UGI - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the UGI Corporation fiscal year 2019 earnings call and webcast. At this time, all participants are in a listen only mode and after the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. [Operator Instructions].

to Manager conference of like today, to now Zahora, Alanna Investor would hand over the speaker I Relations. Please go ahead, ma'am.

Alanna Zahora

morning today CFO President and Thanks us. of Global Perreault, Good everyone of John you President thank James. Walsh, and for Executive With Vice me UGI UGI. are of Jastrzebski, CEO LPG Ted Corporation, Roger and joining

our differ Before include reasonable which may statements, to be report no because events certain as expectations. Actual we that are today's an significantly could for management read forward-looking to to and release factors results. begin, only. let or circumstances affect me earnings and are remind revise you risks forward-looking that our reflect duty our comments on date Form that of to from uncertainties of today list annual of difficult Please different update XX-K believes assume We or results that extensive predict. statements

using to are Reconciliations our measures. certain describe financial also the in available comparable will the presentation. appendix of business We non-GAAP our measures GAAP these of measures

Now over to call let turn John. me the

John Walsh

progress the strategic an UGI of financial XXXX then Perreault, and to on and on Executive Good our the of press call. full will by overview Global turn will efficiency Alanna. fiscal Ted results. at UGI's to Roger and releases welcome will on projects. comment performance. review all our chance our over will and morning have reporting conclude I provide more hope our will I then I provide UGI's our year fiscal I major detail who had a achievements Thanks briefly you VP to of initiatives guidance XXXX International. LPG reviewing course AmeriGas significant it underway over

of year full GAAP XXXX EPS adjusted reported We was $X.XX. $X.XX, while EPS our fiscal

below a our XX% XXXX loss $X.XX, includes of but quarter was adjusted fiscal fourth with recent dilution Our adjusted acquisitions. and record EPS roughly seasonal our EPS associated

of second the International, strategic this for Roger history. unsettled and will call. in and in delivered efficiency on more with highest our been later hedges detail UGI's $X.XX impact, UGI this valuation represents acquisition AmeriGas EPS Both business the associated years mark-to-market and Ted adjusted costs Excluding adjusted and the at have EPS provide programs the the

delivered number The factors capacity pipeline over being with in XXXX and course by of were impacted dampening results the fiscal very most of significant in winter. weather of a the warm the the Europe values

teams responded those delivered Our face to year of a factors. well in we key and significant the these challenges solid

a in guidance the our return XXXX some service values. later across provide incremental fiscal I Ted on and will Our our range guidance further to $X.XX $X.XX assumes call. details in normal to territories weather improvement of pipeline capacity and

in We we particularly quarter made significant August two the were transaction. as the pleased in on most The transaction on of XXXX of XX extremely noteworthy progress XX% fiscal concluded initiatives. approximately was history. the cast with fourth votes favor in strategic transactions of UGI's with primary our AmeriGas the closed The

to as XXXX wholly-owned a We AmeriGas start UGI are entity. pleased very fiscal with

later will to across major efficiencies performance see be a our some Roger the few businesses, of down debt on deliver which in the investments next as major The flow LPG years, on in operational its the the next pay businesses commenting the gas capital from drive help simplified we use natural AmeriGas opportunity over to program cash will call. and We structure over to decade. will enhanced enhanced help our this

years. in The asset the have of August. the Marcellus. over Midstream five from and that also the our Our range of Group those the a network five August acquired expansion on on through we these we midstream Energy we acquisition will in systems We significantly October to expanded projects across executing closed are scale throughput networks be Columbia breadth of five confident Columbia strong next TC and three saw activities

elements executing decade. the on AmeriGas long-term Columbia to of continued will foundation next to addition we focus transactions, and In strategy our growth the the that for critical over provide

IV Auburn take-or-pay completed which on system the and increases expansion dekatherms $XX a XX% million about budget. on day supported on November, or XXX,XXX a is by project, in Auburn Marcellus Northeast on This by capacity was largest our time investment Our XX-year system contract.

pipeline Northeast Marcellus takeaway the increasing on for options see from demand existing capacity As are we delayed, systems. our other

combined $XX year. with went productive million We case utilities that concluded utilities had that into and October. provided team improved increase Our effect first in rate a case rate gas filed an the extremely our an successfully settlement

