Nov 11, 2008
Executives
Robert W. Krick - VP and Treasurer of AmeriGas Propane,.
Inc., General Partner of AmeriGas Partners, L.P. Lon R.
Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., CEO of UGI Corp.
and President of UGI Corporation Peter Kelly - VP-Finance and CFO of UGI Corporation John Walsh - Vice Chairman, AmeriGas Propane, Inc., President and COO, UGI Corporation Eugene V. N.
Bissell - CEO and President of AmeriGas Propane Inc., General Partner Jerry E. Sheridan - CFO and VP of Finance - AmeriGas Propane Inc.
Analysts
Schneuger Shawnee - UBS Carl Kirst - BMO Capital
Operator
Good day, and welcome everyone to the UGI and AmeriGas Partners Fourth Quarter Fiscal Year 2008 Earnings Results Conference Call and Webcast. This call is being recorded.
At this time for opening remarks and introductions I would like to turn the call over to Mr. Bob Krick.
Please go ahead.
Robert W. Krick - Vice President and Treasurer of AmeriGas Propane,. Inc., General Partner of AmeriGas Partners, L.P.
Thank you, Justin. Good afternoon, and thank you for joining us today.
As we begin, let me remind you that our comments will contain certain forward-looking statements which the management of UGI and AmeriGas believe to be reasonable as of today's date only. Actual results may differ significantly, because of risks and uncertainties that are difficult to predict and many of which are beyond management's control.
You should read the annual reports on Form 10-K for a fuller list of factors that could affect results. But among them are adverse weather conditions, price volatility, and availability of all energy products, including natural gas, propane, and fuel oil, increased customer conservation measures, political, economic, legislative, and regulatory changes in the U.S.
and abroad, currency exchange rates and competition from the same, and alternative energy sources. UGI and AmeriGas undertake no obligation to release revisions to these forward-looking statements to reflect events or circumstances occurring after today.
In addition our remarks today will reference certain non-GAAP financial for fiscal 2007 that management believe provide usual information to investors to more effectively evaluate the year-over-year results of the operations of the company in fiscal 2008. These non-GAAP financial measures, net income, net income per diluted share, net income per diluted Partnership unit and EBITDA, all excluding the sale of a storage terminal by AmeriGas in 2007 are not comparable to measures used by other companies, and should be considered in conjunction with reported net income, net income per diluted share, net income per diluted Partnership unit, EBITDA and other performance measures, such as cash flows from operating activity.
With me today are John Walsh, President and COO of UGI; Eugene Bissell, President and CEO of AmeriGas; and Peter Kelly, CFO of UGI; and of course your host, Chairman and CEO of UGI, Lon Greenberg. Lon?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Thanks, Bob. Hello everyone and welcome to our year-end call.
I trust you've all had the opportunity to review our press releases reporting our 2008 fiscal year results. UGI reported earnings per share of a $1.99 compared to $1.89 last year.
Included in last year's earnings was a $0.12 gains on the sale of our terminal by AmeriGas. After eliminating that $0.12 gain the comparison would be $1.99 compared to $1.77 or about a 12% gain in earnings per share.
Similarly AmeriGas reported a good year as well. AmeriGas reported net income per unit of $2.70 compared to $3.15 last year.
Like with the case of the UGI, last year's results for AmeriGas included the gain from the sale of a terminal, and eliminating that gain results and net income per unit in 2007 of $2.51. So the applicable comparison would be $2.70 to $2.51.
EBITDA rose to $313 million from approximately $293 million last year after eliminating the asset sale gain. Looking at our earnings performance for the year what I would point out to you is that we achieved our earnings growth and paid the dividend and distribution growth that we told you we would, despite encountering a very challenging environment.
During fiscal year 2008, and I don't have remind you that we have experienced a rapid escalation in commodity prices to record levels. We experience warmer than normal weather and of course weakening world wide economies.
It's obvious that none of these circumstances is a good thing for our business. Yet through adherence to long standing carefully thought out strategic plans and our unrelenting focus on execution, we were able to deliver on our commitments.
As all of you know we have a diverse group of energy marketing and distribution businesses, and we adhere to rigorous fundamentally sound financial policies. We are not a significant producer of energy commodities and thus do not have the opportunity to benefit from the rising tide of significant increases in commodity costs.
Rather we have to earn our money everyday as we have millions of relatively small transactions on a regular basis with our customers. We have said for many years we are a sound growth and income vehicle for investors and we believe our performance last year once again demonstrates that fact.
Before I make any further comments I'm going to turn the call over to Peter Kelly to review our financial performance in more detail. Peter will then turn the call over to John Walsh who would give you some flavor for the progress we made operationally last year.
Eugene Bissell will further amplify that on with regard to AmeriGas. And then it will circle back to me for some concluding remarks.
And so, Peter why don't you fill up?
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
Thanks, Lon. As Lon covered in his remarks, 2008 was an extremely challenging year.
Record commodity prices throughout conservation [ph], the weather didn't cooperate and a head of weaker economy. Despite this we once again delivered on our commitment...
delivered on our commitment to deliver both growth and earnings and to increase our dividend. We continue to generate cash and at the end of the year, closed on a significant acquisition giving us additional natural gas, some propane assets that will be accretive in 2009.
So, against that backdrop, I'd like to cover four items; first, our consolidated result for 2008. Second, some color on each of our major businesses.
Third, our balance sheet and finally our liquidity. Our EPS was $1.99 up 5% from the $1.89 reported in 2007.
Now I'm sure you'll all remember our 2007 numbers, included the $0.12 gain on the sale of our Bumstead storage facility. Excluding the Bumstead gain from 2007 the $1.99 reported for 2008, compares to $1.77 in 2007, an improvement over the 12% year-on-year.
