UGI - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the UGI Corporation Fiscal 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation there will be a question-and-answer session. [Operator Instructions]. Please be advised that today’s conference is being recorded. Instructions]. [Operator like Manager conference of now today, your hand Zahora, Alanna Investor to would to the speaker I Relations. Please go ahead ma’am.

Alanna Zahora

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

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

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

Now, me turn over the John. let to call

John L. Walsh

EPS our Alanna. our an activities in across $X.XX hope our you to I'll positioning of while then XXXX. I XXXX comment call. fiscal I all Bob energy financial achievements and Roger for the GAAP to EPS solutions. welcome year and and major developments that of fiscal UGI's will over full detail ESG We conclude update Beard chance strategic Good review will Ted and release more UGI’s XXXX critical reported course it and will on performance. adjusted on our $X.XX. by for providing was over review renewable fiscal had On I a growth provide reporting full businesses will Perreault who press today's guidance call morning have our review UGI’s Thanks results. to then year turn on our our

Our with was of XX% Appalachia which last in our year roughly AmeriGas acquired impact a XXXX. fiscal the QX very EPS the above results pleased XXXX in the reflect EPS fiscal buy-in the adjusted year We're of closed full performance Systems results adjusted delivered strong fiscal UGI of XXXX. $X.XX. and Those

faced we due and significant warmer to those across quickly pandemic effectively operations, challenges of weather we While our the to and challenges. all responded

Our emphasis results on flow and as strong our expense cash management well. reflect

that his CARES We also on provide more significantly performance tax Ted financial the comments. Act. legislation during was benefited will of from details part our

XXXX into number As we look to key a fiscal guidance, of took factors our we account.

As noted for weather planning. a better on XXXX. our earnings our basis average foundation we financial fiscal to call, decided and this weather as assumption XX-year believe both QX We operational provides have for use

the of our pandemic see certain that through assumed have segments impacted We QX. we'll COVID by customer

took account. tax CARES also benefits to benefits total Act We tax Those $X.XX. specific fiscal XXXX approximately into

avoidable more pandemic, to removes will tax provide fiscal presented information of as attention needs the significant and now our call. leadership greatly overall injustice suffered all Those the $X.XX. racial as past no $X.XX. range the team, Cross the Act is communities XXXX as our UGI's and more guidance with few critical We as food the to much spend the we services our communities the to communities impacting food fiscal the educational the American throughout Our even performance a pleased volunteer discussing as and fiscal and tragic, The address Board, Army, in those weather EPS such Philabundance, doubt communities. like while employees We'll important $X.XX XXXX as fiscal such volume communities. financial weather, by urgent. we on number normal There our we the by in later in provide focusing call, have warmer on and also as financial homelessness up extremely In with burden challenges XXXX issues so our serve. approximately XX-year events nine teams Reading of support $X.XX critical XX% provide is impact performance insecurity you such in same were pandemic our Fundamental. of saw many Salvation made I'd on of of guidance CARES is EPS the specific of banks also such response, minutes and over factors and above were from that months COVID, benefits organizations XXXX role the tax to the guidance further is mid-point to our stepped adjusted our Ted our impacted Red which emergency a details those severely the QX

levels and a that support achieved a strive it record for our United for force but need good do of communities, our change for is more. We voice the also in to be to Way. long-term clear we partner, We

to bring initiative I'd before they diversity team is I vitally intend or the our to belonging, and year For also terms strengthen that few these entire belong to perspective, over months. reason to of points We coming critical in success. future the they highlight knows social coming We'll experience efforts and important thought, hand those we created updates have that recently and We're significantly BIDE is in Ted. UGI of a leader a truly committing at change inclusion, UGI equity to to to providing expand that and that we on to a and UGI continue to activities our those diversity us and quick during as months. be ensure within inclusion. like the diversity, ensure enhanced past strive efforts the in

