UGI 10-K & 10-Q changes, risk factors and insider trading

Our business is seasonal and decreases in the demand for our energy products and services because of warmer-than-normal heating season weather or unfavorable weather conditions may adversely affect our results of operations. Because many of our customers rely on our energy products and services to heat their homes and businesses, our results of operations are adversely affected by warmer-than-normal heating season weather. Weather conditions have a significant impact on the demand for our energy products and services for both heating and agricultural purposes. Accordingly, the volume of our energy products sold is at its highest during the peak heating season of October through March and is directly affected by the severity of the winter weather. For example, historically, approximately 60% of PA Gas Utility’s natural gas throughput (the total volume of gas sold to or transported for customers within our distribution system), 60% of Energy Services’ retail natural gas volume, 60% of UGI International’s annual retail LPG volumevolume, and 65% of AmeriGas Propane’s annual retail propane volume has typically been sold during these months. There can be no assurance that normal winter weather in our market areas will occur in the future.

The potential effects of climate change may affect our business, operations, supply chain and customers, which could adversely impact our financial condition and results of operations. Shifts and fluctuations in weather patterns and other environmental conditions, including temperature and precipitation levels, may affect consumer demand for our energy products and services. In addition, the potential physical effects of climate change, such as increased frequency and severity of storms, floods, fires and other climatic events, could disrupt our operations and supply chain, and cause us to incur significant costs in preparing for or responding to these effects. These or other meteorological changes could lead to increased operating costs, capital expensesexpenses, or supply costs. Our commercial and residential customers may also experience the potential physical impacts of climate change and may incur significant costs in preparing for or responding to these efforts, including increasing the mix and resiliency of their energy solutions and supply, which may adversely impact their ability to pay for our products and services or decrease demand for our products and services. The impact of any one or all of the foregoing factors may adversely affect our financial condition and results of operations.

In addition to the direct physical impact that climate change may have on our business, financial condition and results of operations, we may also be adversely impacted by other environmental factors,factors and transition-related risks. These are risks arising from the shift to a lower-carbon economy, including: (i) technological advances designed to promote energy efficiency and limit environmental impact; (ii) increased competition from alternative energy sources; (iii) regulatory responses aimed at decreasing GHG emissions; and (iv) litigation or regulatory actions that address the environmental impact of our energy products and services. For more information on these risks, please refer to the following risk factors included elsewhere in this section:

We are dependent on our principal LPG suppliers, which increases the risks from an interruption in supply and transportation. During Fiscal 2024,2025, AmeriGas Propane purchased approximately 87% of its propane needs from 20 suppliers. If supplies from these sources were interrupted, the cost of procuring replacement supplies and transporting those supplies from alternative locations might be materially higher and, at least on a short-term basis, our earnings could be affected. Additionally, in certain geographic areas, a single supplier provides more than 50% of AmeriGas Propane’s propane requirements. Disruptions in supply in these geographic areas could also have an adverse impact on our earnings. Our international businesses are similarly dependent upon their LPG suppliers, with our businesses in Austria, the Czech Republic, Denmark, Finland, FranceFinland and PolandFrance purchasing more than 50% of their LPG needs from a single supplier. If supplies from UGI International’s principal LPG sources are interrupted, the cost of procuring replacement supplies and transporting those supplies from alternative locations might be materially higher and our earnings could be adversely affected. There is no assurance that our international businesses will be able to continue to acquire sufficient supplies of LPG to meet demand at prices or within time periods that would allow them to remain competitive.

Additionally, we economically hedge the market risk associated with a substantial portion of our supply purchases using certain derivative instruments. Such changes in market prices of the aforementioned commodities could result in material exposures or significant concentrations of balances with derivative counterparties. If certain counterparties were unable to meet the obligations set forth in these derivative contracts and we were unable to fully mitigate this exposure via collateral deposit requirements and master netting arrangements, such outcomes could result in a negative effect on our operating results.