In addition for the 21st year in a row, we increased our dividend and now have the enviable record of delivering a dividend 124 years in a row. The $0.22 improvements over the 2007, adjusted number was largely a result of improved performance in Energy Services operations, which benefited from greater income from peaking supply and storage management services, as well as higher electric generation margins.
In our international operations, the weather, a little warmer than normal, was colder than the record setting room temperatures of 2007. Turning now to our business segment results; AmeriGas' net income contributions for 2008, 2007 were $43.9 million and $53.2 million.
As previously mentioned, the 2007 results included a gain of $12.5 million from the sale of the Bumstead storage facility. Retail volumes were down 1.3% reflecting to a large part, the impact of significantly higher propane costs.
The average wholesale propane costs at Mt. Belvieu, Texas increased nearly 50% during fiscal 2008.
Weather although 3.4% colder than the normal in 2008 was colder that the 6.5% warmer than normal reported in 2007. AmeriGas EBITDA was $313 million versus $338.7 million in 2007.
2007 included the Bumstead gain of $46 million at the EBITDA level. So 2008 once again represents outstanding performance from the AmeriGas team and Gene will have more comments on the performance in his remarks.
Net income for international propane was $52.3 million versus the $44.9 million reported in 2007. The tremendous run up in propane prices clearly impacted our business.
However, with weather only 4.1% warmer than normal in France, versus the 21.1% warmer than normal in 2007, we saw volumes grow in our French business by 8.7% from 269 million gallons in 2007 to nearly 293 million gallons in 2008. In our domestic utility business we turned in a solid performance in both natural gas and electricity.
Natural gas net income rose in 2008 to $60.3 million from the $59 million reported in 2007. And in our electric utility, net income declined slightly from $13.7 million to $13.1 million.
In our natural gas utility, temperatures in 2008 were 5.5% warmer than normal compared to the 4.7% warmer than normal reported in 2007. Total distribution throughput in 2008 increased 1.9 Bcf to 133.7 Bcf principally reflecting greater interruptible delivery service volumes and an increase in the number of gas utility core market customers partially offset by lower average usage per customer.
In our electric utility system throughput was essentially flat versus 2007, the margins were down slightly year-on-year, reflecting higher per unit purchased power costs and higher revenue related taxes. In Energy Services, our net income increased to $45.3 million in 2008 from $34.5 million in 2007.
This improvement in profitability was primarily driven by the expansion of our peaking supply services, higher peaking rates charged and higher electric generation margin, resulting in large part from higher stock market and fixed contract prices. Consolidated interest expense increased to $142.5 million in 2008 from $139.6 million in 2007, principally due to higher interest expense associated with greater Partnership short-term borrowings to fund increases in working capital, mainly resulting from high commodity prices for propane.
Our affective tax rate was comparable to our rate in fiscal 2007. Now moving to our balance sheet.
Our consolidated debt approximately $2.2 billion is similar to last years level and our consolidated cash position was $245 million compared to $252 million at the end of 2007. Included in the $245 million at the end of 2008, and after contributing $120 million to UGI Utilities on September the 25, we had about $97 million of cash available at our holding company to reinvest for growth.
We would typically expect to generate about $90 million to $100 million of such investable cash per year. Of the $2.2 billion of debt at the end of 2008, approximately $2.1 billion is long term debt.
By business AmeriGas had $933 million of debt, similar to the level in 2007. Utility's had $532 million, up $20 million on the $512 million, reported at the end of 2007.
And the international business was approximately $590 million, down from the $605 million reported at the end of 2007. I am pleased to say we have no significant re-financing requirements before spring of 2011.
From a property, plant and equipment perspective, we have nearly $4 billion in gross assets and $2.5 billion in net assets, up from $2.4 billion in 2007. Capital expenditures were approximately $234 million with depreciation and amortization of $184 million.
As we discussed at our recent investment meeting in New York we're expecting our capital expenditures on internal projects to increase and are currently estimating that our expenditures in 2009 will be just over $325 million, of which approximately $175 million will be for growth projects. Turning to liquidity, clearly the last few months have seen unprecedented volatility and uncertainty in the capital markets.
For our traditionally conservative business approach, including minimizing exposure to individual counter parties has been to reduce risk as opposed to generating trading profits and having available substantial lines of credit have stood us in great stead. We believe we have adequate liquidity to fund our requirements throughout all of our operating subsidiaries as we go into 2009.
In utilities, we have lines of credit in place for $350 million. We have $200 million of foreign capacity and Energy Services and a $200 million line in AmeriGas.
And at our French operation Antragaz, we have a facility of 50 million euros. At the end of September AmeriGas had used $43 million of its revolver and had a cash balance of nearly $11 million.
Utility used $57 million of its revolver with cash available of $3 million. Antragaz, had pulled down 50 million euros on its revolver and had 69.3 million euros of cash.
And Energy Services had an outstanding balance of approximately $71 million with cash available of $24 million. So in summary a strong year, despite the run up in commodity prices, a winter that was warmer than normal and the effects of the economic downturn.
All of our businesses continue to do well and once again the strength of our diversified business model, along with our conservative business practices have allowed us to deliver both growth and income. We continue to generate cash and find excellent opportunities both internally and through acquisitions to put this cash to work.
So with that, let me pass the call over to John to discuss our operational performance.
John Walsh - Vice Chairman, AmeriGas Propane, Inc., President and Chief Operating Officer, UGI Corporation
Thanks, Peter. Peter has taken you through the financial highlights of the fiscal year.
