UGI Corporation
08/06/2026 | Press release | Distributed by Public on 08/06/2026 12:22
Quarterly Report for Quarter Ending June 30, 2026 (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 2026 three-month period with the 2025 three-month period and the 2026 nine-month period with the 2025 nine-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
Electric Utility
In April 2026, UGI Utilities entered into a definitive agreement to divest its Electric Utility for a sale price of $470, subject to changes in working capital and other adjustments. The transaction includes the sale of approximately 2,700 miles of transmission and distribution lines and 14 substations in Pennsylvania's Luzerne and Wyoming counties. At June 30, 2026, the Electric Utility's assets and liabilities were classified as held for sale and included in "Held for sale assets" and "Held for sale liabilities", respectively, on the Condensed Consolidated Balance Sheet. The Company expects to recognize a gain upon closing, which is expected in the second quarter of Fiscal 2027, subject to customary closing conditions and applicable regulatory approvals.
Global LPG Business Transactions
As part of the Company's global LPG business portfolio optimization efforts, the Company has strategically divested 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, UGI International, through a wholly-owned subsidiary, entered into a definitive agreement to divest its LPG distribution businesses in Czech Republic, Hungary, Poland, and Slovakia. The sale was completed in May 2026, subject to customary post-closing working capital adjustments. During the second quarter of Fiscal 2026, the Company classified the assets and liabilities associated with these businesses, primarily comprised of long-lived assets and goodwill allocated to the disposal group, as held for sale and recognized a non-cash, pre-tax impairment charge of $64 to record such assets at estimated fair value less costs to sell. During the third quarter of Fiscal 2026, in conjunction with the completion of the sale, the Company recognized an incremental loss on disposal of $7, resulting in a total loss of $71 for the nine months ended June 30, 2026.
In February 2026, UGI International, through a wholly-owned subsidiary, completed the sale of its LPG business in Romania. For the nine months ended June 30, 2026, the Company recognized a pre-tax loss on sale of $2.
In November 2025, UGI International, through a wholly-owned subsidiary, completed the sale of Flaga, its LPG distribution business in Austria. For the nine months ended June 30, 2026, the Company recognized a pre-tax gain on the sale of $29.
In October 2025, UGI International, through a wholly-owned subsidiary, completed the sale of its cylinder business in the United Kingdom. For the nine months ended June 30, 2026, the Company recognized a pre-tax gain on the sale of $2.
See Note 5 to Condensed Consolidated Financial Statements for additional information.
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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 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 (loss) attributable to UGI Corporation: |
Three Months Ended June 30, |
Nine Months Ended June 30, |
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| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Utilities | $ | 9 | $ | 5 | $ | 278 | $ | 260 | ||||||||||||||||||
| Midstream & Marketing | 12 | 19 | 182 | 258 | ||||||||||||||||||||||
| UGI International | 18 | 36 | 224 | 229 | ||||||||||||||||||||||
| AmeriGas Propane | (62) | 37 | 47 | 16 | ||||||||||||||||||||||
| Corporate & Other (a) | (110) | (260) | (47) | (72) | ||||||||||||||||||||||
| Net income (loss) attributable to UGI Corporation | (133) | (163) | 684 | 691 | ||||||||||||||||||||||
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Net losses (gains) on commodity derivative instruments not associated with current-period transactions (net of tax of $(15), $(31), $11 and $(2), respectively)
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76 | 81 | (21) | 12 | ||||||||||||||||||||||
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Unrealized losses (gains) on foreign currency derivative instruments (net of tax of $1, $(7), $6 and $(4), respectively)
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(6) | 18 | (17) | 12 | ||||||||||||||||||||||
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Loss on extinguishments of debt (net of tax of $(4), $(2) $(4) and $(2), respectively)
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11 | 8 | 11 | 8 | ||||||||||||||||||||||
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Restructuring costs (net of tax of $(2), $0, $(2) and $0, respectively)
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4 | - | 4 | - | ||||||||||||||||||||||
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Net loss (gain) on disposals of businesses (net of tax of $(2), $(1), $(1) and $(1), respectively)
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5 | 53 | 41 | 53 | ||||||||||||||||||||||
| Total adjustments (a) (b) | 90 | 160 | 18 | 85 | ||||||||||||||||||||||
| Adjusted net income (loss) attributable to UGI Corporation | $ | (43) | $ | (3) | $ | 702 | $ | 776 | ||||||||||||||||||
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Three Months Ended June 30, |
Nine Months Ended June 30, |
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| Adjusted diluted earnings (loss) per share: | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Utilities | $ | 0.04 | $ | 0.02 | $ | 1.26 | $ | 1.19 | ||||||||||||||||||
| Midstream & Marketing | 0.06 | 0.09 | 0.82 | 1.18 | ||||||||||||||||||||||
| UGI International | 0.08 | 0.17 | 1.01 | 1.05 | ||||||||||||||||||||||
| AmeriGas Propane | (0.29) | 0.17 | 0.21 | 0.07 | ||||||||||||||||||||||
| Corporate & Other (a) | (0.51) | (1.21) | (0.22) | (0.33) | ||||||||||||||||||||||
| Earnings (loss) per share - diluted | (0.62) | (0.76) | 3.08 | 3.16 | ||||||||||||||||||||||
| Net losses (gains) on commodity derivative instruments not associated with current-period transactions | 0.36 | 0.38 | (0.08) | 0.06 | ||||||||||||||||||||||
| Unrealized losses (gains) on foreign currency derivative instruments | (0.03) | 0.08 | (0.08) | 0.05 | ||||||||||||||||||||||
| Loss on extinguishments of debt | 0.05 | 0.04 | 0.05 | 0.04 | ||||||||||||||||||||||
| Restructuring costs | 0.02 | - | 0.02 | - | ||||||||||||||||||||||
| Net loss (gain) on disposals of businesses | 0.02 | 0.25 | 0.18 | 0.24 | ||||||||||||||||||||||
| Total adjustments (a) | 0.42 | 0.75 | 0.09 | 0.39 | ||||||||||||||||||||||
| Adjusted diluted earnings (loss) per share | $ | (0.20) | $ | (0.01) | $ | 3.17 | $ | 3.55 | ||||||||||||||||||
(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.