Our business is dependent on the domestic and global supply chain to ensure that equipment, materials and other resources are available to both expand and maintain services in a safe and reliable manner. Moreover, prices of equipment, materials and other resources have increased recently and may continue to increase in the future. Failure to secure equipment, materials and other resources on economically acceptable terms may adversely impact our financial condition and results of operations. Current domesticDomestic and global supply chain issues arecould delayingdelay the delivery, and in some cases resultingresult in shortages of, materials, equipment and other resources that are critical to our business operations. Failure to eliminate or manage the constraints in the supply chain may impact the availability of items that are necessary to support normal operations as well as materials that are required for continued infrastructure growth, including the replacement of end-of-life assets.

The inability to attract, develop, retain and engage key employees could adversely affect our ability to execute our strategic, operational and financial plans. We are dependent upon the continued service and contributions of our management and key technical and professional employees, as well as our ability to transfer the knowledge and expertise of our workforce to new employees as our employees retire or we otherwise experience employee turnover. In addition, the success of our operations depends on our ability to identify, attract and develop skilled and experienced key employees. There is increased competition for experienced management and technical and professional employees, which could increase the costs associated with identifying, attracting and retaining such individuals. We may not be able to attract, retain or engage key employees if our compensation and benefits program is not as robust as the compensation and benefits programs offered by other employers for similar roles. Further, a lack of employee engagement could lead to loss of productivity and increased employee burnout, turnover, absenteeism, safety incidents as well as decreased customer satisfaction. Additionally, uncertainty as a resultPortions of our ongoingworkforce revieware ofrepresented strategicby alternativescollective bargaining agreements, and disputes with labor unions or work stoppages could negativelydisrupt impactoperations and adversely affect our ability to recruit and retain key employees.business. If we cannot identify, attract, develop, retain and engage management, technical and professional employees, along with other qualified employees, to support the various functions of our business, our operations and financial performance could be adversely impacted.

Declines in the stock market or bond market, and a low interest rate environment, may negatively impact our balance sheet and pension liability. Declines in the stock market and a low interest rate environment historically have resulted in a significant impact on our balance sheet and our pension liability and funded status. Declines in the stock or bond market and valuation of stocks or bonds, combined with low interest rates, could further impact our balance sheet and our pension liability and funded status and increase the amount of required contributions to our pension plans.

UGIGlobal InternationalLPG Energy MarketingBusiness Transactions

United Kingdom. In OctoberJune 2022,2025, UGI International, through a wholly-owned subsidiary, soldcompleted the sale of UniverGas, its naturalLPG gas marketingdistribution business located in the U.K. for a net cash payment to the buyer of $19 million.Italy. In conjunction with the sale, during the first quarter of Fiscal 2023, the Company recorded a pre-tax loss of $215$50 million substantiallyin allFiscal of which was due to the non-cash transfer of commodity derivative instruments associated with the business.2025.

The following tables reflect the adjustments referred to above and reconcile net income (loss) attributable to UGI Corporation, the most directly comparable GAAP measure, to adjusted net income attributable to UGI Corporation, and reconcile diluted earnings per share, the most directly comparable GAAP measure, to adjusted diluted earnings per share:

Net income (loss) attributable to UGI Corporation was $678 million (equal to $3.09 per diluted share) and $269 million (equal to $1.25 per diluted share) and $(1,502) million (equal to $(7.16) per diluted share) in Fiscal 20242025 and Fiscal 2023,2024, respectively. These results include net gains (losses) from changes in unrealized commodity derivative instruments and certain foreign currency derivative instruments of $38$(14) million and $(1,252)$38 million in Fiscal 20242025 and Fiscal 2023,2024, respectively. The higher net gains from changes in these derivative instruments during Fiscal 2024, principally reflects significantly less volatility in commodity energy prices in Europe following unprecedented volatility in such prices during Fiscal 2023 and the effects of significantly lower energy marketing activities in Europe resulting from the exit of substantially all of UGI International’s energy marketing business.

Adjusted net income attributable to UGI Corporation was $728 million (equal to $3.32 per diluted share) and $658 million (equal to $3.06 per diluted share) and $613 million (equal to $2.84 per diluted share) in Fiscal 20242025 and Fiscal 2023,2024, respectively. The increase in adjusted net income attributable to UGI Corporation during Fiscal 20242025 reflects higher earnings contributions primarily from our UGIAmeriGas InternationalPropane and Midstream & Marketing segments and, to a lesser extent, our Utilities segment. Such increase wassegments, partially offset by lower earnings contributions from our AmeriGasUGI PropaneInternational segment. In Fiscal 2024,2025, temperatures in all of our business segments were warmercolder than the prior year.

