UGI CORP /PA/

Previous wording

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 2023 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, electricity, and natural gas, 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, and environmental matters, such as regulatory responses to climate change; (4) inability to timely recover costs through utility rate proceedings; (5) the impact of pending and future legal or regulatory proceedings, inquiries or investigations; (6) competitive pressures from the same and alternative energy sources; (7) failure to acquire new customers or retain current customers thereby reducing or limiting any increase in revenues; (8) liability for environmental claims; (9) increased customer conservation measures due to high energy prices and improvements in energy efficiency and technology resulting in reduced demand; (10) adverse labor relations and our ability to address existing or potential workforce shortages; (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, and foreign …

Excerpt shortened here; the source contains the full paragraph.

Current wording

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 2024 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, electricity, and natural gas, 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, and environmental matters, such as regulatory responses to climate change; (4) inability to timely recover costs through utility rate proceedings; (5) the impact of pending and future legal or regulatory proceedings, inquiries or investigations; (6) competitive pressures from the same and alternative energy sources; (7) failure to acquire new customers or retain current customers thereby reducing or limiting any increase in revenues; (8) liability for environmental claims; (9) increased customer conservation measures due to high energy prices and improvements in energy efficiency and technology resulting in reduced demand; (10) adverse labor relations and our ability to address existing or potential workforce shortages; (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, and foreign …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The following analyses compare the Company’s results of operations for the 2024 three-month period with the 2023 three-month period and the 2024 nine-month period with the 2023 nine-month period. Our analysis of results of operations should be read in conjunction with the segment information included in Note 15 to Condensed Consolidated Financial Statements.

Current wording

The following analyses compare the Company’s results of operations for the 2024 three-month period with the 2023 three-month period. Our analysis of results of operations should be read in conjunction with the segment information included in Note 15 to Condensed Consolidated Financial Statements.

Previous wording

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. As a result, 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.

Current wording

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.

Previous wording

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.

Current wording

UGI does not designate its commodity and certain foreign currency derivative instruments as hedges under GAAP. Volatility in net income 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.

Previous wording

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 (loss) earnings per share, the most directly comparable GAAP measure, to adjusted diluted earnings per share:

Current wording

The following tables reflect the adjustments referred to above and 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 directly comparable GAAP measure, to adjusted diluted earnings per share:

Previous wording

(a)Corporate & Other includes certain adjustments made to our reporting segments in arriving at net income (loss) 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 15 to Condensed Consolidated Financial Statements for additional information related to these adjustments, as well as other items included within Corporate & Other.

Current wording

(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 15 to Condensed Consolidated Financial Statements for additional information related to these adjustments, as well as other items included within Corporate & Other.

Previous wording

Discussion. Net loss attributable to UGI Corporation for the 2024 three-month period was $48 million (equal to $0.23 loss per diluted share) compared to $789 million (equal to $3.76 loss per diluted share) for the 2023 three-month period. These results include net gains (losses) from changes in unrealized commodity derivative instruments and certain foreign currency derivative instruments of $33 million and $(116) million during the 2024 and 2023 three-month periods, respectively. The higher gains from changes in commodity derivative instruments during the 2024 three-month period principally reflects significantly less volatility in commodity energy prices following unprecedented volatility in such prices during the 2023 three-month period and the effects of significantly lower energy marketing activities in Europe resulting from the exit of substantially all of UGI International’s energy marketing business.

Current wording

Net income attributable to UGI Corporation for the 2024 three-month period was $375 million (equal to $1.74 per diluted share) compared to $94 million (equal to $0.44 per diluted share) for the 2023 three-month period. These results include net gains (losses) from changes in unrealized commodity derivative instruments and certain foreign currency derivative instruments of $80 million and $(91) million during the 2024 and 2023 three-month periods, respectively.

Previous wording

Net income attributable to UGI Corporation during the 2024 nine-month period also includes (1) $68 million of costs associated with the exit of our UGI International energy marketing business in Europe, principally reflecting wind-down activities in the Netherlands and the loss on the sale of the energy marketing business located in France; (2) a $45 million impairment of assets held for sale associated with UGID; (3) restructuring costs of $37 million largely attributable to a reduction in workforce and related costs, primarily at UGI International; (4) a $25 million impairment associated with equity method investments at UGI International; (5) external advisory fees of $19 million associated with AmeriGas operations enhancement for growth project; (6) loss on extinguishments of debt of $5 million, primarily at AmeriGas Propane; and (7) an impairment of assets of $5 million at UGI International.

