1 1 1 Fiscal 2021 Second Quarter Results J o h n L . Wa l s h President and CEO, UGI Corporation R o g e r P e r r e a u l t Executive Vice President Global LPG, UGI Corporation President and CEO, UGI Corporation (effective June 26, 2021) Te d J . J a s t r z e b s k i Chief Financial Officer, UGI Corporation R o b e r t F. B e a r d Executive Vice President Natural Gas, UGI Corporation About This Presentation This press release contains statements, estimates and projections that are forward-looking stateme ...

UGI Corporation (NYSE:UGI) Q2 2021 Earnings Conference Call May 6, 2021 9:00 AM ET Company Participants Tameka Morris - Director, Investor Relations John Walsh - President and Chief Executive Officer, Vice Chair of AmeriGas Propane, Inc. Ted Jastrzebski - Chief Financial Officer Robert Beard - Executive Vice President, Natural Gas, Chief Executive Officer, UGI Utilities, Inc. Roger Perreault - Executive Vice President, Global LPG, President UGI International, LLC. Conference Call Participants Marc Solecitto ...

[Glossary of Terms and Abbreviations](index=3&type=section&id=Glossary%20of%20Terms%20and%20Abbreviations) This section defines key company entities and explains industry-specific and regulatory abbreviations used in the report - Defines key UGI Corporation entities and their roles, including **AmeriGas OLP**, **AmeriGas Partners**, **UGI International**, **Energy Services**, and **UGI Utilities**[10](index=10&type=chunk) - Explains various industry-specific and regulatory abbreviations such as **GAAP**, **FERC**, **PAPUC**, and **COVID-19**[12](index=12&type=chunk)[13](index=13&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk) [Part I Financial Information](index=8&type=section&id=Part%20I%20Financial%20Information) [Item 1. Financial Statements (unaudited)](index=8&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements and detailed supporting notes [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Shows the company's unaudited condensed consolidated financial position as of December 31, 2020, and comparative periods Condensed Consolidated Balance Sheets | Metric | Dec 31, 2020 (Millions $) | Sep 30, 2020 (Millions $) | Dec 31, 2019 (Millions $) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Total current assets | 2,180 | 1,543 | 1,947 | | Property, plant and equipment, net | 7,054 | 6,960 | 6,784 | | Goodwill | 3,564 | 3,518 | 3,483 | | Total assets | 14,725 | 13,985 | 14,286 | | **Liabilities & Equity** | | | | | Total current liabilities | 2,097 | 1,755 | 2,391 | | Long-term debt | 6,012 | 5,981 | 5,828 | | Total liabilities | 10,279 | 9,848 | 10,281 | | Total equity | 4,446 | 4,137 | 4,005 | [Condensed Consolidated Statements of Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Details the unaudited condensed consolidated income statement for the three months ended December 31, 2020, and 2019 Condensed Consolidated Statements of Income | Metric | Three Months Ended Dec 31, 2020 (Millions $) | Three Months Ended Dec 31, 2019 (Millions $) | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenues | 1,932 | 2,007 | (75) | | Cost of sales | 833 | 1,008 | (175) | | Operating income | 502 | 377 | 125 | | Income before income taxes | 412 | 288 | 124 | | Net income attributable to UGI Corporation | 303 | 212 | 91 | | Basic EPS | 1.45 | 1.01 | 0.44 | | Diluted EPS | 1.44 | 1.00 | 0.44 | [Condensed Consolidated Statements of Comprehensive Income](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Presents the unaudited condensed consolidated statements of comprehensive income for the three months ended December 31, 2020, and 2019 Condensed Consolidated Statements of Comprehensive Income | Metric | Three Months Ended Dec 31, 2020 (Millions $) | Three Months Ended Dec 31, 2019 (Millions $) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net income attributable to UGI Corporation | 303 | 212 | 91 | | Other comprehensive income | 68 | 54 | 14 | | Comprehensive income attributable to UGI Corporation | 371 | 266 | 105 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Details cash flows from operating, investing, and financing activities for the three months ended December 31, 2020, and 2019 Condensed Consolidated Statements of Cash Flows | Metric | Three Months Ended Dec 31, 2020 (Millions $) | Three Months Ended Dec 31, 2019 (Millions $) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | 151 | 118 | 33 | | Net cash used by investing activities | (189) | (176) | (13) | | Net cash provided (used) by financing activities | 120 | (33) | 153 | | Cash, cash equivalents and restricted cash increase (decrease) | 89 | (82) | 171 | | Cash, cash equivalents and restricted cash at end of period | 446 | 429 | 17 | [Condensed Consolidated Statements of Changes in Equity](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Outlines movements in common stock, retained earnings, AOCI, and treasury stock for the three months ended December 31, 2020, and 2019 Condensed Consolidated Statements of Changes in Equity | Metric | Three Months Ended Dec 31, 2020 (Millions $) | Three Months Ended Dec 31, 2019 (Millions $) | | :--- | :--- | :--- | | Common stock, without par value (end of period) | 1,419 | 1,398 | | Retained earnings (end of period) | 3,139 | 2,798 | | Accumulated other comprehensive income (loss) (end of period) | (79) | (163) | | Treasury stock (end of period) | (42) | (37) | | Total UGI stockholders' equity (end of period) | 4,437 | 3,996 | | Total equity (end of period) | 4,446 | 4,005 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1 — Nature of Operations](index=13&type=section&id=Note%201%20%E2%80%94%20Nature%20of%20Operations) Describes UGI's business as a holding company involved in distributing, storing, transporting, and marketing energy products - UGI operates a diverse energy business including retail propane marketing, natural gas and electric distribution, and energy marketing[31](index=31&type=chunk)[32](index=32&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - European operations focus on **LPG distribution** and energy marketing across much of Europe[31](index=31&type=chunk)[33](index=33&type=chunk) - UGI signed a definitive agreement to acquire Mountaineer Gas Company for a preliminary purchase price of **$540 million**[36](index=36&type=chunk) [Note 2 — Summary of Significant Accounting Policies](index=13&type=section&id=Note%202%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) Outlines significant accounting policies for preparing the unaudited condensed consolidated financial statements - Financial statements are unaudited and prepared in accordance with **SEC rules**, including all necessary normal recurring adjustments[37](index=37&type=chunk) - Equity method investments, primarily PennEast and Pennant, face ongoing legal challenges which could result in delays or additional costs[39](index=39&type=chunk)[40](index=40&type=chunk) - Derivative instruments are reported on the balance sheets at **fair value**, with accounting treatment depending on their designation[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) Weighted-Average Common Shares Outstanding | Denominator (thousands of shares) | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | | :--- | :--- | :--- | | Weighted-average common shares outstanding — basic | 208,774 | 209,439 | | Incremental shares issuable for stock options and awards | 866 | 1,819 | | Weighted-average common shares outstanding — diluted | 209,640 | 211,258 | [Note 3 — Accounting Changes](index=15&type=section&id=Note%203%20%E2%80%94%20Accounting%20Changes) Discusses the adoption of new accounting standards, specifically ASU 2016-13 on Credit Losses and ASU 2019-12 on Income Taxes - Adopted ASU 2016-13, 'Measurement of Credit Losses on Financial Instruments,' which did **not have a material impact** on consolidated financial statements[51](index=51&type=chunk) - Assessing the impact of ASU 2019-12, 'Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,' effective Fiscal 2022[52](index=52&type=chunk) [Note 4 — Revenue from Contracts with Customers](index=15&type=section&id=Note%204%20%E2%80%94%20Revenue%20from%20Contracts%20with%20Customers) Explains the company's revenue recognition policy and provides disaggregated revenue data by segment and type - Revenue is recognized when control of promised goods or services is transferred to customers[53](index=53&type=chunk) - Contract liabilities were **$108 million** at December 31, 2020, and **$93 million** at December 31, 2019[59](index=59&type=chunk) - Midstream & Marketing and UGI Utilities expect to record