UGI Corporation (NYSE: UGI) today reported financial results for
the fiscal quarter ended June 30, 2024.
HIGHLIGHTS
- Q3 GAAP diluted EPS of $(0.23) and adjusted diluted EPS of
$0.06 compared to GAAP diluted EPS of $(3.76) and adjusted diluted
EPS of $0.00 in the prior-year period.
- Year-to-date GAAP diluted EPS of $2.52 and adjusted diluted EPS
of $3.22 compared to GAAP diluted EPS of $(7.78) and adjusted
diluted EPS of $2.81 in the prior-year period.
- Year-to-date reportable segments earnings before interest
expense and income taxes1 ("EBIT") of $1,185 million compared to
$1,076 million in the prior-year period.
- Solid third quarter results largely reflecting a $38 million
year-over-year reduction in operating and administrative expenses
across all segments.
- On a year-to-date basis, refinanced over $1 billion of debt
across the entity and completed approximately $460 million of debt
reduction at AmeriGas Propane.
- Released the sixth annual ESG Report entitled, The Journey:
Managing Climate Risks and Opportunities, outlining our progress on
all aspects of the company’s ESG journey.
- Continue to expect to be within the fiscal 2024 adjusted
diluted EPS guidance range of $2.70 - $3.002 per share.
"UGI reported solid fiscal third quarter results, demonstrating
steady progress in executing on the key strategic priorities," said
Mario Longhi, Interim President and Chief Executive Officer. "We
delivered one of the strongest year-to-date financial performances
in the company’s 140+ year history led by record earnings from our
resilient and growth-oriented natural gas businesses and improved
financial results from UGI International. Actions taken to achieve
sustainable cost savings across the enterprise have also provided a
meaningful contribution to our financial performance. Lastly, we
continue to execute on our objective to stabilize and optimize the
AmeriGas business, including taking cost reduction actions and
eliminating inefficiencies. I want to thank our dedicated employees
who work hard every day to deliver these results.”
“We are confident in UGI’s ability to create sustainable value
for its shareholders through diligent focus and execution of
certain key strategic priorities that we shared last quarter:
pursuing portfolio optimization and growth, continuing our efforts
to stabilize and optimize AmeriGas Propane, creating efficiencies
and an optimal cost structure, and driving balance sheet
improvement.”
EARNINGS CALL AND WEBCAST
UGI Corporation will hold a live Internet Audio Webcast of its
conference call to discuss the quarterly earnings and other current
activities at 9:00 AM ET on Thursday, August 8, 2024. Interested
parties may listen to the audio webcast both live and in replay on
the Internet at
https://www.ugicorp.com/investors/financial-reports/presentations
or by visiting the company website https://www.ugicorp.com and
clicking on Investors and then Presentations. A replay of the
webcast will be available after the event through to 11:59 PM ET
August 7, 2025.
ABOUT UGI
UGI Corporation (NYSE: UGI) is a distributor and marketer of
energy products and services in the US and Europe. UGI offers safe,
reliable, affordable, and sustainable energy solutions to customers
through its subsidiaries, which provide natural gas transmission
and distribution, electric generation and distribution, midstream
services, propane distribution, renewable natural gas generation,
distribution and marketing, and energy marketing services.
Comprehensive information about UGI Corporation is available on
the Internet at https://www.ugicorp.com.
USE OF NON-GAAP MEASURES
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 the impacts of (1) gains and
losses on commodity and certain foreign currency derivative
instruments not associated with current-period transactions and (2)
other significant discrete items that can affect the comparison of
period-over-period results. Volatility in net income attributable
to UGI can occur as a result of gains and losses on commodity and
certain foreign currency derivative instruments not associated with
current-period transactions but included in earnings in accordance
with U.S. generally accepted accounting principles ("GAAP").
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 tables on the last page of this press release reconcile net
income attributable to UGI Corporation, the most directly
comparable GAAP measure, to adjusted net income attributable to UGI
Corporation, and diluted earnings per share, the most comparable
GAAP measure, to adjusted diluted earnings per share, to reflect
the adjustments referred to above.
1 Reportable segments' EBIT represents an aggregate of our
reportable operating segment level EBIT, as determined in
accordance with GAAP.