I would like to focus on our operational performance with specific emphasis on progress on three long-terms strategic objectives; growing our core business, continuously improving operations and reinvesting cash in high quality projects. First, growing our core business.
Our teams were tested this year with the combination of a decelerating economy, a sluggish housing market and high commodity prices. When faced with these conditions, it's critical that we focus on identifying and developing customers segments with growth potential.
We maintained our focus on growth in FY '08 and delivered solid results. I'd like to highlight a few specific achievements.
Our gas utility team did an outstanding job of moving quickly to take advantage of a significant opportunity to convert fuel oil and electric customers to natural gas. Conversions for the full year were up almost 90%.
This strong performance more than offset the continued slowing in our new home segment, where customer additions fell by 20%. We added over 12,000 new residential and commercial accounts in FY08 with total customer additions exceeding prior year by approximately 8%.
Antragaz is programmed for development of the cylinder segment through a combination of innovative product offerings, and a strong operations network continues to deliver excellent results. The Calypso branded composite cylinder is the market leading product.
We added over 225,000 new Calypso customers in the last fiscal year. In our last call, I referenced Antragaz's agreements with Carrefour a leading French retailer to introduce a new private branded cylinder.
This product was launched in June and the results for the first few months have been outstanding. We've added well over 100,000 new customers for the private label product and we are still in the process of rolling out the product across the Carrefour network.
AmeriGas and Antragaz are both focused on developing opportunities for piped networks. These installations serve a group of customers from a common storage tank.
Individual customer usage is metered and billed monthly. This is an efficient way of serving more amount customer cloisters such as small or mid-size villages in France or resort communities in more areas of U.S.
We typically contract with the township or the community with contract normally running in excess of ten years. We expect to be a leader in this segment due to the broad geographic reach of our businesses in France and the U.S.
and our knowledge of pipe gas systems and networks and through continuously improving operations. At UGI we benchmark our operations on a broad range of activities to assess progress continuous improvement initiatives.
I'd like to focus today on our progress on safety. We have strong track record at UGI on safety performances, but this is an area where it is vital that we drive for continuous improvement.
The two recent acquisitions in our utilities business provided us with an excellent opportunity to benchmark and align our key safety programs. While our primary safety training programs are designed for our own employees with also developed and implemented safety training and education programs targeted to our customers and our contractors.
We can see the impact of this consistent approach in our safety statistics where our closure recordable [ph] rates in UGI Gas have declined by over 60% in the past decade. AmeriGas also read and safety programs and practices within the program sector.
Employee training is of course down in the safety program as we seek to identify eliminate safety risk on our production side, within our delivery and transport fleet and at our customer sites. Employer waits are a continuous strong safety performance for AmeriGas as our last four decades has dropped by almost 20% year-on-year and our vehicle incident rates fell by over 30%.
The focus and discipline we bring to safety are also brought to bear on customer service and productivity, the other primary focus area is for our continuous improvement programs. I'll address you these areas on future calls Finally on reinvesting cash in high quality projects, identifying developing all these projects for reinvestment, both acquisitions and capital projects is a strategic priority.
As Peter indicated our businesses generate roughly $100 million in cash each year, an achievement of our long term goals for EPS growth is predicated upon re-investing that cash in attractive projects. We have a range of projects under development and we are confident in our ability to deliver quality investment opportunities.
We closed the acquisition of PPL Gas Utility and their Penn Fuel Propane business on October 1. This acquisition had 75,000 new customers to gas utility's existing base of over 475,000 and strengthened AmeriGas's market coverage in our key Mid Atlantic region.
We are excited to have our new employees on board and we are very pleased with the smooth transition during our first month of operations. As stated in our prior calls we expect the financial results of PPL Gas to be accretive to earnings in FY09.
Energy Services is making excellent progress on our recently announced Broad Mountain landfill gas project. This $36 million project which will generate 11 megawatts of Tier-1 renewable energy using recovered land fill methane gas is expected to come on stream within the next 60 days to 90 days.
Energy Services is also working on a power generation opportunity utilizing our existing Hunlock site. This project which is in the final stages of development would replace our existing 44 megawatt coal fired plant with a gas fired 130 megawatt plan.
We estimate the capital cost for the project is in the $110 million to $115 million range and we'd expect the plan to come on line mid 2011. We will provide additional information on this project when we conclude the development phase.
I'd now like to turn over to Eugene, who will provide you with the details on AmeriGas's performance in the last fiscal year.
Eugene V. N. Bissell - Chief Executive Officer and President of AmeriGas Propane Inc., General Partner
Thanks, John. It is a pleasure to talk about AmeriGas' strong 2008 results and to comment on the progress we've made on our core strategies.
As Peter mentioned, AmeriGas achieved EBITDA of $330 million in 2008, compared $338.7 million in 2007. The 2007 results however included a $46 million gain on the sale of our Bumstead terminal.
Excluding this gain, we increased EBITDA by $20.4 million or 7% compared to 2007. On the same basis, net income per unit also increased by 7%.
Over the last five years, we've achieved a 14% compound annual growth rate and net income per unit. As a result of its earnings track record and our confidence in the future, we announced a 5% increase in our distribution in April, and raised our target for annual distribution increases from 3% to 5%.
These results were achieved despite a nearly 50% increase in the wholesale cost of propane. The drill [ph] of selling prices to customers resulting in reduced customer demand as well as the impact of a weakening economy on commercial customer volumes.
The dramatic increase in energy prices also raised our cost of diesel fuel for our trucks by over 40%, and raised our bad debt, travel and utility expenses. In total, higher energy costs accounted for over 40% of our expense increase year-over-year.
