UGI (US:UGI)2025-02-06 15:37Financial 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].