Good day, and thank you for standing by. Welcome to the UGI Corporation Q3 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today Tameka Morris. Please go ahead.

Good morning, everyone. Thank you for joining our Fiscal 2025 Third Quarter Earnings Call. With me today are Bob Flexon, President and CEO; and Sean O'Brien, CFO. On today's call, we will review our third quarter and fiscal year-to-date financial results, along with other key business highlights 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 or quarterly reports and our 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. And with that, I'll hand the call over to Bob.

Thanks, Tameka, and good morning. UGI has continued to deliver outstanding year-to-date results, reflecting the strength of our asset portfolio and our team's commitment to safely and reliably deliver positive energy solutions to our customers. Our increasing focus on safety, driving superior business performance, operational excellence, and creating greater financial flexibility is yielding results across each of our businesses. UGI's year-to-date adjusted diluted earnings per share of $3.55 is a record performance, up $0.33 over the prior year period. This performance reflects meaningful contribution from all segments, specifically from strategic investments in the growth-oriented natural gas infrastructure, operating efficiencies, particularly at UGI International, the customer focus improvement is now underway at AmeriGas and income tax credits. For the fiscal third quarter, we reported adjusted diluted earnings per share of negative $0.01 compared to positive $0.06 in the prior year period. As a reminder, our third and fourth quarters typically represent the seasonally weaker periods for our business, and this year's results reflect normal seasonal patterns. Given our strong year-to-date performance and the momentum across our businesses, we expect to be at the top end of our fiscal 2025 adjusted earnings per share guidance range of $3 to $3.15, which Sean will discuss later in the call. Slide 5 provides several key operational highlights for the third quarter. We deployed over $600 million of capital on a year-to-date basis with more than 80% directed to our highest risk-adjusted return businesses, the regulated Utilities and UGI energy services. In addition, our Utilities segment continued to demonstrate strong fundamentals with sustained customer growth of approximately 9,000 residential heating and commercial customers added this fiscal year. We also made progress on the Pennsylvania Gas Utility rate case where there was a joint petition for approval of settlement filed on July 9. This petition was…

Thanks, Sean. [Audio Gap]

[Operator Instructions] Our first question comes from Julien Dumoulin-Smith of Jefferies.

It's actually Paul Zimbardo on for Julien. The first one I want to ask is, if you could unpack a little bit the potential disclosure, you have -- a potential benefit from One Big Beautiful Bill Act. Is that bonus depreciation on regulated activities? Is that 45Zs on the RNG? Just any even just qualitative description you can help with there? Sean P. O’Brien: Yes, Paul, this is Sean. I'll hit a couple of things and the biggest impact initially will be -- over time, we have lost some of the interest deductibility, specifically at AmeriGas, almost predominantly at AmeriGas, that started to have impact us, Paul, back in '23. It had impact in '24. And it would have had impact this year. So that's step one is we'll be able to retroactively go back and probably we're still finalizing the numbers. But remove some of the allowance that we had -- the valuation allowance we had to put on the books over the last 2 years and a little bit this year. So that's step one. By the way, that will continue. That's retroactive, but it will also continue as we go forward. The other two items, I think, that have big impact for us is because of the ITCs this year, we're very, very -- we're closing out our RNG projects that they all come into service. Bonus hasn't been an election that we've really focused on. But this act will give us the ability as we move forward, probably to utilize bonus depreciation a little more. So I think you're spot on there. R&D credits is another area with the amount of capital we're spending at the Utility and Nat Gas. We see some benefit there. And then on the 45Zs, I think it's just more strengthening the position as we get into next year and beyond, around 45Z. So we haven't given the exact number, but we definitely know the trend. This is going to be a positive impact to the company.

Okay. It's good to hear across the board. And then, I know, I had asked about AmeriGas, I'll leave that for someone else. I wanted to drill in a little more on the Midstream side of the business. Obviously, you had a lot of activity with the Pennsylvania AI & Innovation Day. Are there any way that you could frame what you think the investment opportunity set is for the Pennsylvania Midstream business, given a lot of the activity in the near your footprint, that would be helpful.

Yes, Paul, I think, the best I can do with that right now is to say that, both Midstream and the Utility, we expect will benefit, we have well into the double digits of NDAs with potential generators and other opportunities to utilize our infrastructure for providing natural gas or providing on-site LPG -- sorry, LNG. So we see pretty robust opportunities there, multiple, like say, multiple counterparties and in-depth discussions that are ongoing. So we have the right assets in the right place to take advantage of all of this. So it's just to continue to cultivate those opportunities.

Okay. Great. And then if I could squeeze in one last one. Any commentary you provide on the multiple for the strategic divestitures you had as of date?