$XXX deployed our Our upgraded capital distribution critical continued fiscal new record our utilities strong. for outlook systems. remains customers, across added we as utilities investment XXXX, gas team infrastructure The and in a million capital of replaced

XXXX have ACE was with growth Accounts itself AmeriGas distinguishes X% another and about strong providing AmeriGas In success of continues National with up to great Fiscal by groups. ACE year volumes and customer Accounts service its cases, National both levels to key programs. volumes up these X%. exceptional

our We generation support based both our in national solution for exchange bending continue our customers. on add and such new delivery second XX/X to as of coverage, programs largest accounts cylinder value-added technologies

the four issued and performed the business portfolio international their XXXX, fiscal tuck-in Belgium, moments. business on warm Our Kingdom. international underway despite debt some weather. few a comment Netherlands in refinanced at will Roger in team first time. senior and integrated The new acquisitions the and well for dry initiatives United LPG entire exciting international Early persistent the notes team in the

our in customer safety, commitment While fiscal undertake, critical operational most year was for we activities and efficiency. XXXX exceptionally excel service also dynamic an the we us, to maintained

comment financial XXXX it but to initiatives, over point our would to Ted fiscal for our I I strategic outlook like turn this on review. will and return at Ted? to the

Ted Jastrzebski

Thanks John.

that XXXX in us reported operations related figure was $X.XX of to, As $X.XX difference history. highest AmeriGas the timing loss $X.XX share be second the adjusted of dilution impact. transaction down the the and and heard to the can broken seasonal delta, two acquisition per the $X.XX adjusted from earnings The have our between parts, refer John fiscal the mentioned, the UGI's of our EPS you into

a was $X.XX to came The forecast. this AmeriGas' XX.XX incremental deal. interest operations there remaining our to from and are in $X.XX financing dilution. First, below This related attributable impact

million consistency our compared Our was $XXX billion to and reportable this last businesses, metrics $X.XX CMG as the the EBIT profitability merger to year, of for AmeriGas segment year, is result UGI acquisitions. largely And a reporting EBIT. shifting across

in reporting. reflected change this see will future our You

our earnings XXXX fiscal share compared This XXXX. and fiscal table lays out per GAAP adjusted for to

on hedging changes adjusted In a of foreign this number of earnings a a As we a derivative you impact in as of such our versus $X.XX $X.XX instruments, of loss fiscal XXXX, $X.XX our commodity items unrealized gain instruments last currency last of exclude gain the year can $X.XX of see, versus mark-to-market year. had gains year.

will on you costs LPG detail businesses Lastly, we call. that discuss see later in our at the transformation will

adjusted Using decreased earnings a as $X.XX share acquisition adjusted year. earnings base, per versus last

Our our weather but weather, our where has and and to domestic warm and dating restrictions increased businesses international a impacted sustained capacity normal business the cold dry marketing lack at XXXX. year-over-year back midstream conditions our relatively experienced of decrease the weather faced The business. of occurred business management pipeline largest summer

the volatility XXXX our idea experienced some of business you pipeline $XX roughly in Moving past expanded the years. of during but capacity fiscal levels XXXX, through below an million territory, give capacity service the delivered per recently few at magnitude, return forward, in over fiscal we To expect management year those margin.

We that roughly margin are a quarter expecting of moving forward.

to million of versus $XXX million the $XXX the side business. adjusted Turning AmeriGas $XXX of of first fiscal in EBITDA reported LPG EBIT million to year. compared XXXX last or $XXX million

service previously year recorded million unfavorable largely prior LPG associated to unusual weather put and and in led adjustment we approximately to for our quarter technology $XX with by QX. The leadership LPG an customer result of lease enhanced with in disclosed, along expenses base patterns anticipated related focus the resulted to As drive regional additional the our efficiency for us that last expenses businesses AmeriGas in than during strategic was of of buy-in structure enhanced second this and during also businesses. accruals to years driven the fall XXX-day the review litigation on lower an place help volumes, we

but this more sustained are Roger of provide a the consistent make will and position a in that to in savings speak and few buy-in with we series efficiencies. us, detail behind moments a cost in will investments to operating at AmeriGas

