UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 2022
(Exact Name of Registrant as Specified in Its Charter)
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: 610 337-1000
Not Applicable
Former Name or Former Address, if Changed Since Last Report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On August 3, 2022, UGI Corporation (the “Company”) issued a press release announcing financial results for the Company for the fiscal quarter ended June 30, 2022. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On August 4, 2022, the Company will hold a live Internet Audio Webcast of its conference call to discuss its financial results for the fiscal quarter ended June 30, 2022.
Presentation materials containing certain historical and forward-looking information relating to the Company (the “Presentation Materials”) have been made available on the Company’s website. A copy of the Presentation Materials is furnished as Exhibit 99.2 to this report and is incorporated herein by reference in this Item 7.01. All information in Exhibit 99.2 is presented as of the particular dates referenced therein, and the Company does not undertake any obligation to, and disclaims any duty to, update any of the information provided.
In accordance with General Instruction B.2 of Form 8-K, the information in this report, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and will not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in that filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are being furnished herewith:
| 99.1 | |||||
| 99.2 | |||||
| 101.INS | XBRL Instance - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | ||||
| 101.SCH | XBRL Taxonomy Extension Schema | ||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase | ||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase | ||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase | ||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase | ||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| UGI Corporation | ||||||||
| August 4, 2022 | By: | /s/ Ted J. Jastrzebski | ||||||
| Name: | Ted J. Jastrzebski | |||||||
| Title: | Chief Financial Officer | |||||||
Press ReleaseUGI Reports Third Quarter Results
August 3, 2022
VALLEY FORGE, PA - UGI Corporation (NYSE: UGI) today reported financial results for the fiscal quarter ended June 30, 2022.
HEADLINES
•Q3 GAAP diluted earnings per share ("EPS") of $(0.03) and adjusted diluted EPS of $0.06 compared to GAAP diluted EPS of $0.71 and adjusted diluted EPS of $0.13 in the prior-year period.
•Year-to-date GAAP diluted EPS of $3.84 and adjusted diluted EPS of $2.90 compared to GAAP diluted EPS of $4.48 and adjusted diluted EPS of $3.30 in the prior-year period.
•Q3 reportable segments earnings before interest expense and income taxes1 ("EBIT") of $100 million compared to $98 million in the prior-year period.
•Strong balance sheet with available liquidity of approximately $2.1 billion as of June 30, 2022.
•Additional strides in our renewables strategy with a commitment to fully fund three projects to produce RNG in South Dakota, with a total investment of ~$70 million.
•Released the fourth annual ESG report entitled, "Transparency, Action and Progress", highlighting our strong progress on all key initiatives.
•On July 28, 2022, UGI Utilities' joint petition for settlement of its gas rate case was approved by a PA Public Utility Commission ("PA PUC") Administrative Law Judge, and is further subject to an order of the PA PUC. Pending approval, the settlement would permit a total of $49.45 million annual distribution rate increase, in two phases, with the first beginning October 29, 2022, and a weather normalization adjustment mechanism.
Roger Perreault, President and Chief Executive Officer of UGI Corporation said, “Commodity price volatility and intensifying inflationary pressures have created an increasingly challenging business environment. Amidst these pressures, UGI delivered reportable segments EBIT of $100 million for the quarter, in comparison to $98 million in the prior-year period. Adjusted diluted EPS for the quarter was $0.06, compared to $0.13 in fiscal 2021, largely due to $0.07 of CARES Act and other tax benefit in the prior fiscal year.
“At the Utilities, we continued to experience strong customer growth and the business is on track to deploy a record level of capital during this fiscal year. We also moved forward with the settlement agreement for our PA gas rate case that was filed in January 2022. Last week, the Administrative Law Judge recommended approval of our settlement to the PA PUC and we expect a final decision by early fall. In Midstream & Marketing, our strategy to build out our natural gas network continued to benefit the business and we experienced a 37% increase in margin for the quarter, when compared to the prior-year period. We also made progress in expanding our renewables footprint, with two previously-announced projects expected to come online this year and a commitment to fund RNG projects in South Dakota. The Global LPG businesses remain focused on efficiency, expense control and margin management. As we announced last quarter, we embarked on a strategic review of UGI International’s energy marketing business and remain open to a range of options, including a sale and wind-down of operations.
“Based on the year-to-date results and expectations for the fourth quarter, UGI now expects to be at the bottom end, or slightly below, its fiscal 2022 adjusted diluted EPS guidance range of $2.90 to $3.002 per share. There is continued economic uncertainty due to persistent inflation, commodity price volatility, customer price sensitivity, and labor shortages. Nevertheless, we believe in the resiliency of our business and are laser-focused on executing our strategy to
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continue meeting shareholder commitments and long-term financial targets of 6 – 10% EPS growth and 4% dividend growth. This strategy is focused on delivering reliable earnings growth, increasing our focus on renewables and rebalancing our portfolio towards natural gas. We are confident in the strength of our asset quality and have ample liquidity to meet our capital needs.”
KEY DRIVERS OF THIRD QUARTER RESULTS
•AmeriGas: Lower total margin due to 6% decline in retail volume and lower average LPG unit margins
•UGI International: Retail volume down 7% on weather that was 29% warmer than the prior year period; higher LPG unit margins due to margin management efforts
•Midstream & Marketing: Total margin up $24 million (37%), largely reflecting higher capacity management margin resulting from the timing of settlement of storage hedge contracts, increased commodity marketing margin and the incremental earnings from the UGI Moraine East (formerly Stonehenge) acquisition
•Utilities: EBIT up $15 million (60%), largely driven by benefits from the Distribution System Improvement Charge ("DSIC") and growth in residential and large delivery service customers
EARNINGS CALL AND WEBCAST
UGI Corporation will hold a live Internet Audio Webcast of its conference call to discuss the quarterly earnings and other current activities at 9:00 AM ET on Thursday, August 4, 2022. Interested parties may listen to the audio webcast both live and in replay on the Internet at https://www.ugicorp.com/investors/financial-reports/presentations or by visiting the company website https://www.ugicorp.com and clicking on Investors and then Presentations. A replay of the webcast will be available after the event through to 11:59 PM ET August 3, 2023.
