William Ruthrauff - IR John Walsh - CEO, President and Executive Director Kirk Oliver - CFO Jerry Sheridan - CEO & President, AmeriGas Propane, Inc..

Christopher Sighinolfi - Jefferies LLC.

Good morning, and welcome to the UGI Corporation and AmeriGas Partners' Fourth Quarter 2017 Earnings Call. [Operator Instructions]. Thank you. I would now like to turn the call over to your host, Mr. Will Ruthrauff. You may begin..

Thanks, Krista. Good morning, everyone, and thank you for joining us. With me today are Hugh Gallagher, CFO of AmeriGas Propane; Kirk Oliver, CFO of UGI Corporation; Jerry Sheridan, President and CEO of AmeriGas Propane; and John Walsh, President and CEO of UGI.

Before we begin, let me remind you that our comments today will 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 annual report on Form 10-K 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'll also describe our business using certain non-GAAP financial measures.

Reconciliations of these measures to the comparable GAAP measures are available in the appendix of our presentation. Now let me turn the call over to John..

Thanks, Will. Good morning, and welcome to our call. I hope that you've all had a chance to review our press releases reporting full year results for UGI and AmeriGas. I'll comment briefly on critical achievements during fiscal 2017, and then I'll turn it over to Kirk, who'll provide more detail on UGI's financial performance.

Jerry will cover AmeriGas' fiscal '17 performance and fiscal '18 outlook, and I'll conclude by reviewing fiscal '18 guidance and progress on our strategic projects. We're pleased to once again report record earnings per share for UGI in the face of very warm weather. Our full year GAAP EPS was $2.46, while our adjusted EPS was $2.29.

The adjusted EPS of $2.29 was 12% above the prior record adjusted EPS of $2.05, which we achieved last year. Both years have been adjusted for the mark-to-market valuation of unsettled hedges and other items that Kirk will cover later on the call. We were very pleased with the earnings delivered in 2017.

This consistent superior performance demonstrates the resiliency of our businesses and our determination to deliver on the critical performance commitments we make to our shareholders.

We were particularly pleased with the progress made over the past 12 months on our primary strategic initiatives, such as our Midstream infrastructure investments in the Marcellus and the expansion of our operations in Europe. Fiscal '17 was another year of significant progress for UGI.

We brought new Midstream assets onstream, expanded our base of operations in Europe, grew ACE and national accounts at AmeriGas and deployed a new customer information system at Utilities.

Our consistently strong performance is enabled by UGI's continued focus on unit margin management, expense control, working capital management and the delivery of organic growth. I'd like to briefly comment on our few key fiscal '17 achievements.

The Midstream & Marketing team had an outstanding year with significant progress made on our strategic initiatives. We completed the Sunbury Pipeline midway through the year and the fee-based income from our baseload customer began in Q4.

We completed construction of our new LNG liquefaction unit in Manning, Pennsylvania, and it's in service as we prepare for the winter peaking season. The PennEast project received its final EIS earlier this year, and we're awaiting the final FERC certificate.

We expect construction of PennEast, which will serve capacity constrained areas of New Jersey and Pennsylvania, to commence by the end of 2018. Our Gas Utility had a very busy fiscal '17. We deployed record levels of capital as we added new customers, execute -- executed our extensive infrastructure replacement program and upgraded our key systems.

We added approximately 14,000 new residential heating and commercial customers in fiscal '17. Our infrastructure replacement and upgrade programs remain on track, and we successfully transitioned to a new customer information system in Q4. All in all, a very busy and successful year for our Utilities team.

Jerry will provide a detailed review of AmeriGas' performance in fiscal '17, but I'd like to comment on our continued progress with the ACE and national accounts programs. We delivered record volume and gross margin for ACE and national accounts.

And based on new business signed over the past 12 months, we've established a very strong foundation for fiscal '18. The ACE team also did an outstanding job responding to the unprecedented demand for cylinders in Texas and Florida, following the major hurricanes that impacted those regions. UGI International had another strong year.

