UGI Corporation

02/05/2026 | Press release | Distributed by Public on 02/05/2026 16:25

Quarterly Report for Quarter Ending December 31, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
Information contained in this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, 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, although not all forward-looking statements contain such words. These statements discuss plans, strategies, events or developments that we expect or anticipate will or may occur in the future. All forward-looking statements made in this Quarterly Report on Form 10-Q rely upon the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995.
A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We believe that we have chosen these assumptions or bases in good faith and that they are reasonable. However, we caution you against relying on any forward-looking statement as these statements are subject to risks and uncertainties that may cause actual results to vary from assumed facts or bases, and the differences between actual results and assumed facts or bases can be material, depending on the circumstances. When considering forward-looking statements, you should keep in mind those factors set forth in Item 1A. Risk Factors in the Company's 2025 Annual Report and the following important factors that could affect our future results and could cause those results to differ materially from those expressed in our forward-looking statements: (1) weather conditions (including increasingly uncertain weather patterns due to climate change) resulting in reduced demand, the seasonal nature of our business, and disruptions in our operations and supply chain; (2) cost volatility and availability of energy products, including propane and other LPG, natural gas, and electricity, as well as the availability of LPG cylinders, and the capacity to transport product to our customers; (3) changes in domestic and foreign laws and regulations, including safety, health, tax, transportation, consumer protection, data privacy, accounting, trade restrictions and policies, such as tariffs and related sanctions, and environmental matters, such as regulatory responses to climate change; (4) inability to timely recover costs through utility rate proceedings; (5) increased customer conservation measures due to high energy prices and improvements in energy efficiency and technology resulting in reduced demand; (6) adverse labor relations and our ability to address existing or potential workforce shortages; (7) the impact of pending and future legal or regulatory proceedings, inquiries or investigations; (8) competitive pressures from the same and alternative energy sources; (9) failure to acquire new customers or retain current customers, thereby reducing or limiting any increase in revenues; (10) liability for environmental claims; (11) customer, counterparty, supplier, or vendor defaults; (12) liability for uninsured claims and for claims in excess of insurance coverage, including those for personal injury and property damage arising from explosions, acts of war, terrorism, natural disasters, pandemics, and other catastrophic events that may result from operating hazards and risks incidental to generating and distributing electricity and transporting, storing and distributing natural gas and LPG in all forms; (13) transmission or distribution system service interruptions; (14) political, regulatory and economic conditions in the United States, Europe and other foreign countries, including uncertainties related to the war between Russia and Ukraine, the conflict in the Middle East, the European energy crisis, the adoption and expansion of tariffs or other trade restrictions and policies, and foreign currency exchange rate fluctuations (particularly the euro); (15) credit and capital market conditions, including reduced access to capital markets and interest rate fluctuations; (16) changes in commodity market prices resulting in significantly higher cash collateral requirements; (17) impacts of our indebtedness and the restrictive covenants in our debt agreements; (18) reduced distributions from subsidiaries impacting the ability to pay dividends or service debt; (19) changes in Marcellus and Utica Shale gas production; (20) the success of our strategic initiatives and investments intended to advance our business strategy; (21) our ability to successfully integrate acquired businesses and achieve anticipated synergies; (22) the interruption, disruption, failure, malfunction, or breach of our information technology systems, and those of our third-party vendors or service providers, including due to cyber attack; (23) the inability to complete pending or future energy infrastructure projects; (24) our ability to attract, develop, retain and engage key employees; (25) uncertainties related to global pandemics; (26) the impact of a material impairment of our assets, (27) the impact of proposed or future tax legislation; (28) the impact of changes in governmental policies related to tariffs, reciprocal and retaliatory tariffs, and other tariff-related measures, trade agreements, or policies; (29) the impact of declines in the stock market or bond market, and a low interest rate environment, on our pension liability; (30) our ability to protect our intellectual property; (31) our ability to overcome supply chain issues that may result in delays or shortages in, as well as increased costs of, equipment, materials or other resources that are critical to our business operations; and (32) our ability to control operating costs and realize cost savings.
These factors, and those factors set forth in Item 1A. Risk Factors in the Company's 2025 Annual Report, are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results. Any forward-looking statement speaks only as of the date on which such statement is made. We undertake no obligation (and expressly
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disclaim any obligation) to update publicly any forward-looking statement, whether as a result of new information or future events, except as required by the federal securities laws.
ANALYSIS OF RESULTS OF OPERATIONS
The following analyses compare the Company's results of operations for the 2025 three-month period with the 2024 three-month period. Our analysis of results of operations should be read in conjunction with the segment information included in Note 13 to Condensed Consolidated Financial Statements.
Because most of our businesses sell or distribute energy products used in large part for heating purposes, our results are significantly influenced by temperatures in our service territories, particularly during the heating-season months of October through March. Accordingly, our results of operations, after adjusting for the effects of gains and losses on derivative instruments not associated with current-period transactions as further discussed below, are significantly higher in our first and second fiscal quarters.
Recent Developments
Global LPG Business Transactions
As part of the Company's ongoing global LPG business portfolio optimization efforts, the Company is strategically divesting operations in non-core markets to focus resources where it can achieve superior operational results and deliver enhanced customer value.
