Debt

12 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Debt

Note 6 — Debt

Significant Financing Activities Since September 30, 2022

UGI Utilities 2023 Credit Agreement. On November 9, 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 rate applicable to borrowings under the UGI Utilities 2023 Credit Agreement will remain unchanged. The 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 maturity of the credit agreement was extended to November 2024 with an additional automatic 5-year extension upon receipt of authorization for such extension from the PAPUC. 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.

On December 13, 2022, UGI Utilities entered into an amendment to the UGI Utilities Credit Agreement, providing for borrowings up to $425 and to replace the use of LIBOR with Term SOFR.

Borrowings under the amended UGI Utilities Credit Agreement bear interest, subject to our election, at a floating rate of either (i) Term SOFR plus the applicable margin plus a credit spread adjustment of 0.10% or (ii) the base rate plus the applicable margin. The applicable margin remains unchanged from the original credit agreement.

AmeriGas Partners Senior Notes. On May 31, 2023, AmeriGas Partners and AmeriGas Finance Corp. issued $500 principal amount of 9.375% Senior Notes due May 2028. The 9.375% Senior Notes rank equally with AmeriGas Partners’ existing senior notes. The net proceeds from the issuance of the 9.375% Senior Notes, together with cash on hand, a $150 cash contribution from the Company and other sources of liquidity, were used for the early repayment, pursuant to a tender offer and notice of redemption, of all AmeriGas Partners 5.625% Senior Notes having an aggregate principal balance of $675, plus tender premiums and accrued and unpaid interest. In conjunction with the early repayment of the 5.625% Senior Notes, in June 2023 the Partnership recognized a pre-tax loss of $9 primarily comprising tender premiums and the write-off of unamortized debt issuance costs, which is reflected in “Loss on extinguishments of debt” on the Consolidated Statement of Income.

The 9.375% Senior Notes are redeemable at the issuers’ option prior to June 2025 at a make whole premium or, on or after June 2025, at a call premium that declines from 4.688% to 0% depending on the year of redemption.

The 9.375% Senior Notes indenture contains customary covenants and default provisions that limit AmeriGas Partners’ ability to, among other things: incur additional indebtedness; create or incur liens; engage in transactions with affiliates; engage in mergers or consolidations or sell all or substantially all of the issuers’ assets; make restricted payments, loans and investments; enter into business combinations and sell assets; and engage in other lines of business.

UGI International 2023 Credit Facilities Agreement. On March 7, 2023, UGI International, LLC and its indirect wholly-owned subsidiary, UGI International Holdings B.V., entered into the UGI International 2023 Credit Facilities Agreement, a five-year unsecured senior facilities agreement, maturing March 7, 2028, with a consortium of banks. The UGI International 2023 Credit Facilities Agreement consists of (1) a €300 variable-rate term loan facility ("Facility A") and (2) a €500 multicurrency revolving credit facility, including a €100 sublimit for swingline loans ("Facility B"). We have designated

borrowings under Facility A as a net investment hedge. In connection with entering into the UGI International 2023 Credit Facilities Agreement, UGI International, LLC paid off in full and terminated the UGI International Credit Facilities Agreement, dated as of October 18, 2018. Borrowings under the multicurrency revolving credit facility may be used to finance the working capital needs of UGI International, LLC and its subsidiaries and for general corporate purposes.

Borrowings under Facility A bear interest at the euro interbank offered rate plus the applicable margin and borrowings under Facility B bear interest at the daily non-cumulative compounded Reference Rate Terms, as defined in the Agreement, plus the applicable margin. The applicable margin for Facility A ranges from 1.70% to 3.35%, and for Facility B from 1.35% to 3.35%, and are dependent on the total net leverage ratio of UGI International, LLC and its subsidiaries on a consolidated basis. UGI International, LLC entered into an interest rate swap, effective March 31, 2023, that fixes the underlying market-based interest rate on Facility A at 3.10% through March 2026.