Executive Overview
2026 three-month period compared with 2025 three-month period
Net loss attributable to UGI Corporation for the 2026 three-month period was $133 (equal to $0.62 loss per diluted share) compared to $163 (equal to $0.76 loss per diluted share) for the 2025 three-month period. These results include net losses from changes in unrealized commodity derivative instruments and certain foreign currency derivative instruments of $70 and $99 during the 2026 and 2025 three-month periods, respectively.
Net loss attributable to UGI Corporation for the 2026 three-month period also includes (1) a loss on extinguishments of debt of $11, primarily at AmeriGas Propane; (2) a $5 net loss on disposals of certain non-core assets from our LPG business at UGI International; and (3) restructuring costs of $4 largely attributable to a reduction in workforce and related costs.
Net loss attributable to UGI Corporation for the 2025 three-month period also includes (1) a $53 loss on disposals of certain non-core assets from our global LPG business; and (2) a loss on extinguishments of debt of $8, primarily at AmeriGas Propane.
Adjusted net loss attributable to UGI Corporation for the 2026 three-month period was $43 (equal to $0.20 loss per diluted share) compared to $3 (equal to $0.01 loss per diluted share) for the 2025 three-month period. The increase in adjusted net loss attributable to UGI Corporation during the 2026 three-month period reflects lower earnings contributions from our AmeriGas Propane, UGI International and Midstream & Marketing segments, partially offset by higher earnings contributions from the Utilities segment. During the 2026 three-month period, temperatures in our Utilities segment were colder than the prior-year period.
Utilities' adjusted net income attributable to UGI Corporation increased $4 in the 2026 three-month period compared to the prior-year period, primarily attributable to higher total margin.
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Midstream & Marketing's adjusted net income attributable to UGI Corporation decreased $7 in the 2026 three-month period, primarily attributable to higher income tax expenses, reflecting lower investment tax credits in the 2026 three-month period, partially offset by higher total margin.
UGI International's adjusted net income attributable to UGI Corporation decreased $18 in the 2026 three-month period, reflecting higher income tax expenses and, to a lesser extent, lower total margin.
AmeriGas Propane's adjusted net income attributable to UGI Corporation decreased $99, from adjusted net income in the 2025 three-month period to an adjusted net loss in the 2026 three-month period. The decrease principally reflects a lower income tax benefit in the current period; the segment's earnings before interest expense and income taxes declined $25 over the same period, with the balance of the change attributable to income taxes.
2026 nine-month period compared with 2025 nine-month period
Net income attributable to UGI Corporation for the 2026 nine-month period was $684 (equal to $3.08 per diluted share) compared to $691 (equal to $3.16 per diluted share) for the 2025 nine-month period. These results include net gains (losses) from changes in unrealized commodity derivative instruments and certain foreign currency derivative instruments of $38 and $(24) during the 2026 and 2025 nine-month periods, respectively.
Net income attributable to UGI Corporation for the 2026 nine-month period also includes (1) a $41 net loss on disposals of certain non-core assets from our LPG business at UGI International; (2) a loss on extinguishments of debt of $11, primarily at AmeriGas Propane; and (3) restructuring costs of $4 largely attributable to a reduction in workforce and related costs.
Net income attributable to UGI Corporation for the 2025 nine-month period also includes (1) a $53 loss on disposals of certain non-core assets from our global LPG business; and (2) a loss on extinguishments of debt of $8, primarily at AmeriGas Propane.
Adjusted net income attributable to UGI Corporation for the 2026 nine-month period was $702 (equal to $3.17 per diluted share) compared to $776 (equal to $3.55 per diluted share) for the 2025 nine-month period. The decrease in adjusted net income attributable to UGI Corporation for the 2026 nine-month period reflects lower earnings contributions from our Midstream & Marketing and UGI International segments, partially offset by higher earnings contributions from the AmeriGas Propane and Utilities segments. In addition, the decrease in adjusted net income during the 2026 nine-month period also reflects higher income tax expenses primarily related to a decrease in investment tax credits in our Midstream & Marketing segment. During the 2026 nine-month period, temperatures in our Utilities and Midstream & Marketing segments were colder than the prior-year period.
Utilities' adjusted net income attributable to UGI Corporation increased $18 during the 2026 nine-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 $76 during the 2026 nine-month period, primarily attributable to higher income tax expenses and higher operating and administrative expenses, partially offset by higher total margin.
UGI International's adjusted net income attributable to UGI Corporation decreased $5 during the 2026 nine-month period. The decrease is mainly attributable to higher realized losses on foreign currency contracts, partially offset by higher total margin.
AmeriGas Propane's adjusted net income attributable to UGI Corporation increased $31 during the 2026 nine-month period, primarily reflecting significantly lower income tax expenses. This increase was achieved despite a $25 decline in earnings before interest expense and income taxes, and reflects lower total margin and higher operating and administrative expenses.
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Analysis of Segment Results
2026 Three-Month Period Compared with the 2025 Three-Month Period
Utilities
| For the three months ended June 30, | 2026 | 2025 | Increase (Decrease) | |||||||||||||||||||||||
| Revenues | $ | 302 | $ | 287 | $ | 15 | 5 | % | ||||||||||||||||||
| Total margin (a) | $ | 181 | $ | 168 | $ | 13 | 8 | % | ||||||||||||||||||
| Operating and administrative expenses (a) | $ | 96 | $ | 96 | $ | - | - | % | ||||||||||||||||||
| Operating income | $ | 39 | $ | 29 | $ | 10 | 34 | % | ||||||||||||||||||
| Earnings before interest expense and income taxes | $ | 40 | $ | 30 | $ | 10 | 33 | % | ||||||||||||||||||
| Gas Utility system throughput-bcf | ||||||||||||||||||||||||||
| Core market | 12 | 12 | - | - | % | |||||||||||||||||||||
| Total | 73 | 82 | (9) | (11) | % | |||||||||||||||||||||
| Electric Utility distribution sales - gwh | 215 | 216 | (1) | - | % | |||||||||||||||||||||
| Gas Utility degree days-% (warmer) than normal (b) | (4.1) | % | (8.9) | % | - | - | ||||||||||||||||||||
(a)Total margin represents revenues less cost of sales and revenue-related taxes (i.e., gross receipts and business and occupation taxes) of $4 each during the 2026 and 2025 three-month periods. For financial statement 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 2026 three-month period were 4.1% warmer than normal and 5.6% colder than the prior-year period. Notwithstanding the colder weather, Gas Utility core market volumes were comparable to the prior-year period. Total Gas Utility volume decreased 11% during the 2026 three-month period, reflecting lower large firm delivery service volumes. Electric Utility distribution sales volumes were comparable to the prior-year period.