UGI International. In January 2026, the Company's Board of Directors authorized and management executed agreements to sell our LPG distribution businesses in Czech Republic, Hungary, Poland, Slovakia and Romania. The transactions are subject to customary closing conditions and are expected to be finalized by the third quarter of Fiscal 2026. During the second quarter of Fiscal 2026, the conditions to present these businesses as assets held for sale will have been met and management expects to recognize an expected loss, with the amount of such expected loss subject to management's completion of the required allocation of goodwill to these businesses.
In November 2025, UGI International, through a wholly-owned subsidiary, completed the sale of Flaga, its LPG distribution business in Austria. In conjunction with the sale, during the first quarter of Fiscal 2026, the Company recorded a pre-tax gain of $25.
In October 2025, UGI International, through a wholly-owned subsidiary, completed the sale of its cylinder business in the United Kingdom. During the first quarter of Fiscal 2026, a pre-tax gain on the sale of $2 was recorded.
See Note 5 to Condensed Consolidated Financial Statements for additional information.
Non-GAAP Financial Measures
UGI management uses "adjusted net income attributable to UGI Corporation" and "adjusted diluted earnings per share," both of which are non-GAAP financial measures, when evaluating UGI's overall performance. Management believes that these non-GAAP measures provide meaningful information to investors about UGI's performance because they eliminate gains and losses on commodity and certain foreign currency derivative instruments not associated with current-period transactions and other significant discrete items that can affect the comparison of period-over-period results.
UGI does not designate its commodity and certain foreign currency derivative instruments as hedges under GAAP. Volatility in net income (loss) attributable to UGI Corporation can occur as a result of gains and losses on such derivative instruments not associated with current-period transactions. These gains and losses result principally from recording changes in unrealized gains and losses on unsettled commodity and certain foreign currency derivative instruments and, to a much lesser extent, certain realized gains and losses on settled commodity derivative instruments that are not associated with current-period transactions. However, because these derivative instruments economically hedge anticipated future purchases or sales of energy commodities, or in the case of certain foreign currency derivatives reduce volatility in anticipated future earnings associated with our foreign operations, we expect that such gains or losses will be largely offset by gains or losses on anticipated future
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energy commodity transactions or mitigate volatility in anticipated future earnings. Non-GAAP financial measures are not in accordance with, or an alternative to, GAAP and should be considered in addition to, and not as a substitute for, the comparable GAAP measures.
The following tables reflect the adjustments referred to above and reconcile net income (loss) attributable to UGI Corporation, the most directly comparable GAAP measure, to adjusted net income (loss) attributable to UGI Corporation, and reconcile diluted earnings (loss) per share, the most directly comparable GAAP measure, to adjusted diluted earnings (loss) per share:
Adjusted net income attributable to UGI Corporation: Three Months Ended
December 31,
2025 2024
Utilities $ 98 $ 89
Midstream & Marketing 61 89
UGI International 103 100
AmeriGas Propane 24 (46)
Corporate & Other (a) 11 143
Net income attributable to UGI Corporation 297 375
Net losses (gains) on commodity derivative instruments not associated with current-period transactions (net of tax of $1 and $14, respectively)
12 (64)
Unrealized losses (gains) on foreign currency derivative instruments (net of tax of $1 and $6, respectively)
(4) (16)
Loss (gain) on disposals of businesses (net of tax of $1 and $0, respectively)
(26) -
Total adjustments (a) (b) (18) (80)
Adjusted net income attributable to UGI Corporation $ 279 $ 295
Three Months Ended
December 31,
Adjusted diluted earnings per share: 2025 2024
Utilities $ 0.44 $ 0.41
Midstream & Marketing 0.28 0.41
UGI International 0.47 0.46
AmeriGas Propane 0.11 (0.21)
Corporate & Other (a) 0.04 0.67
Diluted earnings per share 1.34 1.74
Net losses (gains) on commodity derivative instruments not associated with current-period transactions 0.06 (0.30)
Unrealized losses (gains) on foreign currency derivative instruments (0.02) (0.07)
Loss (gain) on disposals of businesses (0.12) -
Total adjustments (a) (0.08) (0.37)
Adjusted diluted earnings per share $ 1.26 $ 1.37
(a)Corporate & Other includes certain adjustments made to our reporting segments in arriving at net income attributable to UGI Corporation. These adjustments have been excluded from the segment results to align with the measure used by our CODM in assessing segment performance and allocating resources. See Note 13 to Condensed Consolidated Financial Statements for additional information related to these adjustments, as well as other items included within Corporate & Other.
(b)Income taxes associated with pre-tax adjustments determined using statutory business unit tax rates.
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Executive Overview
2025 three-month period compared with 2024 three-month period
Net income attributable to UGI Corporation for the 2025 three-month period was $297 (equal to $1.34 per diluted share) compared to $375 (equal to $1.74 per diluted share) for the 2024 three-month period. These results include net gains (losses) from changes in unrealized commodity derivative instruments and certain foreign currency derivative instruments of $(8) and $80 during the 2025 and 2024 three-month periods, respectively.
Net income attributable to UGI Corporation for the 2025 three-month period also includes a $26 net gain on disposals of certain non-core assets from our LPG business at UGI International.