approximately **$2.1 billion** and **$0.2 billion** of revenues, respectively, from future performance obligations[60](index=60&type=chunk) Disaggregated Revenue | Revenue Type (Millions $) | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Total Utility Revenues | 284 | 314 | | Total Non-Utility Revenues | 1,619 | 1,661 | | Total revenues from contracts with customers | 1,903 | 1,975 | | Other revenues | 29 | 32 | | **Total revenues** | **1,932** | **2,007** | [Note 5 — Inventories](index=18&type=section&id=Note%205%20%E2%80%94%20Inventories) Details the composition of inventories, including non-utility LPG, natural gas, and other materials and supplies - UGI Utilities is party to Storage Contract Administrative Agreements (SCAAs) with Energy Services, with effects eliminated in consolidation[61](index=61&type=chunk) Inventory Composition | Inventory Type (Millions $) | Dec 31, 2020 | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | :--- | | Non-utility LPG and natural gas | 181 | 164 | 164 | | Gas Utility natural gas | 19 | 20 | 24 | | Materials, supplies and other | 79 | 57 | 60 | | **Total inventories** | **279** | **241** | **248** | [Note 6 — Utility Regulatory Assets and Liabilities and Regulatory Matters](index=19&type=section&id=Note%206%20%E2%80%94%20Utility%20Regulatory%20Assets%20and%20Liabilities%20and%20Regulatory%20Matters) Provides a breakdown of UGI Utilities' regulatory assets and liabilities and discusses key regulatory matters - Gas Utility's and Electric Utility's tariffs permit recovery of prudently incurred purchased gas and power costs[64](index=64&type=chunk) - The PAPUC approved a settlement for Gas Utility to increase annual base distribution rates by **$20 million** and establish a regulatory asset for certain COVID-19 expenses[66](index=66&type=chunk) Regulatory Assets and Liabilities | Regulatory Item (Millions $) | Dec 31, 2020 | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | :--- | | Total regulatory assets | 395 | 397 | 391 | | Total regulatory liabilities | 346 | 353 | 351 | [Note 7 — Commitments and Contingencies](index=20&type=section&id=Note%207%20%E2%80%94%20Commitments%20and%20Contingencies) Details environmental matters related to former manufactured gas plant sites and ongoing class action lawsuits - UGI Utilities' aggregate estimated accrued liabilities for environmental remediation totaled **$49 million** at December 31, 2020[69](index=69&type=chunk)[70](index=70&type=chunk) - AmeriGas OLP has an undiscounted environmental remediation liability of **$8 million** as of December 31, 2020[73](index=73&type=chunk) - Purported class action lawsuits against AmeriGas Propane/UGI regarding propane cylinder fill levels were settled or have an agreement in principle[74](index=74&type=chunk)[76](index=76&type=chunk) - Management believes the final outcome of pending claims will **not have a material effect** on the financial statements[77](index=77&type=chunk)[78](index=78&type=chunk) [Note 8 — Defined Benefit Pension and Other Postretirement Plans](index=21&type=section&id=Note%208%20%E2%80%94%20Defined%20Benefit%20Pension%20and%20Other%20Postretirement%20Plans) Provides information on the components of net periodic pension cost for the three months ended December 31, 2020, and 2019 Net Periodic Pension Cost | Net Periodic Pension Cost (Millions $) | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | | :--- | :--- | :--- | | Service cost | 3 | 3 | | Interest cost | 5 | 6 | | Expected return on assets | (10) | (10) | | Amortization of actuarial loss | 4 | 4 | | **Net cost** | **2** | **3** | [Note 9 — Fair Value Measurements](index=23&type=section&id=Note%209%20%E2%80%94%20Fair%20Value%20Measurements) Presents financial assets and liabilities measured at fair value on a recurring basis, categorized by fair value hierarchy levels - Fair values of Level 1 instruments are based on actively quoted market prices, while Level 2 derivatives use indicative price quotations[82](index=82&type=chunk) Fair Value of Financial Instruments | Financial Instrument (Millions $) | Level 1 (Dec 31, 2020) | Level 2 (Dec 31, 2020) | Level 3 (Dec 31, 2020) | Total (Dec 31, 2020) | | :--- | :--- | :--- | :--- | :--- | | Derivative instruments (Assets) | | | | | | Commodity contracts | 60 | 111 | — | 171 | | Foreign currency contracts | — | 14 | — | 14 | | Derivative instruments (Liabilities) | | | | | | Commodity contracts | (58) | (14) | — | (72) | | Foreign currency contracts | — | (25) | — | (25) | | Interest rate contracts | — | (50) | — | (50) | | Non-qualified supplemental postretirement grantor trust investments | 46 | — | — | 46 | Fair Value of Long-term Debt | Long-term Debt (Millions $) | Dec 31, 2020 | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | :--- | | Carrying amount | 6,078 | 6,081 | 5,906 | | Estimated fair value | 6,581 | 6,504 | 6,249 | [Note 10 — Derivative Instruments and Hedging Activities](index=24&type=section&id=Note%2010%20%E2%80%94%20Derivative%20Instruments%20and%20Hedging%20Activities) Details UGI's use of derivative instruments to manage commodity price, interest rate, and foreign currency exchange rate risks - UGI uses derivative instruments to manage commodity price, interest rate, and foreign currency exchange rate risk, **not for speculative purposes**[85](index=85&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) - The maximum loss UGI would incur if derivative counterparties failed to perform was **not material** at December 31, 2020[99](index=99&type=chunk) Derivative Notional Amounts | Derivative Type (Notional Amounts in Millions) | Dec 31, 2020 | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | :--- | | Regulated Utility Operations (Dekatherms) | 16 | 22 | 15 | | LPG swaps (Gallons) | 719 | 846 | 772 | | Natural gas futures, forward, basis swap, options and pipeline contracts (Dekatherms) | 342 | 339 | 358 | | Electricity long forward and futures contracts (Kilowatt hours) | 4,719 | 4,517 | 4,145 | | Electricity short forward and futures contracts (Kilowatt hours) | 97 | 188 | 556 | | Interest rate swaps (Euro) | €300 | €300 | €300 | | Interest rate swaps (USD) | $1,306 | $1,344 | $1,354 | | Forward foreign currency exchange contracts (USD) | $457 | $511 | $431 | | Net investment hedge forward foreign exchange contracts (Euro) | €173 | €173 | €173 | Net Derivative Assets and Liabilities | Derivative Assets/Liabilities (Millions $) | Dec 31, 2020 | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | :--- | | Total derivative assets — net | 131 | 82 | 60 | | Total derivative liabilities — net | (99) | (123) | (160) | Derivative Impact on Income | Derivative Impact on Income (Millions $) | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | | :--- | :--- | :--- | | Gain (Loss) Recognized in AOCI (Cash Flow Hedges) | $0 | $8 | | Gain (Loss) Recognized in AOCI (Net Investment Hedges) | $(8) | $(4) | | Gain (Loss) Recognized in Income (Derivatives Not Designated as Hedging Instruments) | $93 | $(42) | [Note 11 — Accumulated Other Comprehensive Income (Loss)](index=31&type=section&id=Note%2011%20%E2%80%94%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) Presents changes in Accumulated Other Comprehensive Income (Loss), net of tax, for the three months ended December 31, 2020, and 2019 Changes in AOCI (2020) | AOCI Component (Millions $) | Sep 30, 2020 | Dec 31, 2020 | Change | | :--- | :--- | :--- | :--- | | Postretirement Benefit Plans | (26) | (26) | 0 | | Derivative Instruments | (54) | (49) | 5 | | Foreign Currency | (67) | (4) | 63 | | **Total AOCI** | **(147)** | **(79)** | **68** | Changes in AOCI (2019) | AOCI Component (Millions $) | Sep 30, 2019 | Dec 31, 2019 | Change | | :--- | :--- | :--- | :--- | | Postretirement Benefit Plans | (26) | (26) | 0 | | Derivative Instruments | (25) | (18) | 7 | | Foreign Currency | (166) | (119) | 47 | | **Total AOCI** | **(217)** | **(163)** | **54** | [Note 12 — Segment Information](index=31&type=section&id=Note%2012%20%E2%80%94%20Segment%20Information) Provides disaggregated financial information for UGI's four reportable segments and Corporate & Other - UGI's operations comprise four reportable segments: **AmeriGas Propane**, **UGI International**, **Midstream & Marketing**, and **UGI Utilities**[106](index=106&type=chunk) - Corporate & Other includes items excluded from segment performance assessment, such as unallocated corporate and interest expenses[107](index=107&type=chunk) Segment Performance | Segment Performance (Millions $) | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Revenues from external customers** | | | | AmeriGas