Core Viewpoint - UGI Corporation reported strong operating earnings for the first quarter of fiscal 2025, exceeding expectations, but total revenues fell short of estimates and declined year-over-year [1][3]. Financial Performance - Operating earnings for Q1 fiscal 2025 were $1.37 per share, surpassing the Zacks Consensus Estimate of $1.21 by 13.2% [1]. - GAAP earnings per share were $1.74, a significant increase from 44 cents in the same quarter last year [2]. - Total revenues amounted to $2.03 billion, missing the Zacks Consensus Estimate of $2.15 billion by 5.5% and declining 4.3% from $2.12 billion in the prior year [3]. Investment and Growth - UGI invested nearly $236 million in Q1 fiscal 2025, with 84% allocated to natural gas businesses [4]. - The company added over 4,000 customers in its Utilities segment during the quarter [4]. - Substantial completion was achieved on several RNG facilities, which will produce over 650 million cubic feet of RNG from dairy feedstock at full capacity [5]. Segment Performance - AmeriGas Propane reported EBIT of $71 million, up 4.2% year-over-year [7]. - UGI International's EBIT was $110 million, down 5.9% from the previous year [7]. - Midstream & Marketing's EBIT decreased by 6.9% to $95 million [7]. - UGI Utilities saw EBIT increase by 4.4% to $141 million [7]. Guidance - UGI reiterated its fiscal 2025 adjusted earnings guidance at $2.75-$3.05 per share, with the Zacks Consensus Estimate at $3 per share [8]. - The company plans to invest $800-$900 million in fiscal 2025 to enhance operations [8].

Financial Data and Key Metrics Changes - UGI Corporation reported adjusted diluted earnings per share (EPS) of $1.37, a 14% increase compared to the prior year [6][19] - The utility segment's EPS increased by one cent due to higher gas base rates at Mountaineer [19] - The overall effective tax rate for UGI corporate is expected to be between 12% and 14% for fiscal 2025, down from 16% in the prior year [22] Business Line Data and Key Metrics Changes - The natural gas business benefited from strong demand and higher gas rates, contributing to solid performance [7] - The midstream and marketing segment reported EBITDA of $95 million, down from $102 million in the prior year, primarily due to lower margins from gathering and processing activities [25] - UGI International saw a seven-cent increase in EPS, attributed to foreign tax credits offsetting lower operating income [20] Market Data and Key Metrics Changes - UGI Utilities experienced slightly colder weather than the prior year, leading to higher core market volumes [23] - LPG volumes at UGI International increased due to a colder winter, but total margin decreased by $15 million due to lower margins from the energy marketing business [26] Company Strategy and Development Direction - UGI Corporation is focusing on operational excellence and capital allocation to drive sustainable growth and long-term value creation [17][34] - The company is enhancing its AmeriGas operations through a new organizational structure aimed at improving customer experience and operational efficiency [15][16] - UGI is committed to optimizing its natural gas businesses while transforming its propane operations to improve performance [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the natural gas segment's performance, highlighting near-record demand and safe operational execution [42][68] - The company acknowledged the need for improvement in AmeriGas's business processes to better handle operational challenges during peak demand periods [66] - Management reaffirmed the guidance range of $2.75 to $3.05 for the fiscal year, indicating a strong start but recognizing challenges ahead [31] Other Important Information - UGI deployed over $200 million in capital investment during the quarter, primarily in natural gas businesses [8] - The company filed a gas base rate case requesting a distribution rate increase of approximately $110 million to support $750 million in investments [12] Q&A Session Summary Question: Thoughts on larger maturities coming up ahead - Management discussed the intercompany loan as a strategic move to manage near-term maturities and expressed confidence in cash flow from AmeriGas to repay the loan [40][41] Question: Strategic direction of the international business - Management indicated a focus on optimizing storage capabilities in Europe and evaluating the portfolio for competitive advantages [50] Question: Performance during cold weather and operational challenges - Management acknowledged benefits from colder weather but noted the need for improvements in AmeriGas's business processes to handle peak demand better [66] Question: Midstream margins and future capital allocation - Management explained that lower midstream margins were anticipated and attributed to contract renewals at lower pricing, while expressing optimism for future pricing opportunities [72][73]