Bethlehem by year, Throughput will X% those attractive more lower Appalachia we of were such despite proven take efficiently the pricing prior also natural LNG is Peaking season. flow a to and We're Our supported important cash environment, our portfolio LNG that of is supports an ours the service critical and plan half on winter can expectations our fiscal systems is exceeded XXXX gas acreage business for first significant we long-term Vaporization where approach up located Bethlehem commodity addition strong network pricing a pay the services peaking was Storage by systems on and almost all the System first of well-developed System, contracts. with to our full contracts. as value UGI our EBIT The systems contracts. The long-term of and EBIT one. in the have peaking decade UGI EBIT or generated the of systems that operating for pay and XXXX. serve almost utilized the past virtually fiscal from year generation. to long-term be generating acquired as or and segments take such of XX We the emerge demand million distributed demonstrated expanded. of as during with challenge network particularly opportunities we acreage completed other serving our transportation for excited over about construction versus production annually, serve that is developed volumes

another record as to deployed and has the consistent capital and challenges both in positioned while UGI LNG of levels peaking a commercial of expansion we in Utilities Our near leader mid-Atlantic busy critical of supply addressing had LNG Northeast. services our the network as pandemic. the year commitment

and see evident our segments clear iron a wide as leak emissions to is steel move replacement operational eliminate cast bare infrastructure We in environmental reduced performance. investment and our in networks. and methane trend in system fewer we consistent in Our

residential we and over heating customers. continue utilities in XX,XXX new to grow commercial as also We added our customer base

a We also programs. concluded our the National year had fiscal a going phase January. Accounts first increase effect rate latter of in part of into case another two very strong the ACE with in rate growth in and XXXX of AmeriGas

summer. volumes XX% of as COVID in customer combined the the Our demand base up spring were and almost Ace saw related we expanding strong our impact and

the financial This that Bob than weather through minutes. few review. Beard of combined had and of normal COVID enabling Accounts customer positioned margin year in considerably prior program details European bus National hospitality countries, our on Roger National was as deliver France. XXXX. March impacted the grew impact key impact Perreault customers and to than I'd Ted. efficiencies warmer in International despite volumes operating these is return us like on UGI and as over of outstanding as warmer growth to of effective as Accounts a EBIT well more it adjusted normal provide $XXX levels performance including will the this with our demand an for record some fleets for the despite well point in stringent school fiscal sector. turn to year, year was June this many and Ted million. such at groups, Our COVID management, to lockdowns operating

Ted J. Jastrzebski

Thanks, John.

and into quarter days guidance year. As full included call, to third and $X.XX, additional I higher resulting an of in a but our considerably we new for additional high The quarter. benefits the tax when legislation performance John before estimate full guidance as anticipated five we of taken difference full $X.XX our mentioned, results, the our impacts the call an place moving net On we're quarter carried The than losses strong was reflected took few to our wanted which GILTI, reconcile lower $X.XX benefit. operating $X.XX COVID an with pleased a or to very years. year out the earnings Act for CARES fourth businesses. parts back together $X.XX provided benefit fully tax loss better before we range report provided The year, that position that roughly of and or of came updated at just compounding tax from get remainder the particular

year ahead legislation. and we're headwind guidance approximately the new to $X.XX COVID XXXX, benefit including tax our for for Looking minimal related to the

positioned fiscal keeps long-term guidance of well growth XX%. us commitment to on range to Our deliver X% annual XXXX our

per adjusted $X.XX table out the we As and GAAP share prior year. to fiscal in mentioned delivered earlier, compared lays earnings versus fiscal This EPS XXXX. our adjusted XXXX $X.XX for of

items of XXXX. exclude year. instruments, instruments prior loss mark-to-market This in $X.XX of in to earnings commodity a Our on changes a year, the we hedging had currency $X.XX year a foreign loss this gain gain adjusted of in $X.XX the compared such impact versus as of derivative fiscal number $X.XX a a

exceeded million touch a transformation can and their for International permanent of we AmeriGas out As targets respectively $X.XX annual expenses fiscal business see, will in million commitments you realize XXXX with benefits. associated Roger UGI and to adjusted bit later $XX Both our call. on €X the LPG initiatives. of

as to and sold as the and identified out on reviews Lastly, regular was the the business wanted and sale related continued expansion Conemaugh non-core HVAC portfolio. of ESG the businesses. point The We drivers to strengthening I core the a Conemaugh of the disposition we our previous HVAC strategic to of on during our both calls. loss business touched asset $X.XX focus on

