the period October 1, 1998 to December 31, 1998.
6. SUBSEQUENT EVENT
On February 28, 1999, the board of directors of UGI and Unisource Worldwide,
Inc. (Unisource) approved an Agreement and Plan of Merger (Merger Agreement)
for a stock-for-stock transaction. Under the terms of the Merger Agreement, UGI
will exchange 0.566 shares of UGI common stock for each share of Unisource
common stock outstanding at the effective time of the merger. The merger is
conditioned upon, among other things, the approvals of UGI and Unisource
shareholders and clearance under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 and the Canadian Competition Act. UGI and Unisource anticipate the
transaction will be completed by the end of June 1999.
Also on February 28, 1999, the Board of Directors of UGI determined that, in
connection with the merger, UGI will sell its natural gas and electric utility
operations and its energy marketing businesses. UGI has commenced seeking
buyers for these businesses and expects to complete the sale of these
businesses substantially for cash during fiscal 2000. The sale of UGI's gas and
electric utility operations will be subject to approval by the Pennsylvania
Public Utility Commission.
F-24
<PAGE> 26
UGI UTILITIES, INC. SAVINGS PLAN
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
<TABLE>
<CAPTION>
September 30, 1998
------------------------------------------------------------------
Number of
Shares or Fair Value/
Principal Contract
NAME OF ISSUER AND TITLE OF ISSUE Amount Cost Value % (3)
- --------------------------------- --------------- ----------- ----------- ------
<S> <C> <C> <C> <C>
FIXED INCOME FUND
Contract with insurance company: (1)
1996 Plan Year -- New York Life - 6.12% (2) $1,985,693 $ 1,985,693 $ 1,985,693 100.00%
----------- ----------- ------
FIDELITY EQUITY INCOME FUND (2) (4) 198,714 shrs 7,822,322 9,856,218 100.00%
----------- ----------- ------
FIDELITY MAGELLAN FUND (2) (4) 126,761 shrs 10,246,999 12,361,716 100.00%
----------- ----------- ------
FIDELITY CASH RESERVES FUND (2) (4) 3,053,522 shrs 3,053,522 3,053,522 100.00%
----------- ----------- ------
FIDELITY INTERMEDIATE BOND FUND (4) 81,642 shrs 836,653 849,079 100.00%
----------- ----------- ------
UGI COMMON STOCK FUND (2) (4)
UGI Corporation Unitized Stock Fund 241,341 units 2,319,914 2,398,928 98.54%
Dividends receivable $ 35,499 35,499 35,499 1.46%
----------- ----------- ------
2,355,413 2,434,427 100.00%
----------- ----------- ------
FIDELITY MANAGED INCOME
PORTFOLIO II FUND (2) (4) 5,278,268 shrs 5,278,268 5,278,268 100.00%
----------- ----------- ------
FIDELITY U.S. EQUITY INDEX FUND (4) 44,253 shrs 1,477,426 1,607,693 100.00%
----------- ----------- ------
FIDELITY FUND (4) 44,881 shrs 1,346,083 1,346,425 100.00%
----------- ----------- ------
FIDELITY GROWTH COMPANY FUND (4) 19,883 shrs 893,832 895,539 100.00%
----------- ----------- ------
FIDELITY OVERSEAS FUND (4) 13,354 shrs 459,201 415,838 100.00%
----------- ----------- ------
PARTICIPANT LOANS
Loan principal outstanding (7.00% - 10.00%) (4)(5) -- 1,333,525 100.00%
----------- ----------- ------
Total - all funds $35,755,412 $41,417,943
=========== ===========
</TABLE>
(1) The 1996 Plan Year group annuity contract is carried at cost plus
accrued interest. The insurance company guarantees the repayment of
principal and the crediting of interest under this contract. The timing
of the remittance of participant and employer contributions, if any,
and other participant-directed transactions may cause the actual yield
to vary from this rate. The 1996 Plan year contract is for a three-year
term.
(2) Investment represents 5% or more of the net assets available for
benefits.
(3) Percentages represent percentage of fair value / contract value of each
fund.
(4) Party in interest.
(5) Range of interest rates for loans outstanding as of September 30, 1998.
F - 25
<PAGE> 27
UGI UTILITIES, INC. SAVINGS PLAN
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS (1)
YEAR ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Percent of Net
Total Total Beginning Number of Number of Realized
TRANSACTION BY FUND OR CARRIER Purchases Sales Net Assets Purchases Sales Gains
------------------------------ ----------- ---------- ---------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
FIXED INCOME FUND
Group Annuity Contract -- 1995
John Hancock Mutual Life - 6.86% (2) $ -- $2,397,407 6.2% -- 1 --
FIDELITY EQUITY INCOME FUND $2,647,875 $1,861,162 11.6% 147 77 $437,722
FIDELITY MAGELLAN FUND $3,621,076 $1,741,569 13.8% 157 68 $325,258
FIDELITY MANAGED INCOME
PORTFOLIO II FUND $3,613,056 $1,573,197 13.3% 127 109 --
</TABLE>
(1) A transaction or series of transactions within the plan year with or in
conjunction with the same person, which exceeds 5% of the net assets
available for benefits as of the beginning of the plan year.
(2) The insurance company guarantees the repayment of principal and the
crediting of interest under this contract. The timing of the remittance
of participant and employer contributions, if any, and other
participant-directed transactions may cause the actual yield to vary from
the stated rate. The contracts are for three-year terms.
F-26
<PAGE> 28
AMERIGAS PROPANE, INC.
SAVINGS PLAN
FINANCIAL STATEMENTS
for the years ended September 30, 1998 and 1997
F-27
<PAGE> 29
AMERIGAS PROPANE, INC.
SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS: Page(s)
-------
Report of Independent Public Accountants F-29
Financial Statements:
Statements of Net Assets Available for Benefits at
September 30, 1998 and 1997 F-30 to F-31
Statements of Changes in Net Assets Available for
Benefits for the years ended September 30, 1998
and 1997 F-32 to F-33
Notes to Financial Statements F-34 to F-45
Item 27a - Schedule of Assets Held for Investment Purposes -
September 30, 1998 F-46
Item 27d - Schedule of Reportable Transactions for the year
ended September 30, 1998 F-47
F-28
<PAGE> 30
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Benefits Committee of
AmeriGas Propane, Inc.:
We have audited the accompanying statements of net assets available for benefits
of the AmeriGas Propane, Inc. Savings Plan (the "Plan") as of September 30, 1998
and 1997, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements and the
supplemental schedules referred to below are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements and supplemental schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
September 30, 1998 and 1997, and the changes in net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for purposes
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The Fund Information in the statements
of net assets available for benefits and the statements of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for benefits and changes in net assets
available for benefits of each fund. The supplemental schedules and Fund
Information have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
Arthur Andersen LLP
Chicago, Illinois
March 19, 1999
F-29
<PAGE> 31
AMERIGAS PROPANE, INC. SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
September 30, 1998
<TABLE>
<CAPTION>
Participant Directed
---------------------------------------------------------------------------
Fidelity Fidelity Fidelity UGI
Fixed Equity Fidelity Cash Intermediate Common
Income Income Magellan Reserves Bond Stock
Total Fund Fund Fund Fund Fund Fund
------------ ---------- ----------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Trust investments (Note 3) $127,715,516 $3,498,512 $28,011,033 $34,000,364 $28,120,717 $ 3,665,176 $2,207,684
Loans to participants 3,682,518
------------ ---------- ----------- ----------- ----------- ------------ ----------
Net assets available for benefits $131,398,034 $3,498,512 $28,011,033 $34,000,364 $28,120,717 $ 3,665,176 $2,207,684
============ ========== =========== =========== =========== ============ ==========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
------------------------------------------------------------------------------------
Fidelity Fidelity Fidelity
Managed U.S. Equity Growth Fidelity
Income Index Fidelity Company Overseas Participant
Portfolio II Fund Fund Fund Fund Fund Loans
----------------- ------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Trust investments (Note 3) $ 15,763,425 $ 3,849,983 $ 3,924,749 $ 3,637,906 $ 1,035,967
Loans to participants $ 3,682,518
----------------- ------------- ----------- ----------- ----------- -----------
Net assets available for benefits $ 15,763,425 $ 3,849,983 $ 3,924,749 $ 3,637,906 $ 1,035,967 $ 3,682,518
================= ============= =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F - 30
<PAGE> 32
AMERIGAS PROPANE, INC. SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
September 30, 1997
<TABLE>
<CAPTION>
Participant Directed
---------------------------------------------------------------------------
Fidelity Fidelity Fidelity UGI
Fixed Equity Fidelity Cash Intermediate Common
Income Income Magellan Reserves Bond Stock
Total Fund Fund Fund Fund Fund Fund
------------ ---------- ----------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Trust investments (Note 3) $125,883,630 $8,735,309 $30,711,643 $32,918,096 $29,213,828 $ 3,002,368 $2,276,655
Loans to participants 2,874,200
------------ ---------- ----------- ----------- ----------- ------------ ----------
Net assets available for benefits $128,757,830 $8,735,309 $30,711,643 $32,918,096 $29,213,828 $ 3,002,368 $2,276,655
============ ========== =========== =========== =========== ============ ==========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
-----------------------------------------------------------------------------
Fidelity Fidelity Fidelity
Managed U.S. Equity Growth Fidelity
Income Index Fidelity Company Overseas Participant
Portfolio II Fund Fund Fund Fund Fund Loans
----------------- ----------- ---------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Trust investments (Note 3) $ 9,966,151 $3,014,426 $2,390,809 $2,709,675 $944,670
Loans to participants $ 2,874,200
------------ ----------- ---------- ---------- -------- -----------
Net assets available for benefits $ 9,966,151 $3,014,426 $2,390,809 $2,709,675 $944,670 $ 2,874,200
============ =========== ========== ========== ======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F - 31
<PAGE> 33
AMERIGAS PROPANE, INC. SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
For the Year Ended September 30, 1998
<TABLE>
<CAPTION>
Participant Directed
------------------------------------------------------------------------------
Fidelity Fidelity Fidelity UGI
Fixed Equity Fidelity Cash Intermediate Common
Income Income Magellan Reserves Bond Stock
Total Fund Fund Fund Fund Fund Fund
------------ ---------- ----------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Participants' contributions $ 6,675,809 $ 1,406,751 $ 1,765,003 $ 381,701 $ 340,887 $ 302,146
Company contributions 4,383,100 891,399 1,172,746 298,390 226,584 203,125
Investment income:
Interest 216,115 $ 216,115
Dividends 7,652,793 1,777,481 2,388,243 1,492,069 201,176 129,293
Net appreciation (depreciation)
in value of investments (3,274,376) (1,849,169) (699,822) 92,796 (433,909)
Loan administration fees (28,119) (2,639) (12,745) (2,496) (365) (5,840)
Other 228,448 (17) 48,655 65,526 28,871 9,914 9,570
Transfers of participants'
balances, net 173,836 (4,976,872) (2,514,643) (969,057) 134,496 269,046 (152,121)
------------ ---------- ----------- ----------- ----------- ---------- ----------
16,027,606 (4,760,774) (242,165) 3,709,894 2,333,031 1,140,038 52,264
Less - Distributions to participants 13,387,402 476,023 2,458,445 2,627,626 3,426,142 477,230 121,235
------------ ---------- ----------- ----------- ----------- ---------- ----------
Net additions (deductions) 2,640,204 (5,236,797) (2,700,610) 1,082,268 (1,093,111) 662,808 (68,971)
Net assets available for benefits-
beginning of year 128,757,830 8,735,309 30,711,643 32,918,096 29,213,828 3,002,368 2,276,655
------------ ---------- ----------- ----------- ----------- ---------- ----------
Net assets available for benefits-
end of year $131,398,034 $3,498,512 $28,011,033 $34,000,364 $28,120,717 $3,665,176 $2,207,684
============ ========== =========== =========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
-----------------------------------------------------------------------------------
Fidelity Fidelity Fidelity
Managed U.S. Equity Growth Fidelity
Income Index Fidelity Company Overseas Participant
Portfolio II Fund Fund Fund Fund Fund Loans
----------------- ----------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Participants' contributions $ 812,796 $ 425,734 $ 384,815 $ 659,691 $ 196,285
Company contributions 597,798 241,992 234,914 401,736 114,416
Investment income:
Interest
Dividends 896,879 98,358 324,881 297,413 47,000
Net appreciation (depreciation)
in value of investments 197,302 (124,147) (275,288) (182,139)
Loan administration fees (208) (46) (3,610) (170)
Other 29,055 8,465 8,197 17,081 4,886 $ (1,755)
Transfers of participants'
balances, net 6,109,894 227,124 875,587 109,790 39,779 1,020,813
---------------- ----------- ---------- ---------- ---------- ----------
8,446,214 1,198,929 1,700,637 1,210,253 220,227 1,019,058
Less - Distributions to participants 2,648,940 363,372 166,697 282,022 128,930 210,740
---------------- ----------- ---------- ---------- ---------- ----------
Net additions (deductions) 5,797,274 835,557 1,533,940 928,231 91,297 808,318
Net assets available for benefits-
beginning of year 9,966,151 3,014,426 2,390,809 2,709,675 944,670 2,874,200
---------------- ----------- ---------- ---------- ---------- ----------
Net assets available for benefits-
end of year $15,763,425 $3,849,983 $3,924,749 $3,637,906 $1,035,967 $3,682,518
================ =========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F - 32
<PAGE> 34
AMERIGAS PROPANE, INC. SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
Participant Directed
-------------------------------------------------------------------------------
Fidelity Fidelity Fidelity UGI
Fixed Equity Fidelity Cash Intermediate Common
Income Income Magellan Reserves Bond Stock
Total Fund Fund Fund Fund Fund Fund
------------ ---------- ----------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Merger of AmeriGas Propane, Inc.
Pension Plan (Note 1) $ 35,418,653 $6,778,721 $ 5,074,664 $ 8,246,264 $14,525,846 $ 356,982 $ 59,105
Participants' contributions 6,574,791 1,301,147 1,714,947 702,184 361,269 326,243
Company contributions 4,604,209 916,658 1,194,047 528,321 246,134 197,878
Investment income:
Interest 648,429 567,171 1,265 944 972 250 31
Dividends 5,116,269 1,615,956 940,404 1,593,522 163,006 96,308
Net appreciation
in value of investments 16,809,205 7,065,909 8,097,367 25,993 324,281
Loan administration fees (15,335) (1,432) (6,679) (1,839) (209) (3,425)
Other 174,890 (8,436) 37,355 49,034 21,652 9,591 6,853
Transfers of participants'
balances, net 293,614 (6,484,143) (560,967) (3,461,297) (1,520,001) 324,398 175,958
------------ ---------- ----------- ----------- ----------- ----------- ----------
69,624,725 853,313 15,450,555 16,775,031 15,850,657 1,487,414 1,183,232
Less - Distributions to
participants 14,443,029 1,033,761 3,202,411 3,347,998 4,837,628 162,251 88,209
------------ ---------- ----------- ----------- ----------- ----------- ----------
Net additions (deductions) 55,181,696 (180,448) 12,248,144 13,427,033 11,013,029 1,325,163 1,095,023
Net assets available for benefits-
beginning of year 73,576,134 8,915,757 18,463,499 19,491,063 18,200,799 1,677,205 1,181,632
------------ ---------- ----------- ----------- ----------- ------------ -----------
Net assets available for benefits-
end of year $128,757,830 $8,735,309 $30,711,643 $32,918,096 $29,213,828 $3,002,368 $2,276,655
============ ========== =========== =========== =========== =========== ==========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
-----------------------------------------------------------------------------------------------
Fidelity Fidelity Fidelity
Managed U.S. Equity Growth Fidelity
Income Index Fidelity Company Overseas GIC Participant
Portfolio II Fund Fund Fund Fund Fund Fund Loans
----------------- ----------- ---------- ---------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Merger of AmeriGas Propane, Inc.