Most of the increase in EBITDA last year was a result of effective execution of our strategies. Our objective is to increase earnings by 4% and distributions by 5% annually by growing our market share, leveraging our scale, driving productivity and achieving world class safety performance.
We have a track record of growing our share through a combination of acquisitions, growth in our cylinder exchange business and strategic accounts and through growth in our traditional base of residential and commercial customers. More than half of the increase in earnings last year was a result of successful integration of the acquisitions we completed in the fiscal year 2007, especially the All Star and Shell acquisitions.
Last year, we completed four more acquisitions, which together with the Penn Fuel acquisition that closed on October 1, will add 20 million gallons in fiscal year 2009. ACE also helped us to grow our market share.
We achieved 10% growth in ACE cylinder transactions through same store growth, and by adding about 1200 locations. Some of our store growth was a result of the installation of 300 7- Eleven convenience store locations.
In total 7- Eleven awarded us over 1500 locations. So, we still have quite a few to install this year.
Our self service 200 dispensing machines continued to be a competitive advantage in this segment as well. We now have almost a 1000 machine in operation across the country.
These machines give customers 7/24 access to propane drill cylinder without even having to step into the store. We also upgraded the quality of our strategic account customer base last year, resulting in a 4% increase in its EBITDA contribution.
For the first time in six years, we were not successful in growing our local customer base, primarily due to a fall of new home sales. We believe however, there are continued focus on customer growth, and customer service help to mitigate the impact of the weak housing market and the weak economy on internal growth.
One indication of that was the fact that 93% of our customers last year rated our service as meeting or exceeding their expectations. We also made considerable progress since last year, toward our goal of achieving world-class safety performance.
As John mentioned, we were successful in reducing employ and vehicle incidents by more than 25% year-over-year primarily through safety training and awareness programs. In September Hurricane Ike slammed into Texas and gave us and opportunity to demonstrate the benefits of our scale and our dedication to customer service.
The hurricane primarily affected customers served from our four locations in the Houston area. Before the hurricane landed we had already mobilized our emergency response team in Georgia, who arrived at the scene with generators and satellite phones, trailers of temporary housing and diesel for our trucks.
Employees from the three state area joined local AmeriGas employees in responding to the crisis. The day after the storm passed over Houston, our trucks where back on the road.
Our first priorities were to get fuel to back-up generators at self power, propane for chemo [ph] trailers and grill cylinders to customers at home centers, to supply homeowners without power. Customers were amazed at quickly we are back in the road and very complimentary of our response to crisis.
I'd like to thank all of the employees who helped us take care of our customers and the emergency workers in Texas. Every year we seem to have a crisis like hurricane Ike, that gives us an opportunity to demonstrate how we can bring national resources to bear to address local customer requirements.
I'd also like to take this opportunity to thank the entire AmeriGas team for continuing to grow our business and our earnings in 2008 and for achieving a significant improvement in our safety performance. And with that let me turn the call back to Lon for some concluding remarks.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Thank you, Gene. Let me quickly sum up with the following thoughts.
As you know we reiterated guidance of $2.10 to $2.20 a share for UTI's earnings in fiscal year '09 and $315 million to $325 million of EBITDA for AmeriGas. In the challenging environment that exists today, we see some positive factors that support our guidance.
Among them are the drop in energy commodity costs that occurred over the last month or two is not only good for us but is good for our customers and is good for our industry. We have nearly a $100 million of cash on our balance sheet.
We have a very strong balance sheet and importantly sufficient liquidity to support our businesses. We have good internal growth opportunities that John and Peter talked about which were available to us for the next few years.
And in addition, given our overall strength, if other opportunities arise during this difficult time in the economy, we expect to examine those opportunities and pursue those which create long term value for our shareholders. I don't want our optimism to leave you with the impression that we are either unaware of or immune from the consequences of the difficult external environment that exists today because we most assuredly are not.
However we have a long tradition of capitalizing on opportunities that arise in difficult times. In addition our keen focused on execution has served us well for many years and we will be focused once again on meeting our commitments.
We will also continue to pursue our long term strategies as we focus on that execution. We remain committed to meeting our long standing financial goals of growing UGI's earnings per share 6% to 10% a year and increasing UGI's dividend 4% and at the same time increasing the distribution to AmeriGas's unit holders by 5%.
We do have a very long standing tradition of meeting those goals. That should instill confidence in all of you that our projection for next year, which once again meets these goals, is obtainable.
Finally, I'm comfortable that we are examining the right issues, putting in place the correct strategies and executing against clear objectives and goals as we move forward. Thank you very much for your attention and Justin, we'll be happy to take questions.
Question And Answer
Operator
Thank you. [Operator Instructions].
And the first question comes from Faisel Khan with Citi.
Unidentified Analyst
This is actually Barry Kline [ph]. How is it going guys?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
How are you?
Unidentified Analyst
Good. I had a couple of quick questions here.
What exchange rate are you guys assuming in your guidance?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
142 and 142.
Unidentified Analyst
142, 142.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Because, don't forget, we've already got that hedged effectively because of the way we hedge our propane purchases.
Unidentified Analyst
Okay. And then over what period, did you hedge it.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
That's... we got all the 2009 covered, most of 2010 I believe.
Unidentified Analyst
Yes, we got three years, don't we?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, some of these are rolling ... We don't have much in...
Unidentified Analyst
That is okay. What type of demand ...
what type of propane demand growth do you expect in both, the U.S and international and what have you seen so far with the decline in commodity prices versus your expectations with regard to the demand.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, let me take a shot at that Barry. We ...
the industry in the U.S probably are not going to experience any growth. And for us to tell you that we could grow our business, 5, 6, 7% you ought to be checking our sanity, I think that is something that's achievable for us in that environment.
