UGI : Annual Report 2021

RELIABLE EARNINGS

GROWTH

2021 Annual Report

REBALANCERENEWABLES

CORPORATEPROFILE

International distributor and marketer of energy products and services, including natural gas, LPG, electricity and renewable energy solutions, with robust infrastructure in key markets

FY21 EPS Contribution by Business

					%
				0
		4	17%
G	a	s				26%
		Midstream &	%
				Marketing			0
						AmeriGas
l							Propane
								6
a			23%
r								G
u				Utilities	34%
a
t									L
							UGI
N					l	P
	International
									a
								b
							o
							l
							G

18	~3 million
Countries	Customers
11,000+	~18,000
Employees	Miles of Gas Mains

Natural Gas

• Second largest regulated gas utility in Pennsylvania
• Historical rate base CAGR of 11%+ (2016-21)

•Acquisition completed on September 1, 2021

• Largest regulated gas utility in West Virginia

• Strategic midstream assets and energy marketing business

• Significant fee-based income

Global LPG

• Largest LPG distributor in the US

•Broad geographic footprint with ~1,600 locations serving customers in all 50 states

• LPG distributor in 17 countries throughout Europe

•Largest LPG distributor in France, Austria, Belgium, Denmark, Luxembourg, Norway and Hungary

UGI Corporation 2021 Annual Report

2

TOOURSHAREHOLDERS

Fiscal year 2021 was a strong year for UGI. We achieved record earnings in the face of continued uncertainty and challenges in the global environment. We are proud of our performance which is a direct testament to our sound business strategy, resiliency, and dedicated employees. The entire Board of Directors want to extend their sincere gratitude to all of our employees for their commitment to safety and excellence while managing the continued impact of the global pandemic.

Fiscal 2021 marked another year where our diversified business created value for its shareholders. In May 2021, we increased our dividend, the 34th consecutive year of increasing dividends and the 137th year of consecutively paying dividends. Our shareholders have experienced a dividend growth rate of 7.2% and an earnings per share growth rate of 7.7% over the past 10 fiscal years.

Our strategy is clear. We are commied to providing reliable earnings growth, investing in renewable energy solutions, and rebalancing our portfolio, with an emphasis on natural gas and renewable energy solutions.

Delivering reliable earnings growth. In Fiscal 2021, the company reported GAAP earnings per share of $6.92 and adjusted earnings per share of $2.96, with the laer being 11% higher than the previous year. All of our businesses reported higher results in comparison to Fiscal 2020. We delivered reliable earnings growth as we executed on several growth and environmental, social, and governance initiatives.

In our natural gas business:

• We increased our regulated utilities footprint with the Mountaineer acquisition that closed on September 1st. With this acquisition, we added roughly 6,200 miles of pipeline and nearly 214,000 customers in West Virginia.
• We deployed a record level of capital at our regulated gas utilities in infrastructure replacement and reinforcement. With the remaining miles of cast iron and bare steel le to replace in both Pennsylvania and West Virginia, we have a long runway to deploy our capital at aractive rates of return.

• Our Pennsylvania gas utility also added more than 12,000 new residential and commercial heating customers, continuing a strong track record of annual customer growth.
• Within the Midstream & Marketing segment, we continued to see a significant amount of margin from fee-based income. We also expanded our interest in the natural gas gathering systems in the Appalachian basin with an investment in Pine Run. This investment has performed well and we are pleased with the strong production volumes during the fiscal year.

In the Global LPG business:

• UGI International generated record financial results due to strong margin management efforts and relatively normal weather conditions.
• AmeriGas grew national account volumes by over 9% and continued to expand its cylinder home delivery service, Cynch, now offered in 22 cities in the U.S. The national accounts and cylinder exchange programs continue to be strong growth avenues for AmeriGas largely due to our unmatched geographic footprint and supply and distribution network.
• Also at AmeriGas, our teams were focused on enhancing the customer experience and driving operational efficiency as a part of our business transformation initiative. In Fiscal 2021, we established a centralized customer engagement services center, enhanced customer management tools, and introduced a new routing and logistics tool.
• In conjunction with the business transformation initiatives, we have substantially completed the planned investments of $220 million and €55 million for AmeriGas and UGI International, respectively. This will result in total savings of $150 million and €30 million for AmeriGas and UGI International, respectively, and transitioning into continuous improvement to gain continued efficiency.

RELIABLE EARNINGS	RENEWABLES	REBALANCE
GROWTH

UGI Corporation 2021 Annual Report	3

Advancing our renewables growth strategy. UGI has a strong culture of innovation that is evident when you look at our history over the past 139 years. We believe that once again, our world is at a pivotal point with an increasing demand for environmentally responsible and affordable energy solutions. We believe that this demand can only be met by a range of energy solutions, including natural gas and LPG. With that in mind, in Fiscal 2021 we shared our commitment to invest over $1 billion in renewable energy solutions over the next five years.

