Slide 1: AGA Financial Forum
AGA Financial Forum May 17-19, 2022
Slide 2: About This Presentation
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
Slide 3: Use of Non-GAAP Measures
Use of Non-GAAP Measures In this presentation, Management uses certain non-GAAP financial measures, including UGI Corporation adjusted earnings per share, UGI Corporation Free Cash Flow, AmeriGas Free Cash Flow, UGI International Free Cash Flow, UGI Corporation Adjusted Earnings before interest, tax
Slide 4: Agenda
Agenda Strategic Overview 6 5 Natural Gas 9 Global LPG 21 Renewables 29 Environmental, Social and Governance 33 Financial Overview 38 Appendix 46 4
Slide 5: A Diversified Energy Provider
A Diversified Energy Provider UGI Corporation is a distributor and marketer of energy products and services, including natural gas, LPG, electricity and renewable energy solutions 140 years 18 countries 3 million+ customers 1 11,000+ employees 1 4 diversified businesses ONE Reliable Earnings Growth
Slide 6: Executing on our Strategy
Executing on our Strategy Long track record of solid EPS and dividend Delivering on long term Strong cash growth driven by disciplined investments commitments: 6 – 10 % generation; Cash Flow EPS growth and 4% from Operations of dividend growth ~$1.5B in FY21 Leading market positions in our target ma
Slide 7: Recent Accomplishments
1 Recent Accomplishments • Strong contributions from recent strategic acquisitions: Mountaineer and Stonehenge • 12,000+ customers added in FY21 at the Utilities businesses; on track for similar growth in FY22 Reliable Earnings • 8,400+ added in YTD FY221 Growth • UGI Utilities requested an increase
Slide 8: FY22 Guidance
FY22 Guidance With focus on margin management and disciplined expense control actions, UGI is well positioned to deliver strong Fiscal 2022 results despite the impact of warmer than normal weather and significant increases and volatility in commodity costs, particularly on the international energy m
Slide 9: Natural Gas
CORPORATION | NATURAL GAS
Slide 10: Regulated Utilities Business
Regulated Utilities Business Key Highlights 2nd largest regulated gas utility in Pennsylvania • $3+ billion rate base1 • Record capital investment projected for FY22 with a focus on safety, reliability and growth • Authorized gas ROEs of 10.2% (DSIC) and 9.75% at UGI Utilities, Inc. and Mountaineer
Slide 11: Capital Investment Drives Rate Base Growth
Capital Investment Drives Rate Base Growth • Record capital spend, to retire aged infrastructure and expand our systems, drives reliable earnings growth and rebalancing of our portfolio • Minimal regulatory lag with ~90% of capital recoverable within 12 months Capital Investment2 (~$2.3B between FY2
Slide 12: Pipeline Replacement & Betterment Opportunity
Pipeline Replacement & Betterment Opportunity • Commitment to replace all cast iron pipes by 2027 and all bare steel pipes Pipeline Replacement & Betterment Opportunity by 2041 at PA Utilities with ~1,100 miles remaining • Replaced 78 miles in FY2021 UGI Utilities, Inc. Mountaineer Gas • Constructiv
Slide 13: Customer Growth & Affordability
Customer Growth & Affordability Total Number of Gas Utility Customers Sustained Growth ~886,000 250,000+ • Strong customer growth at our PA gas LDC adding an average of 15,000+ conversion prospects heating customers annually over the within 150 feet of PA last 10 years ~575,000 Gas Utility mains • R
Slide 14: UGI Utilities Peak Day Growth
UGI Utilities Peak Day Growth 2.5 2.0 1.5 BCF 1.0 0.5 - 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 PGC Customers Transportation Customers Capacity Reserve Requirement • Peak day demand growth driven by above average customer growth,
Slide 15: Midstream & Marketing Business
Midstream & Marketing Business Key Highlights • Full suite of midstream services • Commodity Marketing • LNG Peaking • Pipeline Capacity • Storage • Gathering services • 42,000+ customer locations • Marketing gas on 46 gas utility systems and 20 Legacy Assets Appalachia Assets electric utility syste