Propane | 666 | 730 | | UGI International | 700 | 651 | | Midstream & Marketing | 279 | 309 | | UGI Utilities | 285 | 314 | | Corporate & Other | 2 | 3 | | **Total** | **1,932** | **2,007** | | **Operating income** | | | | AmeriGas Propane | 141 | 165 | | UGI International | 135 | 96 | | Midstream & Marketing | 52 | 55 | | UGI Utilities | 77 | 92 | | Corporate & Other | 97 | (31) | | **Total** | **502** | **377** | [Note 13 — Business Transformation Initiatives](index=33&type=section&id=Note%2013%20%E2%80%94%20Business%20Transformation%20Initiatives) Describes ongoing multi-year business transformation initiatives aimed at improving operational performance and reducing costs - AmeriGas Propane and UGI International are executing multi-year business transformation initiatives to improve long-term performance[112](index=112&type=chunk) - AmeriGas Propane expects over **$140 million** in ongoing annualized benefits by the end of Fiscal 2022 from its initiatives[112](index=112&type=chunk)[129](index=129&type=chunk) - UGI International's 'Project Alliance' aims to generate over **€30 million** of annual benefits[113](index=113&type=chunk)[131](index=131&type=chunk) - A Corporate Services transformation project is expected to result in more than **$15 million** of ongoing annualized savings by Fiscal 2023[113](index=113&type=chunk)[128](index=128&type=chunk) [Note 14 — Impact of Global Pandemic](index=34&type=section&id=Note%2014%20%E2%80%94%20Impact%20of%20Global%20Pandemic) Discusses the ongoing impact of the COVID-19 pandemic on UGI's operations, financial condition, and liquidity - The COVID-19 pandemic has significantly impacted the global economy and UGI's operations[114](index=114&type=chunk) - UGI continues to provide essential products and services while evaluating potential effects on demand, receivables, and project delays[114](index=114&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) - The total magnitude of the pandemic and its effects on UGI's business **cannot be predicted** at this time[114](index=114&type=chunk)[127](index=127&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides a detailed discussion and analysis of UGI's financial condition and results of operations for the three months ended December 31, 2020 [Forward-Looking Statements](index=35&type=section&id=Forward-Looking%20Statements) Provides a cautionary statement regarding forward-looking statements and outlines factors that could cause actual results to differ - The Quarterly Report contains forward-looking statements, and actual results can materially vary from expectations[116](index=116&type=chunk)[117](index=117&type=chunk) - Important factors affecting future results include weather, commodity prices, regulations, and the impact of the COVID-19 pandemic[117](index=117&type=chunk) [Analysis of Results of Operations](index=35&type=section&id=Analysis%20of%20Results%20of%20Operations) Compares UGI's results of operations for the three months ended December 31, 2020, with the same period in 2019 - The analysis compares UGI's results of operations for the three months ended December 31, 2020, with the prior-year period[120](index=120&type=chunk) - Operating results are **significantly influenced by temperatures** in service territories, particularly during the heating season[121](index=121&type=chunk) [Recent Developments](index=36&type=section&id=Recent%20Developments) Highlights key recent developments including a pending acquisition, the COVID-19 pandemic, and business transformation initiatives [Pending Acquisition of Mountaineer Gas Company](index=36&type=section&id=Pending%20Acquisition%20of%20Mountaineer%20Gas%20Company) Details the definitive agreement to acquire Mountaineer Gas Company for $540 million, expected to close in the second half of 2021 - UGI signed a definitive agreement to acquire Mountaineer Gas Company for a preliminary purchase price of **$540 million**[124](index=124&type=chunk) - Mountaineer serves nearly **215,000 customers** across 50 of West Virginia's 55 counties[124](index=124&type=chunk) - The acquisition is subject to regulatory approvals and is expected to close in the **second half of calendar year 2021**[124](index=124&type=chunk) [COVID-19 Pandemic](index=36&type=section&id=COVID-19%20Pandemic) Discusses the ongoing impact of the COVID-19 pandemic on UGI's operations and the benefits from the CARES Act - The COVID-19 pandemic continues to significantly impact the global economy and UGI's results[125](index=125&type=chunk) - UGI continues to provide essential services and is evaluating potential effects on customer demand and accounts receivable[125](index=125&type=chunk) - The **CARES Act** includes provisions modifying NOL limitation and carryback rules, which UGI is evaluating[126](index=126&type=chunk) [Business Transformation Initiatives](index=36&type=section&id=Business%20Transformation%20Initiatives) Outlines multi-year business transformation initiatives across Corporate Services, AmeriGas Propane, and UGI International - Corporate Services initiated a transformation project expecting over **$15 million** in ongoing annualized savings by Fiscal 2023[128](index=128&type=chunk) - AmeriGas Propane's initiatives are expected to provide over **$140 million** in annual benefits by the end of Fiscal 2022[129](index=129&type=chunk) - UGI International's 'Project Alliance' is expected to generate over **€30 million** of annual benefits[131](index=131&type=chunk) [Non-GAAP Financial Measures](index=37&type=section&id=Non-GAAP%20Financial%20Measures) Explains the use of non-GAAP financial measures to provide meaningful information by excluding certain items - UGI management uses 'adjusted net income' and 'adjusted diluted EPS' as non-GAAP financial measures to evaluate performance[132](index=132&type=chunk) - These measures eliminate gains and losses on certain derivative instruments and other discrete items for better period-over-period comparisons[132](index=132&type=chunk)[133](index=133&type=chunk) Reconciliation of Net Income to Adjusted Net Income | Metric (Millions $) | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | | :--- | :--- | :--- | | Net income attributable to UGI Corporation | 303 | 212 | | Net (gains) losses on commodity derivative instruments not associated with current-period transactions (net of tax) | (85) | 10 | | Unrealized losses on foreign currency derivative instruments (net of tax) | 15 | 11 | | Acquisition and integration expenses (net of tax) | — | 1 | | Acquisition expenses (net of tax) | 1 | — | | Business transformation expenses (net of tax) | 13 | 12 | | Total adjustments | (56) | 34 | | **Adjusted net income attributable to UGI Corporation** | **247** | **246** | | Diluted EPS | 1.44 | 1.00 | | Total adjustments (per share) | (0.26) | 0.17 | | **Adjusted diluted earnings per share** | **1.18** | **1.17** | [Executive Overview](index=39&type=section&id=Executive%20Overview) Provides a high-level comparison of UGI's financial performance for the three months ended December 31, 2020, versus 2019 - Net income in the 2020 period reflects gains from changes in unrealized commodity and foreign currency derivative instruments[139](index=139&type=chunk) - Adjusted net income saw a slight increase, reflecting higher earnings from UGI International, offset by lower domestic contributions[140](index=140&type=chunk) - Both net income and adjusted net income in the 2020 period reflect an **NOL benefit** resulting from the CARES Act[141](index=141&type=chunk) Financial Performance Summary | Metric | Three Months Ended Dec 31, 2020 (Millions $) | Three Months Ended Dec 31, 2019 (Millions $) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net income attributable to UGI Corporation | 303 | 212 | 91 | | Adjusted net income attributable to UGI Corporation | 247 | 246 | 1 | | Diluted EPS | 1.44 | 1.00 | 0.44 | | Adjusted diluted EPS | 1.18 | 1.17 | 0.01 | [Segment Results of Operations](index=40&type=section&id=Segment%20Results%20of%20Operations) Provides a detailed financial performance analysis for each of UGI's four reportable segments [AmeriGas Propane](index=40&type=section&id=AmeriGas%20Propane) Reports a decrease in revenues, total margin, and operating income due to warmer weather and lower volumes - Total retail gallons sold **decreased by 9%** primarily due to warmer weather and the continued impact of COVID-19[148](index=148&type=chunk) - Operating and administrative expenses **decreased by $19 million**, reflecting benefits from ongoing business transformation initiatives[151](index=151&type=chunk) AmeriGas