AmeriGas Propane’sUtilities adjusted net (loss) income was $(23) million and $71 million in Fiscal 20242025 andwas Fiscalcomparable 2023,to respectively,the principallyprior reflectingyear loweras higher total margin,margin primarilydue attributablein large part to lowerhigher retailcore propanemarket volumes sold,was partiallysubstantially offset by lowerhigher operating and administrative expenses in Fiscal 2024.expenses.

Temperatures in Gas Utility’s service territories during Fiscal 20242025 were 16.0%2.4% warmer than normal and 4.5%11.3% warmercolder than the prior year. The decrease in Gas Utility core market volumes increased 10% during Fiscal 20242025, isprincipally largelyreflecting relatedthe impact from the colder weather. Total Gas Utility volume was comparable to the warmerprior-year weather,period partially offset by growth inas the core market customers. Notwithstanding the decreaseincrease in core market volume,volumes totalwas Gassubstantially Utilityoffset volumeby slightly increased during Fiscal 2024, primarily reflecting higherlower large firm delivery service volumes. The increase in Electric Utility distribution sales volumes during Fiscal 20242025 is primarily attributable to customerwarmer growth.weather during the cooling season in the fourth quarter of Fiscal 2025.

Revenues decreasedincreased $256$163 million induring Fiscal 20242025, reflecting a $260 million decrease inhigher Gas Utility revenues,revenues partially offset by a $4($154 million) increaseand inhigher Electric Utility revenues.revenues ($9 million). The decreaseincrease in Gas Utility revenues was largely attributable to lower PGC and PGA rates reflecting lower natural gas costs and, to a lesser extent, the lowerhigher core market volumesvolumes, higher off-system sales and lowerthe off-systemincrease sales.in the WV Gas Utility base rates, effective January 1, 2024. These decreasesincreases were partially offset by the effects of increases in base rates for PA Gas Utility (effective October 1, 2023) and Mountaineer (effective January 1, 2024), increases in DSIC revenues and the effects of the weather normalization adjustmentsadjustments. forThe PAincrease Gas Utility (effective November 1, 2022).in Electric Utility revenues slightlyis increasedprincipally duringattributable Fiscal 2024, largely reflectingto higher baseDS rates and saleshigher volumes, partially offset by lower DS rates.volumes.

Total margin increased $47$39 million during Fiscal 2024,2025, primarilysubstantially attributable to higher Gas Utility total margin ($35$38 million),. notwithstandingThe the warmer weather, mainly reflecting the effects of increasesincrease in base rates for PA Gas Utility (effectivetotal Octobermargin 1,mainly 2023)reflects the higher core market volumes and Mountaineerthe (increase in the WV Gas Utility base rates, effective January 1, 2024),2024, thepartially increasesoffset in DSIC revenues, the impacts from growth in the core market customers andby the effects of the weather normalization adjustments for PA Gas Utility (effective November 1, 2022) .adjustments. Electric Utility margin increasedwas $12comparable million during Fiscal 2024, mainly reflectingto the increaseprior-year in base rates effective October 1, 2023 and the higher sales volumes.period.

Operating income and earnings before interest expense and income taxes each increased $37$3 million and $35 million, respectively, during Fiscal 2024.2025. TheseThe increasesincrease largely reflectreflects the previously mentioned increase in total margin ($47$39 million) and,substantially tooffset aby lesser extent, lowerhigher operating and administrative expenses ($5$25 million), partially offset byand higher depreciation expense ($14$12 million). The lowerhigher operating and administrative expenses primarilyreflect, reflectsamong lowerother uncollectiblethings, accountshigher personnel expenses, higher general insurance costs and higher maintenance expenses. The higher depreciation expense compared to the prior year reflects the effects of continued distribution system capital expenditure activity.

Average temperatures across Midstream & Marketing’s energy marketing territory during Fiscal 20242025 were 13.3%0.4% warmer than normal and 4.9%12.2% warmercolder than the prior year.