Slide 16: Fee-Based Income Provides Earnings Stability
Fee-Based Income Provides Earnings Stability Midstream & Marketing offers services in the Appalachian basin and the eastern US with significant fee-based income. Total Margin ($ in millions)1 Midstream & Marketing Fee-Based Margins (2021) • Our Midstream & Marketing 2021 3% business provides stable
Slide 17: Strategic Midstream Capabilities
Strategic Midstream Capabilities Strong capabilities across the value chain • LNG Peaking • Total vaporization (~360,000 Dth/day) • Total liquefaction (~22,500 Dth/day) • 19.5 million gallons of Tank storage • Built Pipeline Capacity • Total capacity (~4,800,000 Dth/day)1 • Underground Natural Gas S
Slide 18: Commodity Marketing
Commodity Marketing 1 Strong experience in managing margins across economic cycles Hedging strategy • Aggregated fixed price sales are backed with fixed price 2 financial or physical purchases • No speculative trading 3 Cost advantage with Marcellus and Utica supply Customer diversity 4 • ~12,600 cu
Slide 19: Cumulative Capital Investment
Cumulative Capital Investment Capital deployment spans our entire business focusing on growth projects $1800 1600 Capital Expenditures1 ($ in millions) 1400 1200 1000 800 600 400 200 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Other LNG Power Generation Midstream Renewables 1. Does
Slide 20: Growing our Appalachian Footprint
Growing our Appalachian Footprint Pine Run Midstream Stonehenge • In February 2021, acquired a 49% equity • In January 2022, UGI Energy Services interest in Pine Run Midstream for acquired Stonehenge Appalachia, LLC $56mm from Stonehenge Energy Holdings for ~$190mm • Operates 43-miles of dry gas gat
Slide 21: Global LPG
CORPORATION | GLOBAL LPG
Slide 22: Global LPG Business
Global LPG Business Key Highlights • Robust transportation and logistics infrastructure provides flexibility and supply reliability • #1 propane distributor in the US; services all 50 states • A leading provider in multiple territories of the 17 countries served in Europe • Track record of margin ma
Slide 23: Leveraging Our Supply Infrastructure
Leveraging Our Supply Infrastructure Robust, flexible and reliable supply chain coverage to meet customer needs and support expansion into renewable energy solutions. AmeriGas: Best-in-class network of supply assets that provide the UGI International: Strategically located supply ability to quickly
Slide 24: Our Pathway to Reliable Earnings Growth
Our Pathway to Reliable Earnings Growth Areas of Focus Demonstrated Growth Enhanced customer experience Prioritizing Less 7.4% 6.4% Weather Sensitive National Accounts Cylinder Exchange Customer retention and growth Programs Volume Growth (US) Volume Growth (FY16 – 21) (FY16 – 21) Effective margin m
Slide 25: LPG Customer Contracts
LPG Customer Contracts The majority of our contracts have pass-through structures which enable recovery over the long-term despite the potential for short-term lags in covering higher commodity cost. FY 2021 Contract Types by Volume Formula-Based / Contract Floating • Prices calculated based on the
Slide 26: Margin Management Driving Reliable Earnings
Margin Management Driving Reliable Earnings Over the long term, our Global LPG business consistently maintains unit margins to provide reliable earnings growth through varying economic cycles. Unit Margins at AmeriGas 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Avg Retail Unit Margin AmeriGas
Slide 27: UGI International Energy Marketing Overview
UGI International Energy Marketing Overview UGI International markets and supplies natural gas and electricity to small and medium enterprises, schools, and municipalities through third party distribution systems. • As of May 4th, UGI announced that it had commenced a strategic review of the energy
Slide 28: LPG Business Transformation
