Answer
The pressârelease only supplies the headline earningsâperâshare (EPS) figures for the quarter and the priorâyear period; it does not spell out the specific lineâitems that caused the change.âŻHowever, by comparing the GAAPâEPS result with the âadjustedâ EPS result we can infer what is most likely behind the steep GAAP decline.
| Metric | Priorâyear (FYâŻ2024) | Current Q3 (FYâŻ2025) |
|---|---|---|
| GAAP diluted EPS | $(0.23) | $(0.76) |
| Adjusted diluted EPS | $0.06 | $(0.01) |
1. The magnitude of the GAAP drop
- GAAP EPS fell from a loss of $0.23 per share to a loss of $0.76 per share â a swing of $0.53 per share (ââŻ230âŻ% worse on a relative basis).
- The âadjustedâ EPS, which strips out certain nonârecurring or nonâcash items, moved only from a small positive $0.06 to a modest loss of $0.01 (a $0.07 perâshare change).
The fact that the adjusted EPS deteriorated far less than the GAAP EPS tells us that the bulk of the GAAP decline is coming from items that are excluded in the adjusted calculation.
2. What âadjustedâ EPS typically excludes
In most UGI earnings releases, the âadjustedâ (or ânonâGAAPâ) earnings figure removes:
| Typical exclusions | Why they matter |
|---|---|
| Depreciation & amortization (especially for capitalâintensive assets) | GAAP includes these as operating expenses; adjusted removes them to show cashâflowârelated profitability. |
| Impairments or writeâdowns of assets (e.g., gasâdistribution infrastructure, realâestate, or goodwill) | Large, nonârecurring charges that depress GAAP EPS but are not part of ongoing operations. |
| Acquisitionârelated integration costs (integration, restructuring, or transition expenses) | Oneâoff costs that are excluded from adjusted earnings. |
| Losses on discontinued operations or nonâcore businesses | Adjusted EPS focuses on the continuingâoperations performance. |
| Certain pension or postâretirement benefit adjustments | These can be volatile and are often stripped out. |
Because the adjusted EPS only moved $0.07 per share versus the GAAP EPSâs $0.53 per share swing, the primary drivers of the GAAP decline are likely one or more of the above nonâcash or nonârecurring items.
3. Plausible specific contributors (based on UGIâs business model)
UGI Corp. is a diversified energyâdistribution and services company with significant naturalâgas, petroleumâproducts, and electricityâdistribution operations, plus midstream and logistics businesses. The following are the most common sources of GAAPâEPS headwinds for a company in this sector during a quarter:
| Potential source | How it could create a GAAPâEPS gap |
|---|---|
| Higher commodityâprice volatility (e.g., naturalâgas price swings) | Impacts revenue and may trigger markâtoâmarket adjustments on inventory or derivative positions that are recorded in GAAP. |
| Infrastructure impairments (e.g., pipeâline or storageâfacility writeâdowns) | When assets are reâvalued downward, the loss is recorded as an impairment expense, which is GAAPâdeductible but excluded from adjusted EPS. |
| Capitalâintensive depreciation | UGIâs large, regulated utility assets generate sizable depreciation expense that is fully reflected in GAAP EPS but stripped out in the adjusted metric. |
| Acquisitionârelated costs (e.g., purchaseâprice allocations, integration expenses) | If UGI closed a significant acquisition in the quarter, the associated integration, legal, and advisory costs would be GAAPâdeductible. |
| Regulatory or compliance charges (e.g., environmental remediation, safetyârelated upgrades) | These can be recorded as operating expenses under GAAP, but may be treated as ânonârecurringâ in the adjusted presentation. |
| Pension or postâretirement benefit adjustments | Changes in actuarial assumptions or funding status can create GAAPârecognizable gains/losses that are excluded from adjusted EPS. |
4. The âadjustedâ EPS signal
The adjusted EPS still slipped from $0.06 a year ago to $(0.01) this quarter, a $0.07 perâshare decline. This modest change suggests that the core operating performance of the continuing businesses is relatively stable, and the bulk of the GAAP loss is indeed coming from the nonâoperating or nonâcash items listed above.
5. Bottom line â What is most likely driving the GAAPâEPS decline?
- Impairment or writeâdown charges on assets (e.g., gasâdistribution infrastructure, realâestate, or goodwill) that are recorded in GAAP but excluded from adjusted EPS.
- Higher depreciation/amortization expense due to the capitalâintensive nature of UGIâs regulated utility assets.
- Oneâoff acquisition or integration costs (if any acquisitions were completed in the quarter).
- Regulatory or compliance expenses that are GAAPâdeductible but treated as ânonârecurringâ in the adjusted metric.
Because the adjusted EPS only moved marginally, the dominant factor is almost certainly a nonâcash or nonârecurring GAAP chargeâmost plausibly an asset impairment or a large depreciation/amortization expenseârather than a fundamental deterioration in the companyâs operating profitability.
Takeaway for investors:
The GAAPâEPS decline from $(0.23) to $(0.76) reflects a significant, likely nonârecurring charge that depresses the headline loss. The adjusted EPS, which is a better gauge of ongoing cashâgenerating performance, shows only a modest deterioration. Until UGI provides a detailed breakdown (e.g., in the Management Discussion & Analysis or the full earnings release), the safest interpretation is that the GAAP loss is driven by assetârelated writeâdowns, higher depreciation, or other oneâoff items rather than a sustained drop in core operating earnings.