Our financial performance in terms of both earnings and cash flow was exceptionally strong. In addition, we expanded our LPG footprint with acquisitions in Sweden and Italy, and significantly enhanced our natural gas and power marketing program with the DVEP acquisition in the Netherlands.

We continue to find attractive growth opportunities in Europe, and our leadership team has done an outstanding job integrating these businesses. Our team in France is entering the final stages of the 3-year integration program for the Finagaz acquisition.

We've met or exceeded all that targets for that investment and the positive impact of the Finagaz acquisition is evident when you review the performance of our international business over the past 2 years.

Fiscal '17 was a noteworthy year for UGI, as we delivered the highest adjusted EPS in our history, while making clear progress on a broad range of strategic investments.

This performance was enabled by our team's ability to address challenging market conditions, while maintaining our focus on identifying and securing attractive long-term growth opportunities.

We also maintained our commitment to excel in the most critical activities we undertake, safety, customer service, building core capabilities and operational efficiency. I'll return to comment on our fiscal '18 outlook and our strategic initiatives, but I'd like to turn it over to Kirk at this point for the financial review.

Kirk?.

Thanks, John, and good morning, everybody. As John mentioned, fiscal year '17 was a strong year with adjusted earnings coming in at $2.29 per share, a record level for the company $0.24 higher than last year. On this slide, we've laid out the adjustment to GAAP earnings, which are pretty straightforward.

Starting with GAAP EPS of $2.46, we back out $0.29 for unrealized gains on commodity derivatives and add back $0.08 of unrealized losses on foreign currency derivatives. We then add back $0.05 for loss on extinguishment of debt related to the AmeriGas refinancings and $0.15 of after-tax integration expenses associated with the Finagaz acquisition.

Finally, we back out the onetime benefit of a reduction in French tax rates that occurred in the first quarter. This chart highlights the benefits of UGI's diversity and growth driven by the redeployment of our strong cash flows.

Although, the year was significantly warmer than normal, the company still delivered earnings that were 12% higher than the prior year.

The biggest contributors to the $0.24 increase over the prior year were international, which benefited from weather that was colder than the prior year, Finagaz synergies and certain tax items and UGI Utilities, which benefited from new base rates at its largest utility, growth of its customer base and higher margin from large firm delivery.

Turning first to the LPG side of the business. AmeriGas is reporting adjusted EBITDA of $551 million, $8 million higher than the prior year. Jerry will discuss AmeriGas results in more detail in a few minutes.

For UGI International, we achieved adjusted income before taxes of $215 million, as shown in the bottom right column of the slide, compared to $210 million in the prior year. This increase of $5 million was due to the lower operating expenses, excluding transition cost that more than offset the reduction in margin.

These results compare to $109 million and $94 million in fiscal years '15 and '14, respectively, clearly highlighting the significant contributions of the Finagaz acquisition that closed in 2015.

Although, Slide 11 shows results to the income before taxes line, I should note that UGI International also benefited from some cash-related items this year.

Most notably, the release of a foreign tax credit reserve of $7.6 million and a tax refund in France of approximately $7 million that contributed to adjusted net income of $155.8 million, about $27 million higher than the prior year. Turning now to the natural gas businesses.

Midstream & Marketing posted income before taxes of $141 million, down about 2% versus last year. Total margin was in line with the prior year as higher margin from peaking natural gas gathering and natural gas marketing were offset by decreases in capacity management, electric generation and storage services margin.

Depreciation expense was higher due to incremental depreciation related to the expansion of our pipeline and peaking assets. The higher depreciation expense was offset by higher AFUDC related to the Sunbury and PennEast pipelines. Utilities has reporting income before taxes of $188 million, approximately $25 million or 15% higher than the prior year.

