UGI - Earnings call transcript Q1 2018

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Operator

Good morning. My name is Krista and I will be your conference operator today. At this time, I would like to welcome to the UGI Corporation and AmeriGas Partners’ First Quarter 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. you. Thank Instructions] [Operator like Ruthrauff, the Director now your over host, Will of to will call turn to I Investor Relations.

begin. may You

Will Ruthrauff

Thanks, thank and morning, joining Good you us. Krista. for everyone,

today Corporation; Jerry President AmeriGas call On John CFO Propane; of Sheridan, Hugh CEO Walsh, CFO UGI Oliver, President and of and the of Propane; are AmeriGas Kirk and CEO Gallagher, UGI. of

today’s assume forward-looking extensive reflect be list let financial our these may We’ll certain because comments are appendix Please no include of the statements difficult revise measures. our or and of XX-K update certain report events release that reasonable results also in me using to comparable today our to of the earnings believes GAAP you of statements, on different only. Form remind begin, to an forward-looking or describe management factors differ we to that from of We non-GAAP for Before uncertainties that presentation. which Reconciliations results. Actual risks duty are predict. circumstances business date as expectations. available to our could that annual our will measures measures affect significantly, read and are

to John. Now let turn the call me over

John Walsh

AmeriGas. Thanks had fiscal that our net but XXXX. our a higher QX than than Weather contributed of and fiscal call. chance was results a morning adjusted press quarter welcome in to slightly income normal weather colder QX strong as our releases I businesses Will. We Good businesses domestic of each warmer was you’ve to in UGI domestic than each XXXX. our for review and QX, hope all had reporting first

will our U.S., over tax the then can in new I’ll it be for overview I key investments wrap the with of including and more Federal to QX review detailed I’ll impact a turn earnings report on who am UGI. a with you market acquisitions. Jerry from initiatives. UGI’s continuing our to attributed an review our in activities reform again performance pleased for once of of Our I’ll the of of comment developments AmeriGas strategic impact earnings Legislation. weather return Kirk, beneficial contributions and provide will QX the record on strong financial update and performance to normal up and Tax the

our to strength That one-time EPS GAAP deferred of demonstrate impact $X.XX hedges exceeded QX results EPS impact the normal key while growth. the of valuation also in our reflect tax been of Our contributed service the on and accrued EPS items cover a $X.XX, record year. have legislation tax quarters the These rate $X.XX adjusted which permanent later. notably adjusted of changes, last for significant change and adjusted prior was noteworthy mark-to-market $X.XX. temporary the as liabilities our a which positive of U.S. and the negative we rate France and was in adjusted EPS was in change smaller each of the tax underlying unsettled resulting most of impact tax will impact businesses. in of from reported The areas QX net and quarter Both weather our other EPS our near strong our tax Kirk

activities. a on projects to performance significant the to quarter, and addition first In like strategic the we number comment the of strong earnings on I’d progress in made

for we achieved projects residential XX new Jersey. QX. fronts needed gas its in performed both received on our weigh Marcellus enhanced to The or foundation happy to on and affordable our will critical in Our on their final the to capacity the future on growth. partnership January meeting of ensuring that PennEast to several exceed PennEast critical their serve, will pipeline access customers and much well targets. that our always FERC New milestones report the our Pennsylvania communities focus capital pipeline we as new eastern while We project. provide in for performance state meet acquisitions across maintain projects also certificate I’m customers the and teams critical commitments that

New which excited We’re phase local of our next in the start to with Pennsylvania involve and agencies the activities, close collaborations will state and Jersey.

