Q4 2019 Earnings Call
Earnings call and webcast.
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I'd now like that and the conference over to your speaker today, along as a hora manager of Investor Relations. Please go ahead Mike.
Thanks, James Good morning, everyone and thank you for joining US with me today are 10, Stravinsky CFO of you Jay Corporation, Roger Krone, Executive Vice President of Global LPG, and John Walsh, President and CEO .
Before we begin let me remind you that our comments today include certain forward looking statement, which management believes to be reasonable as of today's date only actual results may differ significantly because of risks and uncertainties are difficult to predict.
We did our earnings release and our annual report on Form 10-K for an extensive list of factors that could affect result.
We assume no duty to update or revise forward looking statements to reflect events or circumstances. There are different from an expectation will also describe our business using certain non-GAAP financial measure.
Reconciliations of these measures to the comparable GAAP measure are available in the appendix of our presentation.
Now, let me turn the call over to John .
Thanks, a lot of a good morning, and welcome to our call I Hope you've all had a chance to review our press release reporting you judge full year results I'll comment briefly on major achievements over the course of fiscal 19, not turned over to Chad who'll provide more detail on your judge financial performance, Roger Perot, our executive VP of Global LP.
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Right, an overview of the significant efficiency initiatives underway at Amerigas and UGI International.
I'll, then conclude by reviewing our fiscal 20 guidance and progress on our strategic projects.
We reported full year fiscal 19, GAAP EPS of $1.41, while our adjusted EPS was $2 in 28 cents. Our adjusted EPS was roughly 17% below our fiscal 18 record adjusted EPS of $2.74, but includes dilution and a fourth quarter sees a loss associated with our.
Recent acquisitions, excluding the acquisition impact our business delivered $2.36 GPS and this represents the second highest adjusted he P.S. and you guys history.
Both years when adjusted for the Mark to market valuation of an unsettled hedges and cost associated with the strategic efficiency programs at Amerigas, and UGI International CAD and Roger will provide more detail on this way on the call.
The results delivered at fiscal 19 were impacted by a number of factors with the most significant being very warm weather in Europe , and the dampening of pipeline capacity values over the course of the winter.
James responded well to be significant challenges and we delivered a solid year in the face of those key factors.
Our fiscal 20 guidance range of $2.60 to $2, a 90 cents assumes a return to normal weather across our service territories and some incremental improvement in pipeline capacity values 10, I will provide further details on our guidance later in the call.
We were extremely pleased with the progress made in fiscal 19 on our primary strategic initiatives.
The fourth quarter was particularly noteworthy as we close to the most significant transactions in huge ice history.
The Amerigas transaction concluded on August 21st with approximately 93% of the votes cast in favor of the transaction.
We're very pleased to start fiscal 20 with Amerigas was a wholly own UGI I entergy.
Well use the enhanced cash flow for amerigas to pay down some of its dad and to help fund a major capital investment in our natural gas businesses over the next decade.
Simplified structure will help drive operational efficiencies across our LPG businesses, which was she is a major opportunity to deliver enhanced performance over the next few years Roger will be commenting on this program later in the call.
Our acquisition of the Columbia Midstream group from TC Energy also closed in August the five Columbia asset networks, we acquired have significantly expanded the breadth and scale of our midstream activities in the Marcellus we start saw strong throughput across these networks in August through October and we're comping.
That will be executing a range of expansion projects on those five systems over the next three to five years.
In addition to the Amerigas in Colombia transactions, we continue to focus on executing critical elements of our long term strategy that will provide the foundation for growth over the next decade.
Our often for expansion project, which increases capacity on the harbored system by 150000, Dekatherms a day or about 30% was completed at November on time and on budget. This 50 million dollar investment on our largest northeast Marcellus system is supported by 10 year take or pay contract.
As other northeast takeaway options on the Marcellus are delayed we see increasing demand for pipeline capacity on our existing systems.
Our utilities team had an extremely productive year, we filed our first combined gas utilities rate case and successfully concluded the case with an approved settlement that provided a 30 million dollar rate increase that went into effect in October .