Propane Performance | Metric (Millions $) | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenues | 666 | 730 | (64) (9%) | | Total margin | 394 | 441 | (47) (11%) | | Operating income | 141 | 165 | (24) (15%) | | Retail gallons sold (millions) | 276 | 304 | (28) (9%) | | Heating degree days—% (warmer) colder than normal | (4.6)% warmer | 4.0% colder | 8.6% warmer | [UGI International](index=41&type=section&id=UGI%20International) Shows an increase in revenues, total margin, and operating income driven by colder weather and favorable euro translation effects - Revenues increased by **$49 million**, principally reflecting the translation effects of a stronger euro[157](index=157&type=chunk) - Total margin increased by **$41 million**, reflecting higher average LPG unit margins and favorable euro translation effects[158](index=158&type=chunk) - Operating income increased by **$39 million**, primarily due to the increase in total margin[159](index=159&type=chunk) UGI International Performance | Metric (Millions $) | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenues | 700 | 651 | 49 (8%) | | Total margin | 317 | 276 | 41 (15%) | | Operating income | 135 | 96 | 39 (41%) | | LPG retail gallons sold (millions) | 236 | 246 | (10) (4%) | | Heating degree days—% warmer than normal | (2.0)% warmer | (6.6)% warmer | 4.6% colder | [Midstream & Marketing](index=42&type=section&id=Midstream%20%26%20Marketing) Reports a slight decrease in revenues, total margin, and operating income due to divested assets and lower peaking margin - Revenues decreased by **$32 million**, reflecting decreased natural gas revenues and the absence of revenues from divested assets[164](index=164&type=chunk) - Total margin decreased by **$5 million**, reflecting the absence of margins from divested assets and lower peaking margin[165](index=165&type=chunk) - Operating income decreased by **$3 million**, primarily reflecting the lower total margin[166](index=166&type=chunk) Midstream & Marketing Performance | Metric (Millions $) | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenues | 341 | 373 | (32) (9%) | | Total margin | 104 | 109 | (5) (5%) | | Operating income | 52 | 55 | (3) (5%) | [UGI Utilities](index=43&type=section&id=UGI%20Utilities) Details a decrease in revenues, total margin, and operating income mainly due to warmer weather and reduced volumes - Gas Utility core market volumes **decreased by 12%** due to warmer weather and reduced commercial and industrial volumes[169](index=169&type=chunk) - Total margin decreased by **$10 million**, primarily reflecting lower margin from Gas Utility[172](index=172&type=chunk) - Operating income decreased by **$15 million**, reflecting the decrease in total margin and higher depreciation expense[173](index=173&type=chunk) UGI Utilities Performance | Metric (Millions $) | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenues | 300 | 329 | (29) (9%) | | Total margin | 167 | 177 | (10) (6%) | | Operating income | 77 | 92 | (15) (16%) | | Gas Utility system throughput—Core market (bcf) | 23 | 26 | (3) (12%) | | Electric Utility distribution sales (gwh) | 244 | 246 | (2) (1%) | | Gas Utility heating degree days—% (warmer) colder than normal | (9.8)% warmer | 0.3% colder | 10.1% warmer | [Interest Expense and Income Taxes](index=44&type=section&id=Interest%20Expense%20and%20Income%20Taxes) Discusses the decrease in consolidated interest expense and the consistency of the effective income tax rate - The decrease in interest expense principally reflects **lower average short-term borrowing** outstanding[174](index=174&type=chunk) - The effective income tax rate was largely consistent with the prior-year period, with CARES Act benefits offset by other factors[175](index=175&type=chunk) - The impacts on income tax provisions related to the **CARES Act and GILTI provisions** are subject to change[176](index=176&type=chunk) Interest Expense | Metric (Millions $) | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | Change (YoY) | | :--- | :--- | :--- | :--- | | Consolidated interest expense | 78 | 84 | (6) (7%) | [Financial Condition and Liquidity](index=44&type=section&id=Financial%20Condition%20and%20Liquidity) Provides an overview of UGI's financial condition, liquidity, debt structure, credit facilities, and cash flows [Long-term Debt and Credit Facilities](index=45&type=section&id=Long-term%20Debt%20and%20Credit%20Facilities) Details UGI's liquidity position, long-term debt, and credit facilities, highlighting available borrowing capacity - UGI expects to have sufficient liquidity, totaling approximately **$1.5 billion** at December 31, 2020[178](index=178&type=chunk) - UGI and its subsidiaries were in **compliance with all debt covenants** as of December 31, 2020[178](index=178&type=chunk) - Energy Services has a Receivables Facility, with **$75 million** of trade receivables sold to the bank at December 31, 2020[187](index=187&type=chunk) Total Debt | Debt Type (Millions $) | Dec 31, 2020 | Sep 30, 2020 | | :--- | :--- | :--- | | Short-term borrowings | 568 | 347 | | Long-term debt (including current maturities) | 6,033 | 6,034 | | **Total debt** | **6,601** | **6,381** | Credit Facility Availability | Credit Facility (Millions $) | Total Capacity (Dec 31, 2020) | Borrowings Outstanding (Dec 31, 2020) | Available Borrowing Capacity (Dec 31, 2020) | | :--- | :--- | :--- | :--- | | AmeriGas OLP | $600 | $222 | $318 | | UGI International, LLC | €300 | €0 | €300 | | Energy Services | $260 | $4 | $256 | | UGI Utilities | $350 | $266 | $84 | | UGI Corporation | $300 | $270 | $30 | [Dividends](index=46&type=section&id=Dividends) Reports on UGI's Board of Directors' declaration of cash dividends for common stock - UGI's Board of Directors declared a cash dividend of **$0.33 per common share** paid on January 1, 2021[188](index=188&type=chunk) - Another quarterly dividend of **$0.33 per common share** was declared, payable April 1, 2021[188](index=188&type=chunk) [Cash Flows](index=46&type=section&id=Cash%20Flows) Analyzes UGI's cash flows from operating, investing, and financing activities for the three months ended December 31, 2020, and 2019 - Cash flows from operating activities are generally strongest during the second and third fiscal quarters[189](index=189&type=chunk) - The increase in cash flow from operating activities was driven by changes in current liabilities and accounts receivable[190](index=190&type=chunk) - The change in cash flows from financing activities is primarily attributable to **$221 million of net borrowings** on revolving facilities[194](index=194&type=chunk) Cash Flow Summary | Cash Flow Activity (Millions $) | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | Change (YoY) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | 151 | 118 | 33 | | Net cash used by investing activities | (189) | (176) | (13) | | Net cash provided (used) by financing activities | 120 | (33) | 153 | [Utility Regulatory Matters](index=47&type=section&id=Utility%20Regulatory%20Matters) Provides an update on Gas Utility's base rate filing with the PAPUC, detailing the approved rate increase and other items - The PAPUC approved a settlement allowing Gas Utility to increase its annual base distribution rates by **$20 million**[195](index=195&type=chunk) - Gas Utility is authorized to implement a **Distribution System Improvement Charge (DSIC)** once certain capital thresholds are met[195](index=195&type=chunk) - The PAPUC's final Order permits Gas Utility to establish a regulatory asset for certain incremental expenses attributable to COVID-19[195](index=195&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Outlines UGI's primary market risk exposures and the strategies and derivative instruments used to manage them [Commodity Price Risk](index=48&type=section&id=Commodity%20Price%20Risk) Discusses UGI's exposure to commodity price fluctuations and the strategies employed to mitigate this risk - UGI is exposed to commodity price risk for LPG, natural gas, and electricity, which is managed through derivative instruments[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) - Gas Utility has **limited commodity price risk** due to tariff clauses that permit recovery of prudently incurred natural gas costs[200](index=200&type=chunk) - Midstream & Marketing diversifies its purchases across multiple suppliers to reduce the risk of supplier nonperformance[201](index=201&type=chunk) [Interest Rate Risk](index=48&type=section&id=Interest%20Rate%20Risk) Explains UGI's exposure to interest rate risk from both fixed-rate and variable-rate debt