Current wording

Net income attributable to UGI Corporation during the 2023 three-month period also includes (1) $65 million of costs associated with the exit of our UGI International energy marketing business in Europe, principally reflecting wind-down activities in the Netherlands and the loss on the sale of the energy marketing business located in France; (2) external advisory fees of $5 million associated with AmeriGas operations enhancement for growth project; and (3) restructuring costs of $3 million largely attributable to a reduction in workforce and related costs.

Previous wording

Adjusted net income attributable to UGI Corporation for the 2024 three-month period was $12 million (equal to $0.06 per diluted share) compared to adjusted net loss of $1 million (equal to $0.00 per diluted share) for the 2023 three-month period. The increase in adjusted net income attributable to UGI Corporation during the 2024 three-month period reflects higher earnings contributions primarily from our UGI International segment and, to a much lesser extent, our Utilities segment. The earnings contribution from the Midstream & Marketing and AmeriGas Propane segments were comparable to the prior-year period. During the 2024 three-month period, temperatures in most of our segments were significantly warmer than the prior-year period.

Current wording

Adjusted net income attributable to UGI Corporation for the 2024 three-month period was $295 million (equal to $1.37 per diluted share) compared to $258 million (equal to $1.20 per diluted share) for the 2023 three-month period. The increase in adjusted net income attributable to UGI Corporation for the 2024 three-month period reflects higher earnings contributions from the UGI International and, to a much lesser extent, Utilities segments, offset by lower earnings contributions from the AmeriGas Propane and, to a much lesser extent, Midstream & Marketing segments. In addition, the increase in adjusted net income during the 2024 three-month period also reflects significantly lower income tax expenses primarily related to an increase in investment tax credits in our Midstream & Marketing segment and the release of a valuation allowance on deferred tax assets expected to be utilized in the current year in our UGI International segment. During the 2024 three-month period, temperatures in all of our segments were colder than the prior-year period, with significantly colder temperatures during the peak heating season month of December 2024.

Previous wording

Utilities’ adjusted net income attributable to UGI Corporation increased $3 million in the 2024 three-month period compared to the prior-year period. The increase was largely attributable to higher total margin due in large part to increases in base rates at PA Gas Utility, Mountaineer and Electric Utility during Fiscal 2024.

Current wording

Utilities’ adjusted net income attributable to UGI Corporation increased $3 million in the 2024 three-month period. The increase was largely attributable to higher total margin due in large part to increases in base rates at WV Gas Utility effective January 2024 and the impacts from growth in the core market customers.

Previous wording

Midstream & Marketing’s adjusted net income attributable to UGI Corporation increased $69 million in the 2024 nine-month period. The increase is primarily attributable to higher total margin from natural gas marketing activities and lower income taxes reflecting higher investment tax credits in the 2024 nine-month period.

Current wording

Midstream & Marketing’s adjusted net income attributable to UGI Corporation decreased $3 million in the 2024 three-month period. The decrease is primarily attributable to lower total margin from natural gas marketing activities, partially offset by lower income tax expenses, reflecting higher investment tax credits in the 2024 three-month period.

Previous wording

UGI International’s adjusted net income attributable to UGI Corporation increased $63 million in the 2024 nine-month period. The increase is mainly attributable to higher margin contributions from our LPG business, principally reflecting the benefit from higher average unit margins attributable to strong margin management efforts and lower operating and administrative expenses.

Current wording

UGI International’s adjusted net income attributable to UGI Corporation increased $17 million in the 2024 three-month period. The increase is mainly attributable to lower income tax expenses and lower operating and administrative expenses, partially offset by lower margin contributions primarily from our energy marketing activities, reflecting the exit of substantially all of UGI International’s energy marketing business in Fiscal 2024.

Previous wording

AmeriGas Propane’s adjusted net income attributable to UGI Corporation decreased $70 million in the 2024 nine-month period. The decrease principally reflects lower total margin, largely attributable to lower retail propane volumes sold, partially offset by the benefit of higher average retail propane unit margins, and lower operating and administrative expenses in the 2024 nine-month period.