The UGI International 2023 Credit Facilities Agreement contains customary covenants and default provisions and requires compliance with certain financial covenants including a consolidated net leverage ratio as defined in the agreement.

UGI Energy Services Credit Agreement. On May 12, 2023, Energy Services entered into the second amendment to the UGI Energy Services Credit Agreement, which provides that the Term SOFR rate (as defined in the UGI Energy Services Credit Agreement) shall replace LIBOR as a reference rate. After giving effect to the second amendment, the UGI Energy Services Credit Agreement shall bear interest at a floating rate of, at Energy Services’ option, either (i) Term SOFR plus the Applicable Rate (as defined in the UGI Energy Services Credit Agreement) plus a credit spread adjustment of 0.10%, or (ii) the base rate plus the applicable margin that is based on the leverage of Energy Services.

Energy Services Amended Term Loan Credit Agreement. On February 23, 2023, Energy Services entered into the Energy Services Amended Term Loan Credit Agreement, the first amendment to the Energy Services Term Loan Credit Agreement, dated August 13, 2019. The Energy Services Amended Term Loan Credit Agreement provides, among other items, that (i) the outstanding principal amount of the loans shall be increased by $125 to $800, (ii) the maturity date of the loans shall be extended to February 22, 2030, (iii) Term SOFR (as defined in the Energy Services Amended Term Loan Credit Agreement) shall replace LIBOR as a reference rate and (iv) borrowings under the Energy Services Amended Term Loan Credit Agreement shall bear interest at a floating rate of, at Energy Services’ option, either (x) Term SOFR plus the applicable margin plus a credit spread adjustment of 0.10% or (y) the base rate, as defined in the Agreement, plus the applicable margin. The applicable margin shall be 3.25% per annum for Term SOFR loans and 2.25% per annum for base rate loans. Borrowings under the Energy Services Amended Term Loan Credit Agreement are payable in equal quarterly installments of $2, commencing in March 2023, with the balance of the principal being due and payable in full at maturity.

The Energy Services Amended Term Loan Credit Agreement contains customary covenants and default provisions and requires compliance with certain financial covenants including a minimum debt service coverage ratio as defined in the Agreement.

In March 2023, in connection with the Energy Services Amended Term Loan Credit Agreement, Energy Services terminated and settled its existing interest rate swap associated with the Energy Services Term Loan Credit Agreement at a $32 gain. This gain has been deferred in AOCI and is being amortized to interest expense over the remaining term of the initial interest rate swap ending July 2024. Energy Services entered into a new interest rate swap, effective March 31, 2023, that fixes the underlying market-based interest rate on this variable-rate term loan at 4.53% through September 2026.

Mountaineer 2023 Credit Agreement. On October 20, 2022, Mountaineer entered into the Mountaineer 2023 Credit Agreement with a group of lenders. The Mountaineer 2023 Credit Agreement amends and restates a previous credit agreement and provides for borrowings up to $150, including a $20 sublimit for letters of credit. Mountaineer may request an increase in the amount of loan commitments to a maximum aggregate amount of $250, subject to certain terms and conditions. Borrowings under the Mountaineer 2023 Credit Agreement can be used to finance the working capital needs of Mountaineer and for general corporate purposes. The Mountaineer 2023 Credit Agreement is scheduled to expire in November 2024, and Mountaineer has the option, with the consent of the lenders, to extend the maturity date up to November 2026.

Borrowings under the Mountaineer 2023 Credit Agreement bear interest, subject to our election, at either (i) the base rate, defined as the highest of (a) the prime rate, (b) the federal funds rate plus 0.50% and (c) the adjusted Term SOFR rate for a one-month tenor plus 1%, in each case, plus the applicable margin or (ii) the adjusted Term SOFR rate plus the applicable margin. The applicable margin for base rate loans ranges from 0% to 1.25%, and for Term SOFR loans from 1.00% to 2.25%, depending on the debt rating of Mountaineer. The adjusted Term SOFR rate is defined as the Term SOFR reference rate for the selected interest period, plus 0.10% per annum for a one-month interest period, 0.15% per annum for a three-month interest period, or 0.25% per annum for a six-month interest period. The Mountaineer Credit Agreement contains customary covenants and default provisions and requires compliance with certain financial covenants including a maximum leverage ratio and a minimum interest coverage ratio as defined in the agreement.

