UGI CEO Lon R. Greenberg said, “We are pleased that we exceeded our earnings growth goal once again, notwithstanding the extremely warm winter weather of 2002. Our mix of businesses, prudent acquisitions and the dedication of our employees overcame much of the effects of record warm weather. We are confident that a return to normal winter weather will demonstrate the true earnings power of our assets.”

Pretax income from UGI Utilities declined in fiscal year 2002 to $73.7 million from $79.5 million last year due to lower weather-induced results from the gas utility, partially offset by improved results from electric operations. Throughput in the Gas Utility was 70.5 Bcf in 2002 versus 77.3 Bcf in 2001 on weather that was over 17% warmer than normal and nearly 19% warmer than the previous year. Operating income in the Gas Utility declined to $77.1 million from $87.8 million.

In the Electric Utility, sales were 933.6 gigawatthours in 2002, slightly lower than the 945.5 GWh in 2001, as a result of adverse winter weather offset by higher sales in the summer months. Operating income improved to $13.2 million versus $10.7 million a year ago principally due to lower purchased power costs partially offset by lower miscellaneous income.

Energy Services pretax income for the year was $11.1 million compared with $6.9 million last year, reflecting the net effect of higher volumes and margins reduced by higher operating expenses, all as a result of acquisitions made in 2001 and internal growth. “GASMARK continued its profitable and disciplined approach to marketing value-added energy services to mid-sized commercial customers in the Mid-Atlantic region where our logistical knowledge is a competitive advantage,” Greenberg said.

Retail propane sales volumes in fiscal 2002 were 932.8 million gallons, up over 13% compared to 820.8 million gallons in the prior year, principally as a result of the addition of the Columbia Propane operations acquired in August 2001, which substantially offset by the effects of significantly warmer winter weather and the slower economy.

In UGI’s domestic propane unit, AmeriGas Partners, L.P., pretax income was $28.8 million for fiscal year 2002 compared to $29.9 million last year. International propane operations produced pretax income of $8.0 million for the year compared to a loss of $5.6 million a year ago.

UGI’s ongoing financial objectives are to grow earnings per share 6-10% per year and increase its dividend 3% per year. In fiscal year 2002, our earnings improved significantly, we raised our dividend for the sixteenth consecutive year and we continued to invest in growth in our energy distribution businesses, Greenberg said.

UGI is a holding company with propane marketing, utility and energy marketing subsidiaries. Its gas utility serves 277,000 customers in 14 counties. Its electric division serves 60,000 customers in two counties. Through subsidiaries, UGI owns 51% of AmeriGas Partners, L.P., the nation’s largest retail propane marketer.

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