PennEast We the by expect construction commence to XXXX. end of of

working areas new at one. unit for never Pennsylvania stronger which been from stream day has July came in liquefaction northeast LNG Demand peak LNG by Our Manning has on in capacity driven been increased northeast peak element east constrained portfolio. challenges NLG by the significant day demand of become faced capacity most the has supply essential and and were the LDCs in gas for an

investment it’s Manning strong and winter important the it off heating is start consumers for paying season. the during to timely, was Our

continues investing infrastructure mission unserved to growth utility make progress with our critical while replace also in Our to to force system great its across extend our to and communities. networks projects

residential customer with new in customers and the grow X,XXX gas utility our at We added base almost heating commercial QX. continue to

infrastructure cast calendar replaced steel target the of year for program bare iron Our and during on XX and with XXXX track replacement miles pipeline XXXX. over for similar remains a

our up month our first normal quickly weather rate with had year-on-year. to conditions in AmeriGas’ The comment redeploy a reach of we filed case AmeriGas on years. assets supply in teams this and for solid with a is more much we of in quarter minutes. XX distribution a Jerry our impacted continuity extensive addition underscores ensure colder critically AmeriGas in will adjusted performs QX network UGI detail the In of Electric to supply. few scale EBITDA as more areas important

Our warmer in net years Europe approximately deliver QX QX that last to performance our our for five prior which by in international for program This X% year than weather earnings enabled acquisition and growth international XX% targeted was significant represents our the years FY strategic focus earnings. can QX teams, the has our strong returns our preceded were European record to the those while faced attributed year, the execution the investments. that us from five for an below income successful in over average team be reported business last XXXX our increase with was adjusted past

strategic remains of process and turn to later the integration integration financial point fiscal call on over this conclude to review. strategic acquisitions, initiatives. it I’ll Speaking on Finagaz this on the our schedule we I’d to to comment return expect the year. business for the at our Kirk like Kirk? But of

Kirk Oliver

everyone. good and John morning Thanks,

our to U.S. As adjusted John mentioned, corporate adjustments to States French France integration the to both tax federal France deferred reductions benefit address rate next September discuss GAAP EPS back GAAP were and back tax one-time remove of year of gains legislation, legislation of Starting from be reduce included XX.X% U.S. rate out with effective rate UGI’s slide. the P&L XX.X% deferred the EPS related a XX.X% to in this enacted year derivatives strong fiscal The $X.XX. connection one-time Cuts XX% our to subject X XX.X% $X.XX, to in $XX.X expenses and $X.XX earnings after Act with just add in January accrued rate. significant statement out income XXXX connection and or to after legislation estimating of results. to in to In France that largest we The revalued XXXX. GAAP and $XXX excluded UGI one-time reform, to tax fiscal a the to with adjusted adjustments benefits from we associated Due in the results. fiscal tax acquisition. and with our $X.XX United which U.S. end for and new legislation tax slide, these of The liabilities of current Jobs income be reduce tax this with FY the our in have share. moment. benefit our and rate the fiscal we laid $X.XX tax assets due $X.XX GAAP were or year this The of a a from realize income are In quarter year I’ll per On been XXXX. adjustments unrealized a one-time the XX% related of will EPS one-time due detail I’ll tax revaluation Both December. benefit beginning XX% liabilities. and will items EPS this blended we’ve commodity this rates, our had $X.XX of to the on Finagaz per which French Tax corporate and tax share two the on million increased more of million subject in

lower from tax changes corporate to addition due the measures expense. the liabilities to tax reform XXXX the tax respective our impacts to revaluation and fiscal assets deferred these In rates income will of

while share, income million expense U.S. per rate lower decreased For share. $XX.X the $X.XX rate current reduced $X.XX higher quarter million by by or per tax income net French $X.X or the the

$X.XX. As John combined was net basis the mentioned, quarter a on this to contribution earnings

the full we more Pennsylvania For XXXX fiscal factor from the per tax understanding treat in the due year be benefits. net to the adjusted approximately expects One impact information will benefit it likely to be estimate $X.XX share. changes PUC to key to EPS these how of $X.XX will getting that as the to