Current wording

AmeriGas Propane’s adjusted net income attributable to UGI Corporation decreased $62 million in the 2024 three-month period. The decrease principally reflects higher income tax expenses, partially offset by lower operating and administrative expenses in the 2024 three-month period.

Previous wording

(a)Total margin represents revenues less cost of sales and revenue-related taxes (i.e., gross receipts and business and occupation taxes) of $4 million each during the 2024 and 2023 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).

Current wording

(a)Total margin represents revenues less cost of sales and revenue-related taxes (i.e., gross receipts and business and occupation taxes) of $7 million each during the 2024 and 2023 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).

Previous wording

Temperatures in Gas Utility’s service territories during the 2024 three-month period were 26.1% warmer than normal and 16.6% warmer than the prior-year period. Gas Utility core market volumes during the 2024 three-month period were comparable to the prior-year period as growth in the core market customers were largely offset by the impact from the significantly warmer weather. Total Gas Utility volume increased 1% during the 2024 three-month period, primarily reflecting higher large firm delivery service volumes. The increase in Electric Utility distribution sales volumes is primarily attributable to an increase in cooling degree days during the 2024 three-month period and, to a lesser extent, customer growth.

Current wording

Temperatures in Gas Utility’s service territories during the 2024 three-month period were 3.2% warmer than normal and 3.1% colder than the prior-year period. The slight increase in Gas Utility core market volumes during the 2024 three-month period is largely related to the colder weather compared to the prior-year period. Total Gas Utility volume decreased 6% during the 2024 three-month period, notwithstanding the increase in core market volumes, primarily reflecting lower large firm delivery service volumes. Electric Utility distribution sales volumes were comparable to the prior-year period.

Previous wording

Utilities revenues decreased $248 million in the 2024 nine-month period, reflecting lower Gas Utility revenues. The decrease in Gas Utility revenues was largely attributable to lower PGC and PGA rates reflecting lower natural gas costs and, to a lesser extent, the lower core market volumes and lower off-system sales. These decreases were partially offset by the effects of increases in base rates for PA Gas Utility (effective October 1, 2023) and Mountaineer (effective January 1, 2024) and the effects of the weather normalization adjustments for PA Gas Utility (effective November 1, 2022). Electric Utility revenues slightly increased during the 2024 nine-month period, largely reflecting higher base rates and sales volumes, partially offset by lower DS rates.

Current wording

Utilities revenues decreased $8 million in the 2024 three-month period, reflecting lower Gas Utility revenues. The decrease in Gas Utility revenues was largely attributable to lower PGC and PGA rates reflecting lower natural gas costs and, to a lesser extent, the effects of the weather normalization adjustments for Gas Utility. These decreases were partially offset by the effects of increases in base rates for WV Gas Utility effective January 1, 2024, the slightly higher core market volumes and higher off-system sales. Electric Utility revenues were comparable to the prior-year period.

Previous wording

Utilities cost of sales decreased $290 million in the 2024 nine-month period primarily attributable to Gas Utility ($283 million) mainly reflecting lower PGC and PGA rates, the lower core market volumes and, to a lesser extent, lower cost of sales associated with off-system sales. Electric Utility cost of sales decreased $7 million during the 2024 nine-month period largely reflecting the lower DS rates, partially offset by higher sales volumes.

Current wording

Utilities cost of sales decreased $17 million in the 2024 three-month period, reflecting lower Gas Utility cost of sales. The decrease in Gas Utility cost of sales was mainly attributable to lower PGC and PGA rates, partially offset by the slightly higher core market volumes and higher cost of sales associated with off-system sales. Electric Utility cost of sales was comparable to the prior-year period.

Previous wording

Utilities total margin increased $42 million during the 2024 nine-month period primarily attributable to higher Gas Utility total margin ($33 million), notwithstanding the warmer weather, mainly reflecting the increases in DSIC revenues, the effects of increases in base rates for PA Gas Utility (effective October 1, 2023) and Mountaineer (effective January 1, 2024) and the effects of the weather normalization adjustments for PA Gas Utility (effective November 1, 2022) and the impacts from growth in the core market customers. Electric Utility margin increased $9 million during the 2024 nine-month period, mainly reflecting the increase in base rates effective October 1, 2023 and the higher sales volumes.

