Financial Performance - Adjusted net income attributable to UGI Corporation for the three months ended March 31, 2023, was $363 million, compared to $413 million for the same period in 2022, reflecting a decrease of approximately 12.1%[154] - Adjusted diluted earnings per share for the three months ended March 31, 2023, was $1.68, down from $1.91 in the same period of 2022, representing a decline of about 12.0%[156] - UGI Corporation's net income attributable to the company for the three months ended March 31, 2023, was $110 million, down from $933 million in the same period of 2022, indicating a decrease of approximately 88.2%[154] - Net income attributable to UGI Corporation for the 2023 three-month period was $110 million, a decrease of 88% compared to $933 million in the 2022 three-month period[163] - Adjusted net income for the 2023 three-month period was $363 million, down 12% from $413 million in the 2022 three-month period, primarily due to lower earnings from the AmeriGas Propane business[166] - For the 2023 six-month period, UGI Corporation reported a net loss of $844 million, compared to a net income of $836 million in the 2022 six-month period, largely due to losses from commodity derivative instruments[173] Segment Performance - UGI International reported adjusted net income of $92 million for the three months ended March 31, 2023, compared to $89 million in the same period of 2022, indicating a growth of approximately 3.4%[154] - The Utilities segment achieved adjusted net income of $143 million for the three months ended March 31, 2023, compared to $134 million in the same period of 2022, marking an increase of about 6.7%[154] - The Midstream & Marketing segment's adjusted net income increased to $66 million for the three months ended March 31, 2023, from $58 million in the same period of 2022, representing an increase of approximately 13.8%[154] - Corporate & Other segment reported a net loss of $264 million for the three months ended March 31, 2023, compared to a net income of $514 million in the same period of 2022, reflecting a significant decline[154] Revenue and Sales - AmeriGas Propane's revenues decreased by $181 million (17%) to $867 million, with retail gallons sold down 15% due to warmer weather and operational challenges[182] - UGI International's revenues fell by $276 million (23%) to $948 million, while total margin increased by 7% to $315 million despite lower LPG retail gallons sold[187] - UGI International revenues decreased by $448 million (20%) to $1.825 billion for the six months ended March 31, 2023, compared to $2.273 billion in the prior year[217] - Midstream & Marketing revenues increased by $101 million (8%) to $1,307 million, driven by higher revenues from natural gas and power marketing activities[223] - Utilities revenues increased by $240 million (21%) to $1,366 million, reflecting a $226 million increase in Gas Utility revenues and a $14 million increase in Electric Utility revenues[229] Costs and Expenses - The company experienced significant inflationary pressures and volatility in energy commodity prices, impacting operating and distribution expenses across all business segments[162] - UGI International's total cost of sales decreased by $147 million during the 2023 six-month period, reflecting lower average retail propane volumes sold[214] - Consolidated interest expense increased to $185 million during the 2023 six-month period from $163 million in the prior period, largely due to higher credit agreement interest rates[236] Cash Flow and Liquidity - Cash flow from operating activities was $424 million in the 2023 six-month period, an increase from $400 million in the 2022 six-month period[267] - Cash flow used by investing activities was $473 million in the 2023 six-month period, compared to $515 million in the 2022 six-month period[268] - Cash flow used by financing activities was $46 million in the 2023 six-month period, a decrease from cash provided of $25 million in the 2022 six-month period[270] - Total available liquidity increased to approximately $1.9 billion as of March 31, 2023, compared to $1.7 billion at September 30, 2022, due to higher borrowing capacity[240] Debt and Financing - The Company had total long-term debt of $6,764 million as of March 31, 2023, compared to $6,632 million at September 30, 2022[245] - As of March 31, 2023, total borrowings outstanding amounted to $30 million for AmeriGas OLP, €150 million for UGI International, and $183 million for UGI Utilities[248] - The average daily short-term borrowings for AmeriGas OLP was $153 million, with a peak of $242 million for the six months ended March 31, 2023[250] Strategic Initiatives - The company anticipates continued volatility in energy product costs and demand due to weather conditions and regulatory changes, which may impact future performance[147] - The company continues to pursue the sale of its energy marketing business