Adjusted net income attributable to UGI Corporation for the 2025 three-month period was $279 (equal to $1.26 per diluted share) compared to $295 (equal to $1.37 per diluted share) for the 2024 three-month period. The decrease in adjusted net income attributable to UGI Corporation for the 2025 three-month period reflects lower earnings contributions from our Midstream & Marketing segment, partially offset by higher earnings contributions from the Utilities and UGI International segments. In addition, the decrease in adjusted net income during the 2025 three-month period also reflects higher income tax expenses primarily related to a decrease in investment tax credits in our Midstream & Marketing segment and lower release of a valuation allowance on deferred tax assets expected to be utilized in the current year in our UGI International segment. During the 2025 three-month period, temperatures in all of our segments were colder than the prior-year period.
Utilities' adjusted net income attributable to UGI Corporation increased $9 during the 2025 three-month period. The increase was largely attributable to higher total margin, partially offset by higher operating and administrative expenses.
Midstream & Marketing's adjusted net income attributable to UGI Corporation decreased $28 during the 2025 three-month period, primarily attributable to higher income tax expenses.
UGI International's adjusted net income attributable to UGI Corporation increased $3 during the 2025 three-month period. The increase is mainly attributable to higher total margin that was substantially offset by higher income tax expenses.
AmeriGas Propane's adjusted net income attributable to UGI Corporation increased $70 during the 2025 three-month period, primarily reflecting significantly lower income tax expenses and, to a much lesser extent, lower operating and administrative expenses.
Analysis of Segment Results
2025 Three-Month Period Compared with the 2024 Three-Month Period
Utilities
For the three months ended December 31, 2025 2024 Increase (Decrease)
Revenues $ 591 $ 485 $ 106 22 %
Total margin (a) $ 302 $ 274 $ 28 10 %
Operating and administrative expenses (a) $ 100 $ 91 $ 9 10 %
Operating income $ 155 $ 138 $ 17 12 %
Earnings before interest expense and income taxes $ 157 $ 141 $ 16 11 %
Gas Utility system throughput-bcf
Core market 36 31 5 16 %
Total 101 98 3 3 %
Electric Utility distribution sales - gwh 250 242 8 3 %
Gas Utility degree days-% colder (warmer) than normal (b) 16.8 % (3.2) % - -
(a)Total margin represents revenues less cost of sales and revenue-related taxes (i.e., gross receipts and business and occupation taxes) of $8 and $7 during the 2025 and 2024 three-month periods, respectively. For financial statement
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purposes, revenue-related taxes are included in "Operating and administrative expenses" on the Condensed Consolidated Statements of Income (but are excluded from operating and administrative expenses presented above).
(b)Deviation from average heating degree days is determined on a 10-year period utilizing volume-weighted weather data based on weather statistics provided by NOAA for airports located within Gas Utility's service territories.
Temperatures in Gas Utility's service territories during the 2025 three-month period were 16.8% colder than normal and 21.0% colder than the prior-year period. Gas Utility core market volumes increased 16% during the 2025 three-month period, principally reflecting the impact from the colder weather compared to the prior-year period. Total Gas Utility volume increased 3% during the 2025 three-month period, reflecting the increase in core market volumes that was partially offset by lower large firm delivery service volumes. The increase in Electric Utility distribution sales volumes is primarily attributable to the impact from the colder weather compared to the prior-year period.
Utilities revenues increased $106 during the 2025 three-month period, primarily reflecting higher Gas Utility revenues ($103). The increase in Gas Utility revenues was largely attributable to the higher core market volumes, the increase in the PA Gas Utility base rates, effective October 2025, higher PGC and PGA rates and higher off-system sales. These increases were partially offset by the effects of the weather normalization adjustments. The increase in Electric Utility revenues ($3) in the 2025 three-month period is principally attributable to the higher DS rates and higher volumes.
Utilities cost of sales increased $78 during the 2025 three-month period, primarily reflecting higher Gas Utility cost of sales ($76). The increase in Gas Utility cost of sales was largely attributable to the higher core market volumes, higher PGC and PGA rates and higher cost of sales associated with off-system sales. The increase in Electric Utility cost of sales ($2) is principally attributable to the higher DS rates and higher sales volumes.
Utilities total margin increased $28 during the 2025 three-month period, primarily reflecting higher Gas Utility total margin ($27). The increase in Gas Utility total margin principally reflects the higher core market volumes and the increase in the PA Gas Utility base rates, effective October 2025, partially offset by the effects of the weather normalization adjustments. Electric Utility margin was comparable to the prior-year period.
Utilities operating income increased $17 during the 2025 three-month period. This increase largely reflects the increase in total margin ($28), partially offset by higher operating and administrative expenses ($9) and higher depreciation expense ($3). The higher operating and administrative expenses reflect, among other things, higher personnel and maintenance expenses. The higher depreciation expense compared to the prior-year period reflects the effects of continued distribution system capital expenditure activity.
Utilities earnings before interest expense and income taxes increased $16 during the 2025 three-month period, principally representing the increase in operating income ($17).
Midstream & Marketing
For the three months ended December 31, 2025 2024 Increase (Decrease)
Revenues $ 427 $ 367 $ 60 16 %
Total margin (a) $ 139 $ 138 $ 1 1 %
Operating and administrative expenses $ 35 $ 29 $ 6 21 %
Operating income $ 84 $ 91 $ (7) (8) %
Earnings before interest expense and income taxes $ 88 $ 95 $ (7) (7) %
(a)Total margin represents revenues less cost of sales.
Average temperatures across Midstream & Marketing's energy marketing territory during the 2025 three-month period were 14.1% colder than normal and 17.5% colder than the prior-year period.