and its management strategies - UGI has both fixed-rate and variable-rate debt, with variable-rate debt primarily from revolving credit facilities[203](index=203&type=chunk)[204](index=204&type=chunk) - Pay-fixed, receive-variable interest rate swap agreements are used to fix underlying short-term market interest rates[204](index=204&type=chunk) - Interest Rate Protection Agreements (IRPAs) are used to reduce market rate risk associated with forecasted debt issuances[206](index=206&type=chunk) - Combined borrowings outstanding under variable-rate debt agreements totaled **$878 million** at December 31, 2020[204](index=204&type=chunk) [Foreign Currency Exchange Rate Risk](index=49&type=section&id=Foreign%20Currency%20Exchange%20Rate%20Risk) Describes UGI's primary foreign currency exchange rate risk and the use of hedges to mitigate volatility - UGI's primary currency exchange rate risk is associated with the **U.S. dollar versus the euro** and British pound sterling[207](index=207&type=chunk) - Forward foreign currency exchange contracts are used to hedge approximately **90% of anticipated UGI International local currency earnings**[208](index=208&type=chunk) - A **10% decline** in associated foreign currencies would reduce UGI International's aggregate net book value by approximately **$120 million**[207](index=207&type=chunk) [Derivative Instrument Credit Risk](index=49&type=section&id=Derivative%20Instrument%20Credit%20Risk) Addresses the credit risk associated with derivative instrument counterparties and outlines UGI's management policies - UGI is exposed to risk of loss from nonperformance by derivative instrument counterparties[209](index=209&type=chunk) - Credit policies include evaluating counterparties' financial condition, establishing credit limits, and using netting and collateral arrangements[209](index=209&type=chunk)[210](index=210&type=chunk) - The maximum amount of loss UGI would incur if counterparties failed to perform was **not material** at December 31, 2020[210](index=210&type=chunk) Market Risk Sensitivity Analysis | Market Risk Sensitive Derivative Instruments (Millions $) | Fair Value (Dec 31, 2020) | Change in Fair Value (10% adverse change) | | :--- | :--- | :--- | | Commodity price risk | $100 | $(123) | | Interest rate risk | $(50) | $(7) | | Foreign currency exchange rate risk | $(11) | $(48) | [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Details the evaluation of UGI's disclosure controls and procedures and reports on any changes in internal control [Evaluation of Disclosure Controls and Procedures](index=50&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) States that management evaluated the effectiveness of disclosure controls and procedures and concluded they were effective - UGI's management evaluated the effectiveness of the Company's disclosure controls and procedures as of December 31, 2020[214](index=214&type=chunk) - The CEO and CFO concluded that the Company's disclosure controls and procedures were **effective at the reasonable assurance level**[214](index=214&type=chunk) [Change in Internal Control over Financial Reporting](index=50&type=section&id=Change%20in%20Internal%20Control%20over%20Financial%20Reporting) Reports that no material change in internal control over financial reporting occurred during the most recent fiscal quarter - **No change** in the Company's internal control over financial reporting occurred that has materially affected, or is likely to materially affect, controls[215](index=215&type=chunk) [Part II Other Information](index=51&type=section&id=Part%20II%20Other%20Information) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) Refers readers to the comprehensive discussion of risk factors in the company's 2020 Annual Report - Readers should carefully consider the factors discussed in Part I, 'Item 1A. Risk Factors' in UGI's **2020 Annual Report**[218](index=218&type=chunk) - Other unknown or unpredictable factors could also have **material adverse effects** on future results[218](index=218&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) Lists the exhibits filed as part of the Form 10-Q report, including certifications and XBRL-related documents - Includes certifications by the CEO and CFO pursuant to **Section 302** of the Sarbanes-Oxley Act of 2002[220](index=220&type=chunk)[222](index=222&type=chunk) - Includes a joint certification by the CEO and CFO pursuant to **Section 906** of the Sarbanes-Oxley Act of 2002[220](index=220&type=chunk)[223](index=223&type=chunk) - Contains XBRL Instance, Schema, and other interactive data files[220](index=220&type=chunk)[223](index=223&type=chunk) [Signatures](index=53&type=section&id=Signatures) Contains the signatures of authorized officers certifying the filing of the report - The report is signed by the Chief Financial Officer and the Vice President, Chief Accounting Officer and Corporate Controller on **February 4, 2021**[226](index=226&type=chunk)

Financial Data and Key Metrics Changes - UGI Corporation reported Q1 GAAP EPS of $1.44 and adjusted EPS of $1.18, slightly above the prior year's adjusted EPS of $1.17 despite warmer weather conditions [9][20][19] - Reportable segments EBIT was $414 million, down from $419 million in the prior year [15][16] - Year-to-date cash provided by operating activities grew by 28% compared to the same period last year, with available liquidity of $1.5 billion [18][19] Business Line Data and Key Metrics Changes - AmeriGas reported EBIT of $141 million, down from $165 million in the prior year, primarily due to 8.2% warmer weather and COVID-19 impacts [24][30] - UGI International achieved EBIT of $136 million, up from $100 million in fiscal 2020, benefiting from strong crop drying and heating-related bulk volumes [26][29] - Midstream and marketing reported EBIT of $59 million, roughly flat compared to the prior year despite warmer weather [29] Market Data and Key Metrics Changes - The A Cylinder Exchange program at AmeriGas saw a 25% increase in total volumes compared to the same period last year, driven by changing consumer habits due to the pandemic [12] - UGI Utilities added over 3,900 new heating customers, indicating growth in the customer base [13] Company Strategy and Development Direction - UGI announced the acquisition of Mountaineer Gas Company, the largest LDC in West Virginia, to expand its gas utilities business [6][34] - The company is investing in renewable natural gas projects, including a utility-scale project in Idaho and a partnership for bioLPG in Europe, to enhance its ESG efforts [7][55][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenges posed by warmer weather and the pandemic, highlighting the strength of its diversified business model [5][21] - The company expects the full-year impact of COVID-19 to remain within the previously estimated $0.10 range [20][58] Other Important Information - UGI has paid common dividends for 136 consecutive years and raised its dividend for the last 33 years [19] - The company is focused on long-term infrastructure replacement programs and expects to establish new record levels of replacement spending in fiscal '21 [14] Q&A Session Summary Question: Why was the AmeriGas business total margin down year-over-year despite cylinder volume increases? - Management indicated that weather was the primary factor impacting volume, coupled with COVID-19's effects on specific segments like commercial volumes [66][67] Question: Can you provide details on the bioLPG partnership in Europe? - The partnership involves converting bioethanol to bioLPG, with potential for small-scale projects across various markets, including the Nordic countries [70][71] Question: What are the expected returns on renewable natural gas investments? - Management is targeting returns that support long-term earnings growth, with positive early indications from renewable solutions investments [92] Question: Will the cylinder exchange business see lasting impacts post-pandemic? - Management believes consumer habits have changed, leading to sustained demand for outdoor dining and cylinder exchange services [94][95]

1 1 1 Fiscal 2021 First Quarter Results John L. Walsh President & CEO, UGI Corporation Ted J. Jastrzebski Chief Financial Officer, UGI Corporation Robert F. Beard Executive Vice President Natural Gas, UGI Corporation Roger Perreault Executive Vice President Global LPG, UGI Corporation About This Presentation This press release contains statements, estimates and projections that are forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended). Management believes ...