EPS results, impact $X.XX of the prior quarter refund to business the of the provides impact Slide out a tax we France Beginning of with on get year individual shown by forward Shows unit. items this in to comment adjusted from $X.XX, the wanted breaks in have This a a prior prior unit quarter. I the X. the year. related I waterfall impact year the walk to the slide receiving and smaller tax Before negative business net on significant versus

a detail up the French these now impact on offset by the that as through right, the as Moving by I’ll results shown the as the legislation. you is U.S. operations both the the AmeriGas, to over Midstream Marketing, & prior as I column the $X.XX related the of the well shown negative and $X.XX of slide the business QX on benefit tax UGI to year prior slide. in attributable increase previous $X.XX Net the unit. legislation tax tax drove of discussed to French of run corporate the on businesses. other and can the each benefit items for UGI of core last cumulative business and Utilities tax $X.XX The second see slide

relatively taxes results year. million, was charge before volume into week last sales a year second higher reduced correction prior of that decrease was warmer more was as contributed $XXX include margin quarter, year. normal in UGI first DVEP adjusted weather Adjusted that to heavily year to previously non-cash one-time a AmeriGas pushed but than that the review a driven was a million the prior EBITDA year offset than acquisitions the to as AmeriGas, will weather last the which is recorded The weighted million in last in Jerry $X.X Turning $X.X International the year the by UniverGas X% for detail quarter. which than of higher million. was minutes. colder last volume flat gain income was asset on EBITDA prior by few $XX.X by the and over the

before the As see the associated you of can income tax integration with excludes Finagaz. costs adjusted

is completion lower the nearing quarter the $X This million we’re businesses. prior of than significantly adjustment the two of approximately integrating year as

the while income the to greater depreciation now X% that Turning and XX% Total related the was from gas large peaking million pipeline to income higher our colder prior Total delivery Midstream peaking market reflecting weather The margin than the year. before XX% employee natural increased approximately business Sunbury primarily higher increased Operating pipeline million higher million reflecting expenses up posted year. peaking taxes gas taxes margin than increased $XX.X $XX.X and prior expansion & year $XX.X X% to due higher gas our colder of higher was service was in $XX addition before firm margin million new businesses. margin gathering than weather the about is the primarily expenses that year. higher and is reporting that last or core reflecting assets. on and growth natural than reflecting of benefit margin. of margin activity, gathering natural utilities prior in X% Marketing of about and

and PNG on the increased XXXX utility call on addition our core margin. due to the Operating effect at That expenses market took margin basis well now expenditures $X.X XX, In capital to benefited firm my higher over as on Jerry on October update comments distribution largely combined and as to delivery higher higher I’ll million weather from AmeriGas. expenses. higher which a large quarter increased for and concludes the appreciation about base his rates turn

Jerry Sheridan

everyone. morning good and Kirk you, Thank Okay.

EBITDA trend first adjusted being Weather the a nationwide December, than colder this in of first last compared late was east our XX% AmeriGas to QX quarter year in cold first last quarter however extremely for and million quarter with XXXX of the $XXX For footprint. was year. particularly million $XXX not in of southern in full very was the weather regions fiscal

The year warmer but first many XX% with actually than three in last weeks last of was areas. week December of the were final than XX% temperatures colder December record year

call last when of of one But cold was of seeing have the week we lag east all saw weather Rocky actual Much that continued last remained weather to first increased received volume. are given of significantly has in last because spike quarter. volume propane in the by of amount through a last affected part The and quarter flat volume. XX% Belvieu orders call higher the quarter XX% Average weather would temperatures uneven colder details between due compared deliveries. colder of the Excluding to December we’re benefit Mont year. was compared the the weather providing at expect of really throughout December and the I’m substantially the December volumes than the to the for the to volume country placing gallons call last AmeriGas essentially flat to were year QX January cost second the Retail half fairly early until in for XX the than timing essentially of year. XXX country year. was western the those December X% million warm. December Mountain and with customers has Customer January

were throughout remain bouncing of extremely up However, costs period Despite from range the Belvieu. propane Currently propane higher Mont operating overall it’s to last year. $X.XX. last $X.XX good slightly stable cold the slightly about propane expenses from costs up is margins to at see this also year, $X.XX were around

so Our with car service strong, been geographies levels rail in some challenged have delays.