Midstream & Marketing revenues increased $60 during the 2025 three-month period, primarily reflecting higher revenues from natural gas marketing activities ($50), including the effects of capacity management activities, that were primarily impacted by the colder weather.
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Midstream & Marketing cost of sales increased $59 during the 2025 three-month period, primarily reflecting higher natural gas costs ($50) related to the previously mentioned natural gas marketing activities.
Midstream & Marketing total margin during the 2025 three-month period was comparable to the prior-year period, as the effect of the colder weather was substantially offset by higher pipeline transportation costs.
Midstream & Marketing operating income during the 2025 three-month period decreased $7 compared to the prior-year period, mainly reflecting higher operating and administrative expenses ($6). The increase in operating and administrative expenses was primarily due to higher compensation expenses and higher operating expenses related to certain projects placed in service in September 2025.
Midstream & Marketing earnings before interest expense and income taxes during the 2025 three-month period decreased $7 compared to the prior-year period, representing the decrease in operating income ($7).
UGI International
For the three months ended December 31, 2025 2024 Increase (Decrease)
Revenues $ 575 $ 638 $ (63) (10) %
Total margin (a) $ 284 $ 264 $ 20 8 %
Operating and administrative expenses $ 134 $ 134 $ - - %
Operating income $ 127 $ 106 $ 21 20 %
Earnings before interest expense and income taxes $ 124 $ 110 $ 14 13 %
LPG retail gallons sold (millions) 195 218 (23) (11) %
Degree days-% (warmer) than normal (b) (0.7) % (3.5) % - -
(a)Total margin represents revenues less cost of sales.
(b)Deviation from average heating degree days is determined on a rolling 10-year period utilizing volume-weighted weather data at locations in our UGI International service territories.
Average temperatures during the 2025 three-month period were 0.7% warmer than normal and 0.6% colder than the prior-year period. Total LPG retail gallons sold during the 2025 three-month period decreased 11% compared to the prior-year period, largely attributable to the impacts from the divestitures of certain non-core LPG businesses, lower crop drying campaigns and continued structural conservation, partially offset by higher residential volumes sold.
UGI International base-currency results are translated into USD based upon exchange rates experienced during the reporting periods. The functional currency of a significant portion of our UGI International results is the euro and, to a much lesser extent, the British pound sterling. During the 2025 and 2024 three-month periods, the average unweighted euro-to-USD translation rates were approximately $1.16 and $1.07, respectively, and the average unweighted British pound sterling-to-USD translation rates were approximately $1.33 and $1.28, respectively. Fluctuations in these foreign currency exchange rates can have a significant impact on the individual financial statement components discussed below. The Company uses forward foreign currency exchange contracts entered into over multi-year periods to reduce the volatility in earnings that may result from such changes in foreign currency exchange rates. These forward foreign currency exchange contracts resulted in realized net gains (losses) of $(3) and $4 in the 2025 and 2024 three-month periods, respectively.
Average wholesale prices for propane and butane during the 2025 three-month period in northwest Europe were approximately 28.6% and 21.6% lower, respectively, compared with the prior-year period. UGI International revenues and cost of sales decreased $63 and $83, respectively, during the 2025 three-month period compared to the prior-year period. The decrease in revenues was primarily attributable to the lower LPG retail volumes sold and, to a lesser extent, lower LPG price, partially offset by the translation effects of the stronger foreign currencies (approximately $48). The decrease in cost of sales was mainly attributable to lower LPG product costs and the lower LPG retail volumes sold, partially offset by the translation effects of the stronger foreign currencies (approximately $24).
UGI International total margin increased $20 during the 2025 three-month period, primarily reflecting the effects of higher average unit margins in the 2025 three-month period and the translation effects of the stronger foreign currencies (approximately $24), partially offset by the lower LPG retail volumes sold.
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UGI International operating income increased $21 during the 2025 three-month period, principally reflecting the increase in total margin ($20). Operating and administrative expenses during the 2025 three-month period were comparable to the prior-year period as the impacts from the divestitures of certain non-core LPG businesses and lower distribution and maintenance expenses were substantially offset by the translation effects of the stronger foreign currencies (approximately $13).
UGI International earnings before interest expense and income taxes increased $14 during the 2025 three-month period. This increase largely reflects the $21 increase in operating income, partially offset by lower realized gains on foreign currency exchange contracts ($7) entered into in order to reduce volatility in UGI International earnings resulting from the effects of changes in foreign currency exchange rates.
AmeriGas Propane
For the three months ended December 31, 2025 2024 Increase (Decrease)
Revenues $ 600 $ 627 $ (27) (4) %
Total margin (a) $ 349 $ 347 $ 2 1 %
Operating and administrative expenses $ 244 $ 236 $ 8 3 %
Operating income $ 72 $ 74 $ (2) (3) %
Earnings before interest expense and income taxes $ 72 $ 74 $ (2) (3) %
Retail gallons sold (millions) 205 204 1 - %
Degree days-% colder (warmer) than normal (b) 0.8 % (6.3) % - -
(a)Total margin represents total revenues less total cost of sales.
(b)Deviation from average heating degree days is determined on a rolling 10-year period utilizing volume-weighted weather data based on weather statistics provided by NOAA for 344 regions in the U.S., excluding Alaska and Hawaii.
Average temperatures during the 2025 three-month period were 0.8% colder than normal and 7.9% colder than the prior-year period. Total retail gallons sold were comparable to the prior-year period as the effects of colder weather in the Eastern U.S. were largely offset by (1) the warmer weather in the Western U.S.; (2) the sale of the LPG operations in Hawaii in September 2025; and (3) continuing customer attrition.