CONTACT INVESTOR RELATIONS
Tel: +1 610-337-1000
Tameka Morris, ext. 6297
Arnab Mukherjee, ext. 7498
Shelly Oates, ext. 3202
ABOUT UGI
UGI Corporation is a distributor and marketer of energy products and services. Through subsidiaries, UGI operates natural gas and electric utilities in Pennsylvania, natural gas utilities in West Virginia, distributes LPG both domestically (through AmeriGas) and internationally (through UGI International), manages midstream energy assets in Pennsylvania, Ohio, and West Virginia and electric generation assets in Pennsylvania, and engages in energy marketing, including renewable natural gas, in the Mid-Atlantic region of the United States and California, and internationally in France, Belgium, the Netherlands and the UK.
Comprehensive information about UGI Corporation is available on the Internet at https://www.ugicorp.com.
USE OF NON-GAAP MEASURES
Management uses "adjusted diluted earnings per share," a non-GAAP financial measure, when evaluating UGI's overall performance. Management believes that this non-GAAP measure provides meaningful information to investors about UGI’s performance because it eliminates the impact of (1) gains and losses on commodity and certain foreign currency derivative instruments not associated with current-period transactions and (2) other significant discrete items that can affect the comparison of period-over-period results. Volatility in net income at UGI can occur as a result of gains and losses on commodity and certain foreign currency derivative instruments not associated with current-period transactions but included in earnings in accordance with U.S. generally accepted accounting principles ("GAAP").
Non-GAAP financial measures are not in accordance with, or an alternative to, GAAP and should be considered in addition to, and not as a substitute for, the comparable GAAP measures.
Tables on the last page reconcile net income attributable to UGI Corporation, the most directly comparable GAAP measure, to adjusted net income attributable to UGI Corporation, and diluted earnings per share, the most comparable GAAP measure, to adjusted diluted earnings per share, to reflect the adjustments referred to above.
1 Reportable segments' earnings before interest expense and income taxes represents an aggregate of our operating segment level EBIT, as determined in accordance with GAAP.
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2 Because we are unable to predict certain potentially material items affecting diluted earnings per share on a GAAP basis, principally mark-to-market gains and losses on commodity and certain foreign currency derivative instruments, we cannot reconcile fiscal year 2022 adjusted diluted earnings per share, a non-GAAP measure, to diluted earnings per share, the most directly comparable GAAP measure, in reliance on the “unreasonable efforts” exception set forth in SEC rules.
USE OF FORWARD-LOOKING STATEMENTS
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). Such statements use forward-looking words such as “believe,” “plan,” “anticipate,” “continue,” “estimate,” “expect,” “may,” or other similar words. These statements discuss plans, strategies, events or developments that we expect or anticipate will or may occur in the future. Management believes that these are reasonable as of today’s date only. Actual results may differ significantly because of risks and uncertainties that are difficult to predict and many of which are beyond management’s control. You should read UGI’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q for a more extensive list of factors that could affect results. Among them are adverse weather conditions (including increasingly uncertain weather patterns due to climate change) resulting in reduced demand, and the seasonal nature of our business; cost volatility and availability of all energy products, including propane and other LPG, natural gas, and electricity, as well as the availability of LPG cylinders, and the capacity to transport product to our customers; changes in domestic and foreign laws and regulations, including safety, tax, consumer protection, data privacy, accounting, and environmental matters, such as regulatory responses to climate change; the inability to timely recover costs through utility rate proceedings; increased customer conservation measures due to high energy prices and improvements in energy efficiency and technology resulting in reduced demand; adverse labor relations and our ability to address existing or potential workforce shortages; the impact of pending and future legal or regulatory proceedings, inquiries or investigations; competitive pressures from the same and alternative energy sources; failure to acquire new customers or retain current customers, thereby reducing or limiting any increase in revenues; liability for environmental claims; customer, counterparty, supplier, or vendor defaults; liability for uninsured claims and for claims in excess of insurance coverage, including those for personal injury and property damage arising from explosions, terrorism, natural disasters, pandemics and other catastrophic events that may result from operating hazards and risks incidental to generating and distributing electricity and transporting, storing and distributing natural gas in all forms; transmission or distribution system service interruptions; political, regulatory and economic conditions in the United States, Europe and other foreign countries, including uncertainties related to the military conflict between Russia and Ukraine, and foreign currency exchange rate fluctuations (particularly the euro); capital market conditions, including reduced access to capital markets and interest rate fluctuations; changes in commodity market prices resulting in significantly higher cash collateral requirements; reduced distributions from subsidiaries impacting the ability to pay dividends; the timing of development of Marcellus and Utica Shale gas production; the availability, timing and success of our acquisitions, commercial initiatives and investments to grow our business; our ability to successfully integrate acquired businesses and achieve anticipated synergies; the interruption, disruption, failure, malfunction, or breach of our information technology systems, and those of our third-party vendors or service providers, including due to cyber-attack; the inability to complete pending or future energy infrastructure projects; our ability to achieve the operational benefits and cost efficiencies expected from the completion of pending and future transformation initiatives, including the impact of customer disruptions resulting in potential customer loss due to the transformation activities; uncertainties related to a global pandemic, including the duration and/or impact of the COVID-19 pandemic; the impact of proposed or future tax legislation, including the potential reversal of existing tax legislation that is beneficial to us; and our ability to overcome supply chain issues that may result in delays or shortages in, as well as increased costs of, equipment, materials or other resources that are critical to our business operations.
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SEGMENT RESULTS ($ in millions, except where otherwise indicated)
AmeriGas Propane
| For the fiscal quarter ended June 30, | 2022 | 2021 | Increase (Decrease) | |||||||||||||||||||||||
| Revenues | $ | 597 | $ | 526 | $ | 71 | 13 | % | ||||||||||||||||||
| Total margin (a) | $ | 227 | $ | 259 | $ | (32) | (12) | % | ||||||||||||||||||
| Operating and administrative expenses | $ | 204 | $ | 212 | $ | (8) | (4) | % | ||||||||||||||||||
| Operating (loss) income/(loss) earnings before interest expense and income taxes | $ | (10) | $ | 11 | $ | (21) | (191) | % | ||||||||||||||||||
| Retail gallons sold (millions) | 173 | 184 | (11) | (6) | % | |||||||||||||||||||||
| Heating degree days - % colder than normal (b) | 16.5 | % | 2.5 | % | ||||||||||||||||||||||
| Capital expenditures | $ | 28 | $ | 26 | $ | 2 | 8 | % | ||||||||||||||||||
•Temperatures were 22.8% colder than the prior-year period.
