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PROPANE OPERATIONS ADD STRONG CASH FLOWS TO UGI'S UTILITY STRENGTH

PROPANE OPERATIONS ADD STRONG CASH FLOWS TO UGI'S UTILITY STRENGTH
 VALLEY FORGE, Pa., May 19 /PRNewswire/ -- Although earnings of UGI Corp. (NYSE: UGI) were "lower than expected" last year, 1991 "was an excellent year from the standpoint of strengthening the balance sheet and substantially improving cash flow per share," James A. Sutton, chairman and chief executive officer, said today.
 Sutton told shareholders at the annual meeting that UGI, a holding company with utility and propane marketing subsidiaries, reduced its total debt by more than $86 million during the year.
 The debt reduction was accomplished, he said, with $75 million of proceeds from a common stock offering and with funds from the company's dividend reinvestment plan and excess operating cash flows.
 He noted that propane cash flows enabled UGI to have surplus cash for debt repayment after funding its marketing programs, a high level of capital investment and an increased dividend payout.
 Sutton said UGI received 50 percent of the book income but minimal cash flow from its national propane operations when it was a joint venture. But the acquisition of the unowned half of the business in November 1990 made UGI "a unique, new kind of gas company, one that combines the strength of a utility with extraordinary propane cash flows."
 UGI realized this financial benefit from propane for the first time in 1991, he said, when operating cash flow per share increased to $3.55, compared with $1.98 in 1989 when the company last experienced normal weather.
 It was also a good year for the company's shareholders, Sutton reported. UGI's total return of 33.1 percent in 1991, consisting of stock-price appreciation and dividends, outpaced the returns of Standard & Poor's 500-Stock Index and a peer group of gas utilities against which UGI measures its performance, he said.
 For the last five years, the company's annualized total return of 17.2 percent also outperformed the S & P 500 and the peer group of utilities, he added. During this period, the total value of shareholders' investment increased by almost $290 million.
 On 1992's first-quarter results, Sutton said the weather, which was 16 percent warmer than normal, and the recession reduced propane's operating earnings.
 Weather and economic conditions were more favorable in the gas utility's service territory and its operating income increased 9 percent from last year. He noted that the gas utility has added more than 2,000 residential heating customers through April, "a pace substantially greater than last year."
 Electric utility operating income declined 4 percent because of unrecovered operating expenses, he said.
 Sutton said UGI has reduced debt further in 1992 with proceeds from a $15 million issue of preferred stock and that UGI's reorganization as a holding company on April 10 will improve the independent financing capabilities of the propane and utility subsidiaries.
 Since formation of the holding company, he said Standard & Poor's has placed the utility subsidiary, UGI Utilities, Inc., on a positive credit outlook.
 He said that AmeriGas, the propane subsidiary, is continuing its efforts to acquire Petrolane Gas Service, a company about 50 percent larger than AmeriGas Propane.
 UGI's business strategies will continue to be "growing market share in the gas utility and growing with the market in the electric utility -- both through internal capital investment," he said. "We expect to expand our propane business through both large and small acquisitions."
 UGI's shareholders re-elected eight directors to another term and approved a long-term executive compensation plan, consisting of stock options and dividend equivalents, a directors' stock plan, and the appointment of Coopers & Lybrand as independent public accountants.
 Three directors, James G. McKee, Myron S. Gelbach Jr. and Henry R. Linden, completing their final terms today, did not stand for re-election. They retired at age 70 in accordance with the company's bylaws.
 Re-elected to the board were: Sutton; James W. Stratton, president of Stratton Management Co.; Robert C. Forney, retired, former executive vice president and director, du Pont Co.; David I.J. Wang, retired, former executive vice president and director, International Paper Co.; Richard C. Gozon, president and chief operating officer, Alco Standard Corp.; Cyrus H. Holley, president and sole owner, Management Consulting Services; Quentin I. Smith Jr., retired, former chairman and chief executive officer, Towers, Perrin, Forster & Crosby, and Stephen D. Ban, president and chief executive officer, Gas Research Institute.
 /delval/
 -0- 5/19/92
 /CONTACT: Vince Testa of UGI, 215-337-1000/
 (UGI) CO: UGI Corporation ST: Pennsylvania IN: UTI SU:


MK-JS -- PH026 -- 1982 05/19/92 15:50 EDT
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Publication:PR Newswire
Date:May 19, 1992
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