Pension Plan (Note 1) $ 62,820 $ 96,207 $ 174,162 $ 43,882
Participants' contributions $ 841,755 283,502 286,862 576,969 179,913
Company contributions 675,226 169,766 192,412 376,679 107,088
Investment income:
Interest 164 190 210 149 81 $ 77,002
Dividends 515,672 37,750 90,155 42,342 21,154
Net appreciation
in value of investments 465,414 317,293 404,016 108,932
Loan administration fees (166) (1,585)
Other 25,518 5,590 5,715 12,073 3,363 (260) $ 6,842
Transfers of participants'
balances, net 9,111,487 2,120,814 1,437,298 1,186,162 492,967 (3,487,065) 958,003
----------------- ----------- ---------- ---------- -------- ----------- -----------
11,169,656 3,145,846 2,424,567 2,772,552 957,380 (3,410,323) 964,845
Less - Distributions to
participants 1,203,505 131,420 33,758 62,877 12,710 102,536 223,965
----------------- ----------- ---------- ---------- -------- ----------- -----------
Net additions (deductions) 9,966,151 3,014,426 2,390,809 2,709,675 944,670 (3,512,859) 740,880
Net assets available for benefits-
beginning of year -- -- -- -- -- 3,512,859 2,133,320
----------------- ----------- ---------- ---------- -------- ----------- -----------
Net assets available for benefits-
end of year $9,966,151 $3,014,426 $2,390,809 $2,709,675 $944,670 $ -- $2,874,200
================= =========== ========== ========== ======== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F - 33
<PAGE> 35
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following brief description of the AmeriGas Propane, Inc. Savings Plan
(Plan) provides general information on the provisions of the Plan in effect on
September 30, 1998 and during the periods covered by the financial statements.
More complete information is included in the Plan document.
GENERAL. The Plan is a defined contribution plan covering employees of AmeriGas
Propane, Inc. (a Pennsylvania corporation, hereinafter referred to as "the
Company"). The Plan covers employees of the Company having a minimum of one year
of eligible service as defined in the Plan document. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The
Plan is administered by the AmeriGas Propane, Inc. Benefits Committee (Plan
Administrator), whose members are appointed by the President of the Company and
subject to approval by the Company's Compensation/Pension Committee.
CONTRIBUTIONS. Subject to certain statutory limitations prescribed by the
Internal Revenue Code (IRC), a participant may elect to contribute to the Plan
on a before-tax basis through payroll reduction an amount equal to from 1% to
10%, in whole percentages, of eligible compensation. A participant may increase
the rate of his or her contribution at any time. A participant may reduce or
suspend his or her contributions at any time by calling Fidelity Institutional
Retirement Services Co. (FIRSCO).
The Plan also accepts on behalf of any employee, whether or not he or she has
met the requirements for participation in the Plan, (i) the entire amount of
cash received as a distribution from another qualified trust forming part of a
plan described in section 401(a) of the IRC or from a "rollover" individual
retirement plan described in section 408 of the IRC, or (ii) a direct transfer
from another plan qualified under Section 401(a) of the IRC.
The Company shall contribute to the Plan an amount equal to 100% of
contributions made by each eligible participant for each payroll period of up to
a total of 5% of the participant's eligible compensation for each such payroll
period. A participant will be eligible to receive matching contributions after
he or she has completed a year of service.
The Company may also contribute for each Plan year, out of its net profits, such
amounts, if any, as shall be determined by its Board of Directors, in its sole
discretion, to all eligible participants. A participant will be eligible to
receive profit sharing contributions if he or she (a) has completed a year of
service, (b) was not eligible to participate in the AmeriGas Propane, Inc.
Supplemental Executive Retirement Plan as of the last day of the Plan year and
(c) either (i) was actively employed or on a qualifying leave of absence on the
last day of the Plan year or (ii) retired, died,
F-34
<PAGE> 36
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
or became disabled (as defined in the Plan) during the Plan year. Subject to
certain limitations, the profit sharing contribution to be credited to a
participant's account shall be determined by dividing the total amount of such
contribution by the number of eligible Plan participants. No such amounts were
contributed to the Plan for the 1998 or 1997 Plan year.
Any participant who satisfies the eligibility requirements for the profit
sharing contributions described in the preceding paragraph, was a participant in
the former Retirement Income Plan for Employees of AP Propane, Inc. as of
December 31, 1988 and had attained the age of 50 as of that date, is entitled to
an additional contribution as of the last day of each Plan year as follows:
<TABLE>
<CAPTION>
Age as of Percentage of
December 31, 1988 Eligible Compensation
----------------- ---------------------
<S> <C>
50 to 54 2%
55 to 59 3%
60 and over 4%
</TABLE>
All contributions are invested in accordance with participant investment
elections in effect on the dates of the contributions.
A participant will at all times be fully (100%) vested in the portion of his or
her account attributable to participant contributions. A participant is fully
vested in the portion of his or her account attributable to the Company's
contributions (including Company contributions previously made to the AmeriGas
Propane, Inc. Pension Plan (the "Pension Plan")) upon the earlier of (i) the
completion of five years of service or (ii) the attainment of normal retirement
age, total disability (as defined by the Plan document) or death while in the
employ of the Company or an affiliated company. For Plan purposes, a participant
will attain normal retirement age on the later of his or her 65th birthday or
the fifth anniversary of his or her date of hire.
A participant who terminates employment before he or she is fully vested will
forfeit nonvested amounts attributable to Company contributions in his account.
These forfeited amounts remain in the Plan and are available to reduce future
Company contributions. For the 1998 Plan year, Plan forfeitures of $425,686 were
used to reduce Company contributions. During the 1998 and 1997 Plan years,
$346,273 and $332,597, respectively, were forfeited from participant accounts.
In addition, in conjunction with the Pension Plan Merger, as more fully
described below, forfeitures of $211,376 were transferred to the Plan effective
October 1, 1996. As of September 30, 1998 and 1997, there was $569,447 and
$621,160, respectively, of forfeitures remaining in the Plan.
INVESTMENT FUNDS. A participant may elect to have his or her funds invested in
one or more of the following types of funds:
F-35
<PAGE> 37
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
. Fixed Income Fund
This fund consists of three-year guaranteed investment contracts with
insurance companies. The 1996 Plan Year contract was placed with New
York Life Insurance Company. The 1995 Plan Year contract was placed
with John Hancock Mutual Life Insurance Company. The investment
objective of the fund is to provide a fixed rate of investment return
guaranteed by the insurance companies for a specified period of time.
The 1996 and 1995 Plan year contracts matured on September 30, 1998
and 1997, respectively. Effective October 1, 1996, contributions to
the Fixed Income Fund were discontinued. Participant account balances
in the Fixed Income Fund are liquidated and reinvested in accordance
with participant elections (or, if an election is not made, the
default funds described below) as the guaranteed investment contracts
mature.
. Fidelity Equity Income Fund
This fund is an unaffiliated registered investment company mutual fund
whose investments comprise principally income-producing equity
securities and whose investment objective is to achieve reasonable
income and capital appreciation.
. Fidelity Magellan Fund
This fund is an unaffiliated registered investment company mutual fund
whose investments comprise principally equity securities of domestic,
foreign, and multinational issuers and whose investment objective is
to achieve capital appreciation over an extended period of time.
. Fidelity Cash Reserves Fund
This fund is an unaffiliated registered investment company mutual fund
whose investments comprise high-quality, short-term certificates of
deposit, repurchase agreements, commercial paper or other similar
short-term investments and whose investment objective is to achieve
current income while maintaining a stable share price.
F-36
<PAGE> 38
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
. Fidelity Intermediate Bond Fund
This fund is an unaffiliated registered investment company mutual fund
whose investments comprise investment-grade fixed income obligations
including U.S. Government and corporate bonds and mortgage-backed
securities with average maturities of three to ten years and whose
investment objective is to achieve high current income.