Throughput to core customers was up about 6%, reflecting weather that was 2.6% colder than last year and the impact of customer growth.

The margin increased nearly $42 million reflecting the impact of higher base rates at UGI Gas, which contributed about $20 million, higher core market throughput contributing $12 million and higher large firm delivery service margin that contributed $11 million.

Operating expenses increased primarily reflecting higher pension and employee benefits, customer accounts and environmental remediation expenses and the absence of onetime adjustments related to an IT project that reduced expenses in the prior year.

Depreciation expense increased $5 million reflecting increased capital expenditures and other income was higher, primarily reflecting a $6 million environmental insurance settlement. Lastly, we wanted to highlight one of the core value drivers of UGI, it's outstanding cash flow.

This chart shows the cumulative free cash flow defined as cash from operations less total CapEx from rolling 3-year periods over the past 20 years. You can see that UGI generated free cash of $1.4 billion in the past 3 years alone, and has grown free cash flow by more than 11% per year over 20 years.

The strong cash flow generation allows us to fund growth projects and grow the dividend without having to access the equity markets. We're proud of this track record and confident that our firm projects will enable us to continue driving this growth. That concludes my remarks, and I'll now turn the call over to Jerry for his report on AmeriGas..

All right, Kirk, thanks. AmeriGas finished fiscal 2017 with adjusted EBITDA of $551 million, in line with our revised guidance of $550 million.

Weather for the full fiscal 2017 year was 13.5% warmer than normal, making this the third warmest year in the 121 years of recorded weather history in the U.S., following the second warmest year on record in fiscal 2016.

As we noted on previous calls, our emphasis in these unusually warm weather conditions is to work the controllables, carefully manage margins, expenses, capital and liquidity. Some examples. Year-over-year, margins were $0.015 over the prior year, a solid accomplishment given the fact that cost was up 18% year-over-year.

Operating expenses came in $21 million below the prior year, this excludes the impact of the third quarter environmental reserve of $7.5 million, which is also excluded from adjusted EBITDA.

Capital spending was $3.5 million below fiscal 2016 and $22 million below our planned level of spending for the year, largely due to efforts to curtail spending given the operating environment.

Despite the challenges of weather, we were pleased with our continued progress on the roll-out of technology to both drive out cost and enable better customer service.

Our automated AmeriMobile distribution system with optimized routing has taken $10 million of cost out of our distribution system so far, and we fully expect additional savings to be realized in 2018. We also now have over 400,000 customers doing business with this online at amerigas.com. Our growth thrusts also continued to deliver strong results.

Our national accounts program had a very strong year despite the weather with volume up over 8%. Our AmeriGas Cylinder Exchange program volume also increased over 8%. Both national accounts and AmeriGas Cylinder Exchange had record years in terms of both volume and earnings contributions.

We also completed 5 acquisitions this year for $37 million in cash, adding 6 million annualized gallons to the company. And we funded $20 million of the acquisition expenditures through proceeds from the sales of excess or underutilized assets. Now looking ahead to fiscal 2018.

We believe the progress we've made in our growth thrust and our technology capabilities will enable our front line employees to deliver strong results, and we're optimistic about the upcoming winter. We expect to report adjusted EBITDA in the range of $650 million to $690 million, given normal operating conditions.

And it's important to note that this guidance is based on an assumption of 15-year normal weather, which is about 3% warmer than the 30-year normal previously used in developing our forecast and guidance.

We believe that this change is a more prudent expectation of weather going forward, and we positioned our staffing expenses, capital allocations and balance sheet accordingly. Although we would welcome normal weather, we've taken actions to help offset the impacts of 2 record warm winters on our business. A couple examples.

Earlier in fiscal 2017, we completed the final steps in refinancing all of our long-term debt reducing our average interest rates by over 100 basis points, while extending maturities to 2024 through 2027.