Average daily wholesale propane commodity prices during the 2025 three-month period at Mont Belvieu, Texas, one of the major supply points in the U.S., were approximately 14.0% lower than such prices during the 2024 three-month period. Total revenues decreased $27 during the 2025 three-month period primarily reflecting lower wholesale revenues ($12), the effects of lower average retail propane selling prices ($10) and lower fee income ($8).
Total cost of sales decreased $29 during the 2025 three-month period largely reflecting lower retail propane product costs ($16) and lower wholesale cost of sales ($12).
AmeriGas Propane total margin increased $2 during the 2025 three-month period as the impact from higher average retail propane unit margins ($7) was largely offset by lower fee income ($6).
AmeriGas Propane operating income decreased $2 during the 2025 three-month period, primarily reflecting higher operating and administrative expenses ($8), partially offset by the increase in total margin ($2) and higher gains on sales of fixed assets ($3). The increase in operating and administrative expenses primarily reflects higher compensation and advertising expenses.
AmeriGas Propane earnings before interest expense and income taxes decreased $2 during the 2025 three-month period, representing the decrease in operating income ($2).
Interest Expense and Income Taxes
Our consolidated interest expense during the 2025 three-month period was $111 compared to $102 during the 2024 three-month period. The increase in interest expense principally reflects the effects of higher interest rates on long-term debt, partially offset by lower average long-term debt outstanding at AmeriGas Propane during the 2025 three-month period.
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The increase in the Company's income tax rate for the 2025 three-month period principally reflects a decrease in investment tax credits in our Midstream & Marketing segment and a decrease in release of a valuation allowance on deferred tax assets expected to be utilized by our UGI International segment.
FINANCIAL CONDITION AND LIQUIDITY
The Company expects to have sufficient liquidity including cash on hand and available borrowing capacity, to continue to support long-term commitments and ongoing operations. Our total available liquidity balance, comprising cash and cash equivalents and available borrowing capacity on our revolving credit facilities, totaled approximately $1.6 billion at both December 31, 2025 and September 30, 2025.
As of December 31, 2025, "Current maturities of long-term debt" on the Condensed Consolidated Balance Sheet principally comprises (1) $100 outstanding principal balance of the UGI Utilities, 2.95% Senior Notes, due June 2026; and (2) $700 outstanding principal balance of the UGI Corporation Senior Notes due in 2028 which became eligible for early conversion requests from January 1, 2026 through March 31, 2026. The Company cannot predict whether noteholders will elect to convert during the conversion period. To-date, no noteholders have elected to convert their notes. As of December 31, 2025, the Company had $187 of unused borrowing capacity under its existing $475 revolving credit facility and access to additional liquidity via subsidiaries to fund any cash consideration, if needed, in the event of early conversion by noteholders. In addition, the Company has a $300 revolving credit facility, the borrowings of which, if any, can be used solely to fund the cash consideration in the event of conversion by noteholders. This credit facility is scheduled to expire in August 2026, and the Company has the option, subject to meeting certain conditions, to convert and extend the credit facility borrowings into a one year term loan. See "Significant Financing Activities" below and Note 8 to Condensed Consolidated Financial Statements for further information.
Except as disclosed, the Company does not have any senior notes or term loans maturing in the next twelve months. UGI and its subsidiaries were in compliance with all of its debt covenants as of December 31, 2025
We depend on both internal and external sources of liquidity to provide funds for working capital and to fund capital requirements. Our short-term cash requirements not met by cash from operations are generally satisfied with borrowings under credit facilities and, in the case of Midstream & Marketing, also from a Receivables Facility. Long-term cash requirements are generally met through the issuance of long-term debt, hybrid or equity securities. We believe that each of our business units has sufficient liquidity in the forms of cash and cash equivalents on hand; cash expected to be generated from operations; credit facility and Receivables Facility borrowing capacity; and the ability to obtain long-term financing to meet anticipated contractual and projected cash commitments. Issuances of debt, hybrid and equity securities in the capital markets and additional credit facilities may not, however, be available to us on acceptable terms.
The primary sources of UGI's cash and cash equivalents are the dividends and other cash payments made to UGI or its corporate subsidiaries by its principal business units. Our cash and cash equivalents totaled $251 at December 31, 2025, compared with $335 at September 30, 2025. Excluding cash and cash equivalents that reside at UGI's operating subsidiaries, at December 31, 2025 and September 30, 2025, UGI had $167 and $214 of cash and cash equivalents, respectively. Such cash is available to pay dividends on UGI Common Stock and for investment purposes.
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Long-term Debt and Credit Facilities
Long-term Debt
The Company's debt outstanding at December 31, 2025 and September 30, 2025, comprises the following:
December 31, 2025 September 30, 2025
Utilities Midstream & Marketing UGI International AmeriGas Propane Corp & Other Eliminations (a) Total Total
Short-term borrowings $ 304 $ 22 $ 77 $ 38 $ - $ - $ 441 $ 486
Long-term debt (including current maturities):
Senior notes $ 2,100 $ - $ 470 $ 1,555 $ 700 $ - $ 4,825 $ 4,724
Term loans 115 776 352 - 400 - 1,643 1,646
Other long-term debt 14 40 12 150 288 (150) 354 331
Unamortized debt issuance costs (8) (10) (4) (12) (15) - (49) (53)
Total long-term debt $ 2,221 $ 806 $ 830 $ 1,693 $ 1,373 $ (150) $ 6,773 $ 6,648
Total debt $ 2,525 $ 828 $ 907 $ 1,731 $ 1,373 $ (150) $ 7,214 $ 7,134
(a) Represents the elimination of the intersegment loan between UGI International to AmeriGas Partners.