As an XXXX John challenging and key initiatives, like fundamentals, mentioned gas a making in did earlier, natural gas. areas natural the business renewable excellent job was on infrastructure expanding our key on business but our and year, progress executing

but experienced new compared year, cost focus the As share earnings and of and this proportion of able at you weather approach ACE can a impact Primary with still Consistent all impact our larger offset historical year-over-year of to our on as of increased the National the to agile experienced last was UGI the delivered AmeriGas, acquisition, of warm warmer a XX%. year we margin drivers International. more adjusted year on see, weather full the Appalachia growth bass recent than rates norms. businesses utilities, our management growth growth at of Accounts considerably calls, include UGI to discussions management per

and transformation, of only mitigate the capabilities will employee and development the a for efficiency across leveraging the our of project efficiency within our the global come. initiatives technology, including fiscal foundation businesses, and connectivity incorporate provide improvement which in best will for these our in departments expansion began warmer project and a cost each UGI practices to years further improve manage transformation opportunities. to This provide platform, centralization support over that increase important This ability procurement, the global now finance, will and HR, lens is redesign, will activities initiated and Our years standardize future. than of establish functions three our XXXX anticipate expected an next impact review, processes more has start and to year weather transformation continued IT. we we using between of

of $XX costs of half will going to expect non-recurring two investment years, OPEX We to next million. attributable over roughly be which the $XX of result million to annual three in savings

volumes to due volume last than industrial impact commercial versus on X% Turning X% decreased other was Retail primarily residential to the volume loss. warmer the declined impact of and EBIT X% the AmeriGas that year. and business, XXXX, COVID-XX weather

on margin margins. Accounts total the by of ACE slightly base record higher volume business unit offset margin Some National impact and was and

unit While of year ACE tailwind Slightly compared XX% did only total of the in margins a at accounts the to uptick results The were from transformation initiatives, in a related COVID impact The compared lower $XX higher offset operating XX% portion Roger warm a see a a last AmeriGas as of and we the to last mix, Total of to are UGI of number overall customer half the impact margin small due the lower lower from another LPG volumes. volume. the XXXX lower which expenses volumes, primarily decreased a items, to offset very to million efforts compared costs portion team and of second year discuss strong slightly including COVID-XX. progress to weather International's year. despite year few and the EBIT impact will volumes. on helped management of LPG margin delivered international strong minutes. increased of

see, expenses compensation lower to you distribution can million, largely and operating due and decreased As $XX expenses. administrative

the offset which euros worked changes of at roughly Our currency the foreign EBIT intended as anticipated equal. year-over-year the and hedging is strategy, dollars and are level to in impact improvement

other which on Utilities contractor than of market administrative the XX% offset margin, partially a Pennant to $XXX Total IT $XXX driven the expenses year that income depreciation was entered the UGI to from amortization, of had which higher was base margin driven is $XXX Xth. the we're by marketing the adopted million million to EBIT of Appalachia which weather to and of Core Total in higher the warm rates acquired October income was $XX in and of the largely equity reported new XXXX. COVID-XX. effective was XX, operating in consulting being the and compared increased October million and became and reflect speak decreased main Turning acquisition prior UGI other to increase impact Other order as part rates topic, On year. of The due and that all million, for natural X% that in report the our for driven XXXX. was income midstream by expenses, by pleased transportation slightly gas improvement. house, last result the the side was UGI and by and driver base Like Bob, utilities year-over-year decreases This XXXX, acquisition. more volume XXXX, system moment. EBIT OPEX to Appalachia. of lower compared businesses, maintenance in costs the higher this expenses. and year. the reported by

position, consolidated about our a us deal year with serving higher continued Lastly, last as COVID-XX finish by we the sheet distribution COVID-XX. the billion available Corporation of $X.X the fiscal up situation. as $X.X in of UGI the leverage impact on fiscal fiscal On billion the despite basis, close XXXX. have position of seen XXXX, reduction ongoing position. had expense want I and the of a to balance of talking from to system we balance up result depreciation CAPEX had IT end sheet, activity. maintain a in continues liquidity uncertainty strong our versus consolidated UGI to our liquidity year in well at Staying a

weather as debt. this continue trend expect and assuming to Bob? that, to I'll turn to with over pay Bob. call growth, earnings normal continue With down the We we