•Retail gallons sold decreased 6% largely due to the continued impact of customer service challenges that occurred in fiscal 2021, staffing shortages in key delivery-related positions and increased price sensitivity in the higher commodity cost environment.
•Total margin decreased $32 million compared to the prior-year period primarily due to lower average retail unit margins ($21 million) and lower retail volumes ($13 million).
•Operating and administrative expenses decreased $8 million reflecting lower employee compensation and benefits ($18 million), advertising and vehicle leases. These decreases were partially offset and impacted by the persistent inflationary cost environment as well as increases in bad debt reserves ($4 million), vehicle fuel ($3 million), insurance claims and telecommunication expenses.
UGI International
| For the fiscal quarter ended June 30, | 2022 | 2021 | Increase (Decrease) | |||||||||||||||||||||||
| Revenues | $ | 738 | $ | 572 | $ | 166 | 29 | % | ||||||||||||||||||
| Total margin (a) | $ | 194 | $ | 217 | $ | (23) | (11) | % | ||||||||||||||||||
| Operating and administrative expenses (a) | $ | 143 | $ | 144 | $ | (1) | (1) | % | ||||||||||||||||||
| Operating income | $ | 22 | $ | 40 | $ | (18) | (45) | % | ||||||||||||||||||
| Earnings before interest expense and income taxes | $ | 26 | $ | 41 | $ | (15) | (37) | % | ||||||||||||||||||
| LPG retail gallons sold (millions) | 155 | 166 | (11) | (7) | % | |||||||||||||||||||||
| Heating degree days - % (warmer) colder than normal (b) | (9.1) | % | 24.4 | % | ||||||||||||||||||||||
| Capital expenditures | $ | 25 | $ | 21 | $ | 4 | 19 | % | ||||||||||||||||||
UGI International base-currency results are translated into U.S. dollars based upon exchange rates experienced during the reporting periods. Differences in these translation rates affect the comparison of line item amounts presented in the table above. The functional currency of a significant portion of our UGI International results is the euro and, to a much lesser extent, the British pound sterling. During the 2022 and 2021 three-month periods, the average unweighted euro-to-dollar translation rates were approximately $1.06 and $1.21, respectively, and the average unweighted British pound sterling-to-dollar translation rates were approximately $1.26 and $1.40, respectively.
•Retail volume decreased 7% primarily due to weather that was 29.3% warmer than the prior-year period, partially offset by the recovery of certain bulk and autogas volumes that were negatively affected by the COVID-19 pandemic.
•Average propane wholesale selling prices in northwest Europe were approximately 65% higher than the prior-year period.
•Total margin decreased $23 million reflecting the translation effects of the weaker foreign currencies (approximately $25 million) and lower retail volume. These impacts were partially offset by higher LPG unit margins.
•Operating and administrative expenses decreased $1 million as the impact of the global inflationary cost environment on the underlying distribution, personnel and maintenance costs was offset by the translation effects of the weaker foreign currencies (approximately $24 million).
•Operating income decreased $18 million due to the impact of the global inflationary cost environment on our operating and administrative expenses.
•Earnings before interest expense and income taxes decreased $15 million compared to the prior-year period due to the lower operating income, partially offset by higher realized gains on foreign currency exchange contracts ($3 million).
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Midstream & Marketing
| For the fiscal quarter ended June 30, | 2022 | 2021 | Increase (Decrease) | |||||||||||||||||||||||
| Revenues | $ | 525 | $ | 261 | $ | 264 | 101 | % | ||||||||||||||||||
| Total margin (a) | $ | 89 | $ | 65 | $ | 24 | 37 | % | ||||||||||||||||||
| Operating and administrative expenses | $ | 29 | $ | 31 | $ | (2) | (6) | % | ||||||||||||||||||
| Operating income | $ | 38 | $ | 14 | $ | 24 | 171 | % | ||||||||||||||||||
| Earnings before interest expense and income taxes | $ | 44 | $ | 21 | $ | 23 | 110 | % | ||||||||||||||||||
| Heating degree days - % warmer than normal (b) | (5.2) | % | (1.5) | % | ||||||||||||||||||||||
| Capital expenditures | $ | 9 | $ | 3 | $ | 6 | 200 | % | ||||||||||||||||||
•Temperatures were 5.8% warmer than the prior-year period.
•Total margin increased $24 million due to higher capacity management margins that were largely attributable to the timing of settlement of storage hedge contracts, increased commodity marketing margins, and incremental margin from UGI Moraine East (formerly Stonehenge).
•Operating income increased $24 million reflecting higher total margin.
Utilities
| For the fiscal quarter ended June 30, | 2022 | 2021 | Increase | |||||||||||||||||||||||
| Revenues | $ | 274 | $ | 181 | $ | 93 | 51 | % | ||||||||||||||||||
| Total margin (a) | $ | 151 | $ | 113 | $ | 38 | 34 | % | ||||||||||||||||||
| Operating and administrative expenses | $ | 79 | $ | 59 | $ | 20 | 34 | % | ||||||||||||||||||
| Operating income | $ | 38 | $ | 24 | $ | 14 | 58 | % | ||||||||||||||||||
| Earnings before interest expense and income taxes | $ | 40 | $ | 25 | $ | 15 | 60 | % | ||||||||||||||||||
| Gas Utility system throughput - billions of cubic feet | ||||||||||||||||||||||||||
| Core market | 13 | 10 | 3 | 30 | % | |||||||||||||||||||||
| Total | 74 | 62 | 12 | 19 | % | |||||||||||||||||||||
| Gas Utility heating degree days - % (warmer) colder than normal (b) | (3.0) | % | 5.0 | % | ||||||||||||||||||||||
| Capital expenditures | $ | 139 | $ | 112 | $ | 27 | 24 | % | ||||||||||||||||||
•Gas Utility service territory experienced temperatures that were 11% warmer than the prior-year period.
•Core market and total gas utility volumes increased due to incremental volume from Mountaineer.
•Total margin increased $38 million compared to the prior-year period, primarily reflecting the incremental margin from Mountaineer ($25 million), benefits from the increase in DSIC rates, and growth in residential and large delivery service customers.
•Operating income increased $14 million compared to the prior-year period, largely reflecting the higher total margin, partially offset by higher operating and administrative expenses and higher depreciation expense, both principally due to the incremental expenses attributable to Mountaineer.