Utilities revenues increased $15 during the 2026 three-month period, primarily reflecting higher Gas Utility revenues ($14). The increase in Gas Utility revenues was largely attributable to the increase in the PA Gas Utility base rates, effective October 2025, and higher PGC and PGA rates, largely offset by lower off-system sales. Electric Utility revenues were comparable to the prior-year period.
Utilities cost of sales increased $2 during the 2026 three-month period, reflecting higher Gas Utility cost of sales ($2). The increase in Gas Utility cost of sales was largely attributable to the higher PGC and PGA rates, substantially offset by lower cost of sales associated with off-system sales. Electric Utility cost of sales was comparable to the prior-year period.
Utilities total margin increased $13 during the 2026 three-month period, primarily reflecting higher Gas Utility total margin ($11). The increase in Gas Utility total margin principally reflects the increase in the PA Gas Utility base rates, effective October 2025. Electric Utility margin was comparable to the prior-year period.
Utilities operating income increased $10 during the 2026 three-month period. This increase largely reflects the increase in total margin ($13), partially offset by higher depreciation expense ($3). 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 $10 during the 2026 three-month period, principally representing the increase in operating income ($10).
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Midstream & Marketing
| For the three months ended June 30, | 2026 | 2025 | Increase (Decrease) | |||||||||||||||||||||||
| Revenues | $ | 249 | $ | 278 | $ | (29) | (10) | % | ||||||||||||||||||
| Total margin (a) | $ | 90 | $ | 77 | $ | 13 | 17 | % | ||||||||||||||||||
| Operating and administrative expenses | $ | 40 | $ | 32 | $ | 8 | 25 | % | ||||||||||||||||||
| Operating income | $ | 31 | $ | 27 | $ | 4 | 15 | % | ||||||||||||||||||
| Earnings before interest expense and income taxes | $ | 30 | $ | 27 | $ | 3 | 11 | % | ||||||||||||||||||
(a)Total margin represents revenues less cost of sales.
Average temperatures across Midstream & Marketing's energy marketing territory during the 2026 three-month period were 10.2% warmer than normal and 4.6% warmer than the prior-year period.
Midstream & Marketing revenues decreased $29 during the 2026 three-month period, primarily reflecting lower revenues from natural gas marketing activities ($36), including the effects of capacity management activities, partially offset by higher revenues from renewable energy ($5).
Midstream & Marketing cost of sales decreased $42 during the 2026 three-month period, primarily reflecting lower natural gas costs ($47) related to the previously mentioned natural gas marketing activities, partially offset by higher cost of sales from renewable energy ($4).
Midstream & Marketing total margin increased $13 during the 2026 three-month period, principally reflecting higher total margin from capacity management activities.
Midstream & Marketing operating income increased $4 during the 2026 three-month period, mainly reflecting higher total margin ($13), substantially offset by higher operating and administrative expenses ($8). The increase in operating and administrative expenses was primarily due to higher operating expenses related to renewable energy projects.
Midstream & Marketing earnings before interest expense and income taxes increased $3 during the 2026 three-month period, primarily representing the increase in operating income ($4).
UGI International
| For the three months ended June 30, | 2026 | 2025 | Increase (Decrease) | |||||||||||||||||||||||
| Revenues | $ | 436 | $ | 437 | $ | (1) | - | % | ||||||||||||||||||
| Total margin (a) | $ | 186 | $ | 192 | $ | (6) | (3) | % | ||||||||||||||||||
| Operating and administrative expenses | $ | 126 | $ | 129 | $ | (3) | (2) | % | ||||||||||||||||||
| Operating income | $ | 41 | $ | 43 | $ | (2) | (5) | % | ||||||||||||||||||
| Earnings before interest expense and income taxes | $ | 41 | $ | 43 | $ | (2) | (5) | % | ||||||||||||||||||
| LPG retail gallons sold (millions) | 125 | 139 | (14) | (10) | % | |||||||||||||||||||||
| Degree days-% (warmer) than normal (b) | (23.1) | % | (20.8) | % | - | - | ||||||||||||||||||||
(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 2026 three-month period were 23.1% warmer than normal and 2.2% warmer than the prior-year period. Total LPG retail gallons sold during the 2026 three-month period were 10% lower than the prior-year period, largely attributable to the impacts from the divestitures of certain non-core LPG businesses, continued structural conservation and the impact from the warmer weather.
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
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extent, the British pound sterling. During the 2026 and 2025 three-month periods, the average unweighted euro-to-USD translation rates were approximately $1.16 and $1.13, respectively, and the average unweighted British pound sterling-to-USD translation rates were approximately $1.34 and $1.34, 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 did not have a material impact on either of the three-month periods.
Average wholesale prices for propane and butane during the 2026 three-month period in northwest Europe were approximately 31.6% and 46.5% higher, respectively, compared with the prior-year period. UGI International revenues decreased $1 and cost of sales increased $5 during the 2026 three-month period compared to the prior-year period. The decrease in revenues principally reflects lower LPG retail volumes sold, substantially offset by higher LPG prices and, to a lesser extent, the translation effects of the stronger foreign currencies (approximately $12). The increase in cost of sales was mainly attributable to higher LPG product costs and, to a lesser extent, the translation effects of the stronger foreign currencies (approximately $7), largely offset by lower LPG retail volumes sold.