Revenues decreasedincreased $478$114 million during Fiscal 2024,2025, primarily reflecting lowerhigher revenues from natural gas marketing activities ($453$115 million) that were principallyprimarily impacted by lowerthe naturalcolder gas pricesweather, and lower volumes resulting from the warmer weather, partially offset by higher capacity management activities. The decrease also reflects, to a much lesser extent, lower revenues from renewable energy ($22$12 million). These increases were partially offset by the absence of revenues from UGID that was sold in September 2024 ($35 million).

Cost of sales decreasedincreased $496$125 million during Fiscal 2024,2025, primarily reflecting lowerhigher natural gas costs ($488$95 million) related to the previously mentioned natural gas marketing activitiesactivities, and,higher to a much lesser extent, lowermidstream cost of sales related($16 tomillion), mainly from higher peaking activities, and higher cost of sales from renewable energy ($14$9 million). These increases were partially offset by the absence of cost of sales from UGID that was sold in September 2024 ($19 million).

Midstream & Marketing total margin increaseddecreased $18$11 million induring Fiscal 2024,2025, primarily reflecting higherlower midstream margins from capacity management activities ($31$22 million), partially offset by lower total marginmainly from renewable energy ($8 million) and lower natural gas gathering and processing activitiesactivities, and the absence of margins from UGID that was sold in September 2024 ($7$16 million). These decreases were partially offset by higher total margin from natural gas marketing activities ($20 million).

Average temperatures during Fiscal 20242025 were 11.8%3.3% warmer than normal and 2.2%5.0% warmercolder than Fiscal 2023.2024. Notwithstanding the warmercolder weather, total LPG retail gallons sold during Fiscal 20242025 wasslightly comparabledecreased compared to Fiscal 20232024, aslargely attributable to continued structural conservation and the impactsabsence of certain customers who previously converted from warmernatural weathergas andto lower cylinder volumes wereLPG, substantially offset by growththe impact from naturalthe gascolder conversions to LPGweather and higher autocrop gasdrying volumes sold.campaigns.

Average wholesale prices for propane and butane during Fiscal 20242025 in northwest Europe were approximately 2%4.4% and 5%4.0% lower, respectively, compared to Fiscal 2023.2024. Revenues and cost of sales decreased $686$160 million and $744$122 million, respectively, in Fiscal 2024.2025. The decrease in revenues and cost of sales principally reflects significantly lower energy marketing activities during Fiscal 20242025, resulting from the exit of substantially all of UGI International’s energy marketing business in Belgium, France and the Netherlands in Fiscal 2024. The decrease in revenues fromwas also attributable to the energylower marketingLPG activitiesretail wasvolumes sold, partially offset by LPG price increases across Europe and the translation effects of the stronger foreign currencies (approximately $52$21 million) and LPG price increases across Europe.. The decrease in cost of sales was also attributable to the lower LPG retail volumes sold, substantially offset by higher LPG product costs,costs partially offset byand the translation effects of the stronger foreign currencies (approximately $32$12 million).

Total margin increaseddecreased $58$38 million during Fiscal 20242025 primarily reflecting higherthe lower margin contributions primarily from our LPG business,business and, to a lesser extent, from our energy marketing activities. The lower margin from our LPG business primarily reflects the lower LPG retail volumes sold, partially offset by the effects of higher average unit margins during Fiscal 2025 and the translation effects of the stronger foreign currencies (approximately $20$9 million) and, to a much lesser extent, higher margin contributions from our energy marketing activities.. The higher margin from our LPG business reflects the effects of higher average unit margins attributable to strong margin management efforts, partially offset by the impacts from the lower LPG volumes sold. The slightly higher margin from our energy marketing activities primarily reflects the impact of the aforementioned exit of substantially all of UGI International’s energy marketing business.

Average temperatures during Fiscal 20242025 were 8.0%1.3% warmer than normal and 8.0%6.3% warmercolder than the prior year. Total retail gallons sold slightly decreased 10% during Fiscal 20242025 primarilyas duethe toimpact from continuing customer attrition andwas substantially offset by the effects of the warmercolder weather.

