UGI Corporation Q1 FY2026 earnings call

• Total reportable segments EBIT was $441 million, aligning with expectations, driven by strong natural gas businesses and effective margin management in global LPG operations. • Natural gas businesses performed well due to robust gas demand and the impact of the 2025 gas base rate case at the Pennsylvania utility. • Global LPG businesses capitalized on favorable weather in certain U.S. regions and managed to offset divestiture impacts through effective margin management and cost control. • AmeriGas saw improvements in safety metrics with a 45% reduction in recordable incidents and 60% less lost time injuries, along with higher net promoter scores and an A-minus ranking from the Better Business Bureau. • UGI International completed its portfolio rationalization efforts with divestitures in seven European countries, generating approximately $215 million in cash proceeds. • The natural gas business deployed $225 million of capital, with 73% going to regulated utilities for infrastructure replacement and system betterment. • UGI Energy Services' Carlisle LNG storage and vaporization facility became operational. • Filed gas base rate cases for UGI Utilities and Mountaineer Gas Company requesting rate increases to fund over $500 million in system and technology upgrades.

For the fiscal 2026 first quarter, UGI Corporation's total reportable segments EBIT was $441 million, which is a 5% increase over the prior year period. The utilities segment delivered an EBIT of $157 million, up $16 million from the prior year. Core market volumes in gas utility service territories increased by 16% due to colder weather. The Midstream and Marketing segment reported an EBIT of $88 million, compared to $95 million in the prior year. The UGI International segment had an EBIT of $124 million, up $14 million from the prior year, largely due to operating efficiencies offsetting the impact of divestitures. The AmeriGas segment reported an EBIT of $72 million, down $2 million from the prior year, with total retail LPG volume up but partially offset by divestitures and weather conditions.

• Continue to execute strategic priorities, focusing on operational excellence, safety, and cultural transformation. • Remain focused on meeting the strong demand during winter months and positioning the natural gas infrastructure to capture growing demand in Pennsylvania. • Maintain disciplined capital allocation and advance efforts to unlock intrinsic value. • Expect to see continued benefits from operational improvement efforts such as safety initiatives and margin management.

• Extreme weather conditions could impact operational efficiency and delivery, affecting business performance. • Uncertainty regarding the outcome of rate cases, which could impact revenue and cost structures. • Market price volatility in natural gas and LPG could affect margins and profitability. • Risks associated with divestiture integration and the impact of portfolio rationalization on future performance.

Q: How has AmeriGas performed through the recent extreme winter weather and what about the impact of natural gas price volatility on the marketing business?

A: AmeriGas has seen record safety performance with fewer recordable injuries and higher net promoter scores. However, extreme weather conditions, particularly road conditions, have impacted delivery. Regarding the marketing business, weather typically benefits it, but there is a lag in the recovery of pipeline transportation cost increases, which will be recovered over time.

Q: Can you talk about the decision to file a rate case in Pennsylvania relatively quickly and the progress on NDAs for increasing natural gas demand in PA?

A: The decision to file the rate case in Pennsylvania is part of focusing on affordability and operational efficiency. On NDAs for increasing natural gas demand in PA, discussions are ongoing with several parties, and progress is being made with hopes to announce something during the fiscal year.

Q: Why was the chief strategic officer role created and can you quantify the pipeline cost recovery in the midstream business?

A: The chief strategic officer role is created to focus on long-term strategic planning for the company's portfolio and opportunities. The pipeline cost recovery in the midstream business is approximately $5 million, with a significant portion expected to be recovered in the current fiscal year.