Significant Financing Activities
The following significant financing activities occurred during Fiscal 2026. See Note 8 to Condensed Consolidated Financial Statements for additional information on these transactions.
UGI Utilities Senior Notes. In July 2025, UGI Utilities entered into a note purchase agreement with a consortium of lenders. Pursuant to the note purchase agreement, in November 2025, UGI Utilities issued $150 aggregate principal amount of 5.10% Senior Notes due November 15, 2030, and $125 aggregate principal amount of 5.68% Senior Notes due November 15, 2035. UGI Utilities used the net proceeds from the issuance of these senior notes to (1) repay the $100 outstanding principal balance of the 1.59% Senior Notes, due June 2026 and $75 outstanding principal balance of the 1.64% Senior Notes, due September 2026; (2) reduce short-term borrowings; and (3) for general corporate purposes.
UGI Corporation Senior Notes.The Company has $700 aggregate principal amount of outstanding 5.00% UGI Corporation Senior Notes due June 2028. The UGI Corporation Senior Notes are convertible subject to the occurrence of certain events and circumstances.
As of December 31, 2025, an early conversion condition associated with the market price of the Company's common stock was met. Accordingly, pursuant to an indenture dated June 11, 2024, the UGI Corporation Senior Notes are convertible at the option of the noteholders, in whole or in part, from January 1, 2026 through March 31, 2026.
Because the Company must pay noteholders cash up to the aggregate principal amount and noteholders can convert at their sole election beginning January 1, 2026 through March 31, 2026, the Company classified the entire $700 principal amount (net of unamortized debt issuance costs of $11) of the UGI Corporation Senior Notes in "Current maturities of long-term debt" on the December 31, 2025 Condensed Consolidated Balance Sheet.
Whether the UGI Corporation Senior Notes will become convertible in subsequent periods after March 31, 2026 will depend on the future occurrence of early conversion conditions. If none of the conversion conditions are met in future quarters, the UGI Corporation Senior Notes will revert to classification as "Long-term debt" on the Condensed Consolidated Balance Sheet.
UGI CORPORATION AND SUBSIDIARIES
(Currency in millions, except per share amounts and where indicated otherwise)
The Company cannot predict whether noteholders will elect to convert during the conversion period ending March 31, 2026. Whether noteholders elect to convert will depend on various factors including market conditions and the secondary market trading price of the UGI Corporation Senior Notes relative to the value of early conversion. Historically, the secondary market trading price has exhibited a premium over the value of early conversion, indicating economic value to not requesting an early conversion. The Company cannot predict if these conditions will continue. As described in the Company's 2025 Annual Report, the Company has a $300 revolving credit facility, the borrowings of which, if any, can be used solely to fund the cash consideration in the event of conversion by noteholders. In addition, the Company has $187 of unused borrowing capacity under its existing $475 revolving credit facility and access to additional liquidity via subsidiaries to fund any additional cash consideration, if needed, in the event of early conversion by noteholders. To-date, no noteholders have elected to convert their notes.
Credit Facilities
Additional information related to the Company's credit agreements can be found in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and Note 6 to Consolidated Financial Statements in the Company's 2025 Annual Report.
Information about the Company's principal credit agreements (excluding the Receivables Facility discussed below) as of December 31, 2025 and 2024, is presented in the table below.
Total Capacity Borrowings Outstanding Letters of Credit and Guarantees Outstanding Available Borrowing Capacity
As of December 31, 2025
AmeriGas OLP (a) $ 171 $ 38 $ 2 $ 131
UGI International, LLC (b) € 500 € 66 € - € 434
Energy Services $ 300 $ - $ - $ 300
UGI Utilities $ 375 $ 195 $ - $ 180
Mountaineer $ 150 $ 109 $ - $ 41
UGI Corporation (c) $ 475 $ 288 $ - $ 187
As of December 31, 2024
AmeriGas OLP (a) $ 170 $ 69 $ - $ 101
UGI International, LLC (b) € 500 € 110 € - € 390
Energy Services $ 300 $ - $ - $ 300
UGI Utilities $ 375 $ 115 $ - $ 260
Mountaineer $ 150 $ 117 $ - $ 33
UGI Corporation (c) $ 475 $ 282 $ - $ 193
(a)The maximum amount available for borrowing at any time under the AmeriGas Senior Secured Revolving Credit Facility is limited to the borrowing base valuation, as defined by the agreement.
(b)Permits UGI International, LLC or UGI International Holdings B.V. to borrow in euros or USD.
(c)Borrowings outstanding are classified as long-term debt on the balance sheet.