Financial Performance - Net income attributable to UGI Corporation for the 2024 three-month period was $375 million, or $1.74 per diluted share, compared to $94 million, or $0.44 per diluted share, for the 2023 three-month period [142]. - Adjusted net income attributable to UGI Corporation for the 2024 three-month period was $295 million, or $1.37 per diluted share, compared to $258 million, or $1.20 per diluted share, for the 2023 three-month period [144]. - UGI International's adjusted net income increased by $17 million in the 2024 three-month period, mainly due to lower income tax expenses and reduced operating costs [147]. - AmeriGas Propane's adjusted net income decreased by $62 million in the 2024 three-month period, primarily due to higher income tax expenses [148]. - Utilities' adjusted net income increased by $3 million in the 2024 three-month period, attributed to higher total margin from increased base rates effective January 2024 [145]. - Midstream & Marketing's adjusted net income decreased by $3 million in the 2024 three-month period, primarily due to lower total margin from natural gas marketing activities [146]. - The increase in adjusted net income during the 2024 three-month period was also influenced by significantly lower income tax expenses related to investment tax credits [144]. Revenue and Margin Analysis - Utilities revenues decreased by $8 million (2%) to $485 million in the 2024 three-month period compared to $493 million in 2023, primarily due to lower Gas Utility revenues [151]. - Total margin for Utilities increased by $9 million (3%) to $274 million, driven by higher Gas Utility total margin from base rate increases effective January 1, 2024 [153]. - Midstream & Marketing revenues decreased by $27 million (7%) to $367 million, mainly due to lower revenues from natural gas marketing activities and the absence of revenues from UGID sold in September 2024 [158]. - UGI International revenues decreased by $87 million (12%) to $638 million, reflecting significantly lower energy marketing activities following the exit from the energy marketing business in Belgium, France, and the Netherlands [162]. - AmeriGas Propane revenues decreased slightly by $2 million (—%) to $627 million, with total retail gallons sold decreasing by 1% to 204 million gallons [168]. - Midstream & Marketing total margin decreased by $17 million (11%) to $138 million, primarily due to lower midstream margins from natural gas gathering and processing activities [160]. - UGI International total margin decreased by $15 million (5%) to $264 million, reflecting lower margin contributions from energy marketing activities [166]. Cash Flow and Liquidity - Cash flow provided by operating activities was $164 million in the 2024 three-month period, compared to $119 million in the 2023 three-month period [199]. - Cash flow used by investing activities was $232 million in the 2024 three-month period, up from $165 million in the 2023 three-month period [200]. - Cash flow from financing activities was $95 million in the 2024 three-month period, a significant increase from $3 million in the 2023 three-month period [202]. - UGI's total available liquidity balance was approximately $1.5 billion as of December 31, 2024, including cash and cash equivalents and available borrowing capacity [178]. - As of December 31, 2024, UGI's cash and cash equivalents totaled $240 million, up from $213 million at September 30, 2024 [182]. Debt and Financing - Consolidated interest expense increased by $2 million to $102 million in the 2024 three-month period, reflecting higher average long-term debt outstanding at Utilities and UGI Corporation [175]. - UGI Corporation's total long-term debt as of December 31, 2024, was $6.849 billion, compared to $6.678 billion at September 30, 2024 [183]. - UGI Utilities issued $50 million of 5.24% Senior Notes due November 30, 2029, and $125 million of 5.52% Senior Notes due November 30, 2034 [185]. - AmeriGas Partners has an outstanding principal balance of $218 million for 5.50% Senior Notes maturing in May 2025 [180]. - UGI Corporation entered into a $475 million revolving credit facility and a $400 million term loan facility in October 2024 [187]. - The average daily short-term borrowings for UGI Corporation was $263 million for the three months ended December 31, 2024 [192]. - UGI Utilities issued $50 million and $125 million principal amount of senior notes in 2024, compared to $250 million in 2023, with proceeds used to reduce short-term borrowings [202]. Regulatory and Operational Updates - PA Gas Utility filed a request to increase base operating revenues by $110 million annually, effective March 28, 2025, pending approval from the PAPUC [205]. - WV Gas Utility submitted a 2024 IREP filing requesting recovery of $19 million for capital investments totaling $197 million, including $74 million in 2025 [206]. - WV Gas Utility's 2023 IREP filing requested recovery of $10 million, an increase of $6 million, for capital investments totaling $131 million [207]. - A base rate case filing by WV Gas Utility sought a net revenue increase of $20 million, with a final order approving a $14 million increase effective January 1, 2024 [208]. Risk and Control - The company does not designate its commodity and certain foreign currency derivative instruments as hedges under GAAP, leading to volatility in net income attributable to UGI Corporation [137]. - A 10% decline in foreign currencies versus the USD would reduce the net book value of UGI International operations by approximately $75 million [222]. - The maximum potential loss from derivative instrument counterparties was $201 million as of December 31, 2024 [225]. - The fair value of commodity price risk derivatives was $45 million, reflecting a change of $(96) million due to market fluctuations [227]. - Management concluded that internal control over financial reporting was not effective due to a material weakness as of December 31, 2024 [231]. - The company is in the process of designing and implementing additional controls to validate cash flows used in the goodwill impairment test [231]. - A third-party specialist is being engaged to assist in developing valuation models and establishing reasonable assumptions [231]. - The identified material weakness cannot be considered remediated until controls have operated effectively for a sufficient period [232]. - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that materially affected the company's internal controls [233].