Current wording

Utilities total margin increased $9 million during the 2024 three-month period, reflecting higher Gas Utility total margin. The increase in Gas Utility total margin mainly reflects the effects of increases in base rates for WV Gas Utility effective January 1, 2024 and the impacts from growth in the core market customers, partially offset by the effects of the weather normalization adjustments for Gas Utility. Electric Utility margin was comparable to the prior-year period.

Previous wording

Utilities operating income and earnings before interest expense and income taxes increased $35 million and $33 million, respectively, during the 2024 nine-month period. These increases largely reflect the previously mentioned increase in total margin ($42 million) and, to a lesser extent, lower operating and administrative expenses ($4 million), partially offset by higher depreciation expense ($12 million). The slightly lower operating and administrative expenses principally reflect lower uncollectible accounts expenses, contract labor costs and maintenance expenses. The higher depreciation expense compared to the prior-year period reflects the effects of continued distribution system capital expenditure activity.

Current wording

Utilities operating income and earnings before interest expense and income taxes increased $4 million and $6 million, respectively, during the 2024 three-month period. These increases largely reflect the previously mentioned increase in total margin ($9 million), partially offset by higher operating and administrative expenses ($3 million) and higher depreciation expense ($3 million). 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.

Previous wording

Average temperatures across Midstream & Marketing’s energy marketing territory during the 2024 three-month period were 23.5% warmer than normal and 18.3% warmer than the prior-year period.

Current wording

Average temperatures across Midstream & Marketing’s energy marketing territory during the 2024 three-month period were 3.9% warmer than normal and 4.2% colder than the prior-year period.

Previous wording

Midstream & Marketing revenues decreased $456 million compared to the prior-year period, primarily reflecting lower revenues from natural gas marketing activities ($439 million), including the effects of peaking and capacity management activities, that were primarily impacted by lower natural gas prices and lower volumes resulting from the warmer weather. The decrease also reflects, to a much lesser extent, lower revenues from renewable energy ($18 million).

Current wording

Midstream & Marketing revenues decreased $27 million compared to the prior-year period, primarily reflecting (1) lower revenues from natural gas marketing activities ($13 million) that were primarily impacted by lower natural gas prices; (2) lower midstream revenues ($10 million), mainly from lower natural gas gathering and processing activities; and (3) absence of revenues from UGID that was sold in September 2024 ($9 million). The decrease in revenues was partially offset by higher revenues from renewable energy ($5 million).

Previous wording

Midstream & Marketing cost of sales decreased $496 million compared to the prior-year period, primarily reflecting lower natural gas costs ($483 million) related to the previously mentioned natural gas marketing activities and, to a much lesser extent, lower cost of sales related to renewable energy ($11 million).

Current wording

Midstream & Marketing cost of sales decreased $10 million compared to the prior-year period, primarily reflecting lower natural gas costs ($8 million) related to the previously mentioned natural gas marketing activities and absence of cost of sales from UGID that was sold in September 2024 ($5 million), partially offset by higher cost of sales from renewable energy ($4 million).

Previous wording

Midstream & Marketing operating income and earnings before interest expense and income taxes during the 2024 nine-month period increased $42 million and $45 million, respectively, compared to the prior-year period. The increase in operating income is largely attributable to the higher total margin and, to a lesser extent, lower operating and administrative expense ($5 million). The lower operating and administrative expenses during the 2024 nine-month period primarily reflects lower salary and benefits expenses and maintenance expenses. The increase in earnings before interest expense and income taxes principally reflects the increase in operating income and, to a much lesser extent, slightly higher income from equity investees ($3 million).

Current wording

Midstream & Marketing operating income and earnings before interest expense and income taxes during the 2024 three-month period decreased $8 million and $7 million, respectively, compared to the prior-year period. The decrease in operating income is largely attributable to the lower total margin, partially offset by higher other operating income ($5 million), slightly lower operating and administrative expenses ($2 million) and depreciation and amortization expense ($2 million). The decrease in earnings before interest expense and income taxes principally reflects the decrease in operating income.

