UGI (US:UGI)2026-02-05 22:24Financial Performance - Net income attributable to UGI Corporation for the three-month period ended December 31, 2025, was $297 million, or $1.34 per diluted share, compared to $375 million, or $1.74 per diluted share, for the same period in 2024[145]. - Adjusted net income attributable to UGI Corporation for the three-month period ended December 31, 2025, was $279 million, or $1.26 per diluted share, compared to $295 million, or $1.37 per diluted share, for the same period in 2024[147]. - The Utilities segment's adjusted net income increased by $9 million during the 2025 period, primarily due to higher total margin[148]. - The Midstream & Marketing segment's adjusted net income decreased by $28 million during the 2025 period, mainly due to higher income tax expenses[148]. - UGI International's adjusted net income increased by $3 million during the 2025 period, attributed to higher total margin offset by increased income tax expenses[149]. - AmeriGas Propane's adjusted net income increased by $70 million during the 2025 period, primarily due to significantly lower income tax expenses[149]. Revenue and Volume Changes - Utilities revenues increased by $106 million (22%) in the 2025 three-month period compared to 2024, primarily driven by higher Gas Utility revenues of $103 million[150]. - Gas Utility core market volumes rose by 16% during the 2025 period, reflecting colder weather conditions, while total Gas Utility volume increased by 3%[151]. - Midstream & Marketing revenues increased by $60 million (16%) in the 2025 period, mainly due to higher revenues from natural gas marketing activities[157]. - UGI International revenues decreased by $63 million (10%) in the 2025 period, attributed to lower LPG retail volumes sold and lower LPG prices[163]. - AmeriGas Propane revenues decreased by $27 million (4%) in the 2025 period, primarily due to lower wholesale revenues and lower average retail propane selling prices[171]. Operating Income and Margins - Utilities operating income increased by $17 million (12%) in the 2025 period, reflecting a rise in total margin[155]. - UGI International total margin increased by $20 million (8%) during the 2025 period, driven by higher average unit margins and favorable currency translation effects[168]. - AmeriGas Propane total margin increased by $2 million (1%) in the 2025 period, despite lower fee income[175]. Cash Flow and Liquidity - Cash flow from operating activities was $66 million in the 2025 three-month period, down from $164 million in the 2024 period, while cash flow before changes in working capital increased to $438 million from $427 million[206]. - Cash used in investing activities was $145 million in the 2025 three-month period, compared to $232 million in the 2024 period, with cash expenditures for property, plant, and equipment at $221 million[207]. - Cash flow used by financing activities was $6 million in the 2025 three-month period, down from cash flow provided of $95 million in the 2024 period, including the issuance of $150 million in senior notes[209]. - Total available liquidity, including cash and cash equivalents and available borrowing capacity, was approximately $1.6 billion as of December 31, 2025[181]. - As of December 31, 2025, UGI Corporation had $251 million in cash and cash equivalents, down from $335 million as of September 30, 2025[184]. Debt and Financing - The total long-term debt of UGI Corporation was $6,773 million as of December 31, 2025, compared to $6,648 million as of September 30, 2025[186]. - UGI Corporation's total debt, including short-term borrowings, was $7,214 million as of December 31, 2025, compared to $7,134 million as of September 30, 2025[186]. - The company has $700 million in outstanding 5.00% Senior Notes due June 2028, which are convertible from January 1, 2026, to March 31, 2026[189][190]. - UGI Utilities issued $150 million of 5.10% Senior Notes due November 15, 2030, and $125 million of 5.68% Senior Notes due November 15, 2035, in November 2025[188]. - The average daily short-term borrowings for UGI Corporation were $251 million for the three months ended December 31, 2025, with a peak of $288 million[199]. Shareholder Actions - The company declared a cash dividend of $0.375 per common share on November 20, 2025, payable on January 1, 2026[202]. - UGI purchased 0.3 million shares of Common Stock for a total price of $12 during the three months ended December 31, 2025, and extended its share repurchase program for up to 8 million shares until February 2030[203]. Regulatory and Market Risks - PA Gas Utility filed a request to increase its base operating revenues by $99 million annually, effective March 29, 2026, to fund system improvements[211]. - WV Gas Utility submitted a base rate case seeking a net revenue increase of $27 million, with new rates requested to be effective March 5, 2026[213]. - A 10% decline in foreign currencies against the USD would reduce the net book value of UGI International operations by approximately $165 million[230]. - UGI maintains credit policies to mitigate derivative instrument credit risk, evaluating counterparties' financial conditions and credit ratings[232]. - As of December 31, 2025, the maximum potential loss from derivative counterparties failing to perform is $83 million[233]. Derivative Instruments and Risk Management - UGI Corporation uses derivative financial instruments to hedge against commodity price risk, including forward purchase contracts and options[223]. - The company has diversified its supplier base to mitigate risks associated with fixed-price sales contracts for natural gas[225]. - UGI Corporation employs forward foreign currency exchange contracts to hedge approximately 90% of anticipated foreign currency earnings before income taxes[231]. - The fair value change due to commodity price risk was a decrease of $52 million, reflecting a 10% adverse change in market prices[235]. - The fair value change due to interest rate risk was a decrease of $10 million, reflecting a 50 basis point adverse change in prevailing market interest rates[236]. - The fair value change due to foreign currency exchange rate risk was a decrease of $12 million, reflecting a 10% adverse change in the value of the Euro and British pound sterling against the USD[236].