VALLEY FORGE, PA — UGI Corporation (NYSE: UGI) reported financial results for the fiscal year ended September 30, 2021, and provided guidance for fiscal year 2022.
- Record GAAP net income of $1,467 million and adjusted net income of $629 million compared to GAAP net income of $532 million and adjusted net income of $561 million in the prior year.
- Record GAAP diluted earnings per share (“EPS”) of $6.92 and adjusted diluted EPS of $2.96 compared to GAAP diluted EPS of $2.54 and adjusted diluted EPS of $2.67 in the prior year.
- Reportable segments earnings before interest expense and income tax1 (“EBIT”) of $1,134 million compared to $1,029 million in the prior year.
- Fiscal year performance at the top end of the Company’s revised guidance range issued on May 5, 2021, prior to $0.03 non-cash adjustment on equity units issued in May 2021 now reflecting the required if-converted method2.
- Completed the strategic acquisition of Mountaineer Gas Company, the largest gas local distribution company in West Virginia, adding approximately 6,200 miles of pipelines and nearly 214,000 customers.
- Committed investment of over $100 million to renewable natural gas (“RNG”) projects in the U.S.
- Issued Fiscal 2022 adjusted diluted EPS guidance range of $3.05 – $3.253 while reiterating the Company’s long-term 6% – 10% EPS growth rate target.
“Our solid Fiscal 2021 results reflect the strength of our diversified business and the commitment and resiliency of our employees,” said Roger Perreault, President and Chief Executive Officer of UGI Corporation. “We are proud to have delivered record adjusted diluted EPS of $2.96 and strong value creation for the year, while also making progress on environmental, social and governance (“ESG”) initiatives. During Fiscal 2021, we completed the acquisition of Mountaineer Gas Company and deployed a record level of capital at UGI Utilities. Midstream & Marketing entered into several partnerships to produce RNG, with over $100 million committed during the year. We also made great progress to improve the weather resiliency of our business and enhance customer experience through our LPG business transformation initiatives.
“Further demonstrating our commitment to sustainability, we established a dedicated ESG team and committed to reducing Scope I greenhouse gas emissions by 55% by 2025 using 2020 as the base year. We made great strides in advancing Belonging, Inclusion, Diversity and Equity (“BIDE”) and were pleased to increase our domestic spend and commitment with diverse suppliers by over 20%.
“As we turn to Fiscal 2022, we are well positioned to drive growth and create value for our investors, customers and employees. Our strategy of delivering reliable earnings growth, investing in renewable energy solutions and rebalancing our portfolio is delivering results. We will continue to execute our strategy to deliver on our long-term commitment of 6 to 10% EPS growth and 4% dividend growth. We look forward to discussing our long-term outlook at our Virtual Investor Day in December.”
- Reliable Earnings Growth
- UGI Utilities invested a record level of capital ($394 million) and added over 12,000 residential and commercial heating customers in Pennsylvania
- Completed the acquisition of Mountaineer Gas Company which increased rate base to approximately $3 billion
- Midstream & Marketing expanded its interest in the Appalachian basin natural gas gathering systems with the Pine Run investment and continued to generate significant fee-based income
- UGI International generated record financial results, increasing EBIT by 22% over the prior year, and realized €14 million in annual benefits from the business transformation initiatives
- AmeriGas achieved over 9% growth in national account volumes and $78 million in incremental annual benefits from the business transformation initiatives
- Committed over $100 million to renewable natural gas projects in Idaho, New York, Ohio, Kentucky and South Dakota
- Announced an intended joint venture to advance the production and use of Renewable Dimethyl Ether (“rDME”), a low-carbon sustainable liquid gas, in the LPG industry in the US and Europe. The aggregate investment of both joint venture participants is estimated to be up to $1 billion and is expected to involve third party investment
- Rebalance: Progressed on the Company’s objective to rebalance their portfolio through the aforementioned Mountaineer Gas acquisition and investments in replacement and betterment, Pine Run Midstream asset and renewables
UGI provides an adjusted EPS guidance range of $3.05 – $3.253 per diluted share for the fiscal year ending September 30, 2022. This guidance range assumes normal weather, the current tax regime and includes the negative impact of approximately $0.06 per diluted share related to the accounting for the equity units2 issued in May 2021.
UGI will discuss its strategy and longer-term financial outlook at its Virtual Investor Day on Thursday, December 2, 2021.
1 Reportable segments earnings before interest expense and income taxes represents an aggregate of the Company’s reportable operating segment level EBIT as determined in accordance with GAAP.
2 The shares associated with the $220 million equity units issued in May 2021 were previously accounted for using the treasury stock method (in accordance with market practice at the time) and excluded from the calculation of weighted average shares outstanding. Fiscal 2021 results and fiscal 2022 guidance include the dilutive impact of adding underlying shares to the Company’s calculation using the if-converted method.
3 Because the Company states it was unable to predict certain potentially material items affecting diluted earnings per share on a GAAP basis, principally mark-to-market gains and losses on commodity and certain foreign currency derivative instruments they cannot reconcile the fiscal year 2022 adjusted diluted earnings per share guidance, a non-GAAP measure, to diluted earnings per share guidance, the most directly comparable GAAP measure, in reliance on the “unreasonable efforts” exception set forth in SEC rules.
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