Our utilities team deployed a record 355 million of capital in fiscal 19, as we added new customers replace gas distribution infrastructure and upgraded our critical systems.
Look for continued capital investment across our utilities remain strong.
[laughter] Amerigas continues to have great success with its pace and national accounts programs in both cases amerigas distinguishes itself by providing exceptional service levels to these key customer groups fiscal 19 was another year of strong growth with pace volume's up 8% and national accounts volumes up about six.
So.
We continue to add new accounts in both programs based on our national coverage 24, seven support and delivery of value added technologies, such as our second generation vending solution for our largest cylinder exchange customers.
Our international team performed well, despite persistent warm and dry weather team integrated for LPG tuck in acquisitions in Belgium, the Netherlands, any United Kingdom.
Early in fiscal 19, the international business refinance their entire debt portfolio and issued senior notes for the first time.
Roger will comment on some exciting new initiatives underway at the international business in a few moments.
While fiscal 19 was an exceptionally dynamic here for US. We also maintained our commitment to excel in the most critical activities, we undertake safety customer service and operational efficiency.
I'll return to comment on our fiscal 20 outlook in our strategic initiatives, but I'd like to turn it over to chat at this point for the financial review debt.
Thanks, John as John mentioned, our fiscal 2019 acquisition adjusted earnings per share up to 36, or the second highest and UGI ice history.
The difference between our reported adjusted EPS of to 28, and the 236 figure that you've heard us refer to the eight cents delta can be broken down into two parts the seasonal loss from the amerigas operations related to the timing of the transaction and the dilution impact first there are the three said.
There was a three cents impact related to Amerigas is operations and incremental interest from financing. The steel. This came in below or five cents forecast. The remaining five cents are attributable to dilution or.
Our reportable segment EBIT was 978 million this year compared to.
1.08 billion last year, largely as a result to the amerigas merger and CMG acquisitions and for consistency across the businesses UGI I is shifting our profitability reporting metric to EBIT.
You will see this change reflected in our future reporting.
This table lays out our GAAP and adjusted earnings per share for fiscal 19 compared to fiscal 18 as you can see our adjusted earnings exclude a number of items such as the impact of Mark to market changes in commodity hedging instruments, a loss of 82 cents this year versus a gain of 39.
Since last year.
In fiscal 19, we had 13 cents of unrealized gains on our foreign currency derivative instruments versus a gain of 11 cents last year.
Lastly, you will see transformation costs at our LPG businesses that will discuss in detail later on the call.
[noise] using acquisition adjusted earnings as a base adjusted earnings per share decreased 38 cents versus last year, our domestic businesses experienced relatively normal weather, but our international business has faced warm and dry weather conditions dating back to the summer of 2018.
The largest year over year decrease occurred at our midstream and marketing business, where the lack of sustained cold weather and increased pipeline restrictions impacted our capacity management business.
Moving forward, we expect the return of some pipeline capacity volatility in our recently expanded service territory, but at levels below those experienced over the past few years to give you an idea of magnitude during fiscal 16 through fiscal 18, the capacity management business delivered roughly Phil.
$15 million per year and margin, we're expecting roughly a quarter or that margin moving forward.
Turning first to the LPG side of the business Amerigas reported adjusted EBITDA of 580 million versus 606 million in fiscal 18, or EBIT of 404 melt 404 million compared to 422 last year.
As we've previously disclosed this result was driven largely by lower than anticipated base volumes and favorable regional weather patterns. During the second quarter of the air and approximately 15 million of unusual expenses related to accruals for litigation and then that adjustment to lease expenses.
Shaded with prior years recorded during Q3.
The enhance leadership structure, we put in place last fall for LPG businesses, along with the 120 days strategic review that resulted in the by end of Amerigas also led to an additional focus on technology to help us drive efficiency and enhanced customer service in our LPG businesses.
Roger will speak to this in more detail in a few moments, but with the bi and behind US. We're in a position to make a series of investments at Amerigas that'll provide consistent and sustained cost savings and operating efficiencies.
We expect these investments to enable improve customer retention and growth through significant enhancements in amerigas is customer facing capabilities.