We do have a goal of some growth and the reason we are able to execute and create that growth is, we really approach it through three prongs and domestically, one prong is our cylinder exchange business, our cylinder exchange program really. And the other is our strategic accounts program and the third is our base business.
And so, we certainly are going to grow next year is our belief but it's going to be very modest growth in the U.S. And so it's not an area where we have high expectations for growth but I will tell you growing modestly in the environment that we face with virtually no housing, new housing market, very difficult economic circumstances in the U.S.
and particular in the Midwest and upper Midwest would be a very nice achievement in the current environment. Internationally we also expect modest growth, very modest growth and I'll take France, they too are facing similar issues that we face here.
Little bit better growth probably in Eastern Europe, those economies are still growing, although we expect those economies to slow through the ripple effects, as we go forward. So, on balance I guess the answer is I could have short cut all that by saying very, very modest both internationally and in the U.S.
Unidentified Analyst
And I stepped off the phone for a minute before, I apologies if you already answered this but, which regards your revolver, what is the total revolver, when does it mature, and how much of this is currently available?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
I could take it only because I know the answer, Peter can correct me if I overstate it, just for simplicity. Revolvers don't expire until 2011.
We extended those out as we extended out virtually a very significant part of all of our long term debt. And if you think about our debts generally no revolvers are coming due until no earlier than 11 and small maturity in AmeriGas and 2009 small maturity in 2010 and then a big maturity for Antragaz in 2011.
But that's it, in a net shell the maturity schedule.
Unidentified Analyst
And how much is in the revolver and how much is available?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
There is three... in terms of the total revolvers,
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
$350 million for utilities, $200 million for AmeriGas, $50 million euros for Antragaz and we have a receivables line in Energy Services of $200 million. At the end of September AmeriGas reduced $43 million, utilities reduced $57 million and Antragaz had pulled down the whole 50 million euros and Energy Services had an outstanding balance of $71 million.
Unidentified Analyst
Okay.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Okay, and let me just Barry just add to Peters comment on our Antragaz, they pulled down the whole amount, but they are sitting with 69 million euros in cash and so effectively they haven't borrowed on their revolver and they can't pay it back because when you borrow under your revolver you got 30 day windows and when that window comes our expectation is that that would be paid given the amount of cash that they have at the end of September.
Unidentified Analyst
Got you. Okay, thanks a lot guys.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Sure.
Operator
The next question comes from Schneuger Shawnee with UBS.
Schneuger Shawnee - UBS
Good afternoon, guys.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
How are you?
Schneuger Shawnee - UBS
Good. I just wanted to...
I guess follow up a bit Barry's question, just to understand the guidance for AmeriGas. So as you said Lon, just a little bit of modest growth in terms of volumes, is there an implied assumption there of any acquisition volumes or that it would just be incremental to kind of how you're thinking.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, generally speaking, when I talked about growth, I did not include acquisitions, but when AmeriGas budgeted since it is a strategic imperative for AmeriGas to grow by acquisition, we budget 10 million gallons of acquisition a year. But one of the things that's built into our year-over-year numbers is the PPL propane transaction, which was 20 million gallons that what is there last year, there will be there this year.
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
Yes, the total acquisition remained last year plus Penn Fuel would be 20 million gallon that we'll get the benefit this year....
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes.
Schneuger Shawnee - UBS
In addition to anything that you already acquired that's not part of the budget? Or, that is, sorry, and this part budget you expect to do another 10 million gallons.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, we always budget 10, and if you look at our history over time, I think Gene said something that was ... at our analyst call that was probably averaging 20 million a year for the last five years or something like that, I can't remember how long it was?
Schneuger Shawnee - UBS
I think that the deals that you do mid year are not going to contribute a lot in that year, they contribute more in the following year, so
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, generally what we'll do is, we'll budget a half year convention on that stuff. So, it doesn't have a big effect in this year's number what really drives this year's numbers from an acquisition standpoint, that this year being '09 is what we did last year that was not a part of '08, and not really as close to 20 million gallons.
Schneuger Shawnee - UBS
So, I should assume that there was some sort of an investment CapEx above your maintenance CapEx when thinking about cash flows for next year?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, there is, yes, we always have a fairly substantial growth CapEx number for AmeriGas. We are a little different than the other folks, it's the way our capital spending is up.
We, as you heard, Gene pointed out, we have grown this must every year for a lot of years except for this year. And that growth requires cylinders for ACE, it requires cylinders and tanks for the strategic accounts, and it requires tanks, generally underground tanks for any kind of residential, commercial business you get.
Eugene V. N. Bissell - Chief Executive Officer and President of AmeriGas Propane Inc., General Partner
In 2008, we spent $63 million on capital, 29 million was maintenance and 34 million was growth.
Schneuger Shawnee - UBS
I mean basically the resurgence [ph] on your total CapEx basically between maintenance and growth should be somewhere between 30 or 50 numbers. How should we be thinking about this unless--
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes I think maintenance is generally going to be in the somewhere slightly in the excess to 30 and growth is nominally somewhere 35 to 40 somewhere better.
Schneuger Shawnee - UBS
Okay. Perfect.
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
Just one of the point on growth and Lon, referenced kind of residential, the challenges in the residential segment. There's still some as Gene mentioned there's some good growth opportunities and some specifics in the account wins but also in strategic accounts.
So, we're planning on and planning for growth in both those targeted segments.