UGI International total margin decreased $6 during the 2026 three-month period, primarily reflecting the lower LPG retail volumes sold, largely offset by the effects of higher average unit margins and the translation effects of the stronger foreign currencies (approximately $5).
UGI International operating income decreased $2 during the 2026 three-month period, principally reflecting the decrease in total margin ($6), partially offset by slightly lower operating and administrative expenses ($3). The lower operating and administrative expenses in the 2026 three-month period primarily reflect the impacts from the divestitures of certain non-core LPG businesses and lower personnel expenses, substantially offset by the translation effects of the stronger foreign currencies (approximately $3) and the effects of inflationary increases.
UGI International earnings before interest expense and income taxes decreased $2 during the 2026 three-month period, reflecting the lower operating income ($2).
AmeriGas Propane
| For the three months ended June 30, | 2026 | 2025 | Increase (Decrease) | |||||||||||||||||||||||
| Revenues | $ | 372 | $ | 434 | $ | (62) | (14) | % | ||||||||||||||||||
| Total margin (a) | $ | 201 | $ | 227 | $ | (26) | (11) | % | ||||||||||||||||||
| Operating and administrative expenses | $ | 220 | $ | 220 | $ | - | - | % | ||||||||||||||||||
| Operating loss | $ | (53) | $ | (28) | $ | (25) | (89) | % | ||||||||||||||||||
| Loss before interest expense and income taxes | $ | (53) | $ | (28) | $ | (25) | (89) | % | ||||||||||||||||||
| Retail gallons sold (millions) | 124 | 138 | (14) | (10) | % | |||||||||||||||||||||
| Degree days-% colder (warmer) than normal (b) | 1.9 | % | (0.1) | % | - | - | ||||||||||||||||||||
(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 2026 three-month period were 1.9% colder than normal and comparable to the prior-year period. Total retail gallons sold decreased 10% during the 2026 three-month period primarily reflecting continuing customer attrition and the sale of our LPG operations in Hawaii. While weather during the 2026 three-month period was comparable to the prior-year period, the timing of warmer weather early in the quarter reduced volumes and total margin relative to the prior-year period.
Average daily wholesale propane commodity prices during the 2026 three-month period at Mont Belvieu, Texas, one of the major supply points in the U.S., were approximately 4% higher than such prices during the 2025 three-month period. Total revenues decreased $62 during the 2026 three-month period largely reflecting lower retail volumes sold ($37), the effects of lower average retail propane selling prices ($10) and lower wholesale revenues ($9).
UGI CORPORATION AND SUBSIDIARIES
(Currency in millions, except per share amounts and where indicated otherwise)
AmeriGas Propane total cost of sales decreased $36 during the 2026 three-month period largely reflecting lower retail volumes sold ($18), lower wholesale cost of sales ($9) and lower retail propane product costs ($8).
AmeriGas Propane total margin decreased $26 during the 2026 three-month period primarily reflecting the lower retail propane volumes sold ($19) and lower retail unit margins, together with lower fee income ($5).
AmeriGas Propane operating loss increased $25 during the 2026 three-month period, primarily representing the decrease in total margin ($26). Operating and administrative expenses were comparable to the prior-year period as higher compensation expenses were substantially offset by lower vehicle expenses.
AmeriGas Propane loss before interest expense and income taxes increased $25 during the 2026 three-month period, representing the increase in operating loss ($25).
Interest Expense and Income Taxes
Our consolidated interest expense during the 2026 three-month period was $109 compared to $101 during the 2025 three-month period. The increase in interest expense reflects the effects of higher interest rates on long-term debt, higher average long-term debt outstanding at UGI International and higher average short-term borrowings at Utilities. These increases were partially offset by lower average long-term debt outstanding at AmeriGas Propane and lower average short-term borrowings at UGI International.
The increase in the Company's effective income tax rate for the 2026 three-month period primarily reflects the impacts of (1) lower tax reserve releases compared to the prior-year period; and (2) higher unrealized gains on commodity derivative instruments.
The Company's estimated annual effective tax rate is sensitive to changes in the forecasted mix of earnings across jurisdictions and to changes in the fair value of unrealized mark-to-market positions. Unrealized mark-to-market gains and losses on commodity contracts can be material and volatile, and the annual effective tax rate may change significantly in future interim periods if the fair value of these positions changes materially from current estimates.
2026 Nine-Month Period Compared with the 2025 Nine-Month Period
Utilities
| For the nine months ended June 30, | 2026 | 2025 | Increase (Decrease) | |||||||||||||||||||||||
| Revenues | $ | 1,773 | $ | 1,545 | $ | 228 | 15 | % | ||||||||||||||||||
| Total margin (a) | $ | 891 | $ | 827 | $ | 64 | 8 | % | ||||||||||||||||||
| Operating and administrative expenses (a) | $ | 307 | $ | 290 | $ | 17 | 6 | % | ||||||||||||||||||
| Operating income | $ | 443 | $ | 407 | $ | 36 | 9 | % | ||||||||||||||||||
| Earnings before interest expense and income taxes | $ | 447 | $ | 412 | $ | 35 | 8 | % | ||||||||||||||||||
| Gas Utility system throughput-bcf | ||||||||||||||||||||||||||
| Core market | 101 | 96 | 5 | 5 | % | |||||||||||||||||||||
| Total | 303 | 308 | (5) | (2) | % | |||||||||||||||||||||
| Electric Utility distribution sales - gwh | 750 | 737 | 13 | 2 | % | |||||||||||||||||||||
| Gas Utility degree days-% colder (warmer) than normal (b) | 9.3 | % | (1.9) | % | - | - | ||||||||||||||||||||
(a)Total margin represents revenues less cost of sales and revenue-related taxes (i.e., gross receipts and business and occupation taxes) of $23 and $21 during the 2026 and 2025 nine-month periods, respectively. For financial statement 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 2026 nine-month period were 9.3% colder than normal and 10.2% colder than the prior-year period. Gas Utility core market volumes increased 5% during the 2026 nine-month period, principally
UGI CORPORATION AND SUBSIDIARIES
(Currency in millions, except per share amounts and where indicated otherwise)
reflecting the impact from the colder weather compared to the prior-year period. Total Gas Utility volume decreased 2% during the 2026 nine-month period, reflecting lower large firm delivery service volumes, partially offset by the increase in core market 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 $228 during the 2026 nine-month period, primarily reflecting higher Gas Utility revenues ($221). The increase in Gas Utility revenues was largely attributable to the increase in the PA Gas Utility base rates, effective October 2025, higher PGC and PGA rates, the higher core market volumes and higher off-system sales. These increases were partially offset by the effects of the weather normalization adjustments. The increase in Electric Utility revenues ($7) in the 2026 nine-month period is principally attributable to the higher DS rates and higher sales volumes.