These actions will return amerigas to a more consistent EBITDA growth trajectory.
The full impact of this program will provide a permanent benefit by the end of fiscal 22, when we expect amerigas EBITDA to grow to the range of $630 million to $650 million.
We will keep you updated on specifics in coming quarters, but you'll see non-GAAP adjustments called LPG business transformation costs as we invest to transform the business in fiscal year 20 in fiscal year 21.
We're excited about the opportunity to invest in amerigas implement these projects enhance our business provide best in class customer service and increase both earnings and cash flow, which is very important to us as amerigas is a major contributor to the UGI I cash flow engine, we often.
Talk to you about.
UGI International achieved EBIT of $234 million compared to 240 million in fiscal 18 as mentioned throughout our earnings calls into fiscal 2019, the international business experienced persistent warm and dry weather that impacted our crop drying business in the fall.
Oh, and the bulk business throughout the winter.
The team remains focused on profitability in this challenging year and did a great job managing margins and operating expenses I should point out that the line items on this slide includes sizable impacts related to the translation effects of a weaker euro and pound Sterling.
We hedge our ex FX exposure to minimize this impact which is reflected in other income.
Earlier in the year, the international team refinance their entire debt portfolio, including the issuance of 350 million euros of senior notes for the first time at the highly favorable interest rate of 3.25%.
Lastly, like Amerigas. The international team has also be been focused on operational efficiencies. After the successful integration of the FEMA gas acquisition. The team started the process, so centralizing certain functions and incorporating new technology to ensure greater customer service and.
Profitability Roger will comment more on this in a moment.
Turning to the natural gas side of the house midstream and marketing reported EBIT of 114 million a decrease of $65 million compared to 2018.
Total margin decreased $56 million versus 2018, due to lower margin from midstream assets and lower total commodity margin.
The bulk of the decrease in total margin versus last year was attributable to the unfavorable impact of lower capacity values and pipeline restrictions on capacity management margin, we saw a year over year increase of $6.7 million, an operating expenses due to new.
Natural gas gathering assets coming online in fiscal 2019, and incremental expenses associated with the CMT acquisition.
Depreciation and amortization expenses increased 7.9 million due to incremental depreciation from the expansion of our natural gas gathering assets, including CMG as well as our peaking and LNG assets.
Additionally, we saw incremental equity income from our joint venture on the newly acquired Pendants system, which was part of the CMG acquisition.
Lastly, we are pleased by the early results from the CMG assets as John mentioned, we're seeing strong throughput on the system and are confident that we can execute on the expansion projects at attractive capex multiples of five to seven types.
UGI utilities reported EBIT of 226 million for 2019, a $12 million decrease over last year core market throughput was flat to prior year on whether that was 3% warmer some of this impact was offset.
By customer additions and higher use per customer margin was down slightly compared to prior year. However, excluding the effects of the P.C.J.A. in both periods margin increased $8 million versus fiscal 18.
Opex was up 2.1 million as a result of higher contractor costs, IP maintenance and consulting expenses.
Depreciation and amortization increased 8.2 million due to increased distribution system and IP capital expenditures.
Our utilities team continues to execute on our robust capital plan and we expect to invest approximately $1.8 billion into rate base over the next four years.
Additionally, the new rates associated with their 30 million dollar rate increase in our first combined rate case went into effect in October I'd like to thank our teams for all of their hard work and execution and 2019.
[noise] as John mentioned, our fiscal year 20 guidance range is $2.60 to $2 a 90 cents.
This assumption that sorry, this assumes normal weather in our service territories.
In 2020, we'll see the impact from the rate case that utilities, and a more modest impact from cost saving and efficiency measures at our LPG businesses and the incremental margin from the CMG acquisition.
However will really start to see significant impacts from these investments, particularly the cost saving and operational efficiencies at our LPG businesses and the second order investments between 300 500 million at CMG and fiscal 2021 and beyond.
I also wanted to take a moment to talk about how the amerigas merger transactional impact our quarterly earnings in fiscal 20 and beyond due to the seasonality of the LPG businesses, they generate over 100% of their expected earnings during the heating season season and have negative quarters in the south.