UGI Corporation Credit Facility Agreement. On May 12, 2023, the Company entered into the second amendment to the UGI Corporation Credit Agreement, which provides that the Term SOFR rate (as defined in the UGI Corporation Credit Agreement) shall replace LIBOR as a reference rate. After giving effect to the second amendment, the UGI Corporation Credit Agreement shall bear interest at a floating rate of, at the Company’s option, either (i) Term SOFR plus the Applicable Rate (as defined in the UGI Corporation Credit Agreement) plus a credit spread adjustment of 0.10%, or (ii) the base rate plus the applicable margin that will be based on the leverage of the Company or credit ratings assigned to certain indebtedness of the Company.

On September 20, 2023, UGI amended the UGI Corporation Credit Facility Agreement which extended the maturity date of the (1) five-year $250 amortizing variable-rate term loan and (2) five-year $300 revolving credit facility to May 2025 and increased the applicable rate (as defined in the amended UGI Corporation Credit Agreement) by 0.125%.

Credit Facilities and Short-term Borrowings

Information about the Company’s principal credit agreements (excluding the Energy Services Receivables Facility, which is discussed below) as of September 30, 2023 and 2022, is presented in the following table. Borrowings on these credit agreements bear interest at rates indexed to short-term market rates. Borrowings outstanding under these agreements (other than the 2021 UGI Corporation Senior Credit Facility) are classified as “Short-term borrowings” on the Consolidated Balance Sheets.

	Expiration Date	Total Capacity		Borrowings Outstanding		Letters of Credit and Guarantees Outstanding		Available Borrowing Capacity		Weighted Average Interest Rate - End of Year
September 30, 2023
AmeriGas OLP (a)	September 2026	$	600	$	—	$	2	$	598	N.A.
UGI International, LLC (b)	March 2028	€	500	€	202	€	—	€	298	5.17	%
Energy Services (c)	March 2025	$	260	$	57	$	—	$	203	7.67	%
UGI Utilities (d)	June 2024	$	425	$	248	$	—	$	177	6.30	%
Mountaineer (e)	November 2024	$	150	$	84	$	—	$	66	6.68	%
UGI Corporation (f)	May 2025	$	300	$	283	$	—	$	17	7.80	%
September 30, 2022
AmeriGas OLP (a)	September 2026	$	600	$	131	$	2	$	467	7.27	%
UGI International, LLC (b)	October 2023	€	300	€	—	€	—	€	300	N.A.
Energy Services (c)	March 2025	$	260	$	—	$	—	$	260	N.A.
UGI Utilities (d)	June 2024	$	350	$	151	$	—	$	199	4.37	%
Mountaineer (e)	November 2024	$	100	$	85	$	—	$	15	3.82	%
UGI Corporation (f)	August 2024	$	300	$	252	$	—	$	48	5.62	%

(a)At September 30, 2023 and 2022 the 2022 AmeriGas OLP Credit Agreement includes a $100 sublimit for letters of credit.

(b)The UGI International 2023 Credit Facilities Agreement and the previous UGI International Credit Facilities Agreement permits borrowings in euros or USD.

(c)The Energy Services Credit Agreement includes a $50 sublimit for letters of credit and is guaranteed by certain subsidiaries of Energy Services.