Average daily wholesale propane commodity prices during Fiscal 20242025 at Mont Belvieu, Texas, one of the major supply points in the U.S., were comparableapproximately to6% higher than such prices during Fiscal 2023.2024. Total revenues decreasedincreased $310$5 million during Fiscal 20242025, largely reflecting the effects of higher average retail propane selling prices ($46 million), partially offset by lower fee income ($16 million), lower wholesale revenues ($15 million) and the lower retail volumes sold ($228 million), the effects of lower average retail propane selling prices ($39 million) and lower wholesale revenues ($28$10 million).

Total cost of sales decreased $191$5 million during Fiscal 20242025, largely reflecting lower wholesale cost of sales ($13 million) and the lower retail propane volumes sold ($109$5 million), partially offset by the lowerhigher retail propane product costs ($37 million) and lower wholesale cost of sales ($26$17 million).

Total margin decreasedincreased $119$10 million in Fiscal 2024,2025, substantiallylargely allreflecting ofhigher whichaverage wasretail attributablepropane tounit margins ($30 million), partially offset by lower fee income ($12 million) and the lower retail propane volumes sold.sold ($6 million).

Operating income and earnings before interest expense and income taxes decreasedeach $126increased $24 million in Fiscal 20242025 primarily reflecting the decrease inhigher total margin ($119$10 million), lower operating and administrative expenses ($9 million) and lowerhigher other operating income ($23$5 million), mainly resulting from lowerhigher gains on sales of fixed assets during Fiscal 2024.2025. These decreases were partially offset by lowerLower operating and administrative expenses ($17 million), reflecting,reflect, among other things, lower compensationuncollectible accounts expense and advertising expenses, partially offset by higher general insurance costs and higherlower vehicle expenses.

Our consolidated interest expense during Fiscal 20242025 was $394$411 million compared to $379$394 million during the prior year. The increase in interest expense isreflects largelythe attributableeffects toof (1) higher average long-term debt outstanding principally at Utilities and UGI Corporation,Corporation partiallyand (2) higher average credit agreement borrowings during Fiscal 2025, substantially offset by lower averageinterest borrowingsexpense under our credit agreements andfrom lower average long-term debt outstanding at AmeriGas Propane.

Our effective income tax rate decreased in Fiscal 20242025 compared to Fiscal 2023,2024, primarily due to (1) the higher release of a valuation allowanceallowances relatedon deferred tax assets expected to abe notionalutilized interest deduction atby our UGI International segmentand thatAmeriGas exceededPropane thesegments; release of a valuation allowance in the prior year related to foreign tax credits;and (2) higher investment tax credits available in Fiscal 20242025 due to a larger level of project completions compared to the prior year; and (3) lower state income taxes in accordanceour withMidstream the& lowerMarketing statutory rate in Pennsylvania. These decreases were partially offset by the effect of establishing a full valuation allowance against current year losses in the Netherlands.segment.

The following analyses compare the Company’s results of operations for the 2026 three-month period with the 2025 three-month period and the 2026 six-monthnine-month period with the 2025 six-monthnine-month period. Our analysis of results of operations should be read in conjunction with the segment information included in Note 13 to Condensed Consolidated Financial Statements.

In April 2026, UGI Utilities entered into a definitive agreement to divest its Electric Utility for a sale price of $470, subject to changes in working capital and other adjustments. The transaction includes the sale of approximately 2,700 miles of transmission and distribution lines and 14 substations in Pennsylvania’s Luzerne and Wyoming counties. At June 30, 2026, the Electric Utility’s assets and liabilities were classified as held for sale and included in “Held for sale assets” and “Held for sale liabilities”, respectively, on the Condensed Consolidated Balance Sheet. The Company expects to recognize a gain upon closing, which is expected in the second quarter of Fiscal 2027, subject to customary closing conditions and applicable regulatory approvals.

As part of the Company’s ongoing global LPG business portfolio optimization efforts, the Company ishas strategically divestingdivested operations in non-core markets to focus resources where it can achieve superior operational results and deliver enhanced customer value.