I'm or months the timing of our quarterly results will be impacted because you can see in this chart historically, 95% of UGI eyes. Adjusted EPS was earned in the first half of the.
And the remaining 5% came in the second half with Amerigas fully integrated that ratio will change, we now expect to generate roughly 110% of our yearly expected adjusted EPS in the first half of the year and slowly drift down towards 100% in the summer.
Months as we've mentioned in previous presentations will be allocating a larger portion of our capex as a natural gas businesses in the coming years. This will slowly reversed the impact laid out on this slide.
I should point out that earnings from the CMG assets are included in these integrated figures and moderate a portion of this impact CMG generates earnings much more evenly throughout the year.
[noise] 29 team was a busy year for UGI I a year that included taking out long term debt IDT energy services and at the Holdco level for the first time, we mentioned on the Amerigas merger call that we expect to use a portion of the enhanced cash profile, roughly a $100 million per year to lower there.
Leveraged the range of four times to 4.25 times as you know we took on debt to fund a portion of both the Amerigas and CMG acquisitions.
We've always made prudent use of leverage and financing investments like these transactions. We're confident in the strategic benefits that will result from these transactions and we're pleased that are improved cash generation profile provides us with the flexibility to reduce leverage over time, while remaining in good position to consider.
Strategic investments as opportunities arise.
UGI I remains well positioned to build our foundation on our foundation and meet our commitments to shareholders.
With that I will turn the call over to Roger for review of some of our initiatives at Amerigas and UGI International Roger.
Thanks Ted.
Having operational efficiencies across our LPG businesses is an important component of our global LPG strategy for the next few years.
As Ted mentioned, we are implementing strategic unsustainable measures that will increase profitability and deliver a better customer experience.
Some of these measures are already underway at our international business and the Amerigas transaction will enable us to redeploy some of the cash generated into several key investment opportunities that will generate substantial savings and efficiencies.
Let's start with Amerigas.
We have identified over 120 million a permanent operational efficiencies that will be delivered through accelerated investment in customer digital experience.
Customer relationship management.
Operations process redesign and specialization.
Distribution and routing automation.
Sales effectiveness procurement NGL day, and lastly supply and logistics.
You have heard us talk about some of these enhancements like distribution efficiencies in the past these initiatives, which will be fully implemented over the next 24 month significantly accelerate the pace and scale of the technology investments, we have been deploying over the past several years.
We expect the run rate benefits of these investments to be completely realized by the end of fiscal 2022.
We will spend approximately $175 million and capital and transition costs in fiscal year, 20, and fiscal year 21 of which approximately 55% to 60% will be attributable to capex.
We expect to see modest BNL benefits in the fiscal year 20, roughly $30 million and then begin to see more significant benefits build in fiscal year 21 and onward.
We are earmarking a portion of the benefits achieved from these initiatives to be reinvested in the business to take proactive approach to customer retention and growth, including reducing certain base business unit margins as a result of our lower cost structure.
We are confident that these investments will position amerigas to be the best in class propane distribution company in terms of efficient and safe operations competitiveness and customer focus.
Similar initiatives are underway at our international business as we have started to centralize back office functions at UGI International.
After the successful integration of the Finagaz acquisition, we've embarked on a process of identifying synergies across all 17 countries in which we operate across Europe with the goal is centralizing certain enabling functions and directing our operating teams to focus their attention on customer service and safe operations through the establishment of.
Two centers of excellence.
One will be focused on commercial excellence to identify and execute projects to continuously improve our customer experience.
The other will be focused on operational excellence across our distribution network and filling plants.
This effort will generate over 30 million euros or roughly $33 million of permanent annual savings.
We expect to see more than 5 million of the 30 million Euro benefit this year and the full benefit will be realized by the end of fiscal 22.
The cost to implement is roughly 55 million euros of which approximately 35% to 40% will be attributable to capex.
The majority of the spend will occur over the next 24 months.
These critical efficiency focused initiatives are being centrally led under our global LPG structure that we announced in September of 2018.