Eugene V. N. Bissell - Chief Executive Officer and President of AmeriGas Propane Inc., General Partner
We have some nice backlog of some of storages in both businesses is right now.
Schneuger Shawnee - UBS
Okay, and I was worried the first switching off AmeriGas. I was worried if you can talk about margins, kind of what you forecast, you guys expect margin did you accept a traction it all?
where do you expect it to remain at current level given the prices falling at this point, I'm sort of kind of how you're thought was at the margins?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Let me qualitatively and then Gene jump in, qualitatively we do not see in marketplace any rush by the industry to reduce prices, remember this industry carries over inventory that's purchased during the summer, purchased during the spring and stored. And that has to oil work its way through the system, and of course it will as prices stay where they are, that will work its way down.
And if you look at industry, statistics published by EIA, you could prices coming down. But we don't see a real, at this point in time, we don't see a degradation of margin.
Our general philosophy is that there ought to be margin and a static environment, there ought to be margined increases sufficient to allow you to recover your cost, inflationary cost. And that's how we think about budgeting generally speaking.
But of course that's subject to market dynamics out there. We are not the highest priced in the market place by far nor we the lowest priced.
We try to deliver value to our customers in a variety of way. And we intend to compete in the marketplace effectively.
And so, we have to watch it but I can tell you at this point in time we don't see as I should before any industry rush to reduce margins. There are price reduction is going but they're commensurate with a balanced approach on passing on inventory cost that people bought during the summer and passing on to the customers the benefit of the lower prices now.
Schneuger Shawnee - UBS
Okay, I was wondering if we could sort of turn to Energy Services at UGI and I must have applaud you guys on the amount of disclosure that you put out there in. I guess it's unfortunate, I need to ask more questions.
Lon, I was wondering if you first if you could start with the seasonality of the business. Clearly the fourth quarter in `08 is down significantly relative to the third quarter of `08.
I just wanted to understand if there is a seasonality aspect to it, is this related to commodity, just sort of the difference between the third quarter or is it really just more a seasonality issue and you should be more looking towards the previous year?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, seasonality is clearly there with two elements. If you would check that business from three parts, one is a gas commodity marketing business which is clearly seasonal.
It's got a lot of winter peaking to it. And so you will always see some seasonality in that business because the customers by and large use it not only for process which would be more year around but the use it for heating as well.
So, one third of the business, if we think of the business in thirds, one third of it is clearly seasonal. You've got electric generation business which is typically a little counter seasonal, but what you've saw on electric prices, as electric prices drop throughout the summer compared to where they were in the spring and so, we didn't get the normal seasonal kick, that you would get from electric prices.
So, that piece, the counter seasonal piece was missing this year. The last piece of the business is what we call our, kind of mid stream peaking business that too is seasonal.
They recognized the demand charges they get for providing their services over the winter months, which are when they need to provide those services. So, that third of the business is seasonal as, virtually seasonal, in fact perfectly seasonal but it's largely seasonal.
So, nominally two thirds of the business is seasonal to the winter, a third of it is counter seasonal to the summer, but the counter seasonal part this year wasn't as good as it was as in the fourth quarter compared to the third quarter because of the electric generation prices.
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
There is also, in Energy Services, there is a mark-to-market impact, but a gain of, at an operating income level of, $2 million in the quarter ending June, and they had a cost in the quarter, I mean September of $3 million. So, there is quite a big swing is just not a mark-to-market adjustment.
Schneuger Shawnee - UBS
Okay. Is this a similar issue to what we had in the previous quarter where you...
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, it's similar to what we had. The impact at UGI level is about $400,000, so basically nothing for the year.
Schneuger Shawnee - UBS
But, if ... but in the fourth quarter there was a $3 million negative charge relative to the $2 million positive gain?
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
Yes, an operating income level, it's basically hit us about $0.02 in the fourth quarter.
Schneuger Shawnee - UBS
Hit you for $0.02 in the fourth quarter.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, we ... these changes for...
these are transportation, we buy, that we bundle to sell to customer for electricity and the accounting rules, which we studiously adhere to, But don't always understand, that's a proper way to say it. Require us that not withstanding with the effect that we presale this stuff to a lot of customers who will pay us for it.
But we are obliged inter period to mark those to market, and the electricity price volatility that occurred in the third quarter and fourth quarter has tracked down transportation prices with that's of third quarter. So transportation become more valuable because electricity prices were based on gas at 12 bucks, gas tanked down to six bucks, electric prices fell commensurately and of course transportation fell commensurately.
But, we were indifferent to it because we already sold the transportation at they sum but nonetheless because we do follow the accounting rules, we had some mark to markets in there. They're small relative to our business and so that's why we don't break them out with me after $0.02 this long winded explanation, we don't want to confuse people on it.
It's not a big deal but you've identified the quarter's swing that's always been the biggest as Peter responded appropriately to it.
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
The reason I am here on this right now because we actually excluded it in the third quarter. So we wanted to make sure that we may the right adjustment.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, for that intellectual ISP applaud you. And in order to do the same we got to exclude three million pre tax, is it Peter.
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
Yes, 2.7 for Energy Services and 3.3 for UGI as a whole pre tax for Q4.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, our 3.3 pre tax for Q4 going and negative. So you can add that back if you like but again fundamentally, as we try...
we understand you need to do your modeling and stuff. The end of the day over a full year there won't be any swing because we pre sell this stock.
Schneuger Shawnee - UBS
Right, yes, exactly. So when that [indiscernible].
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, you're exactly right, you're exactly right.
Schneuger Shawnee - UBS
Okay one last question here just with the natural gas project you kind of what is the effect of EBITDA impact for 2009 and what's kind of the what would be 12 months run rate, once that's running.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Sorry, of which project?