consistent through full EBITDA we actions $XXX range benefit We growth these will capabilities. growth more to XXXX The expect investments million AmeriGas provide to improved fiscal of retention significant customer the permanent $XXX and customer-facing trajectory. enhancements AmeriGas' this grow expect a to the to EBITDA a million. by end when will program AmeriGas of impact return of to enable in These

we transformation and year in coming in specifics called on updated the invest to will you business transform non-GAAP fiscal business but keep as adjustments XXXX LPG year see will We quarters, you costs XXXX. fiscal

excited contributor invest cash We projects, to us the are you the increase in AmeriGas about about. opportunity and business, and enhance service best-in-class provide very to cash talk AmeriGas, important a earnings customer which our flow implement to as both to is often flow, is these major engine UGI we

EBIT in of $XXX achieved fiscal compared to million $XXX million UGI international XXXX.

throughout the business mentioned dry and focused Pound in a the profitability fall great and job of our related should margins a expenses. in includes experienced that crop-drying point this in the impacts translation effects throughout and sizable did As The this remains international impacted the fiscal I Euro business of and slide business XXXX, our bulk earnings line managing challenging on and call warm out the weather persistent winter. on team items year operating that weaker Sterling. to the

which interest debt FX the other of this in of including international impact, first €XXX the refinanced in Earlier our favorable rate team X.XX%. to million their of the senior exposure notes year, hedge the for entire time reflected the minimize highly We at issuance income. portfolio, is

AmeriGas, has also greater more to After service the started team this successful new and the focused been Lastly technology and process comment certain functions international moment. the efficiencies. a centralizing profitability. of integration acquisition, the incorporating of in like operational ensure on Roger customer on Finagaz the team will

due to and pipeline the versus last decrease gas unfavorable versus capacity in XXXX values of expenses margin. Turning the of $X.X acquisition. incremental total and increase margin online and million and Midstream lower gas of side from fiscal EBIT of $XX in saw midstream lower commodity operating margin with $XX associated to to compared assets in gathering of million restrictions expenses million a impact natural marketing of the year-over-year bulk XXXX. house. coming reported a due XXXX, the management margin. on total We attributable million, decrease the margin The CMG new lower Total was assets to $XXX decreased capacity year to natural

natural our CMG of $X.X and amortization increased incremental our LNG as and depreciation million well from expansion gathering peaking expenses assets assets. to gas including Depreciation due the as

from acquisition. incremental of we Additionally, was the saw equity system the newly income venture on CMG part acquired a which Pennant joint

Lastly, are CMG the results from the assets. by pleased early we

John strong the system five of As we mentioned, are attractive to at throughput that times. and are we multiples the confident expansion can seven projects execute CapEx on seeing on

for was X% warmer. over UGI EBIT of million to utilities was year. throughput market on reported flat million XXXX, last decrease a that prior year Core $XX $XXX weather

by Some this offset was customer. prior year. use compared customer additions per of slightly down and Margin higher to was impact

million and increased However, OpEx system maintenance excluding costs, amortization result and a up Depreciation the to was expenditures. $X capital $X.X the margin consulting expenses. as periods, TCJA both contractor IT XXXX. million fiscal and increased IT million of increased higher distribution versus of $X.X due effects in

to on next the over to execute capital invest our in $X.X we and plan rate expect the continues robust team four billion utilities years. base Our approximately

$XX thank October. million XXXX. increase the hard work rate the combined effect like rate into our in execution Additionally, teams all first would of in case our and associated to new for in went rates with their I

incremental XXXX guidance a CMG assumes the measures to from As margin and and XXXX, in impact range our we businesses impact This $X.XX. LPG the more efficiency In from weather territories. will year $X.XX rate case from John at our mentioned, utilities is at and cost-saving our acquisition. modest normal see fiscal service the

and impacts particularly investments, and at these However, $XXX beyond. XXXX to really efficiencies million at we see fiscal cost-saving businesses LPG significant and and million operational second-order in our the from $XXX CMG investments will start the between

quarterly they fiscal earnings about transaction expected in beyond. AmeriGas moment the to also seasonality impact to quarterly will during I negative heating the earnings take Due talk impacted. XXX% how the a over be the our our will the businesses, merger LPG in of summer the of of to XXXX results and season months, have and wanted timing quarters generate their