(a)Total margin represents total revenue less total cost of sales. In the case of Utilities, total margin is also reduced by certain revenue-related taxes.
(b)Deviation from average heating degree days is determined on a 10-year period utilizing volume-weighted weather data.
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REPORT OF EARNINGS – UGI CORPORATION
(Millions of dollars, except per share)
(Unaudited)
| Three Months Ended June 30, | Nine Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||
| AmeriGas Propane | $ | 597 | $ | 526 | $ | 2,423 | $ | 2,132 | $ | 2,905 | $ | 2,530 | |||||||||||||||||||||||
| UGI International | 738 | 572 | 3,011 | 2,106 | 3,556 | 2,507 | |||||||||||||||||||||||||||||
| Midstream & Marketing | 525 | 261 | 1,731 | 1,086 | 2,051 | 1,316 | |||||||||||||||||||||||||||||
| Utilities | 274 | 181 | 1,400 | 923 | 1,556 | 1,052 | |||||||||||||||||||||||||||||
| Corporate & Other (a) | (101) | (44) | (393) | (238) | (458) | (272) | |||||||||||||||||||||||||||||
| Total revenues | $ | 2,033 | $ | 1,496 | $ | 8,172 | $ | 6,009 | $ | 9,610 | $ | 7,133 | |||||||||||||||||||||||
| (Loss) earnings before interest expense and income taxes: | |||||||||||||||||||||||||||||||||||
| AmeriGas Propane | $ | (10) | $ | 11 | $ | 303 | $ | 391 | $ | 297 | $ | 374 | |||||||||||||||||||||||
| UGI International | 26 | 41 | 228 | 326 | 219 | 338 | |||||||||||||||||||||||||||||
| Midstream & Marketing | 44 | 21 | 216 | 180 | 226 | 187 | |||||||||||||||||||||||||||||
| Utilities | 40 | 25 | 332 | 245 | 329 | 245 | |||||||||||||||||||||||||||||
| Total reportable segments | 100 | 98 | 1,079 | 1,142 | 1,071 | 1,144 | |||||||||||||||||||||||||||||
| Corporate & Other (a) | (26) | 208 | 282 | 353 | 1,094 | 409 | |||||||||||||||||||||||||||||
| Total earnings before interest expense and income taxes | 74 | 306 | 1,361 | 1,495 | 2,165 | 1,553 | |||||||||||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||||||||||||
| AmeriGas Propane | (41) | (40) | (120) | (120) | (159) | (160) | |||||||||||||||||||||||||||||
| UGI International | (7) | (8) | (22) | (21) | (28) | (29) | |||||||||||||||||||||||||||||
| Midstream & Marketing | (11) | (10) | (31) | (31) | (42) | (39) | |||||||||||||||||||||||||||||
| Utilities | (15) | (14) | (47) | (42) | (61) | (55) | |||||||||||||||||||||||||||||
| Corporate & Other, net (a) | (8) | (5) | (25) | (19) | (32) | (25) | |||||||||||||||||||||||||||||
| Total interest expense | (82) | (77) | (245) | (233) | (322) | (308) | |||||||||||||||||||||||||||||
| (Loss) income before income taxes | (8) | 229 | 1,116 | 1,262 | 1,843 | 1,245 | |||||||||||||||||||||||||||||
| Income tax expense (b) | 1 | (79) | (285) | (320) | (487) | (294) | |||||||||||||||||||||||||||||
| Net (loss) income including noncontrolling interests | (7) | 150 | 831 | 942 | 1,356 | 951 | |||||||||||||||||||||||||||||
| Deduct net income attributable to noncontrolling interests | — | — | (2) | — | (2) | — | |||||||||||||||||||||||||||||
| Net (loss) income attributable to UGI Corporation | $ | (7) | $ | 150 | $ | 829 | $ | 942 | $ | 1,354 | $ | 951 | |||||||||||||||||||||||
| (Loss) earnings per share attributable to UGI shareholders: | |||||||||||||||||||||||||||||||||||
| Basic | $ | (0.03) | $ | 0.72 | $ | 3.95 | $ | 4.51 | $ | 6.45 | $ | 4.55 | |||||||||||||||||||||||
| Diluted | $ | (0.03) | $ | 0.71 | $ | 3.84 | $ | 4.48 | $ | 6.27 | $ | 4.53 | |||||||||||||||||||||||
| Weighted Average common shares outstanding (thousands): | |||||||||||||||||||||||||||||||||||
| Basic | 210,190 | 209,099 | 209,992 | 208,934 | 209,850 | 208,863 | |||||||||||||||||||||||||||||
| Diluted | 210,190 | 210,851 | 215,965 | 210,194 | 215,967 | 209,983 | |||||||||||||||||||||||||||||
| Supplemental information: | |||||||||||||||||||||||||||||||||||
| Net (loss) income attributable to UGI Corporation: | |||||||||||||||||||||||||||||||||||
| AmeriGas Propane | $ | (37) | $ | (20) | $ | 135 | $ | 204 | $ | 99 | $ | 162 | |||||||||||||||||||||||
| UGI International | 15 | 31 | 161 | 222 | 160 | 258 | |||||||||||||||||||||||||||||
| Midstream & Marketing | 23 | 8 | 132 | 107 | 132 | 106 | |||||||||||||||||||||||||||||
| Utilities | 19 | 9 | 216 | 157 | 203 | 146 | |||||||||||||||||||||||||||||
| Total reportable segments | 20 | 28 | 644 | 690 | 594 | 672 | |||||||||||||||||||||||||||||
| Corporate & Other (a) | (27) | 122 | 185 | 252 | 760 | 279 | |||||||||||||||||||||||||||||
| Total net (loss) income attributable to UGI Corporation | $ | (7) | $ | 150 | $ | 829 | $ | 942 | $ | 1,354 | $ | 951 | |||||||||||||||||||||||
(a) Corporate & Other includes specific items attributable to our reportable segments that are not included in profit measures used by our chief operating decision maker in assessing our reportable segments' performance or allocating resources. These specific items are shown in the section titled "Non-GAAP Financial Measures - Adjusted Net Income Attributable to UGI
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and Adjusted Diluted Earnings Per Share" below. Corporate & Other also includes the elimination of certain intercompany transactions.