. UGI Common Stock Fund
This fund invests principally in shares of UGI Corporation Common
Stock. Participants in the fund do not individually own specific
shares of UGI Corporation Common Stock but rather own units in the
fund that invests in such shares. The value of a unit in the UGI
Common Stock Fund was initially set at $10.00 and is recalculated
daily by dividing the fair value of the fund's assets (comprising
shares of UGI Corporation Common Stock and temporary cash investments)
by the total number of units outstanding. The UGI Common Stock Fund
holds a small cash position in order to allow participants to perform
certain transactions on a daily basis without having to wait for the
purchase or sale of UGI Common Stock to settle. During the 1998 Plan
year, the range of high and low unit values were $12.72 and $8.95,
respectively. During the period November 8, 1996 (the date the fund
was initially unitized) to September 30, 1997, the range of high and
low unit values were $11.78 and $9.03, respectively.
. Fidelity Managed Income Portfolio II Fund
This fund is an unaffiliated commingled pool whose investments
comprise principally guaranteed investment contracts offered by
insurance companies and financial institutions and whose investment
objective is to provide a fixed rate of investment return guaranteed
by the insurance company or financial institution for a specified
period of time, generally between one and seven years.
. Fidelity U.S. Equity Index Fund
This fund is an unaffiliated registered investment company mutual fund
whose investments comprise principally U.S. equity securities that
broadly represent the U.S. stock market as measured by the Standard &
Poor's Composite Index of 500 Stocks (S&P 500) and whose investment
objective is to track the performance of the S&P 500.
. Fidelity Fund
This fund is an unaffiliated registered investment company mutual fund
whose investments comprise principally equity and fixed income
securities of domestic and foreign issuers and whose investment
objective is to achieve long-term capital appreciation and current
income.
F-37
<PAGE> 39
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
. Fidelity Growth Company Fund
This fund is an unaffiliated registered investment company mutual fund
whose investments comprise principally equity securities of companies
with above average potential for growth and whose investment objective
is to achieve capital appreciation over an extended period of time.
. Fidelity Overseas Fund
This fund is an unaffiliated registered investment company mutual fund
whose investments comprise principally equity securities of foreign
issuers and whose investment objective is to achieve capital
appreciation over an extended period of time.
Prior to October 1, 1993, participants in the former Petrolane Savings Plan
could invest their contributions in the Guaranteed Investment Contract Fund (GIC
Fund). The GIC Fund invested in guaranteed investment contracts offered by
insurance companies which matured at varying times through April 1997.
Participant account balances in the GIC Fund were liquidated and reinvested in
accordance with participant elections (or, if an election was not made, the
default funds described below) as group annuity contracts matured.
Effective November 15, 1996, participants may transfer amounts between funds
(excluding transfers from the Fixed Income Fund prior to the expiration of the
investment contracts) at any time with no limit. Prior to November 15, 1996,
participants could transfer amounts between funds (excluding the Fixed Income
Fund prior to the expiration of the investment contracts) at any time during a
calendar quarter, limited to once each quarter. Participants may change their
investment elections for future contributions at any time. In the absence of a
participant's Fixed Income Fund reinvestment election, during the 1998 and 1997
Plan years all amounts were reinvested in the Fidelity Managed Income Portfolio
II Fund.
Fidelity Management Trust Company is the Plan's trustee for all investment
assets except for the investment assets of the Fixed Income Fund for which
Mellon Bank, N.A. is the Plan's trustee.
F-38
<PAGE> 40
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
DISTRIBUTIONS. The Plan benefit of a participant who terminates employment as a
result of retirement, death or total disability, as defined by the Plan
document, shall be equal to the proceeds of liquidation of 100% of the balance
of his or her account. Participants may elect to receive their interest in the
UGI Common Stock Fund in the form of shares of UGI Corporation Common Stock. The
Plan benefit of a participant who terminates employment for reasons other than
retirement, death or total disability shall be equal to the proceeds of
liquidation of the vested portion of his or her account.
Distributions will generally be made in the form of a lump sum. If the value of
a participant's account exceeds $3,500 and the participant is married, the
participant's Pension Account and Predecessor Pension Rollover Account will be
distributed in the form of a joint and survivor annuity. Under a joint and
survivor annuity, the participant will receive a monthly benefit for his or her
lifetime; upon the participant's death, the participant's surviving spouse, if
any, will receive a monthly benefit equal to 50% of the benefit the participant
was receiving. If the value of the participant's account exceeds $3,500 and the
participant is not married, the participant's Pension Account and Predecessor
Pension Rollover Account will be distributed in the form of a single life
annuity. In lieu of a joint and survivor annuity or a single life annuity, a
participant may generally elect to receive his Pension Account and Predecessor
Pension Rollover Account in the form of (i) a lump sum, (ii) a single life
annuity, (iii) a joint and survivor annuity with 50% or 100% of the
participant's monthly payments continuing, after the participant's death, for
the life of the participant's beneficiary, or (iv) installments over 5 or 10
years, as elected by the participant. Any such election will be subject to
spousal consent, if applicable.
Where the amount to be distributed exceeds $3,500, no distribution shall be made
to any Plan participant prior to his or her normal retirement age (as defined
above) unless the participant elects to receive such distribution. Where the
amount to be distributed does not exceed $3,500, a Plan participant's benefit
will be distributed as soon as practicable after the participant's termination
of employment.
A participant who continues to work past age 70-1/2 may elect to defer
distribution until he terminates employment. Otherwise, distributions must
generally be made as soon as practicable after the participant reaches the
normal retirement age as defined above.
DEATH. If a participant dies prior to receiving a distribution of his or her
account, the participant's designated beneficiary shall be entitled to receive a
distribution of the proceeds of liquidation of 100% of the vested balance of the
participant's account. Generally, the account will be distributed to the
beneficiary as soon as practicable following the date of death. The beneficiary
of a participant who is married at the time of the participant's death will be
the participant's spouse, unless the participant designated another beneficiary
and the spouse consented to such designation in accordance with procedures
specified by the Plan document.
F-39
<PAGE> 41
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
Death benefits are generally paid in the form of a lump sum. Death benefits
payable to a spouse from the Pension Account and the Predecessor Pension
Rollover Account are paid in the form of a single life annuity unless the spouse
elects a lump sum distribution.
WITHDRAWALS. Generally, a participant may withdraw up to 50% of the balance of
his or her account attributable to previously permitted after-tax contributions
(including after-tax contributions that were matched by the Company) at any
time. However, the withdrawal must be in an amount of at least $250. No more
than one withdrawal in any calendar year is permitted from each of the matched
and unmatched portions of a participant's after-tax contribution account.
A participant may withdraw once per calendar year up to 100% of amounts
attributable to participation in certain "predecessor plans" and rollover
contributions from other 401(a) or individual retirement plan accounts, however
the amount must be at least $500 or, if less, the total value of the applicable
account.
A participant may withdraw before-tax contributions (and earnings attributable
thereto credited as of December 31, 1988) only on account of financial hardship
resulting from (a) medical expenses; (b) educational expenses; (c) foreclosure
on a primary residence; or (d) purchase of a primary residence. A hardship
withdrawal will be permitted if the Plan Administrator determines that (i) the
withdrawal is on account of an immediate and heavy financial need of the
participant and (ii) the withdrawal is necessary to satisfy such financial need.
While a participant is still employed by the Company, withdrawals of amounts
attributable to Company contributions, and post-1988 earnings on participant
before-tax contributions, are not permitted.
LOAN PROVISION. The Plan includes an employee loan provision. Generally, at the
time a loan is to be made, the amount of all loans to be outstanding may not
exceed the lesser of (a) 50% of a participant's before-tax and rollover account
balances, or (b) $50,000 less the highest balance of any loan during the prior
twelve-month period. Each loan bears interest at a rate determined in accordance
with generally prevailing market conditions for similar types of loans. The
minimum loan amount is $500. The amount of the loan withdrawn from a
participant's account is allocated in proportion to the value of the
participant's salary deferral and rollover account balances in each investment
fund. Repayments, including interest, are made in equal installments through
payroll deductions and are allocated to participant accounts in accordance with
current investment elections. No loan may have a final maturity in excess of
five years except that, if the loan is used to purchase a principal residence
for the participant, the loan may have a final maturity of up to ten years. No
participant shall be permitted to have more than two loans outstanding at any
one time.