This will also provide a more effective platform for the best practice sharing and implementation across our domestic and international LPG businesses.
We are confident that with these important transformational initiatives at Amerigas and UGI International we will position our global LPG companies to be leaders at serving our customers with digital tools to provide a superior customer experience.
We will drive efficiencies and cost control to enable continued solid margins and cost competitiveness in the markets in which we operate.
These efforts will contribute to reducing volatility based on weather for the coming years.
We will also better position, both our north American and European businesses for continued growth via acquisitions and execution of identified synergies.
Now I'll turn it over to John for the closing statements. Thanks, Roger our guidance for fiscal 20 of 2060 cents to $2. A 90 cents assumes normal weather and the return of some pipeline capacity volatility in our service territories.
As was the case in fiscal 19, we're using 15 year normal weather as the basis for our guidance the midpoint of our fiscal 20 guidance represents a 17% increase in NPS over our acquisition adjusted fiscal 19 performance of $2 in 36 cents.
Following the solid fiscal year 19 performance in a challenging environment and bolstered by the two key key transactions in the last quarter, we entered the new fiscal year in a very strong position you Amerigas in Colombia transactions provide a strong foundation for accelerated cash generation and earnings growth over the next three to five years.
Consistent with when we announced each transaction, we expect amerigas to be accretive in fiscal 20, and CMG to be basically neutral together, we expect the transactions to deliver roughly five cents of accretion. This year. The majority of that coming from the amerigas merger, but both acquisitions will be highly cash positive.
As we move into fiscal 21 and beyond we expect continuing strong cash flows along with positive EPS contributions that become quite meaningful overtime.
As Roger just described we're excited about the opportunity to significantly improve the efficiency of our LPG distribution businesses. Both in the U.S. in Europe , we're confident that the work underway will position Amerigas and UGI international for very strong long term performance.
The investment and transition expenses for restructuring and capital for deployment of New technologies will result in a significant reduction in our ongoing operating expenses and enhance customer service and support.
Well keep you apprised of our progress over the course of the year as Roger noted, we will see modest contribution to earnings from these programs in fiscal 2000, a more significant benefit in fiscal 21 and will deliver full ongoing benefits for both amerigas and UGI international in fiscal 22 and beyond.
As we look across our natural gas businesses, you guys, particularly well positioned to thrive in today's dynamic environment.
All sector participants are impacted by changing commodity values wrapping natural gas demand and production local challenges related to executing infrastructure projects and uncertainty with regard to federal regional and state energy policies in legislation.
Our diversified set of energy distribution businesses will provide us with an attractive range of investment opportunities as these various factors play out over the next decade.
One specific example of the benefits of diversification is in our midstream business over the past two to three years. The industry has seen major changes in the timeframe for placement of new natural gas infrastructure with multiple projects deferred or postpone this has been particularly true in the mid Atlantic in northeast reagents one.
Are there many projects impacted as Penn East. Despite recent challenges the partner companies remain fully committed to the project in the affordable reliable service it will bring to residents and businesses in Pennsylvania, and New Jersey.
The deferral or cancellation of infrastructure projects that would have delivered incremental new capacity to the eastern mid Atlantic where northeast presents challenges for ldcs and other Nat gas distributors, who are experience experience in consistent demand growth.
This change in our operating environment has created a range of new opportunities for UGI that we wouldn't have foreseen three or four years ago.
These include.
Our $50 million carbon for expansion project that I referenced earlier. This project was specifically enabled by the lack of alternative takeaway options in northeast, Pennsylvania as other projects were deferred or canceled.
The continued build out of our LNG network with the most recent example, being our LNG storage and vaporization facility under construction Bethlehem, Pennsylvania.
Our LNG network has proven to be vital to filling the gap between available pipeline capacity and peak day natural gas demand, we see the value of this network increasing due to the constraints around addition of new pipeline capacity.
The high level of interest in expansion projects on several over the newly acquired Columbia systems. These systems are well positioned to efficiently had incremental capacity within a manageable timeframe. This is particularly appealing to producers attempting to address some of the current uncertainties related to market access.
