UGI (UGI) - 2023 Q2 - Quarterly Report

Financial Performance - Adjusted net income attributable to UGI Corporation for the three months ended March 31, 2023, was $363 million, compared to$413 million for the same period in 2022, reflecting a decrease of approximately 12.1%[154] - Adjusted diluted earnings per share for the three months ended March 31, 2023, was $1.68, down from$1.91 in the same period of 2022, representing a decline of about 12.0%[156] - UGI Corporation's net income attributable to the company for the three months ended March 31, 2023, was $110 million, down from$933 million in the same period of 2022, indicating a decrease of approximately 88.2%[154] - Net income attributable to UGI Corporation for the 2023 three-month period was $110 million, a decrease of 88$933 million in the 2022 three-month period[163] - Adjusted net income for the 2023 three-month period was $363 million, down 12$413 million in the 2022 three-month period, primarily due to lower earnings from the AmeriGas Propane business[166] - For the 2023 six-month period, UGI Corporation reported a net loss of $844 million, compared to a net income of$836 million in the 2022 six-month period, largely due to losses from commodity derivative instruments[173] Segment Performance - UGI International reported adjusted net income of $92 million for the three months ended March 31, 2023, compared to$89 million in the same period of 2022, indicating a growth of approximately 3.4%[154] - The Utilities segment achieved adjusted net income of $143 million for the three months ended March 31, 2023, compared to$134 million in the same period of 2022, marking an increase of about 6.7%[154] - The Midstream & Marketing segment's adjusted net income increased to $66 million for the three months ended March 31, 2023, from$58 million in the same period of 2022, representing an increase of approximately 13.8%[154] - Corporate & Other segment reported a net loss of $264 million for the three months ended March 31, 2023, compared to a net income of$514 million in the same period of 2022, reflecting a significant decline[154] Revenue and Sales - AmeriGas Propane's revenues decreased by $181 million (17$867 million, with retail gallons sold down 15% due to warmer weather and operational challenges[182] - UGI International's revenues fell by $276 million (23$948 million, while total margin increased by 7% to $315 million despite lower LPG retail gallons sold[187] - UGI International revenues decreased by$448 million (20%) to $1.825 billion for the six months ended March 31, 2023, compared to$2.273 billion in the prior year[217] - Midstream & Marketing revenues increased by $101 million (8$1,307 million, driven by higher revenues from natural gas and power marketing activities[223] - Utilities revenues increased by $240 million (21$1,366 million, reflecting a $226 million increase in Gas Utility revenues and a$14 million increase in Electric Utility revenues[229] Costs and Expenses - The company experienced significant inflationary pressures and volatility in energy commodity prices, impacting operating and distribution expenses across all business segments[162] - UGI International's total cost of sales decreased by $147 million during the 2023 six-month period, reflecting lower average retail propane volumes sold[214] - Consolidated interest expense increased to$185 million during the 2023 six-month period from $163 million in the prior period, largely due to higher credit agreement interest rates[236] Cash Flow and Liquidity - Cash flow from operating activities was$424 million in the 2023 six-month period, an increase from $400 million in the 2022 six-month period[267] - Cash flow used by investing activities was$473 million in the 2023 six-month period, compared to $515 million in the 2022 six-month period[268] - Cash flow used by financing activities was$46 million in the 2023 six-month period, a decrease from cash provided of $25 million in the 2022 six-month period[270] - Total available liquidity increased to approximately$1.9 billion as of March 31, 2023, compared to $1.7 billion at September 30, 2022, due to higher borrowing capacity[240] Debt and Financing - The Company had total long-term debt of$6,764 million as of March 31, 2023, compared to $6,632 million at September 30, 2022[245] - As of March 31, 2023, total borrowings outstanding amounted to$30 million for AmeriGas OLP, €150 million for UGI International, and $183 million for UGI Utilities[248] - The average daily short-term borrowings for AmeriGas OLP was$153 million, with a peak of $242 million for the six months ended March 31, 2023[250] Strategic Initiatives - The company anticipates continued volatility in energy product costs and demand due to weather conditions and regulatory changes, which may impact future performance[147] - The company continues to pursue the sale of its energy marketing business in France, although the sale is not considered probable within one year[160] - The company was authorized to implement a weather normalization adjustment rider as a five-year pilot program starting November 1, 2022[272] Other Financial Metrics - UGI management emphasizes the importance of non-GAAP measures, such as adjusted net income and adjusted diluted earnings per share, to provide a clearer picture of operational performance[152] - A 10$100 million[288] - The maximum potential loss from derivative instrument counterparties, based on gross fair values, was $422 million as of March 31, 2023[291] - The company has received cash collateral from derivative instrument counterparties totaling$55 million as of March 31, 2023[291] Capital Expenditures and Dividends - Cash expenditures for property, plant, and equipment were $414 million in the 2023 six-month period, up from$355 million in the 2022 six-month period[268] - UGI's Board of Directors approved an increase in the quarterly dividend rate to $0.375 per common share, reflecting a 4.2% increase from the previous rate[264]