truck competitors our graph trucks many allowing We’ve weather. the more while northeast keep green is the service where southeast. However, AmeriGas of in XXX a second Each dot eastward versus it fleet getting be. is transport fleet. to terms levels outperform significant needs transport the high, service to and This customers of shows transport transport mild and moved is to assets you the propane experiences us and west

activated our XX XXX have fleet geographies where among our a as we’ve drivers And We drivers Airborne also we that driver locations. need result, neighboring AmeriGas additional share added assistance. responding to

drivers. to growth turning Now our

cylinder with up and also quarter AmeriGas programs demand Our accounts experiencing was business. exchange up our quarter-over-quarter. new added Volume volume national experienced a X.X% X.X%, solid solid program

significantly this acquisitions and see We pattern, pleased to the so have no far made results. cold will February of which and the year weather sustained January, QX rest bolster we’re

running. and hard thankful working very personally to business keeping very our warm I’m customers is houses in are colleagues conditions Finally, our who difficult to serve AmeriGas X,XXX

John. the Now I’ll call turn back over to

John Walsh

Thanks Jerry.

of in earnings remarks pleased we QX. mentioned earlier achievement in I with our were record my As

January was quarter was in American above was Gas reported on gas XXX This the a our first to other the on were resulted XX% weather over the for gas send prior also January the respects. record unprecedented performance days was coldest in several billion XXXX. record achieved single and above of addition consumption slightly earnings recorded the in X. December polar the these outs natural vortex. of very of UGI noteworthy The day eastern of weather spite was consumption In set on XXXX. in U.S. record cubic-feet that single X% than demand. X cold during XXXX. send X, X% experienced record X, January warmer This Association January natural the day late days half to outs early demand in in experienced that level The of and Send vortex Utilities outs record achieved the

Northeast in Mid-Atlantic was As the pipeline a capacity demand this result and strained. peak of

dramatically. to significant and peak in of demand gas market strong While that those extremely with was prices we periods pleased the impact rising see were spot power gas natural demand the

were gas areas. the prices delivered an higher supplies in production New natural XX As times in example Pennsylvania than Jersey over

early power volatility of million. Marcellus the than day the New This investments natural the differential and $XXX totaled commercial, that for in gas that cost in total During support generation the highlights to cold and continues between have could infrastructure more the Jersey and and weather January, XX period need in gas growth extremely later accessed delivered December industrial from PennEast residential, continued gas sectors. demand in

is growth early gas. record the natural January As of demand slowing no days demonstrate there for of peak

FERC were we to deliver receive will capacity that capacity. pleased that reason pipeline the that areas for new badly which to need certificate incremental For PennEast,

opportunities existing We the are also to midstream expand committed system to seeking Marcellus. our in

location infrastructure play in positions our the geographic role Our of Marcellus network a the the and Northeast. in eastern critical in ends long-term need pipeline of assets and LNG storage to this Mid-Atlantic addressing on us major

from of our cold I early QX. teams noted in late December timing so running the the recent extreme weather often earlier, through span January, As are

new Our arise and including LNG XXXX the of which and opportunities well periods late acquired gathering in enabling to were are during of Texas advantage systems Manning performing take very volatility. Creek that us assets fiscal

months our ahead. Utilities has as position in to network we investment well remain addition critical in unique The LNG Marketing the over from continued and local the continue Our our outlook Steelton to the flexibility our unit. portfolio We’ve & Steelton, in our business. strengthening This of LNG for the enhances to this that been strong storage and the network. utilizing has network be capacity heavily increases believe LNG for benefit at will overall with and capacity Midstream northeast we’re peaking Pennsylvania investment been growth that weeks few vaporization peaked position the past of and quarter demand our

We’re support deploying of capital programs. infrastructure record our levels growth and to replacement

prior noted exceed over billion we increase over at I’ve next As to our expect the four spend $X.X on the capital total four Utilities years. a substantial preceding calls, our years,

our Our by while natural in provide team colder service QX. access of to with great customer and strong enters to the to QX a logistics job the demand serve. the service done and our distribution, to generated performance utilizing the gas momentum a previously at from Jerry AmeriGas customer of ensure world. goal and cost to very cost weather low continued areas for access turn customers improve core end have is of unserved the enhanced reducing our tools common

in our at acquisitions the the very power our the with and Netherlands marketing and initial unit most recent Looking Italian of LPG Europe, UniverGas performance we’re in the investment in pleased market. natural DVEP, gas

