UGI Reports Record First Quarter Results

VALLEY FORGE, Pa.–(BUSINESS WIRE)–UGI Corporation (NYSE: UGI) today reported financial results for the
fiscal quarter ended December 31, 2017.

HIGHLIGHTS

• GAAP EPS of $2.07 and adjusted EPS of $1.01 per diluted share compared
  to GAAP EPS of $1.30 and adjusted EPS of $0.91 per diluted share in
  the prior year
• Weather slightly warmer than normal in all service territories; colder
  than the prior year in AmeriGas, UGI Utilities, and Midstream &
  Marketing service territories; warmer than the prior year in UGI
  International service territory
• Received certificate of public necessity and convenience from FERC for
  PennEast pipeline on January 19, 2018
• Completed construction of Steelton LNG storage and vaporization
  facility in December

"This was a strong start to fiscal 2018 as we experienced colder weather
than the prior year in most of our service territories and realized
benefits from our growth initiatives, as well as the U.S. tax reform
legislation," said John L. Walsh, president and chief executive officer
of UGI Corporation. "Subsequent to the end of the quarter, our electric
utility filed its first rate case in 22 years, and we were pleased to
receive the FERC certificate for the PennEast pipeline."

Given the significance of the second fiscal quarter to full year
results, UGI intends to provide an update regarding its adjusted EPS
guidance upon completion of the second fiscal quarter ending March 31,
2018. Our original guidance did not include the impact of French and
U.S. tax legislation.

U.S. AND FRANCE TAX LEGISLATION

• Both the United States and France enacted tax legislation that
  generated one-time benefits to EPS of $1.04, on a combined basis, in
  the current quarter that were excluded from adjusted EPS.
• For the full year, on a combined basis, these tax law changes are
  expected to have a net benefit to EPS of $0.15 to $0.25, $0.09 of
  which was recorded in the first quarter.

KEY DRIVERS OF RESULTS

• AmeriGas: Cylinder Exchange and National accounts volumes up
  mid single digits with slightly higher bulk unit margins; weather
  colder than prior year but largely due to the last week of the quarter
• UGI International: Impact of weather that was 7% warmer than
  the prior year was offset by contributions from the acquisition of
  DVEP as well as Total's LPG distribution business in Italy
  (UniverGas), and Finagaz synergies
• Midstream & Marketing: Margin growth from Sunbury pipeline,
  peaking demand and electric generation
• UGI Utilities: Added ~3,800 residential and commercial heating
  customers; margin benefit of PNG rate case; weather 6% colder than
  prior year

EARNINGS CALL and WEBCAST

UGI Corporation will hold a live Internet Audio Webcast of its
conference call to discuss first quarter earnings and other current
activities at 9:00 AM ET on Thursday, February 1, 2018. Interested
parties may listen to the audio webcast both live and in replay on the
Internet at http://www.ugicorp.com/investor-relations/events-and-presentations/default.aspx
or at the company website http://www.ugicorp.com
under Investor Relations. A telephonic replay will be available from
12:00 PM ET on February 1 through 11:59 PM ET on February 8. The replay
may be accessed at (855) 859-2056, and internationally at
1-404-537-3406, conference ID 2603134.

ABOUT UGI

UGI is a distributor and marketer of energy products and services.
Through subsidiaries, UGI operates natural gas and electric utilities in
Pennsylvania, distributes propane both domestically and internationally,
manages midstream energy and electric generation assets in Pennsylvania,
and engages in energy marketing primarily in the Mid-Atlantic region as
well as parts of Europe. UGI, through subsidiaries, is the sole General
Partner and owns 26% of AmeriGas Partners, L.P. (NYSE: APU), the
nation's largest retail propane distributor.

Comprehensive information about UGI Corporation is available on the
Internet at http://www.ugicorp.com.

USE OF NON-GAAP MEASURES

Management uses "adjusted diluted earnings per share," which is derived
from "adjusted net income attributable to UGI Corporation," both of
which are non-GAAP financial measures, when evaluating UGI's overall
performance. For the periods presented, adjusted net income attributable
to UGI Corporation is net income attributable to UGI Corporation after
excluding net after-tax gains and losses on commodity and certain
foreign currency derivative instruments not associated with
current-period transactions (principally comprising changes in
unrealized gains and losses on such derivative instruments), losses
associated with extinguishments of debt, Finagaz integration expenses,
and the impact on net deferred tax liabilities from a change in the
French tax rate and U.S. tax reform legislation. 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. Management believes that
these non-GAAP measures provide meaningful information to investors
about UGI’s performance because they eliminate 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.

Tables on page 6 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.