Robert F. Beard

in natural businesses the the operating of of weather was versus businesses for contribution increase and the The Thanks, utilities Despite saw with new effects rates year, services are managing well performing natural nearly our that utilities, utilities FY Appalachia, gas at control efforts at of warmer very the energy to primary a XXXX both XX%. growth adoption expenses. the and the good drivers natural prior at year-over-year while in EBIT the both quarter X% teams COVID-XX of this energy Ted. the of the QX pandemic. UGI of gas services base was teams gas EBIT and a

facility, million recently energy system schedule, services to should of and completed team mentioned, credit services XX,XXX per and the supply challenging the on Bethlehem utilities John system. UGI This will project came in be energy deliver day into such As reliable, $XX budget on on dekatherms so the LNG distribution times. for executing much during given which well

natural renewable commodity our the Our midstream for remain on we see or in for the assumptions, believe company meet for pleased we continues platform exceed continue gas the low area. will as natural significant in August the UGI even We activity focused GHI, We're business Appalachia continued for UGI. the strong. very acquired to energy We've expect remain gas with we in encouraged space and to and business opportunities with do midstream for demand be very of natural of well the renewable been most FY outlook renewable gas this we business space performance XXXX. in see as pricing with to GHI case growth a

production in Once is to plan reach million is is feet the XXXX. and move RNG initial the existing in market. and commence this that of The dairy step took RNG cubic to in upgrade investment upgrades it to and an utility to scale earlier make in plant, project XXXX, another to pipeline as is we definitive commissioned renewable RNG a expected in agreement a process equipment, expected to late new hundred station important processing and consists digester currently processing to into RNG energy this existing gas services involves new a acquisition facility expanded upgrade week, an electricity. of annually generating several interstate a the generate compressor Just Idaho. to entered XXXX The in production small full

front than is our territory regulated dozen the to pursuing projects their developers to throughout gas market. RNG our work we service utility with On a as more bring

of has investing demand renewable marketing can sustainable the non-core cleaner, Conemaugh capital another energy I deep energy of and direct asset LLC. Utility believe to despite we generating Utilities of the continue a pandemic, in million. UGI to emissions the in commitment Of emissions. our more headwind infrastructure see commenced year miles more utility The announced as of iron to utilities emissions aged our services stores, and retired on focus facility new a our third to Auburn ESG IV, of result significantly service program. $XXX quarter we grow the FY Montour additional XXXX. for efforts. over facility as meaningful CAPEX. XX of a is As expect like our demand during gas the reduce the Replacing project annual growth, steel intensify Auburn during grid. see of utility for by FY UGI with of we Conemaugh, years enabler few natural the over Customer exceeding gas pipeline than is business replacement will next reduced to enabled regulator. on territory. to we we have our energy note months consistent other we significant XX our construction sale is few mains commodity this and aged by of A positioned call the past particular these and our nearly XXXX. our XXXX, serve had the and deployment, well seen mention interest COX customer market in reduce XX% service and as in QX strong XX% IV COVID-XX strong UGI’s the continue service COX commercial of considering include, Since cast items XX% note midstream approximately across electric more experience, than mileage has including to an retired as than sale increases bare I'd X% UGI’s more reduction

fee. project nearly through from of good margins prices. million XX%. the approved rate increased Annual times in and This margin system that team Utilities Public Commission Utilities Xth, all Auburn low services October is the of is case. energy gas fixed almost Auburn is result $XX.X expansion, how Pennsylvania FY the during volume example Utility a on XXXX year-over-year growth of even importantly system formally natural XX this a bcf the was gas of As rate driving case, or UGI

of important an In an the will base addition of is pandemic. rate bad continue to this how in be as we debt navigate to rates, increase case effects addressed COVID-XX provision the

natural We exceeds our treated to Therefore, COVID. for in settlement and amortized this bad debt due that included forward, and gas bundle view be over as XX bad asset related level. our COVID mitigates effects be at Going debt as expense a risk very any will years. capped current this utility will positive plan expense a regulatory as case P&L the rate it cash next provision flow our of

cooperatively Lastly, regulatory the of Department due expect Army with the The Environmental PennEast and all agencies working well near the for agencies we in Protection, Phase of [indiscernible]. as of know more as conducting is that appropriate future. Pennsylvania the purview Engineers, including are Corp to one, some the diligence have U.S.

to I'll it turn Now, Roger. over

Roger Perreault

and portfolio AmeriGas International by the full the normal customers, in ability diversified effects very of Thanks, EBIT commercial weather. delivered margin We're strong industrial with fiscal manage and the Even with of global it UGI than lower our COVID, volumes despite pleased driven applications, States. Bob. quarter, result offset the in LPG significantly geographies, delivered this of both warmer challenges value Europe The year last our United results weather line in year. with COVID fourth and and demonstrates expense and the and businesses to roughly warm to as of

XXXX. transformation realizing million AmeriGas and over our provided million fiscal These UGI realizing International. underway exceeded that benefits efforts financial on execute $XX commitments, AmeriGas and year our to €X over continued teams efforts our quarter, last the During in International at with

to million expense million through in Our and an remain in strong helped volume dedicated which head in We LPG well weather. professionals global business across for deliver additional warm expense management, $XX margin AmeriGas uncertainties the International and and compensate of and generating confident that on positioned $XX reduction pricing are despite the pandemic businesses the shortfalls. results additional faced XXXX, challenges our fiscal

addition USA. while our territory In wildfires reliable their by The Southeast service the exchange on demand customers in the our Cynch the handled delivery providing communities U.S. the in team and in also solutions the and employees. our throughout remaining managing to in has carefully increased home Western commitment Europe at increased and historic energy season margins, in brand cylinder team to expenses demonstrated customers our service focused to U.S. and in demand our and businesses our both safety of our hurricane

move more let's to Now, AmeriGas. specifics at

will a annual reminder, $XXX of XXXX. total end announced AmeriGas As excess previously fiscal the million of investment a that expect program at $XXX in of million we by benefits transformation includes provide the

approximately the business. forward, conservation, churn, million. inflation, impacts expect and exceed will structural our more of slightly effect the initial investment look offset a we $XXX evolving million than customer higher we deliver our This and As mix to at estimate of $XXX of benefit

our call, the to support we value customers. As focused proactive third from retention program investment benefits the growth approach business targeted portion the of in mentioned have on to a for high on and quarter achieved customer earmarked a

continued out drive for for to one that to business. I year. experience total like and XX deliver our gain. to allocating additional we cities value and towards will the As improved to share exceptional approximately efficiencies core continue position in market across two and to will the coming customer out and pricing XX customer in on a third business the two processes, AmeriGas such, rolled the approach coming The drive focus would be growth a beneficial the and of will strategic in an we USA additional over been reach long-term roll lifetime customer strategy, of savings the Cynch has are retention items initiatives a years. digitizing growth highlight few cities

despite solid near-term Accounts challenges National continues program Our to the growth pandemic. of the see

reengineering are and systems Our key part efforts now of the operational. that processes transformation of are

way and managed and center, centralized the of fiscal customer new with importantly, a of new achieved a tools. tools, in art with most excited year be new customer the this fact, tool, forward various the improving and services been we customers possible. most mindset about routing our satisfying points In customer management engagement will a look state that logistics We're the has efficient digital to work touch continuously

the weather demonstrated As the XXXX, unpredictable fiscal of effects patterns. management of offset expenses diligent will lingering continue and in to COVID discretionary our teams

Now to moving our business. on international

mentioned international pleased earnings team €XX is million track. improving much experience our of on benefits report that efficiencies calls, still of deliver As focused XXXX. am in of fiscal by with these investments on are also €XX the annual driving very I previous will end the and million customer over euros to that objectives

addition normal driving fiscal headwind resilience In all team than to the tremendous in our weather. on focus international offset XXXX laser efficiencies, warmer and nearly demonstrated significantly of the generated by

strong initiatives EBIT transformation and investments a provide continued for performance. path recent Our

our design. effort organizational is of transformation component Another

now that two excellence place have value. We and fully established centers of delivering are in

various brings entities, and first practices excellence, between on operational sharing including The focused is implementation operating of the best our this center AmeriGas.

employees supply our year team excellence in demonstrated is in to having our assets includes Inclosing also instrumental performance de-fossilize of while place. is to focused infrastructure. and and we leveraging our effort capabilities U.S. challenges renewable other brought transformation excellence, fiscal about XXXX our excited The We're of commitment level solutions. operations validating and the the Europe, renewable efforts. high existing on as the This which continue our our of center commercial yet unprecedented in

the contributed and solid in operational COVID year a on that to results impacted by focus cost continued management Our was pandemic the significantly efficiencies and weather. warm

and dedication proved multiple successful the across this yet strategy again. employees. customer XX to segments underpinned was XX,XXX countries by plus all Our And our and of geographic community of diversification safety, of customer,

Now back John. to

John L. Walsh

to change customers, has energy to we investors employees, and at social, Thanks in underway to position the our environmental, commitments the emerged the and UGI the thoughts governance challenges communities new spend and the time Roger. of opportunities minutes ahead I'd have sharing looking like about a UGI’s few a make significant strength and due now serve. distribution we our on when sector. always focused

We efforts. and stated difference focus programs accelerate efforts the our about support been impacted have on on who a I pandemic commitment of to the by our reports detail ESG our those individuals making racial injustice. and and provided and our commented our social those families earlier in have in can we significant where particularly importance communities,

the growth we into GHI, This our past also across opportunities the to of to facing a RNG identifying footprint drive the carbon and acquisition California future today, renewable offer climate building focus serving growth. for to equally opportunities to we're on a committed changes sourced attractive and natural we're summer, solutions. Those this Turning while on UGI’s are primarily developing in will all U.S. range focused investment platform come reduce to that We're transportation environmental gas energy renewable announced beginning customers with company us. of commitments

a just UGI in project infrastructure. opportunities particularly As emerging feedstock aligns believe RNG is perfectly We're Bob Idaho rapidly mentioned, develop We additional feedstock well this in we week, with RNG that announced and investment this positioned of exploring number that this to actively an commitment. both distribution RNG opportunities involving market.

our plus the to an potential an us. but significant storage, bio RNG, directly to of LPG are provide are team can our solutions feedstock of connection infrastructure around range as large and serving new addition solutions. our eager is when physical infrastructure. customers bio natural RNG They transportation of project a the in for environmental as customers developing on affordable, work sources to depending We'll and can deliver project portfolio communities. utilize service investments renewable source marketing gas distribution to with existing growth bio commercializing other many also particularly over crucial customers We the to is technologies. excited solution of address Sweden. in build applicable field support the to out. battery and those solution customers the gas also local RNG found X promising additional infrastructure We customers We personnel to standpoint, development, and supply recognize for of and about our progress opportunities our LPG million resilient, opportunities and that developing attractive carbon is negative and LPG LPG solutions several are of most and no incremental Investor next these to opportunities see needs we're Our the outstanding can We're directly our UGI. Similar renewable our carbon includes our potential provide These our infrastructure, renewable actively management. our since to our customers, to or to be feedstock. experience new LPG much and strategic in communities existing believe the feedstock million bio bio and related and The potential brought us augment date solutions exploring significant in energy of in disruption about the We're areas LPG growth LPG with that it month. RNG companies zero solutions. objectives. storage, excited solutions by hydrogen, energy We're bio and no our more From enable investments short-term, RNG emerging execution, served on RNG activities these to achieve renewable we no will reliable, our the fundamental X community by detail renewable Day

accelerate new will the opportunities. new gas role, of to resources, leader as an continuing efforts UJI's expand important I'd with future, play and invested position XXXX accelerate development solutions UGI leverage Those growth return LPG infrastructure First, the to natural comment our but growth footprint mix business the energy our capital for brief LPG transport and on but gas existing renewables, fiscal and and and like reach customers create in delivering natural of After the rebalancing renewable to our year. all that and almost residential, the and team to industrial, and sourcing across commercial, look well and Europe. outlook to to negative U.S. carbon beyond free our in carbon solutions existing a a

$X.XX. COVID $X.XX fiscal $X.XX. guidance tax The our Our assumes XXXX by represents roughly over our of XX-year XX% and lingering weather of adjusted of impact new will performance fiscal normal which in to guidance QX, midpoint a our XXXX in EPS impact $X.XX increase volume some EPS mainly

impacting teams and we're deliver in the As up our commitment your to position our an year. to expanding of With Ted that call of to on our opportunities our We're meet on long-term our in throughout who being back work opportunity say growth, very by outstanding as growth earnings by portfolio keeping operator, communities exceptional XX%. December it for with EPS continue commitments excited year quality to on life past the looking can strengthened the Day will that, noted, the first we and of progress you confidence growth annual questions. renewable Investor with our to about over positively for carbon open we remain performed to the positioned turn the well X% carbon I'll the low our I future Xth. deliver solutions. forward updated over We're

Operator

Thank Instructions]. [Operator you.