We’re pleased teams we strength the joined UGI acquired that with businesses of International. the high-quality and have the

LPG they UGI. the performance UGI’s powering They are contributors fuel significant for investment company. growth Our provide short, strategic help crucial earnings flow record cash is of to growth that engine businesses the and free to the In to levels.

his in balance fiscal that estimate both We’ve remain impact in with also excited these changes. We opportunities lie ahead UGI. managing been in will significant these in that who from these highlighted opportunities of prudent the for impact companies about for fits growth companies about that consistently a the of we’re benefit in an the recent have XXXX excited their a benefit company. invest Kirk have provided tax remarks, impact and reward and changes descriptions changes. sheet. of way meaningful UGI and positive The tax will As long-term legislation law you positive the in

that, up that over has I’ve teams growth benefiting our call been greatly for path the our in and Krista, open to forward years, As With from diversity pursuing who’ll turn it back questions. several clearer. of are your I’ll the opportunities never noted we’re recent times

Operator

question Your Merrick line comes from Citigroup. is Instructions] of ahead, [Operator go from Please Buck your line first the open.

Merrick Buck

everyone. HI, good morning

John Walsh

Good morning.

Merrick Buck

future? environment, rate tax do that filings the in protect new recent have that? and you impacting rate Or your place cases cases any the potential anything Regarding foresee rate business your do from you like from moratoriums in

Kirk Oliver

cases. place, in moratoriums filing for and based have any in businesses have we cadence a returns don’t rate the on a We

we right So no await terms the there’s as of and of and to on of their PUC that Pennsylvania impact legislation. changes really, the guidance from feedback now, perspective cadence, the in tax

Merrick Buck

states moved and forward. working in now And to PennEast Has now to this and – that to on shifting all move expect PennEast. spend What date that with with focusing service year? and you local do are Okay. agencies you

John Walsh

into is in head, the spend forward The by moving to construction number XXXX don’t are phase. expected we’ll end my year. on that I We the start at project. of the have of calendar that the top the

ramp construction. that really answer question. will the XXXX, spend We we into when Obviously, actually look of in significant that get have at the to most and stages significant

Merrick Buck

the same And in-service now? right remains Okay. the date

John Walsh

Yes. calendar XXXX. End of

Merrick Buck

the tank some And colder around weather. entering more that to all? remaining season lastly AmeriGas into flat part color the you just on Okay. refills push entering, have relatively them that XQ as levels higher at volumes give did Propane how such allowing play were tank Can despite they levels customer off

Jerry Sheridan

two good in tank We two to year the the Very pretty into fiscal in consecutively, winters coming in higher. had have years with fact fact warm and Yes. question were customer last that certainly, levels yes. us look that that carefully

last little good led the volume to of the in last vengeance your December in prior has end weather year. in example than cycle and smaller. delay be some than pool a So in January XX% between approximately is delivery really But Friday through will the and really but at January. an cold XX% year weather higher ordering as the was about the I order colder customers just volumes mentioned, The came our

kind we’re the but December So in over of January almost hangover. earning it’s

Merrick Buck

great. Okay,

That’s all me. from Thanks. Okay.

John Walsh

you. Thank

Operator

Please from comes line your next Ben ahead, is from Your Raymond open. question line Brownlow the of James. go

Ben Brownlow

monthly to March quarter? the about volume the talk historical Good morning. Can you contribution

Kirk Oliver

the… what’s Sorry,

Ben Brownlow

kind just the obviously, where contribution idea the volume with you up historically, of monthly through But monthly that talk an Can January You very basically, volumes year-over-year. perspective. just varies and XX%, contribution see you weather. of or to mentioned trying about dramatically get

Jerry Sheridan

it has about days February XX% degree think off. January, this similar level the is tails – think quarter. in February I in of numbers, January rough and somewhat the Say, I roughly

roughly impact is is of So the XX% for placeholder January. days, degree volume good a which