UGI International. In January 2026, UGI International, through a wholly-owned subsidiary, entered into a definitive agreement to divest its LPG distribution businesses in Czech Republic, Hungary, PolandPoland, and Slovakia. Accordingly,The sale was completed in May 2026, subject to customary post-closing working capital adjustments. During the second quarter of Fiscal 2026, the Company classified the assets and liabilities associated with these businesses, primarily comprised of long-lived assets and goodwill allocated to the disposal group, qualified as held for sale and were reflected as “Held for sale assets” and “Held for sale liabilities”, respectively, on the Condensed Consolidated Balance Sheet at March 31, 2026. For the three months ended March 31, 2026, the Company recognized a non-cashnon-cash, pre-tax impairment charge of $64 to record such assets at estimated fair value less costs to sell. The transaction is subject to customary closing conditions and is expected to be finalized byDuring the third quarter of Fiscal 2026, in conjunction with the completion of the sale, the Company recognized an incremental loss on disposal of $7, resulting in a total loss of $71 for the nine months ended June 30, 2026.

In OctoberFebruary 2025,2026, UGI International, through a wholly-owned subsidiary, completed the sale of its cylinderLPG business in the United Kingdom.Romania. For the sixnine months ended MarchJune 31,30, 2026, the Company recognized a pre-tax gainloss on the sale of $2.

Net incomeloss attributable to UGI Corporation for the 2026 three-month period was $520$133 (equal to $2.33$0.62 loss per diluted share) compared to $479$163 (equal to $2.19$0.76 loss per diluted share) for the 2025 three-month period. These results include net gains (losses) from changes in unrealized commodity derivative instruments and certain foreign currency derivative instruments of $116$70 and $(5)$99 during the 2026 and 2025 three-month periods, respectively.

Net incomeloss attributable to UGI Corporation for the 2026 three-month period also includes (1) a $62loss on extinguishments of debt of $11, primarily at AmeriGas Propane; (2) a $5 net loss on disposals of certain non-core assets from our LPG business at UGI International.International; and (3) restructuring costs of $4 largely attributable to a reduction in workforce and related costs.

Net incomeloss attributable to UGI Corporation for the 20262025 six-monththree-month period also includes (1) a $36 net$53 loss on disposals of certain non-core assets from our global LPG business; and (2) a loss on extinguishments of debt of $8, primarily at UGIAmeriGas International.Propane.

Adjusted net incomeloss attributable to UGI Corporation for the 2026 six-monththree-month period was $745$43 (equal to $3.35$0.20 loss per diluted share) compared to $779$3 (equal to $3.58$0.01 loss per diluted share) for the 2025 six-monththree-month period. The decreaseincrease in adjusted net incomeloss attributable to UGI Corporation forduring the 2026 six-monththree-month period reflects lower earnings contributions from our AmeriGas Propane, UGI International and Midstream & Marketing segment,segments, partially offset by higher earnings contributions from the Utilities, UGI International and AmeriGas Propane segments. In addition, the decrease in adjusted net income during the 2026 six-month period also reflects higher income tax expenses primarily related to a decrease in investment tax credits in our Midstream & MarketingUtilities segment. During the 2026 six-monththree-month period, temperatures in all of our segments,Utilities with the exception of our UGI International segment,segment were colder than the prior-year period.

Utilities’ adjusted net income attributable to UGI Corporation increased $14$4 duringin the 2026 six-monththree-month period.period Thecompared increaseto wasthe largelyprior-year period, primarily attributable to higher total margin, partially offset by higher operating and administrative expenses.margin.

Midstream & Marketing’s adjusted net income attributable to UGI Corporation decreased $69$7 duringin the 2026 six-monththree-month period, primarily attributable to higher income tax expenses.expenses, reflecting lower investment tax credits in the 2026 three-month period, partially offset by higher total margin.

AmeriGasUGI Propane’sInternational’s adjusted net income attributable to UGI Corporation increaseddecreased $130$18 duringin the 2026 six-monththree-month period, primarily reflecting significantly lowerhigher income tax expenses,expenses partiallyand, offsetto bya higherlesser operatingextent, andlower administrativetotal expenses.margin.