UGI CORPORATION AND SUBSIDIARIES
(Currency in millions, except per share amounts and where indicated otherwise)
The average daily and peak short-term borrowings under the Company's principal credit agreements are as follows:
For the three months ended For the three months ended
December 31, 2025 December 31, 2024
Average Peak Average Peak
AmeriGas OLP $ 4 $ 57 $ 58 $ 85
UGI International, LLC € 36 € 170 € 111 € 115
Energy Services $ - $ - $ - $ -
UGI Utilities $ 209 $ 254 $ 167 $ 263
Mountaineer $ 90 $ 109 $ 103 $ 118
UGI Corporation $ 251 $ 288 $ 263 $ 640
Energy Services Receivables Facility. Energy Services has a Receivables Facility with an issuer of receivables-backed commercial paper. In October 2025, the expiration date of the Receivables Facility was extended to October 2026. The Receivables Facility provides Energy Services with the ability to borrow up to $150 of eligible receivables during the period October 17, 2025 to April 30, 2026, and up to $75 of eligible receivables during the period May 1, 2026 to October 16, 2026, with the option to request consent for an increase of $50. Energy Services uses the Receivables Facility to fund working capital, margin calls under commodity futures contracts, capital expenditures, dividends and for general corporate purposes.
Under the Receivables Facility, Energy Services transfers, on an ongoing basis and without recourse, its trade accounts receivable to its wholly owned, special purpose subsidiary, ESFC, which is consolidated for financial statement purposes. ESFC, in turn, has sold and, subject to certain conditions, may from time to time sell, an undivided interest in some or all of the receivables to a major bank. Amounts sold to the bank are reflected as "Short-term borrowings" on the Condensed Consolidated Balance Sheets. ESFC was created and has been structured to isolate its assets from creditors of Energy Services and its affiliates, including UGI. Trade receivables sold to the bank remain on the Company's balance sheet and the Company reflects a liability equal to the amount advanced by the bank. The Company records interest expense on amounts owed to the bank. Energy Services continues to service, administer and collect trade receivables on behalf of the bank, as applicable.
At December 31, 2025, the outstanding balance of ESFC trade receivables was $108, $22 of which were sold to the bank. At December 31, 2024, the outstanding balance of ESFC trade receivables was $82, none of which was sold to the bank. During the three months ended December 31, 2025, peaks sales of receivables was $63 and average daily amounts sold were $8. There were no sales of receivables under the Receivables Facility during the three months ended December 31, 2024.
Dividends and Repurchases of Common Stock
On November 20, 2025, UGI's Board of Directors declared a cash dividend equal to $0.375 per common share. The dividend was paid on January 1, 2026, to shareholders of record on December 15, 2025. On February 4, 2026, UGI's Board of Directors declared a cash dividend equal to $0.375 per common share. The dividend will be payable on April 1, 2026, to shareholders of record on March 16, 2026.
Pursuant to the UGI share repurchase program authorized in February 2022, during the three months ended December 31, 2025, the Company purchased 0.3 million shares of Common Stock on the open market at a total purchase price of $12. In February 2026, UGI's Board of Directors authorized an extension of the share repurchase program for up to 8 million shares of Common Stock for an additional four-year period, expiring in February 2030.
Cash Flows
Due to the seasonal nature of the Company's businesses, cash flows from operating activities are generally strongest during the second and third fiscal quarters when customers pay for natural gas, LPG, electricity and other energy products and services consumed during the peak heating season months. Conversely, operating cash flows are generally at their lowest levels during the fourth and first fiscal quarters when the Company's investment in working capital, principally inventories and accounts receivable, is generally greatest.
UGI CORPORATION AND SUBSIDIARIES
(Currency in millions, except per share amounts and where indicated otherwise)
Operating Activities.Year-to-year variations in our cash flows from operating activities can be significantly affected by changes in operating working capital, especially during periods with significant changes in energy commodity prices. Cash flow provided by operating activities was $66 in the 2025 three-month period compared to $164 in the 2024 three-month period. Cash flow provided by operating activities before changes in operating working capital was $438 in the 2025 three-month period compared to $427 in the 2024 three-month period. Cash used to fund changes in operating working capital totaled $372 in the 2025 three-month period, as compared to the $263 in the 2024 three-month period. The increase in cash required to fund changes in operating working capital in the 2025 three-month period reflects, among other things, a decrease in cash received for derivative instrument collateral deposits, an increase in cash used to fund changes in accounts receivable and other current liabilities largely offset by lower cash required to fund changes accounts payable.
Investing Activities.Investing activity cash flow is principally affected by cash expenditures for property, plant and equipment; cash paid for acquisitions of businesses and assets; investments in equity method investees; and cash activity associated with dispositions of businesses and assets. Cash flow used by investing activities was $145 in the 2025 three-month period compared to $232 in the 2024 three-month period. Cash expenditures for property, plant and equipment were $221 in the 2025 three-month period compared with $211 in the 2024 three-month period. Net proceeds from the disposal of businesses and assets in Fiscal 2026 includes, among other things, proceeds from the sale of the LPG distribution business in Austria and the cylinder business in the United Kingdom. Investments in equity method investments during the 2025 three-month period principally reflects our continuing investments in renewable energy projects at our Midstream & Marketing segment.
Financing Activities.Changes in cash flow from financing activities are primarily due to issuances and repayments of long-term debt; net short-term borrowings; dividends on UGI Common Stock; and issuances and repurchases of equity instruments.
Cash flow used by financing activities was $6 in the 2025 three-month period compared to cash flow provided of $95 in the 2024 three-month period. The 2025 three-month period includes, among other things, (a) the issuance by UGI Utilities of $150 aggregate principal amount of 5.10% senior notes and $125 aggregate principal amount of 5.68% senior notes (b) the repayment by UGI Utilities of the $100 outstanding aggregate principal amount of the 1.59% Senior Notes and $75 outstanding aggregate principal amount of the 1.64% Senior Notes and (c) the repurchase of $12 of Common Stock.