(b) Income tax expense for the nine and twelve months ended June 30, 2021 includes a $23 million income tax benefit from adjustments due to a step-up in tax basis in Italy as a result of Italian tax legislation.
Non-GAAP Financial Measures - Adjusted Net Income Attributable to UGI and Adjusted Diluted Earnings Per Share
The following tables reconcile net income attributable to UGI Corporation, the most directly comparable GAAP measure, to adjusted net income attributable to UGI Corporation, and reconcile diluted earnings per share, the most comparable GAAP measure, to adjusted diluted earnings per share, to reflect the adjustments referred to previously:
| Three Months Ended June 30, | Nine Months Ended June 30, | Twelve Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||
| Adjusted net income attributable to UGI Corporation (millions): | ||||||||||||||||||||||||||||||||||||||
| Net (loss) income attributable to UGI Corporation | $ | (7) | $ | 150 | $ | 829 | $ | 942 | $ | 1,354 | $ | 951 | ||||||||||||||||||||||||||
Net gains on commodity derivative instruments not associated with current-period transactions (net of tax of $5, $94, $98, $147, $340 and $176, respectively) | (12) | (231) | (255) | (368) | (888) | (435) | ||||||||||||||||||||||||||||||||
Unrealized (gains) losses on foreign currency derivative instruments (net of tax of $4, $(1), $5, $(2), $9 and $(6), respectively) | (10) | — | (14) | 4 | (24) | 16 | ||||||||||||||||||||||||||||||||
Loss on extinguishment of debt (net of tax of $0, $0, $(3), $0, $(3) and $0, respectively) | — | — | 8 | — | 8 | — | ||||||||||||||||||||||||||||||||
Acquisition and integration expenses associated with the Mountaineer Acquisition (net of tax of $0, $0, $0, $(1), $(3) and $(1), respectively) | — | 1 | 1 | 3 | 8 | 3 | ||||||||||||||||||||||||||||||||
Business transformation expenses (net of tax of $(1), $(6), $(2), $(15), $(14), and $(19), respectively) | 1 | 15 | 4 | 42 | 36 | 57 | ||||||||||||||||||||||||||||||||
Impairments associated with certain equity method investments (net of tax of $(14), $0, $(14), $0, $(14) and $0, respectively) | 36 | 93 | 36 | 93 | 36 | 93 | ||||||||||||||||||||||||||||||||
| Impact of change in Italian tax law | — | — | — | (23) | — | (23) | ||||||||||||||||||||||||||||||||
Impairment of customer relationship intangible (net of tax of $0, $0, $0, $0, $(5) and $0, respectively) | — | — | — | — | 15 | — | ||||||||||||||||||||||||||||||||
Loss on disposal of HVAC (net of tax of $0, $0, $0, $0, $0 and $0, respectively) | — | — | — | — | — | 2 | ||||||||||||||||||||||||||||||||
Restructuring costs (net of tax of $(1), $0, $(6), $0, $(6) and $0, respectively) | 4 | — | 17 | — | 17 | — | ||||||||||||||||||||||||||||||||
| Total adjustments (1) | 19 | (122) | (203) | (249) | (792) | (287) | ||||||||||||||||||||||||||||||||
Adjusted net income attributable to UGI Corporation | $ | 12 | $ | 28 | $ | 626 | $ | 693 | $ | 562 | $ | 664 | ||||||||||||||||||||||||||
| Adjusted diluted earnings per share: | ||||||||||||||||||||||||||||||||||||||
| UGI Corporation (loss) earnings per share — diluted (2) | $ | (0.03) | $ | 0.71 | $ | 3.84 | $ | 4.48 | $ | 6.27 | $ | 4.53 | ||||||||||||||||||||||||||
| Net gains on commodity derivative instruments not associated with current-period transactions | (0.06) | (1.09) | (1.18) | (1.75) | (4.13) | (2.07) | ||||||||||||||||||||||||||||||||
| Unrealized (gains) losses on foreign currency derivative instruments | (0.05) | — | (0.06) | 0.03 | (0.11) | 0.09 | ||||||||||||||||||||||||||||||||
| Loss on extinguishment of debt | — | — | 0.03 | — | 0.04 | — | ||||||||||||||||||||||||||||||||
| Acquisition and integration expenses associated with the Mountaineer Acquisition | — | — | — | 0.01 | 0.04 | 0.01 | ||||||||||||||||||||||||||||||||
| Business transformation expenses | 0.01 | 0.07 | 0.02 | 0.20 | 0.17 | 0.27 | ||||||||||||||||||||||||||||||||
| Impairments associated with certain equity method investments | 0.17 | 0.44 | 0.17 | 0.44 | 0.17 | 0.44 | ||||||||||||||||||||||||||||||||
| Impact of change in Italian tax law | — | — | — | (0.11) | — | (0.11) | ||||||||||||||||||||||||||||||||
| Impairment of customer relationship intangible | — | — | — | — | 0.07 | — | ||||||||||||||||||||||||||||||||
| Restructuring costs | 0.02 | — | 0.08 | — | 0.08 | — | ||||||||||||||||||||||||||||||||
| Total adjustments (2) | 0.09 | (0.58) | (0.94) | (1.18) | (3.67) | (1.37) | ||||||||||||||||||||||||||||||||
| Adjusted diluted earnings per share (2) | $ | 0.06 | $ | 0.13 | $ | 2.90 | $ | 3.30 | $ | 2.60 | $ | 3.16 | ||||||||||||||||||||||||||
(1)Income taxes associated with pre-tax adjustments determined using statutory business unit tax rates.
(2)The loss per share for the three months ended June 30, 2022, was determined excluding the effect of 5.67 million dilutive shares as the impact of such shares would have been antidilutive to the net loss for the period. Adjusted earnings per share for the three months ended June 30, 2022 was determined based upon fully dilutive shares of 215.89 million.
7
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 s t r ze bs k i Chief Financial Officer, UGI Corporation Ro be r t F. B e a rd Executive Vice President, Natural Gas, Global Engineering & Construction, and Procurement 1
2 2 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 Exchange Act of 1934, as amended. Forward-looking statements are based on management’s beliefs and assumptions and can often be identified by terms and phrases that include “believe,” “plan,” “anticipate,” “continue,” “estimate,” “expect,” “may,” “intend,” “target,” “project,” “forecast,” or other similar words. Management believes that these are reasonable as of today’s date only. Actual results may differ significantly because of risks and uncertainties that are difficult to predict and many of which are beyond management’s control; accordingly, there is no assurance that results will be realized. You should read UGI’s Annual Report on Form 10-K and quarterly reports on Form 10-Q for a more extensive list of factors that could affect results. We undertake no obligation to update publicly any forward-looking statement whether as a result of new information or future events except as required by the federal securities laws. Among them are adverse weather conditions (including increasingly uncertain weather patterns due to climate change) resulting in reduced demand, and the seasonal nature of our business; cost volatility and availability of all energy products, including propane and other LPG, natural gas, and electricity as well as the availability of LPG cylinders, and the capacity to transport product to our customers; changes in domestic and foreign laws and regulations, including safety, tax, consumer protection, data privacy, accounting, and environmental matters, such as regulatory responses to climate change; the inability to timely recover costs through utility rate proceedings; increased customer conservation measures due to high energy prices and improvements in energy efficiency and technology resulting in reduced demand; adverse labor relations and our ability to address existing or potential workforce shortages; the impact of pending and future legal or regulatory proceedings, inquiries or investigations; competitive pressures from the same and alternative energy sources; failure to acquire new customers or retain current customers, thereby reducing or limiting any increase in revenues; liability for environmental claims; customer, counterparty, supplier, or vendor defaults; liability for uninsured claims and for claims in excess of insurance coverage, including those for personal injury and property damage arising from explosions, terrorism, natural disasters, pandemics and other catastrophic events that may result from operating hazards and risks incidental to generating and distributing electricity and transporting, storing and distributing natural gas in all forms; transmission or distribution system service interruptions; political, regulatory and economic conditions in the United States, Europe and other foreign countries, including uncertainties related to the military conflict between Russia and Ukraine, and foreign currency exchange rate fluctuations (particularly the euro); capital market conditions, including reduced access to capital markets and interest rate fluctuations; changes in commodity market prices resulting in significantly higher cash collateral requirements; reduced distributions from subsidiaries impacting the ability to pay dividends; changes in Marcellus and Utica Shale gas production; the availability, timing and success of our acquisitions, commercial initiatives and investments to grow our business; our ability to successfully integrate acquired businesses and achieve anticipated synergies; the interruption, disruption, failure, malfunction, or breach of our information technology systems, and those of our third-party vendors or service providers, including due to cyberattack; the inability to complete pending or future energy infrastructure projects; our ability to achieve the operational benefits and cost efficiencies expected from the completion of pending and future transformation initiatives, including the impact of customer service disruptions resulting in potential customer loss due to the transformation activities; uncertainties related to a global pandemic, including the duration and/or impact of the COVID-19 pandemic; the impact of proposed or future tax legislation, including the potential reversal of existing tax legislation that is beneficial to us; and our ability to overcome supply chain issues that may result in delays or shortages in, as well as increased costs of, equipment, materials or other resources that are critical to our business operations. This presentation also contains non-GAAP measures GAAP financial measures, and we refer to the reconciliations to the comparable GAAP financial measures and related information.
3 3 Third Quarter Summary Roger Perreault President and CEO, UGI Corporation
4 4 $98 $100 Q3 FY21 Q3 FY22 Third Quarter Financial Overview 4 • Q3 FY22 GAAP diluted EPS of $(0.03) vs. $0.71 in Q3 FY21 • Adjusted diluted EPS1 of $0.06 in Q3 FY22 vs. $0.13 in Q3 FY21 • Solid performance from our reportable segments • Increased margins from capacity management and commodity marketing at Midstream and Marketing business • Higher rates from the Distribution System Improvement Charge (DSIC) • Benefits from expense control actions • Expects to be at the bottom end, or slightly below, the FY22 adjusted diluted EPS guidance range of $2.90 to $3.003 per share 1. Adjusted EPS is a non-GAAP measure. See Slide 7 for Q3 FY22 reconciliation. 2. Excludes EBIT related to Corporate & Other. 3. Because we are unable to predict certain potentially material items affecting diluted earnings per share on a GAAP basis, principally mark to market gains and losses on commodity and certain foreign currency derivative instruments, we cannot reconcile fiscal year 2022 adjusted diluted earnings per share, a non GAAP measure, to diluted earnings per share, the most directly comparable GAAP measure, in reliance on the “unreasonable efforts” exception set forth in SEC rules. Adjusted Diluted EPS1 Reportable Segments Earnings before Interest and Taxes ($ in Million)2 $0.13 $0.06 Q3 FY21 Q3 FY22
5 5 Recent Accomplishments 5 Reliable Earnings Growth Renewables Rebalance • 11,000+ customers added in YTD1 FY22 at the Utilities • On July 28th, received the recommend decision from the Administrative Law Judge (ALJ) assigned to our current PA gas rate case. Expect final approval from the PA PUC2 by fall • Increase in gas base rates of $38 million effective on October 29, 2022, and another increase of $11 million in October 2023 • Includes a 5-year pilot for a weather normalization adjustment rider • Commitment to fully fund 3 projects to produce RNG in South Dakota, a total investment of ~$70 million • Released 4th annual ESG report titled, "Transparency, Action and Progress", highlighting our strong progress on all key initiatives • Strategic acquisitions enhance asset quality and earnings capability: Mountaineer, UGI Moraine East (Stonehenge) and UGI Appalachia • Utilities segment on track for record capital spend in FY22 1. YTD represents 9 months ending June 30, 2022. 2. PA PUC stands for Pennsylvania Public Utility Commission.
6 6 Third Quarter Financial Review Ted J. Jastrzebski Chief Financial Officer, UGI Corporation
7 7 Third Quarter Adjusted Diluted Earnings per Share Q3 FY22 Q3 FY21 AmeriGas Propane $(0.17) $(0.10) UGI International 0.07 0.15 Midstream & Marketing 0.11 0.04 Utilities 0.08 0.04 Corporate & Other (a) (0.12) 0.58 (Loss) earnings per share – diluted (b) (0.03) 0.71 Net gains on commodity derivative instruments not associated with current-period transactions (0.06) (1.09) Unrealized gains on foreign currency derivative instruments (0.05) - Business transformation expenses 0.01 0.07 Restructuring costs 0.02 - Impairments associated with certain equity method investments 0.17 0.44 Total adjustments (a) 0.09 (0.58) Adjusted earnings per share – diluted (b) $0.06 $0.13 (a) Corporate & Other includes certain adjustments made to our reporting segments in arriving at net income attributable to UGI Corporation. These adjustments have been excluded from the segment results to align with the measure used by our Chief Operating Decision Maker in assessing segment performance and allocating resources. (b) The loss per share for the three months ended June 30, 2022, was determined excluding the effect of 5.67 million dilutive shares as the impact of such shares would have been antidilutive to the net loss for the period. Adjusted earnings per share for the three months ended June 30, 2022, was determined based upon fully diluted shares of 215.89 million.