in France, although the sale is not considered probable within one year[160] - The company was authorized to implement a weather normalization adjustment rider as a five-year pilot program starting November 1, 2022[272] Other Financial Metrics - UGI management emphasizes the importance of non-GAAP measures, such as adjusted net income and adjusted diluted earnings per share, to provide a clearer picture of operational performance[152] - A 10% decline in the value of foreign currencies (euro and British pound) would reduce the aggregate net book value of UGI International operations by approximately $100 million[288] - The maximum potential loss from derivative instrument counterparties, based on gross fair values, was $422 million as of March 31, 2023[291] - The company has received cash collateral from derivative instrument counterparties totaling $55 million as of March 31, 2023[291] Capital Expenditures and Dividends - Cash expenditures for property, plant, and equipment were $414 million in the 2023 six-month period, up from $355 million in the 2022 six-month period[268] - UGI's Board of Directors approved an increase in the quarterly dividend rate to $0.375 per common share, reflecting a 4.2% increase from the previous rate[264]

Financial Data and Key Metrics Changes - UGI reported adjusted diluted EPS of $1.68 for Q2 2023, down from $1.91 in the prior year [9] - The company expects adjusted diluted EPS for fiscal 2023 to be within a revised range of $2.75 to $2.90 [8][14] Business Line Data and Key Metrics Changes - Natural gas businesses saw an increase of $0.09 year-over-year, benefiting from higher gas base rates and a weather normalization rider [9] - UGI International's earnings increased by $0.02 year-over-year, aided by the noncore European energy marketing business [9] - AmeriGas reported a decrease of $0.30 in earnings year-over-year due to adverse weather impacts and driver shortages [9][10] Market Data and Key Metrics Changes - The U.S. experienced extremely warm temperatures, impacting customer volumes, particularly in the East and South [5][10] - Severe weather events in the West also impeded growth and efficient service delivery [5][11] - Energy conservation efforts in Europe due to the Russia-Ukraine war affected LPG volumes [12] Company Strategy and Development Direction - UGI is focusing on investing in natural gas businesses and renewable energy solutions to rebalance its portfolio [7] - The company plans to maintain operational excellence and discipline in capital allocation, particularly in infrastructure replacement and renewable projects [17][18] - UGI is committed to transforming AmeriGas operationally to position for future growth [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in Q2 2023, including weather-related issues and inflationary pressures [5][6] - The company remains focused on controlling costs and improving operational metrics for the second half of the year [14][19] - UGI is optimistic about the exit strategy for the noncore energy marketing business and expects to see benefits from margin management efforts [12][20] Other Important Information - UGI's Board of Directors increased the quarterly dividend to $0.375 per share, marking the 139th consecutive year of dividend payments [8] - The company had available liquidity of $1.9 billion at the end of the quarter, bolstered by renewed credit agreements [15] Q&A Session Summary Question: Measures in place for AmeriGas cost expenses - Management discussed inflation impacts and emphasized controlling costs across the company, particularly at AmeriGas [22][23] Question: Future capital contributions from corporate level - A $31 million equity cure was provided to AmeriGas in Q2, with plans for opportunistic debt management in the future [24] Question: Customer acquisition and market impressions for AmeriGas - Management noted active customer acquisition efforts and challenges due to severe weather impacting volumes [25][26] Question: Contribution from noncore assets in UGI International - The noncore energy marketing business is performing as expected, contributing positively to margins [28][29] Question: Strategic considerations for the LPG business - Management confirmed the LPG business remains a strong cash source, with a commitment to balance investments between LPG and natural gas [31] Question: Outlook for renewables investment - UGI is on track to invest $1 billion to $1.25 billion in renewables, with over $500 million already committed [32]

1 1 1 Second Quarter Fiscal 2023 Results Ro ge r Pe r re a u l t President and CEO, UGI Corporation S e a n P. O ' B r i e n Chief Financial Officer, UGI Corporation Ro b e r t F. B e a rd Chief Operations Officer, UGI Corporation About This Presentation This presentation contains statements, estimates and projections that are forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended). Such statements u ...