Kirk Oliver

good, looks February March mark. is question

whole we out. quarter have plays see the to how So

Ben Brownlow

And competitors Can share I you demand. about it talk reportedly how think difficulty X you on reallocated in making to successfully is assets Good. had on understand market of the just one to labor market you that geographically in deliveries. share quarter? match Slide appears Jerry, timely shifted all your

Jerry Sheridan

hard Yes, us that that. speak for or judge to to

a I that all industry the we think lot have able blessed that we’re of the do assets were with struggled around. to move things

business – a competing independence, where mom in have don’t and of We’re we’re kind just against they kind pop of that flexibility.

like mentioned John chain times his like our us cold it’s in So that, and helps this over winters this. control in really remarks and supply

Ben Brownlow

historical me last in pricing one improvement or just anticipate margin Can competitive you talk the sort unit propane. and is there of inventory shouldn’t for seeing the are sequentially play that And margin. any in unit we in landscape on about Great. you dynamic what seasonal that of one terms from on pricing

Jerry Sheridan

Yes.

just mentioned car And We’re some I really that the pleased not we’re extreme cost recurring has across our good with But in pockets been it’s pretty generally propane news shortages, country – delays. really rail pockets. the seeing stable. have is as it

saw pricing. vortex it the into propane the happen, all around so customer drop $X.XX. seen with since been huge then there I is polar spikes spikes created think surprised now the when of issues and pretty it’s the that kinds the bouncing but their going where This $X.XX with we’ve bills pricing where we understand don’t customers don’t we’ve stable, So what’s is down different on

Ben Brownlow

That’s Okay. Thank from it you. me.

John Walsh

Thank you.

Operator

comes of line open. question your Sighinolfi ahead, Your line from next is the from Chris Please Jefferies. go

Chris Sighinolfi

guys. morning, Good

John Walsh

good Hey, morning.

Kirk Oliver

Good morning, Chris.

Chris Sighinolfi

tax this We’ve recurring. that, got most. was you do appreciate related of who non-recurring the way and companies questions bunch and I both it do in guys clearer two have laid a of really though. to the out John, terms impacts, than this

sort rate assuming than first regulated you assumption I following that something any delta on out effectively case that, assets? is give the impact Are question the with or capture to the net XXXX back the don’t other potential of Are did action make, assuming there? bleeds up First on guess, you the you in regard you what that that? about

John Walsh

the this number an sort of of gave or we range. the specific of uncertainty, then indicator in a we a much that drove as that is provided impact PUC Well, from guidance the input tighter opposed waiting terms sort also to range and fact range the of that a and

– with depending Pennsylvania be the we range, if perspective look and what other will the and you discussing, speaking at the we’re and impact be and getting the sort how from that takes. Utilities can So in that will will PUC, impacts see of go But you their this there. on action PUC

Chris Sighinolfi

Okay.

the itself it and range the now delta regulated the is driven by So Utilities? primarily with comes

John Walsh

the impact significant far. most That’s so

Kirk Oliver

Yes.

benefit the quarter, assumes the first The at utility.

assumed we’re or – So first quarter. we haven’t any kind refund of anything yet the for

Chris Sighinolfi

dividend and payout paid with long-dated I’ve been guidance your guess, around ratio, policies with looked has this overtime. on I then, attention to one regard regard And Kirk. helpful, to That’s and

For the five on income paid and this reported over, or statements. have we’ve let’s you’re you between versus last what for seen been paying the cash delta there’s tax others, the rate say, years

real change guess, how question of the EPS how in based it policy how wondering, cash up tax means interfaces in States just is in and policies? terms the affect we just United what line step maybe I’m the France a that in And versus interpret the obligations? with tax sort change should also but both on So tax then, earnings dividend of I in

Kirk Oliver

Sure.