Previous wording

Average temperatures during the 2024 nine-month period were 12.3% warmer than normal and 4.1% warmer than the prior-year period. Notwithstanding the warmer weather, total LPG retail gallons sold during the 2024 nine-month period slightly increased compared to the prior-year period, largely attributable to growth from natural gas conversions to LPG and higher auto gas volumes sold, partially offset by warmer weather and lower cylinder volumes.

Current wording

Average temperatures during the 2024 three-month period were 3.5% warmer than normal and 8.2% colder than the prior-year period. Total LPG retail gallons sold during the 2024 three-month period slightly increased compared to the prior-year period, largely attributable to higher crop drying campaigns and colder weather, partially offset by lower natural gas conversions to LPG.

Previous wording

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 2024 and 2023 nine-month periods, the average unweighted euro-to-USD translation rates were approximately $1.08 and $1.06, respectively, and the average unweighted British pound sterling-to-USD translation rates were approximately $1.26 and $1.21, 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 net realized gains of $12 million and $16 million in the 2024 and 2023 nine-month periods, respectively.

Current wording

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 2024 and 2023 three-month periods, the average unweighted euro-to-USD translation rates were approximately $1.07 and $1.08, respectively, and the average unweighted British pound sterling-to-USD translation rates were approximately $1.28 and $1.24, 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 of $4 million each in the 2024 and 2023 three-month periods.

Previous wording

Average wholesale prices for propane and butane during the 2024 three-month period in northwest Europe were each approximately 16% higher compared with the prior-year period. UGI International revenues and cost of sales decreased $156 million and $174 million, respectively, during the 2024 three-month period compared to the prior-year period. The decrease in revenues and cost of sales principally reflects significantly lower energy marketing activities during the 2024 three-month period resulting from the exit of substantially all of UGI International’s energy marketing business in Belgium, France and the Netherlands. The decrease in revenues from the energy marketing business was partially offset by the effects of LPG price increases across Europe. The decrease in cost of sales was also attributable to lower LPG volumes sold.

Current wording

Average wholesale prices for propane and butane during the 2024 three-month period in northwest Europe were approximately 13.5% and 5.3% higher, respectively, compared with the prior-year period. UGI International revenues and cost of sales decreased $87 million and $72 million, respectively, during the 2024 three-month period compared to the prior-year period. The decrease in revenues and cost of sales principally reflects significantly lower energy marketing activities during the 2024 three-month period resulting from the exit of substantially all of UGI International’s energy marketing business in Belgium, France and the Netherlands in Fiscal 2024. The decrease in revenues from the energy marketing activities was partially offset by LPG price increases across Europe. The decrease in cost of sales from the energy marketing activities was partially offset by higher LPG product costs.

Previous wording

UGI International total margin increased $18 million during the 2024 three-month period primarily reflecting higher margin contributions from our LPG business and, to a lesser extent, our energy marketing activities. The higher margin contribution from our LPG business reflects the effects of higher average unit margins attributable to strong margin management efforts. The higher margin contributions from our energy marketing activities result from the impact of the aforementioned exit of substantially all of UGI International’s energy marketing business.

Current wording

UGI International total margin decreased $15 million during the 2024 three-month period reflecting lower margin contributions primarily from our energy marketing activities and, to a much lesser extent, lower margin contributions from our LPG business. The lower margin from our energy marketing activities reflects the impact of the aforementioned exit of substantially all of UGI International’s energy marketing business. The slightly lower margin from our LPG business primarily reflects the effects of lower average unit margins in the 2024 three-month period.

Previous wording

UGI International operating income and earnings before interest expense and income taxes increased $36 million and $35 million, respectively, during the 2024 three-month period. The increase in operating income principally reflects lower operating and administrative expenses ($19 million), the previously mentioned $18 million increase in total margin and higher gains associated with sales of assets ($6 million), partially offset by lower other operating income ($5 million). The lower operating and administrative expenses in the 2024 three-month period primarily reflects lower personnel and maintenance expenses, partially offset by the effects of inflationary increases. The increase in earnings before interest expense and income taxes in the 2024 three-month period largely reflects the $36 million increase in operating income.

