UGI Corp 2024 Earnings Call

November 22, 2024

Workers presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone you will then hear an automated message advising that your hand is right to withdraw your question. Please press star one one again please be advised that today's conference is being recorded I would now like to hand, the conference over to Jamaica Morris.

Jamaica Morris: Please go ahead.

Jamaica Morris: Good morning, everyone. Thank you for joining our fiscal 2020 for fourth quarter earnings call with me today are Mario Longhi, Ugi's Board Chair Bowflex, the president and CEO and Sean O'brien CFO on today's call. We will review our fiscal 'twenty four financial results.

Jamaica Morris: And key accomplishments as well as the strategic priorities and financial outlook for fiscal 'twenty five before concluding with a question and answer session.

Jamaica Morris: Before we begin let me remind you that our comments today include certain forward looking statements, which management believes to be reasonable as of todays date only.

Jamaica Morris: Actual results may differ significantly because of risks and uncertainties that are difficult to predict please read our earnings release and our annual report for an extensive list of factors that could affect results.

Jamaica Morris: We assume no duty to update or revise forward looking statements to reflect events or circumstances that are differing from expectations.

Welcome to the UGI Corporation Q4 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session to ask a question during the session. You will need to press star 1, 1 on your telephone. You will then hear an automated message. Advising that your hand is raised to withdraw your question. Please press star 1 1 again, please be advised. That today's conference is being recorded, I would now like to hand the conference over to Jamaica Morris. Please go ahead.

Speaker Change: We will also describe our business using certain non-GAAP financial measures reconciliations of these measures to the comparable GAAP measures are available within our presentation and with that I'll turn the call over to Mario.

Mario Longhi: Thank you tamika and good morning, everyone.

Mario Longhi: Fiscal 2024 was a pivotal year for UGI as we embarked on a multiyear journey to enhance our financial profile.

Good morning everyone. Thank you for joining our fiscal 2024, fourth quarter earnings call with me. Today, are Mario longhi UGI, sports chair, Bob flexen, president, and CEO and Shaun O'Brien CFO on today's call. We will review our fiscal 24 Financial results, and key accomplishments, as well as the Strategic priorities and financial outlook for fiscal 25.

Mario Longhi: Strong execution against our strategy led to the company realizing the highest adjusted diluted EPS in its history.

Mario Longhi: We took decisive actions to strengthen the leadership team.

Mario Longhi: Create greater operational efficiencies and improve our balance sheet.

Mario Longhi: I'm proud of our people who have come together and work diligently to achieve these results.

Before concluding with a question and answer session.

Mario Longhi: Now I am pleased that Bob has taken the role as president and CEO of UGI.

Before we begin, let me remind you that our comments today, include certain forward-looking statements, which management believes to be reasonable as of, today's date only.

Mario Longhi: Bob brings strong leadership.

Mario Longhi: Extensive experience and in depth knowledge of the energy industry.

actual results May differ significantly because of risks and uncertainties that are difficult to predict,

Mario Longhi: He has a proven track record of leading companies to create significant value.

Please read or earnings release and our annual report for an extensive list of factors that could affect results.

Mario Longhi: And with his leadership.

Mario Longhi: I'm confident the UGI can be better positioned to meet the needs of our stakeholders.

We assume no due to update or revise forward-looking statements to reflect events or circumstances that are different from expectations.

Mario Longhi: And now I'll.

I'll hand, the call over to Bob So he can share his opening remarks.

We will also describe our business using certain non-GAAP Financial measures, reconciliations of these measures to the comparable. Gaap measures are available within our presentation.

Bob: Thanks, Mario and good morning to all of you let.

Bob: Let me start by saying that I'm honored to rejoin UGI with its rich history, and a solid reputation for integrity.

And with that, I'll turn the call over to Mario.

Bob: Excellent and a deep commitment to customers and the communities in which we serve.

Thank you, Tamika and, uh, good morning everyone.

Bob: I also want to express my gratitude to Mario <unk>.

Fiscal 2024 was a pivotal year for UGI as we embarked on a multi-year journey to enhance our financial profile.

Bob: Strong leadership and contribution as interim president and CEO.

Bob: And for the effective and efficient transition that has taken place.

Strong execution against our strategy, led to the company, realizing the highest adjusted diluted EPS in its history.

Speaker Change: Over the past few weeks I have been getting up to speed by engaging listening and learning more about our customers our operations and strategies for each of our businesses.

We took the size of actions to strengthen the leadership team. Create greater operational efficiencies and improve our balance sheet.

Speaker Change: Post our call today, I will have the opportunity to engage more closely with our business partners and shareholders to gain alignment as we drive the company forward.

I'm proud of our people who have come together and worked diligently to achieve these results.

Speaker Change: <unk> matters, leveraging our competitive advantages.

Now.

I'm pleased that Bob has taken the role as president and CEO of UGI.

Speaker Change: And to generate greater shareholder value.

Later in the call I will share with you the strategic priorities for the current year.

Bob brings strong leadership.

Extensive experience and in-depth, knowledge of the energy industry.

Speaker Change: Now I'll hand, it over to Sean to cover Ugi's fiscal 2024 of accomplishments.

He has a proven track record of leading companies to create significant value.

Sean O'Brien: Thanks, Bob and good morning.

As Mario mentioned UGI had a strong fiscal 2024 delivering record adjusted EPS of $3 <unk> and a five year EPS CAGR of 6%.

And with his leadership, I'm confident that UGI can be better positioned to meet the needs of our stakeholders.

and now,

Sean O'Brien: Three of our business segments delivered their strongest EBIT on record due to higher margins and sustainable cost savings. These benefits helped offset the impact of lower financial results at Amerigas as the business continued to experience volume declines.

I'll hand the call over to Bob so he can share his opening remarks.

Thanks Mario and good morning to all of you.

Let me start by saying that I'm honored to rejoin UGI with its Rich history in a solid reputation for integrity excellence in a deep commitment to customers and the communities in which we serve

Sean O'Brien: Earlier in the year, we shared several key areas of focus with you.

Sean O'Brien: One was to achieve permanent cost savings of $70 million to $100 million by the end of fiscal 2025.

I also want to express my gratitude to Mario for a strong leadership and contribution as interim president and CEO.

Sean O'Brien: As noted on the slide we achieved a $75 million reduction in operating and administrative expenses this year.

And for the effective and efficient transition that has taken place.

Sean O'Brien: Accelerating the previously anticipated timeline.

Over the past few weeks, I have been getting up to speed by engaging listening and learning more about our customers, our operations and strategies, for each of our businesses.

Sean O'Brien: These cost savings were achieved through right sizing operations and driving efficiencies within our business processes.

Sean O'Brien: Next our key priority was to realign our capital allocation model to the business strategy.

Post our call today, it was the opportunity to engage more closely with our business partners, and shareholders to gain alignment, as we drive the company forward, focusing on what matters leveraging, our competitive advantages and to generate greater shareholder value.

Sean O'Brien: In fiscal 2024, we returned approximately $320 million to shareholders through dividend payments building, a 140 year history of consecutively paying dividends.

Sean O'Brien: Over the past 10 years UGI has provided a dividend CAGR up 6%.

Later in the call, I will share with you the Strategic priorities for the current year, but now I'll hand it over to Sean to cover. Oogies, fiscal 2024 accomplishments.

Sean O'Brien: We were disciplined in deploying capital of the roughly $900 million of capital, 80% was allocated to the natural gas businesses, specifically at our regulated utilities, we deployed approximately $500 million, primarily in infrastructure replacement and betterment, where we've replaced roughly 109 miles of.

Thanks bye. And good morning.

As Mario mentioned UGI, had a strong fiscal 2024 delivering record adjusted, EPS of $3.06 and a 5-year, EPS kager of 6%.

3 of our business segments, delivered. Their strongest Eevee on record due to higher margins and sustainable cost savings.

Sean O'Brien: Titan and made noteworthy updates to our infrastructure.

At the midstream businesses, we completed construction of the Moody project, which is expected to produce up to 300 Mcf of RMG per year once fully operational.

These benefits helped offset the impact of lower Financial results at Americas as the business continued to experience volume decline.

Earlier in the year, we shared several key areas of focus with you.

Sean O'Brien: <unk> also began construction of the Carlisle LNG storage and vaporization facility that is expected to come online at the end of calendar 2025.

Want to wish to achieve permanent cost, Savings of 70 to 100 million by the end of fiscal 2025.

As noted on the slide, we achieved the 75 million reduction in operating and administrative expenses this year.

Sean O'Brien: The facility is backed by a 15 year contract with the gas utility with margin underpinned by take or pay arrangements.

Accelerating the previously anticipated timeline.

Sean O'Brien: Similarly expansion of LNG liquefaction capacity at demanding facility is on track for completion in late fiscal 2025.

These cost savings were achieved through right-sizing operations and driving efficiencies within our business processes.

Next, a key priority was to realign our Capital allocation model to the business strategy.

Sean O'Brien: We see increasing demand for natural gas and with this expansion, we will double our liquefaction capacity at the facility to 2000 <unk> per day.

in fiscal 2024, we returned approximately 320 million to shareholders through dividend payments, building a 140-year history of consecutively paying dividends

Sean O'Brien: And now this brings me to our focus on strengthening the balance sheet, which is crucial to sustaining operations and driving earnings growth.

Over the past 10 years UGI, has provided a dividend gagger of 6%.

At Amerigas, we've reduced absolute debt by approximately $460 million and replace the pre existing revolver, which had more restrictive debt covenant metrics.

We were disappointed to point capital.

Of the roughly 900 million of capital 80% was allocated to the Natural Gas businesses. Specifically at our regulated utilities, we deployed approximately 500 million primarily in infrastructure replacement and betterment where we've replaced roughly, 109 miles of pipe and made noteworthy updates to our infrastructure.

Sean O'Brien: This action was important to provide the business with runway to drive better performance.

Sean O'Brien: Additionally, we completed over $2 5 billion of debt financing actions across the enterprise to support our ongoing operations and improve liquidity.

Speaker Change: And finally as Bob mentioned UGI has a deep commitment to the communities in which we operate it is important that we do our part in helping to improve the lives and well being of those around us to that effect. We are proud of our employees, who volunteered over 40000 hours, serving and partnering with various organizations.

At the Midstream businesses, we completed construction of the Moody project which is expected to produce up to 300. Mmcf of RNG per year, once fully operational,

The team also began construction of the Carlile LNG storage and vaporization facility that is expected to come online at the end of calendar 2025.

Speaker Change: To meet the needs within our community.

Speaker Change: Now, let me walk you through the year over year financial performance as I mentioned earlier for fiscal 2020 for UGI delivered adjusted diluted EPS of $3 six.

Facility is backed by a 15-year contract with the gas utility with margin, underpinned by taker, pay Arrangements.

Similarly expansion of LNG with with faction capacity at the Manning facility is on track for completion. In late, fiscal 2025

Speaker Change: In comparison to $2 84 in the prior year.

Speaker Change: The utility segment was up nine due to higher gas and electric base rates and increased disk revenues Mitch.

We see increasing demand for natural gas. And with this expansion, we will double our local faction capacity at the facility to 20,000 decades per day.

Mitch: Midstream and marketing had an increase of 22.

Mitch: And adjusted EPS, largely due to higher capacity management margins and approximately <unk> <unk> of year over year increase in investment tax credits associated with the Moody RMG facility that was placed in service this year.

And now this brings me to our focus on strengthening the balance sheet, which is crucial to sustaining operations and driving earnings growth.

At a gas, we reduced absolute debt by approximately 460 million and replace the pre-existing revolver which had more restrictive debt, Covenant metrics.

Mitch: At UGI International there was significant improvement in year over year results led by higher LPG unit margins, lower operating and administrative expenses and lower taxes through a favorable change in regulation that allowed us to utilize a previously expense valuation allowance.

This action was important to provide the business with Runway to drive better performance.

Additionally, we completed over 2.5 billion of debt financing actions. According to the Enterprise, to support our ongoing operations and improve liquidity.

Mitch: Amerigas was down 44.

And finally, as Bob mentioned UGI, has a deep commitment to the communities in which we operate.

Mitch: As the effects of lower volumes were partially offset by lower operating and administrative expenses.

It is important that we do our part in helping to improve the lives of well-being of those around us.

Mitch: Lastly, corporate and other was down <unk> <unk>, primarily due to higher interest expense.

To that effect, we are proud of our employees who volunteered over 40,000 hours serving and partnering with various organizations to meet the needs within our community.

Mitch: Now before I walk through the key drivers for each reportable segment I also want to note that we recorded a noncash pretax goodwill impairment charge of approximately $195 million to reduce the carrying values of amerigas, reflecting lower growth expectation.

Now, I'm going to walk you through the year-over-year financial performance.

As I mentioned earlier for fiscal 2024 UGI delivered a just diluted EPS of 3.06 in comparison to 2.84 cents in the prior year.

Mitch: Turning to the next slide.

Mitch: At our regulated utilities EBIT was up $35 million over the prior year, largely due to higher gas and electric base rates incremental benefits from the disc program as well as continued customer growth.

The utility segment was up 9 cents due to higher gas and electric base rates and increased disc revenues.

Mitch: During the year, we added over 12000 residential heating and commercial customers, increasing our utilities customer base to roughly 962000 customers in Pennsylvania, West, Virginia and Maryland.

Midstream and marketing, had an increase of 22 cents in adjusted, EPS largely due to higher capacity, management margins. And approximately 7 cents of year-over-year, increase in investment tax credits associated with the Moodie RNG facility that was placed in service this year at UGI International. There was significant Improvement in year-over-year, results led by higher LPG, unit, margins, lower operating, and administrative expenses. And lower taxes through a favorable change in regulation. That allowed us to utilize a previously expensed valuation allowance.

Mitch: Core market volume was slightly lower than the prior year as the effects of warmer weather were partially offset by customer growth.

Mitch: Operating and administrative expenses were down $5 billion, reflecting lower uncollectible accounts expenses.

Mitch: In our midstream and marketing segment for the second year in a row, we saw record results with EBIT of $313 million up $22 million over the prior year.

Americas was down, 44 cents, as the effects of lower volumes were partially offset by lower operating and administrative expenses.

Mitch: The segment benefited from its highly fee based portfolio and the optimization of its peaking assets during a cold snap that occurred in January these.

Lastly corporate and other was down, 7 cents, primarily due to higher interest expense.

These benefits were partially offset by lower margins from renewable energy marketing activities and reduced natural gas gathering earnings.

Now, before I walk through the key drivers for each reportable segments, I also want to note that we recorded a non-cash pre-tax Goodwill, impairment charge of approximately 195 million to reduce the carrying values of America, gas reflecting lower growth expectations,

Mitch: Operating and administrative expenses were down $8 million, reflecting lower salaries and benefits from cost reduction actions taken as well as lower maintenance expenses.

Turning to the global LPG businesses.

Turning to the next slide.

Mitch: UGI International delivered record EBIT of $323 million up $89 million over the prior year, largely due to higher LPG unit margins lower operating and administrative expenses and the effect of substantially exiting the noncore energy marketing business.

At our regulated utilities, even if it was up 35 million over the prior year, largely due to higher gas and electric base rates, incremental benefits from the disk program, as well as continued customer growth.

During the year, we added over 12,000 Residential Heating and Commercial customers, increasing our utilities, customer base to roughly. 962,000 customers in Pennsylvania, West Virginia and Maryland.

Mitch: LPG volumes were comparable to the prior year as the effect of warmer weather was partially offset by additional volume from auto gas customers and small industrial customers converting from natural gas to LPG.

Core Market volume was slightly lower than the prior year as the effects of warmer weather were partially offset by customer growth.

Mitch: Operating and administrative expenses were down $45 million, reflecting lower costs from exiting the noncore energy marketing business and lower personnel maintenance and advertising expenses.

Operating and administrative expenses were down 5 million reflecting lower uncollectible accounts expenses.

In our Midstream and marketing segment. For the second year in a row, we saw record results with ebit of 313 million of 22 million over the prior year.

Mitch: Lastly, at Amerigas, LPG volumes were down 10% due to continuing customer attrition and the effects of warmer weather.

And this led to a $119 million reduction in total margin.

The segment benefited from its highly fee-based portfolio, and the optimization of its peaking assets during a cold snap that occurred in January.

Mitch: Operating and administrative expenses were down $17 million due to lower personnel and advertising expenses, while the business reported lower gains from asset sales during the year.

These benefits were partially offset by lower margins from renewable energy, marketing activities, and reduce natural gas Gathering earnings.

Mitch: Turning to liquidity and the balance sheet at.

Operating in administrative expenses, were down 8 million, reflecting, lower salaries and benefits from cost reduction actions taken as well as lower maintenance expenses.

Mitch: At the end of the fiscal year UGI had available liquidity of one 5 billion inclusive of cash and cash equivalents and available borrowing capacity on our revolving credit facilities in fiscal 2024, we completed over $2 5 billion of debt financing to support ongoing operations and improved lip.

Turning to the global LPG businesses.

UGI. International delivered, record ebit of 323 million up, 89 million over the prior year, largely due to higher LPG, unit margins, lower operating and administrative expenses. And the effect of substantially. Exiting, the non-core energy marketing business

Mitch: Quiddity subs.

Mitch: Subsequent to the fiscal year and we were pleased to fully address the 2025 maturities at UGI Corporation by entering into a new $475 million revolving credit facility, and a 2027 and $400 million term loan.

LPG volumes were comparable to the prior year as the effective warmer weather was partially offset by additional volume from Auto gas customers and small industrial customers converting from natural gas to LBG.

Mitch: As of today upcoming maturities within the next 12 months is limited to the $218 million outstanding at Amerigas propane.

Operating in administrative expenses, we're down 45 million reflecting lower costs for exiting, the non-core energy, marketing business and lower Personnel, maintenance and advertising expenses.

Mitch: Finally earlier this month, we also increased the borrowing capacity on Amerigas as revolver from 200 billion to 300 million, providing additional liquidity for the business.

Lastly, at America's LPG volumes were down 10% due to continuing customer attrition and the effects of warmer weather.

Mitch: Looking ahead, we will continue to focus on improving our free cash flow generation and reducing absolute debt through operational actions monetization of LPG assets and disciplined capital allocation.

And this led to a 119 million dollar reduction in total margin.

Operating and administrative expenses were down. 17 billion due to lower personnel and advertising expenses while the business reported lower gains from asset sales during the year.

Mitch: And that takes me to the fiscal 2025 outlook.

Mitch: Yesterday, we announced our fiscal 2025 guidance range for adjusted diluted EPS of $2 75 to $3 five.

Trying to liquidity in the balance sheet.

At the end of the fiscal year UGI had available liquidity of 1.5 billion inclusive of cash and cash equivalents and available borrowing capacity on our revolving credit facilities.

Mitch: Which assumes normal weather based on a 10 year average and the current tax regime.

Mitch: Other core assumptions reflected in the guidance range include continued actions to stabilize Amerigas and subsequently drive greater financial performance additional interest expense associated with recent financing activities and incremental tax benefits from RMG plants being placed in service.

In fiscal 2024, we completed over 2.5 billion of debt, financing to support ongoing operations and improved liquidity.

Subsequent to the fiscal year end. We were pleased to fully address the 2025 maturity at UGI Corporation by entering into a new 475 million revolving credit facility and a 2027400 million dollar term 1.

Mitch: We have taken into account additional distribution costs of $5 <unk> at.

Mitch: At UGI International due to the previously mentioned damage to a supply port in France.

As of today upcoming maturities. Within the next 12 months is limited to the 2118 million outstanding at America's propane.

Mitch: As we mentioned on the Q3 earnings call repairs to this facility are expected to take up to 18 months, which necessitates a change to our supply and logistics plan for fiscal 2025.

Finally earlier this month, we also increase the borrowing capacity on Americas revolver from 200 million to 300 billion, providing additional liquidity for the business.

Mitch: We anticipate that all capital expenditure will be covered by our insurance policy. However, the incremental distribution costs may not be fully recoverable.

Looking ahead, we will continue to focus on, improving our free cash flow generation and reducing absolute debt through operational. Actions, monetization of LPG assets and discipline capital allocations.

Mitch: Lastly, I am excited as we build off the strong execution in fiscal 'twenty four and used 25 is a critical rebuilding year to better position the company for long term growth and value creation.

And that takes me to the fiscal 2025 Outlook.

Speaker Change: And with that I'll turn the call over to Bob.

yesterday, we announced our fiscal 2025 guidance range for adjusted diluted EPS of $2.75 to $35, which assumes normal weather based on a 10-year average and the current tax regime

Bob: Thanks, Sean before we open the line for questions I want to highlight our key priorities for fiscal 2025.

Speaker Change: When I look in the pathway to improving UGI as the overall performance at the core is understanding our talent and acting on identified gaps.

Other core assumptions, reflected in the guidance range include continued actions, to stabilize the maragas and subsequently Drive, greater financial performance. Additional interest expense associated with recent, financing activities, and incremental, tax benefits, from RNG plans, being placed in service.

Speaker Change: We need to establish the environment, where culture that drives the desired performance and outcomes.

Speaker Change: It must be relentless and the accountability for executing against the strategy.

Speaker Change: This will likely result in our sourcing and redesigning our core business processes, our ways of working to drive operational excellence strategic alignment and greater efficiencies.

We have taken into account additional distribution costs of 5 to 8 cents at UGI International due to the previously mentioned damage to a Supply Port in France.

Speaker Change: At Amerigas fundamental changes needed to reduce customer churn.

As we mentioned on the Q3 earnings, call repairs to. This facility are expected to take up to 18 months, which necessitates, a change to our supply and Logistics plan for fiscal 2025.

Speaker Change: Bank customers and drive performance in that business assuring we remain customer focused.

Speaker Change: We must get back to where customers want to do business with us and we are their propane provider of choice.

We anticipate that all capital expenditure will be covered by our insurance policy. However, the incremental distribution costs may not be fully recoverable.

Speaker Change: While the company has taken actions some of these areas. We are in the early stages and so fiscal 2021.

Speaker Change: Be an important year to drive stability and subsequently better business performance.

Lastly, I'm excited. As we build off the strong execution, in fiscal 24, and use 25 as a critical rebuilding year to better position. The company for long-term growth, and value creation.

Speaker Change: Next is focusing on optimizing our overall LPG portfolio.

Speaker Change: Suing opportunities, where the economics make sense to monetize assets.

And with that, I'll turn the call over to Bob.

Speaker Change: And moving the company to become more heavily weighted to natural gas.

Thanks, Sean. Before we open the line for questions. I want to highlight our key priorities for fiscal 2025.

With the execution of these priorities and the continued focus on right sizing our balance sheet. The intent is to improve ugi's financial profile for.

When I look at the pathway to improving, oogies overall performance. At the core is understanding our challenges and acting on identified gaps.

Speaker Change: For the benefit of our stakeholders.

Speaker Change: In closing I am excited for this opportunity and driving the company forward.

We need to establish the environment or culture that drives the desired performance and outcomes.

Speaker Change: There's a lot of work to do but the progress is well underway and I look forward to providing more updates as we progress.

We must be relentless in the accountability for executing against the strategy.

Speaker Change: We appreciate your time with us today and now we will open the line for questions.

this will likely result in assessing and redesigning, our Core Business processes, our ways of working to drive, operational excellence, strategic alignment, and greater efficiencies,

Speaker Change: Certainly as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.

At American guest, fundamental change is needed to reduce customer churn.

Speaker Change: One moment for your first question.

Win back customers and drive performance in that business. Assuring we remain customer focused.

Speaker Change: Which will come from Julien Dumoulin Smith of Jefferies. Your line is open Julien.

Speaker Change: Hey, good morning team. Thank you guys very much hope you guys are all well and Bob Congratulations again on the role of <unk> nice to see you back in the seat here.

We must get back to our customers. Want to do business with us, and we are their propane provider of choice.

While the company is taking action in some of these areas, we are in the early stages. And so fiscal 2025.

Speaker Change: Yeah. Thanks.

Speaker Change: Yes.

Speaker Change: Absolutely nice to chat with you guys. So maybe just following up on a couple of things here I mean, obviously you continue to highlight some of the challenges at Amerigas, maybe just to kick it off their first how do you think about.

Will be an important year to drive stability, and subsequently Better Business performance.

Next is focusing on optimizing. Our overall LPG portfolio pursuing opportunities. Where the economics make sense to monetize assets.

Speaker Change: Our mandate and coming into the firm here, specifically as it pertains to the strategic direction of Amerigas I mean, obviously there was.

And moving the company to become more heavily weighted to Natural Gas.

Perhaps a former strategy here.

Speaker Change: How is how does your appointment and how do you think about the opportunity that exists within amerigas at this point.

With the execution of these priorities and the continued focus on right-sizing our balance sheet. The intent is to improve oogies Financial profile.

Speaker Change: Thanks, Joanne and focusing specifically just on Amerigas on your question that the immediate action for Amerigas is really to solidify the business brings stabilization to it we've had a good running start of fixing a lot of the past practices that were.

For the benefit of our stakeholders.

In closing, I'm excited for this opportunity in driving the company forward. There's a lot of work to do but the progress is well underway and I look forward to providing more updates as we progress.

We appreciate your time with us today, and now, we will open the line for questions.

Speaker Change: Contributing to the churn of customers long way to go but we've got teams mobilized and.

Speaker Change: There'll be some supplemental talent coming in as well, but.

To ask a question.

Please press star.

To be announced to withdraw your question. Please, press star 1 1 1, again please, stand by while we compile the Q&A roster,

Speaker Change: Right out of the gate, what we need to do is to stabilize that business.

Speaker Change: I operate under the principle that from a capital allocation standpoint, each business needs to support itself. So America.

1 moment for our first question.

Which will come from Julian deulen Smith of Jeffrey's. Your line is open Julian.

Speaker Change: Or it itself, you're not going to see funds from the parent company down to Amerigas. So <unk>.

Hey, good morning team. Thank you guys very much. Hope you guys are all well and uh, Bob congratulations again, on the roll, nice to see that. Nice to see you back in the seat here. Um, yeah, thank you.

Speaker Change: Amerigas has to perform amerigas has to work on their balance sheet and Amerigas has to work on providing.

Speaker Change: Excellent customer service and really fix our business processes that have gone away over the past few years. So that's right.

Absolutely nice to chat with you guys. So, um, maybe just following up on a couple things here. I mean, you know, obviously you can see the highlights of the challenges that the mayor got maybe just to to kick it off their first. You know, how do you think about, you know, your mandate in in coming into the firm here, uh, specifically as it pertains to strategic direction of America? I mean, obviously there was, um, perhaps a former strategy here. Um, how is it, how does your appointment? And how do you think about, um, the opportunity to?

Speaker Change: <unk> spending a lot of my time will be on amerigas to really focus on those things in and getting the performance up stabilization and driving the cash flow there.

Speaker Change: So it sounds just to make sure I'm hearing that right. So no no further equity going into Amerigas at this point.

Speaker Change: And no specific timeline on any kind of strategic actions too.

Exists within America at this point.

Speaker Change: As you review for divestment in this but it sounds like more internal focus turnaround the metrics first before going back to any kind of conversation about what to do with it right.

Thanks Joanne and focusing specifically just on a maragas on your question that the immediate action for maragas is really to solidify the business. Bring stabilization to it. We've had a a good running Stardust fixing a lot of the past practices that were uh contributing to the churn of customers long way to go but we've got teams mobilized and you know there'll be some supplemental talent coming in as well but

Speaker Change: Yes, I'll reiterate that so no equity going down to Amerigas. It has to support itself that has to manage its own balance sheet.

Speaker Change: And Thats I can really expand that to the entire LPG business.

Speaker Change: And then I'd also say that what we can control right now to make that business performed better.

Right out of the gate. What we need to do is to stabilize that business.

Speaker Change: Strategic thoughts of actions and opportunities may arise.

I operate under the principle that from a capital allocation standpoint, each business needs to support itself. So AmeriGas needs to support itself, you're not going to see funds going from the parent company down to Amerigas. So

Speaker Change: Ruling anything out in that from that standpoint, but what we can control right now is making that business performed better and Thats, where the focus is to do that I think that will drive the most value for our shareholders to get this thing stabilized as quickly as we can.

America gas has to perform if margus has to work on their balance sheet and AmeriGas has to work on providing

Like I said a lot of good things have been happening over the past year, and we're going to keep that momentum going and expand the improvements.

excellent customer service and really fix our business processes that have gone away over the past few years. So that that's

Why I see spending a lot of my time will be on the maragas to really focus on those things. And, and getting the performance up stabilization and driving the cash flow there.

Excellent. Thank you and then just if I can follow up more strategic more holistically here, rather as you think about the balance of the businesses here, how do you think about the opportunity for us.

Speaker Change: More of a review from a cost perspective, or otherwise strategically around the balance of businesses here.

Right? So it sounds just to make sure I'm hearing that, right? So, no, no further Equity going into America gas at this point and and no specific timeline on any kind of strategic actions to to potentially review for divestment. At this point it sounds like more internal focus turn around the metrics. First before going back to any kind of conversation about what to do with it, right.

Speaker Change: Well Julian when you take a look at and I know you know this quite well when you take a look at the utility.

Speaker Change: Our natural gas business with energy services as well I mean, the utility, particularly when your bench market across the country. It's the best in class and I look at our trading multiple.

Yeah, so I'll reiterate that. So no equity going down to America gas. It has to support itself. It has to manage its own balance sheet, uh, and that's, I can really expand that to the entire LPG business.

Speaker Change: At eight times.

Speaker Change: The UGI utility natural gas business, where that multiple should be dramatically higher it should be best in class given.

And then I would also say that what we can control right now is to make that business perform better.

The construct of the regulatory environment in Pennsylvania, the low risk.

Strategic thoughts and actions and opportunities may arise. And

Speaker Change: Pretty deep capital program that <unk> provided.

Speaker Change: Provide plenty of opportunity for investment so thats really just.

Not ruling anything out in that uh, from that standpoint. But what we can control right now is making that business perform better. And that's where the focus is to do that. I think that will drive the most value for our shareholders to get this thing stabilized as quickly as we can. And and like I said, a lot of good things have been happening over the past year and we're going to keep that momentum going. And uh, expand the the the improvements.

Speaker Change: Top decile utility in the country.

Speaker Change: And energy services brings great synergies in that business.

Speaker Change: Great.

Tomorrow and supplier to the utility.

Speaker Change: And when you think about the demand of what's happening in PJM for natural gas and the opportunities that energy services.

Speaker Change: To be involved in that given the footprint of that business.

Awesome. Excellent. Thank you. And then just if I can follow up more strategic, uh, more holistically here, rather. Um, as you think about the balance of the businesses here, how do you think about the opportunity for, um, more of a review from a cost perspective or you know, otherwise strategically around the balance of businesses here?

Speaker Change: First the demand for power the demand for additional natural gas is going to provide opportunities for energy services. So the overall natural gas business is really sitting just fabulous situation. When I was here back in 2011.

Speaker Change: <unk> services did not have the physical assets behind it like it does today, so it's really a dramatically.

well, you know, Julian when you

and I know, you know, this quite well when you take a look at the utility and the overall natural gas business with Energy Services as well. I mean, the utility

Speaker Change: It dramatically evolved business that has great synergies not only for the utility but that also allows you to <unk>.

Particularly when you Benchmark it across the country, it's the best in class. And you know, I look at our trading, multiple of of of 8 times and you think where the UGI utility natural gas business where that multiple should be dramatically higher, it should be Best in Class given this is the construct of the regulatory environment.

Speaker Change: Experienced excellent upside with.

Speaker Change: Market demand, whether that's for additional power that's coming via the investment in data centers or.

Speaker Change: Whether driven when you have spikes in cold weather. So it really is a strong franchise on the natural gas side. So I think that actually the run very well they've got great opportunity. So when I think of allocating my own time, it's got to be to make sure that we're running the LPG side of the business really really well and we'll think about.

I'm in Pennsylvania, the low risk, the

pretty deep Capital program that prevents provides plenty of opportunity for investment. So that's really just a, a top death style utility in this country.

An Energy Services brings great, Synergy to that business. It's a it's a great customer and supplier too. Um the utility

Speaker Change: Attunity is how to maximize value longer term.

Speaker Change: Awesome, all right I'll leave it there guys. Thank you so very much best of luck to you and the team okay.

And when you think about the demand of what's happening in PGM for natural gas and the opportunities that Energy Services has, um, to be involved in that, given the footprint of that business.

Thank you Julien.

Speaker Change: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.

Our next question will be coming from Gabriel Moreen of Mizuho. Your line is open.

That the demand for power, the demand for additional natural gas is going to provide opportunities for Energy Services. So the overall natural gas business is really sitting in just a fabulous, uh, situation. When I was here back in 2011 and Energy Services, did not have the physical assets behind it, like it does today. So it's really a dramatically impact.

Speaker Change: Good morning, everyone and welcome Bob look forward to working with you.

Speaker Change: Couple of questions, if I could maybe on guidance, both near and long term.

Speaker Change: Just around Amerigas, I know youre, assuming normal weather, but can you speak to maybe what youre assuming around stem.

Speaker Change: Stemming customer attrition going into fiscal 'twenty, five how that may compare year on year.

you dramatically evolved business, that has great synergies, not only for the utility, but then also allows you to

Speaker Change: Yes, I can take that Gabe amerigas going into 25 on the volumetric side Theres still work to be done if you listen to some of Bob's comments. So we are assuming continued.

experience, uh, excellent upside with uh,

Market demands, whether that's for additional power, that's coming via the uh, investment in data centers or

Speaker Change: Volume declines from 24% to 25 is the team really works on turning that business around and stabilizing yet. So you would expect if you are modeling that to see volume declines continue on the positive side.

Whether driven when you have spikes in cold weather so it really is a strong franchise on the natural gas side. So I think that actually the the run very well, they've got great opportunities. So again, when I think of allocating my own time, it's got to be to make sure that we're running the LPG side of the business really, really well. And we'll think about opportunities how to maximize value for longer term.

Speaker Change: If you looked at the 24 results on the Amerigas side of the equation. There was we were able to drive some efficiencies in costs I think costs were down $17 million and then on the capital conservation side regarding Amerigas I believe capital was down about $50 million. So we're trying to make sure that we're controlling the levers while the business is really focused.

Awesome. All right, I'll let I'll leave it there, guys. Thank you so very much best of luck to you and the team. Okay.

Thank you, Julian.

Speaker Change: On volumes and really getting that as you said you heard Bob say stabilize so for 25 continued volume declines as the business stabilizes, we're pulling all the levers we can to make sure that the <unk>.

As a reminder to ask a question. Please press star 1, 1 on your telephone, and wait, for your name to be announced.

Our next question, will be coming from. Gabriel moiraine of mizuho. Your line is open.

Speaker Change: Variable nature of costs and capital.

Good morning everyone and uh welcome Bob look forward to working with you. Um, a couple questions if I could maybe on guidance both near and dear to long term.

Speaker Change: Do we see those efficiencies as we continue to turn the business around.

Speaker Change: Great. Thanks, Sean and then maybe if I can ask on midstream and I. Appreciate some of the additional disclosures and this morning's presentation. One just on the surface of the guide for next year. When you think about some of the marketing uplift you experienced some 24 I'm wondering kind of what you are or not slotting in for 25, and then also kind of thinking bigger picture long.

Just around America, gas. I know you're assuming normal weather, but can you speak to me what you're assuming around?

Stemming customer attrition going into fiscal 25. You know, how that may compare year on year.

Yeah, I can take that Gabe. You know are gas, um, going into 25 on the volumetric side, there's still work to be done, you know, if you listen to some of Bob's comments. So we are assuming continued, you know, volume declines from 24 to 25 as the team really works on turning that business around and stabilizing it. So you would expect if you're modeling that to see um volume declines continue on the positive side. Um, if you looked at the 24s on the American side of the equation, there was we we were able to drive some efficiencies and costs I think costs were down 17 million and then on the capital uh conservation side regarding are gas, I believe Capital was down about 50 million so we're trying

Her term to Bob's comments earlier about I.

Speaker Change: I think some of the value in these midstream services can you just talk to how you are pricing new services currently.

Speaker Change: And whether you think over the medium to long term or is it still just be a natural uplift maybe in terms of some of the pricing behind some of these some of these peaking services in particular.

Speaker Change: Yes sure.

Speaker Change: The first one I'll cover the first one on the I mean, when you look at Q2.

Speaker Change: Gave Q2 was incredibly strong right. There was we saw some pockets and Bob was alluding to earlier, where you had some some cold weather spikes in our capacity business that takes advantage of <unk>.

Trying to make sure that we're controlling the levers while the business is really focused on volumes. And really getting that under, as you said, you heard Bob say stabilized. So for 25, Continuum declines as the business stabilizes, we're pulling all the levers we can to make sure that the um variable nature of costs and capital um that we see those efficiencies as we continue to turn the business around

Speaker Change: <unk> basis points and our access to gas had an incredibly strong Q2, if you go back and look at it it really stood out so we would not.

In a normal.

Speaker Change: <unk> forecast a normal budget, we would take that back down to normal levels, but it is a great opportunity. If we continue this year, we see it similar opportunities like that out for that business to really set up well for those types of opportunities in terms of growth maybe I'll just highlight some of the growth that we have in play we've got two LNG facilities Carl Island Manny.

Great, thanks, Sean. And then maybe if I can ask on Midstream and I appreciate some of the additional disclosures in this morning's presentation, 1 just as a guide for next year, when you think about some of the marketing uplift, you experience in 24, I'm wondering kind of what you are, or not slotting in for 25. And then also kind of thinking bigger picture longer term to Bob's comments earlier about

Speaker Change: I think Carlyle comes online in Q1 of 2026 <unk> will be Q3 of this year. So it will have some impact on this year, but.

Speaker Change: We are even though we've been very capital disciplined we have applied some capital to that midstream energy services business on the R&D front, you have three facilities coming in in 2012.

I think some of the value in these Midstream Services. Can you just talk to how your pricing these Services currently, and whether you think over the medium to long term, there's they'll just be a natural uplift. Maybe in terms of some of the pricing behind some of these um some of these speaking services in particular,

Speaker Change: Fiscal year 2025, one in Q2, and Q1 and one in Q3. So we have kept a little bit of the growth engine going there in terms of.

Speaker Change: Future opportunities I think Bob hit it you've got PJM really looking to control power cost and to add some.

Yeah, sure. Um

the first 1, I I've covered the first 1 on on the, I mean, when you look at Q2,

Speaker Change: Increased generation, which will drive gas demand you have the potential we're in very good spot in Pennsylvania, and West Virginia for data centers.

Uh, gate. 222 was incredibly strong, right there. Was, we, we saw some pockets and Bob was alluding to it earlier, where you had some, some cold weather spikes and our capacity business that takes advantage of, you know, V, various bases points, and our access to gas had an incredibly strong Q2. If you go back and look at it, it really stood out. So we would not, you know, in the normal, um, forecast, the normal budget. We would take that back down to normal levels, but it's a great opportunity. If we continue, you know, this year, if we see it similar opportunities like that, for that business to really set up. Well, for those types of opportunities in terms of growth, maybe I'll just highlight some of the growth that we have in play. We've got 2 LNG facilities,

Speaker Change: So all of this should have some favorable impact on future contract and future pricing.

Speaker Change: I think we're set up very well to play a role in that that increased demand as it goes forward.

Speaker Change: In 25, I'll, let me.

Be clear, we don't have out of outside of the growth I mentioned, there is none of that in the.

Speaker Change: Forecast, so that would be post 25 potential upside for the company.

Speaker Change: Thanks, Rob appreciate it.

Speaker Change: Yes.

Speaker Change: And I would now like to turn the call back to Bob.

These Carl Island Manning. Um, I think Carlile comes on 9821 of 2026, Manning will be Q3 of this year. So it'll have some impact on this year. But, um, you know, we are even though we've been very Capital disciplined. We have applied some Capital to that, Midstream Energy Services business on the RNG front. You have 3 facilities coming in in 2020 in in fiscal year, 2025 1 in Q2 in q1 and 1 in Q3. So we have kept a little bit of the growth engine going there in terms of um future opportunities. I think Bob hit it, you know, you've got pjm really looking to to control Power costs and to add some um, increased generation which will drive gas demand, you have the potential, we're in very good spot in Pennsylvania and West Virginia for data centers. Um, so all this should have some favorable impact on future contract and future pricing. Um, and I think we're set up very well to uh, play a role in that that in

Flaxen, President and CEO for closing remarks.

Speaker Change: Thank you Latanya and I appreciate the time.

Speaker Change: The call today.

Speaker Change: Thrilled to be back at UGI would think Mario.

Speaker Change: The work that he's done over the past year on stabilizing the company and getting improvements launched underway. So this is a handoff in flight. So we have great progress already and that will be certainly my focus.

Speaker Change: Over the balance of the new fiscal years to bring that stabilization and improvements to the business. So we can.

Speaker Change: Generate the right level of cash flow and get the right valuation on our stock, which seems to be dramatically undervalued given the multiple that we trade at.

Speaker Change: And we have lots of opportunity here.

Speaker Change: I'm thrilled to be back and I look forward to engaging with all of you as we go forward.

And with that with Honeywell.

Speaker Change: In today's call.

Speaker Change: This concludes today's conference. Thank you for participating you may now disconnect.

Increased demand as it goes forward. Uh, but in 25 of the uh growth I mentioned there is none of that in in the uh, forecast. So that would be Post 25 potential upside for the company.

Thanks Sean. Appreciate it.

That would now like to turn the call back to Bob press flexen president and CEO for closing remarks.

Thank you, lotta and I appreciate the attendance at the call today. Um, I'm thrilled to be back at UGI. I want to thank Mario.

For the work that he's done over the past year, on stabilizing, the company and getting improvements.

Launched underway. So this is a handoff in flight. So we have great progress already and that will be. Certainly my focus.

Over the balance of the new fiscal years to bring that stabilization in improvements to the business. So we can

generate the right level of cash flow and get the right valuation on our stock which seems to be dramatically undervalued given the multiple that we trade at.

And we have lots of opportunity here and I'm like I said I'm thrilled to be back and look forward to engaging with all of you as we go forward.

and with that, with any, we'll

and today's call,

Certainly, this concludes today's conference. Thank you for participating. You may now. Disconnect

Goodbye.

111 again, please be advised. That today's conference is being recorded. I would now like to hand the conference over to Jamaica Morris. Please go ahead.

Good morning everyone. Thank you for joining our fiscal 2024, fourth quarter earnings call with me. Today, are Mario longhi UGI, sports chair, ball, flexen, president, and CEO, and Shaun O'Brien CFO on today's call. We will review our fiscal 24 Financial results, and key accomplishments, as well as the Strategic priorities and financial outlook for fiscal 25 before concluding with a question and answer session.

Before we begin, let me remind you that our comments today, include certain forward-looking statements, which 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,

please read our earnings release and our annual report for an extensive list of factors that could affect results.

We assume no duty to update or revise forward-looking statements, to reflect events or circumstances that are different from expectations.

We will also describe our business using certain non-GAAP Financial measures reconciliations of these measures to the comparable. Gaap measures are available within our presentation.

And with that, I'll turn the call over to Mario.

Thank you, Tamika and, uh, good morning everyone.

Fiscal 2024 was a pivotal year for UGI as we embarked on a multi-year journey to enhance our financial profile.

Strong execution against our strategy, led to the company, realizing the highest adjusted diluted EPS in its history.

We took decisive actions, to strengthen the leadership team. Create greater operational efficiencies and improve our balance sheet.

I'm proud of our people who have come together and worked diligently to achieve these results.

Now, I'm pleased that Bob has taken the role as president and CEO of UGI.

Bob brings strong leadership.

Extensive experience and in-depth, knowledge of the energy industry.

He has a proven track record of leading companies to create significant value.

And with his leadership, I'm confident that UGI can be better positioned to meet the needs of our stakeholders.

and now,

I'll hand the call over to Bob so he can share his opening remarks.

Thanks Mario and good morning to all of you.

Let me start by saying that I'm honored to rejoin UGI with its Rich history in a solid reputation for integrity excellence in a deep commitment to customers and the communities in which we serve

I also want to express my gratitude to Mario for a strong leadership and contribution as internal president and CEO.

And for the effective and efficient transition that has taken place.

Over the past few weeks, I have been getting up to speed by engaging listening and learning more about our customers, our operations and strategies, for each of our businesses.

Later in the call, I will share with you the Strategic priorities for the current year, but now I'll hand it over to Sean to cover. Oogies, fiscal 2024 accomplishments.

Thanks bye. And good morning.

As Mario mentioned UGI, had a strong fiscal 2024 delivering record adjusted, EPS of $3.66, and a 5-year, EPS kager of 6%.

3 of our business segments, delivered. Their strongest Eevee on record due to higher margins and sustainable cost savings.

These benefits helped offset the impact of lower Financial results at Americas as the business continued to experience volume decline.

Earlier in the year, we shared several key areas of focus with you.

1 was to achieve permanent cost, Savings of 70 to 100 million by the end of fiscal 2025,

As noted on the slide, we achieved the 75 million reduction in operating and administrative expenses this year.

Accelerating the previously anticipated timeline.

These cost savings were achieved through right sizing operations and driving efficiencies within our business processes.

Next, a key priority was to realign our Capital allocation model to the business strategy.

in fiscal 2024, we returned approximately 320 million to shareholders through dividend payments, building a 140-year history of consecutively paying dividends

Over the past 10 years UGI, has provided a dividend gagger of 6%.

We were disciplined in the point capital.

Of the roughly 900 million of capital 80% was allocated to the Natural Gas businesses.

Specifically at our regulated utilities, we deployed approximately 500 million primarily in infrastructure replacement and betterment where we were placed roughly 109 miles of pipe and made no worthy updates to our information.

At the Midstream businesses, we completed construction of the Moody project which is expected to produce up to 300. Mmcf of RNG per year, once fully operational,

The team also began construction of the Carlile LNG storage and vaporization facility that is expected to come online at the end of calendar 2025.

The facility is backed by a 15-year contract with the gas utility with margin, underpinned by taker, pay Arrangements.

Similarly expansion of LNG with with faction capacity at the Manning facility is on track for completion. In late, fiscal 2025

We see increasing demand for natural gas. And with this expansion, we will double our liquefaction capacity at the facility to 20,000 Dithers per day.

And now this brings me to our focus on strengthening the balance sheet, which is crucial to sustaining.

Operations and driving earnings growth.

At America's, we reduced absolute debt by approximately 460 million and replace the pre-existing revolver which had more restrictive debt, Covenant metrics.

This action was important to provide the business with Runway to drive better performance.

Additionally, we completed over 2.5 billion of debt financing actions, across the Enterprise to support our ongoing operations and improve liquidity.

And finally, as Bob mentioned UGI, has a deep commitment to the communities in which we operate.

It is important that we do our part in helping to improve the lives of well-being of those around us.

To that effect, we are proud of our employees who volunteered over 40,000 hours serving and partnering with various organizations to meet the needs within our community.

Now, I'm going to walk you through the year-over-year financial performance.

As I mentioned earlier for fiscal 2024 UGI delivered a just diluted EPS of 3 dollars in comparison to $2.84 in the prior year.

The utility segment was up 9 cents due to higher gas and electric base rates and increased disc revenues.

Americas was down, 44 cents, as the effects of lower volumes were partially offset by lower operating and administrative expenses.

Lastly, corporate other was down, 7 cents, primarily due to higher interest expense,

now, before I walk through the key drivers for each reportable segments, I also want to note that we recorded a non-cash pre-tax Goodwill, impairment charge of approximately 195 million to reduce the carrying values of America, gas reflecting lower growth expectations,

Turning to the next slide.

At our regulated utilities, even with up 35 million. Over the prior year, largely due to higher gas and electric base rates. Incremental benefits from the disc program, as well as continued customer growth.

During the year, we added over 12,000 Residential Heating and Commercial customers, increasing our utilities, customer base to roughly. 962,000 customers in Pennsylvania, West Virginia and Maryland.

Core Market volume was slightly lower than the prior year as the effects of warmer weather were partially offset by customer growth.

Operating and administrative expenses were down 5 million reflecting lower uncollectible accounts expenses.

In our Midstream and marketing segment for the second year in a row, we saw a record results with ebit of 313 million up 22 million over the prior year.

The segment benefited from its highly fee-based portfolio, and the optimization of its peaking assets during a cold snap that occurred in January.

These benefits were partially offset by lower margins from renewable energy, marketing activities, and reduce natural gas Gathering earnings.

Operating in administrative expenses, were down 8 million, reflecting, lower salaries and benefits from cost reduction actions taken as well as lower maintenance expenses.

Turning to the global LPG businesses.

Operating administrative expenses were down, 45 million, reflecting lower costs from exiting, the non-core energy, marketing business and lower Personnel, maintenance and advertising expenses.

Lastly, at America's LPG volumes were down 10% due to continuing customer attrition and the effects of warmer weather.

And this led to a 119 million dollar reduction in total margin.

Operating and administrative expenses were down 7 million due to lower personnel and advertising expenses. While the business reported lower gains from asset sales during the year.

Trying to liquidity in the balance sheet.

At the end of the fiscal year UGI had available liquidity of 1.5 billion inclusive of cash and cash equivalents and available borrowing capacity on our revolving credit facilities.

In fiscal 2024, we completed over 2.5 billion of debt, financing to support ongoing operations and improved liquidity.

Subsequent to the fiscal year end. We were pleased to fully address the 2025 maturity and UGI Corporation by entering into a new 475 billion revolving credit facility and a 2027400 million dollar term 1.

As of today upcoming maturities. Within the next 12 months is limited to the 2118 million outstanding at America's propane.

Finally earlier this month, we also increase the borrowing capacity on American gases revolver from 200 million to 300 billion, providing additional liquidity for the business.

And that takes me to the fiscal 2025 Outlook.

Yesterday, we announced our fiscal 2025 guidance range for adjusted diluted EPS of 2.75 to 3 dollars, which assumes normal weather based on a 10-year average and the current tax regime.

We have taken into account additional distribution costs of 5 to 8 cents at UGI International due to the previously mentioned damage to a Supply Port in France.

As we mentioned on the Q3 earnings, call repairs to. This facility are expected to take up to 18 months, which necessitates, a change to our supply and Logistics plan for fiscal 2025.

We anticipate that all capital expenditure will be covered by our insurance policy. However, the incremental distribution costs may not be fully recoverable.

Lastly, I'm excited. As we build off the strong execution, in fiscal 24, and use 25 as a critical rebuilding year to better position. The company for long-term growth, and value creation.

And with that, I'll turn the call over to Bob.

Thanks, Sean. Before we open the line for questions. I want to highlight our key priorities for fiscal 2025.

When I look at the pathway to improving, oogies overall performance. At the core is understanding our challenges and acting on identified gaps.

We need to establish the environment or culture that drives the desired performance and outcomes.

We must be relentless in the accountability for executing against the strategy.

this will likely result in assessing and redesigning, our Core Business processes, our ways of working to drive, operational excellence, strategic alignment, and greater efficiencies,

At America's fundamental change is needed to reduce customer churn.

When back customers and drive performance in that business, assuring we remain customer focused.

We must get back to our customers. Want to do business with us, and we are there propane provider of choice.

While the company is taking action in some of these areas, we are in the early stages. And so fiscal 2025.

Will be an important year to drive stability, and subsequently Better Business performance.

Next is focusing on optimizing. Our overall LPG portfolio pursuing opportunities. Where the economics make sense to monetize assets.

And moving the company to become more heavily weighted to Natural Gas.

With the execution of these priorities and the continued focus on, rightsizing our balance sheet, the intent is to improve oogies Financial profile.

For the benefit of our stakeholders.

In closing, I'm excited for this opportunity in driving the company forward. There's a lot of work to do but the progress is well underway and I look forward to providing more updates as we progress.

We appreciate your time with us today, and now, we will open the line for questions.

To ask a question.

Please press star 1.

To be announced to withdraw your question. Please, press star 1 1, again please, stand by while we compile the Q&A roster.

1 moment for our first question.

Which will come from Julian deulen Smith of Jeffrey's. Your line is open Julian.

Hey, good morning team. Thank you guys very much. Hope you guys are all well and uh, Bob congratulations again, on the roll, nice to, nice to see you back in the seat here. Um, yeah, thank you.

Absolutely nice to chat with you guys. So, um, maybe just following up on a couple things here. I mean, you know, obviously, you continue to highlight some of the challenges that Americans maybe just to to kick it off their first, you know, how do you think about, you know, your mandate in in coming into the firm here uh, specifically as it pertains to the Strategic direction of America? I mean, obviously there was um, perhaps a former strategy here. Um, how is it, how does your appointment? And how do you think about, um, the opportunity to?

Exists within America at this point.

Thanks Joanne and focusing specifically just on maragas on your question that the immediate action for maragas is really to solidify the business. Bring stabilization to it. We've had a a good running start up fixing a lot of the past practices that were uh contributing to the churn of customers long way to go but we've got teams mobilized and you know there'll be some supplemental talent coming in as well but

Right out of the gate. What we need to do is to stabilize that business.

I operate under the principle that from a capital allocation standpoint, each business needs to support itself. So a Marriott needs to support itself, you're not going to see funds going from the parent company, down to a maragas. So

Americas has to perform, if maragas has to work on their balance sheet, and a maragas has to work on providing

Excellent customer service and really fix our business processes that have gone away over the past few years. So that's why I see spending a lot of my time will be on a maragas to really focus on those things. And, and getting the performance up stabilization and driving the cash flow there.

Yes. So I'll reiterate that. So no equity going down to America gas. It has to support itself. It has to manage its own balance sheet, uh, and that's, I can really expand that to the entire LPG business.

And then I would also say that what we can control right now is to make that business perform better.

Strategic thoughts and actions and opportunities may arise. And

Well, you know, Julian, when you take a look at and I know, you know, there's quite well when you take a look at the utility and the overall natural gas business with Energy Services as well. I mean, the utility

in Pennsylvania, the low-risk, the

pretty deep Capital program that prevents provides plenty of opportunity for investment. So that's really just a, a top death style utility in this country.

Energy Services, brings great, Synergy to that business. It's a, it's a great customer and supplier too. Um the utility

And when you think about the demand of what's happening in PGM for natural gas and the opportunities that Energy Services has, um, to be involved in that, given the footprint of that business.

That the demand for power, the demand for additional natural gas is going to provide opportunities for Energy Services. So the overall natural gas business is really sitting in just a fabulous uh, situation when I was here back in 2011 Energy Services did not have the physical assets behind it like it does today. So it's really a dramatically.

impact dramatically evolved business, that has great synergies, not only for the utility, but then also allows you to

experience, uh, excellent upside with uh,

Market demands, whether that's for additional power, that's coming via the uh, investment in data centers or

Whether driven when you have spikes in cold weather so it really is a strong franchise on on the Natural Gas.

So I think that actually the the run very well, they've got great opportunities. So again, when I think of allocating my own time, it's got to be to make sure that we're running the LPG side of the business really, really well. And we'll think about opportunities how to maximize value longer term.

Awesome. All right. I'll I'll leave it there, guys. Thank you so very much best of luck to you and the team. Okay.

Thank you, Julian.

As a reminder to ask a question. Please press star 1, 1 on your telephone, and wait, for your name to be announced.

Question will be coming from Gabriel moiraine of mizuho? Your line is open.

Good morning everyone and uh welcome Bob look forward to working with you. Um, a couple questions if I could maybe on guidance both near and dear to long term.

Just around America, gas. I know you're assuming normal weather, but can you speak to maybe what you're assuming around?

Stemming customer attrition going into fiscal 25. You know, how that may compare year on year.

Yeah, I can take that Gabe. You know are gas, um, going into 25 on the volume metric side, there's still work to be done, you know, if you listen to some of Bob's comments. So we are assuming continued, you know, volume declines from 24 to 25 as the team really works on turning that business around and stabilizing it. So you would expect if you're modeling that to see, um, buying declines, continue on the positive side. Um,

if you looked at the 24th on the American side of the equation, there was we we were able to drive some efficiencies and costs, I think costs were down 17 million and then on the capital,

Uh, conservation side, regarding Emerald gas, I believe Capital was down about 50 million, so we're trying to make sure that we're controlling the levers while the business is really focused on volumes. And really getting that under, as you said, you heard Bob say stabilized. So for 25, Continuum declines as the business stabilizes, we're pulling all the levers we can to make sure that the um variable nature of costs and capital um that we see those efficiencies as we continue to turn the business around

Yeah, sure. Um

the first 1, I I've covered the first 1 on on the, I mean, when you look at Q2,

Uh, gate. 222 was incredibly strong, right there. Was, we, we saw some pockets and Bob was alluding to it earlier, where you had some, some cold weather spikes and our capacity business that takes advantage of, you know, V, various bases points, and our access to gas had an incredibly strong Q2. If you go back and look at it, it really stood out. So we would not, you know, in a normal, um, forecast, a normal budget. We would take that back down to normal levels but it's a great opportunity. If we continue, you know, this year, if we see it similar opportunities like that, for that business to really, it's set up. Well for those types of opportunities in terms of growth, maybe I'll just highlight some of the growth that we have in play. We've got 2 LNG facilities

Carl and Manning. Um, I think Carlile comes online. In q1 of 2026 Manning will be Q3 of this year. So it'll have some impact on this year. But um, you know, we are even though we've been very Capital disciplined. We have applied some Capital to that, Midstream Energy Services business on the RNG front. You have 3 facilities coming in in 2020 in in fiscal year, 2025 1 in Q2 in q1 and 1 in Q3. So we have kept a little bit of the growth engine going there in terms of um future opportunities. I think Bob hit it, you know, you've got pjm really looking to to control Power costs and to add some um, increased generation which will drive gas demand, you have the potential, we're in very good spot in Pennsylvania and West Virginia for data centers. Um, so all this should have some favorable impact on future contract and future pricing. Um, and I think we're set up very well to uh, play a role in that that in

Increased demand as it goes forward. Uh, but in 2525 potential upside for the company.

Thanks Sean. Appreciate it.

I would now like to turn the call back to Bob press flexen president and CEO for closing remarks.

Thank you, lotta and I appreciate the attendance at the call today. Um, I'm thrilled to be back at UGI. I want to thank Mario.

For the work that he's done over the past year, on stabilizing, the company and getting improvements.

Launched underway. So this is a handoff in flight. So we have great progress already and that will be. Certainly my focus.

Over the balance of the new fiscal years to bring that stabilization in improvements to the business. So we can

generate the right level of cash flow. Get the right valuation on our stock which seems to be dramatically undervalued given the multiple that we trade at.

And we have lots of opportunity here and I'm like I said I'm thrilled to be back and look forward to engaging with all of you as we go forward.

and with that, with time, you will,

and today's call,

Certainly, this concludes today's conference. Thank you for participating. You may now. Disconnect

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