No. I mean, the way that we looked at all the divestitures is that we looked at, kind of, how we view the value in our hands versus the value that we're receiving from again, the counterparty on it. And we wouldn't sell any asset that would be dilutive. So when you think about the various multiples of our business even when you break them apart, it's got to either be equal or better than in our own hands. So that way on a risk-adjusted basis, you're creating value versus not selling. So, that's the way we look at it. Again, we look at the NPV in our hands versus the sale price and make sure that it's not going to be dilutive to us. On leverage, Paul, when you think about it. So it's got to be much better than our leverage ratio as well.

[Operator Instructions] Our next question comes from Gabriel Moreen of Mizuho.

Good morning, everybody. I guess, I'll take the AmeriGas question then just twofold there. One is, there's a lot of moving parts, I think, between the wholesale divestiture, potential high-grading of the customer base. So I'm curious, Bob, as you go into the upcoming winter heating season, what sort of metrics you're most focused on here, whether it's, I guess, profit -- I'm sure profitability is a big one. But anything you can kind of direct us to whether it's absolute or relative metrics? And then, the second part on the divestiture program, just on LPG, wondering if you think you're kind of done for now if there's more to go at this point?

Thanks, Gabe. I'll go into it, and certainly in the AmeriGas topic, I'll try not to use the rest of the call time for that. First of all, the wholesale business, again, creates -- it's been creating a lot of activity in our business, but not providing any bottom line benefit. So again, working on simplifying that business we're not going to supply largely our competitors basically at our cost using our infrastructure. So it doesn't make any sense to continue doing that. To the extent we've got customers in there that are lost customers, they'll either become new national accounts on a profitable level or they, again, will not be continuing on with them. So it's really, I think, as you said, high-grading the portfolio, taking the complexity out of the portfolio, so we're focusing on our highest value customers out there providing the commensurate level of service that our customers expect and deserve it. So I think, it's a good step as we go into the winter to better handle our profitable businesses, our profitable customers within AmeriGas. When you think about some of the indicators we're looking at, safety is one that we don't talk a lot about on these calls. But certainly, the third quarter of this year at AmeriGas had substantial improvements in our safety record. And to me, that's a leading indicator of how well you're focusing on your businesses, your processes, and getting inefficiencies out of your business and maintaining a safe workforce and not creating rework or anything that's just adding cost and more complexity to the business. So -- really happy to see the dramatic improvement that we've experienced in the third quarter on safety. It has been a key focus area for us. On a lot of the improvement projects…

That was very comprehensive. Maybe if I can comment Midstream from a different angle. When you think about your producer activity be signed behind some of the supply push systems that you have, can you maybe talk about what you're seeing, given the uptick in in-basin demand, maybe some egress capacity, too. And as a second part to that question, are there any notable contract expiries on the Midstream side that you're kind of watching over the next, call it, 12 to 18 months? Sean P. O’Brien: Yes, I can hit a few of those, Gabe. No significant notable contract expiries or at least nothing that we anticipate where there's a significant shift, meaning on the re-up, we think it will be generally in line with what we're at. We did have that one last year. Maybe that's what you're referring to. So I think as we look at '26, we're not thinking about any big dip due to big contract expirations.

And again, Gabe, just a follow-up on maybe the earlier question from Paul as well. When we look at the potential developers within the state of Pennsylvania, both on the regulated and unregulated side for power generation and the like. We're seeing substantial inquiries and opportunities there. So will continue to work with all of those counterparties to see what we can do to participate and help make the energy investment that's happening across the state. Again, we're in a exciting time for the state of Pennsylvania. The Energy Summit really highlighted that. And the great thing of Pennsylvania is how, from a political standpoint, all parties are aligned on bringing investment into the state of Pennsylvania. So it's really an exciting time here in Pennsylvania. And again, our Midstream business and our Utility business should be substantial benefactors of the movement underway.

I'm showing no further questions at this time. I would like to turn it back to Bob Flexon for closing remarks.

Thanks, Dana, and thanks, everyone, for dialing in. And just a few -- maybe a few closing comments. We had a record year. So certainly, that's exciting in its own, right? But work is underway to make the future even more successful than what we had this year. As I just mentioned, talking with Gabe, I'm very excited about our safety performance and the improvements we're seeing in safety, I just view that as a leading indicator to a well-run company. So we feel great about that. The financial performance this year, we talked about was great. The cash flow of $558 million is an 11% improvement year-on-year. And that really takes me to the kind of the third point of what really focusing on is the balance sheet. And we've got our corporate leverage down to 3.8x, $200 million debt reduction, as I mentioned a moment ago. The AmeriGas achieving nearly one turn improvement in its leverage ratio. So we're going to continue focusing on the intrinsic value drivers in our business, the State of Pennsylvania and West Virginia. We've had a constructive rate case proceeding. We're looking to get that through its final stages and have that part of our fiscal '26 results. And we've completed our Midstream projects, and we just continue to look at our emerging opportunities. And finally, I'll just say that our eyes are completely focused on this upcoming winter and to be ready for winter to have a really successful launch into fiscal '26. to our discussions in the future.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.