LPG Business Transformation AmeriGas Driving Efficiency, Improving Customer Experience FY22 LPG Business Expect to realize $150 Million in permanent Process Efficiency Transformation Benefits1 annual savings by the end of FY22 • Standardized leading processes across UGI Annual Savings • Cost savings
Slide 29: Renewables
CORPORATION | RENEWABLES
Slide 30: Renewables: Our Growth Engine for the Future
Renewables: Our Growth Engine for the Future Investment Priorities • Investments in renewable energy solutions $1 - 1.25B • Leverage existing infrastructure and our core Projected investment competencies in renewable energy • Achieve carbon emission reduction goals solutions1 (FY21 - 25) • Participa
Slide 31: Establishing a Broad Renewables Footprint
Establishing a Broad Renewables Footprint RNG and Renewable Power Production Bio-LPG, rDME Production – USA & Europe RNG: Project Total Investment Expected Product Joint Ventures Location Expected Expected Production1 Completion Production1 JV with SHV $1B over 5 years 300 kilotons rDME (~ Mmcf) Ene
Slide 32: Case Study: Cayuga RNG
Case Study: Cayuga RNG • Construction of gas upgrading equipment to produce ~50,000 Program Overview Spruce Dth of RNG annually from on-site dairy waste feedstock • Cayuga RNG, a JV with Global Common Ventures, Haven Farm • RNG will be delivered to a local natural gas distribution system will develo
Slide 33: Environmental, Social and Governance
Environmental, Social and Governance 33
Slide 34: ESG Update
ESG Update Key ESG Focus Areas UGI ESG Rating History - MSCI UGI is positioned in top 18% of our peers Continue to align disclosure with shareholder expectations Commitment to invest in renewable energy solutions Reducing emissions Commitment to Belonging, Inclusion, Diversity and Equity Ongoing est
Slide 35: Strong Focus on Environmental Factors
Strong Focus on Environmental Factors • Reduced methane emissions by ~90%1; remains Methane Reduction [] committed to achieving reduction of 92% by 20301 and 95% by 20401 • Committed to reducing Scope I emissions by 55% by 2025 using 2020 as the base year2 • Committed to replacing all cast iron by 2
Slide 36: Safety is Our Top Priority
Safety is Our Top Priority • Making solid progress on our safety commitments: • 35% reduction Total Recordable Injuries by 20251,3 • 50% Reduction in Accountable Vehicle Incidents by 20252,3 Total Recordable Incidents Rate (TRIR)4 Accountable Vehicle Incident Rate (AVIR)4 ~26% 50%+ 4.12 5.20 reducti
Slide 37: Socially Responsible Business Built on Strong Governance
Socially Responsible Business Built on Strong Governance Belonging, Inclusion, Collaborations with Big Diversity and Equity 64 Brothers Big Sisters and (BIDE) Average Age of Directors United Way 5 years 82% Average Board Tenure1 Independent Directors2 Employee Resource Independent Supplier Groups: B
Slide 38: Financial Overview
CORPORATION | FINANCIAL OVERVIEW
Slide 39: Our Core Financial Strengths
Our Core Financial Strengths Sustainable Earnings Growth Excellent Track Record of Cash Generation Balanced Growth and Strong Balance Sheet Position Income Investment Strong Dividend Growth 39
Slide 40: A Strategy that Delivers Shareholder Value
A Strategy that Delivers Shareholder Value Sustained Earnings Growth Strong Dividend Growth 2016-21 CAGR of 7.6% 2016-21 CAGR of 7.8% $2.05 $2.29 $2.74 $2.28 $2.67 $2.96 $0.95 $1.00 $1.04 $1.30 $1.32 $1.38 Adjusted Dividend 2 2 2016 2017 2018 2019 2020 2021 EPS Growth 2016 2017 20182 2019 2020 2021
Slide 41: Our Continuous Improvement Journey
Our Continuous Improvement Journey FY2020 – 21 FY2022 and Beyond On track to realize annual savings of $15+ million by the Established Centers of end of FY23 from support Excellence functions transformation • Embarked on support functions transformation journey to • Economies of scale and scope stre
Slide 42: FY2022 – 25 Cash Deployment Plan