XX% ratio historically X% half the change. chart, second this remaining year came in integrated, that in UGI's see the the AmeriGas in of adjusted first fully earned can the you As half. With EPS and was will of

We the our of now of summer in in down XXX% expect half the XXX% and the EPS generate first to slowly expected yearly roughly towards drift adjusted year months.

have our slide. included assets businesses these throughout on and earnings gas of much presentations, are larger As the this we impact. from will CMG figures CapEx more out generates years. mentioned the the I in point should in portion that will coming CMG we reverse portion previous the allocating this integrated laid moderate out evenly a natural earnings a be of the year. in This impact to slowly

time. to roughly first range debt mentioned for energy year expect of year, XXXX services leverage to a lower at the and to times four the UGI, busy year per of use on was portion level to out million we taking AmeriGas included that cash the call $XXX long-term that HoldCo a the a the times. We for X.XX profile, enhanced their merger that

you AmeriGas on acquisitions. and fund As CMG to know, the both we a portion took of debt

investments We leverage like these transactions. prudent and have always use made of financing

with shareholders. commitments the remains in remaining strategic that foundation as consider pleased leverage well over result us on are will transactions from to good these the reduce confident are our positioned position while time, generation profile meet improved our that investments we build UGI and to cash flexibility We strategic to opportunities arise. our to and in benefits provides

of to some With that, initiatives our Roger review a the turn call AmeriGas International. over Roger? of at I for UGI and will

Roger Perreault

is Driving operational LPG for businesses strategy Ted. component our global years. Thanks LPG few next important across of an efficiencies our the

and increase implementing experience. we profitability better will As Ted customer mentioned, a are sustainable strategic that and deliver measures

opportunities of of transaction underway some and AmeriGas will business will redeploy these and Some enable efficiencies. into are savings generated measures investment generate at cash several us already substantial that to the our the international key

Let's start with AmeriGas.

of delivered routing in We and automation, have efficiencies that relationship G&A investment process effectiveness, operational customer logistics. experience, operations identified and be redesign lastly, and permanent will distribution customer million over $XXX digital accelerated sales and through management, and procurement supply specialization,

initiatives, over talk You scale the These enhancements have been XX in investments the several have distribution deploying past. heard some which these efficiencies accelerate we implemented pace be next and of like about months over years. past us the will technology the of significantly fully the

by these to We expect investments the run rate of end benefits fiscal of XXXX. realized be completely the

XX% CapEx. million capital in fiscal transition attributable XXXX We XX% year year in will and XXXX, will to $XXX spend fiscal approximately cost and to of which be approximately

in fiscal We significant expect to begin see more modest benefits fiscal build $XX to year see and P&L in year roughly then and XXXX onward. benefits XXXX, the million

of business retention proactive the portion including to customer a initiatives in these be result reinvested certain approach to earmarking are business of We achieved a benefits to take the margins and as cost from growth, structure. our base reducing lower unit

company distribution the We operations, propane customer and best-in-class and focus. competitiveness terms these AmeriGas investments that position will are in efficient be safe to confident of

two at in as international centers which and a have our the we integration countries International. certain have the back-office UGI of business of service their operations customer teams underway through all goal with and XX identifying on of centralized functions across successful started establishment operate the across of enabling are After our on to Europe, to attention synergies process at we of the operating acquisition, Finagaz safe functions initiatives Similar focus centralizing excellence. directing we

or $XX focused plants. focused experience. savings. our other roughly across €XX will This our to over and projects permanent distribution of operational effort customer on network excellence and continuously And the execute annual One on million generate million filling will will be identify be to commercial improve excellence

the €X federal to million next The CapEx. majority implement and full see to to approximately XX the XXXX. more of the of realized expect million benefit We over be The end by will this months. than year the be attributable million €XX cost will fiscal roughly XX% €XX is of the benefit which XX% occur to of

a efficiency-focused our LPG LPG also we in the effective These XXXX. led sharing centrally across domestic and announced implementation critical structure platform will provide been our have initiatives Global more and September international best This under that practice for businesses.

with at We LPG at International, to tools leaders to are position these will transformational initiatives provide customers our AmeriGas Global companies digital customer that and important serving confident with a superior we be UGI our experience.

volatility operate. We in will to weather control based reducing on These contribute margins to drive and efficiencies cost continued and which in will enable we years. solid competitiveness markets for the the coming cost efforts

identified for of We both and North better growth execution position and continued American will also synergies. European acquisitions by businesses our

statements. over it John I turn will Now closing to the for

John Walsh

Thanks Roger.