As these projects demonstrate you guys very well positioned to perform in the current market environment. In addition to those examples. We can also point to a significant portfolio of capital investment opportunities with a high degree of certainty in terms of both scale and timing of the capital spend.
Our team at utilities continues to see strong natural gas demand across its entire service territory and this demand intensity is reflected in our outlook for capital spending.
Following a record Capex investment of 355 million in fiscal 19, we expect total capex investment at utilities over the next for years to exceed 1.8 billion.
Our team utilities has done an exceptional job over achieving this step change in project execution, while maintaining a strong focus on safety very high levels of customer service and maintaining affordable rates for our customers.
Amerigas expects to deploy significant capital and its cylinder exchange business is to support underlying growth and strong customer pull for its second generation vending solution.
We are the clear innovation leader delivering a technology solution preferred by our retail partners and that appeals to our customers.
Our midstream team remains very active on new gathering projects in the eastern Marcellus, we're executing a range of projects related to the Texas Creek in March lens investments, we made over the past two years.
We expect to invest approximately $50 million in the eastern Marcellus in fiscal 20 with very attractive returns.
We have entered the new fiscal year and a strong position.
With a broader portfolio of new investment opportunities and enhance cash flows following the amerigas and Columbia midstream transactions.
We're in an excellent position to execute our growth strategy and expect our free cash flow and earnings over the next three to five years to benefit from the LPG efficiency program programs that Roger described earlier and the range of growth projects currently in execution or under development.
Let's take a look at how this translates into business growth over the next few years.
We created this slide for our industry that back in December as you can see from fiscal 20 to 23, we expect to both our LPG and our natural gas businesses will grow at or above the high end of our stated 6% to 10% earnings target.
LPG hesitate your of approximately 10% to 12% while the natural gas side of the house has a CAGR of approximately 11% to 13% through fiscal 2003.
We expect steady growth over the next few years as projects and initiatives contributed consistently to earnings across the budget and plan period.
In addition to funding our growth projects. We also remain very committed to growing our dividend.
The two dividend increases in fiscal 19, our cater for dividend growth over the past decade is 9.4%.
29 team was also milestone also milestone year for US as you Jay has now paid a dividend for 135 consecutive years, we obviously take this commitment seriously.
I can say with confidence that we're in an outstanding position to deliver on our commitments for future earnings growth. We're looking forward to keeping you updated on our progress throughout the year.
With that I'll turn the call back over to James who will open it up for your questions.
James at this time.
Time, I'd like to remind everyone in order to ask a question. Please press star followed by the number one on your telephone keypad.
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Thanks.
And again, if you'd like to ask a question. Please press star one on your telephone keypad.
Your first question comes on line of Chris taken off from Jefferies. Go ahead. Please your line is open.
Hey, good morning, John .
Good morning.
Just wanted to start with your guidance if I could.
The information contained in the slides and Rogers explanation of somebody efficiency focused investments, you're making I see a 135 million any view and 55 million euro.
Internationally over a couple of years Roger on the breakdown of the.
Dealt with it.
Break down between Capex and Opex treatment. There Im just curious you've noted that youre going to exclude these costs from your adjusted numbers weren't included from your and your guidance I'm wondering just if you could quantify how much is excluded.
From fiscal 20, just so we can calibrate that.
Yes.
Yes, Chris this is Roger talking so.
The way I would think about it is the opex numbers.
Are the ones that would be adjusted in fiscal 20. So we are split we are expecting the rollout of these efficiency plans to be really this year and up to two at 22. So over the course of two years and if you just break that out and look at the Opex number that's what I would adjust out.
And would you just break the numbers roughly in half Roger do front in weight those anyway.
I would be pretty close to half and half a little bit front end loaded I would say this year.
Okay.
And then I guess.
Logic around excluding them.
I understand when you guys have acquired businesses than we've had some sort of transitional costs than we've had some labor workouts like we saw at Sina gas you know those are cost.
Came with a specific action I guess the idea around adjusting out investment costs here.
Be through that.
Yes, I think Chris is John I think the logic as this is a major so the transformation program. We think is fundamental to too. So the long term strong performance for Amerigas and UGI International and we wanted to make sure for Enbridge.