2 Because we are unable to predict certain potentially material
items affecting diluted earnings per share on a GAAP basis,
principally mark-to-market gains and losses on commodity and
certain foreign currency derivative instruments, we cannot
reconcile fiscal year 2024 adjusted diluted earnings per share, a
non-GAAP measure, to diluted earnings per share, the most directly
comparable GAAP measure, in reliance on the “unreasonable efforts”
exception set forth in SEC rules.
USE OF FORWARD-LOOKING STATEMENTS
This press release contains statements, estimates and
projections that are forward-looking statements (as defined in
Section 21E of the Securities Exchange Act of 1934, as amended, and
Section 27A of the Securities Act of 1933, 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. Management believes
that these are reasonable as of today’s date only. Actual results
may differ significantly because of risks and uncertainties that
are difficult to predict and many of which are beyond management’s
control; accordingly, there is no assurance that results will be
realized. You should read UGI’s Annual Report on Form 10-K for a
more extensive list of factors that could affect results. We
undertake no obligation (and expressly 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. Among them are adverse 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; 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; changes in domestic and foreign laws and
regulations, including safety, health, tax, transportation,
consumer protection, data privacy, accounting, and environmental
matters, such as regulatory responses to climate change; the
inability to timely recover costs through utility rate proceedings;
increased customer conservation measures due to high energy prices
and improvements in energy efficiency and technology resulting in
reduced demand; adverse labor relations and our ability to address
existing or potential workforce shortages; the impact of pending
and future legal or regulatory proceedings, inquiries or
investigations; competitive pressures from the same and alternative
energy sources; failure to acquire new customers or retain current
customers, thereby reducing or limiting any increase in revenues;
liability for environmental claims; customer, counterparty,
supplier, or vendor defaults; 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; transmission or distribution system service interruptions;
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, and foreign currency exchange
rate fluctuations (particularly the euro); credit and capital
market conditions, including reduced access to capital markets and
interest rate fluctuations; changes in commodity market prices
resulting in significantly higher cash collateral requirements;
impacts of our indebtedness and the restrictive covenants in our
debt agreements; reduced distributions from subsidiaries impacting
the ability to pay dividends or service debt; changes in Marcellus
and Utica Shale gas production; the success of our strategic
initiatives and investments intended to advance our business
strategy; our ability to successfully integrate acquired businesses
and achieve anticipated synergies; 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; the inability to complete pending or
future energy infrastructure projects; our ability to attract,
develop, retain and engage key employees; uncertainties related to
global pandemics; the impact of a material impairment of our
assets; the impact of proposed or future tax legislation; the
impact of declines in the stock market or bond market, and a low
interest rate environment, on our pension liability; our ability to
protect our intellectual property; 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 our ability to control
operating costs and realize cost savings.
SEGMENT RESULTS ($ in millions, except where otherwise
indicated)
Utilities
For the fiscal quarter ended June 30,
2024
2023
(Decrease) Increase
Revenues
$
257
$
278
$
(21
)
(8
)%
Total margin (a)
$
164
$
156
$
8
5
%
Operating and administrative expenses
$
86
$
87
$
(1
)
(1
)%
Operating income
$
37
$
32
$
5
16
%
Earnings before interest expense and
income taxes
$
39
$
34
$
5
15
%
Gas Utility system throughput - billions
of cubic feet
Core market
12
12
—
—
%
Total
78
77
1
1
%
Gas Utility heating degree days - %
(warmer) than normal (b)
(26.1
)%
(11.2
)%
Capital expenditures
$
126
$
146
$
(20
)
(14
)%
- Gas Utility service territory experienced temperatures that
were 17% warmer than the prior-year period.
- Core market volumes were consistent as the impact of growth in
core market customers was offset by warmer than prior-year
weather.
- Total margin increased $8 million primarily due to higher gas
and electric base rates, higher Distribution System Improvement
Charge (DSIC) benefits, and continued customer growth.
- Operating income increased $5 million due to the higher total
margin ($8 million) and lower operating and administrative
expenses, partially offset by higher depreciation expense ($4
million) from continued distribution system capital expenditure
activity.
Midstream & Marketing
For the fiscal quarter ended June 30,
2024
2023
(Decrease) Increase
Revenues
$
253
$
279
$
(26
)
(9
)%
Total margin (a)
$
86
$
87
$
(1
)
(1
)%
Operating and administrative expenses
$
30
$
31
$
(1
)
(3
)%
Operating income
$
41
$
40
$
1
3
%
Earnings before interest expense and
income taxes
$
43
$
41
$
2
5
%
Heating degree days - % (warmer) than
normal (b)
(23.5
)%
(6.8
)%
Capital expenditures
$
40
$
40
$
—
—
%
- Temperatures were 18% warmer than the prior-year period.