F-40
<PAGE> 42
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
ADMINISTRATIVE EXPENSES. Administrative expenses of the Plan are chargeable to
the Plan unless paid for by the Company. The Company currently pays Plan
administrative expenses other than loan administration fees which are charged to
participants. Mutual fund expenses are paid to fund managers from mutual fund
assets.
PLAN TERMINATION. Although it has not expressed any intent to do so, the Company
has the right to terminate the Plan in whole or in part at any time for any
reason. In the event of a complete or partial termination of the Plan, the
affected participants will become fully vested in their account balances.
PLAN AMENDMENT. The Company may amend the Plan at any time for any reason by
written action of its Board of Directors. Amendments required to comply with
applicable legal requirements, however, may be made by an officer of the Company
without Board approval.
VOTING RIGHTS OF UGI COMMON STOCK FUND PARTICIPANTS. A participant has the right
to instruct the trustee of the Plan how to vote, at each meeting of
shareholders, all shares of UGI Corporation Common Stock (including fractional
shares) represented by the value of the participant's interest in the UGI Common
Stock Fund, and a pro rata portion of unvoted shares. A participant also has the
right to direct the trustee of the Plan whether or not to tender shares in
response to a tender offer.
AMERIGAS PROPANE, INC. PENSION PLAN MERGER. Effective October 1, 1996, the
Pension Plan was frozen and its assets were merged into the Plan (the "Pension
Plan Merger"). The Pension Plan was a defined contribution plan covering certain
eligible employees of the Company. The general provisions of the Plan were not
affected by the Pension Plan Merger. However, in order to permit the orderly
transfer and reconciliation of Pension Plan account balances, during the period
September 13, 1996 through mid-November 1996, certain activities of Plan
participants, including interfund transfers, loans and distributions upon
termination or retirement, were suspended.
2. ACCOUNTING POLICIES
Investments, other than contracts with insurance companies, are recorded at fair
value generally based upon quoted market prices. The contracts with insurance
companies included in the Fixed Income Fund and the GIC Fund approximate fair
value and represent amounts on deposit with insurance companies plus accrued
interest.
Dividend income is recorded on the record date. Interest earned on investments
is recorded on the accrual basis. Purchases and sales of securities are recorded
on a trade date basis.
F-41
<PAGE> 43
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
The Plan presents in the Statement of Changes in Net Assets Available for
Benefits the net appreciation (depreciation) in fair value of investments which
consists of realized gains or losses and unrealized appreciation (depreciation)
in the fair value of those investments.
Distributions are made to Plan participants based upon the fair value of each
participant's investment account (except for investments of the Fixed Income
Fund and the GIC Fund for which distributions are based upon contract value) as
of the date of distribution.
Transfers of participant balances represent amounts directed by participants to
be transferred among investment funds, amounts transferred as a result of the
maturity of group annuity contracts, and those amounts transferred to or from
the UGI Utilities, Inc. Savings Plan and other affiliated plans.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of net assets available for benefits and changes
therein. Actual results could differ from these estimates.
F-42
<PAGE> 44
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
3. TRUST INVESTMENTS
The components of trust investments by fund at September 30, 1998 and 1997 are
as follows:
<TABLE>
<CAPTION>
September 30,
1998 1997
------------- -------------
<S> <C> <C>
Fixed Income Fund
Group annuity contracts with insurance companies:
1996 Plan Year - 6.12% $ 3,498,512 $ 3,776,326
1995 Plan Year - 6.86% -- 4,958,983
------------- -------------
3,498,512 8,735,309
------------- -------------
Fidelity Equity Income Fund (shares -- 1998 - 564,738; 1997 - 579,029) 28,011,033 30,711,643
------------- -------------
Fidelity Magellan Fund (shares -- 1998 - 348,650; 1997 - 329,679) 34,000,364 32,918,096
------------- -------------
Fidelity Cash Reserves Fund (shares -- 1998 - 28,120,717; 1997 - 29,213,828) 28,120,717 29,213,828
------------- -------------
Fidelity Intermediate Bond Fund (shares -- 1998 - 352,421; 1997 - 296,678) 3,665,176 3,002,368
------------- -------------
UGI Common Stock Fund
UGI Corporation Unitized Stock Fund (units -- 1998 - 221,951; 1997 - 190,549) 2,173,578 2,248,474
Dividends receivable 34,106 28,181
------------- -------------
2,207,684 2,276,655
------------- -------------
Fidelity Managed Income Portfolio II Fund (shares -- 1998 - 15,763,425; 1997 - 9,966,151) 15,763,425 9,966,151
------------- -------------
Fidelity U.S. Equity Index Fund (shares -- 1998 - 105,973; 1997 - 87,859) 3,849,983 3,014,426
------------- -------------
Fidelity Fund (shares -- 1998 - 130,825; 1997 - 79,192) 3,924,749 2,390,809
------------- -------------
Fidelity Growth Company Fund (shares -- 1998 - 80,771; 1997 - 54,401) 3,637,906 2,709,675
------------- -------------
Fidelity Overseas Fund (shares -- 1998 - 33,268; 1997 - 25,747) 1,035,967 944,670
------------- -------------
Total trust investments - fair value, except for group annuity contracts
which are carried at cost plus accrued interest $ 127,715,516 $ 125,883,630
-============ =============
Total trust investments - cost $ 115,306,882 $ 106,699,448
-============ =============
</TABLE>
F-43
<PAGE> 45
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
The numbers of Plan participants with account balances by investment option at
September 30, 1998 and 1997 were:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Fixed Income Fund:
1996 Plan Year contract 1,958 1,808
1995 Plan Year contract - 1,544
Fidelity Equity Income Fund 2,556 2,707
Fidelity Magellan Fund 2,795 2,880
Fidelity Cash Reserves Fund 3,553 3,946
Fidelity Intermediate Bond Fund 955 974
UGI Common Stock Fund 841 823
Fidelity Managed Income Portfolio II Fund 2,341 2,361
Fidelity U.S. Equity Index Fund 625 516
Fidelity Fund 666 594
Fidelity Growth Company Fund 906 886
Fidelity Overseas Fund 394 369
Participant loans 971 881
</TABLE>
The total number of Plan participants with account balances at September 30,
1998 and 1997 of 5,481 and 5,707, respectively, was less than the sum of the
numbers of participants shown in the schedule above because many participants
invest in more than one fund.
During the 1998 and 1997 Plan years, the Plan purchased, at market prices,
19,786 and 25,029 shares of UGI Corporation Common Stock directly from UGI
Corporation for $521,127 and $590,117, respectively.
The Plan's principal financial instruments subject to credit risk are the
investments of the separate investment funds. The degree and concentration of
credit risk varies by fund depending upon the type and diversity of investments.
The Schedule of Assets Held for Investment Purposes depicts the types of
investment funds available and the proportionate share of assets held in each
particular investment option.
4. FEDERAL INCOME TAX STATUS
On July 31, 1995, the Internal Revenue Service issued a favorable determination
letter concerning the qualified status of the Plan in effect as of September 30,
1994 under Section 401(a) of the IRC. The Plan has since been amended, however,
the Plan Administrator believes that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC. No U.S.
income taxes are required to be paid by the trust created under the Plan (the
Trust)
F-44
<PAGE> 46
AMERIGAS PROPANE, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
and participants are not taxed on Company contributions to the Trust or
income earned by the Trust. When a participant, or his or her beneficiary or
estate, receives a distribution under the Plan, the taxability of the value of
such distribution depends on the form and time of payment.
5. CHANGE IN PLAN YEAR
The Compensation/Pension Committee of the Company's Board of Directors approved
a change to the Plan's fiscal year from one ending on September 30 to one ending
on December 31. The change in the Plan's fiscal year will result in a short plan
year for the period October 1, 1998 to December 31, 1998.
