UGI Corporation

Good day and thank you for standing by. Welcome to the UGI Corporation Q2 2023 Earnings Conference Call. At this time, all participants are in 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 TAR 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press TAR 1-1 again. please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Samika Morris. Please go ahead.

Good morning, everyone. Thank you for joining our fiscal 2023 second quarter earnings call. With me today are Roger Perot, President and CEO, Sean O'Brien, Chief Financial Officer, and Bob Beard, Chief Operations Officer. Roger and Sean 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 and our most recent annual and quarterly reports 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. Now, I'm pleased to turn the call over to Roger.

Thank you, Tamika, and good morning, everyone. Before I begin, let me say that I am pleased to be joined by our recently appointed CFO, Sean O'Brien, who joined our team in April. I look forward to working with Sean, who brings a tremendous amount of experience in the energy sector. I would also like to thank Ted, our outgoing CFO, for his leadership and important contributions over the past five years. Thank you, Ted. I have really appreciated your insights and partnership over the past few years. Now, on today's call, we will provide a business update, review our financial results for the quarter, and discuss the outlook for the rest of this fiscal year before concluding with a question and answer session. This quarter is one where UGI demonstrated resiliency and the value of its diversified operating model as the company navigated several headwinds. We saw extremely warm temperatures across most of our service territories in the U.S., severe weather events in the West which impeded our ability to efficiently serve customers and drive growth, significant energy conservation efforts in Europe due to the ongoing Russia-Ukraine war, and continued cost inflation. It was a difficult quarter, and in the midst of these pressures, our teams worked diligently and with resilience. I would like to take a moment to thank our teams who have continued to serve customers and execute on our strategy, which is in line with UGI's 140-year-plus history of providing essential energy solutions to customers. For the quarter, UGI delivered adjusted diluted EPS of $1.68, reflective of the strong performance from our natural gas businesses and the effects of the headwinds that I previously mentioned. In our natural gas businesses, we are pleased with the improved earnings reliability that we continue to experience, largely due to the weather normalization rider at our Pennsylvania gas utility and a large proportion of fee-based contract structures that we have in place at our midstream and marketing business. These are attractive elements of our diversified business portfolio and were particularly meaningful during the quarter. Over the past few years, we have shared with you our intent to disproportionately invest in the natural gas businesses and in renewable energy solutions in order to rebalance our portfolio. Of the year-to-date capital spend, roughly 64% was invested in our regulated utility businesses where there is a theme of sustained growth through customer additions as well as infrastructure replacement and expansion. On a fiscal year-to-date basis, we've added more than 8,000 new residential, heating, and commercial customers at our utilities, demonstrating attractive customer growth despite the tight construction market that is impacted by higher prices and increased mortgage rates. The utilities also remains on track to deploy a record level of capital in infrastructure replacement and betterment this fiscal year as we execute on our goal to replace and reinforce critical infrastructure and extend our gas mains to reach underserved areas within our service territory. UGI has a proven strategy for creating shareholder value. Yesterday, we were pleased to announce that our Board of Directors increased the quarterly dividend to 37.5 cents per share, making this the 139th year of consecutively paying dividends and 36th consecutive year of increasing dividends. UGI continues to exceed its long-term target of providing 4% dividend growth. Lastly, given the results in the first half of the year, we now expect adjusted diluted EPS to be within a revised guidance range of $2.75 to $2.90, inclusive of the effects of margin management and expense control actions that our teams have implemented. Sean will now comment on the financial results for the quarter, as well as our revised fiscal 2023 outlook.