llic THE FOUNDATION OF A RENEWABLE ENERGY FUTURE DECEMBER 7, 2020 Our Management Team Welcomes You UGI Corporation John Walsh President & CEO Ted Jastrzebski CFO Robert Beard Executive VP, Natural Gas Roger Perreault Executive VP, Global LPG 2 Our Agenda Today UGI Corporation | --- | --- | |---------------------------------|-------| | | | | A Foundation for the Future | | | Our Natural Gas Strategic Focus | | | | | | Our Global LPG Strategic Focus | | | Our Financial Overview | | | Q&A Q | | 3 About This Pr ...

Part I [Items 1 and 2. Business and Properties](index=16&type=section&id=Items%201.%20and%202.%20Business%20and%20Properties) UGI Corporation operates four energy segments, focusing on growth, acquisitions, and renewable energy, with key FY2020 strategic initiatives [Corporate Overview](index=16&type=section&id=CORPORATE%20OVERVIEW) UGI Corporation is a holding company focused on energy distribution and marketing, pursuing growth through core competencies and strategic acquisitions - UGI Corporation is a holding company that distributes, stores, transports, and markets energy products through four principal business segments: AmeriGas Propane, UGI International, Midstream & Marketing, and UGI Utilities[39](index=39&type=chunk) - The company's business strategy is to grow by focusing on its core competencies in energy distribution and marketing, accelerating both organic growth and acquisitions in existing and complementary businesses[44](index=44&type=chunk) - In Fiscal 2020, UGI advanced its renewable energy strategy by acquiring GHI Energy, LLC, a renewable natural gas marketing company, and reduced its direct carbon emissions by over **30%** through the sale of its ownership in the Conemaugh coal-fired power generation facility[45](index=45&type=chunk) - Business transformation initiatives at AmeriGas Propane and UGI International yielded over **$40 million** and approximately **€7 million** in benefits, respectively, in Fiscal 2020, with plans to continue these efforts in Fiscal 2021[49](index=49&type=chunk) [AmeriGas Propane](index=18&type=section&id=AMERIGAS%20PROPANE) AmeriGas Propane is the largest U.S. retail propane distributor, serving over 1.5 million customers nationwide with seasonal sales - AmeriGas Propane is the largest retail propane distributor in the U.S., serving over **1.5 million** customers in all **50** states from more than **1,800** distribution locations[40](index=40&type=chunk)[53](index=53&type=chunk) AmeriGas Propane FY2020 Retail Gallons Sold by Customer Type | Customer Type | Percentage of Retail Gallons Sold | | :--- | :--- | | Commercial/Industrial | 41% | | Residential | 33% | | Motor Fuel | 18% | | Agricultural | 4% | | Transport | 4% | - The AmeriGas Cylinder Exchange (ACE) program is a key business element, with cylinders available at over **61,000** retail locations, and the Cynch propane home delivery service is expanding, available in thirteen cities as of September 30, 2020[56](index=56&type=chunk) - The business is highly seasonal, with approximately **65%** of retail sales volume occurring during the peak heating season from October through March[76](index=76&type=chunk) - In Fiscal 2020, approximately **98%** of propane supply was purchased under one- to three-year agreements, with the top three suppliers being Enterprise Products Operating LLC (**13%**), Targa Liquids Marketing and Trade (**10%**), and Crestwood Services, LLC (**10%**)[62](index=62&type=chunk) [UGI International](index=26&type=section&id=UGI%20INTERNATIONAL) UGI International operates LPG distribution and energy marketing across 17 European countries, holding leading market positions in several - UGI International conducts an LPG distribution business in **17** European countries and an energy marketing business in **four** countries, being the largest LPG distributor in France, Austria, Belgium, Denmark, Luxembourg, and Norway[88](index=88&type=chunk) UGI International FY2020 LPG Volume by Customer Type | Customer Type | Percentage of LPG Volume | | :--- | :--- | | Commercial & Industrial | 48% | | Wholesale & Other | 21% | | Residential | 19% | | Agricultural | 12% | - The business is seasonal, with approximately **63%** of retail sales volume occurring during the peak heating season from October through March[100](index=100&type=chunk) - In the second half of Fiscal 2020, propane and butane production was reduced at refineries due to COVID-19 related demand decreases for primary fuels like jet fuel, gasoline, and diesel[95](index=95&type=chunk) [Midstream & Marketing](index=28&type=section&id=MIDSTREAM%20%26%20MARKETING) This segment markets natural gas, liquid fuels, and electricity, managing midstream assets and expanding into renewable natural gas - The segment sells natural gas, renewable natural gas, liquid fuels, and electricity to nearly **14,000** customers at over **45,000** locations across **12** states and the District of Columbia[107](index=107&type=chunk) - Midstream assets include natural gas liquefaction, storage, and vaporization facilities, propane-air mixing stations, gathering systems, and pipelines, primarily in the Marcellus and Utica Shale regions[109](index=109&type=chunk)[112](index=112&type=chunk)[114](index=114&type=chunk) - In July 2020, the segment acquired GHI Energy, LLC, a Houston-based company that markets renewable natural gas in California, to expand its presence in the renewable energy space[121](index=121&type=chunk) - On September 30, 2020, the segment completed the sale of its ownership stake in the Conemaugh coal-fired power generation facility[120](index=120&type=chunk) - The PennEast Pipeline project faced a legal setback from the U.S. Court of Appeals for the Third Circuit regarding eminent domain against the State of New Jersey, with PennEast seeking U.S. Supreme Court review[117](index=117&type=chunk)[118](index=118&type=chunk) [UGI Utilities](index=32&type=section&id=UGI%20Utilities) UGI Utilities provides regulated natural gas and electric distribution services in Pennsylvania and Maryland, with ongoing infrastructure upgrades - The Gas Utility serves approximately **670,000** customers in **46** Pennsylvania counties and over **500** customers in one Maryland county, committed to replacing all cast iron mains by March 2027 and all bare steel mains by September 2041[132](index=132&type=chunk)[133](index=133&type=chunk) - In Fiscal 2020, Gas Utility's system throughput was approximately **310 Bcf**, with transported gas for customers buying from third parties accounting for nearly **82%** of this volume[134](index=134&type=chunk) - On October 8, 2020, the PAPUC approved a settlement for the Gas Utility to increase base distribution revenue by **$20 million**, phased in during 2021[149](index=149&type=chunk) - The Electric Utility serves over **62,500** customers in northeastern Pennsylvania through a system of over **2,500** miles of lines and **14** substations[159](index=159&type=chunk) [Human Capital Initiatives](index=38&type=section&id=HUMAN%20CAPITAL%20INITIATIVES) The company's human capital strategy prioritizes COVID-19 response, workplace safety, diversity, and talent management - The company's human capital strategy focuses on four key areas: COVID-19 response, workplace safety, Belonging, Inclusion, Diversity, and Equity (BIDE), and talent management[174](index=174&type=chunk) - In response to COVID-19, UGI implemented a work-from-home plan for over **4,000** office-based employees and revised work practices for over **7,400** field-based employees globally to ensure safety and service continuity[175](index=175&type=chunk) - Workplace safety is a strategic initiative, with oversight from the Board's Safety, Environmental, and Regulatory Compliance (SERC) Committee and inclusion as a component in annual bonus calculations[177](index=177&type=chunk)[178](index=178&type=chunk) - The company launched a BIDE Initiative to promote diversity and inclusion, expanding partnerships with organizations that support underrepresented populations[180](index=180&type=chunk) [Item 1A. Risk Factors](index=40&type=page&id=Item%201A.