[Part I Financial Information](index=8&type=section&id=Part%20I%20Financial%20Information) [Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) UGI Corporation's Q4 2022 unaudited financials report a **$954 million net loss**, largely due to a **$215 million pre-tax loss** on its U.K. energy marketing business disposal and derivative losses Condensed Consolidated Statements of Income (Three Months Ended Dec 31) | (Millions of dollars, except per share) | 2022 | 2021 | | :--- | :--- | :--- | | **Revenues** | **$2,759** | **$2,673** | | Operating loss | $(1,204) | $(68) | | Loss before income taxes | $(1,323) | $(142) | | **Net loss attributable to UGI Corporation** | **$(954)** | **$(97)** | | **Diluted Loss per common share** | **$(4.54)** | **$(0.46)** | Condensed Consolidated Balance Sheets Highlights | (Millions of dollars) | Dec 31, 2022 | Sep 30, 2022 | | :--- | :--- | :--- | | Total current assets | $3,456 | $3,802 | | **Total assets** | **$17,128** | **$17,575** | | Total current liabilities | $3,380 | $2,444 | | Long-term debt | $6,323 | $6,483 | | **Total liabilities** | **$11,940** | **$11,501** | | **Total equity** | **$5,188** | **$6,074** | Condensed Consolidated Statements of Cash Flows (Three Months Ended Dec 31) | (Millions of dollars) | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used by operating activities | $(240) | $(594) | | Net cash used by investing activities | $(271) | $(154) | | Net cash provided by financing activities | $548 | $234 | | **Cash, cash equivalents and restricted cash increase (decrease)** | **$75** | **$(519)** | - On October **21**, **2022**, UGI International sold its U.K. natural gas marketing business, recording a pre-tax loss of **$215 million**, primarily due to the non-cash transfer of associated commodity derivative instruments[63](index=63&type=chunk) [Note 4: Revenue from Contracts with Customers](index=17&type=section&id=Note%204%20%E2%80%94%20Revenue%20from%20Contracts%20with%20Customers) Total revenues from contracts with customers reached **$2.72 billion** for the three months ended December 31, 2022, primarily driven by Non-Utility LPG retail and Energy Marketing segments Disaggregated Revenues by Segment (Three Months Ended Dec 31, 2022) | (Millions of dollars) | AmeriGas Propane | UGI International | Midstream & Marketing | Utilities | Total (after eliminations) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$766** | **$877** | **$669** | **$592** | **$2,759** | [Note 8: Debt](index=21&type=section&id=Note%208%20%E2%80%94%20Debt) The company amended key credit agreements, increasing UGI Utilities' borrowing capacity to **$425 million** and Mountaineer's to **$150 million** (with an option to **$250 million**), while replacing LIBOR with SOFR - UGI Utilities amended its credit agreement, increasing borrowing capacity from **$350 million** to **$425 million** and replacing LIBOR with SOFR as the benchmark interest rate[76](index=76&type=chunk) - Mountaineer entered into an amended credit agreement providing for borrowings up to **$150 million**, with an option to increase to **$250 million**, to finance working capital and for general corporate purposes[78](index=78&type=chunk) [Note 12: Derivative Instruments and Hedging Activities](index=25&type=section&id=Note%2012%20%E2%80%94%20Derivative%20Instruments%20and%20Hedging%20Activities) The company utilizes derivative instruments to manage commodity price, interest rate, and foreign currency risks, with gross fair values of **$772 million** in assets and **$453 million** in liabilities as of December 31, 2022 - The company is exposed to a maximum loss of **$772 million** from derivative instrument counterparties in the event of nonperformance, based on gross fair values as of December **31**, **2022**[107](index=107&type=chunk) Notional Amounts of Open Derivative Contracts (as of Dec 31, 2022) | Type | Units | Notional Amount (millions) | | :--- | :--- | :--- | | LPG swaps | Gallons | 844 | | Natural gas contracts | Dekatherms | 371 | | Electricity contracts | Kilowatt hours | 2,270 | | Interest rate swaps | USD | $1,354 | | Forward foreign currency contracts | USD | $390 | | Net investment hedge contracts | Euro | €331 | [Note 14: Segment Information](index=31&type=section&id=Note%2014%20%E2%80%94%20Segment%20Information) For Q4 2022, Utilities reported the highest operating income at **$126 million**, while Corporate & Other incurred a significant **$1.6 billion operating loss** primarily from unallocated unrealized commodity derivative losses Segment Performance (Three Months Ended Dec 31, 2022) | (Millions of dollars) | AmeriGas Propane | UGI International | Midstream & Marketing | Utilities | Corporate & Other | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $766 | $877 | $554 | $559 | $3 | | **Operating (loss) income** | $110 | $56 | $106 | $126 | $(1,603) | | **(Loss) income before income taxes** | $67 | $59 | $96 | $107 | $(1,653) | [Management's Discussion and Analysis (MD&A)](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management highlights a **$954 million GAAP net loss** for the quarter, but adjusted net income increased to **$246 million** from **$201 million**, reflecting strong segment performance despite the U.K. energy marketing business sale Reconciliation of GAAP Net Loss to Adjusted Net Income (Three Months Ended Dec 31) | (Millions of dollars) | 2022 | 2021 | | :--- | :--- | :--- | | **Net loss attributable to UGI Corporation** | **$(954)** | **$(97)** | | Net losses on commodity derivative instruments | $999 | $292 | | Loss on disposal of U.K. energy marketing business | $151 | $— | | Other adjustments | $50 | $5 | | **Adjusted net income attributable to UGI Corporation** | **$246** | **$201** | - The company expects to have sufficient liquidity to support operations, with approximately **$1.2 billion** in available liquidity as of December **31**, **2022**, despite volatility in commodity prices and inflationary pressures[174](index=174&type=chunk) - The UGI International Credit Facilities Agreement, including a **€300 million** term loan, matures in October **2023**[174](index=174&type=chunk) - The company expects to refinance this facility during the first half of Fiscal **2023**[174](index=174&type=chunk) [Analysis of Results of Operations](index=35&type=section&id=ANALYSIS%20OF%20RESULTS%20OF%20OPERATIONS) Adjusted net income increased to **$246 million** from **$201 million** year-over-year, driven by stronger performance in Midstream & Marketing, Utilities, and AmeriGas Propane, partially offset by UGI International's decline AmeriGas Propane Performance (Q1 FY23 vs Q1 FY22) | Metric | Q1 2022 | Q1 2021 | Change | | :--- | :--- | :--- | :--- | | Total margin | $380M | $360M | +6% | | Operating income | $110M | $86M | +28% | | Retail gallons sold | 236M | 241M | -2% | UGI International Performance (Q1 FY23 vs Q1 FY22) | Metric | Q1 2022 | Q1 2021 | Change | | :--- | :--- | :--- | :--- | | Total margin | $215M | $256M | -16% | | Operating income | $56M | $78M | -28% | | LPG retail gallons sold | 205M | 249M | -18% | Midstream & Marketing Performance (Q1 FY23 vs Q1 FY22) | Metric | Q1 2022 | Q1 2021 | Change | | :--- | :--- | :--- | :--- | | Total margin | $155M | $122M | +27% | | Operating income | $106M | $74M | +43% | Utilities Performance (Q1 FY23 vs Q1 FY22) | Metric | Q1 2022 | Q1 2021 | Change | | :--- | :--- | :--- | :--- | | Total margin | $256M | $213M | +20% | | Operating income | $126M | $96M | +31% | | Gas Utility core throughput | 34 bcf | 29 bcf | +17% | [Financial Condition and Liquidity](index=42&type=section&id=FINANCIAL%20CONDITION%20AND%20LIQUIDITY) The company maintains strong liquidity with **$1.2 billion** available and total debt at **$7.7 billion**, while cash flow used by operations improved to **$240 million** from **$594 million** year-over-year Total Debt Outstanding (Millions of dollars) | Segment | Dec 31, 2022 | Sep 30, 2022 | | :--- | :--- | :--- | | AmeriGas Propane | $2,712 | $2,564 | | UGI International | $1,073 | $746 | | Midstream & Marketing | $830 | $709 | | Utilities | $2,051 | $1,656 | | Corp & Other | $1,050 | $1,050 | | **Total Debt** | **$7,716** | **$7,000** | - Cash flow used by operating activities improved to **$240 million** from **$594 million** year-over-year, mainly due to lower cash required for accounts receivable and inventories, partially offset by higher cash collateral payments for derivatives[196](index=196&type=chunk)[198](index=198&type=chunk) - During the quarter, the company repurchased **0.3 million** shares for approximately **$12 million** and paid a quarterly dividend of **$0.36** per share[193](index=193&type=chunk)[194](index=194&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages primary market risks including commodity price, interest rate, and foreign currency exchange rate through derivatives, with a **10% adverse commodity price change** potentially impacting fair value by **$214 million** - The company manages commodity price risk through forward contracts and derivatives[208](index=208&type=chunk) - Profitability is sensitive to LPG supply costs, but these are generally passed to customers[209](index=209&type=chunk) - Utilities' commodity risk is limited due to cost recovery mechanisms[209](index=209&type=chunk) - Primary foreign currency risk is the USD vs the euro[216](index=216&type=chunk) - A **10%** decline in associated foreign currencies would reduce the net book value of UGI International operations by approximately **$105 