Our comes Shneur question UBS. from Gershuni with first

is line now open. Your

Shneur Gershuni

the that around good for we maybe wondering is morning start Hi, was everyone Good XXXX. I thought to everyone. and guidance see well. can process the safe with if fiscal

extended sort the an of an restaurants and season you for the sensitivities just and Wondering having XQ of pluses thinking of to are of like other have impact kind give You talk need XQ potential, cases about there an would are cylinder where you we about alternatively, are then exchange to with bit, a adjust we can cases as globally? are be using that kind obviously that’s thinking is for process lamps wondering due there watch that us be the just thought if of to you sort of offset, sort minuses, forth. if some COVID a to impact you and can could is there or little sort so

Robert F. Beard

Shneur. thanks Sure,

has segments doubt, in on our we seen the Without business. the sort we're see customer beginning fiscal that incremental pandemic, of of of part segment, general COVID demand growth demand as we since continues it of the to that enter as our terms estimating a different impact a out impact segments business. in you the of year, sort we point differential or In which have seeing the in the cylinder it

demand We as being families full residential among customers school and also time opposed working. see are because most to very home strong in

So and transportation residential some And the quite impacted strong. segment we then that, segments well. is the the core hospitality of demand see as offsetting

that estimate view. balanced of sort is on based the So

The is in begin and the of into through approximately our job experience that that, having view looking we're terms work very why we customer We impact. after QX the we now core done we we Our and we XXXX. for around FY estimated provide to we're move situation mixed incorporating into like felt nine of segments, at XXXX, different the it's demand much seeing, in that is that that FY saw have some specificity were this with But likely we've And absolute feel of it. impact a sectors in the accurate impacted through that bag guidance. demand, months that's how segments being fluid, see can best ways. different we but to terms working of we relatively with different could as in we terms what

Shneur Gershuni

people Great, need still demand they so are basically effectively. and keep still at home

leverage in? achieve, hit which, step to obviously up material is was I some you in have can fortunate thinking CAPEX you or think wondering approach dividends like end you sort after of for you'd here, calculation. if bring that obviously pursue and and of leverage there to think your I down cash dividend at up, which talk put other Okay, this and just transition type that positive does in then can the I EBITDA free sort further. going is When time target when guidance where appears that your in situation little changes of your same But might that yourself to whatever about, a a position buybacks that about a you bit just about flow a about to year you're see be you're your it going or that situation, up,

Robert F. Beard

briefly comment we're then comment certainly to Ted let have. I'll capabilities fortunate have businesses the as across Fundamentally, generation and our cash Sure. I'll we well. that

you priorities, in us paying are of position down of forward execute terms address on noted, alternatives then us puts apply as up of how that the And strategy, cash. terms we move in the strong short-term we being it in debt. as that range for and are to that able incremental in a So opens a really which

moving So forward. a we range have of options

priorities in term, to our Ted are comment at point I'll short think but well, clear I as it turn this to Shneur. the over

Ted J. Jastrzebski

a clear as AmeriGas have down a to to sharing, in we'll we levels that build we've down we been to years. doing consistent yet. we've not lower as books want We're kind off Shneur, of we multiple, to that in. like as over just next the We the on now pay acquisition Appalachia past as that four to on Yeah, four debt and the quarter. most be couple we UGI talked took get things, those there And that four debt see corporate in of also, the and fairly did the of buy that we'd the AmeriGas of

as the the if to so three go shifting over see won't become focus for what otherwise or we next yeah, absolutely But away business that debt corporation. everything four all some that entire guess true. to of years. suggesting years, stayed of the units for will it directly I static next the you're be just some several And the starts

pay generate dividend out. potentially we us won't facing of debt We We lot way have that couple strategy couple We'll But the over of down will cash. our at of looks that's will have a start next years. to what the years really to like the point. a revisit

Shneur Gershuni

the when of you've going that that. or remember APU what transformation either Well apples comparing about XX-year can of there changed weather corporate to from related perfect, any got a you level? that at the was couple Are we XX-year all, to of really the I call, And prior appreciate remind contemplated if fiscal a us transformations two Maybe charges If business correctly, on apples. for sort doing are XXXX, $X.XX and a small forth. first so different are just you're you negative impact in weather. clarifications, OPEX

John L. Walsh

this is Shneur John.

weather weather, impact. on right on you're the the Just

transformations because through will and terms that Day those let AmeriGas detail as additional in XXXX the ongoing certainly and as On the quarter we efforts, into to charges will I Investor call both question sort we they're On third about XXXX the transformation it change roughly domestically of on more be was talked certainly and of at your related comment transformations, But Roger that FY Europe. and ongoing on provide $X.XX. well. can across with well there

Roger Perreault

John and that to and good Yeah, morning, spending there approximately be XXXX XX mentioned, the certainly we efforts OPEX estimate million million we rest then as continuing and to of Shneur. CAPEX. XX in fiscal will execute and are the that be OPEX John we transformation to Thanks, being is

fiscal benefits initiatives we've will roll transformation to executed continue of we XXXX, the initiatives have As highlighted and XXXX throughout XXXX. in and the the of our then by will end

Shneur Gershuni

Alright.

