Good day, and thank you for standing by. Welcome to UGI Corporation's Fiscal 2024 first quarter earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Tameka Morris, Senior Director of Investor Relations. Please go ahead. Good morning, everyone. Thank you for joining our fiscal 2024 first quarter earnings call. With me today are Mario Longhi, Interim President and CEO, Sean O'Brien, CFO, and Bob Beard, COO. On today's call, we will discuss our near-term priorities and financial results for the quarter before concluding with a question-and-answer session. Before we begin, let me remind you that our comments today include certain forward-looking statements which management believes to be reasonable as of today's date only. Actual results may differ significantly because of risks and uncertainties that are difficult to predict. Please read our earnings release and our most recent annual report for an extensive list of factors that could affect results. We assume no duty to update or revise forward-looking statements to reflect events or circumstances that are different from expectations. We will also describe our business using certain non-GAAP financial measures. Reconciliations of these measures to the comparable GAAP measures are available within our presentation. Now, I'm pleased to turn the call over to Mario. Thank you, Tameka, and good morning, everyone. As I have been engaging with our people at all levels of the organization, a key objective of these interactions has been to better understand our culture, strengths, and the improvements needed for greater financial performance. Now, what is evident from my time on the board and engagement with the organization is that the fundamentals of our core business are solid. In Pennsylvania and West Virginia, we operate attractive regulated utilities business that deliver over 10% return on equity in aggregate. These businesses provide earnings, stability, and growth due to continued customer additions, the long runway of opportunities to replace aging infrastructure, and reduced weather sensitivity due to a Weather Normalization Rider. At the Midstream and Marketing segment, we continue to optimize our portfolio and benefit from earnings reliability, given the significant proportion of fee-based contracts. This business serves gas and electric utilities, including our own UGI Utilities and many top-tier customers in the Mid-Atlantic region. As I move to UGI International, there is no doubt that the propane distribution business has and continues to provide attractive free cash flow, which helps to meet capital needs and paying the dividends. While there is some weather sensitivity and regulatory considerations, the business has strong market share in key countries and great brand recognition. Now, our final segment, AmeriGas, has experienced several challenges over the past few years that have affected volumes and ultimately earnings. While efforts were made in the past to address performance, it is evident that there needs to be a renewed focus on execution. As a result, we are examining the operating model and business processes to determine the adjustment that is needed, along with disciplined execution to effect a positive change in the overall performance. T his takes me to our key near-term priorities as we embark on the journey to better position UGI for the long term. We're taking actions that should realign our cost base to the underlying business performance and enable us to become more cost-competitive in a sustainable manner, as well as allocating capital to segments that have a solid track record of providing attractive returns. These actions, along with other prudent measures, will allow us to strengthen the balance sheet, improve our credit metrics, and evolve into an organization with more financial flexibility to capitalize on future opportunities. We have a dedicated team of employees who are instrumental in accomplishing these goals in advancing UGI. Going forward, it is crucial that we operate as a unified and collaborative organization, one that is customer-centric and with a high-performing culture. With that, I will share some of our key highlights for the quarter before handing the call to Sean, who will cover the financial results in more details. For the quarter, UGI delivered adjusted EPS of $1.20 in comparison to $1.14 in the prior year. These results reflect the strong performance of UGI International and the natural gas businesses and underscores our commitment to our customers, shareholders, and employees... as the team previously anticipated and discussed on the year-end earnings call, AmeriGas experienced a decline in its year-over-year financial results. Also of note, during the quarter, our regulated utilities continued to deploy capital, primarily in infrastructure replacement and betterment, and added more than 3,500 new residential, heating, and commercial customers. In December, we received approval of the gas rate case for Mountaineer, which went into effect on January 1. As a part of the settlement, we were also pleased to receive approval of a weather normalization rider with a 2% dead band, effective from October 1, 2024. This rider normalizes revenue and customer bills when weather deviates from normal by more than 2%. Finally, during the quarter, we completed the sale of several energy marketing portfolios in France and the Netherlands, further progressing on our objective to exit the non-core energy marketing business. With the actions taken since January 2022, we have reduced our customer supply locations by over 97%, thereby significantly reducing our exposure. With that, I'll hand the call over to Sean. Thanks, Mario, and good morning. As Mario mentioned, for the fiscal 2024 first quarter, UGI delivered adjusted diluted EPS of $1.26, six cents over the prior year period. The utility segment was up $0.02, as benefits from the weather normalization rider and higher base rates offset the impact of warmer weather and slightly higher operating expenses. Midstream and Marketing was up $0.08 due to lower income taxes, partially associated with an increase in investment tax credits. UGI International was up $0.18, with the continued exit from the non-core energy marketing business and increased total margins from the LPG business. AmeriGas was down $0.16 as the business continued to deal with lower volumes and increased investment in operations. Lastly, Corporate Other was down $0.06 due to higher interest expense and income taxes. Now turning to the next slide. I'll now walk you through the key drivers for each reportable segment when compared to the prior year. Starting with the utility segment, our regulated utilities delivered EBIT of $135 million, up $7 million over the prior year period. Despite significantly warmer weather, the business benefited from the weather normalization rider that was implemented at the end of October 2022. Utilities realized an increase of $9 million in total margins due to higher gas base rates in Pennsylvania, incremental benefits from the DSIC and IREP programs, as well as continued customer growth. Electric margins were comparable with the prior period, as higher base rates from the recently settled rate case offset the impact of the warmer weather. Operating and administrative expenses were down $3 million, largely due to lower contract labor cost and personnel-related expenses. Next, Midstream and Marketing reported EBIT of $102 million in comparison to $107 million in the prior year. Total margin was flat year-over-year, as higher margins from the natural gas marketing activities offset the effect of the warmer weather and lower margins from renewable energy activities. The segment realized lower margins from renewable energy, largely due to the timing of RIN sales when compared to the prior year. Operating and administrative expenses were up $2 million, primarily due to the recovery of an uncollectible account in the prior year. At UGI International, EBIT was $117 million, up $51 million on a year-over-year basis. LPG volumes were up 4% due to increased natural gas to LPG conversions and weather that was slightly colder than the prior year. Total margin was up $64 million, as we realized year-over-year benefits from the continued exit of the non-core energy marketing business, increased LPG unit margins, and the impact of higher LPG volumes. Total margin was also impacted by the translation effect of stronger foreign currencies, amounting to approximately $15 million. Next, while operating and administrative expenses were down on a constant currency basis due to lower personnel and maintenance costs, this was fully offset by the translation effect of the stronger foreign currencies. Lastly, UGI International realized a $7 million decline in other income, largely due to lower foreign currency translation gains. Lastly, at AmeriGas, EBIT was down $39 million on a year-over-year basis. Total margin was down $34 million, largely due to a 13% decline in LPG volumes. This volume decline was primarily a result of customer attrition and warmer weather. Operating and administrative expenses were up $8 million, largely due to higher employee-related costs as the business increased its delivery capacity and vehicle expenses. The business also realized a $3 million increase in other income, largely attributable to gains from asset sales. Moving to liquidity. At the end of the quarter, UGI had available liquidity of $1.5 billion, inclusive of cash and cash equivalents and available borrowing capacity on our revolving credit facilities. As we've shared with you over the past several months, we are focused on strengthening the balance sheet. This is an important near-term focus, particularly at AmeriGas, where we expect to further reduce debt and provide more buffer on the credit metrics. And now I'll hand the call back over to Mario. Thanks, Sean. To summarize, we had a strong start to the year, which was in line with our expectation. The team is focused on the near-term priorities that I mentioned earlier, while also continue to execute on the strategic review. While there are no new updates at this time, we are in the latter stages of the review and anticipate providing additional information by the Q2 earnings call. Lastly, our actions are intended to address the business performance, continue returning value to shareholders through dividends, and