million**[216](index=216&type=chunk) Market Risk Sensitivity Analysis (as of Dec 31, 2022) | Risk Type | Fair Value of Derivatives | Change in Fair Value (Adverse Scenario) | | :--- | :--- | :--- | | Commodity price risk | $242M | $(214)M | | Interest rate risk | $63M | $(9)M | | Foreign currency risk | $31M | $(43)M | [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2022, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[223](index=223&type=chunk) - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[224](index=224&type=chunk) [Part II Other Information](index=50&type=section&id=Part%20II%20Other%20Information) [Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 9, 'Commitments and Contingencies,' within the Condensed Consolidated Financial Statements section - Details on legal proceedings are found in Note **9** of the financial statements[227](index=227&type=chunk) [Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) The European energy marketing business faces significant risk from extreme price volatility and supply disruptions due to the war in Ukraine, leading to the sale of its U.K. business and planned exits from other European operations - The European energy marketing business is severely impacted by extreme price volatility and supply issues stemming from the war in Ukraine and reduced Russian gas imports[229](index=229&type=chunk) - UGI is actively restructuring its European energy marketing portfolio, having sold its U.K. business and intending to exit or wind down its businesses in France, Belgium, and the Netherlands[229](index=229&type=chunk) [Share Repurchases](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q4 2022, the company repurchased **300,000 shares** of common stock at an average price of **$38.85** per share, with **6.80 million shares** remaining under the authorized program Common Stock Repurchases (Quarter Ended Dec 31, 2022) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Remaining in Program | | :--- | :--- | :--- | :--- | | Dec 1 - Dec 31, 2022 | 300,000 | $38.85 | 6.80 million | [Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including an amendment to the UGI Utilities credit agreement and CEO/CFO certifications under the Sarbanes-Oxley Act of 2002 - Key exhibits filed include the First Amendment to the UGI Utilities Credit Agreement and CEO/CFO certifications under Sarbanes-Oxley Sections **302** and **906**[233](index=233&type=chunk)

Financial Data and Key Metrics Changes - UGI reported adjusted diluted EPS of $1.14 for Q1 2023, an increase from $0.93 in the prior-year period, reflecting a $63 million increase in EBIT over the prior-year period [4][9] - The adjusted diluted EPS would have been $0.08 higher without the noncore energy marketing business [4] - The company had available liquidity of $1.2 billion at the end of the quarter, with strong cash flows generated [19] Business Line Data and Key Metrics Changes - AmeriGas reported EBIT of $110 million, up from $86 million in the prior-year period, despite a 2% decline in retail volume due to staffing shortages [12] - UGI International's EBIT decreased to $66 million from $82 million, attributed to lower volume in the European LPG business and significantly warmer weather [13] - The Midstream and Marketing segment reported EBIT of $107 million, an increase of $25 million over the prior year, benefiting from colder weather and increased margins from natural gas marketing activities [15][16] - The Utilities segment had EBIT of $128 million, $30 million higher than the prior year, driven by a 17% increase in core market volume due to colder weather [17] Market Data and Key Metrics Changes - The warmer weather in Europe led to an 18% decline in retail LPG volumes year-over-year for UGI International [13] - The company experienced elevated inflationary pressures, particularly in personnel-related costs, impacting overall expenses [11][14] Company Strategy and Development Direction - UGI is focused on a 3R strategy: delivering reliable earnings growth, investing in renewables, and rebalancing the portfolio [20] - The company has committed over $450 million to renewable projects and aims for 6% to 10% EPS growth and 4% dividend growth over the long term [8] - A strategic growth project at AmeriGas is aimed at enhancing customer experience and operational efficiencies [7] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by sustained inflationary pressures and geopolitical tensions but expressed confidence in the company's ability to manage these headwinds [20] - The company plans to provide updated guidance at the end of the second quarter, with expectations for continued monitoring of weather impacts [22][23] Other Important Information - UGI Utilities filed a request to increase