Our to in our some territories. weather normal assumes pipeline and $X.XX capacity of guidance $X.XX the of for return fiscal XXXX service volatility

case guidance acquisition the in was our the our increase as XXXX, As guidance. for represents XXXX The fiscal year our in basis XX% are adjusted midpoint using performance normal weather XX of fiscal of over EPS we $X.XX. XXXX fiscal a

by fiscal last the a over we years. and next very three AmeriGas position. transactions we be fiscal quarter, performance a generation The and new and in the fiscal two provide Following expect with year the the XXXX challenging year strong CMG growth XXXX in accelerated to to bolstered announced enter in a strong be Columbia key and five solid AmeriGas earnings each basically for in environment transactions accretive when foundation transaction, neutral. Consistent cash to the we

the positive. expect acquisitions merger, transactions that AmeriGas highly of deliver from both we but cash of to the the $X.XX majority roughly this year, Together, accretion coming be will

we move over continuing and cash positive quite that with contributions along beyond, XXXX fiscal EPS into strong As flows we time. expect meaningful become

improve we the in U.S. our are to LPG and distribution of excited about Europe. the described, significantly just both efficiency right As Roger businesses, opportunity the

position performance. significant transition term and AmeriGas ongoing long and International service underway new UGI for investment result in for our will strong support. capital customer We are very The restructuring will and operating of expenses that a confident technologies expenses for and the work reduction in in deployment enhance

We over of will keep progress of the you the course year. apprised our

see in and both fiscal these programs and in deliver we fiscal benefits International significant Roger XXXX earnings modest noted, As full a contribution beyond. fiscal will in and AmeriGas XXXX from to ongoing for will XXXX, we more UGI benefit

by across our and changing federal, policies well-positioned sector production, projects thrive infrastructure executing natural and regard ramping As to dynamic is values, challenges particularly gas are we businesses. local uncertainty look All UGI energy with commodity to today's related in environment. demand gas impacted and state natural regional participants and legislation. to

of distribution businesses as us Our over an these various the diversified set provide with range energy out factors will investment of play next decade. attractive opportunities

One benefits of in the our is specific example business. diversification of midstream

past industry gas new the has has mid-Atlantic infrastructure timeframe of to the the for particularly projects placement two Northeast with in regions. in years, three multiple or the and changes major postponed. natural deferred Over This true been seen

of service One the in residents and Despite will the projects Jersey. remain bring project it and Pennsylvania the businesses recent reliable partner fully many PennEast. is challenges, the to and New impacted affordable, companies committed

delivered change ago. a infrastructure or who have environment three cancellation other that new UGI created This capacity of or or of that consistent range deferral Easter four Northeast in for incremental and wouldn't our foreseen demand have opportunities for projects years operating distributors growth. LDCs new are has The we and experiencing would to mid-Atlantic challenges presents the natgas

by of alternative our facility that under $XX other project our the in construction the most takeaway were in buildout The expansion was example Northeast specifically network vaporization lack deferred and of LNG with Auburn These Bethlehem, options Pennsylvania. million canceled. LNG being continued include Pennsylvania project earlier. as recent storage referenced enabled I projects our or IV This

see available day around constraints is filling capacity increasing We between network value of pipeline to network proving to gas this of vital be and LNG pipeline peak natural gap the to the Our new due demand. addition capacity. the

projects market The capacity to producers to uncertainties a These the high current efficiently appealing of well-positioned address newly to incremental some in manageable timeframe. acquired access. on particularly are within Columbia attempting related level This expansion is add of of systems interest to systems. the several

the As very demonstrate, well-positioned UGI these in current market is to projects environment. perform

examples, investment of timing scale point high In can also addition and of we a portfolio capital a the significant to spend. terms in those of to opportunities both with certainty degree capital of

continues its Our to outlook team demand gas spending. at and across is entire our strong natural demand service this see capital for reflected utilities intensity territory in