year of good. that is review this look – policy the dividend each we the board spring It’s of in timing the and forward. policy with So

factor a and in we’re It’s becomes here. shorter-term. over the the But with all will cash So on will at time, both impact, having development cash some factor over still the tax board the in positive. in impact this team, And past as But to dividend the the earnings impact. we’ll you can and There’s imagine, policy. cash the certainly, has diligently that positive in. been spring looking working takes over and all the working weeks puts discussions it on the mid-term, our very

update conditions we changes, on and policy position the our as dividend – overtime revise know, businesses. changes you based As in the our

a do, with of So out and reviewing be any lot this the shortly cash still on thereafter. impact that updates policy we’ll the we’ve work spring, we’ll board come with to in our and of particularly got then, our

Chris Sighinolfi

and have recent then investments maybe Okay. been at other on electric release, relates you’ve pertains John, –you some just is that as what the side, rate just rate gas that in I will into I on customer helpful? flame some could. the I the but if any you the about that integrity it you’ve the small, two the talk the Obviously, we Understood. doing to changes drove action case side? infrastructure with of up had all, filing know be on questions business One the can on understand you quite electric. But growth. mentioned

John Walsh

an filing used doing the a enabled it’s at in XX% our that near the or – utilizing in making overtime, terms But great think, we’re system. electric nowhere the investment last in units look really performances of that’s Chris, now utility. I the operating re-qualified its business, performance level investing continued point we’ve that Well, metrics after the just disk. utility, – rate look of things. to been you division, operational years are electric infrastructure case thing for on customer now earning our overtime, of we’re gas sure our and And it’s Electric, because over XX by about the regulated of Utilities business been the reinforce to capital and accounts the last that – rate been where that certainly, a is earning electric service investments properly in good the enables reliability, had a disk it’s at exceptionally isn’t to which investment it’s we’ve a couple electric is strong the same of file And If if us – to the just lot in that’s qualify the make we invested also, of decades. continued case Utilities

Chris Sighinolfi

guys you of you Okay. legislatively John, there regard rate is is sort expect anything there that a in decision with prescripted timeline case – PUC? the

John Walsh

rate to the will of PUC for every speak fiscal new experience. allow year. the discuss parties right time rates commonly the they’ll obviously, typically, that but that’s around We the sort to fiscal to the to action go reach suspend the the again, and and But been we’re our many file looking year, interveners process entirely into our PUC, effect completed sort they driven take more at cases, and the be openly and by the timing is and of Yes. beginning period the for of drive towards cases the typically a new timeline. settlement case at this of the a year In or end end and rate

Chris Sighinolfi

one if weather question And sort appreciate tracking on for Jerry, Okay. demand. Jerry cadence of volumes I comments could. of the I the

some areas some I are causes had so flexibility. I’m delay no anything that there regionally, at concern this difference peers paying anything breaking there’s some – if you at this business. your polar We we there I out tight, mentioned between and shortages, exercise Last dynamics rail the any wondering don’t EI are the just about some But you of vortex. of and in guys sort weather talking if your I car briefly of be winter’s wondering look just terms look the weather inventories should You across and some time, issues that guess, of have so. capacities Obviously, attention saw quite seeing the days you if too? am that versus

Jerry Sheridan

a strange chunk because whole got country dynamic that this the the isn’t west you warm, been Well, propane. it’s a of very consuming has year, so

So we’re around. I can’t that it easy. you it’s moving tell

up keeping we’re I moving around. pockets, it. keeps and But it scrambling with mention when We’re

So we’ve the Northeast. problems had in

settled down. that Now

Now Southeast. having the in we’re problems

transportation. it so, keep and and all you’re to good. incurring moving costly to because job far our sure in around, to pivoting just is have times do assets and the propane we But are so So customers make so one

Chris Sighinolfi

guys. a Okay. so Great. know, have I I your lot for asked Thanks much questions. time

it. appreciate I So

John Walsh

Thanks, Chris.