rates by approximately $11 million to fund ongoing system improvements [6] - The company is also working on bio LPG projects and renewable dimethyl ether as part of its renewable strategy [28] Q&A Session Summary Question: Context around Q1 relative to guidance expectations - Management indicated that Q1 was solid, with some upside due to margin management efficiencies, but did not provide specific guidance for the second quarter yet [21][22] Question: Dynamics in Midstream and Marketing segment - Management noted that December's severe weather volatility contributed to additional benefits, but it is uncertain if this will carry into Q2 [24] Question: Mountaineer gas rate case timeline - Management confirmed plans to file a rate case but did not predict whether it would be effective in FY 2023 or calendar 2023 [25][26] Question: Scale of RNG projects - Management stated that they have a healthy pipeline of RNG projects and are targeting double-digit rates of return while remaining disciplined in project selection [27][28]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2022 ☐ 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 of Inc ...

UGI Corporation (NYSE:UGI) Q4 2022 Earnings Conference Call November 18, 2022 9:00 AM ET Company Participants Tameka Morris - Senior Director of Investor Relations Roger Perreault - President, Chief Executive Officer Ted Jastrzebski - Chief Financial Officer Bob Beard - Executive Vice President, Natural Gas, Global Engineering & Construction Conference Call Participants Julien Dumoulin-Smith - Bank of America Marc Solecitto - Barclays Operator Good day, and thank you for standing by. Welcome to the UGI Corp ...

Financial Performance - Adjusted net income attributable to UGI Corporation for the three months ended June 30, 2022, was $12 million, compared to $28 million in the same period of 2021, representing a decrease of 57.1%[141] - For the nine months ended June 30, 2022, adjusted net income attributable to UGI Corporation was $626 million, down from $693 million in the prior year, a decline of 9.7%[141] - The adjusted diluted earnings per share for the three months ended June 30, 2022, was $0.06, compared to $0.13 for the same period in 2021, a decrease of 53.8%[143] - For the nine months ended June 30, 2022, adjusted diluted earnings per share was $2.90, down from $3.30 in the previous year, a decline of 12.1%[143] - The net loss attributable to UGI Corporation for the three months ended June 30, 2022, was $7 million, compared to a net income of $150 million in the same period of 2021[141] - UGI Corporation reported a net loss of $7 million for the 2022 three-month period, compared to a net income of $150 million in the same period of 2021, reflecting a significant decline in profitability[149] - Adjusted net income for the 2022 three-month period was $12 million, down from $28 million in the prior year, primarily due to lower earnings from LPG businesses impacted by commodity price volatility[150] - For the 2022 nine-month period, net income attributable to UGI Corporation was $829 million, down from $942 million in the prior year, with significant impacts from unrealized commodity derivative instruments[155] - Adjusted net income for the 2022 nine-month period was $626 million, a decrease from $693 million in 2021, reflecting lower earnings from LPG businesses and the absence of prior-year tax benefits[158] Revenue and Margin Analysis - UGI International revenues increased by $166 million during the 2022 three-month period, driven by higher average propane and butane prices, which were approximately 65% and 103% higher, respectively[173] - Midstream & Marketing revenues surged by 101% to $525 million in the 2022 three-month period, with total margin increasing by 37% to $89 million[177] - Midstream & Marketing revenues increased by $645 million (59%) to $1,731 million for the nine months ended June 30, 2022, compared to the prior year[209] - Utilities revenues rose by $93 million (51%) to $274 million for the three months ended June 30, 2022, driven by an $84 million increase in Gas Utility revenues[184] - Total margin for Utilities increased by $38 million (34%) during the three-month period, largely due to incremental margin from the Mountaineer acquisition[187] - Average wholesale propane prices during the nine-month period were approximately 63% higher than the previous year, impacting revenues and costs[195] - UGI International revenues increased by $905 million (43%) to $3,011 million for the nine months ended June 30, 2022, reflecting significant increases in propane and butane prices[200] - UGI International total margin decreased by $133 million (15%) during the nine-month period, primarily due to lower margins from the energy marketing