Yesterday, we announced that the partnership and our sponsor UGI have recently agreed to a standby equity commitment, whereby the partnership may offer, at our option, up to $225 million in Class B common units to UGI through June of 2019. The key provisions of this agreement are outlined on this slide, and were reported on Form 8-K this morning.

We view this as a significant positive development for both our debt and equity investors as it underscores the support of our sponsor, and our commitment to a strong balance sheet should we experience a third consecutive warm year.

There are no plans to draw on this standby equity commitment at the current time, but we're pleased to have this flexible equity commitment at our disposal as we enter the new year. In closing, I want to thank the entire AmeriGas team, 8,100 strong, for their energy, commitment and resilience over these past 2 years.

Particularly noteworthy was the outstanding performance, as John mentioned, in providing great customer service to our customers through the recent hurricanes in Texas and Florida, as well as the wildfires in California.

AmeriGas' scale and the ability to bring resources and assets to ensure security of supply is very evident during these difficult events. Thank you. And I'll turn the call back over to John..

Okay. Thank you, Jerry. Our UGI guidance for fiscal '18 of $2.45 to $2.65 assumes normal weather and volatility in our service territories. We used 15-year normal weather as the basis for our fiscal '18 guidance across all of our businesses.

With the exception of our utility business, where we are already using the 15-year average, this updated weather assumptions results in normal weather that is 3% to 5% warmer than our prior 30-year average weather assumption. The midpoint of our fiscal '18 guidance represents an 11% increase versus our fiscal year '17 earnings per share.

Contributions from our recent strategic investments and organic growth in our businesses are key drivers to this year-over-year increase. We've entered the new fiscal year with significant momentum. We've made noteworthy progress on a range of strategic investments over the past 5 years, resulting in a 2012 to 2017 EPS CAGR of approximately 13%.

This strong EPS growth, above the top end of our 6% to 10% long-term EPS growth target, demonstrates the fundamental strength of our businesses. We have an exceptional pipeline of high-quality investment opportunities in development.

Our portfolio of projects in development and execution is stronger than ever due to the scale and reach of our businesses.

This strength is reflected in our guidance for fiscal '18, and provides us with great confidence in our ability to continue to deliver strong earnings growth in future years, as shown in the right-hand portion of the graph on Slide 20. Looking to the future, we'd like to reemphasize our growth engine.

The business generates very strong cash flow, as Kirk noted in his remarks, approximately $700 million to $750 million per year after maintenance CapEx, about 30% of which is given back to shareholders through dividends and stock repurchases. The remaining 70% is reinvested in our businesses.

This combination of deploying cash for earnings and dividend growth supports our commitments to 6% to 10% EPS growth and 4% dividend growth, which we have exceeded over the past 5 years. Turning back to our growth drivers. Our Midstream and Utilities teams continue to see very strong gas demand across the Mid-Atlantic region and in New England.

This strong end-user demand has underpinned a series of UGI pipeline investments and has significantly increased demand for LNG peaking services.

UGI is uniquely positioned to invest in both these growth segments as we expand our pipeline and gathering systems in the Marcellus and expand our LNG network in the Mid-Atlantic by adding both liquefaction and storage vaporization units to our network.

We're working diligently to develop and execute new investments that address this critical infrastructure gap. Just last week, we announced the acquisition of a gathering system in North Central Pennsylvania from Rockdale Holdings. This followed Rockdale's acquisition of Shell's production acreage in Texas Creek, Pennsylvania.

These assets fit nicely with our existing pipeline and storage network in that region and will be immediately accretive to earnings. The continued strong demand for natural gas and the extended timelines for approval of pipeline capacity additions are stressing the natural gas network in the Mid-Atlantic and Northeast.

This is resulting in significant demand growth for our LNG peaking services. LDCs in the Mid-Atlantic and Northeast are looking to augment their supply portfolio with LNG peaking. We've more than doubled our LNG liquefaction capacity over the past 36 months, and we're adding storage and vaporization units to our network.

