A Pennsylvania-based utility holding company whose businesses include AmeriGas Propane, a propane distributor, and UGI Utilities, a natural gas utility serving Pennsylvania customers. UGI Utilities also manages environmental cleanup of former manufactured gas plants under agreements with the Pennsylvania Department of Environmental Protection, and the company's propane operations include the Heritage Propane brand.
AmeriGas Propane swung to a $62M adjusted loss, erasing the prior year's profit and driving UGI's adjusted net loss to $43M.
AmeriGas Propane's turnaround reversed sharply. fell 4.5% to $1,331.0M and the company posted a net loss of $133.0M as AmeriGas swung to a $62M adjusted loss on lower retail volumes and unit margins. The core Utilities grew, but the quarter leaves the company's largest propane unit back in the red and its nearly depleted.
Key takeaways
AmeriGas Propane swung to a $62M adjusted net loss from a $37M adjusted profit a year earlier, driven by a $26M decline in total margin as both retail volumes and unit margins fell.
UGI International fell $18M to $18M, reflecting a 10% drop in LPG retail gallons sold, partly from divestitures, and higher income taxes.
Utilities rose $4M to $9M, as a $13M increase in total margin from higher PA Gas Utility base rates was partially offset by higher .
Section summaries
Management's Discussion and Analysis
UGI's Q3 FY2026 adjusted net loss widened to $43M from $3M, driven by a steep decline at AmeriGas Propane and lower international earnings.
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AmeriGas Propane swung from a $37M adjusted profit to a $62M adjusted loss, primarily due to a lower income tax benefit and a $26M drop in from lower retail volumes and unit margins.
was a loss of $133.0M, compared to a $13.0M loss a year earlier, weighed down by a $71M pre-tax loss on the divestiture of Central European LPG businesses.
for the quarter was $16.0M, down 76.1% , as fell 16.3% to $242.0M.
Total available liquidity stood at $1.9B at quarter-end, and the company is divesting its Electric Utility for $470M.
What changed
The prior quarter's flag for AmeriGas Propane risk remains unresolved, but the unit's swing to a $62M adjusted loss from an $85M profit in Q2 FY2026 intensifies the pressure on the remaining $1.2B of .
The pending sale of four Central European LPG operations flagged in Q2 FY2026 was completed, resulting in a recognized pre-tax loss of $71M, higher than the $64M charge previously recorded on assets held for sale.
The $700M of convertible senior notes, flagged as eligible for early conversion in Q3 FY2025 and reclassified as current in Q1 FY2026, remain outstanding with no conversions reported.
The PA Gas Utility $99M and Mountaineer $27M rate decisions, pending from Q1 FY2026 filings, have not yet been decided, but the PA Gas Utility base rate increase effective October 2025 continued to benefit Utilities' total margin.
What to watch
AmeriGas Propane retail gallon volumes and unit margins next quarter to see if the Q3 decline stabilizes or deepens, and whether it triggers a test.
Outcome of the $470M Electric Utility divestiture and use of proceeds, and its effect on the balance sheet.
Decisions on the PA Gas Utility $99M and Mountaineer $27M base rate increase requests.
FY2026 against the $1,053M planned , with nine-month free cash flow at $342M after Q3's $16M contribution.
UGI International adjusted fell $18M to $18M, reflecting higher income taxes and a $6M decline on a 10% drop in LPG retail gallons sold, partly from divestitures.
Utilities adjusted rose $4M to $9M, as a $13M increase in from higher PA Gas Utility base rates was partially offset by higher .
Midstream & Marketing adjusted decreased $7M to $12M, with higher from capacity management more than offset by increased income tax expenses and operating costs.
for the nine months fell to $972M from $1,137M, largely due to a $133M increase in cash used for , while total available liquidity stood at $1.9B at quarter-end.
The company is divesting its Electric Utility for $470M and completed the sale of several non-core European LPG businesses, recognizing a total pre-tax loss of $71M on the Central European divestiture.
Quantitative and Qualitative Disclosures About Market Risk
UGI faces commodity, interest-rate, and currency risks, using derivatives only to hedge, not speculate.
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LPG commodity price risk is managed via forward purchases, fixed-price supply agreements, and over-the-counter swaps and options, though rapid cost increases may not be fully or timely passed to customers.
Utilities’ natural gas commodity risk is largely mitigated by tariff recovery clauses (PGC/PGA) that allow prudently incurred hedging costs to be recovered from retail core-market customers.
Midstream & Marketing hedges fixed-price physical gas and electricity sales with NYMEX, ICE, and OTC futures, options, and basis swaps, but supplier nonperformance remains a residual risk.
Variable-rate debt of $769 million (excluding effectively fixed-rate portions via swaps) is exposed to higher interest costs; the company uses pay-fixed swaps and IRPAs to manage near-term refinancing risk.
A 10% adverse move in the euro and pound versus the USD would reduce UGI International’s net by approximately $70 million, partly hedged by euro borrowings designated as net investment hedges.
Derivative counterparty credit risk is concentrated among large energy firms and financial institutions; maximum gross loss exposure at June 30, 2026 was $112 million, with $1 million cash collateral received.
The information set forth in Note 9 to Condensed Consolidated Financial Statements included in Item 1 of Part I of this report, is incorporated herein by reference.
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The information set forth in Note 9 to Condensed Consolidated Financial Statements included in Item 1 of Part I of this report, is incorporated herein by reference.
In addition to the information presented in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2025 Annual Report, which could materially affect our business, financial condition or future results. The risks described in ou…
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In addition to the information presented in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2025 Annual Report, which could materially affect our business, financial condition or future results. The risks described in our 2025 Annual Report are not the only risks facing the Company. Other unknown or unpredictable factors could also have material adverse effects on future results.