Current wording

UGI International operating income and earnings before interest expense and income taxes decreased $7 million each during the 2024 three-month period. The decrease in operating income principally reflects the previously mentioned $15 million decrease in total margin and lower foreign currency transaction gains ($2 million), partially offset by lower operating and administrative expenses ($13 million). The lower operating and administrative expenses in the 2024 three-month period primarily reflects lower personnel and maintenance expenses in our LPG business and a decline in energy marketing-related operating expenses, partially offset by the effects of inflationary increases. The decrease in earnings before interest expense and income taxes in the 2024 three-month period largely reflects the $7 million decrease in operating income.

Previous wording

Average temperatures during the 2024 three-month period were 5.5% warmer than normal and 8.7% warmer than the prior-year period. Total retail gallons sold decreased 13% during the 2024 three-month period primarily due to continuing customer attrition and the effects of the warmer weather.

Current wording

Average temperatures during the 2024 three-month period were 6.3% warmer than normal and comparable to the prior-year period. Although average temperatures during the 2024 three-month period were comparable to the prior-year period, we experienced significantly colder temperatures during the peak heating season month of December 2024. Total retail gallons sold decreased 1% during the 2024 three-month period, primarily due to continuing customer attrition.

Previous wording

Average daily wholesale propane commodity prices during the 2024 three-month period at Mont Belvieu, Texas, one of the major supply points in the U.S., were approximately 12% higher than such prices during the 2023 three-month period. Total revenues decreased $69 million during the 2024 three-month period largely reflecting the lower retail volumes sold ($55 million), lower wholesale revenues ($6 million) and the effects of lower average retail propane selling prices ($5 million).

Current wording

Average daily wholesale propane commodity prices during the 2024 three-month period at Mont Belvieu, Texas, one of the major supply points in the U.S., were approximately 14.9% higher than such prices during the 2023 three-month period. Total revenues decreased $2 million during the 2024 three-month period reflecting the lower retail volumes sold ($5 million) and slightly lower fee income that was largely offset by the effects of higher average retail propane selling prices ($6 million).

Previous wording

Our consolidated interest expense during the 2024 nine-month period was $296 million compared to $281 million during the 2023 nine-month period. The increase largely reflects higher total long-term debt interest expense including the effects of higher average long-term debt outstanding at Utilities and Midstream & Marketing and a higher average interest rate on UGI International long-term debt, partially offset by lower average long-term debt outstanding at AmeriGas Propane. The increase in long-term debt interest expense was partially offset by lower short-term debt interest expense principally reflecting the effects of lower average credit agreement borrowings during the 2024 nine-month period.

Current wording

Our consolidated interest expense during the 2024 three-month period was $102 million compared to $100 million during the 2023 three-month period. The slight increase in interest expense reflects the effects of higher average long-term debt outstanding at Utilities and UGI Corporation, substantially offset by lower interest expense from lower average long-term debt outstanding at AmeriGas Propane and lower average credit agreement borrowings during the 2024 three-month period.

Previous wording

The increase in the Company’s income tax rate for the 2024 three-month period was principally related to the effects of establishing a full valuation allowance against current year losses in the Netherlands, partially offset by an increase in investment tax credits mainly at our Midstream & Marketing segment.

Current wording

The decrease in the Company’s income tax rate for the 2024 three-month period principally reflects an increase in investment tax credits in our Midstream & Marketing segment and the release of a valuation allowance on deferred tax assets expected to be utilized by our UGI International segment.

Previous wording

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 despite uncertainties associated with the previously mentioned ongoing global macroeconomic conditions. 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, 2024 and September 30, 2023, respectively. As of June 30, 2024, “Current maturities of long-term debt” on the Condensed Consolidated Balance Sheet principally comprises (1) $218 million outstanding principal balance of the AmeriGas Partners, 5.50% Senior Notes, maturing May 2025 and (2) $51 million outstanding principal balance representing a portion of borrowings outstanding under the UGI Corporation Credit Facility Agreement, maturing May 2025. Except as noted, the Company does not have any senior notes or term loans maturing in the next twelve months. The Company cannot predict the duration or total magnitude of the uncertain macroeconomic conditions mentioned above and the total effects they will have on its liquidity, debt covenants, financial condition or the timing of capital expenditures. UGI and its subsidiaries were in compliance with its debt covenants as of June 30, 2024.