6. SUBSEQUENT EVENT
On February 28, 1999, the board of directors of UGI Corporation (UGI) and
Unisource Worldwide, Inc. (Unisource) approved an Agreement and Plan of Merger
(Merger Agreement) for a stock-for-stock transaction. Under the terms of the
Merger Agreement, UGI will exchange 0.566 shares of UGI common stock for each
share of Unisource common stock outstanding at the effective time of the
merger. The merger is conditioned upon, among other things, the approvals of
UGI and Unisource shareholders and clearance under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and the Canadian Competition Act. UGI and
Unisource anticipate the transaction will be completed by the end of June 1999.
Also on February 28, 1999, the Board of Directors of UGI determined that, in
connection with the merger, UGI will sell its natural gas and electric utility
operations and its energy marketing businesses. UGI has commenced seeking
buyers for these businesses and expects to complete the sale of these
businesses substantially for cash during fiscal 2000. The sale of UGI's gas and
electric utility operations will be subject to approval by the Pennsylvania
Public Utility Commission.
F-45
<PAGE> 47
AMERIGAS PROPANE, INC. SAVINGS PLAN
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
<TABLE>
<CAPTION>
September 30, 1998
-------------------------------------------------------------------------
Number of
Shares or Fair Value/
Principal Contract
Name of Issuer and Title of Issue Amount Cost Value % (3)
- --------------------------------- ------ ---- ----- ---
<S> <C> <C> <C> <C>
FIXED INCOME FUND
Contract with insurance company:(1)
1996 Plan Year -- New York Life - 6.12% $ 3,498,512 $ 3,498,512 $ 3,498,512 100.00%
------------- ------------- ----------
FIDELITY EQUITY INCOME FUND (2) (4) 564,738 shrs 22,348,802 28,011,033 100.00%
------------- ------------- ----------
FIDELITY MAGELLAN FUND (2) (4) 348,650 shrs 27,753,440 34,000,364 100.00%
------------- ------------- ----------
FIDELITY CASH RESERVES FUND (2) (4) 28,120,717 shrs 28,120,717 28,120,717 100.00%
------------- ------------- ----------
FIDELITY INTERMEDIATE BOND FUND (4) 352,421 shrs 3,590,091 3,665,176 100.00%
------------- ------------- ----------
UGI COMMON STOCK FUND (4)
UGI Corporation Unitized Stock Fund 221,951 units 2,203,881 2,173,578 98.46%
Dividends receivable $ 34,106 34,106 34,106 1.54%
------------- ------------- ----------
2,237,987 2,207,684 100.00%
------------- ------------- ----------
FIDELITY MANAGED INCOME
PORTFOLIO II FUND (2) (4) 15,763,425 shrs 15,763,425 15,763,425 100.00%
------------- ------------- ----------
FIDELITY U.S. EQUITY INDEX FUND (4) 105,973 shrs 3,443,176 3,849,983 100.00%
------------- ------------- ----------
FIDELITY FUND (4) 130,825 shrs 3,836,422 3,924,749 100.00%
------------- ------------- ----------
FIDELITY GROWTH COMPANY FUND (4) 80,771 shrs 3,586,955 3,637,906 100.00%
------------- ------------- ----------
FIDELITY OVERSEAS FUND (4) 33,268 shrs 1,127,355 1,035,967 100.00%
------------- ------------- ----------
PARTICIPANT LOANS
Loan principal outstanding (7.00% - 12.70%) (4) (5) - 3,682,518 100.00%
------------- ------------- ----------
Total - all funds $ 115,306,882 $ 131,398,034
============= ==============
</TABLE>
- -------------------------------------------------------------------------------
(1) The 1996 Plan Year Group annuity contract is carried at cost plus accrued
interest. The insurance company guarantees the repayment of principal and
the crediting of interest under this contract. The timing of the remittance
of participant and employer contributions, if any, and other
participant-directed transactions may cause the actual yield to vary from
this rate. The 1996 Plan year contract is for a three-year term.
(2) Investment represents 5% or more of the net assets available for benefits.
(3) Percentages represent percentage of fair value / contract value of each
fund.
(4) Party in interest.
(5) Range of interest rates for loans outstanding as of September 30, 1998.
F - 46
<PAGE> 48
AMERIGAS PROPANE, INC. SAVINGS PLAN
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS (1)
YEAR ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Percent of Net
Total Total Beginning Number of Number of Realized
Transaction by Fund Purchases Sales Net Assets Purchases Sales Gains
------------------- ----------- ----------- ---------- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
FIDELITY EQUITY INCOME FUND $ 5,556,142 $ 6,407,581 9.3% 237 217 $ 1,747,428
FIDELITY MAGELLAN FUND $ 7,431,877 $ 5,649,788 10.2% 245 224 $ 1,316,715
FIDELITY CASH RESERVES FUND $ 4,681,621 $ 5,774,588 8.1% 185 221 -
FIDELITY MANAGED INCOME
PORTFOLIO II FUND $ 9,949,078 $ 4,151,801 11.0% 186 216 -
</TABLE>
(1) A transaction or series of transactions within the plan year with or in
conjunction with the same person, which exceeds 5% of the net assets
available for benefits as of the beginning of the plan year.
F-47
<PAGE> 49
UGI CORPORATION AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
BALANCE SHEETS
(Millions of dollars)
<TABLE>
<CAPTION>
September 30,
ASSETS 1998 1997
------ ------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 15.2 $ 20.1
Accounts receivable 0.5 0.5
Deferred income taxes 0.2 0.2
Prepaid expenses and other current assets 0.5 0.1
------ ------
Total current assets 16.4 20.9
Investments in subsidiaries 375.1 376.2
Other assets 2.1 4.0
------ ------
Total assets $393.6 $401.1
====== ======
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Current liabilities:
Accounts and notes payable $ 10.3 $ 10.3
Accrued liabilities 13.1 13.2
------ ------
Total current liabilities 23.4 23.5
Noncurrent liabilities 3.2 1.5
Common stockholders' equity:
Common Stock, without par value (authorized - 100,000,000 shares;
issued - 33,198,731 shares) 394.3 393.7
Accumulated deficit (17.7) (9.2)
------ ------
376.6 384.5
Less treasury stock, at cost (9.6) (8.4)
------ ------
Total common stockholders' equity 367.0 376.1
------ ------
Total liabilities and common stockholders' equity $393.6 $401.1
====== ======
</TABLE>
S-1
<PAGE> 50
UGI CORPORATION AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
STATEMENTS OF INCOME
(Millions of dollars, except per share amounts)
<TABLE>
<CAPTION>
Year Ended
September 30,
----------------------------
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Revenues $ -- $ -- $ --
Costs and expenses:
Operating and administrative expenses 10.7 12.2 10.1
Miscellaneous income, net (10.4) (14.8) (13.4)
------ ------ ------
0.3 (2.6) (3.3)
------ ------ ------
Operating income (loss) (0.3) 2.6 3.3
Interest income -- -- 0.1
------ ------ ------
Income (loss) before income taxes (0.3) 2.6 3.4
Income taxes (0.1) 1.1 1.4
------ ------ ------
Income (loss) before equity in income
of unconsolidated subsidiaries (0.2) 1.5 2.0
Equity in income
of unconsolidated subsidiaries 40.5 50.6 37.5
------ ------ ------
Net income $ 40.3 $ 52.1 $ 39.5
====== ====== ======
Earnings per common share:
Basic $ 1.22 $ 1.58 $ 1.19
====== ====== ======
Diluted $ 1.22 $ 1.57 $ 1.19
====== ====== ======
</TABLE>
S-2
<PAGE> 51
UGI CORPORATION AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
STATEMENTS OF CASH FLOWS
(Millions of dollars)
<TABLE>
<CAPTION>
Year Ended
September 30,
-------------------------
1998 1997 1996
----- ----- -----
<S> <C> <C> <C>
NET CASH PROVIDED BY OPERATING
ACTIVITIES (a) $77.8 $77.5 $96.6
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in unconsolidated subsidiaries (34.8) (74.6) (1.1)
Other 2.5 20.6 (21.1)
----- ----- -----
Net cash used by investing activities (32.3) (54.0) (22.2)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of dividends on Common Stock (47.6) (47.2) (46.4)
Issuance of Common Stock 8.5 11.7 11.3
Purchase of Common Stock (11.3) (19.2) (7.1)
----- ----- -----
Net cash used by financing activities (50.4) (54.7) (42.2)
----- ----- -----
Cash and cash equivalents increase (decrease) $(4.9) $(31.2) $32.2
===== ===== =====
Cash and cash equivalents:
End of period $15.2 $20.1 $51.3
Beginning of period 20.1 51.3 19.1
----- ----- -----
Increase (decrease) $(4.9) $(31.2) $32.2
===== ===== =====
</TABLE>
(a) Includes dividends received from unconsolidated subsidiaries of $77.6,
$75.8 and $95.2, respectively, for the years ended September 30, 1998,
1997 and 1996.