(d)The UGI Utilities Credit Agreement includes a $100 sublimit for letters of credit. On November 9, 2023, UGI Utilities entered into the UGI Utilities 2023 Credit Agreement and concurrently terminated the UGI Utilities Credit Agreement, a predecessor agreement. See Significant Financing Activities above and Note 6 for additional information. See Significant Financing Activities Since September 30, 2022 above for additional information.

(e)The Mountaineer 2023 Credit Agreements includes a $20 sublimit for letters of credit.

(f)At September 30, 2023 and 2022, management intended to maintain a substantial portion of amounts outstanding under the UGI Corporation Senior Credit Facility beyond twelve months from the respective balance sheet dates. As such, borrowings outstanding are classified as “Long-term debt” on the Consolidated Balance Sheets. Subsequent to September 30, 2022, the Company repaid $87 of such borrowings and classified these repayments as “Current maturities of long-term debt” on the Consolidated Balance Sheets. The UGI Corporation Senior Credit Facility includes a $10 sublimit for letters of credit.

N.A. - Not applicable

Energy Services Receivables Facility. Energy Services has a Receivables Facility with an issuer of receivables-backed commercial paper. On October 20, 2023, the expiration date of the Receivables Facility was extended to October 18, 2024. The Receivables Facility provides Energy Services with the ability to borrow up to $200 of eligible receivables during the period October 20, 2023 to April 30, 2024, and up to $100 of eligible receivables during the period May 1, 2024 to October 18, 2024. Energy Services uses the Receivables Facility to fund working capital, margin calls under commodity futures contracts, capital expenditures, dividends and for general corporate purposes.

Under the Receivables Facility, Energy Services transfers, on an ongoing basis and without recourse, its trade accounts receivable to its wholly owned, special purpose subsidiary, ESFC, which is consolidated for financial statement purposes. ESFC, in turn, has sold and, subject to certain conditions, may from time to time sell, an undivided interest in some or all of the receivables to a major bank. Amounts sold to the bank are reflected as “Short-term borrowings” on the Consolidated Balance Sheets. ESFC was created and has been structured to isolate its assets from creditors of Energy Services and its affiliates, including UGI. Trade receivables sold to the bank remain on the Company’s balance sheet and the Company reflects a liability equal to the amount advanced by the bank. The Company records interest expense on amounts owed to the bank. Energy Services continues to service, administer and collect trade receivables on behalf of the bank, as applicable.

Information regarding the amounts of trade receivables transferred to ESFC and the amounts sold to the bank are as follows:

	2023		2022		2021
Trade receivables transferred to ESFC during the year	$	1,946	$	2,221	$	1,353
ESFC trade receivables sold to the bank during the year	$	535	$	152	$	308
ESFC trade receivables - end of year (a)	$	62	$	101	$	61

(a)At September 30, 2023, the amounts of ESFC trade receivables sold to the bank was $46, and is reflected as “Short-term borrowings” on the Consolidated Balance Sheets. At September 30, 2022 there were no ESFC trade receivables sold to the bank.

Long-term Debt

Long-term debt comprises the following at September 30:

	2023		2022
AmeriGas Propane:
AmeriGas Partners Senior Notes:
5.50% due May 2025	$	700	$	700
5.875% due August 2026	675		675
5.625% due May 2024	—		675
5.75% due May 2027	525		525
9.375% due May 2028	500		—
Unamortized debt issuance costs	(15)		(12)
Total AmeriGas Propane	2,385		2,563
UGI International:
2.50% Senior Notes due December 2029	424		392
UGI International, LLC variable-rate term loan due March 2028 (a)	317		—
UGI International, LLC variable-rate term loan due October 2023 (b)	—		294
Other	6		2
Unamortized debt issuance costs	(8)		(6)
Total UGI International	739		682
Midstream & Marketing:
Energy Services variable-rate term loan due through February 2030 (c)	794		677
Other	41		40
Unamortized discount and debt issuance costs	(15)		(7)
Total Energy Services	820		710
Utilities:
UGI Utilities Senior Notes:
4.12% due September 2046	200		200
4.98% due March 2044	175		175
3.12% due April 2050	150		150
4.55% due February 2049	150		150
4.12% due October 2046	100		100
6.21% due September 2036	100		100
2.95% due June 2026	100		100
1.59% due June 2026	100		100
1.64% due September 2026	75		75
4.75% due July 2032	90		90
4.99% due September 2052	85		85
UGI Utilities Medium-Term Notes:
6.13% due October 2034	20		20
6.50% due August 2033	20		20
Mountaineer senior notes (d)	199		201
UGI Utilities variable-rate term loan due through July 2027 (e)	89		95
Other	2		1
Unamortized debt issuance costs	(6)		(6)
Total Utilities	1,649		1,656
UGI Corporation:
UGI Corporation Credit Facilities:
UGI Corporation revolving credit facility maturing May 2025 (f)	283		252
UGI Corporation variable-rate term loan due May 2025 (g)	300		300
UGI Corporation variable-rate term loan due through May 2025 (h)	212		250
UGI Corporation variable-rate term loan due May 2025 (i)	215		215
Unamortized debt issuance costs	(3)		(2)
Total UGI Corporation	1,007		1,015
Other	—		6
Total long-term debt	6,600		6,632
Less: current maturities	(57)		(149)
Total long-term debt due after one year	$	6,543	$	6,483

(a)At September 30, 2023, the effective interest rate on the term loan was 4.95%. We have entered into pay-fixed, receive-variable interest rate swaps that fix the underlying variable rate at 3.10% through March 2026.

(b)At September 30, 2022, the effective interest rate on the term loan was 1.89%. The term loan was repaid in full and terminated concurrently with the execution of the UGI International 2023 Credit Facilities Agreement.

(c)At September 30, 2023 and 2022, the effective interest rates on the term loan were 7.82% and 5.13%, respectively. We have entered into a pay-fixed, receive-variable interest rate swap to effectively fix the underlying variable rate at 4.53% on these borrowings through September 2026. Term loan borrowings are due in equal quarterly installments of $2, with the balance of the principal being due in full at maturity. Under certain circumstances, Energy Services is required to make additional principal payments if the consolidated total leverage ratio, as defined, is greater than defined thresholds. This term loan is collateralized by substantially all of the assets of Energy Services, subject to certain exceptions and carveouts including, but not limited to, accounts receivable and certain real property.

(d)Total long-term debt at September 30, 2023 and 2022, comprises $180 principal amount of Mountaineer senior secured notes plus unamortized premium of $19 and $21 for September 30, 2023 and 2022, respectively. The face interest rates on the Mountaineer senior notes range from 3.50% to 4.49%, with maturities ranging from 2027 to 2052.

(e)At September 30, 2023 and 2022, the effective interest rate on this term loan was 3.92%. We have entered into a pay-fixed, receive-variable interest rate swap to effectively fix the underlying variable rate at approximately 2.82% on a portion of these borrowings through June 2026. Term loan borrowings are due in equal quarterly installments of $2, with the balance of the principal being due in full at maturity.

(f)At September 30, 2023 and 2022, the effective interest rates on credit facility borrowings were 7.80% and 5.61%, respectively.

(g)At September 30, 2023 and 2022, the effective interest rates on the term loan were 2.77% and 2.67%, respectively. We have entered into pay-fixed, receive-variable interest rate swaps to effectively fix the underlying variable rate at approximately 0.70% on these borrowings through September 2024.

(h)At September 30, 2023 and 2022, the effective interest rates on the term loan were 7.79% and 4.15%, respectively. Term loan borrowings are due in equal quarterly installments of $9, commencing December 2022, which the balance of the principal being due in full at maturity.

(i)At September 30, 2023 and 2022, the effective interest rates on the term loan were 4.73% and 3.53%, respectively. We have entered into pay-fixed, receive-variable interest rate swaps to effectively fix the underlying variable rate at approximately 0.70% on a portion of these borrowings through September 2024.

