UGI Corporation Q4 FY2025 earnings call

• UGI delivered record adjusted earnings per share, strengthened balance sheet, generated free cash flow, upgraded pipeline infrastructure, and completed new LNG and renewable natural gas facilities. - AmeriGas is streamlining and transforming key business processes, with 5 strategic pillars: safety, customer focus, efficiency, people investment, and financial discipline. - In customer value and retention work stream, AmeriGas segmented customer base, exited unprofitable wholesale business. - In supply and logistics work stream, optimized supply, routing, and delivery. - Improved call center operations and simplified billing process.

UGI delivered record adjusted earnings per share of $3.32. AmeriGas led to higher EBIT. Regulated utilities reported record EBIT of $403 million, up $3 million over prior year, with core market volumes up 10% due to colder weather, higher gas base rates, and customer growth, but operating and administrative expenses increased. Midstream & Marketing segment had EBIT of $293 million, down $20 million vs prior year due to lower margin and reduced income from equity method investments. UGI International reported $314 million of EBIT, $9 million below prior year as reduced margin and lower realized gain on foreign currency exchange contracts were partially offset by lower operating and administrative expenses. AmeriGas reported EBIT of $166 million, $24 million or 17% above prior year, with LPG volumes largely consistent year-over-year, total margin increased due to higher LPG unit margins.

• 2025 fiscal year adjusted diluted EPS was $3.32, surpassing revised guidance range. - 2026 guidance range for adjusted diluted EPS is $2.85 to $3.15. - 2026 - 2029 plan targets EPS compound annual growth rate of 5% to 7% with $4.5 billion to $4.9 billion capital investment program. - Regulated utilities expect rate base growth of 9% or higher. - Target leverage ratio at or below 3.75x at UGI Corporation and at or below 4.0x at AmeriGas.

Q: Can you talk about what you're expecting from midstream in the LPG businesses in the 5-year plan?

A: Over that planning horizon, we expect to have growth in all business lines with low double-digit growth.

Q: Last quarter, Bob mentioned all the NDAs that you had signed around some of the activity happening in your backyard, can you get an update on that?

A: We still continue to see a lot of activity, advanced some projects with interested parties, have north of 50 NDAs with counterparties.

Q: There were some media reports about potentially putting your electric utility on the market, can you comment on that?

A: We take a look at our portfolio all the time, will continuously look at our portfolio for those opportunities.

Q: How do you think about getting to that sub 4x for AmeriGas and specifically, is that deleveraging or principally going to be underlying adjusted EBITDA improvement?

A: AmeriGas has a lot of intrinsic value, successfully executing 6 PMO projects, foresee this year being in the same ballpark as last year's 70% EBIT growth, and going forward there's additional value.

Q: Can you speak a little bit more to just the consistency ex credits and just confirm effectively that going forward, you don't have any kind of onetime tax credit items that will roll off or what have you?

A: OB3 out of the picture and the timing of the ITC is essentially out of the picture, seeing a very normalized run rate.

Q: The shift in CapEx relative to the $200 million increase in shareholder return, is that meant to be a reduction in utility CapEx and then an increase in dividends or pivot towards midstream CapEx?

A: Utility CapEx is pretty consistent, maybe even slightly up, see a little more midstream capital and commitment to dividend in the out years.

Q: I just wanted to sort of follow up on the 45Z credits, is the first year that you're going to be collecting that in '26? Or did you collect any in '25?

A: It will be '26 will be the first time.

Q: Were you using sort of a negative credit score to calculate the 45Z credits going forward?

A: Not sure about that one, we'll need to get back to you on that