USE OF FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements that
management believes to be 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 for a more
extensive list of factors that could affect results. Among them are
adverse weather conditions, cost volatility and availability of all
energy products, including propane, natural gas, electricity and fuel
oil, increased customer conservation measures, the impact of pending and
future legal proceedings, continued analysis of recent tax legislation,
domestic and international political, regulatory and economic conditions
in the United States and in foreign countries, including the current
conflicts in the Middle East, and foreign currency exchange rate
fluctuations (particularly the euro), the timing of development of
Marcellus 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, and the interruption, disruption,
failure, malfunction, or breach of our information technology systems,
including due to cyber-attack. UGI undertakes no obligation to release
revisions to its forward-looking statements to reflect events or
circumstances occurring after today.

SEGMENT RESULTS ($ millions, except where otherwise indicated)

AmeriGas Propane1

• Retail gallons sold were approximately equal to the prior year.
  Temperatures were 9.9% colder than the prior year, however they were
  significantly impacted by the last week of the quarter which was
  nearly 60% colder than the prior year. Excluding that week,
  temperatures were 6.6% warmer than normal and 3.8% colder than the
  prior year.
• Total margin increased primarily reflecting slightly higher retail
  unit margins and higher non-propane margin.
• Partnership operating and administrative expenses were slightly higher
  than the prior year primarily reflecting higher vehicle and outside
  services expenses.
• Partnership Adjusted EBITDA increased principally reflecting the
  higher total margin and higher other operating income due to the
  absence of a prior-year correction of previously recorded gains on
  sale of assets, partially offset by higher operating expenses.

1 UGI, through subsidiaries, is the sole General Partner and
owns 26% of AmeriGas Partners, L.P.

UGI International

Base-currency results are translated into U.S. dollars based upon
exchange rates experienced during the reporting periods. During the
first quarter, the euro and British pound sterling were approximately 9%
and 6% stronger, respectively, versus the U.S. dollar, compared with the
prior-year period. The effects of the stronger currencies did not
materially impact UGI International net income due to gains and losses
on foreign currency exchange contracts.

• Total margin increased primarily reflecting the volume associated with
  acquired operations and the translation effects of a stronger Euro and
  British Pound Sterling, partially offset by lower volume at our legacy
  business due to weather that was 7% warmer than the prior year and
  slightly lower unit margins.
• Operating expenses increased primarily due to the effects of currency
  translation and approximately $10 million of incremental expenses
  associated with acquired operations, partially offset by Finagaz
  synergies and lower integration costs.
• Operating income increased primarily reflecting the higher total
  margin, partially offset by the higher operating and administrative
  expenses and higher depreciation and amortization expense.
• Adjusted income before income taxes was lower primarily due to warmer
  weather and slightly lower unit margins, partially offset by the
  benefit of acquired operations and Finagaz synergies.

SEGMENT RESULTS ($ millions, except where otherwise indicated)

Midstream & Marketing

• Temperatures across Midstream & Marketing's service territory were
  1.1% warmer than normal and 6.2% colder than the prior year.
• Total margin increased, driven primarily by higher natural gas
  gathering margin related to the Sunbury pipeline, higher peaking
  margin due to additional contracts and the impact of colder weather,
  and higher electric generation margin due to higher volume and unit
  margins, primarily at our Hunlock generation facility.
• Operating income and income before taxes increased primarily
  reflecting higher total margin, partially offset by higher operating
  and administrative expenses and higher depreciation expense.
• Capital expenditures in the prior year include construction costs
  associated with the Sunbury pipeline.

UGI Utilities

• Gas Utility service territory experienced temperatures that were
  approximately 1.9% warmer than normal and 6.0% colder than the prior
  year.
• Core market volumes increased due colder weather and customer growth.
• Total margin increased primarily reflecting higher margin from Gas
  Utility core market customers due to higher core market throughput and
  the higher PNG base rates, and higher large-firm delivery service
  margin.
• Operating and administrative expenses increased over the prior year
  primarily due to higher distribution, uncollectible accounts, and IT
  expenses, partially offset by a favorable payroll tax adjustment
  related to a prior year.
• Operating income and income before income taxes increased reflecting
  the higher total margin, partially offset by the higher operating and
  administrative expenses and depreciation expenses.

Non-GAAP Financial Measures – Adjusted Net
Income Attributable to UGI and Adjusted Diluted Earnings Per Share

The following table reconciles net income attributable to UGI
Corporation, the most directly comparable GAAP measure, to adjusted net
income attributable to UGI Corporation, and reconciles diluted earnings
per share, the most comparable GAAP measure, to adjusted diluted
earnings per share, to reflect the adjustments referred to previously:

Contacts

UGI Corporation
Will Ruthrauff, 610-337-1000 ext. 6571
Brendan
Heck, 610-337-1000 ext. 6608
Shelly Oates, 610-337-1000 ext.
3202