Fiscal 2025 First Quarter Earnings Presentation February 6, 2025 About This Presentation This presentation contains statements, estimates and projections that are forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended). Such statements use forward-looking words such as "believe," "plan," "anticipate," "continue," "estimate," "expect," "may," or other similar words and terms of similar meaning, althou ...

Financial Performance - Q1 GAAP diluted EPS was $1.74 and adjusted diluted EPS was $1.37, compared to GAAP diluted EPS of $0.44 and adjusted diluted EPS of $1.20 in the prior-year period, representing a 14% increase in adjusted diluted EPS[4] - Net income attributable to UGI Corporation for the three months ended December 31, 2024, was $375 million, significantly up from $94 million in the same period of 2023[25] - Adjusted net income attributable to UGI Corporation for the twelve months ended December 31, 2024, was $695 million, compared to $625 million for the same period in 2023, reflecting an increase of 11.2%[26] - Earnings per share (diluted) for the three months ended December 31, 2024, was $1.74, compared to $0.44 for the same period in 2023, marking a substantial increase[25] Revenue and Segment Performance - Total revenues for the three months ended December 31, 2024, were $2,030 million, a decrease of 4.3% compared to $2,121 million in the same period of 2023[25] - Revenues for the Utilities segment were $485 million, a decrease of 2% from $493 million in the prior-year period[12] - UGI International revenues decreased by 12% to $638 million from $725 million in the prior-year period[18] - Total margin for the Midstream & Marketing segment decreased by 11% to $138 million from $155 million in the prior-year period[15] - AmeriGas Propane's total margin decreased by $15 million primarily due to lower margin from non-core energy marketing activities[22] - UGI International reported revenues of $638 million for the three months ended December 31, 2024, down from $725 million in the same period of 2023, a decrease of 12.0%[25] Capital Expenditures and Investments - Capital expenditures for the Utilities segment increased by 29% to $106 million from $82 million in the prior-year period[12] Liquidity and Financial Position - Available liquidity was approximately $1.5 billion as of December 31, 2024[4] Interest and Adjustments - The total interest expense for the twelve months ended December 31, 2024, was $396 million, slightly up from $387 million in 2023[25] - The company reported total adjustments of $145 million for the twelve months ended December 31, 2024, compared to $1,079 million in 2023, indicating a significant reduction in adjustments[26] Corporate and Other Segment - Corporate & Other segment reported a net income of $143 million for the three months ended December 31, 2024, compared to a loss of $183 million in the same period of 2023[25] Regulatory Filings - Filed a gas base rate case requesting an overall distribution rate increase of approximately $110 million with the PA Public Utility Commission[4] Sales Volume - Retail gallons sold in UGI International increased by 2% to 218 million gallons compared to 214 million gallons in the prior-year period[18] Earnings Before Interest and Taxes - Q1 reportable segments earnings before interest expense and income taxes (EBIT) were $420 million, slightly down from $425 million in the prior-year period[4] - The total reportable segments' earnings before interest expense and income taxes for the three months ended December 31, 2024, was $420 million, a slight decrease from $425 million in the same period of 2023[25] Shareholder Information - UGI Corporation's weighted average common shares outstanding (diluted) for the three months ended December 31, 2024, was 215,695 thousand, compared to 215,570 thousand in the same period of 2023[25]

Group 1 - UGI reported quarterly earnings of $1.37 per share, exceeding the Zacks Consensus Estimate of $1.21 per share, and up from $1.20 per share a year ago, representing an earnings surprise of 13.22% [1] - The company posted revenues of $2.03 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 5.45%, and down from $2.12 billion year-over-year [2] - UGI shares have increased approximately 10% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $1.86 on revenues of $2.5 billion, and for the current fiscal year, it is $3 on revenues of $7.78 billion [7] - The Utility - Gas Distribution industry, to which UGI belongs, is currently ranked in the top 15% of over 250 Zacks industries, indicating a favorable outlook [8]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for UGI, driven by higher revenues, with a focus on how actual results will compare to estimates [1][2]. Earnings Expectations - UGI is expected to report quarterly earnings of $1.21 per share, reflecting a year-over-year change of +0.8% [3]. - Revenue is projected to be $2.15 billion, an increase of 1.2% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4]. - A positive Earnings ESP of +0.42% suggests analysts have recently become more optimistic about UGI's earnings prospects [10]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. - UGI currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [11]. Historical Performance - UGI has consistently beaten consensus EPS estimates, achieving this in the last four quarters [13]. - In the last reported quarter, UGI was expected to post a loss of $0.30 per share but instead reported a loss of $0.16, resulting in a surprise of +46.67% [12]. Conclusion - UGI is positioned as a compelling candidate for an earnings beat, but investors should consider other factors influencing stock performance beyond earnings results [16].