strengthen the balance sheet, which should provide financial flexibility and enable value creation in the years to come. With that, I'll turn the call back to our operator to open the line for questions. Thank you. As a reminder, to ask a question, please press star one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star one, one again. Please stand by while we compile the Q&A roster. Our first question comes from Gabriel Moreen with Mizuho. Your line is now open. Thank you. Good morning, everyone. Maybe, Mario, if I can start out at the comments you made about examining AmeriGas's operating model. If you just would care to elaborate on that, and I'm also curious about that within the context of where customer attrition stands at the moment, and, I guess what metrics you're looking for on that, that customer attrition metric to see it improving, where you wanna see it going, and also just other facets of how you're thinking about running the business. Morning, Gabriel. You know, every operating model has a number of elements that need to come together in order for us to have a sustainable and efficient way to deliver value to the bottom line. We created a frame to go and look into every single one of those elements. Their interactivity is what will define our ability to get to a more sustainable situation and then evolve into improvements. If you just pick one element and you focus on it and you improve that, but the other ones are not evolving in the same manner, you, you don't get the results you look. So we're actually starting also with the bottom line, and we're checking every contribution that we must expect to have from all of those elements in order to get these things to translate to the bottom line and be sustainable there. So that's kind of the frame that is in place that we're using to make decisions in how to improve that business. Thanks, Mario. And Sean, you mentioned in your comments about trying to accelerate, if I understood you correctly, accelerate debt repayment at AmeriGas. Can you just... And create further buffer, I think, on the balance sheet. Can you maybe talk about what that may mean from a valuation standpoint, and then also where AmeriGas stands at this current quarter relative to its leverage covenants? And yeah, just curious, you know, in the near term and long-term cap structure, what you may or may not be contemplating. Yep, sure, Gabe. Good morning. Couple things. In terms of the long term, you know, I'll start with the success. Mario just said things need to translate into the bottom line. W e have taken roughly $325 million of absolute debt off of AmeriGas's balance sheet. So we've made some progress there. My comments about the remainder of this year are to indicate that all excess free cash flow, AmeriGas is still generating a fair amount of excess free cash flow, will be utilized to continue to take debt off the balance sheet. And we're looking at, when I say accelerate, we're also looking at maybe going above and beyond that and trying to take off, in total, maybe somewhere in the $400+ range of additional debt off the balance sheet. All that is in an effort to get their leverage metric down into the, you know, sub 5 range, down into the, you know, as close as we can to 4.5. Step one, get it below 5. Step two, let's start moving to that 4.5 range. We're still sitting, you know, in the, you know, the covenant range is 5.75. I'll remind you, Q1 is, you know, high working capital quarter. It's typically the quarter we have the highest metrics, so we peaked, you know, right about at the covenant there, in Q1, we anticipated that. But we will be working over the remainder of the year to continue to take debt off the books and try and get that metric below 5 and into what I would call, you know, the right range. Thanks, Sean. Just to clarify, did UGI have to do an Equity Cure at AmeriGas this past quarter? Just, you know, just- Yeah, um. clear from the presentation. Yep. So let me. Yeah, I'll highlight. We took, you know, an Equity Cure in Q2 of 2023. That is available to us for four quarters. Gabe, so we utilized a little bit of it. It was $31 million, you may recall. That's what we utilized in Q2 of 2023. We utilized, I think, around $9 million of it. We, as I mentioned, you have it for four quarters. In Q1, which would be the last quarter we had, we utilized around $9 million. Okay, I appreciate it. Then maybe if I could just have one last one around international. Of the $64 million increase in margin year-over-year, you know, obviously, it seems like the base business did a bit better with the weather and margins. But can you just talk about how much of that $64 million may have come from the non-core marketing business? And should we think that that may repeat as you wind the business down? Let's say, if we assume that European gas and electricity prices continue to decline. So I'm just curious how much of that may show up relative to the -$0.05, I think you had talked about in exiting that business, in the yearly impact. Yeah, so a couple of things. In terms of, you know, obviously, international, Mario and I both highlighted a very strong quarter. You know, somewhere in the range of half