- Total margin decreased $1 million as lower margin from capacity
management activities were partially offset by higher storage and
natural gas pipeline gathering margins.
- Operating income increased $1 million as slightly lower total
margin was offset by reduced operating and administrative expenses
and other operating income.
UGI International
For the fiscal quarter ended June 30,
2024
2023
(Decrease) Increase
Revenues
$
455
$
611
$
(156
)
(26
)%
Total margin (a)
$
211
$
193
$
18
9
%
Operating and administrative expenses
(a)
$
138
$
157
$
(19
)
(12
)%
Operating income
$
57
$
21
$
36
171
%
Earnings before interest expense and
income taxes
$
57
$
22
$
35
159
%
LPG retail gallons sold (millions)
152
158
(6
)
(4
)%
Heating degree days - % (warmer) than
normal (b)
(10.0
)%
(9.8
)%
Capital expenditures
$
24
$
27
$
(3
)
(11
)%
UGI International base-currency results are translated into U.S.
dollars based upon exchange rates experienced during the reporting
periods. Differences in these translation rates affect the
comparison of line item amounts presented in the table above. 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 2024 and 2023 three-month
periods, the average unweighted euro-to-dollar translation rates
were approximately $1.08 and $1.09, respectively, and the average
unweighted British pound sterling-to-dollar translation rates were
approximately $1.26 and $1.25, respectively.
- Temperatures were 10% warmer than normal and 3% warmer than the
prior-year period.
- Retail volume decreased 4% largely due to the effects of the
warmer weather and lower growth from natural gas to LPG
conversions.
- Total margin increased $18 million primarily due to higher LPG
unit margins and, to a lesser extent, increased margin from energy
marketing activities.
- Operating and administrative expenses decreased $19 million
reflecting lower personnel-related and maintenance expenses.
- Operating income increased $36 million reflecting higher total
margin ($18 million), lower operating and administrative expenses
($19 million), and higher gains associated with asset sales ($6
million), partially offset by lower other operating income ($5
million).
AmeriGas Propane
For the fiscal quarter ended June 30,
2024
2023
(Decrease) Increase
Revenues
$
445
$
514
$
(69
)
(13
)%
Total margin (a)
$
228
$
263
$
(35
)
(13
)%
Operating and administrative expenses
$
219
$
236
$
(17
)
(7
)%
Operating (loss)/(loss) before interest
expense and income taxes
$
(27
)
$
(8
)
$
(19
)
238
%
Retail gallons sold (millions)
142
163
(21
)
(13
)%
Heating degree days - % (warmer) colder
than normal (b)
(5.5
)%
4.2
%
Capital expenditures
$
21
$
42
$
(21
)
(50
)%
- Temperatures were 6% warmer than normal and 9% warmer than the
prior-year period.
- Retail gallons sold decreased 13% due to continued customer
attrition and the effect of warmer weather.
- Total margin decreased $35 million reflecting the impact of
lower retail volume.
- Operating and administrative expenses decreased $17 million
reflecting, among other things, lower compensation and advertising
expenses.
- Operating income decreased $19 million as lower total margin
was partially offset by reduced operating and administrative
expenses.
(a)
Total margin represents total revenue less
total cost of sales. In the case of Utilities, total margin is also
reduced by certain revenue-related taxes.
(b)
Deviation from average heating degree days
is determined on a 10-year period utilizing volume-weighted weather
data.