Schneuger Shawnee - UBS
[indiscernible]
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Well, I don't thing we've publicly disclose this, it's small
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
But if you look at their expected ROE on that project, it's sort of high teens for our $36 million investment.
Schneuger Shawnee - UBS
Okay, thanks. And then, I was just wondering one last question.
What is the AmeriGas value hike, I was wondering if you could give us wholesale volume for AmeriGas for the quarter? And what is the corporate CapEx guidance for 2009, gallons of sales?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Let see anybody have a copy of the addressed annual report to give him CapEx going on, 20 million gallons of sales for the quarter.
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
And the total CapEx is $325 million, 175 of that is growth and 160 maintenance.
Schneuger Shawnee - UBS
Perfect. Thank you very much guys.
Thank you for the attention.
Schneuger Shawnee - UBS
Sure, thank you no problem.
Operator
And next question comes from Carl Kirst with BMO Capital.
Carl Kirst - BMO Capital
Hi, good afternoon everyone. Most of my questions have been hit, really just a couple maybe to clean up and I apologize if this was mentioned in the opening remarks because I was writing furiously here.
The LNG peaker did you guys discuss an update to the status of that?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
No, that is something that's still in the investigatory planning phases and so has I think we said as our offside to that's kind of a 2011ish event. Money will be spend, 10 or 11 and we don't expect to see earnings rather until probably albeit late '011, 12 time.
Eugene V. N. Bissell - Chief Executive Officer and President of AmeriGas Propane Inc., General Partner
Yes, certainly at an earlier stage of development then Hunlock which is why we focused on Hunlock today, we continue to progress and do the appropriate filings to defer but it's still sort of mid cycle in terms of development.
Carl Kirst - BMO Capital
Okay, no fair enough. I just wanted to make sure I had it...
which should be on the front burner and which should be on the backburner and understanding going back to utility and Pennsylvania here, we sort of lost the ground swell for decoupling and conservation trackers earlier on in the year. Does the environment that we are in, is there any anticipation that that might bring that back to the forefront or--?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
I think Carl it's an intriguing question, I have a hard enough time predicting what I'm going to eat for dinner, let alone, let the legislators or the governor got to do and a very difficult thing. It's clear to us that the governor and legislature are concerned about energy prices, are concerned about the environment, want to put together some kind of program to handle the rate caps coming off and it will be electric business because of the great shock that will be experienced by customers beginning in 2010.
In Pennsylvania, not ours because we are out of the rate caps but generally speaking the preponderance of the population of Pennsylvania. Since the variety of energy bills that were considered and the decoupling is not a principle driver in those bills, it's kind of an add-on, and it has some support we understand, but I can't predict for you, whether that will happen this year or not.
Carl Kirst - BMO Capital
Okay, but it would be ... your comments are helpful, we're certainly not seeing a ground swell towards it, right now?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, that's correct.
Carl Kirst - BMO Capital
And I think that really is it a, just as a general. I know one we're really talking about 3% over the normal, 4% over normal statistically gets kind of difficult to spike the numbers here.
But on sort of a fiscal year 2008, is there is any sense of sort of on a corporate 30,000 foot stand point. Had we have had normal weather are we're kind of looking it sort of a $0.02, $0.03 impact overall or something that was more of $0.05 plus?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
I'd probably be in between, I'm sorry as you're talking, I was kind of, you think back to where our expectations were and everything else, I would say approximately a nickel, give or take a little.
Carl Kirst - BMO Capital
Okay, I just want to make sure I was in the right range. I appreciate the comments, guys.
Thank you
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, thank you.
Operator
And next question comes from Peter Iso with Schneider Capital Management [ph].
Unidentified Analyst
Hi, good afternoon.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
How are you, Peter?
Unidentified Analyst
Pretty good. Lon, could you provide just some clarity or detail perhaps on the $175 million in growth CapEx that you've identified?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, let me turn that to Peter, his got the details with him on that.
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
Yes, it's pretty tough year-on-year about probably $60 million, $35 million of that is in our Energy Services group, which took the projects that John was talking about. On the balances is in our international operation then in AmeriGas.
This maybe around cylinder exchange type programs.
Unidentified Analyst
But perhaps that has increased about the absolute amounts by segment. You have something like that?
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
Well I have the... for two...
to hand I have the 2008 number for AmeriGas which was $29 million of maintenance and $34 million of growth. I don't have to hand the individual numbers in terms of maintenance and growth.
But I do have the absolute number if you like that.
Unidentified Analyst
Yes, I was specifically looking at on the growth CapEx by segment, so 175 broken down?
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
Yes, I don't have that to hand Peter.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
What we can do Peter is maybe we can put that in... try to break that out in the annual report in some fashion so that at least it will get out there.
This just broadly speaking, Peter is correct that Energy Services will eat a nice piece of the 175 with their growth program for the Hunlock conversion of the electric plant, let's call it all-in for Energy Services not nearly 40. And these are very broad numbers, normally 40ish for them and we heard what is safe for AmeriGas, Peter 40 for them.
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
About 40 from AmeriGas, that is 80, so it is normally half of it and Antragaz, part of it is dollar conversion numbers but I am going to say Antragaz could be 25 to 30 of their total capital budget and that area is growth related to their cylinder exchange business, their pipe business and other things they have going on. That leaves our utility business and remember we have the new business we've bought from PP&L.
There is additional growth capital there. And probably the remainder is you see the utility business is where as John pointed out, we had despite the housing slowdown, we had nice growth in the utility businesses through convergence and otherwise.