Core Viewpoint - UGI Corporation reported a narrower operating loss in Q4 fiscal 2024 compared to expectations, but total revenues fell short of consensus estimates and declined year-over-year Financial Performance - The operating loss for Q4 fiscal 2024 was 16 cents per share, better than the Zacks Consensus Estimate of a loss of 30 cents, and down from earnings of 3 cents per share in the same quarter last year [1] - Total revenues were $1.24 billion, missing the consensus estimate of $1.54 billion by 19.5%, and decreased 11.5% from $1.44 billion in the year-ago quarter [2] Investment and Dividends - UGI invested nearly $900 million in fiscal 2024, with 80% allocated to regulated utilities for infrastructure replacement and the Midstream and Marketing segment [3] - The company maintained its legacy dividend payment, marking the 140th consecutive year of dividends, with a 10-year compound annual growth rate of 6% [3] Cost Management - Efficient management allowed UGI to reduce operation and maintenance expenses by $75 million compared to the previous year [4] Segment Performance - AmeriGas Propane: EBIT of $142 million, down 47% year-over-year, with retail gallons sold decreasing 10% due to warmer weather and customer attrition [5] - UGI International: EBIT of $323 million, up 38% year-over-year, driven by higher LPG unit margins and favorable currency translation effects [6] - Midstream & Marketing: EBIT of $313 million, up 7.6% year-over-year, attributed to increased capacity management and lower operational expenses [6] - UGI Utilities: EBIT of $400 million, up 9.6% year-over-year, due to increases in gas and electric base rates and higher DSIC revenues [7] Future Guidance - UGI anticipates adjusted earnings for fiscal 2025 to be in the range of $2.75-$3.05 per share, with the Zacks Consensus Estimate at $3.14 per share [8] - The company plans to invest between $800-$900 million in fiscal 2025 to strengthen operations [8] Long-term Outlook - UGI's long-term earnings growth rate is projected to be in the range of 4-6%, with planned investments of $3.7 billion to $4.1 billion from fiscal 2024 to 2027 [9]

Financial Performance - UGI's FY24 GAAP Diluted EPS was $1.25, compared to ($7.16) in FY23[8, 10] - Adjusted Diluted EPS increased from $2.84 in FY23 to $3.06 in FY24[8, 10] - The company achieved a 4% reduction in operating and administrative expenses, amounting to $75 million[8] - Debt reduction of approximately $460 million was achieved, along with key financing activities to provide covenant relief at AmeriGas[8] Segment Results - Utilities FY24 EBIT increased due to higher margin from increased base rates and DSIC revenues, and lower OPEX[12] - Midstream & Marketing FY24 EBIT increased due to higher margins from capacity management activities[12] - UGI International experienced slightly lower volumes due to warmer weather, offset by higher LPG unit margin and stronger foreign currencies[12] - AmeriGas Propane saw lower retail volumes due to customer attrition and warmer weather, and lower OPEX[12] Capital Allocation and Strategy - $318 million was allocated to dividend payments to shareholders[9] - Capital expenditure of $897 million, with 80% invested in the natural gas businesses[9] - The company is targeting long-term EPS growth rate of 4-6%[21] - The company is targeting over 75% of earnings from the Natural Gas Businesses[21]

Core Insights - UGI reported a quarterly loss of $0.16 per share, better than the Zacks Consensus Estimate of a loss of $0.30, representing an earnings surprise of 46.67% [1] - The company posted revenues of $1.24 billion for the quarter ended September 2024, missing the Zacks Consensus Estimate by 19.50% and down from $1.4 billion year-over-year [2] - UGI has surpassed consensus EPS estimates for the last four quarters but has not beaten revenue estimates during the same period [2] Company Performance - UGI shares have declined approximately 1.2% year-to-date, contrasting with the S&P 500's gain of 24.1% [4] - The current consensus EPS estimate for the upcoming quarter is $1.27 on revenues of $2.15 billion, and for the current fiscal year, it is $3.14 on revenues of $7.64 billion [8] Industry Context - The Utility - Gas Distribution industry, to which UGI belongs, is currently ranked in the bottom 46% of over 250 Zacks industries, indicating potential challenges ahead [9] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact UGI's stock performance [6]