This infrastructure will ensure that we can meet the rapidly increasing demand for peaking services and serve the growing LNG demand in the Mid-Atlantic and Northeast.

We're awaiting our final FERC certificate for the PennEast project, where we partner with 4 other major companies to construct 120-mile pipeline to transport low-cost Marcellus gas from Northeast Pennsylvania to customers in Eastern Pennsylvania and Central New Jersey.

PennEast is almost fully subscribed, which reflects the high demand for this badly needed new capacity. Based on the current schedule for regulatory approval and local permitting, we expect field construction on PennEast to commence by the end of 2018. One final key point on these Midstream investments.

The revenue streams for these projects are fee-based with the majority of the fees guaranteed. Capital deployment at the Gas Utility reached another record level of just under $320 million invested to execute our infrastructure replacement and upgrade programs and support customer growth.

We expect total CapEx spend at Utilities over the next 4 years to exceed $1.2 billion. Our team at UGI Utilities has done an exceptional job of achieving this step change in project execution, while maintaining very high levels of customer services.

Our LPG businesses, AmeriGas and UGI International, are critically important to the execution of UGI's strategy. Both businesses will contribute to the EPS growth reflected in our fiscal '18 guidance and generate significant level of the free cash flow that is crucial to UGI's ability to fund our growth investments.

AmeriGas' EBITDA guidance of $650 million to $690 million assumes a return to normal weather and reflects continued growth in our ACE and national accounts programs as well as contributions from the utilization of enhanced logistics and customer service tools.

UGI was pleased to provide AmeriGas with a standby equity commitment for access to up to $225 million in additional capital, if the need arises over the next 2 winters. This support ensures that AmeriGas will be able to execute its strategic investments regardless of the weather in the upcoming winter seasons.

UGI International enters fiscal '18 focused on fully integrating our acquisition of Total's LPG business in Italy and DVEP's natural gas and power marketing business in the Netherlands. This is particularly exciting for us as we push the boundaries of our European businesses in areas where we have significant potential for growth.

Our objectives for these 2 businesses go beyond delivering the core investment case, although that is crucially important, we're looking to leverage these new strategic positions to identify new investment opportunities.

We're delighted with the quality of the teams that have joined UGI with these 2 key acquisitions, and we'll keep you updated on our progress on future calls. Fiscal '17 was another milestone year for UGI as we continued to expand our base of operations, while delivering record EPS.

I've intentionally limited my references to weather impacts in my remarks today since our teams year-in and year-out have done an outstanding job of delivering strong performance in the face of varying weather conditions.

We start the new fiscal year with cash flow and balance sheet capacity and strength to fund our full range of active projects with significant spare capacities to support additional new investments.

As you've seen from the announcements over the past 60 days, we're actively developing new growth opportunities across our businesses, while retaining the financial discipline that has long been a hallmark of UGI's performance.

Before concluding our call, I wanted to take a moment to remind our investors and analysts of the key value drivers of our company. We continue to offer balanced growth and income investment, as evidenced by our 5-year growth rates of adjusted EPS of 13% and dividends of 7%.

Our strong cash generation of $700 million to $750 million annually after maintenance CapEx expenditures ensures we have adequate capital to invest in our businesses and drive further growth. We pride ourselves not only on identifying highly strategic investments, but ensuring that we are disciplined stewards of our investor's capital.

Our focus on identifying and executing highly accretive growth project have been -- has been the key to delivering a 15% annual total shareholder return over the past 20 years.

Finally, on behalf of our teams at both UGI and AmeriGas, I can say with confidence that we're in an outstanding position to deliver on our commitments for future earnings growth. We're looking forward to keeping you updated on our progress throughout the year. With that, I'll turn the call back over to Krista, who'll open it up for your questions..

[Operator Instructions]. Your first question comes from the line of Chris Sighinolfi from Jefferies..