%20Risk%20Factors) The company faces risks from demand, operations, international business, supply chain, and regulatory changes, including pandemic effects - Demand Risk: The business is highly seasonal and adversely affected by warmer-than-normal heating season weather, with **60-70%** of volume for most segments typically sold between October and March[186](index=186&type=chunk) - Operational Risk: The company faces risks in integrating acquired businesses, such as assuming liabilities and assimilating different cultures, and potential disruptions from ongoing business transformation initiatives designed to create efficiencies[192](index=192&type=chunk)[200](index=200&type=chunk) - Cybersecurity Risk: Information technology systems are vulnerable to cyber-attacks, which could disrupt operations, lead to misappropriation of sensitive data, and adversely affect internal controls[202](index=202&type=chunk) - International Risk: Operations in Europe face risks from currency fluctuations (particularly the euro), political and economic uncertainty related to Brexit, and complex regulatory requirements such as GDPR and anti-corruption laws[205](index=205&type=chunk)[206](index=206&type=chunk)[210](index=210&type=chunk) - Supply Chain Risk: The company is dependent on a limited number of principal LPG suppliers; in FY2020, AmeriGas Propane purchased approximately **84%** of its propane from **20** suppliers, and in certain regions, a single supplier may provide over **50%** of requirements[208](index=208&type=chunk) - Regulatory Risk: The company is subject to extensive governmental regulations, including rate approvals for UGI Utilities and complex environmental, safety, and climate change regulations (e.g., GHG emission limits) that could increase costs[215](index=215&type=chunk)[216](index=216&type=chunk)[219](index=219&type=chunk) - Pandemic Risk: The COVID-19 outbreak presents significant uncertainty, with potential adverse impacts on customer financial health, energy demand, project timelines, and workforce availability[233](index=233&type=chunk) [Item 1B. Unresolved Staff Comments](index=53&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[247](index=247&type=chunk) [Item 3. Legal Proceedings](index=53&type=section&id=Item%203.%20Legal%20Proceedings) The company states that, other than matters disclosed in Note 17 to the Consolidated Financial Statements and ordinary course claims, there are no material pending legal proceedings - No material legal proceedings are pending outside of those mentioned in Note 17 to the financial statements and claims arising in the ordinary course of business[248](index=248&type=chunk) [Item 4. Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reports no mine safety disclosures - There are no mine safety disclosures to report[249](index=249&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=54&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) UGI Common Stock trades on the NYSE, with the company continuing quarterly dividends and a share repurchase program in place - UGI Common Stock is traded on the NYSE under the symbol 'UGI'[253](index=253&type=chunk) - The company did not repurchase any shares of its Common Stock in the fourth quarter of Fiscal 2020; as of September 30, 2020, **5.85 million** shares were available for repurchase under a program authorized through January 2022[256](index=256&type=chunk) [Item 6. Selected Financial Data](index=56&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year summary of UGI Corporation's key financial data, including income statement, balance sheet, and per-share metrics Selected Financial Data (FY2016-FY2020) | (Millions of dollars, except per share) | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $6,559 | $7,320 | $7,651 | $6,121 | $5,686 | | **Net income attributable to UGI** | $532 | $256 | $719 | $437 | $365 | | **Diluted EPS** | $2.54 | $1.41 | $4.06 | $2.46 | $2.08 | | **Cash dividends declared per share** | $1.310 | $1.145 | $1.020 | $0.975 | $0.930 | | **Total assets** | $13,985 | $13,347 | $11,981 | $11,582 | $10,847 | | **Total debt** | $6,381 | $6,600 | $4,590 | $4,539 | $4,087 | Reconciliation to Adjusted Diluted EPS (Non-GAAP) | (per share) | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Diluted EPS (GAAP)** | $2.54 | $1.41 | $4.06 | $2.46 | $2.08 | | **Total Adjustments** | $0.13 | $0.87 | ($1.32) | ($0.17) | ($0.03) | | **Adjusted Diluted EPS (Non-GAAP)** | $2.67 | $2.28 | $2.74 | $2.29 | $2.05 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=59&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses FY2020 financial results, including increased net income, liquidity, and the impacts of strategic initiatives and the pandemic [Executive Overview](index=59&type=section&id=Executive%20Overview) The executive overview highlights the impact of COVID-19, CARES Act benefits, and ongoing business transformation initiatives - The COVID-19 pandemic negatively impacted Fiscal 2020 results, but the company continued to provide essential services, with the full future impact remaining uncertain[267](index=267&type=chunk) - The CARES Act, enacted in March 2020, provided tax benefits by modifying Net Operating Loss (NOL) carryback rules, which positively impacted FY2020 results[268](index=268&type=chunk) - AmeriGas Propane's transformation initiatives resulted in over **$40 million** of benefits in FY2020 and are expected to provide over **$140 million** in annual savings once completed, at a total estimated cost of approximately **$200 million**[271](index=271&type=chunk)[272](index=272&type=chunk) - UGI International's 'Project Alliance' transformation initiative resulted in approximately **€7 million** of savings in FY2020 and is expected to generate over **€30 million** in annual savings once completed, at a total estimated cost of **€55 million**[273](index=273&type=chunk) [Results of Operations](index=62&type=section&id=Results%20of%20Operations) This section details the financial performance of each segment for FY2020 compared to FY2019, highlighting key drivers of change FY2020 vs. FY2019 Performance Summary | Metric | FY2020 | FY2019 | | :--- | :--- | :--- | | **Net Income attributable to UGI** | $532M | $256M | | **Diluted EPS** | $2.54 | $1.41 | | **Adjusted Net Income attributable to UGI** | $561M | $413M | | **Adjusted Diluted EPS** | $2.67 | $2.28 | - AmeriGas Propane's operating income decreased by **$31 million**, driven by a **$70 million** drop in total margin from lower retail volumes due to warmer weather (**4.6%** warmer than prior year) and COVID-19 impacts, partially offset by a **$39 million** reduction in operating expenses[287](index=287&type=chunk)[289](index=289&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) - UGI International's earnings before interest and taxes increased by **$25 million**, primarily due to lower operating expenses and higher realized gains on foreign currency contracts, which offset lower total margin from significantly warmer weather (**6.7%** warmer than prior year) and COVID-19 impacts[293](index=293&type=chunk)[295](index=295&type=chunk)[299](index=299&type=chunk) - Midstream & Marketing's earnings before interest and taxes rose by **$54 million**, mainly due to incremental income from the UGI Appalachia (formerly CMG) acquisition, which contributed to an **$80 million** increase in total margin[300](index=300&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk) - UGI Utilities' earnings before interest and taxes increased by **$3 million**, as higher total margin from a Gas Utility base rate increase effective October 2019 was mostly offset by the effects of warmer weather (**5.8%** warmer than prior year) and higher depreciation expense[306](index=306&type=chunk)[308](index=308&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk) [Financial Condition and Liquidity](index=66&type=section&id=Financial%20Condition%20and%20Liquidity) The company maintains strong liquidity, with detailed capital expenditure plans and contractual cash obligations outlined - The company expects to have sufficient liquidity, with a total available balance of approximately **$1.5 billion** at September 30, 2020, up from **$1.1 billion** at September 30, 2019[316](index=316&type=chunk) - Cash flow from operating activities was **$1,102 million** in FY2020, a slight increase from **$1,078 million** in FY2019[335](index=335&type=chunk) Capital Expenditures (Excluding Acquisitions) | (Millions of dollars) | 2021 (estimate) | 2020 | 2019 | | :--- | :--- | :--- | :--- | | AmeriGas