(a)Total margin represents revenues less cost of sales and revenue-related taxes (i.e., gross receipts and business and occupation taxes) of $11$4 and $10each during the 2026 and 2025 three-month periods, respectively.periods. For financial statement purposes, revenue-related taxes are included in “Operating and administrative expenses” on the Condensed Consolidated Statements of Income (but are excluded from operating and administrative expenses presented above).

Temperatures in Gas Utility’s service territories during the 2026 three-month period were 7.1%4.1% colderwarmer than normal and 4.1%5.6% colder than the prior-year period. Notwithstanding the colder weather, Gas Utility core market volumes andwere comparable to the prior-year period. Total Gas Utility volume decreased 11% during the 2026 three-month period, reflecting lower large firm delivery service volumes. Electric Utility distribution sales volumes were comparable to the prior-year period. The increase in Electric Utility distribution sales volumes is primarily attributable to colder weather in the Electric Utility’s service territories.

Utilities total marginrevenues increased $23$15 during the 2026 three-month period, primarily reflecting higher Gas Utility total marginrevenues ($22$14). The increase in Gas Utility totalrevenues marginwas principallylargely reflectsattributable to the increase in the PA Gas Utility base rates, effective October 2025, partiallyand higher PGC and PGA rates, largely offset by thelower effectsoff-system of the weather normalization adjustments.sales. Electric Utility marginrevenues waswere comparable to the prior-year period.

Utilities operating income increased $9$10 during the 2026 three-month period. This increase largely reflects the increase in total margin ($23$13), partially offset by higher operating and administrative expenses ($8) and higher depreciation expense ($4$3). The higher operating and administrative expenses reflect, among other things, higher personnel expenses and higher uncollectible accounts expenses. The higher depreciation expense compared to the prior-year period reflects the effects of continued distribution system capital expenditure activity.

Average temperatures across Midstream & Marketing’s energy marketing territory during the 2026 three-month period were 8.5%10.2% colderwarmer than normal and 3.1%4.6% colderwarmer than the prior-year period.

Midstream & Marketing revenues increaseddecreased $128$29 during the 2026 three-month period, primarily reflecting higherlower revenues from natural gas marketing activities ($115$36), including the effects of capacity management activities, thatpartially were primarily impactedoffset by thehigher colderrevenues weather.from renewable energy ($5).

Midstream & Marketing cost of sales increaseddecreased $127$42 during the 2026 three-month period, primarily reflecting higherlower natural gas costs ($125$47) related to the previously mentioned natural gas marketing activities, partially offset by lower midstreamhigher cost of sales from renewable energy ($7$4).

Midstream & Marketing total margin increased $1$13 during the 2026 three-month period, asprincipally reflecting higher peaking margins were substantially offset by lower total margin from capacity management activities.

Midstream & Marketing operating income decreasedincreased $6$4 during the 2026 three-month period, mainly reflecting higher total margin ($13), substantially offset by higher operating and administrative expenses ($5$8). The increase in operating and administrative expenses was primarily due to higher operating expenses related to renewable energy projects.

Midstream & Marketing earnings before interest expense and income taxes decreasedincreased $4$3 during the 2026 three-month period, primarily representing the decreaseincrease in operating income ($6), partially offset by slightly higher income from equity investees ($2$4).

Average temperatures during the 2026 three-month period were 6.0%23.1% warmer than normal and 4.7%2.2% warmer than the prior-year period. Total LPG retail gallons sold during the 2026 three-month period were 8%10% lower than the prior-year period, largely attributable to the impacts from the divestitures of certain non-core LPG businesses, lower residential volumes sold, continued structural conservation and the impact from the warmer weather.

UGI International base-currency results are translated into USD based upon exchange rates experienced during the reporting periods. The functional currency of a significant portion of our UGI International results is the euro and, to a much lesser extent, the British pound sterling. During the 2026 and 2025 three-month periods, the average unweighted euro-to-USD translation rates were approximately $1.17$1.16 and $1.05,$1.13, respectively, and the average unweighted British pound sterling-to-USD translation rates were approximately $1.35$1.34 and $1.26,$1.34, respectively. Fluctuations in these foreign currency exchange rates can have a significant impact on the individual financial statement components discussed below. The Company uses forward foreign currency exchange contracts entered into over multi-year periods to reduce the volatility in earnings that may result from such changes in foreign currency exchange rates. These forward foreign currency exchange contracts resulteddid innot realizedhave neta gainsmaterial (losses)impact on either of $(5) and $3 in the 2026 and 2025 three-month periods.