of it, the benefit was driven by the marketing. We anticipated that, Gabe. You may recall Q1 of last year, there were some pretty sizable losses in that marketing business. So, and we had actually a slight positive this year. So really, you know, that's really proud of the efforts the company's done to exit that business or the majority of that business, and you're seeing it pay dividends. So about half of that was driven by the energy marketing. Again, that was anticipated by the company. The other positive stories are unit margins were up. We were glad to see that. You know, you're definitely seeing volumes favorable, little help from some weather. And then the big one are the natural gas to LPG conversions. So that was something that, you know, that has been happening over the last 12 months, and we're seeing some of the benefits in the volumes in International there. The last thing I would tell you is, I think you dialed in on the guidance we gave around losing around $0.05-$0.06 this year on the marketing business. So two things: I think, there is some timing to that. So we had, as I mentioned, slight favorable in Q1. It's not going to be a big driver the remainder of the year, Gabe. I think in every quarter, it's going to be relatively de minimis, and we're still targeting, you know, that 5-6 cents, which I'll remind you is about a $0.50 improvement versus the prior year on the marketing loss. Got it. Thanks, Sean. Appreciate it. Thank you. One moment for our next question. Our next question comes from Julien Dumoulin-Smith with Bank of America. Your line's now open. Hey, good morning, team. Thank you guys very much for the opportunity here. Maybe just picking up on a couple of things you said. In the prepared remarks, you talked about 2Q there momentarily ago. Can you elaborate, what would you expect by that point in time to be able to, to talk to? Is this 6-10, something multiple to kind of address at that point in time? And, and how far would you expect to be on, on kind of, you know, revamping both what is core versus non, as well as how do you think about, you know, kind of updating, your plans on kind of refining and streamlining the business to elevate, cash flow and, and, you know, improve the overall, you know, OpEx profile? I can maybe start around the, you know, improving the OpEx profile, Julien. We have already taken some actions that I mentioned maybe on the last call. So what we're looking, obviously, at $70 million-$100 million of sustainable reductions. We've taken some actions. They were late in Q1, so I do want to point out that the impact of those actions were you know, you didn't see a significant amount, but those actions will continue to drive lower OpEx related to those actions the remainder of the year. We have you know, significant other actions targeted for Q2, late Q2, once again, and we're continuing to drive efficiencies. I think it's a big theme that Mario brings to the table to ensure that that OpEx trend continues to go down. Q1, we did not see an absolute reduction in OpEx. It was slightly up year-over-year. The primary driver of that was going to be AmeriGas, and we did make some—you know, I call them investments, but we definitely spent some money to prepare for the winter. I think you're talking about in terms of, you know, the longer term priorities. I think we need to get through the strategic review. We've not revised any of our longer term priorities, whether it be the EPS growth or the dividend. But at the end of the day, I think we want to make sure we get through the strategic review and fully, and as Mario said, we're in the latter stages, and we'll give you another update in Q2. And then I think we'll address some of the longer term goals that the company had. In terms of the rebalancing of the portfolio, we've been very clear that we're moving more to a higher percentage of nat gas in relation to LPG. That's happened already. Obviously, you know, maybe not the exact way we wanted to, but we are more of a nat gas company today than we were, you know, above 60%. We do anticipate, and I think we've been clear, the goal of the company is to increase that percentage over the next few years. And we're utilizing the strategic review to help us in that effect. So I think I got most of your questions, Julien. Indeed, I think you hit them categorically. Actually, just to follow up and clarify, right? So if 2Q is kind of the bogey for a bigger update here, how do you think about, like, what's strategic here and kind of should we expect some level of divestment activity here in the interim, kind of leading up into that, just as you, as you kind of prepare to kind of fully update things? Julien, everything is on the table. That's what a strategic review is all about, and you'll hear more about that when we finish it off. All right. No, fair enough. And then just—sorry to come back to the numbers real quickly on where Gabe was. Do you mind speaking a little bit to the marketing? I mean, I think you were—in your response, you said half of the benefit there was due to marketing. I think you guys had only been contemplating roughly a nickel for the year here. So, it seems like you guys are ahead of