Propane | $175 | $135 | $107 | | UGI International | $135 | $89 | $106 | | Midstream & Marketing | $110 | $93 | $138 | | UGI Utilities | $430 | $348 | $355 | | **Total** | **$850** | **$665** | **$706** | Contractual Cash Obligations as of Sept 30, 2020 | (Millions of dollars) | Total | Fiscal 2021 | Fiscal 2022-2023 | Fiscal 2024-2025 | Thereafter | | :--- | :--- | :--- | :--- | :--- | :--- | | Long-term debt | $6,081 | $53 | $486 | $2,223 | $3,319 | | Interest on long-term fixed-rate debt | $2,147 | $279 | $539 | $425 | $904 | | Operating leases | $481 | $102 | $159 | $111 | $109 | | Supply & other contracts | $1,265 | $750 | $375 | $96 | $44 | | **Total** | **$9,974** | **$1,184** | **$1,559** | **$2,855** | **$4,376** | [Critical Accounting Policies and Estimates](index=74&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section outlines critical accounting policies and estimates, including goodwill impairment, loss contingencies, regulatory assets, and business combination allocations - Goodwill Impairment Evaluation: Goodwill is tested at least annually for impairment at the reporting unit level, with fair value determined using income (discounted cash flows) and market approaches, and no impairments recorded in the periods presented[371](index=371&type=chunk)[372](index=372&type=chunk) - Loss Contingencies and Environmental Liabilities: Reserves are established for probable losses that can be reasonably estimated, including litigation, self-insured claims, and environmental remediation, with estimates based on management judgment and reviewed quarterly[374](index=374&type=chunk)[375](index=375&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk) - Regulatory Assets and Liabilities: For regulated utility operations, costs probable of future recovery through rates are deferred as regulatory assets, and obligations for future customer refunds are recorded as regulatory liabilities[378](index=378&type=chunk)[379](index=379&type=chunk) - Business Combination Purchase Price Allocations: The purchase price of acquisitions is allocated to assets and liabilities at their estimated fair value, requiring significant management judgment, especially for intangible assets like customer relationships and trade names[381](index=381&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=77&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section incorporates market risk disclosures by reference from Item 7, detailing exposures to commodity, interest rate, and foreign currency risks - The disclosures for this item are incorporated by reference from the "Market Risk Disclosures" section within Item 7 of the report[384](index=384&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=77&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates the company's audited consolidated financial statements, supplementary data, and internal control report by reference - This item incorporates by reference Management's Annual Report on Internal Control Over Financial Reporting and the financial statements and schedules indexed on page F-2[385](index=385&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=77&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None reported[386](index=386&type=chunk) [Item 9A. Controls and Procedures](index=77&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2020, with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2020[389](index=389&type=chunk) - No material changes in internal control over financial reporting occurred during the fourth fiscal quarter[389](index=389&type=chunk) [Item 9B. Other Information](index=77&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None reported[388](index=388&type=chunk) Part III [Items 10-14. Directors, Executive Officers, Corporate Governance, Compensation, Security Ownership, and Principal Accountant Fees](index=78&type=section&id=Items%2010-14) This section incorporates information from the upcoming Proxy Statement regarding directors, executive officers, governance, compensation, and security ownership - Information required for Items 10, 11, 12, 13, and 14 is incorporated by reference from UGI's Proxy Statement, to be filed by December 31, 2020[390](index=390&type=chunk) Equity Compensation Plan Information (as of Sept 30, 2020) | Plan Category | Securities to be issued upon exercise (options, warrants, rights) | Weighted-average exercise price | Securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | **Equity compensation plans approved by security holders** | 10,820,808 | $38.58 | 6,105,754 | - A list of ten executive officers, including their age and position, is provided, with John L. Walsh serving as President and Chief Executive Officer[397](index=397&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=81&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Form 10-K report - This item lists the financial statements, financial statement schedules, and exhibits filed with the report[409](index=409&type=chunk)[411](index=411&type=chunk) [Item 16. Form 10-K Summary](index=92&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no Form 10-K summary for this item - None provided[422](index=422&type=chunk) Financial Statements [Consolidated Financial Statements](index=94&type=section&id=Consolidated%20Financial%20Statements) The audited consolidated financial statements for FY2020 detail revenues, net income, assets, and debt, reflecting key acquisitions and tax impacts Consolidated Statement of Income Highlights (FY2020 vs. FY2019) | (Millions of dollars) | 2020 | 2019 | | :--- | :--- | :--- | | **Revenues** | $6,559 | $7,320 | | **Operating income** | $982 | $617 | | **Interest expense** | ($322) | ($258) | | **Income before income taxes** | $667 | $401 | | **Net income attributable to UGI** | $532 | $256 | Consolidated Balance Sheet Highlights (as of Sept 30) | (Millions of dollars) | 2020 | 2019 | | :--- | :--- | | **Total current assets** | $1,543 | $1,566 | | **Net property, plant, and equipment** | $6,960 | $6,688 | | **Goodwill** | $3,518 | $3,456 | | **Total assets** | $13,985 | $13,347 | | **Total current liabilities** | $1,755 | $2,028 | | **Long-term debt** | $5,981 | $5,780 | | **Total liabilities** | $9,848 | $9,520 | | **Total UGI Corporation stockholders' equity** | $4,128 | $3,817 | Consolidated Statement of Cash Flows Highlights (FY2020 vs. FY2019) | (Millions of dollars) | 2020 | 2019 | | :--- | :--- | | **Net cash provided by operating activities** | $1,102 | $1,078 | | **Net cash used by investing activities** | ($649) | ($2,055) | | **Net cash (used) provided by financing activities** | ($635) | $1,042 | | **Cash and cash equivalents (decrease) increase** | ($154) | $49 | - The August 2019 AmeriGas Merger was accounted for as an equity transaction, with UGI issuing **34.6 million** shares and paying **$529 million** in cash, resulting in a deferred tax asset of **$512 million** due to the step-up in tax basis[569](index=569&type=chunk)[571](index=571&type=chunk) - The August 2019 acquisition of Columbia Midstream Group (CMG) for **$1.284 billion** was accounted for using the acquisition method, recognizing **$614 million** in property, plant and equipment, **$250 million** in intangible assets, and **$324 million** in goodwill[572](index=572&type=chunk)[573](index=573&type=chunk) - The CARES Act, enacted in March 2020, allowed the company to carry back its FY2020 U.S. federal tax loss to FY2015, generating an incremental tax benefit of **$32 million**[603](index=603&type=chunk)

UGI Corporation (NYSE:UGI) Q4 2020 Earnings Conference Call November 19, 2020 9:00 AM ET Company Participants Alanna Zahora - IR Manager John L. Walsh - President and CEO Ted J. Jastrzebski - CFO Robert F. Beard - EVP, Natural Gas Roger Perreault - EVP, Global LPG Conference Call Participants Shneur Gershuni - UBS Marc Solecitto - Barclays Operator Ladies and gentlemen, thank you for standing by and welcome to the UGI Corporation Fiscal 2020 Earnings Conference Call. At this time, all participants are in a ...

Table of Contents FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Commission file number 1-11071 UGI CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdiction ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number 1-11071 UGI CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdiction ...