UGI Corporation

Good day, ladies and gentlemen, and welcome to UGI Corporation 4th Quarter 2021 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. To ask a question, you will need to press star, then 1 on your telephone. As a reminder, this call is being recorded. If anyone should require operator assistance, please press star, then 0. I would now like to turn the call over to Tameka Morris, Director of Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining our Fiscal 2021 Fourth Quarter Earnings Call. Today I'm joined by Roger Perreault, President and CEO, Ted Yastrzewski, CFO, and Bob Beard, Executive Vice President, Natural Gas, Global Engineering and Construction, and Procurement. Roger and Ted will provide an overview of our results, and the entire team will then be available to answer your questions. 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, our most recent annual report, and our quarterly reports on Form 10Q 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 GAAP measures are available within our presentation. Now, I'm pleased to turn the call over to Roger.

Thanks, Tameka, and good morning, everyone. Thank you for joining the call today. We are excited to discuss our fiscal 2021 results and expectations for 2022. As you may have seen from our earnings release, we achieved all-time record earnings. Thank you for joining us today. My diversified business reported GAAP EPS of $6.92 and adjusted EPS of $2.96, which was 11% higher than the previous year and at the top end of our revised guidance, prior to the $0.03 non-cash adjustment related to equity units that Ted will discuss in further detail in a moment. All of our businesses reported higher results in comparison to fiscal 2020. particularly UGI International, which delivered a record performance due to relatively normal weather conditions and continued strong margin management efforts. This year marked the 34th consecutive year of increasing dividends and the 137th year of consecutively paying dividends. Our shareholders have experienced a dividend growth rate of 7.2% and an EPS growth rate of 7.7% over the past 10 years. Looking forward for fiscal 2022, we expect adjusted EPS to be in the range of $3.05 to $3.25. We are encouraged by the growth prospects ahead of us and believe we are well positioned to continue the momentum from 2021 as we execute on our strategy of delivering reliable earnings growth, investing in renewable energy solutions, and rebalancing our portfolio towards a more equal split between LPG and natural gas. Next, I'll comment on several major achievements over the course of fiscal 2021 before turning the call over to Ted, who will provide more details on UGI's financial performance. This year, we made noteworthy progress on a range of strategic investments and focused on new opportunities that leverage our existing infrastructure and expertise. We delivered reliable earnings growth as we executed on several growth and environmental, social, and governance initiatives. In our natural gas business, we deployed a record level of capital at our regulated gas utilities, investing $394 million in infrastructure replacement and reinforcement. The PA gas utility continued to produce an attractive rate-based growth rate with the five-year average being 11% plus. And we expect to continue that investment profile, driving reliable earnings growth going forward. Our PA gas utility also added more than 12,000 new residential and commercial heating customers, continuing a strong track record of annual customer growth. We are pleased to increase our regulated utilities footprint with the mountain air acquisition that closed on September 1st. With this acquisition, we added roughly 6,200 miles of pipeline and nearly 214,000 customers in West Virginia. Within the midstream and marketing segment, we continued to see a significant amount of margin from fee-based income. We also expanded our interest in the natural gas gathering systems in the Appalachian Basin with its investment in Pine Run in February 2021. This investment has performed well and we are pleased with the strong production volumes during the fiscal year. With the rising natural gas prices, we remain confident that our midstream assets position us well for future opportunities. Moving to the global LPG business. As I mentioned before, UGI International generated record financial results this year. The segment also realized approximately 14 million euros in annual benefits from the business transformation initiatives and remains on track to deliver on our previously stated goal of 30 million euros in annual benefits by the end of fiscal 2022. Amerigas grew national account volumes by over 9% and continued to expand its cylinder home delivery service, CINCH, now offered in 22 cities in the U.S., As part of our business transformation initiative at Amerigas, our teams are focused on enhancing the customer experience and driving operational efficiency. During the year, we established a centralized customer engagement services center, enhanced customer management tools, and introduced a new routing and logistics tool. In conjunction with those efforts, Amerigas realized $78 million in incremental annual benefits in fiscal 2021. These transformation activities are substantially complete and we now expect to provide total annual benefits of more than $150 million at a total cost of $220 million by the end of fiscal 2022. Moving to our ESG initiatives. Further demonstrating our commitment to sustainability, we established a dedicated ESG team and committed to a 55% reduction in Scope 1 greenhouse gas emissions by 2025, using 2020 as the base year. We also made great strides in advancing on our belonging, inclusion, diversity and equity initiative and we're pleased to increase our domestic spend and commitment with diverse suppliers by over 20%. As part of these efforts, We also established partnerships with the Human Library Organization and strengthened existing relationships with the Urban Affairs Coalition and Big Brothers Big Sisters. Turning to our progress in advancing our renewable strategy. During fiscal 2021, the midstream and marketing segment entered into several strategic partnerships to produce renewable natural gas from a diversified set of feedstocks and also from outside of our historical geographic boundaries. In these attractive RNG partnerships, we committed over $100 million of investment during the year. Adding to those RNG investments, in October 2021, UGI Energy Services announced that it had identified its third RNG project in upstate New York to develop a dairy digester project to produce renewable natural gas through the Cayuga RNG joint venture. We are also pleased with the foundation that we've begun to lay with biofuels. We established an exclusive supply arrangement that enabled us to receive bio-LPG in Europe to meet customer needs. In May, we announced the intent to create a joint venture for the production and use of renewable dimethyl ether, or RDME, a low-carbon sustainable liquid gas in the U.S. and Europe. We are currently in the regulatory filing process with the European authorities and will provide more updates as we progress on this venture. We are pleased with the strides that we've made in these initial renewable investment opportunities. First, these projects allow us to utilize our existing natural gas and LPG distribution infrastructure to deliver RNG and bio-LPG to the customers we serve. In most cases, They require no incremental investments by our customers and no community disruption related to infrastructure build-out. Secondly, similar to our investments in the natural gas business through the Mountaineer acquisition, capital spend and replacement and betterment, and investment in the Pine Run midstream system, these investments in renewable energy solutions will drive forward our portfolio rebalancing strategy and lead to continued earnings growth. and now I'll turn over the call to Ted who will get into more details on the financials as well as our fiscal 2022 guidance.