8 8 Third Quarter and YTD FY22 Results Recap UGI Utilities Midstream & Marketing UGI International AmeriGas YTD2 Adjusted Diluted EPS1 – Segment Split 1. Adjusted Diluted EPS is a non-GAAP measure. See Slide 7 and Appendix for Q3 FY22 and YTD reconciliations, respectively. 2. YTD represents 9 months ending June 30, 2022. 3. Includes $0.01 Corporate & Other. 4. Includes $(0.09) Corporate & Other. Q3 FY22 GAAP diluted EPS of $(0.03) compared to $0.71 in Q3 FY21 YTD FY22 GAAP diluted EPS of $3.84 compared to $4.48 in YTD FY21 Q3 FY22 Adjusted Diluted EPS1 – Comparison with Q3 FY21 $0.97 $0.63 $1.06 $0.75 $0.51 $0.61 $0.75 $1.00 YTD FY21 YTD FY22 $2.904 $3.303
9 9 Financial Results – AmeriGas Propane (Millions of dollars) Q3 FY21 Q3 FY22 Earnings Before Interest Expense & Income Taxes $11 Total Margin (32) Operating and Administrative Expenses 8 Depreciation and Amortization (1) Other Income and Expense, net 4 (Loss) Before Interest Expense & Income Taxes $(10) Total Volume ↓ Retail gallons sold decreased 6% largely due to the continued impact of customer service challenges, staffing shortages for certain key delivery positions and increased price sensitivity in the higher commodity cost environment Total Margin ↓ Primarily due to lower average retail unit margins ($21 million) and lower retail volumes ($13 million) Operating and Admin Expenses ↓ Reflects lower expenses associated with employee benefits and compensation ($18 million), advertising and vehicle leases, partially offset by increases related to the inflationary cost environment, which included higher expenses associated with bad debt reserves ($4 million), vehicle fuel ($3 million), insurance claims and telecommunications Weather versus normal 22.8% colder than prior year Warmer 2.5% Q3 FY21 Q3 FY22 16.5% Primary Drivers Q3 FY22 EBIT - Comparison with Q3 FY21
10 10 (Millions of dollars) Q3 FY21 Q3 FY22 Earnings Before Interest Expense & Income Taxes $41 Total Margin (23) Operating and Administrative Expenses 1 Depreciation and Amortization 4 Realized FX Gains 3 Earnings Before Interest Expense & Income Taxes $26 Total Volume ↓ Retail volume decreased 7% primarily due to warmer weather, partially offset by the recovery of certain bulk and autogas volumes that were negatively affected by the COVID-19 pandemic Total Margin ↓ Primarily reflects the translation effects of weaker foreign currencies (~$25 million) and lower volumes, partially offset by higher LPG unit margins which reflect effects of strong margin management efforts Earnings Before Interest Expense & Income Taxes↓ Lower EBIT largely due to impact of the global inflationary cost environment on the underlying distribution, personnel and maintenance costs. Includes ~$1 million1 loss related to energy marketing Financial Results – UGI International Weather versus normal 29.3% warmer than prior year (14.7%) Warmer 24.4% Q3 FY21 Q3 FY22 (9.1%) (1) When compared to the prior year period, YTD energy marketing EBIT decreased by ~$81 million. Given continued volatility in commodity prices and the pervasive inflation that we’ve seen, we anticipate ~20% of the YTD EBIT loss will be recovered in 4Q FY22. Primary Drivers Q3 FY22 EBIT - Comparison with Q3 FY21
11 11 Total Margin ↑ Primarily reflecting higher capacity management margins that were largely attributable to the timing of settlement of storage hedge contracts, increased commodity marketing margins and incremental margin from the UGI Moraine East acquisition. Financial Results – Midstream & Marketing Weather versus normal 5.8% warmer than prior year Warmer (1.5%) Q3 FY21 Q3 FY22 (5.2%) (Millions of dollars) Q3 FY21 Q3 FY22 Earnings Before Interest Expense & Income Taxes $21 Total Margin 24 Operating and Administrative Expenses 2 Depreciation and Amortization (1) Other Income and Expense, net (2) Earnings Before Interest Expense & Income Taxes $44 Primary Drivers Q3 FY22 EBIT - Comparison with Q3 FY21
12 12 Volume ↑ Increase in Gas Utility core market and total volumes largely related to incremental volumes attributable to the acquisition of Mountaineer Total Margin ↑ Largely reflecting incremental margin attributable to Mountaineer ($25 million), increase in DSIC rates, and growth in residential and large delivery service customers Operating and Admin Expenses ↑ Principally related to incremental expenses attributable to Mountaineer Depreciation ↑ Attributable to Mountaineer and effects of continued distribution system capital expenditure activity Financial Results – Utilities (Millions of dollars) Q3 FY22 Q3 FY22 Earnings Before Interest Expense & Income Taxes $25 Total Margin 38 Operating and Administrative Expenses (20) Depreciation (8) Other Income and Expense, net 5 Earnings Before Interest Expense & Income Taxes $40 Weather versus normal 11.0% warmer than prior year Warmer 5.0% Q3 FY21 Q3 FY22 (3.0%)Primary Drivers Q3 FY22 EBIT - Comparison with Q3 FY21
13 13 Liquidity Update • Strong balance sheet position: • $2.1 Billion in available liquidity1 as of June 30, 2022 • On August 3rd, our Board of Directors approved a quarterly dividend of $0.36 per share 1. Defined as cash and cash equivalents, and available borrowing capacity on our revolving credit facilities. $1.6 $1.5 $1.5 $1.6 $2.4 $2.2 $1.5 $1.9 $2.1 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Available Liquidity Liquidity ($ in Billions)
14 14 Conclusion Roger Perreault President and CEO, UGI Corporation
15 15 Conclusion Strategic review of UGI International’s energy marketing business in progress, with options including a sale and wind-down Key strategic assets and integrated portfolio provides a competitive advantage and avenue for growth Strong underlying demand for our energy solutions Healthy pipeline of growth opportunities Robust balance sheet provides required flexibility Strong customer base and dedicated employees Reliable Earnings Growth RebalanceRenewables We continue to remain well-positioned to deliver on our long-term commitments to shareholders of 6-10% annual EPS growth and 4% dividend growth
16 16 Q & A Q
17 17 Appendix