S-3
<PAGE> 52
UGI CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(Millions of dollars)
<TABLE>
<CAPTION>
Charged
Balance at (credited) Balance at
beginning to costs and end of
of year expenses Other year
----- ----- ----- -----
<S> <C> <C> <C> <C>
YEAR ENDED SEPTEMBER 30, 1998
Reserves deducted from assets in
the consolidated balance sheet:
Allowance for doubtful accounts $11.3 $ 8.4 $(11.8)(1) $ 7.9
===== =====
Allowance for amortization of deferred
financing costs - Propane $ 3.8 $ 1.6 $ -- $ 5.4
===== =====
Allowance for amortization of
other deferred costs - Propane $ 3.9 $ 0.7 $ -- $ 4.6
===== =====
Other reserves:
Self-insured property and casualty liability $48.5 $11.7 $(11.7)(2) $48.5
===== =====
Insured property and casualty liability $ 1.8 $ 2.9 $ (0.4)(2) $ 4.3
===== =====
Environmental, litigation and other $22.6 $(4.0) $ (4.7)(2) $13.9
===== =====
YEAR ENDED SEPTEMBER 30, 1997
Reserves deducted from assets in
the consolidated balance sheet:
Allowance for doubtful accounts $10.6 $11.3 $(10.6)(1) $11.3
===== =====
Allowance for amortization of deferred
financing costs - Propane $ 2.2 $ 1.6 $ -- $ 3.8
===== =====
Allowance for amortization of
other deferred costs - Propane $ 2.8 $ 1.1 $ -- $ 3.9
===== =====
Other reserves:
Self-insured property and casualty liability $47.7 $11.3 $(10.5)(2) $48.5
===== =====
Insured property and casualty liability $19.0 $ 3.3 $(20.5)(2) $ 1.8
===== =====
Environmental, litigation and other $16.1 $ 7.6 $ (1.1)(2) $22.6
===== =====
</TABLE>
S-4
<PAGE> 53
UGI CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (CONTINUED)
(Millions of dollars)
<TABLE>
<CAPTION>
Charged
Balance at (credited) Balance at
beginning to costs and end of
of year expenses Other year
----- ----- ----- -----
<S> <C> <C> <C> <C>
YEAR ENDED SEPTEMBER 30, 1996
Reserves deducted from assets in
the consolidated balance sheet:
Allowance for doubtful accounts $ 7.3 $10.5 $(7.2)(1) $10.6
===== =====
Allowance for amortization of deferred
financing costs - Propane $ 0.7 $ 1.5 $ -- $ 2.2
===== =====
Allowance for amortization of
other deferred costs - Propane $ 1.8 $ 1.0 $ -- $ 2.8
===== =====
Other reserves:
Self-insured property and casualty liability $48.5 $14.0 $(14.8)(2) $47.7
===== =====
Insured property and casualty liability $11.7 $ 6.8 $ 0.5 (3) $19.0
===== =====
Environmental, litigation and other $26.1 $(7.1) $(2.9)(2) $16.1
===== =====
</TABLE>
(1) Uncollectible accounts written off, net of recoveries.
(2) Payments.
(3) Other adjustments.
S-5
<PAGE> 54
PART IV: ADDITIONAL EXHIBITS, SCHEDULES AND REPORTS
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
(a) DOCUMENTS FILED AS PART OF THIS REPORT:
(1), (2) The financial statements and financial statement schedules
incorporated by reference or included in this Report are listed in the
accompanying Index to Financial Statements and Financial Statement Schedules set
forth on page F-2 through F-3 of this Report, which is incorporated herein by
reference.
(3) LIST OF EXHIBITS:
The exhibits filed as part of this Report are as follows (exhibits
incorporated by reference are set forth with the name of the registrant, the
type of report and registration number or last date of the period for which it
was filed, and the exhibit number in such filing):
-2-
<PAGE> 55
INCORPORATION BY REFERENCE
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
<S> <C> <C> <C> <C>
3.1 (Second) Amended and Restated Articles of UGI Amendment No. 1 on 3.(3)(a)
Incorporation of the Company Form 8 to Form 8-B
(4/10/92)
3.2 Bylaws of UGI as in effect since October
27, 1998
4 Instruments defining the rights of
security holders, including indentures.
(The Company agrees to furnish to the
Commission upon request a copy of any
instrument defining the rights of holders
of its long-term debt not required to be
filed pursuant to Item 601(b)(4) of
Regulation S-K)
4.1 Rights Agreement, as amended as of April UGI Form 8-K (4/17/96) 4.1
17, 1996, between the Company and Mellon
Bank, N.A., successor to Mellon Bank
(East) N.A., as Rights Agent, and
Assumption Agreement dated April 7, 1992
4.2 The description of the Company's Common UGI Form 8-B/A 3.(4)
Stock contained in the Company's (4/17/96)
registration statement filed under the
Securities Exchange Act of 1934, as
amended
4.3 UGI's (Second) Amended and Restated
Articles of Incorporation and Bylaws
referred to in 3.1 and 3.2 above
4.4 Utilities' Articles of Incorporation Utilities Form 8-K (9/22/94) 4(a)
4.5 Note Agreement dated as of April 12, 1995 AmeriGas Form 10-Q 10.8
among The Prudential Insurance Company of Partners, L.P. (3/31/95)
America, Metropolitan Life Insurance
Company, and certain other institutional
investors and AmeriGas Propane, L.P., New
AmeriGas Propane, Inc. and Petrolane
Incorporated
4.6 First Amendment dated as of September 12, AmeriGas Form 10-K 4.5
1997 to Note Agreement dated as of April Partners, L.P. (9/30/97)
12, 1995
</TABLE>
-3-
<PAGE> 56
INCORPORATION BY REFERENCE
<TABLE>
<S> <C> <C> <C> <C>
4.7 Second Amendment dated as of September AmeriGas Form 10-K 4.6
15, 1998 to Note Agreement dated as of Partners, L.P. (9/30/98)
April 12, 1995
10.1 Service Agreement (Rate FSS) dated as of UGI Form 10-K 10.5
November 1, 1989 between Utilities and (9/30/95)
Columbia, as modified pursuant to the
orders of the Federal Energy Regulatory
Commission at Docket No. RS92-5-000
reported at Columbia Gas Transmission
Corp., 64 FERC paragraph 61,060 (1993),
order on rehearing, 64 FERC paragraph
61,365 (1993)
10.2 Service Agreement (Rate FTS) dated June Utilities Form 10-K (10)o.
1, 1987 between Utilities and Columbia, (12/31/90)
as modified by Supplement No. 1 dated
October 1, 1988; Supplement No. 2 dated
November 1, 1989; Supplement No. 3 dated
November 1, 1990; Supplement No. 4 dated
November 1, 1990; and Supplement No. 5
dated January 1, 1991, as further
modified pursuant to the orders of the
Federal Energy Regulatory Commission at
Docket No. RS92-5-000 reported at
Columbia Gas Transmission Corp., 64 FERC
paragraph 61,060 (1993), order on
rehearing, 64 FERC paragraph 61,365
(1993)