Scheduled principal repayments of long-term debt for each of the next five fiscal years ending September 30 are as follows:

	2024		2025		2026		2027		2028
AmeriGas Propane	$	—	$	700	$	675	$	525	$	500
UGI International	1		—		—		—		317
Midstream & Marketing	12		8		8		8		8
Utilities	6		6		281		70		40
UGI Corporation	38		973		—		—		—
Total	$	57	$	1,687	$	964	$	603	$	865

Restrictive Covenants

Our long-term debt and credit facility agreements generally contain customary covenants and default provisions which may include, among other things, restrictions on the incurrence of additional indebtedness and also restrict liens, guarantees, investments, loans and advances, payments, mergers, consolidations, asset transfers, transactions with affiliates, sales of assets, acquisitions and other transactions. These agreements contain standard provisions which require compliance with certain financial ratios. Certain of the subsidiaries nonrecourse debt agreements contain cross-default provisions, whereby default under an agreement with one lender simultaneously causes default under agreements with other lenders. In addition, under the default provisions, a default of a subsidiary results in or is at risk of triggering a cross-default under the debt of the parent company. UGI and its subsidiaries were in compliance with all debt covenants as of September 30, 2023.

2022 AmeriGas OLP Credit Agreement. Under the 2022 AmeriGas OLP Credit Agreement, AmeriGas OLP, as borrower, is required to comply with financial covenants related to leverage and interest coverage measured at the Partnership and at AmeriGas OLP. On November 15 2023, the Company entered into an amendment to the 2022 AmeriGas OLP Credit Agreement, which amends certain provisions of the credit agreement dated as of September 28, 2022 to, among other things, (i) reduce the maximum revolver amount from $600 to $400, (ii) reduce the minimum interest coverage ratio, effective for the fourth quarter of Fiscal 2023 through the end of the fourth quarter of Fiscal 2024 and (iii) beginning for the first quarter of Fiscal 2025, the minimum interest coverage ratio will remain reduced if the net leverage ratio is below a threshold as defined by the agreement; if the net leverage ratio exceeds such threshold, the minimum interest coverage ratio will revert to the original ratio as defined by the agreement.

As of March 31, 2023, AmeriGas OLP was in breach of the leverage ratio debt covenant and interest coverage ratio, which it cured with the funds received from UGI. The 2022 AmeriGas OLP Credit Agreement contains an equity cure provision, which allows AmeriGas OLP’s direct or indirect parent, including UGI and its other subsidiaries, to fund capital contributions to eliminate any EBITDA (as defined in the 2022 AmeriGas OLP Credit Agreement) shortfalls that would otherwise result in non-compliance with these financial covenants. UGI made capital contributions to AmeriGas OLP of $20 and $11 on March 31, 2023 and April 24, 2023, respectively, which in aggregate represented one equity cure in accordance with the 2022 AmeriGas OLP Credit Agreement. As a result of these capital contributions, AmeriGas OLP and the Partnership were in compliance with its financial covenants after considering the equity cure provision as of June 30, 2023 and March 31, 2023. As of September 30, 2023, the Partnership was in compliance with all debt covenants as set forth in the amended 2022 AmeriGas OLP Credit Agreement without the consideration of the equity cure provision.

UGI also provided an irrevocable letter of support whereby UGI has committed to fund any such EBITDA shortfalls and debt service, if any. Based on the support and the projected EBITDA, AmeriGas OLP is expected to remain in compliance with its financial debt covenants for the succeeding twelve-month period. In addition, in May 2023, the Company contributed $52 in an equity contribution principally to fund debt service on the senior notes.

Restricted Net Assets

At September 30, 2023, the amount of net assets of UGI’s consolidated subsidiaries that were restricted from transfer to UGI under debt agreements, subsidiary partnership agreements and regulatory requirements under foreign laws totaled approximately $3,600.