##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended December 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from
 _____ 
to
 _____
 Commission file number 1-1398
 UGI UTILITIES, INC.
  Pennsylvania
(State or other jurisdiction of 
incorporation or organization)
    
    23-1174060
(I.R.S. Employer
Identification No.)
 
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o
 Yes o No þ




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##### 



UGI UTILITIES, INC. AND SUBSIDIARIES
 TABLE OF CONTENTS
 PAGESPart I Financial InformationItem 1. Financial Statements (unaudited)Condensed Consolidated Balance Sheets as of December 31, 2008, September 30, 2008 and December 31, 2007
    
    
    1Condensed Consolidated Statements of Income for the three months ended December 31, 2008 and 2007
    
    
    2Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2008 and 2007
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4 - 20Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21 - 29Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    29 - 30Item 4T. Controls and Procedures
    
    
    31Part II Other InformationItem 1. Legal Proceedings
    
    
    32Item 1A. Risk Factors
    
    
    32Item 6. Exhibits
    
    
    33Signatures
    
    
    34Exhibit 12.1Exhibit 31.1Exhibit 31.2Exhibit 32
   -i-




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December 31,
    
    
    September 30,
    
    
    December 31,2008
    
    
    2008
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    10,955
    
    
    $
    3,483
    
    
    $
    23,016Restricted cash
    
    
    72,672
    
    
    
    34,037
    
    
    
    14,812Accounts receivable (less allowances for doubtful accounts of
($17,644, $10,369 and $10,841, respectively)
    
    
    168,646
    
    
    
    70,259
    
    
    
    137,999Accounts receivable  related parties
    
    
    3,551
    
    
    
    1,946
    
    
    
    5,124Accrued utility revenues
    
    
    90,246
    
    
    
    20,823
    
    
    
    82,051Regulatory assets
    
    
    46,953
    
    
    
    15,987
    
    
    
    14,657Inventories
    
    
    167,384
    
    
    
    161,272
    
    
    
    141,718Deferred income taxes
    
    
    21,336
    
    
    
    13,712
    
    
    
    6,322Prepaid expenses & other current assets
    
    
    5,496
    
    
    
    3,886
    
    
    
    2,951Total current assets
    
    
    587,239
    
    
    
    325,405
    
    
    
    428,650Property, plant and equipment, at cost (less accumulated depreciation and amortization
of $669,751, $562,135, and $538,540, respectively)
    
    
    1,343,833
    
    
    
    1,106,921
    
    
    
    1,085,984Goodwill
    
    
    182,723
    
    
    
    161,726
    
    
    
    162,309Regulatory assets
    
    
    103,458
    
    
    
    91,396
    
    
    
    90,621Other assets
    
    
    13,165
    
    
    
    9,018
    
    
    
    7,570Total assets
    
    $
    2,230,418
    
    
    $
    1,694,466
    
    
    $
    1,775,134LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Bank loans
    
    $
    283,000
    
    
    $
    57,000
    
    
    $
    257,000Accounts payable
    
    
    111,455
    
    
    
    57,384
    
    
    
    94,748Accounts payable  related parties
    
    
    4,424
    
    
    
    14,680
    
    
    
    3,692Accrued income taxes
    
    
    16,192
    
    
    
    3,170
    
    
    
    9,668Deferred fuel refunds
    
    
    
    
    
    
    
    
    
    
    2,435Derivative financial instruments
    
    
    58,675
    
    
    
    23,488
    
    
    
    1,340Other current liabilities
    
    
    137,851
    
    
    
    68,441
    
    
    
    73,634Total current liabilities
    
    
    611,597
    
    
    
    224,163
    
    
    
    442,517Long-term debt
    
    
    640,000
    
    
    
    532,000
    
    
    
    512,000Deferred income taxes
    
    
    136,004
    
    
    
    171,623
    
    
    
    184,091Deferred investment tax credits
    
    
    5,945
    
    
    
    6,039
    
    
    
    6,321Other noncurrent liabilities
    
    
    192,879
    
    
    
    93,071
    
    
    
    41,928Total liabilities
    
    
    1,586,425
    
    
    
    1,026,896
    
    
    
    1,186,857Commitments and contingencies (note 6)Common stockholders equity:Common Stock, $2.25 par value (authorized - 40,000,000 shares;
issued and outstanding - 26,781,785 shares)
    
    
    60,259
    
    
    
    60,259
    
    
    
    60,259Additional paid-in capital
    
    
    466,888
    
    
    
    466,888
    
    
    
    346,758Retained earnings
    
    
    199,142
    
    
    
    184,201
    
    
    
    196,855Accumulated other comprehensive loss
    
    
    (82,296
    )
    
    
    (43,778
    )
    
    
    (15,595
    )Total common stockholders equity
    
    
    643,993
    
    
    
    667,570
    
    
    
    588,277Total liabilities and stockholders equity
    
    $
    2,230,418
    
    
    $
    1,694,466
    
    
    $
    1,775,134
   -1-




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Three Months EndedDecember 31,2008
    
    
    2007Revenues
    
    $
    446,692
    
    
    $
    364,388Costs and expenses:Cost of sales  gas, fuel and purchased power (excluding
depreciation shown below)
    
    
    316,234
    
    
    
    256,939Operating and administrative expenses
    
    
    50,678
    
    
    
    35,504Operating and administrative expenses  related parties
    
    
    2,745
    
    
    
    1,454Taxes other than income taxes
    
    
    4,604
    
    
    
    4,469Depreciation and amortization
    
    
    12,512
    
    
    
    10,231Other income, net
    
    
    (2,093
    )
    
    
    (2,818
    )384,680
    
    
    
    305,779Operating income
    
    
    62,012
    
    
    
    58,609Interest expense
    
    
    11,380
    
    
    
    10,900Income before income taxes
    
    
    50,632
    
    
    
    47,709Income taxes
    
    
    19,498
    
    
    
    19,076Net income
    
    $
    31,134
    
    
    $
    28,633
   -2-




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Three Months EndedDecember 31,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    31,134
    
    
    $
    28,633Adjustments to reconcile net income to net cash from
operating activities:Depreciation and amortization
    
    
    12,512
    
    
    
    10,231Deferred income taxes, net
    
    
    (2,222
    )
    
    
    8,738Provision for uncollectible accounts
    
    
    8,702
    
    
    
    3,812Other, net
    
    
    1,323
    
    
    
    554Net change in:Accounts receivable and accrued utility revenues
    
    
    (164,448
    )
    
    
    (134,951
    )Inventories
    
    
    16,876
    
    
    
    20,541Deferred fuel costs
    
    
    10,129
    
    
    
    2,560Accounts payable
    
    
    33,256
    
    
    
    22,557Storage agreement security deposits
    
    
    40,500
    
    
    
    Other current assets
    
    
    (940
    )
    
    
    330Other current liabilities
    
    
    31,614
    
    
    
    8,159Net cash provided (used) by operating activities
    
    
    18,436
    
    
    
    (28,836
    )CASH FLOWS FROM INVESTING ACTIVITIES:Expenditures for property, plant and equipment
    
    
    (22,811
    )
    
    
    (12,409
    )Net costs of property, plant and equipment disposals
    
    
    (389
    )
    
    
    (214
    )Acquisition of CPG, net of cash acquired
    
    
    (300,561
    )
    
    
    Proceeds from sale of CPP
    
    
    33,621
    
    
    
    Increase in restricted cash
    
    
    (38,635
    )
    
    
    (8,170
    )Net cash used by investing activities
    
    
    (328,775
    )
    
    
    (20,793
    )CASH FLOWS FROM FINANCING ACTIVITIES:Payment of dividends
    
    
    (16,189
    )
    
    
    (10,562
    )Issuance of long-term debt
    
    
    108,000
    
    
    
    Increase in bank loans
    
    
    226,000
    
    
    
    67,000Net cash provided by financing activities
    
    
    317,811
    
    
    
    56,438Cash and cash equivalents increase
    
    $
    7,472
    
    
    $
    6,809CASH AND CASH EQUIVALENTS:End of period
    
    $
    10,955
    
    
    $
    23,016Beginning of period
    
    
    3,483
    
    
    
    16,207Increase
    
    $
    7,472
    
    
    $
    6,809
   -3-




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UGI UTILITIES, INC. AND SUBSIDIARIES
 
 Notes to Condensed Consolidated Financial Statements
   1.
    
    Basis of Presentation
     Restricted Cash.
  -4-




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##### Table of Contents



UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
 Comprehensive
Income (Loss).
 Three Months EndedDecember 31,2008
    
    
    2007Net income
    
    $
    31,134
    
    
    $
    28,633Other comprehensive loss
    
    
    (38,518
    )
    
    
    (278
    )Comprehensive (loss) income
    
    $
    (7,384
    )
    
    $
    28,355
  Natural Gas Inventories.
 Reclassifications.
  -5-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
 Use of Estimates.
 Income Taxes.
 Newly Adopted Accounting Standards.
   -6-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
  Recently Issued Accounting Standards Not Yet Adopted.
    -7-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
  2.
    
    Acquisition of PPL Gas Utilities Corporation
    -8-




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##### Table of Contents



UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
  Working capital
    
    $
    21,475Property, plant and equipment, net
    
    
    227,301Goodwill
    
    
    20,997Regulatory assets
    
    
    14,365Other assets
    
    
    14,059Noncurrent liabilities
    
    
    (28,260
    )Total
    
    $
    269,937
   Three Months EndedDecember 31, 2007(pro forma)Revenues
    
    $
    411,586Net income
    
    
    32,639
  3.
    
    Segment Information
    -9-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
  Three Months Ended December 31, 2008:
 Reportable SegmentsGas
    
    
    ElectricTotal
    
    
    Utility
    
    
    Utility
    
    
    OtherRevenues
    
    $
    446,692
    
    
    $
    410,366
    
    
    $
    35,921
    
    
    $
    405Cost of sales
    
    
    316,234
    
    
    
    293,024
    
    
    
    23,210
    
    
    
    Depreciation and amortization
    
    
    12,512
    
    
    
    11,549
    
    
    
    963
    
    
    
    Operating income
    
    
    62,012
    
    
    
    56,885
    
    
    
    5,047
    
    
    
    80Interest expense
    
    
    11,380
    
    
    
    10,975
    
    
    
    405
    
    
    
    Income before income taxes
    
    
    50,632
    
    
    
    45,910
    
    
    
    4,642
    
    
    
    80Total assets at period end
    
    $
    2,230,418
    
    
    $
    2,114,385
    
    
    $
    115,101
    
    
    $
    932Goodwill at period end
    
    $
    182,723
    
    
    $
    182,723
    
    
    $
    
    
    
    $
    
 Three Months Ended December 31, 2007:
 Reportable SegmentsGas
    
    
    ElectricTotal
    
    
    Utility
    
    
    Utility
    
    
    OtherRevenues
    
    $
    364,388
    
    
    $
    326,642
    
    
    $
    31,936
    
    
    $
    5,810Cost of sales
    
    
    256,939
    
    
    
    236,778
    
    
    
    17,670
    
    
    
    2,491Depreciation and amortization
    
    
    10,231
    
    
    
    9,348
    
    
    
    880
    
    
    
    3Operating income
    
    
    58,609
    
    
    
    50,068
    
    
    
    7,459
    
    
    
    1,082Interest expense
    
    
    10,900
    
    
    
    10,359
    
    
    
    541
    
    
    
    Income before income taxes
    
    
    47,709
    
    
    
    39,710
    
    
    
    6,917
    
    
    
    1,082Total assets at period end
    
    $
    1,775,134
    
    
    $
    1,655,105
    
    
    $
    110,702
    
    
    $
    9,327Goodwill at period end
    
    $
    162,309
    
    
    $
    162,309
    
    
    $
    
    
    
    $
    
  -10-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
 4.
    
    Regulatory Assets and Liabilities and Regulatory Matters
  December 31,
    
    
    September 30,
    
    
    December 31,2008
    
    
    2008
    
    
    2007Regulatory assets:Income taxes recoverable
    
    $
    74,676
    
    
    $
    73,695
    
    
    $
    73,057Postretirement benefits
    
    
    4,118
    
    
    
    4,321
    
    
    
    4,672Recoverable costs  CPG Gas postretirement benefit plans
    
    
    9,068
    
    
    
    
    
    
    
    Environmental costs
    
    
    9,128
    
    
    
    9,009
    
    
    
    8,255Deferred fuel costs
    
    
    46,953
    
    
    
    15,987
    
    
    
    14,657Other
    
    
    6,468
    
    
    
    4,371
    
    
    
    4,637Total regulatory assets
    
    $
    150,411
    
    
    $
    107,383
    
    
    $
    105,278Regulatory liabilities:Postretirement benefits
    
    $
    9,248
    
    
    $
    8,886
    
    
    $
    7,797Environmental overcollections
    
    
    9,713
    
    
    
    
    
    
    
    Deferred fuel refunds
    
    
    
    
    
    
    
    
    
    
    2,435Total regulatory liabilities
    
    $
    18,961
    
    
    $
    8,886
    
    
    $
    10,232
 Deferred fuel costs and refunds.
 Recoverable costs  CPG Gas postretirement benefit plans.
 Environmental overcollections.
  -11-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
 Other Regulatory Matters
 Electric Utility.
   UGIPNG and CPG Base Rate Filings.
 5.
    
    Defined Benefit Pension and Other Postretirement Plans
   -12-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
  Pension Benefits
    
    
    Other Postretirement BenefitsThree Months Ended
    
    
    Three Months EndedDecember 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Service cost
    
    $
    1,381
    
    
    $
    1,271
    
    
    $
    64
    
    
    $
    67Interest cost
    
    
    5,454
    
    
    
    4,453
    
    
    
    260
    
    
    
    212Expected return on assets
    
    
    (6,106
    )
    
    
    (5,693
    )
    
    
    (130
    )
    
    
    (159
    )Amortization of:Prior service cost (benefit)
    
    
    7
    
    
    
    7
    
    
    
    (87
    )
    
    
    (97
    )Actuarial loss
    
    
    173
    
    
    
    
    
    
    
    30
    
    
    
    17Net benefit cost
    
    
    909
    
    
    
    38
    
    
    
    137
    
    
    
    40Change in regulatory
assets and liabilities
    
    
    
    
    
    
    
    
    
    
    803
    
    
    
    817Net expense
    
    $
    909
    
    
    $
    38
    
    
    $
    940
    
    
    $
    857
     -13-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
  Three MonthsEndedDecember 31, 2008Change in benefit obligations:Benefit obligations  October 1, 2008
    
    $
    300,578Service cost
    
    
    1,317Interest cost
    
    
    5,073Actuarial loss
    
    
    35,413Benefits paid
    
    
    (3,690
    )Benefit obligations  December 31, 2008
    
    $
    338,691Change in plan assets:Fair value of plan assets  October 1, 2008
    
    $
    240,997Actual loss on assets
    
    
    (27,350
    )Benefits paid
    
    
    (3,690
    )Fair value of plan assets  December 31, 2008
    
    $
    209,957Funded status of the merged plan  December 31, 2008
    
    $
    (128,734
    )Liabilities recorded in the balance sheet:Unfunded liabilities (included in other
noncurrent liabilities)
    
    
    (128,734
    )Amounts recorded in stockholders equity  December 31, 2008:Prior service cost
    
    $
    313Net actuarial loss
    
    
    132,874Total
    
    $
    133,187
  6.
    
    Commitments and Contingencies
    -14-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
      -15-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
 South Carolina Electric & Gas Company v. UGI Utilities, Inc.
 City of Bangor, Maine v. Citizens Communications Company.
 Sag Harbor, New York Matter.
  -16-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
 Yankee Gas Services Company and Connecticut Light and Power Company v. UGI Utilities, Inc.
  7.
    
    Related Party Transactions
   -17-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
     8.
    
    Financing Transactions
   -18-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
 9.
    
    Fair Value Measurement
    
    
    Level 1  Quoted prices (unadjusted) in active markets for identical assets and
liabilities that we have the ability to access at the measurement date.
Instruments categorized in Level 1 consist of our exchange-traded commodity
futures contracts.
    
    Level 2  Inputs other than quoted prices included within Level 1 that are
either directly or indirectly observable for the asset or liability, including
quoted prices for similar assets or liabilities in active markets, quoted prices
for identical or similar assets or liabilities in inactive markets, inputs other
than quoted prices that are observable for the asset or liability, and inputs that
are derived from observable market data by correlation or other means. Instruments
categorized in Level 2 include our FTRs.
 
    
    Level 3  Unobservable inputs for the asset or liability including situations
where there is little, if any, market activity for the asset or liability. The
Company did not have any derivative financial instruments categorized as Level 3
at December 31, 2008.
  -19-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
   Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalDerivative financial
instruments:Assets
    
    $
    
    
    
    $
    1,004
    
    
    $
    
    
    
    $
    1,004Liabilities
    
    
    (58,675
    )
    
    
    
    
    
    
    
    
    
    
    (58,675
    )
  -20-




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UGI UTILITIES, INC. AND SUBSIDIARIES
 
 ITEM 2.

    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Forward-Looking Statements
     -21-




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UGI UTILITIES, INC. AND SUBSIDIARIES
 ANALYSIS OF RESULTS OF OPERATIONS
  2008 three-month period compared with 2007 three-month period
 IncreaseThree Months Ended December 31,
    
    2008
    
    
    2007
    
    
    (Decrease)(Millions of dollars)Gas Utility:Revenues
    
    $
    410.4
    
    
    $
    326.6
    
    
    $
    83.8
    
    
    
    25.7
    %Total margin (a)
    
    $
    117.3
    
    
    $
    89.9
    
    
    $
    27.4
    
    
    
    30.5
    %Operating income
    
    $
    56.9
    
    
    $
    50.1
    
    
    $
    6.8
    
    
    
    13.6
    %Income before income taxes
    
    $
    45.9
    
    
    $
    39.7
    
    
    $
    6.2
    
    
    
    15.6
    %System throughput  bcf
    
    
    44.0
    
    
    
    39.5
    
    
    
    4.5
    
    
    
    11.4
    %Heating degree days  % colder (warmer)
than normal (b)
    
    
    7.1
    %
    
    
    (4.3
    )%
    
    
    
    
    
    
    Electric Utility:Revenues
    
    $
    35.9
    
    
    $
    31.9
    
    
    $
    4.0
    
    
    
    12.5
    %Total margin (a)
    
    $
    10.7
    
    
    $
    12.4
    
    
    $
    (1.7
    )
    
    
    (13.7
    )%Operating income
    
    $
    5.0
    
    
    $
    7.5
    
    
    $
    (2.5
    )
    
    
    (33.3
    )%Income before income taxes
    
    $
    4.6
    
    
    $
    6.9
    
    
    $
    (2.3
    )
    
    
    (33.3
    )%Distribution sales  gwh
    
    
    252.8
    
    
    
    254.4
    
    
    
    (1.6
    )
    
    
    (0.6
    )%
 bcf 
    
    billions of cubic feet.    gwh  millions of kilowatt-hours.(a)
    
    Gas Utilitys total margin represents total revenues less total cost of sales. Electric
Utilitys total margin represents total revenues less total cost of sales and revenue-related
taxes, i.e. Electric Utility gross receipts taxes, of $2.0 million and $1.8 million during the
three-month periods ended December 31, 2008 and 2007, respectively. For financial statement
purposes, revenue-related taxes are included in Taxes other than income taxes in the
Condensed Consolidated Statements of Income.(b)
    
    Deviation from average
heating degree days for the 15-year period 1990-2004 based upon
weather statistics provided by the National Oceanic and Atmospheric Administration (NOAA)
for airports located within Gas Utilitys service territory. Gas Utility.
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UGI UTILITIES, INC. AND SUBSIDIARIES
    Electric Utility.
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UGI UTILITIES, INC. AND SUBSIDIARIES
   FINANCIAL CONDITION AND LIQUIDITY
 Financial Condition
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UGI UTILITIES, INC. AND SUBSIDIARIES
 Acquisition of PPL Gas Utilities Corporation
   Payments Due by PeriodFiscal
    
    
    Fiscal
    
    
    FiscalTotal
    
    
    2009
    
    
    2010-2011
    
    
    2012-2013
    
    
    ThereafterLong-term debt
    
    $
    108.0
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    108.0Interest on long-term debt
    
    
    34.4
    
    
    
    3.4
    
    
    
    13.8
    
    
    
    13.8
    
    
    
    3.4Supply, storage and
transportation contracts
    
    
    140.6
    
    
    
    58.6
    
    
    
    53.5
    
    
    
    16.1
    
    
    
    12.4Total
    
    $
    283.0
    
    
    $
    62.0
    
    
    $
    67.3
    
    
    $
    29.9
    
    
    $
    123.8
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UGI UTILITIES, INC. AND SUBSIDIARIES
 Merger of Defined Benefit Pension Plans
  Effect of Recent Market Conditions.
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UGI UTILITIES, INC. AND SUBSIDIARIES
 Cash Flows
 Operating activities.
  Investing activities.
 Financing activities.
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UGI UTILITIES, INC. AND SUBSIDIARIES
 Regulatory Matters
 Electric Utility.
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UGI UTILITIES, INC. AND SUBSIDIARIES
 UGIPNG and CPG Base Rate Filings.
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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UGI UTILITIES, INC. AND SUBSIDIARIES
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UGI UTILITIES, INC. AND SUBSIDIARIES
 
 ITEM 4T. CONTROLS AND PROCEDURES
 (a)
    
    Evaluation of Disclosure Controls and ProceduresThe Companys management, with the participation of the Companys Chief Executive Officer
and Chief Financial Officer, evaluated the effectiveness of the Companys disclosure
controls and procedures as of the end of the period covered by this report. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the
Companys disclosure controls and procedures as of the end of the period covered by this
report were designed and functioning effectively to provide reasonable assurance that the
information required to be disclosed by the Company in reports filed under the Securities
Exchange Act of 1934, as amended, is (i) recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commissions rules and forms, and
(ii) accumulated and communicated to our management, including the Chief Executive Officer
and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.(b)
    
    Change in Internal Control over Financial ReportingNo change in the Companys internal control over financial reporting occurred during the
Companys most recent fiscal quarter that has materially affected, or is reasonably likely
to materially affect, the Companys internal control over financial reporting.
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UGI UTILITIES, INC. AND SUBSIDIARIES
 
 PART II OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
 South Carolina Electric & Gas Company v. UGI Utilities, Inc.
 UGI Central Penn Gas, Inc. Consent Order and Agreement.
 
 ITEM 1A. RISK FACTORS
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UGI UTILITIES, INC. AND SUBSIDIARIES
 
 ITEM 6. EXHIBITS
  ExhibitNo.
    
    Exhibit12.1
    
    
    Computation of ratio
of earnings to fixed
charges.31.1
    
    
    Certification by the
Chief Executive
Officer relating to
the Registrants
Report on Form 10-Q
for the quarter ended
December 31, 2008,
pursuant to Section
302 of the
Sarbanes-Oxley Act of
2002.31.2
    
    
    Certification by the
Chief Financial
Officer relating to
the Registrants
Report on Form 10-Q
for the quarter ended
December 31, 2008,
pursuant to Section
302 of the
Sarbanes-Oxley Act of
2002.32
    
    
    Certification by the
Chief Executive
Officer and the Chief
Financial Officer
relating to the
Registrants Report on
Form 10-Q for the
quarter ended December
31, 2008, pursuant to
Section 906 of the
Sarbanes-Oxley Act of
2002.
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UGI UTILITIES, INC. AND SUBSIDIARIES
 
 SIGNATURES
  UGI Utilities, Inc.
(Registrant)Date: February 6, 2009
    
    By:
    
    /s/ John C. Barney

John C. BarneySenior Vice President  Finance and
Chief Financial Officer
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UGI UTILITIES, INC.
 
 EXHIBIT INDEX
 12.1
    
    
    Computation of ratio of earnings to fixed charges.31.1
    
    
    Certification by the Chief Executive Officer relating to the Registrants
Report on Form 10-Q for the quarter ended December 31, 2008, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification by the Chief Financial Officer relating to the Registrants
Report on Form 10-Q for the quarter ended December 31, 2008, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32
    
    
    Certification by the Chief Executive Officer and the Chief Financial Officer
relating to the Registrants Report on Form 10-Q for the quarter ended December 31,
2008, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.