$XXX XXXX, $X.X we Following in our utilities CapEx four CapEx years expect exceed at million over investment investment to record of the total fiscal next billion.

exceptional an execution step Our customers. affordable levels job service and high this project maintaining strong change for very team at focus of utilities has rates maintaining customer achieving on in while safety, done a our of

underlying AmeriGas customer bending support expects significant strong exchange second generation pull its business, and to to deploy its growth capital cylinder in for ACE, solution.

the partners We solution that and leader technology innovation our to are regional appeals by clear customers. a delivering preferred our

midstream remains gathering on very Marcellus. Eastern the new Our team in projects active

Marshlands a related made We projects are over we the investments executing to the Texas range of and years. two Creek past

to very expect fiscal approximately million in with invest Marcellus the XXXX in We attractive Eastern $XX returns.

portfolio of following entered Columbia have a position fiscal AmeriGas flows broader transaction. We and with a year and enhanced opportunities cash in investment new the new strong Midstream the

We programs flow are to projects under and the earnings Roger LPG execution of or the growth benefit execute currently next to free range efficiency to earlier over that growth our described and development. cash position excellent three five and our years the strategy expect in from in

growth how into slide Let's for take created our in years. a Day translates few over Investor the look We next this at December. this business back

to XX% of while house to earnings to of approximately approximately fiscal expect that a our CAGR businesses LPG has XX% both from through see XXXX. at natural the we XX% our a the can X% of XX%, end to grow side our XXXX, LPG stated above natural fiscal of gas and or CAGR has you gas XXXX XX% high As the will target.

projects budget initiatives the years few and plan earnings across contribute expect to We the period. steady consistently next growth as and over

years. dividend. our milestone the obviously outstanding XXXX also with us are With our a X.X%. year we CAGR growth growing funding UGI consecutive for dividend on growth two future a past commitment In say seriously. addition fiscal decade now I for XXXX, we deliver over is our that to dividend has as earnings for was to growth. in this to also XXX our for dividend committed take confidence position can paid projects, commitments remain We increases in very an

We forward throughout year. progress the our are looking updated on to you keeping

call will James I your to up the open over turn who will questions. back that With it for James?

Operator

[Operator Instructions].

Your first comes from line Jefferies. ahead, Sighinolfi of question please. Go Chris the from

Your line is open.

Chris Sighinolfi

Hi. Good John. morning

John Walsh

Good morning.

Chris Sighinolfi

want OpEx I the I you slides just I I your breakdown with contained calibrate from just these we you treatment XXXX, the see to $XXX breakdown adjusted you noted the as Roger's have excluded of wondering I your investments and information and delta start €XX appreciate your your the in going over million I guidance. the could just or if CapEx could. APU costs making. that guidance, can of exclude and a explanation fiscal of much offered million or efficiency-focused at am some that? years. internationally from how are Roger so numbers to between curious, you quantify am from is it are exclude just there. if couple

Roger Perreault

talking. Roger is this Chris, Yes.

the the So would would the that think adjusted about it is, in numbers fiscal be way I OpEx XXXX. are ones

out. just plans And two XXXX, are OpEx so the and of rollout to would these So years. adjust that look really to course you if be the and year out of number, this at that's what the expecting efficiency up we I break over

Chris Sighinolfi

weight just Roger? you anyway? roughly in break numbers those Or the in half, do you would And front-end

Roger Perreault

and this a to little would be bit front-end year. pretty half half, close would loaded, say I Yes. I

Chris Sighinolfi

guys had that sort specific then through like around we businesses like here. them, with costs, And we just guess, have costs I investment idea the we costs came I you Can out around so guess have Finagaz. action, of are walk Okay. a transitional excluding workouts acquired when adjusting some had that? the I and saw Those some understand logic with labor you have me

John Walsh

is Yes. Chris, this John.

expenses UGI And this is long to a is AmeriGas logic investors non-recurring performance that International. for sure think these the transformation and one-time that is deliverables we of and And for major we the what strong term what charges. program are was fact wanted the we and others investing operating to sort kind were think sort the clear I of particularly it are, this that with were. of also associated fundamental make

we with to had cost around So business than rather sure one-time we of wanted our make reducing the cost base. clarity have associated underlying mixed the performance that with

it that's logic the scale just and of So important significant and company. strategically is the the to

