UGI Corporation

Ladies and gentlemen, today's conference is scheduled to begin shortly. Please continue to stand by. Thank you for your patience. Thank you. Ladies and gentlemen, thank you for standing by. and welcome to the UGI Corporation Fiscal 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker 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. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference to your speaker today, Alana Zahora, Manager of Investor Relations.

Please go ahead, ma'am. Thanks, Joelle. Good morning, everyone, and thank you for joining us. With me today are Ted Yastrzewski, CFO of UGI Corporation, Bob Beard, Executive Vice President, Natural Gas, Roger Perot, Executive Vice President of Global LPG, and John Walsh, 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. Actual results may differ significantly because of risks and uncertainties that are difficult to predict. Please read our earnings release and our annual report on Form 10-K 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'll also describe our business using certain non-GAAP financial measures. Reconciliations of these measures to the comparable gap measures are available on slide 10 of our presentation. Now let me turn the call over to John.

Thanks, Alana. Good morning and welcome to our call. I hope that you've all had a chance to review our press release reporting UGI's full year results. On today's call, I'll comment on our major achievements over the course of fiscal 20 and review our guidance for fiscal 21. I'll then turn it over to Ted who will provide more detail on UGI's financial performance. Roger Perot and Bob Beard will review critical developments across our businesses, and I'll then conclude by providing an update on our ESG activities and UGI's strategic positioning for growth in renewable energy solutions. We reported full-year fiscal 20 GAAP EPS of $2.54, while our adjusted EPS was $2.67. Our adjusted EPS was roughly 17% above our fiscal 19 adjusted EPS of $2.28. We're very pleased with the results delivered in fiscal 20. Those results reflect the strong performance of the UGI Appalachia systems acquired last year and the full-year impact of the Amerigas buy-in, which closed in Q4 fiscal 19. While we faced significant challenges due to the pandemic and warmer weather across all of our operations, we responded quickly and effectively to those challenges. Our results reflect our strong emphasis on expense and cash flow management as well. We also significantly benefited from tax legislation that was part of the CARES Act. Ted will provide more details on our financial performance during his comments. As we look to our fiscal 21 guidance, we took a number of key factors into account. As noted on our Q3 earnings call, we've decided to use 10-year average weather as our basis for fiscal 21. We believe this weather assumption provides a better foundation for both financial and operational planning. We've assumed that we'll see certain of our customer segments impacted by the COVID pandemic through Q1. We also took tax benefits specific to fiscal 20 into account, those CARES Act tax benefits total approximately 17 cents. Our fiscal 21 guidance range, which now factors in the 10-year normal weather, the Q1 volume impact from COVID, and removes the 17-cent CARES Act tax benefits specific to fiscal 20, is $2.65 to $2.95. The midpoint of our guidance is approximately 12 percent above our fiscal 20 tax-adjusted EPS of $2.50. Ted will provide further details on our EPS guidance later in the call. We were extremely pleased with our overall performance in fiscal 20 as we addressed the many challenges presented by warmer weather and the pandemic, while also focusing significant attention on the needs of our communities. We'll provide you with much more information on our financial performance throughout the call, so I'd like to spend a few minutes discussing UGI's important role in the communities we serve. There is no doubt that those communities have suffered greatly over the past nine months as the pandemic made critical issues such as food insecurity and homelessness even more urgent. Those same communities were also severely impacted by the burden of racial injustice as we saw a number of tragic avoidable events impacting those communities. In response, our leadership team, our board, and all of our employees stepped up to provide financial and volunteer support to food banks, such as Philabundance, emergency services organizations, such as the American Red Cross and the Salvation Army, and critical educational teams, such as Reading is Fundamental. We also achieved record levels of support for our long-term partner, the United Way. We strive to be a force for good and a voice for change in our communities, but it is clear that we need to do more. For that reason, we have significantly enhanced those efforts during the past year and intend to continue to strengthen and expand those efforts in the coming months. We're also committing to change within UGI as we strive to ensure that UGI is a leader in terms of diversity and inclusion. We recently created a Belonging, Inclusion, Diversity, and Equity, or BIDE, initiative to ensure that our entire team knows that they truly belong at UGI and the diversity of thought, perspective, and experience they bring to us is vitally important to our future success. We'll be providing updates on these critical social activities in the coming months. I'd like to highlight a few quick points before I hand over to Ted. Our first full operating year for UGI Appalachia was a strong one. EBIT and cash flow from the systems we acquired exceeded our expectations and demonstrated the value of systems located on well-developed acreage supported by long-term take-or-pay contracts. Throughput volumes on those systems were up almost 6% versus prior year, despite the challenge of lower commodity pricing during the first half of fiscal 20. We're excited about the opportunities that will emerge with more attractive natural gas pricing environment, particularly for systems such as ours, serving proven acreage where production can be efficiently expanded. We completed construction of our Bethlehem LNG storage and vaporization system, and that plan is in service as we approach the fiscal 21 winter season. The Bethlehem system is an important addition to our LNG network, and supports our significant portfolio of long-term peaking contracts. Peaking services is a critical business for UGI, generating almost 90 million in EBIT annually, with virtually all of the EBIT generated by long-term take-or-pay contracts. The network that we've developed over the past decade to serve our peaking demand is also utilized to serve other segments, such as transportation and distributed generation. Our commitment to consistent expansion of our LNG network has positioned UGI as a leader in both peaking services and commercial LNG supply in the Mid-Atlantic and Northeast. Utilities had another busy year as we deployed near record levels of capital while addressing the critical challenges of the pandemic. Our consistent investment in infrastructure replacement is evident in our operational and environmental performance. We see a clear trend in reduced methane emissions and fewer leaks system-wide as we move to eliminate cast iron and bare steel segments in our networks. We also continue to grow our customer base in utilities as we added over 12,000 new commercial and residential heating customers. We also concluded a rate case in the latter part of fiscal 20 with the first of a two-phase rate increase going into effect in January. Amerigas had another very strong year of growth in our ACE and National Accounts programs. Our ACE volumes were up almost 18% as we saw the combined impact of our expanding customer base and strong COVID-related demand in the spring and summer. Our National Accounts program grew volumes this year despite the impact of COVID on some key customer groups such as school bus fleets and the hospitality sector. National Accounts is well positioned for growth as these impacted customers returned to normal demand levels in fiscal 21. UGI International had an outstanding year, with the combined impact of operating efficiencies and effective margin management enabling us to deliver record-adjusted EBIT of $259 million. This was despite weather that was considerably warmer than normal and warmer than prior year, as well as stringent March through June COVID lockdowns in many of our European countries, including France. Bob Beard and Roger Perot will provide more details on our operating performance in a few minutes. I'd like to turn it over to Ted at this point for the financial review. Ted?