business[205] - Operating income for UGI International decreased by $111 million (34%) to $211 million for the nine months ended June 30, 2022, reflecting the decrease in total margin[206] - Utilities total margin increased by $163 million, with $110 million attributable to Mountaineer, and higher natural gas margins from increased delivery service customer growth[219] Cost and Expense Management - The company experienced significant inflationary pressures in global commodity and labor markets, impacting inventory costs and distribution expenses across all businesses[145] - Total cost of sales for AmeriGas Propane increased by $363 million during the nine-month period, primarily due to higher average propane product costs[196] - Consolidated interest expense increased to $245 million, reflecting higher long-term debt related to the Mountaineer acquisition and senior notes issuance[221] - Cash flow from operating activities was $848 million in the 2022 nine-month period, down from $1,047 million in the 2021 nine-month period, indicating a decline of about 19%[247] - Cash expenditures for property, plant, and equipment increased to $551 million in the 2022 nine-month period from $460 million in the 2021 nine-month period, representing a rise of approximately 19.8%[250] Liquidity and Capital Structure - Total available liquidity was approximately $2.1 billion as of June 30, 2022, affected by $659 million of cash collateral received from derivative counterparties[225] - The company's cash and cash equivalents totaled $670 million at June 30, 2022, down from $855 million at September 30, 2021, primarily due to commodity price volatility[229] - Total long-term debt stood at $6.446 billion as of June 30, 2022, with a slight decrease from $6.449 billion at September 30, 2021[230] - Average daily short-term borrowings for UGI Corporation were $181 million for the nine months ended June 30, 2022, compared to $243 million for the same period in 2021, reflecting a decrease of approximately 25.5%[237] - Cash flow used for financing activities was $290 million in the 2022 nine-month period, a decrease from $321 million in the 2021 nine-month period, indicating a reduction of about 9.7%[252] - UGI Utilities amended its existing Utilities Term Loan, extending the maturity date from October 2022 to July 2027, with quarterly installments of $2 million[238] - UGI Utilities issued $90 million of 4.75% Senior Notes due July 15, 2032, with proceeds used to reduce short-term borrowings and for general corporate purposes[241] Risk Management - The ongoing military conflict between Russia and Ukraine has contributed to volatility in commodity prices, particularly in LPG, natural gas, and electricity[145] - A 10% decline in the value of foreign currencies (euro and British pound sterling) against the USD would reduce the aggregate net book value of UGI International operations by approximately $160 million[266] - The maximum potential loss from nonperformance by derivative instrument counterparties is estimated at $2,068 million as of June 30, 2022[269] - Cash collateral received from derivative instrument counterparties totaled $659 million as of June 30, 2022, which helps mitigate credit risk[269] - The fair value of commodity price risk derivatives was $1,597 million, with a change in fair value of $(315) million due to a 10% adverse change in market prices[271] - The fair value of interest rate risk derivatives was $44 million, with a change in fair value of $(11) million due to a 50 basis point adverse change in prevailing market interest rates[271] - The fair value of foreign currency exchange rate risk derivatives was $57 million, with a change in fair value of $(48) million due to a 10% adverse change in the value of the euro and British pound sterling against the USD[271] - Midstream & Marketing diversifies its purchases across multiple suppliers to mitigate risks associated with fixed-price supply arrangements[260] - UGI Corporation uses derivative instruments to hedge portions of its net investments in foreign subsidiaries, including anticipated foreign currency denominated dividends[266] Dividend and Shareholder Returns - The company declared a quarterly dividend of $0.36 per common share, reflecting a 4% increase from the previous rate of $0.345[244]

1 1 1 Fiscal 2022 Third Quarter Results Ro ge r Pe r re a u l t President and CEO, UGI Corporation Te d J . J a st r ze bs k i Chief Financial Officer, UGI Corporation Ro b e r t F. B e a rd Executive Vice President, Natural Gas, Global Engineering & Construction, and Procurement About This Presentation This presentation contains forward-looking statements, including estimates and projections, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exch ...