10.3 Transportation Service Agreement (Rate Utilities Form 10-K (10)p.
FTS-1) dated November 1, 1989 between (12/31/90)
Utilities and Columbia Gulf Transmission
Company, as modified pursuant to the
orders of the Federal Energy Regulatory
Commission in Docket No. RP93-6-000
reported at Columbia Gulf Transmission
Co., 64 FERC paragraph 61,060 (1993),
order on rehearing, 64 FERC paragraph
61,365 (1993)
10.4 Amended and Restated Sublease Agreement UGI Form 10-K 10.35
dated April 1, 1988 between Southwest (9/30/94)
Salt Co. and AP Propane, Inc. (the
"Southwest Salt Co. Agreement")
</TABLE>
-4-
<PAGE> 57
INCORPORATION BY REFERENCE
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
<S> <C> <C> <C> <C>
10.5 Letter dated September 26, 1994 pursuant UGI Form 10-K 10.36
to Article 1, Section 1.2 of the (9/30/94)
Southwest Salt Co. Agreement re: option
to renew for period of June 1, 1995 to
May 31, 2000
10.6** UGI Corporation Directors Deferred UGI Form 10-K 10.39
Compensation Plan dated August 26, 1993 (9/30/94)
10.7** UGI Corporation 1992 Stock Option and UGI Form 10-Q (10)ee
Dividend Equivalent Plan, as amended May (6/30/92)
19, 1992
10.8** UGI Corporation Annual Bonus Plan dated UGI Form 10-Q 10.4
March 8, 1996 (6/30/96)
10.9** UGI Corporation Directors' Equity UGI Form 10-Q 10.1
Compensation Plan (3/31/97)
10.10** UGI Corporation 1997 Stock Option and UGI Form 10-Q 10.2
Dividend Equivalent Plan (3/31/97)
10.11** UGI Corporation 1992 Directors' Stock UGI Form 10-Q (10)ff
Plan (6/30/92)
10.12** UGI Corporation Senior Executive Employee UGI Form 10-K 10.12
Severance Pay Plan effective January 1, (9/30/97)
1997
10.13** Change of Control Agreement between UGI UGI Form 10-K 10.13
Corporation and Lon R. Greenberg (9/30/97)
10.14** Form of Change of Control Agreement UGI Form 10-K 10.14
between UGI Corporation and Mr. Bunn (9/30/97)
10.15** Form of Change of Control Agreement UGI Form 10-K 10.15
between UGI Corporation and each of (9/30/97)
Messrs. Bovaird, Cuzzolina, Hall and
Mendicino
10.16** 1997 Stock Purchase Loan Plan UGI Form 10-K 10.16
(9/30/97)
10.17** UGI Corporation Supplemental Executive UGI Form 10-Q 10
Retirement Plan Amended and Restated (6/30/98)
effective October 1, 1996
</TABLE>
-5-
<PAGE> 58
INCORPORATION BY REFERENCE
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
<S> <C> <C> <C> <C>
10.18 Amended and Restated Credit Agreement AmeriGas Form 10-K 10.1
dated as of September 15, 1997 among Partners, L.P. (9/30/97)
AmeriGas Propane, L.P., AmeriGas Propane,
Inc., Petrolane Incorporated, Bank of
America National Trust and Savings
Association, as Agent, First Union
National Bank, as Syndication Agent and
certain banks
10.19 First Amendment dated as of September 15, AmeriGas Form 10-K 10.2
1998 to Amended and Restated Credit Partners, L.P. (9/30/98)
Agreement
10.20 Intercreditor and Agency Agreement dated AmeriGas Form 10-Q 10.2
as of April 19, 1995 among AmeriGas Partners, L.P. (3/31/95)
Propane, Inc., Petrolane Incorporated,
AmeriGas Propane, L.P., Bank of America
National Trust and Savings Association
("Bank of America") as Agent, Mellon
Bank, N.A. as Cash Collateral Sub-Agent,
Bank of America as Collateral Agent and
certain creditors of AmeriGas Propane,
L.P.
10.21 General Security Agreement dated as of AmeriGas Form 10-Q 10.3
April 19, 1995 among AmeriGas Propane, Partners, L.P. (3/31/95)
L.P., Bank of America National Trust and
Savings Association and Mellon Bank, N.A.
10.22 Subsidiary Security Agreement dated as of AmeriGas Form 10-Q 10.4
April 19, 1995 among AmeriGas Propane, Partners, L.P. (3/31/95)
L.P., Bank of America National Trust and
Savings Association as Collateral Agent
and Mellon Bank, N.A. as Cash Collateral
Agent
10.23 Restricted Subsidiary Guarantee dated as AmeriGas Form 10-Q 10.5
of April 19, 1995 by AmeriGas Propane, Partners, L.P. (3/31/95)
L.P. for the benefit of Bank of America
National Trust and Savings Association,
as Collateral Agent
</TABLE>
-6-
<PAGE> 59
INCORPORATION BY REFERENCE
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT REGISTRANT FILING EXHIBIT
<S> <C> <C> <C> <C>
10.24 Trademark License Agreement dated April AmeriGas Form 10-Q 10.6
19, 1995 among UGI Corporation, AmeriGas, Partners, L.P. (3/31/95)
Inc., AmeriGas Propane, Inc., AmeriGas
Partners, L.P. and AmeriGas Propane, L.P.
10.25 Trademark License Agreement, dated April AmeriGas Form 10-Q 10.7
19, 1995 among AmeriGas Propane, Inc., Partners, L.P. (3/31/95)
AmeriGas Partners, L.P. and AmeriGas
Propane, L.P.
10.26 Agreement dated as of May 1, 1996 between AmeriGas Form 10-K 10.2
TE Products Pipeline Company, L.P. and Partners, L.P. (9/30/97)
AmeriGas Propane, L.P.
13.1 Pages 13 through 43 of 1998 Annual Report
to Shareholders
13.2 Amendment No. 1 on Form 8-K/A to Form 8-K
dated July 11, 1997
21 Subsidiaries of the Registrant
23.1 Consent of Arthur Andersen LLP re:
Financial Statements of UGI Corporation
23.2 Consent of Arthur Andersen LLP re:
Financial Statements of AmeriGas Propane,
Inc.
23.3 Consent of PricewaterhouseCoopers LLP
*23.4 Consent of Arthur Andersen LLP re:
Financial Statements of UGI Utilities,
Inc. Savings Plan and AmeriGas Propane,
Inc. Savings Plan
27 Financial Data Schedule
</TABLE>
* Filed herewith.
** As required by Item 14(a)(3), this exhibit is identified as
a compensatory plan or arrangement.
(b) Reports on Form 8-K:
The Company did not file any Current Reports on Form 8-K during
the last quarter of the fiscal year ended September 30, 1998.
-7-
<PAGE> 60
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned.
UGI CORPORATION
Date: March 29, 1999 By: s/Anthony J. Mendicino
-----------------------------
Anthony J. Mendicino
Vice President - Finance
and Chief Financial Officer
-8-
<PAGE> 61
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
23.4 Consent of Arthur Andersen LLP
</TABLE>
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our reports dated March 19, 1999, on our audits of the financial
statements and supplemental schedules of the AmeriGas Propane, Inc. Savings Plan
for the years ended September 30, 1998 and 1997 and the financial statements and
supplemental schedules of the UGI Utilities, Inc. Savings Plan for the years
ended September 30, 1998 and 1997, included in UGI Corporation's Annual Report
on Form 10-K (as amended by Form 10-K/A, Amendment No. 1) for the fiscal year
ended September 30, 1998, into UGI Corporation's previously filed Form S-8
Registration Statement No. 33-47319; Form S-3 Registration Statement No.
33-78776; Form S-8 Registration Statement No. 33-61722; Form S-8 Registration
Statement No. 333-22305, Form S-8 Registration Statement No. 333-37093 and Form
S-4 Registration Statement No. 333-75089.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Chicago, Illinois
March 29, 1999