I was curious, you were talking in some of the prepared remarks about the infrastructure constraints in the Mid-Atlantic, some of the effects that's having on the gas market and the customer demand for some of the peaking services that you guys offer.

I'm just curious, in the sense that we've seen a lot of investment from you over the years in Pennsylvania specifically, and some in the mobility of gas with Manning and Temple and Steelton.

How -- I guess, how easy is that to create in other states? And can you give us a sense of where some of that customer demand is coming from? Is it still sort of Pennsylvania focused? Or is that Maryland, DC, New York? And how -- I guess, just walk me how you think about translating what we know you've accomplished in PA, I guess, to those other regions?.

Sure. Yes, happy to do that, Chris. Yes, what's been happening is, as certain projects have been deferred or a few canceled, is that as all gas LDCs plan their supply portfolio to meet what is, for most of us, increasing demand, increasing core demand. You have to come up with solutions.

And if there's no longer a pipeline solution you can rely on, you're looking at alternative solutions. And one of the simplest and most straightforward solution is LNG. And it's a -- there's an existing network of LNG infrastructure that exists, particularly storage and vaporization, across the region.

We're working with LDCs primarily to the East and Northeast of us. So in terms of the work we're doing to develop our LNG business, most of that is going on with LDCs and other partners in New Jersey, New York and New England, where most of the constraints are being felt.

And that can take the form of just straight delivery of LNG to an existing vessel or could take other forms or we, for example, manage capacity and storage on behalf of a third party.

And we're actively involved in discussions with many parties in terms of potential additional investments in liquefaction that could be positioned somewhere in the region I described, to supplement and -- supplement the existing network and be there to support service to the growing demand for natural gas, which basically all of us are seeing..

Does it get complicated at all? I know the pipeline traverses state boundary, there is federal oversight and regulation that gets involved.

If you have a -- I guess, liquefaction -- in liquefaction business that straddles the same lines, does it get complicated in the same way? Or is that a business that's still -- that would avoid interstate?.

Yes, that's a good question. Certainly, there are -- there is regulatory approvals and permitting that's required to both -- to sight a facility and also as you transport LNG. But it's pretty straightforward and the LNG units, LNG infrastructure have been used pretty extensively for probably at least 4 decades longer throughout this region.

Our original LNG facility dates back to the early 1970s. So it's a well-established mode of production transportation and support. There are -- for sighting of a particular unit, there is permitting that's required.

There's many other permits and approvals that are required, but it's a process that -- the time frames tend to be much shorter than interstate pipeline process, which is very helpful when LDCs are trying to plan for their portfolio to meet forecast demand in 2 years, 3 years, 4 years..

Okay. All right. And I'm less familiar with how that merger looks, so it's helpful to get the color. I guess, I have a couple more questions. Switching gears real quickly on the AmeriGas facility. Obviously, interesting to see that we've discussed in the past some financial flexibility that may come to bear there that could avoid IDR drag.

I just was curious, Jerry, I heard your comments about the lack of need for a facility, at least, as the plan is devised today, you don't plan to execute on it.

Well, I guess, what are the conditions under which you think you might utilize it? Is it to help from an acquisition standpoint? Is it if we experience another exceptionally warm winter? Or I guess, can you refine how you think about drawing on a facility like that with the parent?.

Sure. There's no limitations on the usage of it, but the purpose of putting it in place was really to hedge against the -- another warm winter and/or series of warm winters. That was really the only reason for it. Otherwise, we wouldn't have needed it..

And one other comment I'd make, Chris, is we feel very good about the strategic programs that are underway in AmeriGas, or on deployment of new technologies and positive impact that's happened -- having on both customer service and our operational efficiency.

And as Jerry noted, if you have a challenging winter, we all want to move forward and keep all those projects on track, because they are really critical, and we can see the results they're having. So this just provides another sort of layer of available capital if needed and enables us to stay on that strategic path that we want to stay on..