Utilities cost of sales increased $164 during the 2026 nine-month period, primarily reflecting higher Gas Utility cost of sales ($160). The increase in Gas Utility cost of sales was largely attributable to the higher PGC and PGA rates, higher cost of sales associated with off-system sales and the higher core market volumes. The increase in Electric Utility cost of sales ($4) is principally attributable to the higher DS rates and higher sales volumes.
Utilities total margin increased $64 during the 2026 nine-month period, primarily reflecting higher Gas Utility total margin ($61). The increase in Gas Utility total margin principally reflects the increase in the PA Gas Utility base rates, effective October 2025 and the higher core market volumes, partially offset by the effects of the weather normalization adjustments. Electric Utility margin was comparable to the prior-year period.
Utilities operating income increased $36 during the 2026 nine-month period. This increase largely reflects the increase in total margin ($64), partially offset by higher operating and administrative expenses ($17) and higher depreciation expense ($10). The higher operating and administrative expenses reflect, among other things, higher personnel expenses and higher uncollectible accounts 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 $35 during the 2026 nine-month period, principally representing the increase in operating income ($36).
Midstream & Marketing
| For the nine months ended June 30, | 2026 | 2025 | Increase (Decrease) | |||||||||||||||||||||||
| Revenues | $ | 1,391 | $ | 1,232 | $ | 159 | 13 | % | ||||||||||||||||||
| Total margin (a) | $ | 432 | $ | 417 | $ | 15 | 4 | % | ||||||||||||||||||
| Operating and administrative expenses | $ | 111 | $ | 92 | $ | 19 | 21 | % | ||||||||||||||||||
| Operating income | $ | 260 | $ | 269 | $ | (9) | (3) | % | ||||||||||||||||||
| Earnings before interest expense and income taxes | $ | 268 | $ | 276 | $ | (8) | (3) | % | ||||||||||||||||||
(a)Total margin represents revenues less cost of sales.
Average temperatures across Midstream & Marketing's energy marketing territory during the 2026 nine-month period were 8.1% colder than normal and 7.1% colder than the prior-year period.
Midstream & Marketing revenues increased $159 during the 2026 nine-month period, primarily reflecting (1) higher revenues from natural gas marketing activities ($129), including the effects of capacity management activities, that were primarily impacted by the colder weather; (2) higher revenues from renewable energy ($9); and (3) higher midstream revenues ($8), mainly from higher peaking activities.
Midstream & Marketing cost of sales increased $144 during the 2026 nine-month period, primarily reflecting higher natural gas costs ($127) related to the previously mentioned natural gas marketing activities and higher cost of sales from renewable energy ($9).
Midstream & Marketing total margin increased $15 during the 2026 nine-month period, principally reflecting higher midstream margins, mainly from higher peaking activities.
UGI CORPORATION AND SUBSIDIARIES
(Currency in millions, except per share amounts and where indicated otherwise)
Midstream & Marketing operating income decreased $9 during the 2026 nine-month period, mainly reflecting higher operating and administrative expenses ($19) and higher depreciation and amortization expense ($5), partially offset by the higher total margin ($15). The increase in operating and administrative expenses was primarily due to higher operating expenses related to renewable energy projects.
Midstream & Marketing earnings before interest expense and income taxes during the 2026 nine-month period decreased $8 compared to the prior-year period, representing the lower operating income ($9).
UGI International
| For the nine months ended June 30, | 2026 | 2025 | Increase (Decrease) | |||||||||||||||||||||||
| Revenues | $ | 1,632 | $ | 1,725 | $ | (93) | (5) | % | ||||||||||||||||||
| Total margin (a) | $ | 768 | $ | 758 | $ | 10 | 1 | % | ||||||||||||||||||
| Operating and administrative expenses | $ | 401 | $ | 405 | $ | (4) | (1) | % | ||||||||||||||||||
| Operating income | $ | 304 | $ | 288 | $ | 16 | 6 | % | ||||||||||||||||||
| Earnings before interest expense and income taxes | $ | 297 | $ | 296 | $ | 1 | - | % | ||||||||||||||||||
| LPG retail gallons sold (millions) | 517 | 570 | (53) | (9) | % | |||||||||||||||||||||
| Degree days-% (warmer) than normal (b) | (6.6) | % | (5.6) | % | - | - | ||||||||||||||||||||
(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 2026 nine-month period were 6.6% warmer than normal and 2.3% warmer than the prior-year period. Total LPG retail gallons sold during the 2026 nine-month period decreased 9% compared to the prior-year period, largely attributable to the impacts from the divestitures of certain non-core LPG businesses, lower crop drying campaigns, continued structural conservation and the impact from the warmer weather.
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 2026 and 2025 nine-month periods, the average unweighted euro-to-USD translation rates were approximately $1.17 and $1.08, respectively, and the average unweighted British pound sterling-to-USD translation rates were approximately $1.34 and $1.29, 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 ($8) and $7 in the 2026 and 2025 nine-month periods, respectively.