18 18 UGI Supplemental Footnotes • Management uses “adjusted net income attributable to UGI Corporation” and “adjusted diluted earnings per share,” both of which are non-GAAP financial measures, when evaluating UGI’s overall performance. Management believes that these non-GAAP measures provide meaningful information to investors about UGI’s performance because they eliminate gains and losses on commodity and certain foreign currency derivative instruments not associated with current-period transactions and other significant discrete items that can affect the comparison of period-over-period results. • Management does not designate its commodity and certain foreign currency derivative instruments as hedges under GAAP. Volatility in net income attributable to UGI Corporation can occur as a result of gains and losses on such derivative instruments not associated with current-period transactions. These gains and losses result principally from recording changes in unrealized gains and losses on unsettled commodity and certain foreign currency derivative instruments and, to a much lesser extent, certain realized gains and losses on settled commodity derivative instruments that are not associated with current-period transactions. However, because these derivative instruments economically hedge anticipated future purchases or sales of energy commodities, or in the case of certain foreign currency derivatives reduce volatility in anticipated future earnings associated with our foreign operations, we expect that such gains or losses will be largely offset by gains or losses on anticipated future energy commodity transactions or mitigate volatility in anticipated future earnings. • Non-GAAP financial measures are not in accordance with, or an alternative to, GAAP and should be considered in addition to, and not as a substitute for, the comparable GAAP measures. • The table on slide 19 reconciles net (loss) income attributable to UGI Corporation, the most directly comparable GAAP measure, to adjusted net income attributable to UGI Corporation, and the tables on slide 7, 20, 21 and 22 reconcile diluted (loss) earnings per share, the most directly comparable GAAP measure, to adjusted diluted earnings per share, to reflect the adjustments referred to above.
19 19 Third Quarter Adjusted Net Income (Dollars in Millions) Q3 FY22 Q3 FY21 AmeriGas Propane $(37) $(20) UGI International 15 31 Midstream & Marketing 23 8 Utilities 19 9 Corporate & Other (a) (27) 122 Net (loss) income attributable to UGI Corporation (7) 150 Net gains on commodity derivative instruments not associated with current-period transactions (net of tax of $5 and $94, respectively) (12) (231) Unrealized gains on foreign currency derivative instruments (net of tax of $4 and $(1), respectively) (10) - Acquisition and integration expenses associated with the Mountaineer Acquisition (net of tax of $0 and $0, respectively) - 1 Business transformation expenses (net of tax of $(1) and $(6), respectively) 1 15 Restructuring costs (net of tax of $(1) and $0, respectively) 4 - Impairment associated with certain equity method investments (net of tax of $(14) and $0, respectively) 36 93 Total adjustments (a) (b) 19 (122) Adjusted net income attributable to UGI Corporation $12 $28 (a) Corporate & Other includes certain adjustments made to our reporting segments in arriving at net income attributable to UGI Corporation. These adjustments have been excluded from the segment results to align with the measure used by our Chief Operating Decision Maker in assessing segment performance and allocating resources. (b) Income taxes associated with pre-tax adjustments determined using statutory business unit tax rates.
20 20 YTD Adjusted Diluted Earnings per Share YTD FY22 YTD FY21 AmeriGas Propane $0.63 $0.97 UGI International 0.75 1.06 Midstream & Marketing 0.61 0.51 UGI Utilities 1.00 0.75 Corporate & Other (a) 0.85 1.19 Earnings per share – diluted 3.84 4.48 Net gains on commodity derivative instruments not associated with current-period transactions (1.18) (1.75) Unrealized (gains) losses on foreign currency derivative instruments (0.06) 0.03 Loss on extinguishment of debt 0.03 - Acquisition and integration expenses associated with the Mountaineer Acquisition - 0.01 Business transformation expenses 0.02 0.20 Impact of change in Italian tax law - (0.11) Restructuring costs 0.08 - Impairments associated with certain equity method investments 0.17 0.44 Total adjustments (a) (0.94) (1.18) Adjusted earnings per share – diluted (b) $2.90 $3.30 (a) Corporate & Other includes certain adjustments made to our reporting segments in arriving at net income attributable to UGI Corporation. These adjustments have been excluded from the segment results to align with the measure used by our Chief Operating Decision Maker in assessing segment performance and allocating resources.
21 21 Total AmeriGas Propane UGI International Midstream & Marketing Uti l i ties Corp & Other Revenues $2,033 $597 $738 $525 $274 ($101) Cost of sales (1,361) (370) (544) (436) (121) 110 Total margin 672 227 194 89 153 9 Operating and administrative expenses (465) (204) (143) (29) (81) (8) Depreciation and amortization (130) (44) (29) (20) (37) - Other operating income (expense), net 22 11 - (2) 3 10 Operating income (loss) 99 (10) 22 38 38 11 (Loss) income from equity investees (45) - - 6 - (51) Other non-operating income, net 20 - 4 - 2 14 Earnings (loss) before income taxes and interest expense 74 (10) 26 44 40 (26) Interest expense (82) (41) (7) (11) (15) (8) (Loss) income before income taxes (8) (51) 19 33 25 (34) Income tax (benefit) expense 1 14 (4) (10) (6) 7 Net (loss) income including noncontrolling interests (7) (37) 15 23 19 (27) Net (loss) income attr ibutable to UGI Corporation $(7) $(37) $15 $23 $19 $(27) Q3 FY22 Segment Reconciliation (GAAP) ($ in Million) 1. For US GAAP purposes, certain revenue-related taxes within our Utilities segment are included in “Operating and administrative expenses” above. Such costs reduce margin for Management’s Results of Operations reported in our periodic filings. 1 1
22 22 Investor Relations: Tameka Morris 610-456-6297 morrista@ugicorp.com Arnab Mukherjee 610-768-7498 mukherjeea@ugicorp.com