Chris Sighinolfi

John, had presentation. think, to total CapEx today's roughly number plan $XXX the see featured in million you XXXX. in fiscal And slide didn't Okay. I previous noted, I in in invest business a that presentations, across

the hold a some plans mentioned $XXX these obviously that of have does LPG range You the year? coming long the for But utilities for good and million still business. at we the know investments expectation range as

John Walsh

programs would that. in which in the restructuring good The transformation will be the $XXX million we make addition to is a estimate, rough for or estimate core business. investment The highlight

Chris Sighinolfi

Okay.

was So expansions and just some already additional Creek there Was that embedded Or in you the and $XXX? that? XX? the Texas then noted are Marshlands, slide capital on

John Walsh

just million. opportunities incremental that's that that embedded yes, investments are See, as ongoing. was $XXX captured in in Those growth

Ted Jastrzebski

going are making be over the CMG to next As few years. the we were investments in of

Chris Sighinolfi

Right.

Okay.

items some So Roger efficiency that the outlined? only the are programs of really in additional the investments

John Walsh

Right. Yes.

Chris Sighinolfi

a breakdown fiscal if of could how XQ And XXXX? challenges? of then for sort us the and Okay. book and And on given just a much am regard from I rough then the wondering calibrate what just do the you what you the like CMG, did PennEast? And expect give fourth in to XXXX, for in final I for question with contributed then will queue, Ted, just much you profile how quarter. fiscal looks me back AFUDC to help hop

Ted Jastrzebski

Yes.

these the with on start me the numbers we let So CMG, while AFUDC. find

Chris Sighinolfi

Sure.

Ted Jastrzebski

roughly $XX with What expenses QX. in breakeven very operational roughly gains, in million, offset So CMG saw was increased we QX. in interest was

a terms little in accretion of in north EPS. to to of it CMG, bit XXXX, be We expect neutral

Chris Sighinolfi

Or Okay. that is you you based stable AmeriGas sloping expecting as some that sort But to a the stability you seasonality gradually somewhat discussions producer periods year And there line? something mean is outsized in some movement? see of on are where the the counterbalance a profile? of are business. provides I mentioned it positively

Ted Jastrzebski

closely fairly premium line of mean it the it low a our of over high and of end. the kind couple points So the AmeriGas out. mirrors levels I the it slightly But year. And in kind buy-in of points end couple year on a percentage of percentage slightly,

see So comes quarter-to-quarter terms the in moderates it the into picture next the how line as of slightly over we year. impact the changes AmeriGas

Roger Perreault

have, equivalent and additional volume of commitments we of just covers to comment we XX% have minimum or a underpinning CMG. What margin. on the two-thirds take-or-pay take-or-pay roughly one Good. And that got solid

underlying we you What a on if capacity. across and is of look systems margin at the the we other available that combination capacity near have are five systems, systems also have we So have, or solid. certain

very And systems on we system at have depending will adding other are we projects noted, we capacity, of market happens have, then commodity and with got volumes that to available during are we near us on we expansion where dedicated in the hopeful and because plans, acreage producer in some to potentially values So have or as announce. incremental and we broader individual the what we have the year upside capacity.

some pretty sort a then nice broad by contracts the we and So got of a of a have as evolves. tenure with long underwritten range foundation upside market

John Walsh

that, AFUDC, on you follow-up with on that. Chris And we will

correct to want make numbers. the have sure we exact Just

Chris Sighinolfi

the will queue. back Thanks guys. great. mornings in this hop for That's the time Okay. I

John Walsh

you. Thank Okay.

Operator

there would some no time. the back further closing I questions for remarks. presenters turn our call to over are And to like this at

John Walsh

your for and Okay. attention time this Thanks very morning. much

speaking call, in year of with will group you you XXXX many the speaking care. also on to We Look forward on. interim. a abreast Take as as keep next moves to the but fiscal you

Operator

This for participation. We concludes your call. conference thank today's you

disconnect. now may You

UGI (UGI) 12 Nov 192019 Q4 Earnings call transcript