REPORT OF EARNINGS – UGI
CORPORATION (Millions of dollars, except per share)
(Unaudited)
Three Months Ended June 30,
Nine Months Ended June 30,
Twelve Months Ended June 30,
2024
2023
2024
2023
2024
2023
Revenues:
Utilities
$
257
$
278
$
1,396
$
1,644
$
1,606
$
1,864
Midstream & Marketing
253
279
1,130
1,586
1,391
2,181
UGI International
455
611
1,853
2,436
2,382
3,111
AmeriGas Propane
445
514
1,869
2,147
2,303
2,667
Corporate & Other (a)
(30
)
(23
)
(280
)
(289
)
(310
)
(365
)
Total revenues
$
1,380
$
1,659
$
5,968
$
7,524
$
7,372
$
9,458
Earnings (loss) before interest expense
and income taxes:
Utilities
39
34
$
400
$
367
$
398
$
371
Midstream & Marketing
43
41
298
253
336
306
UGI International
57
22
305
216
323
242
AmeriGas Propane
(27
)
(8
)
182
240
210
244
Total reportable segments
112
89
1,185
1,076
1,267
1,163
Corporate & Other (a)
(71
)
(828
)
(195
)
(2,789
)
(22
)
(2,521
)
Total earnings (loss) before interest
expense and income taxes
41
(739
)
990
(1,713
)
1,245
(1,358
)
Interest expense:
Utilities
(22
)
(20
)
(69
)
(62
)
(89
)
(80
)
Midstream & Marketing
(9
)
(11
)
(29
)
(33
)
(41
)
(43
)
UGI International
(11
)
(10
)
(33
)
(26
)
(44
)
(32
)
AmeriGas Propane
(41
)
(40
)
(122
)
(122
)
(163
)
(162
)
Corporate & Other, net (a)
(13
)
(15
)
(43
)
(38
)
(57
)
(48
)
Total interest expense
(96
)
(96
)
(296
)
(281
)
(394
)
(365
)
(Loss) income before income taxes
(55
)
(835
)
694
(1,994
)
851
(1,723
)
Income tax (expenses) benefits
7
46
(152
)
361
(178
)
333
Net (loss) income including noncontrolling
interests
(48
)
(789
)
542
(1,633
)
673
(1,390
)
Add net loss attributable to
noncontrolling interests
—
—
—
—
—
1
Net (loss) income attributable to UGI
Corporation
$
(48
)
$
(789
)
$
542
$
(1,633
)
$
673
$
(1,389
)
(Loss) earnings per share attributable to
UGI shareholders:
Basic
$
(0.23
)
$
(3.76
)
$
2.58
$
(7.78
)
$
3.20
$
(6.62
)
Diluted
$
(0.23
)
$
(3.76
)
$
2.52
$
(7.78
)
$
3.12
$
(6.62
)
Weighted Average common shares outstanding
(thousands):
Basic
210,679
209,706
210,090
209,811
210,573
209,793
Diluted
210,679
209,706
215,218
209,811
215,909
209,793
Supplemental information:
Net (loss) income attributable to UGI
Corporation:
Utilities
$
13
$
10
$
254
$
234
$
239
$
224
Midstream & Marketing
22
22
234
165
262
196
UGI International
39
13
213
150
235
164
AmeriGas Propane
(36
)
(35
)
17
87
1
64
Total reportable segments
38
10
718
636
737
648
Corporate & Other (a)
(86
)
(799
)
(176
)
(2,269
)
(64
)
(2,037
)
Total net (loss) income attributable to
UGI Corporation
$
(48
)
$
(789
)
$
542
$
(1,633
)
$
673
$
(1,389
)
(a)
Corporate & Other includes specific
items attributable to our reportable segments that are not included
in profit measures used by our Chief Operating Decision Maker in
assessing our reportable segments' performance or allocating
resources. These specific items are shown in the section titled
"Non-GAAP Financial Measures - Adjusted Net Income (Loss)
Attributable to UGI and Adjusted Diluted Earnings Per Share" below.
Corporate & Other also includes the elimination of certain
intercompany transactions.
Non-GAAP Financial Measures - Adjusted
Net Income Attributable to UGI and Adjusted Diluted Earnings Per
Share.