Current wording

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 $1.5 billion at December 31, 2024 and September 30, 2024.

Previous wording

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 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 and equity securities in the capital markets and additional credit facilities may not, however, be available to us on acceptable terms.

Current wording

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 or equity linked 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 and equity securities in the capital markets and additional credit facilities may not, however, be available to us on acceptable terms.

Previous wording

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 $183 million at June 30, 2024, compared with $241 million at September 30, 2023. Excluding cash and cash equivalents that reside at UGI’s operating subsidiaries, at June 30, 2024 and September 30, 2023, UGI had $80 million and $51 million of cash and cash equivalents, respectively. Such cash is available to pay dividends and interest on long-term debt and for investment purposes.

Current wording

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 $240 million at December 31, 2024, compared with $213 million at September 30, 2024. Excluding cash and cash equivalents that reside at UGI’s operating subsidiaries, at December 31, 2024 and September 30, 2024, UGI had $102 million and $72 million of cash and cash equivalents, respectively. Such cash is available to pay dividends on UGI Common Stock and for investment purposes.

Previous wording

The following significant financing activities occurred during Fiscal 2024. See Note 8 to Condensed Consolidated Financial Statements for additional information on these transactions.

Current wording

The following significant financing activities occurred during the 2024 three-month period. See Note 8 to Condensed Consolidated Financial Statements for additional information on these transactions.

Previous wording

UGI Utilities Senior Notes. In November 2023, UGI Utilities entered into a Note Purchase Agreement with a consortium of lenders. Pursuant to the Note Purchase Agreement, UGI Utilities issued (1) $25 million aggregate principal amount of 6.02% Senior Notes due November 30, 2030; (2) $150 million aggregate principal amount of 6.10% Senior Notes due November 30, 2033; and (3) $75 million aggregate principal amount of 6.40% Senior Notes due November 30, 2053. The net proceeds from these issuances were used to reduce short-term borrowings and for general corporate purposes.

Current wording

UGI Utilities Senior Notes. In November 2024, UGI Utilities entered into a Note Purchase Agreement with a consortium of lenders. Pursuant to the Note Purchase Agreement, UGI Utilities issued $50 million aggregate principal amount of 5.24% Senior Notes due November 30, 2029, and $125 million aggregate principal amount of 5.52% Senior Notes due November 30, 2034. The net proceeds from these issuances were used to reduce short-term borrowings and for general corporate purposes.

Previous wording

AmeriGas Senior Secured Revolving Credit Facility. In August 2024, AmeriGas OLP entered into the AmeriGas Senior Secured Revolving Credit Facility, a five-year senior secured revolving credit facility maturing August 2029, providing for borrowings up to $200 million (including a $20 million sublimit for letters of credit). AmeriGas OLP may request an increase in the amount of loan commitments up to a maximum aggregate amount of $150 million. Borrowings under this credit facility were used to pay off borrowings under the 2022 AmeriGas OLP Credit Agreement and are available for general corporate purposes and ongoing working capital needs of AmeriGas OLP. Concurrently with entering into AmeriGas Senior Secured

Current wording

AmeriGas Senior Secured Revolving Credit Facility. In October 2024, AmeriGas OLP amended the AmeriGas Senior Secured Revolving Credit Facility to increase total commitments from $200 million to a total of $300 million.

Previous wording

(a)Permits UGI International, LLC to borrow in euros or USD. At June 30, 2024 and 2023, the amount borrowed consisted of euro-denominated borrowings equivalent to $198 million and $245 million, respectively.

Current wording

(b)Permits UGI International, LLC or UGI International Holdings B.V. to borrow in euros or USD. At December 31, 2024 and 2023, the amount borrowed consisted of euro-denominated borrowings equivalent to $114 million and $182 million, respectively.

Previous wording

(b)Borrowings outstanding have been classified as “Long-term debt” on the Condensed Consolidated Balance Sheets.

Current wording

(c)Borrowings outstanding have been classified as “Long-term debt” on the Condensed Consolidated Balance Sheets. Subsequent to December 31, 2024, the Company made a net repayment of $17 million of such borrowings and classified these net repayments as “Current maturities of long-term debt” on the December 31, 2024 Condensed Consolidated Balance Sheet.