Operator

Your Please next open. line go from comes ahead, question of the line [indiscernible]. is your

Unidentified Analyst

guys. morning, good Hi,

John Walsh

morning. Good

Unidentified Analyst

related to tax policies. here question the a had I

in XXXX. be said, step another XX% U.S. you the your about you XXXX Is to earnings XXXX, in So and assuming XX.X% then that it in tax up tax we benefit are fiscal thinking base? drops there for should

John Walsh

kind provided any puts takes range I as for lot we’re about of of we XXXX. a think would not step and forward, No, up expecting There’s go so we XXXX. the big in

Unidentified Analyst

Right.

the number XX.X% XX%. Is to earnings used. or on Okay. goes I’ll And it get in because that the XX% up when step from French to back just that reverts case tax then in $X.XX from XXXX, you a base XX.X% backdown

Kirk Oliver

quantify yet in try haven’t We to XXXX. even that attempted to

Unidentified Analyst

Kirk. I want to your know number, XXXX

in might you’re at up dividend was other had at a be floor. guys XXXX dividend special in Should I curious are, bring doing then you that remember higher If I might the something And the step when kind to guys the step that industry than I divided was up if thinking and in of normal back looking think did asking. correctly bigger in that, to rebase guys you the level, dividend you’re is Chris that. be you board? you we to you that create what – have going a XXXX, a Okay. new higher been

Kirk Oliver

the year, where payout months, to would board next And sitting what same the process our we’re projected up we over the take kind through processes meeting. will Well, here the that where couple So be? ratios of of leading each Steven, are? spring to up What today? board ramp that we

So be will discussion. positive good thing, a developments it in and reflected that are

from is if development Each have years. in developments is the to XXXX a immediately, forward. take I an think positive earnings and it’s wouldn’t aspects going we out and what great look I that new moving was This year like few standpoint, a did to cash a be this. from is positive but clearly in some positive just process, XXXX a standpoint unique a we

that the will in. discussion part that So will be of board weigh and

have don’t but want the we So ahead we’ll some to discussing with jump be I positive that board. developments

Unidentified Analyst

base cash, utility and free cash be base that the planned. question. that They refund near-term this should bit your because most It faster way was a cash little a the case back. rate actually all might us the invest tax cash actually a for unclear. you actually guys are raising Most to you them. it’s impacts talking the But in have as to more of utilities I dramatically might negative or – increase you And organic giving little what because should final for Okay. way originally than how that have need growth about your of the about the to you be it. not refund not one I then in earnings actually you fill it. in thinking Is that

Kirk Oliver

that Well, over PUC rate it Pennsylvania back to base come something to want act people time, time. will they over just increase refund. and but be the comes in hasn’t may that said It

otherwise have lower how as Pennsylvania you rate on do going we related their you the a a yet had. clarity got higher requirement has you taxes to request rate base really forward, not revenue you and PUC treat it. they’re cases it to So but But might than any haven’t would plant at than looking otherwise on

John Walsh

a negative not Yes. cash your conclusion about the materially company standpoint. Steven anyway from is And is development This in correct. overall

diversity and developments. positive that takes or and company, kind The of but and then significant there’s first a of it’s of years lot positive positive it material couple the reflects becomes and of not materially of the either negative puts

phase, example, the projects we projects executing mentioned are several business, a the are legislation. that will in of Midstream in benefit that capital range will new as I the fact remarks, For in my tax those construction the benefit from of

at looking project from recently enhanced are underway. or that completed returns projects We’re

that’s great as well. thing So a

Unidentified Analyst

saying So – in XXX% assets reflecting from a cash depreciation what you not you that effect in numbers are standpoint. the are is the you not are that is that new

Kirk Oliver

that No. deployed It but I’m talking yet. is, about assets even aren’t

X, IRR be an a that – plus – on based a X capital just now new as looking So at to if example. plus it’s I’m X projects that generic of has

Unidentified Analyst

Okay. Thank guys. much very you

Kirk Oliver

Thank you.

Operator

And call questions the you closing turn the in we have at this queue time. for Walsh, to remarks. further over Mr. I’ll no back

John Walsh

Okay. to morning. updated. all look next you. And your Thank our forward of you And you soon very we on call. you time Thank this Appreciate we’ll talk to much. keeping

Operator

Thank call. disconnect. and your now This for you participation today’s conclude does you conference may

UGI (UGI) 1 Feb 182018 Q1 Earnings call transcript