Average wholesale prices for propane and butane during the 2026 nine-month period in northwest Europe were approximately 2.4% lower and 1.5% higher, respectively, compared with the prior-year period. UGI International revenues and cost of sales decreased $93 and $103, respectively, during the 2026 nine-month period compared to the prior-year period. The decrease in revenues was primarily attributable to the lower LPG retail volumes sold and lower LPG prices, largely offset by the translation effects of the stronger foreign currencies (approximately $120). The decrease in cost of sales was mainly attributable to lower LPG retail volumes sold and lower LPG product costs, partially offset by the translation effects of the stronger foreign currencies (approximately $62).
UGI International total margin increased $10 during the 2026 nine-month period, primarily reflecting the translation effects of the stronger foreign currencies (approximately $59) and, to a lesser extent, the effects of higher average unit margins in the 2026 nine-month period, substantially offset by the lower LPG retail volumes sold.
UGI International operating income increased $16 during the 2026 nine-month period, principally reflecting the increase in total margin ($10) and lower depreciation and amortization expenses ($7). Operating and administrative expenses during the 2026 nine-month period were slightly lower than the prior-year period as the impacts from the divestitures of certain non-core LPG businesses and lower personnel expenses were substantially offset by the translation effects of the stronger foreign currencies (approximately $32) and, to a lesser extent, the effects of inflationary increases.
UGI CORPORATION AND SUBSIDIARIES
(Currency in millions, except per share amounts and where indicated otherwise)
UGI International earnings before interest expense and income taxes increased $1 during the 2026 nine-month period. This increase largely reflects the $16 increase in operating income, substantially offset by higher realized losses on foreign currency exchange contracts ($15) 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 nine months ended June 30, | 2026 | 2025 | Increase (Decrease) | |||||||||||||||||||||||
| Revenues | $ | 1,731 | $ | 1,909 | $ | (178) | (9) | % | ||||||||||||||||||
| Total margin (a) | $ | 998 | $ | 1,020 | $ | (22) | (2) | % | ||||||||||||||||||
| Operating and administrative expenses | $ | 723 | $ | 713 | $ | 10 | 1 | % | ||||||||||||||||||
| Operating income | $ | 175 | $ | 200 | $ | (25) | (13) | % | ||||||||||||||||||
| Earnings before interest expense and income taxes | $ | 175 | $ | 200 | $ | (25) | (13) | % | ||||||||||||||||||
| Retail gallons sold (millions) | 585 | 611 | (26) | (4) | % | |||||||||||||||||||||
| Degree days-% (warmer) than normal (b) | (1.4) | % | (1.1) | % | - | - | ||||||||||||||||||||
(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 2026 nine-month period were 1.4% warmer than normal and comparable to the prior-year period. Total retail gallons sold decreased 4% compared to the prior-year period as the effects of colder weather in the Eastern U.S. were more than 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 2026 nine-month period at Mont Belvieu, Texas, one of the major supply points in the U.S., were approximately 12% lower than such prices during the 2025 nine-month period. Total revenues decreased $178 during the 2026 nine-month period primarily reflecting the effects of lower retail volumes sold ($70), lower average retail propane selling prices ($48) and lower wholesale revenues ($42).
Total cost of sales decreased $156 during the 2026 nine-month period largely reflecting lower retail propane product costs ($71), lower wholesale cost of sales ($43) and lower retail volumes sold ($33).
AmeriGas Propane total margin decreased $22 during the 2026 nine-month period reflecting the lower retail propane volumes sold ($37) and lower fee income ($9), largely offset by the impact from higher average retail propane unit margins ($23).
AmeriGas Propane operating income decreased $25 during the 2026 nine-month period, primarily reflecting the lower total margin ($22) and higher operating and administrative expenses ($10), partially offset by lower depreciation and amortization expense ($8). The higher operating and administrative expenses primarily reflects higher advertising and professional-services spending in support of customer retention and growth initiatives, together with higher compensation expenses reflecting annual merit adjustments, partially offset by lower vehicle expenses.
AmeriGas Propane earnings before interest expense and income taxes decreased $25 during the 2026 nine-month period, representing the lower operating income ($25).
Interest Expense and Income Taxes
Our consolidated interest expense during the 2026 nine-month period was $331 compared to $305 during the 2025 nine-month period. The increase in interest expense principally reflects the effects of higher interest rates on long-term debt and higher average long-term debt outstanding at Utilities and UGI International. These increases were partially offset by lower average long-term debt outstanding at AmeriGas Propane and lower average short-term borrowings at UGI International.
The increase in the Company's effective income tax rate for the 2026 nine-month period primarily reflects the impacts of (1) lower tax reserve releases compared to the prior-year period and (2) higher unrealized gains on commodity derivative instruments.
UGI CORPORATION AND SUBSIDIARIES
(Currency in millions, except per share amounts and where indicated otherwise)
The Company's estimated annual effective tax rate is sensitive to changes in the forecasted mix of earnings across jurisdictions and to changes in the fair value of unrealized mark-to-market positions. Unrealized mark-to-market gains and losses on commodity contracts can be material and volatile, and the annual effective tax rate may change significantly in future interim periods if the fair value of these positions changes materially from current estimates.
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 $1.9 billion and $1.6 billion at June 30, 2026 and September 30, 2025, respectively. 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 June 30, 2026.
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 $476 at June 30, 2026, compared with $335 at September 30, 2025. Excluding cash and cash equivalents that reside at UGI's operating subsidiaries, at June 30, 2026 and September 30, 2025, UGI had $334 and $214 of cash and cash equivalents, respectively. Such cash is available to pay dividends on UGI Common Stock and for investment purposes.