The 2024 three-month period includes the issuance by UGI Utilities of $50 and $125 principal amount of senior notes. The 2024 three-month period activities also include, among other things, entering into the UGI Corporation 2025 Credit Agreement consisting of (1) a $475 revolving credit facility and (2) a $400 variable-rate term loan. Proceeds from the UGI Corporation 2025 Credit Agreement were used to prepay all borrowings under the UGI Corporation Credit Facility Agreement due August 29, 2025 and, concurrent with such repayment, terminated the agreement.
UTILITY REGULATORY MATTERS
UGI Utilities.On January 28, 2026, PA Gas Utility filed a request with the PAPUC to increase its base operating revenues for residential, commercial and industrial customers by $99 annually. The increased revenues would fund ongoing system improvements and operations necessary to maintain safe and reliable natural gas service. PA Gas Utility requested the new gas rates become effective March 29, 2026. However, the PAPUC typically suspends the effective date for general base rate proceedings for a period not to exceed nine months after the filing date to allow for investigation and public hearings. We cannot predict the timing or the ultimate outcome of the rate case review process.
On January 27, 2025, PA Gas Utility filed a request with the PAPUC to increase its base operating revenues for residential, commercial and industrial customers by $110 annually. On September 11, 2025, the PAPUC issued a final order approving a settlement providing for a $70 annual base distribution rate increase, effective October 28, 2025, and maintenance of the weather normalization adjustment through the end of its pilot period with modification.
Mountaineer. On February 3, 2026, WV Gas Utility submitted a base rate case filing with the WVPSC seeking a net revenue increase of $27, which consisted of an increase in base rates of $44 and a decrease in the IREP rates of $17 annually. The increased revenues would fund ongoing system improvements and operations necessary to maintain safe and reliable natural gas service. WV Gas Utility requested the new gas rates become effective March 5, 2026. WV Gas Utility expects the WVPSC to enter an order suspending the effective date for the rate increase to allow for a full review of the filing and public hearings. Unless a settlement is reached sooner, the review process is expected to last up to 270 days from the date of filing. The Company cannot predict the timing or the ultimate outcome of the rate case review process.
UGI CORPORATION AND SUBSIDIARIES
(Currency in millions, except per share amounts and where indicated otherwise)
On July 31, 2025, WV Gas Utility submitted its 2025 IREP filing to the WVPSC requesting recovery of $24, an increase of $5, for costs associated with capital investments after December 31, 2022, that total $274, including $77 in calendar year 2026. The filing included capital investments totaling $445 over the 2026 - 2030 period. On December 17, 2025, the WVPSC issued an order approving WV Gas Utility's request, with new rates effective January 1, 2026.
On July 31, 2024, WV Gas Utility submitted its 2024 IREP filing to the WVPSC requesting recovery of $19, which includes $3 of prior year under-recovery, for costs associated with capital investments after December 31, 2022, that total $197, including $74 in calendar year 2025. The filing included capital investments totaling $418 over the 2025 - 2029 period. On October 28, 2024, the WVPSC issued an order approving WV Gas Utility's request, with new rates effective January 1, 2025.
OTHER MATTERS
West Reading, Pennsylvania Explosion.On March 24, 2023, an explosion occurred in West Reading, Pennsylvania which resulted in seven fatalities, injuries to at least ten others, and extensive property damage to buildings owned by R.M. Palmer, a local chocolate manufacturer, and neighboring structures. The NTSB investigated and the PAPUC is investigating the West Reading incident. The NTSB investigative team included representatives from the Company, the local fire department and the Pipeline and Hazardous Materials Safety Administration. The Company cooperated with the investigation. In September 2023, OSHA closed their investigation of this matter, without any finding pertaining to UGI Utilities.
On December 10, 2024, the NTSB staff presented its draft findings to the NTSB Board. On April 8, 2025, the NTSB released its final report concluding that a fracture in an R.M. Palmer steam pipe created elevated underground temperatures that caused thermal degradation of a UGI Utilities service tee, resulting in a natural gas leak, and recommended UGI Utilities inventory and address risks to plastic gas assets in high-temperature environments.
The Company has received claims as a result of the explosion and is involved in lawsuits relative to the incident. With the issuance of the final NTSB report, discovery in the litigation has begun. The Company maintains liability insurance for personal injury, property and casualty damages and believes that third-party claims associated with the explosion, in excess of the Company's deductible, are recoverable through the Company's insurance. The Company cannot predict the result of these pending or future claims and legal actions at this time.
Regarding these pending claims and legal actions, other than as disclosed above, the Company does not believe, at this early stage, that there is sufficient information available to reasonably estimate a range of loss, if any, or conclude that the final outcome of these matters will or will not have a material effect on our financial statements.
In addition to the matters described above, there are other pending claims and legal actions arising in the normal course of our businesses. Although we cannot predict the final results of these pending claims and legal actions, including those described above, we believe, after consultation with counsel, that the final outcome of these matters will not have a material effect on our financial statements.
UGI CORPORATION AND SUBSIDIARIES
(Currency in millions, except per share amounts and where indicated otherwise)
UGI Corporation published this content on February 05, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 05, 2026 at 22:25 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]