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Debt | 9 Months Ended
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Jun. 30, 2024
Debt Disclosure [Abstract] |
Debt | Note 8 — Debt The following significant financing activities occurred during Fiscal 2024. Utilities Mountaineer Credit Agreement. In April 2024, Mountaineer entered into the fourth amendment to the Mountaineer Credit Agreement, which extends the maturity date of the agreement from November 2024 to December 2025. The applicable margin remains unchanged from the original credit agreement. 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 aggregate principal amount of 6.02% Senior Notes due November 30, 2030; (2) $150 aggregate principal amount of 6.10% Senior Notes due November 30, 2033; and (3) $75 aggregate principal amount of 6.40% Senior Notes due November 30, 2053. The Note Purchase Agreement contains customary covenants and default provisions and requires compliance with certain financial covenants including a leverage ratio and priority debt ratio as defined in the agreement. These senior notes are unsecured and rank equally with UGI Utilities’ existing outstanding senior debt. The net proceeds from these issuances were used to reduce short-term borrowings and for general corporate purposes. UGI Utilities 2023 Credit Agreement. In November 2023, UGI Utilities entered into the UGI Utilities 2023 Credit Agreement providing for borrowings up to $375 (including a $50 sublimit for letters of credit and a $38 sublimit for swingline loans). UGI Utilities may request an increase in the amount of loan commitments under the credit agreement to a maximum aggregate amount of $125. The interest rates applicable to borrowings under the UGI Utilities 2023 Credit Agreement remain unchanged from its predecessor agreement, the UGI Utilities Credit Agreement. The UGI Utilities 2023 Credit Agreement contains customary covenants and default provisions and requires compliance with certain financial covenants including a maximum debt to capitalization ratio as defined in the agreement. The credit agreement is scheduled to expire in November 2028. Borrowings under the credit agreement may be used to refinance UGI Utilities’ existing indebtedness and for general corporate purposes and ongoing working capital needs of UGI Utilities. Midstream & Marketing Energy Services Term Loan Credit Agreement. In June 2024, Energy Services entered into the second 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 2.50% per annum for Term SOFR loans and 1.50% per annum for base rate loans. All other significant terms of the term loan credit agreement remain unchanged. Energy Services Credit Agreement. In May 2024, Energy Services entered into the fourth amendment to the UGI Energy Services Credit Agreement. The amended credit agreement provides for borrowings up to $300, including a $50 sublimit for letters of credit. Borrowings under the UGI Energy Services Credit Agreement, as amended, bear interest, subject to our election, at a rate per annum equal to (i) the alternative base rate plus the applicable margin as defined by the agreement or (ii) the adjusted Term SOFR rate plus the applicable margin as defined by the agreement. Borrowings under the credit agreement can be used for general corporate purposes and ongoing working capital needs of Energy Services and is scheduled to expire in May 2028. All other significant terms of the credit agreement remain unchanged. UGI International UGI International 2023 Credit Agreement. In June 2024, UGI International, LLC and its indirect wholly-owned subsidiary, UGI International Holdings B.V., entered into the first amendment to the UGI International 2023 Credit Agreement, which provides for the establishment and incorporation of specific key performance indicators with respect to Environmental, Social and Governance targets, whereby based on UGI International, LLC’s performance against the key performance indicators, certain adjustments of up to 0.05% in total to the applicable margin may be made. All other significant terms of the credit agreement remain unchanged. AmeriGas Propane 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 (including a $20 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. Borrowings under this credit facility bear interest, subject to our election, at a floating rate of either (i) the base rate plus the applicable margin or (ii) the adjusted term SOFR rate plus the applicable margin, as defined by the agreement. The applicable margin for base rate loans ranges from 0.75% to 1.25%, and for SOFR loans from 1.75% to 2.25%. The borrowings under this credit agreement are secured by certain assets of AmeriGas OLP, including, but not limited to, accounts receivables and inventory, and are guaranteed by any material subsidiaries of AmeriGas OLP. This credit facility contains customary covenants and default provisions. In addition, this credit facility requires AmeriGas OLP to abide by certain financial covenants from time to time including a minimum fixed charge coverage ratio and a senior notes liquidity covenant as defined in the agreement. 