Long-term Debt and Credit Facilities
Long-term Debt
The Company's debt outstanding at June 30, 2026 and September 30, 2025, comprises the following:
| June 30, 2026 | September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||
| Utilities | Midstream & Marketing | UGI International | AmeriGas Propane | Corp & Other | Total | Total | |||||||||||||||||||||||||||||||||||
| Short-term borrowings | $ | 336 | $ | - | $ | - | $ | - | $ | - | $ | 336 | $ | 486 | |||||||||||||||||||||||||||
| Long-term debt (including current maturities): | |||||||||||||||||||||||||||||||||||||||||
| Senior notes | $ | 2,000 | $ | - | $ | 800 | $ | 1,368 | $ | 700 | $ | 4,868 | $ | 4,724 | |||||||||||||||||||||||||||
| Term loans | 112 | 772 | 263 | - | 400 | 1,547 | 1,646 | ||||||||||||||||||||||||||||||||||
| Other long-term debt | 12 | 40 | 12 | - | 289 | 353 | 331 | ||||||||||||||||||||||||||||||||||
| Unamortized debt issuance costs | (7) | (9) | (10) | (17) | (12) | (55) | (53) | ||||||||||||||||||||||||||||||||||
| Total long-term debt | $ | 2,117 | $ | 803 | $ | 1,065 | $ | 1,351 | $ | 1,377 | $ | 6,713 | $ | 6,648 | |||||||||||||||||||||||||||
| Total debt | $ | 2,453 | $ | 803 | $ | 1,065 | $ | 1,351 | $ | 1,377 | $ | 7,049 | $ | 7,134 | |||||||||||||||||||||||||||
UGI CORPORATION AND SUBSIDIARIES
(Currency in millions, except per share amounts and where indicated otherwise)
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.
AmeriGas Partners Senior Notes. In May 2026, AmeriGas Partners and AmeriGas Finance Corp. issued $500 aggregate principal amount of 6.875% Senior Notes due June 2031. The net proceeds from the issuance of the 6.875% Senior Notes, together with cash on hand and a $300 equity contribution from UGI, funded through a dividend from UGI International, LLC, were used to (1) repay in full the $512 outstanding principal balance of the 5.750% Senior Notes, due May 2027, pursuant to a tender offer and notice of redemption, plus tender and make-whole premiums and accrued and unpaid interest; (2) repurchase $175 aggregate principal amount of the 9.375% Senior Notes, due June 2028, pursuant to a tender offer, plus tender premiums and accrued and unpaid interest, resulting in $318 aggregate principal amount of 9.375% Senior Notes outstanding as of June 30, 2026; (3) repay in full the $150 outstanding borrowings of the intercompany loan with UGI International, plus accrued and unpaid interest; and (4) pay related fees and expenses.
UGI International Senior Notes. In May 2026, UGI International, LLC issued €300 aggregate principal amount of 5.00% Senior Notes due June 2031.The net proceeds from the issuance of the 5.00% Senior Notes, together with the $150 intercompany loan repayment received from AmeriGas Partners, were used to (1) prepay €70 aggregate principal amount of the Term Loan, due March 2028, plus accrued and unpaid interest, resulting in €230 aggregate principal amount of the Term Loan outstanding as of June 30, 2026; (2) pay related fees and expenses; (3) reduce short-term borrowings; and (4) fund general corporate purposes.
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.
In June 2026, UGI Utilities repaid the $100 outstanding principal balance of the 2.95% Senior Notes due June 2026 upon maturity.
Energy Services Term Loan Credit Agreement. In June 2026, Energy Services entered into the fourth amendment to the Energy Services Term Loan Credit Agreement. The Energy Services Term Loan Credit Agreement, as amended, provides, among other items, that the applicable margin shall be 2.00% per annum for Term SOFR loans and 1.00% per annum for base rate loans. All other significant terms of the term loan credit agreement remain unchanged.
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.
UGI CORPORATION AND SUBSIDIARIES
(Currency in millions, except per share amounts and where indicated otherwise)
Information about the Company's principal credit agreements (excluding the Receivables Facility discussed below) as of June 30, 2026 and 2025, is presented in the table below.
| Total Capacity | Borrowings Outstanding | Letters of Credit and Guarantees Outstanding | Available Borrowing Capacity | |||||||||||||||||||||||
| As of June 30, 2026 | ||||||||||||||||||||||||||
| AmeriGas OLP (a) | $ | 169 | $ | - | $ | 1 | $ | 168 | ||||||||||||||||||
| UGI International, LLC (b) | € | 500 | € | - | € | - | € | 500 | ||||||||||||||||||
| Energy Services | $ | 300 | $ | - | $ | - | $ | 300 | ||||||||||||||||||
| UGI Utilities | $ | 375 | $ | 244 | $ | - | $ | 131 | ||||||||||||||||||
| Mountaineer | $ | 150 | $ | 92 | $ | - | $ | 58 | ||||||||||||||||||
| UGI Corporation (c) | $ | 475 | $ | 289 | $ | - | $ | 186 | ||||||||||||||||||
| As of June 30, 2025 | ||||||||||||||||||||||||||
| AmeriGas OLP (a) | $ | 170 | $ | 34 | $ | 1 | $ | 135 | ||||||||||||||||||
| UGI International, LLC (b) | € | 500 | € | 220 | € | - | € | 280 | ||||||||||||||||||
| Energy Services | $ | 300 | $ | - | $ | - | $ | 300 | ||||||||||||||||||
| UGI Utilities | $ | 375 | $ | 44 | $ | - | $ | 331 | ||||||||||||||||||
| Mountaineer | $ | 150 | $ | 16 | $ | - | $ | 134 | ||||||||||||||||||
| UGI Corporation (c) | $ | 475 | $ | 196 | $ | - | $ | 279 | ||||||||||||||||||
(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 in 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.
The average daily and peak short-term borrowings under the Company's principal credit agreements are as follows:
| For the nine months ended | For the nine months ended | |||||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | |||||||||||||||||||||||||
| Average | Peak | Average | Peak | |||||||||||||||||||||||
| AmeriGas OLP | $ | 10 | $ | 57 | $ | 34 | $ | 129 | ||||||||||||||||||
| UGI International, LLC | € | 85 | € | 232 | € | 166 | € | 277 | ||||||||||||||||||
| Energy Services | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||
| UGI Utilities | $ | 154 | $ | 254 | $ | 78 | $ | 263 | ||||||||||||||||||
| Mountaineer | $ | 84 | $ | 109 | $ | 80 | $ | 118 | ||||||||||||||||||
| UGI Corporation | $ | 289 | $ | 339 | $ | 238 | $ | 283 | ||||||||||||||||||
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
UGI CORPORATION AND SUBSIDIARIES
(Currency in millions, except per share amounts and where indicated otherwise)
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 June 30, 2026, the outstanding balance of ESFC trade receivables was $65, none of which were sold to the bank. At June 30, 2025, the outstanding balance of ESFC trade receivables was $58, $13 of which were sold to the bank. During the nine months ended June 30, 2026, peaks sales of receivables was $110 and average daily amounts sold were $5. During the nine months ended June 30, 2025, peaks sales of receivables was $13 and average daily amounts sold were not material.