That's broadly speaking where the money has gone.
Unidentified Analyst
Okay, that's great. And, the other question I have that, did you mentioned, I may have missed it, but on the bad debt or accounts 30 days overdue anything, any information there in terms of trends.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
I think, we felt, Jerry, maybe you can speak. Jerry can speak definitively about AmeriGas, and then we'll jump in on the others if we can.
Jerry E. Sheridan - Chief Financial Officer and Vice President of Finance - AmeriGas Propane Inc.
I mean, I guess we're happy so far with the variations of transit. We tend to look at accounts there over 60 days, and we lost about 1% of brand that will be September to September and the same barrels per days is outstanding most of the day.
So, clearly there is impact both on, the commercial and residential with slightly slower pay, but nothing like what we expect.
Unidentified Analyst
Only 1%, you will be going from 18% to 19%?
Jerry E. Sheridan - Chief Financial Officer and Vice President of Finance - AmeriGas Propane Inc.
Yes Very marginal, shared margin outstanding.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
We are and seeing, let me qualitatively answer it using Jerry's data, and knowing, I know where we are in the utilities and the other Energy Services. We get reports on that stuff.
So, generally speaking we are not seeing a significant issue at bad debt at this point in time. I will credit all of our operating groups for doing an outstanding job of working with customers to avoid issues.
We have lot of help [ph] programs in our utilities that help the customers that are low income and we work with them. I know AmeriGas lends a helping hand to customers where we can, and they are deserving, and we stay on top of it where we expect people to pay their bills and we act accordingly and we have groups who try to collect those.
All that said, we don't see a qualitative problem at this time but it is something that we are watching carefully because the economy continues to deteriorate and utility bills, energy bills for customers are a necessity. And so, we just have to be mindful of keeping an eye on it and we have reported to do that.
Unidentified Analyst
Okay, great, thank you.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Sure.
Operator
And next question comes from Justine Mallet with Lord Adam [ph].
Unidentified Analyst
Good afternoon guys, how are you. Just real quick on the hedge you talked about the hedge on the propane buy.
I assume that's transactional not translation, is that fair? And on the [indiscernible] on the international currency you're talking about.
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
Yes, what we do is we hedge I mean if it gets complicated but effectively we hedge propane purchases by Antragas, because Antragas has the currency on the Euro and they buy propane in dollars. And so, we try to hedge that cost of buying for them that locks in the exchange rate.
And of course that creates gains or losses on the actual exchange rate. And when we go through all the calculations implicit in that technique, it has a direct correlation to hedging a good portion of our net income I guess.
Unidentified Analyst
And my follow-up is if you hedging your cost going in it generates a certain profit there and is that subject to any exposure on FX as you translate back to dollars or no you are saying that's effectively hedged?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Well, yes I need that there is to I think it effectively hedged on income. We also hedge dividends that they give us.
So that if we expect a return of capital from Antragaz of 30 million euros or something, we will hedge that return of capital out as well. So we get a return of that capital at a level that we understand that will be open.
So, there's a cash hedge effectively and net investment hedge and we have a propane product hedge as well.
Unidentified Analyst
Okay and just relative to Slag [ph] and the stories we've been hearing for the last month about Eastern European currency implosions and what not, do you guys get concerned at all from a demand perspective that, you know people who apparently are taken on debt, consumers taken on debt in euros and therefore when their currencies are going upside down, there have been a hard time meeting obligations and having to cut corners and that type of thing, is that a consideration at all?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Yes, again, the nature of our business is, we have large, we don't have concentrated customers, and we have a large number of transactions with customers in a row relatively small. What we saw last year was quite interesting, we saw a number of the Eastern European currencies appreciate vis-à-vis the euro, which was appreciating mightily against the dollar.
So, we almost had a double effect if you will there. Recently, some of those currencies have come back in versus the euro, but then they expanded a little more.
So, on balance, the other Eastern European country currencies are weaker to the euro than they were last year. But, they are still in a positive way.
And we don't see much exposure to those currencies overall... give you a sense of scale, the entire Eastern European business is kind of 35 million gallons to 40 million gallons and it's broken up into thousands and thousands and thousands of transactions and so.
We don't consider those currency fluctuations a big risk for us.
Unidentified Analyst
Okay. So that the debt, you guys stripped down the debt and are in heaven sitting in cash, is that...
was there any particular reason for that?
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
No. It is AmeriGas, We pulled the revolver
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
No, no Antragaz,
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Antragaz, we pulled the revolver and it was essentially because they allowed to reduce the interest rate on our long term debt.
Unidentified Analyst
Okay got it.
Peter Kelly - Vice President-Finance and Chief Financial Officer of UGI Corporation
And so when you pull it down, you need to pull it down before year end and then you need to repay it that s why we have 69 million euros in cash.
Unidentified Analyst
Yes, okay. Thanks a lot.
Operator
At this time there are no further questions.
Lon R. Greenberg - Chairman of AmeriGas Propane Inc. a General partner, Chairman of UGI Corp., Chief Executive Officer of UGI Corp. and President of UGI Corporation
Okay good well. I appreciate all of you on the call today paying attention to us and asking such good questions.
To make the happy exchange with all of you and share your thoughts, to summarize we are feeling good about next year of course we are, wary of the economic turmoil that's out there. But I think you pay us to manage that turmoil and we have got the liquidity, we got the assets, the balance sheet and the execution skills to work our way through that.
So we look forward to talking to you in January next time where we report our First quarter earnings, and hopefully we will have some good information for you at that time, So talk to you all then thank you all very much.
Operator
And that does conclude today's conference. We thank you for your participation.
.