plan. Is that insinuating that maybe the back half of the year, there's some falloff, or are you just sustaining that benefit here through the course of the year? No, but I'm. I'll definitely clarify. So, there was a big benefit year-over-year. The primary driver, Julien, was last year, there were big losses, and this year, was relatively flat. You know, so the business, as we've exited the business, the earnings volatility that we're experiencing is gone, and you're not seeing big chunks. So, but to directly answer your question, we're pretty flat. We've given the $0.05-$0.06, and that was a loss. So you and some of that is timing, so we do expect, it's not going to be a driver, and it's fairly spread out if I look at the forecast, you know, between Q2, Q3, and Q4, to have small losses the remainder of the year, that'll get you to that $0.05-$0.06. But this year, in Q1, really, really pretty, pretty much a flat business versus a big loss that occurred last year. Yeah, we're down, what? 97% from the original supply locations that we had. Yeah, 97% of the risk taken off the table. Yep. Yeah. Excellent. Nice. Thanks for clarifying that. And then just super quick on the other side of this business, if you think about the... You said more substantive cash flow profile to continue to address deleveraging on the LPG side. Can you talk about how much cash flow you would expect, you know, post-interest expense to be able to delever this year, you know, prospectively, if you will? I think I heard a couple of comments that earlier, but I just wanted to try to clarify versus what we saw in the quarter here, versus perspectives- Yep. through the course of the year and being able to bring down principal. Yeah. Yeah, and a couple of things to keep in mind, you know, just to give you some data points, AmeriGas closed the quarter, you know, use round numbers, Julien, I think we had $50-$60 million of cash on hand. So, so we did have some, you know, AmeriGas is in a cash position. We expect that. I think what I've said in the past is we anticipate, you know, if we can deliver the year we had in our heads, you know, about $150 million of cash or give or take from directly out of AmeriGas, that'll be used to delever. So you know that's on the $150 million of debt, it's going to come off the table. As we think about the additional delevering, I've been clear that, you know, we may provide, you know, we may target a number closer to, you know, $350 million-$450 million of delevering in total. Again, I'll remind you on the positive, we've already taken $325 million off. So there may be some additional support that continue to delever quicker. I think it's important for the company to get AmeriGas below that 5.0, and to get AmeriGas into a leverage, you know, get its leverage into a level that it can sustain, you know, a warm winter, it can sustain a bump in the night. So that ought to give you a feel for the year. 150 or so directly from AmeriGas delevering, and then we're looking at another 150 to maybe up to 300-400 from Corp. Thank you for all that clarity. Appreciate it. Good luck, guys. Speak to you soon. Thanks, Julian. Thank you. Thank you. As a reminder, please press Star one one to ask a question. One moment for our next question. Our next question comes from Sarah Akers with Wells Fargo. Your line's now open. Hey, good morning. Good morning, Sarah. Morning. Just on AmeriGas, if I understand correctly, the equity cure won't be available for this fiscal Q2. So do you anticipate another equity cure this quarter? And if so, any sense of the size, just given winter weather? Yeah, yes, you're interpreting the first part right, Sarah. W hen we took that equity cure in Q2 of 2023, it stays in, too. You have it available for four quarters, and Q1 would have been of this year is the last one. We have multiple, you know, based on the agreements we have, we can take additional equity cures. Look, I, you know, I think I've been clear, we're trying to run this company without equity cures. I think that's important as we go forward. T he debt reduction is one element, and then, you know, you heard Mario talk a lot about working on the operating model so that we actually see the volumes and the EBITDA grow outside of just the debt. We are doing everything we can. Good news, we have more Equity Cure available to us, but our goal is not to, you know, is to do the best we can, not to have to utilize it, but it kind of gives us some cushion, you know, as we continue to work to improve the business. Got it. And I know, heading into the year, volumes at AmeriGas were expected to decline, but can you kind of quantify in Q1 the impact of the attrition? Because obviously, weather was a factor as well, but that attrition impact and how that compared to your original expectation, was that, in line or, or, worse than the original plan? Yeah, I can, I'll do it in two ways. I'll start with the year-over-year, because I know that's what everyone can see. So, you know, we, we highlighted 13% down. Weather was 12% warmer than normal, so that had a meaningful impact, but then there was also a pretty large impact due to attrition. So that's year-over-year. Now you're asking, okay, what