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 was paid on April 1, 2026, to shareholders of record on March 16, 2026. On May 6, 2026, UGI's Board of Directors declared a quarterly dividend of $0.375 per common share. The dividend was paid on July 1, 2026, to shareholders of record on June 15, 2026. On August 5, 2026, UGI's Board of Directors declared a cash dividend equal to $0.375 per common share. The dividend is payable October 1, 2026, to shareholders of record on September 15, 2026.
Pursuant to the UGI share repurchase program authorized in February 2026, which allows for the repurchase of up to 8 million shares of Common Stock, during the nine months ended June 30, 2026, the Company purchased 0.6 million shares of Common Stock on the open market at a total purchase price of $23. The Company did not repurchase any shares of Common Stock during the third quarter of Fiscal 2026.
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.
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 $972 in the 2026 nine-month period compared to $1,137 in the 2025 nine-month period. Cash flow provided by operating activities before changes in operating working capital was $1,206 in the 2026 nine-month period compared to $1,238 in the 2025 nine-month period. Cash used to fund changes in operating working capital totaled $234 in the 2026 nine-month period, as compared to the $101 in the 2025 nine-month period. The increase in cash required to fund changes in operating working capital in the 2026 nine-month period reflects, among other things, an increase in cash used to fund changes in other current liabilities, offset by lower cash required to fund changes in inventories, accounts payable and other current assets and an increase in derivative instrument collateral deposits received.
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 $469 in the 2026 nine-month period compared to $499 in the 2025 nine-month period. Cash expenditures for property, plant and equipment were $617 in the 2026 nine-month period compared with $579 in the 2025 nine-month period. These increases were more than offset by (1) higher cash proceeds from the disposals of certain non-core assets from our LPG business at UGI International in Fiscal 2026; and (2) lower expenditures on our investments in equity method investments during the 2026 nine-month period 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.
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Cash flow used by financing activities was $326 in the 2026 nine-month period compared to $505 in the 2025 nine-month period. Both periods include $241 each of dividends on Common Stock. The 2026 nine-month period includes, among other things, (1) the issuance by UGI Utilities of $275 aggregate principal amount of new senior notes; (2) the repayment by UGI Utilities of $275 outstanding aggregate principal amount of its senior notes; (3) the repayment by AmeriGas Propane of $687 aggregate principal amount of its senior notes; (4) the issuance by AmeriGas Propane of $500 principal amount of new senior notes; (5) the issuance by UGI International of $345 aggregate principal amount of new senior notes; (6) a partial repayment by UGI International of $81 outstanding principal amount of its term loan; (7) net repayments of short-term borrowings of $149 and (8) the repurchase of $23 of Common Stock.
The 2025 nine-month period includes, among other things, (1) the issuance by UGI Utilities of $175 principal amount of new senior notes; (2) entering into the UGI Corporation 2025 Credit Agreement consisting of (a) a $475 revolving credit facility and (b) a $400 variable-rate term loan, proceeds from the UGI Corporation 2025 Credit Agreement were used to repay all borrowings under the UGI Corporation Credit Facility Agreement; (3) the repayment by AmeriGas Propane of the $218 outstanding aggregate principal amount of its senior notes; (4) the issuance by Mountaineer of $70 principal amount of new senior notes; (5) the issuance by AmeriGas Propane of $550 principal amount of new senior notes; and (6) the repayment by AmeriGas Propane of the $664 outstanding aggregate principal amount of its senior notes.
UTILITY REGULATORY MATTERS
UGI Utilities. On March 27, 2026, Electric Utility filed a rate request with the PAPUC to increase its annual base distribution revenues by $17. The increased revenues would fund ongoing system improvements and operations necessary to maintain safe and reliable electric service. Electric Utility requested that the new electric rates become effective June 1, 2026. The PAPUC entered an order on April 16, 2026, suspending the effective date for the rate increase to allow for investigation and public hearings. Unless a settlement is reached sooner, the review process is expected to last up to nine months from the date of filing. The Company cannot predict the timing or the ultimate outcome of the rate case review process.
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. On July 6, 2026, a joint petition for approval of settlement of all issues was filed with the PAPUC. It provided for a $65 annual base distribution rate increase, through a phased approach, with an increase of $40 effective October 1, 2026 and an additional increase of $25 effective October 1, 2027. It also provided for maintenance of the weather normalization adjustment through the end of the second pilot period with modification. In accordance with the terms of the joint petition, PA Gas Utility will not be permitted to file a general rate increase request prior to January 15, 2029. On July 31, 2026, the presiding PAPUC administrative law judges recommended that the settlement be approved without modification. The joint petition remains subject to receipt of a final order of the PAPUC approving the settlement. The Company 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. The WVPSC entered an order on March 2, 2026, 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.
On July 31, 2026, WV Gas Utility submitted its 2026 IREP filing to the WVPSC requesting recovery of $14, an increase of $9, for costs associated with capital investments after September 30, 2025, that total $180, including $83 in calendar year 2027. The filing included capital investments totaling $475 over the 2027 - 2031 period. An order from the WVPSC is expected in December with new rates effective January 1, 2027.
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
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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 and PAPUC investigated 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 investigations. 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.
On March 18, 2026, the PAPUC filed a formal complaint against UGI Utilities. The complaint alleges various pipeline safety violations and seeks civil penalties. The Company is vigorously defending against the allegations in the complaint. The Company does not believe the resolution of this matter will have a material adverse effect on its financial condition, results of operations, or cash flows.
The Company also 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 all of these matters will or will not have a material adverse 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.
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UGI Corporation published this content on August 06, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 06, 2026 at 18:22 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]