During the year, we commied to several investment opportunities that leverage our existing infrastructure and expertise. These projects will deliver renewable natural gas ("RNG") and bio-LPG to customers and, in most cases, they require no incremental investments by our customers and no community disruption related to infrastructure buildout.

• The Midstream & Marketing segment entered into several strategic partnerships to produce renewable natural gas from a diversified set of feedstock and in areas outside of our historical geographic boundaries. In these aractive RNG partnerships, we commied over $100 million of investment during the year.

established a target to reduce Scope I greenhouse gas emissions by 55% by 2025, using 2020 as the base year, adding to the ambitious GHG and methane reduction targets established at UGI Utilities in Fiscal 2020. During this year, our Pennsylvania gas utility replaced 78 miles of cast iron and bare steel, exceeding the commitment made to regulators. These investments not only enhance the safety, reliability, and efficiency of our system but also reduce fugitive methane emissions.

UGI remains focused on promoting an inclusive culture that respects and embraces diversity and equity. Further progressing on our Belonging, Inclusion, Diversity and Equity ("BIDE") imperative, we partnered with the Human Library Organization to provide diversity and inclusion education as a part of our leadership development, supervisor training and new hire onboarding programs. We also strengthened existing relationships with the Urban Affairs Coalition and Big Brothers Big Sisters as we stride towards making a difference in the communities that we serve. Similarly, we also increased our domestic spend and commitment with diverse suppliers by over 20% in Fiscal 2021.

• We established an exclusive supply arrangement that enabled us to receive bio-LPG in Europe to meet customer need. In addition, in May 2021 we announced the intent to create a joint venture for the production and use of renewable dimethyl ether (rDME), a low-carbon sustainable liquid gas, in the U.S. and Europe.

Laying the foundation for rebalancing our portfolio.

We are pleased with the pathway that we established in Fiscal 2021 towards rebalancing our portfolio. This includes our investments in renewable energy solutions and the natural gas business through the Mountaineer acquisition, capital spend in replacement and beerment at our utilities, and investment in the Pine Run midstream system. These investments support our portfolio rebalancing strategy and will lead to continued earnings growth.

Advancing our Environmental, Social, and Governance ("ESG") initiatives. At the core of UGI's

strategy is the pledge to operate in a sustainable and socially responsible manner. To further advance our ESG strategy, in Fiscal 2021 we established a dedicated ESG team. We also

A sound strategy that positions us well for the future.

Looking forward to Fiscal 2022 and beyond, we are encouraged by the growth prospects ahead of us. We believe that we are well positioned to continue the momentum from 2021 as we execute on our strategy of delivering reliable earnings growth, investing in renewable energy solutions, and rebalancing our portfolio towards a more equal split between LPG and natural gas.

In closing, we want to thank our employees, shareholders, and other strategic partners for your support and commitment. We are optimistic about the future and strongly believe our strategy will deliver our long-term financial targets of 6 - 10% earnings per share growth and 4% dividend growth. We thank you for your investment and look forward to keeping you updated on our progress in Fiscal 2022.

Frank S. Hermance	Roger Perreault
Chairman of the Board	President and
	Chief Executive Officer

UGI was recognized by a number of respected publications and institutions in 2021. Most notably, for the 17th time, UGI was listed among the Fortune 500, which comprises the 500 largest companies in the United States. UGI was also named by Plas as one of the "Top 250 Global Energy Companies."

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RELIABLEEARNINGS

GROWTH

UGI is commied to consistently growing earnings and creating shareholder value. With focused execution, we will continue to deliver on our long-term commitment of 6-10% EPS growth and 4% dividend growth.

UGI provided reliable earnings growth in

Fiscal 2021 through its diversified business.

Investing in Regulated Utilities with Continued Customer Growth

UGI Utilities had a record $394 million investment in capital and ~12,000 customer additions in Fiscal 2021

Leveraging Differentiated

Position

AmeriGas continues to experience growth in National Account volumes with a 9% increase in Fiscal 2021 over the prior year. The Global LPG businesses expanded their cylinder offerings through Cynch in the U.S. and cylinder vending machines in selected European cities

Exploring New Growth

Opportunities

Our businesses continue to

identify new growth

opportunities, including opportunities to invest in renewable energy solutions

Expanding the Regulated

Utilities Footprint

Through the acquisition of Mountaineer Gas on September 1, 2021, we added ~6,200 miles of pipeline and ~30% more customers to the portfolio

Strategic Midstream &

Marketing Business

Our Midstream & Marketing

business provides stable earnings with ~87% of the margin generated from fee-based income

Improving Customer Experience

and Weather Resiliency

In FY21, Global LPG

continued to execute on its

multi-year business

transformation designed

to improve long-term

operational performance

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