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 Revolving Credit Facility, AmeriGas OLP terminated the 2022 AmeriGas OLP Credit Agreement. AmeriGas Partners Senior Notes. In June 2024, pursuant to an early tender offer, AmeriGas Partners and AmeriGas Finance Corp. repurchased $475 aggregate principal amount of the 5.50% Senior Notes due May 2025. Cash on hand, a $315 cash contribution from the Company and other sources of liquidity were used for the repurchase. Following the repurchase, $218 aggregate principal amount of these senior notes remain outstanding at June 30, 2024, and are included in “Current maturities of long-term debt” on the Condensed Consolidated Balance Sheets. In March 2024, AmeriGas Partners and AmeriGas Finance Corp. entered into separate, privately negotiated repurchase agreements with a limited number of holders of the outstanding senior notes to repurchase $38 aggregate principal amount of the senior notes. AmeriGas Partners and AmeriGas Finance Corp. repurchased $7, $11, $13, and $7 par value of its issued and outstanding 5.50% Senior Notes, 5.875% Senior Notes, 5.75% Senior Notes, and 9.375% Senior Notes, respectively. Following these repurchases, $1,887 aggregate principal amount of these senior notes remain outstanding at June 30, 2024. UGI Corporation UGI Corporation Senior Notes. In June 2024, UGI issued, in an underwritten private placement, an aggregate $700 principal amount of 5.00% UGI Corporation Senior Notes due June 2028. The UGI Corporation Senior Notes are senior, unsecured obligations and rank equal in right of payment with our existing and future senior, unsecured indebtedness. Interest is payable semi-annually on June 1 and December 1 of each year, beginning on December 1, 2024, and will mature on June 1, 2028, unless earlier repurchased or converted. The net proceeds from the issuance of the UGI Corporation Senior Notes of approximately $682, after underwriters fees and other debt issuance costs, were used (1) to repay a portion of borrowings under the UGI Corporation Credit Facilities; (2) to make cash contribution of $315 to the Partnership to repay a portion of its 5.50% Senior Notes as described above; and (3) for general corporate purposes. The UGI Corporation Senior Notes are convertible subject to the occurrence of certain events and circumstances. Before March 1, 2028, noteholders will have the right to convert their notes only upon the occurrence of certain events as follows: 1.During any fiscal quarter commencing after the fiscal quarter ending September 30, 2024, if the market price of the Company’s common stock reaches 130% of the conversion price (initially $27.60) for a specified period of time; 2.The trading price of the Notes falls below 98% of the product of the sale price of the Company’s common stock and the conversion rate, for a specified period. The Company is not obligated to track the trading price of the notes unless a holder of the notes provides the Company reasonable evidence that the Notes are trading at 98% of the product of the sale price of the Company’s common stock and the conversion rate; 3.Upon the occurrence of specific corporate events related to specific types of distributions as defined in the Indenture; or 4.Upon the occurrence of a Fundamental Change, Make Whole Fundamental Change or Common Stock Change Event as defined in the indenture From and after March 1, 2028, holders of the UGI Corporation Senior Notes may convert their notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. As of June 30, 2024, none of the events permitting the noteholders to convert their notes early occurred. Accordingly, the UGI Corporation Senior Notes are classified as “Long-term debt” on the Condensed Consolidated Balance Sheet at June 30, 2024. Upon conversion, the Company will pay cash up to the aggregate principal amount of the UGI Corporation Senior notes. For the remainder of the amount in excess of the aggregate principal amount, if applicable, the Company will have the sole right to elect the settlement method upon conversion which can be either entirely in cash or in a combination of cash and shares of its common stock. The default settlement method as defined in the agreement is a combination settlement with a specified dollar amount of $1,000 per $1,000 principal of the UGI Corporation Senior Notes, and any incremental value settled in shares of the Company’s common stock. The initial conversion rate is 36.2319 shares of the Company’s common stock per $1,000 principal amount of the UGI Corporation Senior Notes, which represents an initial conversion price of approximately $27.60 per share of the Company’s common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. The Company may not redeem the UGI Corporation Senior Notes at its option before maturity. UGI Corporation Credit Facility Agreement. In April 2024, UGI entered into the fourth amendment to the UGI Corporation Credit Facility Agreement which extended the maturity date of a substantial portion of the (1) $215 delayed draw term loan facility, (2) $300 term loan facility, (3) $250 term loan facility, and (4) $300 revolving credit facility to August 29, 2025. In addition, the fourth amendment to the UGI Corporation Credit Facility Agreement increased the applicable rate (as defined in the UGI Corporation Credit Facility Agreement, as amended) of the $215 delayed draw term loan facility, and the $300 term loan facility by 0.375%. All other significant terms of the credit agreement remain unchanged. Loss on Extinguishments of Debt In conjunction with the amendment to the Energy Services Term Loan Credit Agreement and the early repayments of AmeriGas Partners’ Senior Notes, during the third quarter of Fiscal 2024, the Company recognized a pre-tax loss of $7, primarily comprising tender premiums and the write-off of unamortized debt issuance costs. In June 2023, pursuant to a tender offer and notice of redemption, AmeriGas Partners repaid in full all AmeriGas Partners’ 5.625% Senior Notes having an aggregate principal balance of $675. In conjunction with such early repayment, during the third quarter of Fiscal 2023, the Partnership recognized a pre-tax loss of $9, primarily comprising tender premiums and the write-off of unamortized debt issuance costs. Losses in connection with early repayment of debt are reflected in “Loss on extinguishments of debt” on the Condensed Consolidated Statements of Income.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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