Well, that solidifies at least the commitment UGI has to the AmeriGas business, at least from my vantage point.

There's been a lot of discussion more broadly across MLP and GP sponsors about what happens when support is required? And that is not always done in a beneficial way to the LP unitholder, so this seems like the flexible structure that avoids those types of concerns?.

Yes..

Okay. I just have a couple more questions, if I could. One is an update on your CFO search..

Sure. CFO search is underway. We're pleased with the progress we've made to date. And we've announced Kirk's time line, he'll be leaving early in 2018, so we're working hard to have those events aligned. So we're making good progress is the way I'd characterize the CFO search..

Okay. So is it, I guess, correct to think that we might have an announcement on that before the timetable you guys had stipulated for Kirk's departure? Or we've seen it in the past, where you guys have gone a period of time without a CFO.

Is that -- I assume that's not the goal, but is that likely given where we are in the calendar?.

I wouldn't say it's likely or unlikely. Obviously, we're looking diligently and well into the process, looking to make sure we find the right person for the role, and the goal is to minimize any gap or -- and not have a gap. So that's our goal, which we'll aim for..

Okay. And final question from me, John, is just you had 4 -- almost 4 years ago put in place the share authorization -- repurchase authorization, which was meant to offset dilutive effects. Obviously, that facility has been -- or that authorization has been used modestly over the last nearly 4 years. I believe it expires at the end of January.

I was just wondering thoughts on renewing that? Anything you or the board have considered around that facility or a replacement to it?.

Sure. I'll let Kirk..

Yes. Chris, there is no plans to change anything there, so we would probably go ahead and re-up that.

And the initial size, I think, was around $10 million, so we'd probably do that $15 million? Yes, $15 million or there was a split?.

Yes, I'm sorry..

Yes, yes. So there was $15 million on a split-adjusted basis. So the plan would probably just be to go and re-up that.

We primarily use that because we have shares coming in to the diluted EPS calculation related to comp plans and other things, so we tend to try to soak some of that up in the marketplace or -- and we'll get a little bit more aggressive if you think the stock price is a little lower than it should be. So that's kind of what we do with it.

It's not an aggressive stock repurchase plan or anything..

Just it's our strategy there, and so the intent, as Kirk outlined, is unchanged..

Your next question comes from the line of Merrick Buck from Citigroup..

In regards to the equity commitment to APU, what were the factors you were looking at in putting that commitment in place versus, say, utilizing the public market.

I mean, I get the fact that you avoid the IDR payment requirements that the -- on that issuance before conversion, but that's somewhat offset by the premium you'd pay over your common unit yield.

So I was just looking at what you thought that the public market might close to you? Or just looking for some more color on your reasoning for putting that specific facility in place?.

Well, as I said before, we really don't need it at the moment. So it's really a backstop and it's an opportunity to draw on in $15 million increments as needed if the weather puts pressure on us. We wouldn't -- we didn't look at the public markets because that's, obviously, an action where would actually be issuing something.

We may or may not use this thing, and obviously, having a sponsor that would offer to us at a slight premium was much more convenient, easier, and we don't have to draw it right away. So this is just a much better vehicle for us..

Provides AmeriGas with a lot of flexibility. And certainly, if you look at AmeriGas through the lens of the public market, AmeriGas has been performing extremely well. It's one of the highest-performing MLPs, top couple of highest-performing MLPs over the last 3 years.

So I think the public view of AmeriGas is quite favorable, but this -- what we reached agreement on it provides just the flexibility, I think, that AmeriGas needs to continue to execute its strategy without being burdened if it's not needed..

[Operator Instructions]. We currently have no questions in the queue at this time. I'll turn the call back over to the presenters..

Okay. Thank you very much. We appreciate your time and attention this morning. And we look forward to talking to all of you again on our call next quarter. Thank you very much..

This does conclude today's conference call. You may now disconnect..