Cameron Taylor: Perfect, Okay, thank you. I’m glad I didn’t miss anything. Can you comment on what is baked into the guide for 2024 on that front?
Robert Beard: What I can say is that 2023 was a heavier — a little bit heavier than normal year, so you could assume that it’s going to be smaller than what we saw in 2023.
Cameron Taylor: Perfect. Okay, got it. Thank you, guys. I will turn it back.
Roger Perreault: Thank you, Cameron.
Operator: Our next question will come from the line of Sarah Akers with Wells Fargo.
Sarah Akers: Hey, good morning.
Roger Perreault: Hey, Good morning, Sarah.
Sean O’Brien: Good morning.
Sarah Akers: Just a couple of questions on leverage. Can you talk about where you ended 2023 relative to the target? I think it was 3.25 to 3.75. And when you forecast you’ll be in that targeted range?
Sean O’Brien: Yes. Sarah, this is Sean. So there’s two primary leverage targets we’re looking at. The one you’re referencing is Corp. So we’re trying to get 3.5 to 3.75 on Corp, we ended in the low 4’s at the end of the year. And we do think we can get sub 4 — we’re very focused on this. We think we can get sub 4 in 2024. One other one that I think that’s important to think through is AmeriGas. That’s another one that we focus on every day. Our covenant range, our covenant max on that’s 5.75. I’ll take this opportunity to say I’m incredibly pleased that we were able to end the year and not utilize equity cure and actually free up the revolver at AmeriGas. That means we’re not utilizing any equity cure at the end of the year.
So I’m very, very excited about that. And we closed the year at AmeriGas at roughly 5.2, 5.3, and our goal is to get that by the end of the year sub-5. So we’re making pretty good progress, actually almost a full-turn improvement at AmeriGas from just a couple quarters ago and we hope we’re really focused by the end of the year to try and get sub-5 and sub-4, high 3’s sub-4 at Corp.
Sarah Akers: And getting to sub-5 presumably would be without additional equity from the parent, correct?
Roger Perreault: Correct, correct. As I mentioned, we got out of the quarter — we got out of the year with no with, again, not having to utilize that equity cure, which is why that now the revolvers freed up, there’s no restrictions on it. And our goals going forward are not to utilize additional equity cure, that’s the plan.
Sarah Akers: Great. And then, in the release it mentions share repurchases obviously with balance sheet considerations that that would seem to be a constraint. But can you just talk about how you’re thinking about the possibility and how that coincides with the balance sheet considerations?
Sean O’Brien: Yes, I can start and Roger can chime in. It’s not to — as you can imagine, we’re doing forward modeling and we’re looking at all the options and it goes without saying we think we’re undervalued. But remember, I had a slide in there that talked about capital prioritization. It’s the dividend, it’s the balance sheet. We’re going to continue to invest in the regulated utility, but as we look forward, the only thing we’re trying to point out is that, we continue to get the company healthier, the balance sheet healthier. It is an option that we think should be on the table down the road. It’s not something imminent at the moment though, Sarah.
Sarah Akers: Great. Thank you.
Roger Perreault: Thank you, Sarah.
Operator: We have a follow-up question from the line of Gabriel Moreen with Mizuho.
Gabriel Moreen: Hey, good morning, everyone. If I could just — hey, just — hello. again. I wanted to just ask a quick follow-up on the utilities outlook, specifically what you’re assuming on O&M and any moderation there in 2024? And the second part of that is, I noticed that the CapEx outlook there over the next couple of years, maybe was tweaked slightly downwards along with rate-based growth. Just wondering what may be behind that?
Roger Perreault: Yes, I’ll kick it off and I’ll ask Bob to add some color as well. Yes, so as we’ve been talking about, we continue to prioritize capital in our natural gas businesses. And we’re wanting to tighten it. In this higher inflation environment right now, we just see it as very prudent to keep our philosophy, keep investing a significant amount of capital in regulated utility and in our natural gas businesses. However, just being prudent and tightening a little bit. And that’s what you’re seeing. You’re seeing us just being very modest on how we’re tightening. We are ahead of schedule with our commitments to PUC, and that’s our full intention, is to continue to be ahead of schedule with our pipeline and betterment process.
We have the benefit of having been ahead of schedule in prior years, and that gives us this opportunity to — in this high inflation environment to just be cautious and say hey let’s right-size this for now, but keep to our game plan of being ahead of schedule for our programs. Bob, anything to add?
Robert Beard: Sure. Good morning. Your question about OpEx, Gabe, the company has grown. The utility company has grown. We had anywhere between 13,000 and maybe 15,000 customers a year. So the company is growing. However, we continue to take a look across all four of our businesses at opportunities to become more efficient. So your question about OpEx creep, absolutely we’re aware of that and we believe we’ve got a handle on that. And as far as capital, I’ll just echo what Roger said. First and foremost, the agreement that we made with the Public Utility Commission a little over a decade ago, we’re ahead of schedule on that. We’re retiring non-contemporary material. System safety performance, things like leaks and leak occurrences are trending in the favorable direction. So we’re comfortable. And again, as you pointed out, this is not a massive reset of capital, it’s just a reallocation.