Average wholesale prices for propane and butane during the 2026 three-month period in northwest Europe were approximately 2.0%31.6% and 6.1%46.5% lower,higher, respectively, compared with the prior-year period. UGI International revenues decreased $1 and cost of sales decreasedincreased $29 and $25, respectively,$5 during the 2026 three-month period compared to the prior-year period. The decrease in revenues principally reflects lower LPG retail volumes soldsold, and lower LPG prices, partiallysubstantially offset by higher LPG prices and, to a lesser extent, the translation effects of the stronger foreign currencies (approximately $60$12). The decreaseincrease in cost of sales was mainly attributable to lowerhigher LPG product costs andand, lowerto LPGa retaillesser volumes sold, partially offset byextent, the translation effects of the stronger foreign currencies (approximately $31$7)., largely offset by lower LPG retail volumes sold.

UGI International total margin decreased $4$6 during the 2026 three-month period, primarily reflecting the lower LPG retail volumes soldsold, andlargely offset by the effects of lowerhigher average unit margins,margins substantially offset byand the translation effects of the stronger foreign currencies (approximately $30$5).

UGI International operating income decreased $3$2 during the 2026 three-month period, principally reflecting the decrease in total margin ($4$6), partially offset by slightly lower operating and administrative expenses ($3). OperatingThe lower operating and administrative expenses in the 2026 three-month period wereprimarily comparable to the prior-year period asreflect the impacts from the divestitures of certain non-core LPG businesses and lower distributionpersonnel expenses wereexpenses, substantially offset by the translation effects of the stronger foreign currencies (approximately $15$3) and, to a lesser extent,and the effects of inflationary increases.

UGI International earnings before interest expense and income taxes decreased $11$2 during the 2026 three-month period.period, This decrease largely reflects higher realized losses on foreign currency exchange contracts ($8) entered into in order to reduce volatility in UGI International earnings resulting fromreflecting the effects of changes in foreign currency exchange rates and the decrease inlower operating income ($3$2).

Average temperatures during the 2026 three-month period were 2.4%1.9% warmercolder than normal and 4.8%comparable warmer thanto the prior-year period. Total retail gallons sold decreased 5%10% during the 2026 three-month period primarily duereflecting continuing customer attrition and the sale of our LPG operations in Hawaii. While weather during the 2026 three-month period was comparable to the impactprior-year fromperiod, the timing of warmer weather early in the quarter reduced volumes and continuingtotal customermargin attrition.relative to the prior-year period.

Average daily wholesale propane commodity prices during the 2026 three-month period at Mont Belvieu, Texas, one of the major supply points in the U.S., were approximately 23%4% lowerhigher than such prices during the 2025 three-month period. Total revenues decreased $89$62 during the 2026 three-month period largely reflecting lower retail volumes sold ($36$37), the effects of lower average retail propane selling prices ($28$10) and lower wholesale revenues ($21$9).

AmeriGas Propane total cost of sales decreased $91$36 during the 2026 three-month period largely reflecting lower retail propanevolumes product costssold ($46$18), lower wholesale cost of sales ($22$9) and the lower retail volumespropane soldproduct costs ($17$8).

AmeriGas Propane total margin increaseddecreased $2$26 induring the 2026 three-month period asprimarily the higher average retail propane unit margins ($18) and higher fee income ($2) were substantially offset byreflecting the lower retail propane volumes sold ($19) and lower retail unit margins, together with lower fee income ($5).

AmeriGas Propane operating incomeloss increased $2$25 during the 2026 three-month periodperiod, asprimarily representing the increasedecrease in total margin ($2$26) and lower depreciation and amortization expense ($4) were partially offset by higher operating and administrative expenses ($2) and slightly lower gains on asset sales.. Operating and administrative expenses increasedwere primarilycomparable reflectingto the prior-year period as higher compensation expenses andwere advertisingsubstantially offset by lower vehicle expenses.