Ted J. Jastrzebski

Shneur XXXX will with that. about add be support I that would the will be million about be And $XX function we on and OPEX. transformation, making investments that investments half total, will In through the of

Shneur Gershuni

OPEX. that what perfect. effectively of transformations, you you're it I was was like if that's charges a wondering to to being I incorporated assuming I on trying negative what related to like as just your have is these OPEX saw knew kind size guidance these versus that into that's was that And on Yeah, figure out, your money to spend CAPEX trying classified some

that, So once you ex correct? then transformation, remove essentially, the you would that would be OPEX ongoing finished that not

Ted J. Jastrzebski

those investments, capital are would investment onetime portion investment, out. that be we pulling for mean, longer right, of made costs, that adjustments for We it. right, making I so OPEX we're we've these the made remove and we're up will non-recurring and from adjusting that once one-time no are and OPEX OPEX

Shneur Gershuni

to Right, over isn't the wanted run. no, that's an long exactly OPEX I that what that charge there's necessarily understand, recurring

helpful. super guys. the was color. Really that So you, appreciate Thank

John L. Walsh

thanks Shneur. Great,

Operator

you. Thank

with Mark comes Solecitto Our from question next Barclays.

Your now line open. is

Mark Solecitto

Hi, good morning.

clarification like XXXX as baking -- initiatives, assuming your far transformation in? are the guys guys are you savings related what on point one you what just to Just as guidance, of a

John L. Walsh

at two don’t ongoing most that, International. transformations I comment certainly Why UGI let of and Roger the AmeriGas on significant the

Roger Perreault

International. that ramp International to fiscal mentioning, Yeah, at XXX was XXX In be AmeriGas XX and -- think million XX at million reaching we million Thanks, I million in at at €X a International. million at John. fiscal it's of AmeriGas going the be XXXX, year we're €XX about will full euros sorry, and and reaching million in up a generated

Mark Solecitto

in P&L what then should with that customers and think of the how guidance? about curious that, past benefits like your you mentioned those so be just to your you're we guys in think I your I some have Great, factoring sharing guess, you'll in

Roger Perreault

that Yeah, segment taking we're to market Therefore, that a quite third we're could is that good so continue different programs that we that we of That's we mentioned, of about comes benefit going the look applying of as develop on really the a a it efficiency benefits segments, across is level our where making investment. and customer to reduce improve rate churn when we'll at an in churn. there's here identify the area able it been to return go really in likely that's and advanced those U.S. seeing if to investment and segment to color from to and as with to the forward small help that And we we've what the as analytics, to high. continue landscape residential where that very commercial provide we our we're there's churn. had competitive we're

Mark Solecitto

if also I provide and PennEast, the And what on commercial update on okay. a project, terms front gears on the path on bit wonder is regulatory could both an it, then you in Got that, just shifting little forward for the that side?

John L. Walsh

input at feedback Essentially And very that's in and in case comment. a terms we're this feedback a Bob key and filed. comment and from Court near the the this I'll General project. let for future I that's looking awaiting the been Solicitor this. Yeah, from John, is that Supreme briefly have we'll following will case on steps for We're time, on a through of working essentially driver next PennEast

We from Supreme hear the whether will to feedback as expect the Court they case.

as we're that well. milestone really Bob a also But I comment in let important that's that will hoping So project the is upcoming. on

Robert F. Beard

John. No, right that's

as front, to what as the far also us and issuing And who scheduling, the project. agencies, be continue will regulatory with construction We we permits you. continue work on the to working have with work commercial

or take to decision not await up the Supreme said, potential Court the talk whether they're case. to to continue We to shippers. the we by And going as John as

Mark Solecitto

Thank Great. you.

John L. Walsh

Mark. Thank you,

Operator

I'm now like further would any over time. to this closing questions Walsh back turn Thank you. the to call showing John not at I for remarks.

John L. Walsh

on being thank with morning. the time you look forward Okay, of to progress opportunity next on updated for the afternoon our Day much Xth. very Investor this We our you keeping your December

forward of to look then. care. all Take you So seeing

Operator

Ladies and today's you gentlemen, participating. Thank call. conference concludes this for

disconnect. now may You

UGI (UGI) 19 Nov 202020 Q4 Earnings call transcript