Posters and others that it was clear kind of what we were investing and also what the.
What the deliverables were and the fact that that these are.
Particularly the operating expenses associated with this are onetime nonrecurring charges. So we wanted to mature we had clarity around the underlying performance of the business.
Rather than have mixed with onetime cost associated with.
Reducing.
Our.
Cost space. So that's the logic and that it's just the scale of it is significant and often.
Yes.
Strategically important to the company.
Okay and John you had noted I think in previous slide presentations, a plan to invest roughly 900 million and total capex across the business in fiscal 2000, I Didnt see that number featured in todays presentation, you've mentioned some of the long range plans for.
The utilities and obviously, we know these investments at the LPG business, but does that 900 million dollar range still hold and that expectation for the coming here.
The 900 million is a good.
Limit rough estimate for the core business the investment, we make which will highlight in the restructuring nor transformation programs would would be in addition to that.
Okay. So there are additional capital and then the Texas Creek and Marsland just some expansions you noted on slide 18 is it was that already embedded in the nine Hundreders Dallas leasing that's embedded as ongoing those are just the incremental investments and growth opportunities that would have was captured in that 900 million as.
For the investments, we're going to be making and CNG over the next few years.
Okay. So really the only additional items, our somebody investments and efficiency programs across Europe .
Right, yes, okay. Okay, and then finally, a question for me and I'll hop back kind of curious just to help calibrate with regard to the fourth.
Fourth quarter fourth fiscal quarter.
Ted I'm, just wondering how how much.
Did you book on pennies and what do you expect for 2020, just given the challenges and then for CNG, if you could give us.
In a rough breakdown of how much contributed in fourq.
What the profile looks like for for fiscal 20.
Yes, So let me start with the CMG loudly.
We are buying these numbers.
Sure.
So.
CNG was was roughly.
Breakeven in Q4.
What we saw an increase operational gains aerie, roughly $11 million was offset with interest expenses.
And in Q4, we expected to be.
A little bit north of Neutrolin and 2020 CNG in terms of.
Creation tend to EPS.
Okay and is that.
Somewhat stable profile I mean, you mentioned to provide some stability to counterbalance the seasonality of the amerigas business, but is that something you see as a gradually positively sloping line or or are there periods in the year were based on producer discussions you're expecting some sort of.
Outside movement.
So it fairly closely mirrors 10 of our pre amerigas by end.
Line over the year, so so and then slightly level that out.
I mean slightly a couple of percentage points and kind of the high end of the year in a couple percentage points on the low end, so and slightly moderates. The impact we see is amerigas comes into the picture in terms of how the line changes quarter to quarter over the next year due in June .
One additional comment on Sheehan Mg.
Well, we have it we've got a solid underpinning of take or pay and minimum volume commitments equivalent to take or pay that covers.
Roughly two thirds or submitted some of the margin. So the the underlying margin is solid what we also have.
If you look across the five system.
We have a combination of available capacity on certain systems and we have other systems that are at or near capacity. So depending on what happens in the in the broader market and with commodity values and individual producer plans. We have the option we have the.
Upside of potentially adding incremental.
Volumes during the year, because we have some available capacity.
And then on other systems where were.
We're we're we've got acreage dedicated to us and were.
At or near system.
Capacity, we're we're very hopeful that we'll have as we noted.
Expansion projects to.
To announce so we've got a nice sort of foundation.
Underwritten by a pretty broad range or contracts with a long tenor and then turn some upside as the market evolves.
Hey, Chris on that few DC, we will follow up with beyond that just want to make sure we add to the exact numbers. Okay. That's great. Thanks for the time. This morning, guys I'll hop back into queue. Okay. Thank you.
And there are no further questions at this time I'd like to turn the call back over to our presenters for some closing remarks.
Okay. Thanks, very much for your time and attention. This morning, we'll we'll keep you abreast as a as fiscal year 20.
Moves I look forward to speaking with you.
As a group on the next call, but also speaking to many of you in the interim.
Take care.
This concludes todays conference call. We thank you for your participation you may now disconnect.