The following tables reconcile net income attributable to UGI
Corporation, the most directly comparable GAAP measure, to adjusted
net income attributable to UGI Corporation, and reconcile diluted
earnings per share, the most comparable GAAP measure, to adjusted
diluted earnings per share, to reflect the adjustments referred to
previously:
Three Months Ended June 30,
Nine Months Ended June 30,
Twelve Months Ended June 30,
2024
2023
2024
2023
2024
2023
Adjusted net (loss) income attributable
to UGI Corporation (millions):
Net (loss) income attributable to UGI
Corporation
$
(48
)
$
(789
)
$
542
$
(1,633
)
$
673
$
(1,389
)
Net (gains) losses on commodity derivative
instruments not associated with current-period transactions (net of
tax of $15, $(36), $16, $(465), $62 and $(423), respectively)
(33
)
115
(66
)
1,349
(190
)
1,146
Unrealized losses on foreign currency
derivative instruments (net of tax of $1, $(1), $(5), $(15), $(1)
and $(6), respectively)
—
1
13
37
3
15
Loss associated with impairment of
AmeriGas Propane goodwill (net of tax of $0, $4, $0, $4, $0, and
$4, respectively)
—
660
—
660
—
660
Loss on extinguishment of debt (net of tax
of $(2), $(2), $(2), $(2), $(2) and $(2), respectively)
5
7
5
7
5
7
Impairment associated with equity method
investments (net of tax of $0, $0, $0, $0, $0 and $1,
respectively)
25
—
25
—
25
(14
)
Business transformation expenses (net of
tax of $0, $(1), $0, $(2), $(1), and $(2), respectively)
—
1
—
4
3
7
Costs associated with exit of the UGI
International energy marketing business (net of tax of $0, $0,
$(14), $(64), $(17) and $(65), respectively)
2
—
68
170
79
174
Impact of change in tax law
—
—
—
—
—
(19
)
AmeriGas operations enhancement for growth
project (net of tax of $(3), $(2), $(6), $(5), $(7) and $(7),
respectively)
9
4
19
14
23
17
Restructuring costs (net of tax of $(2),
$0, $(12), $0, $(12) and $(2), respectively)
7
—
37
—
37
4
Net gain on sale of UGI headquarters
building (net of tax of $0, $0, $0, $0, $4 and $0,
respectively)
—
—
—
—
(10
)
—
Impairment of held-for-sale assets (net of
tax of $(17), $0, $(17), $0, $(17) and $0, respectively)
45
—
45
—
45
—
Impairment of assets (net of tax of $0,
$0, (2), $0, $(2) and $0, respectively)
—
—
5
—
5
—
Total adjustments (1)
60
788
151
2,241
25
1,997
Adjusted net income (loss) attributable to
UGI Corporation
$
12
$
(1
)
$
693
$
608
$
698
$
608
Adjusted diluted earnings per
share:
UGI Corporation (loss) earnings per share
— diluted (2)
$
(0.23
)
$
(3.76
)
$
2.52
$
(7.78
)
$
3.12
$
(6.62
)
Net (gains) losses on commodity derivative
instruments not associated with current-period transactions
(0.14
)
0.55
(0.31
)
6.34
(0.88
)
5.40
Unrealized losses on foreign currency
derivative instruments
—
0.01
0.06
0.18
0.01
0.07
Loss associated with impairment of
AmeriGas Propane goodwill
—
3.14
—
3.14
—
3.14
Loss on extinguishment of debt
0.02
0.03
0.02
0.03
0.02
0.03
Impairment associated with equity method
investments
0.12
—
0.12
—
0.12
(0.07
)
Business transformation expenses
—
0.01
—
0.02
0.01
0.03
Costs associated with the exit of the UGI
International energy marketing business
0.01
—
0.32
0.81
0.37
0.83
Impact of change in tax law
—
—
—
—
—
(0.09
)
AmeriGas operations enhancement for growth
project
0.04
0.02
0.09
0.07
0.11
0.08
Restructuring costs
0.03
—
0.17
—
0.17
0.02
Net gain on sale of UGI headquarters
building
—
—
—
—
(0.05
)
—
Impairment of held-for-sale assets
0.21
—
0.21
—
0.21
—
Impairment of assets
—
—
0.02
—
0.02
—
Total adjustments (2)
0.29
3.76
0.70
10.59
0.11
9.44
Adjusted diluted earnings per share
(2)
$
0.06
$
—
$
3.22
$
2.81
$
3.23
$
2.82
(1)
Income taxes associated with pre-tax
adjustments determined using statutory business unit tax rates.
(2)
The loss per share for the twelve months
ended June 30, 2023, was determined excluding the effect of 6.07
million dilutive shares as the impact of such shares would have
been antidilutive to the net loss for the period. Adjusted earnings
per share for the twelve months ended June 30, 2023, was determined
based upon fully diluted shares of 215.86 million. The loss per
share for the three months ended June 30, 2024 and nine months
ended June 30, 2023, was determined excluding the effect of 3.82
million and 6.22 million dilutive shares, respectively, as the
impact of such shares would have been antidilutive due to the net
loss for the periods. The adjusted earnings per share for the three
months ended June 30, 2024 and nine months ended June 30, 2023, was
determined based upon fully diluted shares of 214.50 million and
216.03 million, respectively.
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