FY2022 – 25 Cash Deployment Plan1 Sources of Cash ($ in Billion) Uses of Cash ($ in Billion) 7 Cash Flow from Operations 6 ~$6.0 - 6.3B 5 ~$3.1 • • Consistent cash generation Optimal capital structure 4 $5.3 – 5.5B Capital Allocation Plan • Process improvement FY2022 – 25 • Optimal shareholder retur
Slide 43: FY2022 – 25 Capital Allocation Plan
FY2022 – 25 Capital Allocation Plan FY2022 – 25 Growth and Regulatory Capital Plan1 ($5.3 – 5.5B) 5 4 80%+ of the $4.5B growth Renewables ~$3.1 27% 3 and regulatory capital will be invested in Natural Gas and 2 Renewables ~$1.4 ~$4.5B Midstream 1 13% 0 ~$0.9 Regulated Sales Business Global LPG Maint
Slide 44: Financial Stability
Financial Stability Leverage1,2 Debt Maturities4 ($ Million) AmeriGas UGI International Midstream & Marketing Utilities 4.7x UGI Corp 4.2x 4.2x 3.9x $ 2,500 3.3x 2,000 1,500 FY19 FY20 FY213 FY22E FY25E 1,000 • UGI’s philosophy is to hold debt at its business units and keep capacity at the holding co
Slide 45: Our Key Takeaways
Our Key Takeaways Disciplined capital deployment delivering reliable earnings growth while rebalancing our portfolio Reliable Earnings Growth Differentiated strategic assets facilitating renewable energy investments and growth Robust pipeline of investment opportunities insuring delivery on ou
Slide 46: Appendix
CORPORATION | APPENDIX
Slide 47: YTD FY22 Adjusted Diluted Earnings per Share
YTD FY22 Adjusted Diluted Earnings per Share YTD FY22 YTD FY21 AmeriGas Propane $0.80 $1.07 UGI International 0.68 0.91 Midstream & Marketing 0.50 0.47 Utilities 0.91 0.71 Corporate & Other (a) 0.98 0.61 Earnings per share – diluted 3.87 3.77 Net gains on commodity derivative instruments not associa
Slide 48: Adjusted Net Income and Adjusted Diluted EPS Reconciliations (1/2)
Adjusted Net Income and Adjusted Diluted EPS Reconciliations (1/2) (Millions of dollars, except per share amounts) Year Ended September 30, 2010 2011 2012 2013 2014 2015 2016 2017 NON-GAAP RECONCILIATION: Adjusted net income attributable to UGI Corporation: Net income attributable to UGI Corporation
Slide 49: Adjusted Net Income and Adjusted Diluted EPS Reconciliations (2/2)
Adjusted Net Income and Adjusted Diluted EPS Reconciliations (2/2) (Millions of dollars, except per share amounts) Year Ended September 30, 2018 2019 2020 2021 NON-GAAP RECONCILIATION: Adjusted net income attributable to UGI Corporation: Net income attributable to UGI Corporation $719 $256 $532 $1,4
Slide 50: UGI Corp Free Cash Flow less Dividends
UGI Corp Free Cash Flow less Dividends ($ in millions) Year Ended September 30, 2016 2017 2018 2019 2020 2021 Net Cash Provided By Operating Activities $970 $964 $1,085 $1,078 $1,102 $1,481 Less: Expenditures for property, plant, and equipment (564) (639) (575) (705) (655) (690) Less: Dividends (161
Slide 51: Free Cash Flow for the Global LPG Businesses
Free Cash Flow for the Global LPG Businesses ($ in millions) Year Ended September 30, 2019 2020 2021 AmeriGas Cash flow from Operations $415 $374 $268 Less: Capital Expenditure (107) (135) (130) Free Cash Flow $308 $239 $138 UGI International Cash flow from Operations $283 $253 $643 Less: Capital Ex
Slide 52: Midstream & Marketing Total Margins
Midstream & Marketing Total Margins ($ in millions) Year Ended September 30, 2011 2021 Total Revenues $1,156 $1,406 Total Cost of Sales (987) (1,033) Margin - Midstream & Marketing $169 $373 Less: HVAC 32 - UGIES Margin $137 $373 52
Slide 53: UGI Corporation Adjusted EBITDA and Leverage
UGI Corporation Adjusted EBITDA and Leverage ($ in millions) Year Ended September 30, 2019 2020 2021 Net income including noncontrolling interests $308 $532 $1,467 Income taxes 93 135 522 Interest expense 258 322 310 Depreciation and amortization 448 484 502 EBITDA 1,107 1,473 2,801 Unrealized losse
Slide 54: Notes to ESG Commitments
Notes to ESG Commitments Committed to reducing Scope I emissions by 55% by 2025 using 2020 as the base year 1. Scope 1 emissions reduction target does not include emissions from the Mountaineer acquisition closed in 2021. The emissions from the Pine Run acquisition, announced in February 2021, was i