UGI CORP /PA/UGI
UGI CORP /PA/ Fair Value Disclosure
Note 17 — Fair Value Measurements
Recurring Fair Value Measurements
The following table presents, on a gross basis, our financial assets and liabilities, including both current and noncurrent portions, that are measured at fair value on a recurring basis within the fair value hierarchy as described in Note 2:
| Asset (Liability) | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| September 30, 2025: | |||||||||||||||||||||||
| Derivative instruments: | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Commodity contracts | $ | 85 | $ | 11 | $ | — | $ | 96 | |||||||||||||||
| Foreign currency contracts | $ | — | $ | 1 | $ | — | $ | 1 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Commodity contracts | $ | (72) | $ | (61) | $ | — | $ | (133) | |||||||||||||||
| Foreign currency contracts | $ | — | $ | (19) | $ | — | $ | (19) | |||||||||||||||
| Interest rate contracts | $ | — | $ | (12) | $ | — | $ | (12) | |||||||||||||||
| Non-qualified supplemental postretirement grantor trust investments (a) | $ | 35 | $ | — | $ | — | $ | 35 | |||||||||||||||
| September 30, 2024 | |||||||||||||||||||||||
| Derivative instruments: | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Commodity contracts | $ | 106 | $ | 27 | $ | — | $ | 133 | |||||||||||||||
| Foreign currency contracts | $ | — | $ | 6 | $ | — | $ | 6 | |||||||||||||||
| Interest rate contracts | $ | — | $ | 1 | $ | — | $ | 1 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Commodity contracts | $ | (120) | $ | (32) | $ | — | $ | (152) | |||||||||||||||
| Foreign currency contracts | $ | — | $ | (9) | $ | — | $ | (9) | |||||||||||||||
| Interest rate contracts | $ | — | $ | (22) | $ | — | $ | (22) | |||||||||||||||
| Non-qualified supplemental postretirement grantor trust investments (a) | $ | 43 | $ | — | $ | — | $ | 43 | |||||||||||||||
(a)Consists primarily of mutual fund investments held in grantor trusts associated with non-qualified supplemental retirement plans (see Note 8).
The fair values of our Level 1 exchange-traded commodity futures and option contracts and non-exchange-traded commodity futures and forward contracts are based upon actively quoted market prices for identical assets and liabilities. Substantially all of the remaining derivative instruments are designated as Level 2. The fair values of certain non-exchange-traded commodity derivatives designated as Level 2 are based upon indicative price quotations available through brokers, industry price publications or recent market transactions and related market indicators. The fair values of our Level 2 interest rate contracts and foreign currency contracts are based upon third-party quotes or indicative values based on recent market transactions. The fair values of investments held in grantor trusts are derived from quoted market prices as substantially all of the investments in these trusts have active markets.
Nonrecurring Fair Value Measurements
During Fiscal 2025 and Fiscal 2024, in connection with the disposition of UGI International’s cylinder business in the United Kingdom and the disposition of UGID, we recognized a non-cash, pre-tax impairment charge of $3 and $62, respectively, to reduce the carrying amount of the long-lived assets included in the disposal groups to their estimated fair values. The Company determined the estimated fair value of such assets fell within Level 2 of the fair value hierarchy and was based upon the estimated sales price. See Note 5 for additional information on these transactions.
Based on our goodwill impairment evaluation in Fiscal 2024 and Fiscal 2023, the estimated fair value of the AmeriGas Propane reporting unit was determined to be less than its carrying value. As a result, the Company recorded a non-cash pre-tax goodwill impairment charge of $195 and $656 in Fiscal 2024 and Fiscal 2023, respectively. See Note 12 for additional information on the impairment test, including the key assumptions used to determine the fair value of the AmeriGas Propane reporting unit.
Other Financial Instruments
The carrying amounts of other financial instruments included in current assets and current liabilities (except for current maturities of long-term debt) approximate their fair values because of their short-term nature. We estimate the fair value of long-term debt by using current market rates and by discounting future cash flows using rates available for similar type debt (Level 2). The carrying amounts and estimated fair values of our long-term debt (including current maturities but excluding unamortized debt issuance costs) were as follows:
| 2025 | 2024 | ||||||||||
| Carrying amount | $ | 6,701 | $ | 6,733 | |||||||
| Estimated fair value | $ | 6,777 | $ | 6,663 | |||||||
Financial instruments other than derivative instruments, such as short-term investments and trade accounts receivable, could expose us to concentrations of credit risk. We limit credit risk from short-term investments by investing only in investment-grade commercial paper, money market mutual funds, securities guaranteed by the U.S. Government or its agencies and FDIC insured bank deposits. The credit risk arising from concentrations of trade accounts receivable is limited because we have a large customer base that extends across many different U.S. markets and a number of foreign countries. See Note 18 for information regarding concentrations of credit risk associated with our derivative instruments.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 21, 2025 | Showing above |
| 2024 | Nov 26, 2024 | |
| 2023 | Nov 29, 2023 | |
| 2022 | Nov 21, 2022 | |
| 2021 | Nov 19, 2021 | |
| 2020 | Nov 20, 2020 | |
| 2019 | Nov 26, 2019 | |
| 2018 | Nov 20, 2018 | |
| 2017 | Nov 21, 2017 | |
| 2016 | Nov 22, 2016 | |
| 2015 | Nov 30, 2015 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.