UGI (US:UGI)2022-08-04 20:34Financial Performance - Adjusted net income attributable to UGI Corporation for the three months ended June 30, 2022, was $12 million, compared to $28 million in the same period of 2021, representing a decrease of 57.1%[141] - For the nine months ended June 30, 2022, adjusted net income attributable to UGI Corporation was $626 million, down from $693 million in the prior year, a decline of 9.7%[141] - The adjusted diluted earnings per share for the three months ended June 30, 2022, was $0.06, compared to $0.13 for the same period in 2021, a decrease of 53.8%[143] - For the nine months ended June 30, 2022, adjusted diluted earnings per share was $2.90, down from $3.30 in the previous year, a decline of 12.1%[143] - The net loss attributable to UGI Corporation for the three months ended June 30, 2022, was $7 million, compared to a net income of $150 million in the same period of 2021[141] - UGI Corporation reported a net loss of $7 million for the 2022 three-month period, compared to a net income of $150 million in the same period of 2021, reflecting a significant decline in profitability[149] - Adjusted net income for the 2022 three-month period was $12 million, down from $28 million in the prior year, primarily due to lower earnings from LPG businesses impacted by commodity price volatility[150] - For the 2022 nine-month period, net income attributable to UGI Corporation was $829 million, down from $942 million in the prior year, with significant impacts from unrealized commodity derivative instruments[155] - Adjusted net income for the 2022 nine-month period was $626 million, a decrease from $693 million in 2021, reflecting lower earnings from LPG businesses and the absence of prior-year tax benefits[158] Revenue and Margin Analysis - UGI International revenues increased by $166 million during the 2022 three-month period, driven by higher average propane and butane prices, which were approximately 65% and 103% higher, respectively[173] - Midstream & Marketing revenues surged by 101% to $525 million in the 2022 three-month period, with total margin increasing by 37% to $89 million[177] - Midstream & Marketing revenues increased by $645 million (59%) to $1,731 million for the nine months ended June 30, 2022, compared to the prior year[209] - Utilities revenues rose by $93 million (51%) to $274 million for the three months ended June 30, 2022, driven by an $84 million increase in Gas Utility revenues[184] - Total margin for Utilities increased by $38 million (34%) during the three-month period, largely due to incremental margin from the Mountaineer acquisition[187] - Average wholesale propane prices during the nine-month period were approximately 63% higher than the previous year, impacting revenues and costs[195] - UGI International revenues increased by $905 million (43%) to $3,011 million for the nine months ended June 30, 2022, reflecting significant increases in propane and butane prices[200] - UGI International total margin decreased by $133 million (15%) during the nine-month period, primarily due to lower margins from the energy marketing business[205] - Operating income for UGI International decreased by $111 million (34%) to $211 million for the nine months ended June 30, 2022, reflecting the decrease in total margin[206] - Utilities total margin increased by $163 million, with $110 million attributable to Mountaineer, and higher natural gas margins from increased delivery service customer growth[219] Cost and Expense Management - The company experienced significant inflationary pressures in global commodity and labor markets, impacting inventory costs and distribution expenses across all businesses[145] - Total cost of sales for AmeriGas Propane increased by $363 million during the nine-month period, primarily due to higher average propane product costs[196] - Consolidated interest expense increased to $245 million, reflecting higher long-term debt related to the Mountaineer acquisition and senior notes issuance[221] - Cash flow from operating activities was $848 million in the 2022 nine-month period, down from $1,047 million in the 2021 nine-month period, indicating a decline of about 19%[247] - Cash expenditures for property, plant, and equipment increased to $551 million in the 2022 nine-month period from $460 million in the 2021 nine-month period, representing a rise of approximately 19.8%[250] Liquidity and Capital Structure - Total available liquidity was approximately $2.1 billion as of June 30, 2022, affected by $659 million of cash collateral received from derivative counterparties[225] - The company's cash and cash equivalents totaled $670 million at June 30, 2022, down from $855 million at September 30, 2021, primarily due to commodity price volatility[229] - Total long-term debt stood at $6.446 billion as of June 30, 2022, with a slight decrease from $6.449 billion at September 30, 2021[230] - Average daily short-term borrowings for UGI Corporation were $181 million for the nine months ended June 30, 2022, compared to $243 million for the same period in 2021, reflecting a decrease of approximately 25.5%[237] - Cash flow used for financing activities was $290 million in the 2022 nine-month period, a decrease from $321 million in the 2021 nine-month period, indicating a reduction of about 9.7%[252] - UGI Utilities amended its existing Utilities Term Loan, extending the maturity date from October 2022 to July 2027, with quarterly installments of $2 million[238] - UGI Utilities issued $90 million of 4.75% Senior Notes due July 15, 2032, with proceeds used to reduce short-term borrowings and for general corporate purposes[241] Risk Management - The ongoing military conflict between Russia and Ukraine has contributed to volatility in commodity prices, particularly in LPG, natural gas, and electricity[145] - A 10% decline in the value of foreign currencies (euro and British pound sterling) against the USD would reduce the aggregate net book value of UGI International operations by approximately $160 million[266] - The maximum potential loss from nonperformance by derivative instrument counterparties is estimated at $2,068 million as of June 30, 2022[269] - Cash collateral received from derivative instrument counterparties totaled $659 million as of June 30, 2022, which helps mitigate credit risk[269] - The fair value of commodity price risk derivatives was $1,597 million, with a change in fair value of $(315) million due to a 10% adverse change in market prices[271] - The fair value of interest rate risk derivatives was $44 million, with a change in fair value of $(11) million due to a 50 basis point adverse change in prevailing market interest rates[271] - The fair value of foreign currency exchange rate risk derivatives was $57 million, with a change in fair value of $(48) million due to a 10% adverse change in the value of the euro and British pound sterling against the USD[271] - Midstream & Marketing diversifies its purchases across multiple suppliers to mitigate risks associated with fixed-price supply arrangements[260] - UGI Corporation uses derivative instruments to hedge portions of its net investments in foreign subsidiaries, including anticipated foreign currency denominated dividends[266] Dividend and Shareholder Returns - The company declared a quarterly dividend of $0.36 per common share, reflecting a 4% increase from the previous rate of $0.345[244]