UGI Corporation

Good day and thank you for standing by. Welcome to the UGI Corporation's fourth quarter 2023 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 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 your host today, Tamika Morris, Senior Director of Investor Relations. Please go ahead.

Good morning, everyone. Thank you for joining our Fiscal 2023 Fourth Quarter Earnings Call. With me today are Roger Perrault, President and CEO, Sean O'Brien, CFO, and Bob Beard, COO. On today's call, we will review our financial results and some notable performance highlights for the year, discuss the strategic priorities and financial outlook for fiscal 2024, and conclude 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 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 gap measures are available within our presentation. Now, I'm pleased to turn the call over to Roger.

Thank you, Tamika, and good morning, everyone. We appreciate your interest in joining our call today. Fiscal 2023 was a year where we continued to see uncertainty in the macroeconomic environment, particularly with high interest rates and elevated inflation levels. Across most of our service territory, weather was significantly warmer than normal, and we experienced challenges within our global LPG businesses, largely due to operational headwinds at Amerigas and energy conservation in Europe. Against that backdrop, UGI reported adjusted diluted earnings per share of $2.84 for the fiscal year. The utilities and midstream and marketing segments delivered record earnings and an 8% growth in EBIT over the prior year. This performance was aided by the weather normalization rider that was implemented in the fiscal first quarter and the higher gas base rates at our Pennsylvania gas utility, as well as incremental earnings from the prior year acquisitions of UGI Moraine East and Pennant. We also benefited from margin management actions taken to alleviate volume and cost-related pressures in the global LPG businesses. These businesses continue to generate attractive free cash flow, which support actions to return capital to shareholders, service the balance sheet, and make growth investments in other portions of the business. This diversified portfolio has provided a solid foundation for consecutively paying dividends over the past 139 years, increasing dividends in the past 36 consecutive years, and delivering a 10-year EPS CAGR of 6%. and dividend CAGR of 7%. Of course, our performance would not have been possible without the tremendous dedication of our employees who continue to safely serve our customers and other stakeholders despite the challenging economic and operating environment. In fiscal 2023, we continue to execute on critical elements of our long-term strategy in areas that provide the foundation for reliable earnings growth in the years to come. At our regulated utilities, we deployed a significant amount of capital with approximately $563 million invested, primarily in infrastructure replacement and betterment. The team replaced roughly 142 miles of pipeline and made noteworthy updates to its infrastructure, including an upgrade to its Auburn station to increase natural gas capacity as we accommodate growing customer demand. Customer additions remain robust with more than 13,000 new residential heating and commercial customers added during the year, reflecting further growth in the business. We also continue to facilitate programs designed to aid our customers with energy affordability. Along with various customer assistance programs, in fiscal 23, we were pleased that nearly 51,000 utility customers received LIHEAP grants totaling more than $15 million, enabling those customers to pay for heating costs. At Mountaineer, the rate case continues to progress as expected, and on October 6, the company filed a joint stipulation and agreement for settlement, which included a revenue increase of $13.9 million. We anticipate that the new rates will go into effect on January 1. Looking at the midstream and marketing segments, We continue to provide a full suite of midstream services, which includes LNG peaking, pipeline capacity, storage, and gathering services. Approximately 86% of our margins are underpinned by fee-based contracts, which includes taker pay arrangements and minimum volume commitments. These contracts are with gas and electric utilities, top-tier producers, and other commercial and industrial customers. Many of our midstream assets, which include LNG facilities, pipeline capacity, storage, and other assets are either located on or connected via pipelines to our utility system. Given the strategic positioning, UGI Utilities has typically been the largest customer of the midstream business, with all contractual arrangements completed through open RFPs. Next, we made progress on the previously announced RNG projects, and we were pleased to complete construction of two such projects in upstate New York, namely Allen Farms and Alvey Farms. These facilities have the capacity to produce 140 million cubic feet of RNG annually in total that will be sold to local gas utilities. GHI Energy, our wholly owned subsidiary, is the exclusive marketer of the environmental credits on these projects. Moving to the global LPG businesses. At UGI International, we made important progress in exiting the non-core energy marketing business as we sold our operations in the UK and Belgium during fiscal 23. In addition, in October 2023, we completed the sale of substantially all of the energy marketing portfolios in France. In completing these transactions, we have been able to substantially reduce our exposure to natural gas and power marketing in Europe. and we anticipate that we will fully exit this business by the end of calendar 2025. At Amerigas, we continue to see a positive trend in several of our critical operating metrics, such as on-time deliveries, zero fills, and inefficient fills. Our teams have been focused on enhancing the customer experience and optimizing our systems to enable more efficient delivery. During the year, We've also made investments in technology and other areas to promote the safety of our employees and the communities we serve. At UGI, we are committed to making a difference in the communities in which we operate. I am so proud of our employees who continue to spend time each year serving their local communities through programs such as United Way, Big Brothers, Big Sisters, Reading is Fundamental, and Habitat for Humanity, among others. And with that, I'll turn the call over to Sean, who will comment on the financial results for the year.