Financial Data and Key Metrics Changes - UGI reported adjusted EBIT of $100 million for Q3 2022, an increase from $98 million in the prior fiscal year [9] - Adjusted diluted EPS was $0.06 compared to $0.13 in fiscal 2021, largely due to $0.07 of tax benefits in the prior year [10] - The company expects to deliver results at the bottom end or slightly below the fiscal 2022 guidance range of $2.90 to $3 [10] Business Line Data and Key Metrics Changes - The utility segment achieved an EBIT of $40 million, a 60% increase from the prior year, driven by increased disc rates and strong customer growth [34] - AmeriGas reported a loss of $10 million compared to EBIT of $11 million in the prior year, impacted by inflation, labor shortages, and increased commodity costs [26] - UGI International's EBIT decreased to $26 million from $41 million, with retail volumes down 7% due to warmer weather [28] Market Data and Key Metrics Changes - The global LPG business faced challenges from warmer weather in Europe and rising cost inflation, but showed resilience in demand [15] - The energy marketing business experienced increased volatility in natural gas and power prices, leading to a year-to-date EBIT decrease of approximately $81 million [30] Company Strategy and Development Direction - UGI is focused on executing its renewables and rebalancing strategy, with commitments to fund projects converting dairy waste to RNG [16] - The company is exploring options for its energy marketing business, including potential sale or wind down of operations [38] - UGI aims for long-term financial targets of 6% to 10% EPS growth and 4% dividend growth, supported by a robust asset portfolio [39] Management's Comments on Operating Environment and Future Outlook - Management highlighted ongoing economic uncertainty due to inflation, commodity price volatility, and labor shortages, but expressed confidence in the resiliency of the business [11] - The company anticipates that macroeconomic pressures will continue to impact operations, but remains focused on growth and efficiency [39] Other Important Information - UGI's available liquidity at quarter-end was $2.1 billion, reflecting strong cash generation capabilities [35] - The Board declared a quarterly dividend of $0.36 per share, marking 138 consecutive years of dividend payments [35] Q&A Session Summary Question: Cost mitigation efforts for 2023 - Management confirmed ongoing efficiency improvements and cost mitigation efforts, including headcount reductions, which are expected to yield benefits in fiscal 2023 [45] Question: Impact of the Inflation Reduction Act - Management is reviewing the Inflation Reduction Act to understand its potential impacts and will provide updates in the coming months [46] Question: Energy supply challenges in Europe - Management acknowledged pressure on natural gas supply in Europe but noted that UGI is well-hedged and sees opportunities for LPG to play a larger role in the energy mix [56][58] Question: Customer growth sustainability in utilities - Management reported a 2% year-over-year increase in utility customers and identified approximately 250,000 potential customers within service range [60] Question: Recovery of energy marketing losses - Management expects to recover 20% of the $81 million energy marketing losses in Q4, driven by contract expirations and improved margin conditions [71] Question: Drivers behind impairment charge - The impairment charge was related to the Columbia midstream assets, attributed to lower than anticipated production of wet gas [79]