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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 June 30, 2007
 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
  o o þ
 o 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 June 30, 2007,
September 30, 2006 and June 30, 2006
    
    1Condensed Consolidated Statements of Income for the three
and nine months ended June 30, 2007 and 2006
    
    2Condensed Consolidated Statements of Cash Flows for the
nine months ended June 30, 2007 and 2006
    
    3Notes to Condensed Consolidated Financial Statements
    
    4        -        15Item 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    16        -        23Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    23Item 4.
    
    Controls and Procedures
    
    24Part II Other InformationItem 1A.
    
    Risk Factors
    
    25Item 6.
    
    Exhibits
    
    25Signatures
    
    26Exhibit 12.1Exhibit 31.1Exhibit 31.2Exhibit 32
   -i-




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June 30,
    
    
    September 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    4,777
    
    
    $
    2,942
    
    
    $
    8,418Restricted cash
    
    
    4,358
    
    
    
    2,697
    
    
    
    -Accounts receivable (less allowances for doubtful accounts
of $15,342, $12,389 and $9,523, respectively)
    
    
    104,512
    
    
    
    61,917
    
    
    
    68,588Accounts receivable  related parties
    
    
    2,591
    
    
    
    1,888
    
    
    
    1,240Accrued utility revenues
    
    
    20,950
    
    
    
    16,649
    
    
    
    12,240Inventories
    
    
    88,002
    
    
    
    162,610
    
    
    
    53,594Deferred fuel costs
    
    
    3,797
    
    
    
    
    
    
    
    Prepaid expenses and other current assets
    
    
    17,974
    
    
    
    26,658
    
    
    
    19,974Total current assets
    
    
    246,961
    
    
    
    275,361
    
    
    
    164,054Property, plant and equipment, at cost (less accumulated depreciation
and amortization of $529,076, $503,046 and $344,478, respectively)
    
    
    1,065,685
    
    
    
    1,050,824
    
    
    
    672,187Goodwill
    
    
    162,633
    
    
    
    182,851
    
    
    
    Regulatory assets
    
    
    82,612
    
    
    
    72,919
    
    
    
    61,287Other assets
    
    
    24,647
    
    
    
    27,788
    
    
    
    26,460Total assets
    
    $
    1,582,538
    
    
    $
    1,609,743
    
    
    $
    923,988LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current maturities of long-term debt
    
    $
    
    
    
    $
    20,000
    
    
    $
    20,000Bank loans
    
    
    108,000
    
    
    
    216,000
    
    
    
    112,100Accounts payable
    
    
    56,663
    
    
    
    46,916
    
    
    
    23,359Accounts payable  related parties
    
    
    13,839
    
    
    
    14,768
    
    
    
    14,456Deferred fuel refunds
    
    
    7,494
    
    
    
    12,171
    
    
    
    10,054Other current liabilities
    
    
    72,909
    
    
    
    59,243
    
    
    
    46,084Total current liabilities
    
    
    258,905
    
    
    
    369,098
    
    
    
    226,053Long-term debt
    
    
    512,000
    
    
    
    492,000
    
    
    
    217,000Deferred income taxes
    
    
    172,710
    
    
    
    162,871
    
    
    
    160,099Deferred investment tax credits
    
    
    6,513
    
    
    
    6,803
    
    
    
    6,901Other noncurrent liabilities
    
    
    41,134
    
    
    
    31,872
    
    
    
    16,367Total liabilities
    
    
    991,262
    
    
    
    1,062,644
    
    
    
    626,420Commitments and contingencies (note 7)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
    
    
    345,801
    
    
    
    345,801
    
    
    
    80,622Retained earnings
    
    
    189,714
    
    
    
    144,833
    
    
    
    154,765Accumulated other comprehensive (loss) income
    
    
    (4,498
    )
    
    
    (3,794
    )
    
    
    1,922Total common stockholders equity
    
    
    591,276
    
    
    
    547,099
    
    
    
    297,568Total liabilities and stockholders equity
    
    $
    1,582,538
    
    
    $
    1,609,743
    
    
    $
    923,988
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Three Months Ended
    
    
    Nine Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues
    
    $
    221,687
    
    
    $
    129,128
    
    
    $
    1,019,827
    
    
    $
    694,446Costs and expenses:Cost of sales
    
    
    145,881
    
    
    
    82,802
    
    
    
    709,227
    
    
    
    492,241Operating and administrative expenses
    
    
    35,866
    
    
    
    22,050
    
    
    
    109,337
    
    
    
    71,495Operating and administrative expenses  related parties
    
    
    2,331
    
    
    
    3,749
    
    
    
    8,958
    
    
    
    8,467Taxes other than income taxes
    
    
    4,209
    
    
    
    3,172
    
    
    
    13,937
    
    
    
    10,154Depreciation and amortization
    
    
    9,952
    
    
    
    6,373
    
    
    
    30,610
    
    
    
    18,856Other income, net
    
    
    (1,284
    )
    
    
    (749
    )
    
    
    (6,416
    )
    
    
    (3,930
    )196,955
    
    
    
    117,397
    
    
    
    865,653
    
    
    
    597,283Operating income
    
    
    24,732
    
    
    
    11,731
    
    
    
    154,174
    
    
    
    97,163Interest expense
    
    
    9,621
    
    
    
    5,344
    
    
    
    32,117
    
    
    
    16,300Income before income taxes
    
    
    15,111
    
    
    
    6,387
    
    
    
    122,057
    
    
    
    80,863Income taxes
    
    
    6,026
    
    
    
    2,928
    
    
    
    48,505
    
    
    
    32,450Net income
    
    $
    9,085
    
    
    $
    3,459
    
    
    $
    73,552
    
    
    $
    48,413
   - 2 -




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Nine Months EndedJune 30,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    73,552
    
    
    $
    48,413Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation and amortization
    
    
    30,610
    
    
    
    18,856Deferred income taxes, net
    
    
    6,003
    
    
    
    769Provision for uncollectible accounts
    
    
    12,890
    
    
    
    8,777Other, net
    
    
    7,106
    
    
    
    6,566Net change in:Accounts receivable and accrued utility revenues
    
    
    (60,489
    )
    
    
    (30,181
    )Inventories
    
    
    74,608
    
    
    
    17,990Deferred fuel costs
    
    
    (8,736
    )
    
    
    (7,316
    )Accounts payable
    
    
    8,818
    
    
    
    (14,986
    )Other current assets and liabilities
    
    
    18,777
    
    
    
    (10,779
    )Net cash provided by operating activities
    
    
    163,139
    
    
    
    38,109CASH FLOWS FROM INVESTING ACTIVITIES:Expenditures for property, plant and equipment
    
    
    (45,621
    )
    
    
    (34,946
    )Increase in restricted cash
    
    
    (1,661
    )
    
    
    PG Energy Acquisition working capital settlement
    
    
    23,670
    
    
    
    Other, net
    
    
    (1,022
    )
    
    
    (876
    )Net cash used by investing activities
    
    
    (24,634
    )
    
    
    (35,822
    )CASH FLOWS FROM FINANCING ACTIVITIES:Payment of dividends
    
    
    (28,670
    )
    
    
    (27,455
    )(Decrease) increase in bank loans with maturities of
three months or less
    
    
    (108,000
    )
    
    
    80,900Repayments of debt including bank loans with maturities
greater than three months
    
    
    (20,000
    )
    
    
    (120,000
    )Issuances of debt including bank loans with maturities
greater than three months
    
    
    20,000
    
    
    
    70,000Net cash (used) provided by financing activities
    
    
    (136,670
    )
    
    
    3,445Cash and cash equivalents increase
    
    $
    1,835
    
    
    $
    5,732CASH AND CASH EQUIVALENTS:End of period
    
    $
    4,777
    
    
    $
    8,418Beginning of period
    
    
    2,942
    
    
    
    2,686Increase
    
    $
    1,835
    
    
    $
    5,732
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UGI UTILITIES, INC. AND SUBSIDIARIES
 
 Notes to Condensed Consolidated Financial Statements
 1.
    
    Basis of Presentation
    Comprehensive Income.
 Three Months Ended
    
    
    Nine Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income
    
    $
    9,085
    
    
    $
    3,459
    
    
    $
    73,552
    
    
    $
    48,413Other comprehensive income (loss)
    
    
    (702
    )
    
    
    421
    
    
    
    (704
    )
    
    
    1,679Comprehensive income
    
    $
    8,383
    
    
    $
    3,880
    
    
    $
    72,848
    
    
    $
    50,092
  -4-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
  Reclassifications.
 Use of Estimates.
 Revenue-Related Taxes.
 Recently Issued Accounting Pronouncements.
  -5-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
 2.
    
    PG Energy Acquisition
   Working capital
    
    $
    47,021Property, plant and equipment
    
    
    362,304Goodwill
    
    
    162,633Regulatory assets
    
    
    14,957Other assets
    
    
    4,033Noncurrent liabilities
    
    
    (23,619
    )Total
    
    $
    567,329
 3.
    
    Segment Information
    -6-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
  Three Months Ended June 30, 2007:
 Reportable SegmentsGas
    
    
    ElectricTotal
    
    
    Utility
    
    
    Utility
    
    
    OtherRevenues
    
    $
    221,687
    
    
    $
    185,897
    
    
    $
    29,873
    
    
    $
    5,917Cost of sales
    
    
    145,881
    
    
    
    128,261
    
    
    
    15,221
    
    
    
    2,399Depreciation and amortization
    
    
    9,952
    
    
    
    9,111
    
    
    
    847
    
    
    
    (6
    )Operating income
    
    
    24,732
    
    
    
    15,981
    
    
    
    7,519
    
    
    
    1,232Interest expense
    
    
    9,621
    
    
    
    9,055
    
    
    
    566
    
    
    
    Income before income taxes
    
    
    15,111
    
    
    
    6,926
    
    
    
    6,953
    
    
    
    1,232Total assets at period end
    
    $
    1,582,538
    
    
    $
    1,465,314
    
    
    $
    109,810
    
    
    $
    7,414Goodwill at period end
    
    $
    162,633
    
    
    $
    162,633
    
    
    $
    
    
    
    $
    
 Three Months Ended June 30, 2006:
 Reportable SegmentsGas
    
    
    ElectricTotal
    
    
    Utility
    
    
    Utility
    
    
    OtherRevenues
    
    $
    129,128
    
    
    $
    106,263
    
    
    $
    22,865
    
    
    $
    Cost of sales
    
    
    82,802
    
    
    
    71,631
    
    
    
    11,171
    
    
    
    Depreciation and amortization
    
    
    6,373
    
    
    
    5,533
    
    
    
    840
    
    
    
    Operating income
    
    
    11,731
    
    
    
    6,553
    
    
    
    5,178
    
    
    
    Interest expense
    
    
    5,344
    
    
    
    4,680
    
    
    
    664
    
    
    
    Income before income taxes
    
    
    6,387
    
    
    
    1,873
    
    
    
    4,514
    
    
    
    Total assets at period end
    
    $
    923,988
    
    
    $
    817,488
    
    
    $
    106,500
    
    
    $
    Goodwill at period end
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  -7-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
 Nine Months Ended June 30, 2007:
 Reportable SegmentsGas
    
    
    ElectricTotal
    
    
    Utility
    
    
    Utility
    
    
    OtherRevenues
    
    $
    1,019,827
    
    
    $
    919,325
    
    
    $
    89,645
    
    
    $
    10,857Cost of sales
    
    
    709,227
    
    
    
    656,236
    
    
    
    48,232
    
    
    
    4,759Depreciation and amortization
    
    
    30,610
    
    
    
    27,998
    
    
    
    2,609
    
    
    
    3Operating income
    
    
    154,174
    
    
    
    132,158
    
    
    
    20,457
    
    
    
    1,559Interest expense
    
    
    32,117
    
    
    
    30,233
    
    
    
    1,884
    
    
    
    Income before income taxes
    
    
    122,057
    
    
    
    101,925
    
    
    
    18,573
    
    
    
    1,559Total assets at period end
    
    $
    1,582,538
    
    
    $
    1,465,314
    
    
    $
    109,810
    
    
    $
    7,414Goodwill at period end
    
    $
    162,633
    
    
    $
    162,633
    
    
    $
    
    
    
    $
    
 Nine Months Ended June 30, 2006:
 Reportable SegmentsGas
    
    
    ElectricTotal
    
    
    Utility
    
    
    Utility
    
    
    OtherRevenues
    
    $
    694,446
    
    
    $
    622,280
    
    
    $
    72,166
    
    
    $
    Cost of sales
    
    
    492,241
    
    
    
    454,540
    
    
    
    37,701
    
    
    
    Depreciation and amortization
    
    
    18,856
    
    
    
    16,376
    
    
    
    2,480
    
    
    
    Operating income
    
    
    97,163
    
    
    
    82,161
    
    
    
    15,002
    
    
    
    Interest expense
    
    
    16,300
    
    
    
    14,380
    
    
    
    1,920
    
    
    
    Income before income taxes
    
    
    80,863
    
    
    
    67,781
    
    
    
    13,082
    
    
    
    Total assets at period end
    
    $
    923,988
    
    
    $
    817,488
    
    
    $
    106,500
    
    
    $
    Goodwill at period end
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  -8-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
 4.
    
    Regulatory Matters
   5.
    
    Debt
  6.
    
    Defined Benefit Pension and Other Postretirement Plans
   -9-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
  Pension Benefits
    
    
    Other Postretirement BenefitsThree Months Ended
    
    
    Three Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    1,383
    
    
    $
    1,309
    
    
    $
    65
    
    
    $
    32Interest cost
    
    
    4,282
    
    
    
    3,220
    
    
    
    243
    
    
    
    204Expected return on assets
    
    
    (5,463
    )
    
    
    (4,444
    )
    
    
    (151
    )
    
    
    (152
    )Amortization of:Prior service cost (benefit)
    
    
    61
    
    
    
    196
    
    
    
    (55
    )
    
    
    (55
    )Actuarial loss
    
    
    217
    
    
    
    427
    
    
    
    37
    
    
    
    48Net benefit cost
    
    
    480
    
    
    
    708
    
    
    
    139
    
    
    
    77Change in regulatory and other
assets and liabilities
    
    
    (57
    )
    
    
    (96
    )
    
    
    714
    
    
    
    698Net expense
    
    $
    423
    
    
    $
    612
    
    
    $
    853
    
    
    $
    775
 Pension Benefits
    
    
    Other Postretirement BenefitsNine Months Ended
    
    
    Nine Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    4,149
    
    
    $
    3,930
    
    
    $
    195
    
    
    $
    97Interest cost
    
    
    12,847
    
    
    
    9,662
    
    
    
    728
    
    
    
    612Expected return on assets
    
    
    (16,388
    )
    
    
    (13,336
    )
    
    
    (454
    )
    
    
    (457
    )Amortization of:Prior service cost (benefit)
    
    
    182
    
    
    
    588
    
    
    
    (165
    )
    
    
    (166
    )Actuarial loss
    
    
    650
    
    
    
    1,280
    
    
    
    111
    
    
    
    144Net benefit cost
    
    
    1,440
    
    
    
    2,124
    
    
    
    415
    
    
    
    230Change in regulatory and other
assets and liabilities
    
    
    (178
    )
    
    
    (278
    )
    
    
    2,143
    
    
    
    2,095Net expense
    
    $
    1,262
    
    
    $
    1,846
    
    
    $
    2,558
    
    
    $
    2,325
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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
  7.
    
    Commitments and Contingencies
      -11-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
     -12-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
      -13-




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UGI UTILITIES, INC. AND SUBSIDIARIES  Notes to Condensed Consolidated Financial Statements
  8.
    
    Related Party Transactions
     -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
 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
 Forward-Looking Statements
     -16-




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UGI UTILITIES, INC. AND SUBSIDIARIES
 ANALYSIS OF RESULTS OF OPERATIONS
  2007 three-month period compared with 2006 three-month period
 Three Months Ended June 30,
    
    2007
    
    
    2006
    
    
    Increase(Millions of dollars)Gas Utility:Revenues
    
    $
    185.9
    
    
    $
    106.3
    
    
    $
    79.6
    
    
    
    74.9
    %Total margin (a)
    
    $
    57.6
    
    
    $
    34.6
    
    
    $
    23.0
    
    
    
    66.5
    %Operating income
    
    $
    16.0
    
    
    $
    6.6
    
    
    $
    9.4
    
    
    
    142.4
    %Income before income taxes
    
    $
    6.9
    
    
    $
    1.9
    
    
    $
    5.0
    
    
    
    263.2
    %System throughput  bcf
    
    
    25.4
    
    
    
    14.3
    
    
    
    11.1
    
    
    
    77.6
    %Heating degree days  % colder (warmer)
than normal (b)
    
    
    3.8
    %
    
    
    (13.5
    )%
    
    
    
    
    
    
    Electric Utility:Revenues
    
    $
    29.9
    
    
    $
    22.9
    
    
    $
    7.0
    
    
    
    30.6
    %Total margin (a)
    
    $
    13.0
    
    
    $
    10.5
    
    
    $
    2.5
    
    
    
    23.8
    %Operating income
    
    $
    7.5
    
    
    $
    5.2
    
    
    $
    2.3
    
    
    
    44.2
    %Income before income taxes
    
    $
    7.0
    
    
    $
    4.5
    
    
    $
    2.5
    
    
    
    55.6
    %Distribution sales  gwh
    
    
    231.1
    
    
    
    222.4
    
    
    
    8.7
    
    
    
    3.9
    %
  bcf  billions of cubic feet.       gwh  millions of kilowatt-hours.(a)
    
    Gas Utilitys total margin represents total revenues less 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 $1.7 million and $1.2 million during the
three-month periods ended June 30, 2007 and 2006, respectively. For financial statement
purposes, revenue-related taxes are included in Taxes other than income taxes on the
Condensed Consolidated Statements of Income.(b)
    
    Deviation from average heating degree days based upon weather statistics provided by the
National Oceanic and Atmospheric Administration (NOAA) at airports located within our
service territory. Gas Utility.
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UGI UTILITIES, INC. AND SUBSIDIARIES
     Electric Utility.
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UGI UTILITIES, INC. AND SUBSIDIARIES
   2007 nine-month period compared with 2006 nine-month period
 Nine Months Ended June 30,
    
    2007
    
    
    2006
    
    
    Increase(Millions of dollars)Gas Utility:Revenues
    
    $
    919.3
    
    
    $
    622.3
    
    
    $
    297.0
    
    
    
    47.7
    %Total margin
    
    $
    263.1
    
    
    $
    167.7
    
    
    $
    95.4
    
    
    
    56.9
    %Operating income
    
    $
    132.2
    
    
    $
    82.2
    
    
    $
    50.0
    
    
    
    60.8
    %Income before income taxes
    
    $
    101.9
    
    
    $
    67.8
    
    
    $
    34.1
    
    
    
    50.3
    %System throughput  bcf
    
    
    108.6
    
    
    
    64.4
    
    
    
    44.2
    
    
    
    68.6
    %Heating degree days  % (warmer)
than normal
    
    
    (4.3
    )%
    
    
    (8.8
    )%
    
    
    
    
    
    
    Electric Utility:Revenues
    
    $
    89.6
    
    
    $
    72.2
    
    
    $
    17.4
    
    
    
    24.1
    %Total margin (a)
    
    $
    36.4
    
    
    $
    30.5
    
    
    $
    5.9
    
    
    
    19.3
    %Operating income
    
    $
    20.5
    
    
    $
    15.0
    
    
    $
    5.5
    
    
    
    36.7
    %Income before income taxes
    
    $
    18.6
    
    
    $
    13.1
    
    
    $
    5.5
    
    
    
    42.0
    %Distribution sales  gwh
    
    
    762.0
    
    
    
    748.8
    
    
    
    13.2
    
    
    
    1.8
    %
  (a)
    
    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 $5.0 million and $4.0
million during the nine-month periods ended June 30, 2007 and 2006, respectively. For
financial statement purposes, revenue-related taxes are included in Taxes other than income
taxes on the Condensed Consolidated Statements of Income. 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
    Cash Flows
 Operating activities.
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UGI UTILITIES, INC. AND SUBSIDIARIES
 Investing activities.
 Financing activities.
 PG Energy Acquisition
  Regulatory Matters
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UGI UTILITIES, INC. AND SUBSIDIARIES
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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UGI UTILITIES, INC. AND SUBSIDIARIES
 
 ITEM 4. 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 1A. RISK FACTORS
  
 ITEM 6. EXHIBITS
  Exhibit No.
    
    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 June
30, 2007, 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 June
30, 2007, 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 June 30, 2007, pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
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UGI UTILITIES, INC. AND SUBSIDIARIES
 
   UGI Utilities, Inc.
(Registrant)Date:  August 9, 2007
    By:
    /s/ John C. BarneyJohn C. BarneySenior Vice President - Finance
(Principal Financial Officer)  -26-




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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 June 30, 2007, 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 June 30, 2007, 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 June 30, 2007, pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.