did you anticipate? Obviously, when we talk about our guidance, it's weather normal, so that's why, you know, and weather, I think, was 6% warmer than normal. So, you know, about half what it was versus last year, but still warmer. So some of the impact versus our expectations was driven by weather. We did have customer attrition baked into our forecast, Sarah, but I, you know, what we saw in Q1, the levels of attrition were higher than what we had baked in, so the team's working on that. But you did have weather that wouldn't have been in our forecast, and we had some of the attrition baked in. It was, you know, Mario obviously spoke around our focus. We saw more attrition than what we would have budgeted. ... Got it. And in terms of UGI level financing, are you still confident that the company can weather the AmeriGas issues and, you know, execute on that debt paydown without external equity at UGI? Yeah, I mean, a couple things. You know, UGI, you know, consolidates all of the businesses. I think I've highlighted in the past that international—Just to give you some metrics, in terms of where international sits on its leverage, it's in the low twos. Energy Services is in the low twos. My point being, they're very, very strong. When you look at the debt-to-cap ratios of our utilities, it's incredibly strong, it's in the 50%. So my point is, you know, yes, we have, you know—That's one of the reasons, Sarah, we really need to improve AmeriGas. All these entities roll up and consolidate into corp. So, so the sooner we improve AmeriGas, it helps Corp, and the sooner we can, you know, continue to make inroads at Corp as well. So those are the 2 focuses: improve AmeriGas, you know, debt metrics, and then continue to improve corp. I've been clear, our goal is to get Corp below 4x, and we're sitting in the low 4s right now, so we have a little bit of work to do there. Okay. And just to be clear, is the plan to get there without issuing UGI stock, or is that on the table as a tool? That has not been on the table in any of the models I've run as a tool. Okay, perfect. And then shifting to international, the volumes were up, unit margins were up for the quarter. To what extent do you think that's sustainable? It's a trend that might continue throughout the year, and any comments on what's driving the underlying strength there? Yeah, and I can start. Mario can highlight some of what we're seeing over there, maybe from a conservation. But in terms of the volumes, we benefit a little bit from weather. So you know, you know, that's gonna be dependent on what we see the remainder of the winter. The conversions that I mentioned, that should continue. Those are 2- to 3-year contracts on those nat gas to LPG conversions, so that's a tailwind that should continue to help us out. And the unit margins, you know, they are up year-over-year. I think when I look at versus expectation, they're not up as much. We had some of that baked in. So I think I feel pretty good about some of the, some of the drivers we're seeing. I don't know if you want to, Mario, talk about, you know, conservation, what you're seeing there. The conservation situation over there has shown a little bit of a sign of easing. You know, certainly Italy and Austria have been more vocal about that, and we're beginning to see some signs, potentially a bit in other countries. But it's kind of early to say whether this trend will continue, but at least we've had a start on it. Thanks. If I could squeeze in one more just on the modeling side. If you have it, the adjusted EBITDA for AmeriGas for the quarter and trailing twelve months, is that something you can provide? Yes, after, you know, our financials will be released today, Sarah, so Tameka will be happy to give those to you here after the call. Perfect. Thank you so much. Thanks. Thank you. Thank you. One moment for our next question. Our next question comes from Julien Dumoulin-Smith with Bank of America. Your line's now open. Hey, team, this is actually Cameron, squeezing in for Julian real quick. I just wanted to follow up on one thing, and I realize, you know, it's only one quarter into the fiscal year, but, can you... And sorry if we missed it. Can you provide any color on kind of how you see full year results trending relative to, guide after this quarter? Yeah. I mean, you know, we're happy to see, you know, we started off, we're, we're, as Mario said, you know, a solid quarter. But, you know, we're, we're holding the guidance that we had out there. Okay, so no real commentary, I guess, around like maybe trending higher or lower to the high end or low end? I think you said it the best, Cameron. We're one quarter in. We're pleased with the quarter. But you know, at this point, we're you know, no change. Okay. Got it. Awesome. Thank you, guys. Thank you. I'm showing no further questions at this time. I would now like to turn it back to Mario Longhi, Interim President and CEO, for closing remarks. Well, thank you for spending time with us today, and we look forward to continuing our conversation next quarter. Everyone, be well. Thank you again. This concludes today's conference call. Thank you for participating. You may now disconnect.