Ladies and gentlemen, thank you for standing by and welcome to the UGI Corporation First Quarter Fiscal Year 2020 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. And after the speakers’ presentation, there will be a question-and-answer session. I would now like to hand the conference over to your speaker today, Alanna Zahora, Investor Relations Manager. Please go ahead.

Thanks, Kenzie. Good morning, everyone, and thank you for joining us. With me today are Ted Jastrzebski, CFO of UGI Corporation; Rob Beard, Executive Vice President of Natural Gas; and John Walsh, President and CEO of UGI. 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 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 will also describe our business using certain non-GAAP financial measures. Reconciliations of these measures to the comparable GAAP measures are available on Slide 7 of our presentation. Now, let me turn the call over to John.

Thanks, Alanna, and good morning, and welcome to our call. I hope that you’ve all had a chance to review our press release reporting first quarter results. UGI posted a very strong Q1, with each of our businesses performing at a high level. Our teams did an outstanding job in delivering this strong performance while executing a set of key initiatives that will provide the foundation for superior long-term performance. This was a noteworthy quarter for a number of reasons. It was our first full quarter with the newly acquired CMG asset network and the first full quarter with AmeriGas back in the fold as a wholly-owned UGI subsidiary. It was also our first quarter with the combined rate structure for our gas utility, as those new rates went into effect in October. We also made significant progress on the major restructuring programs across our LPG line of business. Roger Perreault described these programs on last quarter’s call, and we've been hard at work over the past 90 days, developing detailed plans that will be rolled out over the next 18 months. Those programs are delivering their initial results as planned and remain on track to deliver the committed savings and enhance customer service levels. I’ll review our key activities in Q1 and then turn it over to Ted, who’ll provide you with an overview of UGI’s financial performance in the quarter. Bob Beard, our Executive VP, Natural Gas, will provide an update on our natural gas businesses, including progress on the CMG system, and I’ll wrap up with comments on our strategic initiatives. Our Q1 GAAP EPS was $1, while our adjusted Q1 EPS was $1.17. Our adjusted EPS was over 40% above our Q1 fiscal 2019 adjusted EPS of $0.81 and significantly exceeded the prior high point for Q1 adjusted EPS of $1.01, achieved in Q1 fiscal 2018. Both quarters have been adjusted for the mark-to-market valuation of unsettled hedges and other items, which Ted will cover later. As I noted earlier, this very strong earnings performance reflected the strength of our diversified businesses, with all four business units contributing in a major way. This performance was in a quarter when weather in the Mid-Atlantic and Europe was a bit of a challenge. Our French teams were managing the impact of the general strike activities, and there were no opportunities for incremental capacity margin at energy services. Despite those challenges, we delivered our highest adjusted Q1 EPS ever by a wide margin. Our teams did an exceptional job executing, as we managed our supply chain to optimize margin and saw the positive impact of our restructuring programs on operating expenses, all while maintaining high levels of service to our customers. Before I turn the call over to Ted, I’d like to comment on the progress achieved in several key areas with major developments in Q1. We had a very successful first full quarter with the Columbia Midstream systems and team. The positive impact of the new fee-based revenues is evident in the Q1 financial performance of Midstream and Marketing. Adjusted EBIT is up nearly 45% with CMG’s contributions being the major growth driver. Also, going forward, we will be referring to the acquired CMG assets as UGI Appalachia. Our Utility had another busy quarter, adding over 4,000 new heating customers while continuing to execute our broad range of infrastructure replacement and reinforcement projects. Our long-term infrastructure replacement program remains on schedule. The combined focus on infrastructure replacement and customer growth will remain for the foreseeable future, as we invest in the infrastructure to serve our expanding customer base. We expect CapEx for the utilities to exceed $400 million in fiscal 2020. AmeriGas had a solid Q1 with adjusted EBIT just below prior year despite weather that was slightly warmer. AmeriGas continues to excel with our Cylinder Exchange and National Accounts programs. National Accounts volumes increased 12% versus Q1 fiscal 2019, and Cylinder Exchange volumes were up almost 7%. We’ll continue to look for opportunities to leverage our exceptional U.S. distribution infrastructure to drive growth in these two very successful programs. UGI International had an extremely strong first quarter. Adjusted EBIT was up substantially over Q1 fiscal 2019, despite warmer weather. We benefited from higher grain drying volumes, lower propane and butane costs that enabled strong margin performance, and lower operating expenses resulting from our transformation program in Europe. I’ll return later on the call to comment on our strategic initiatives, but I’d like to turn it over to Ted at this point for the financial review.

Thanks, John. As John mentioned, we delivered adjusted EPS of $1.17, a 44% increase versus fiscal 2019 results. Our reportable segment’s EBIT was $418 million compared to $346 million last year. After a busy fourth quarter with the completion of two significant transactions, our teams returned their focus on operational excellence and delivered a strong start to the fiscal year. This table lays out our GAAP and adjusted earnings per share for fiscal 2020 compared to fiscal 2019. As you can see, our adjusted earnings exclude a number of items such as the impact of mark-to-market changes in commodity hedging instruments, a loss of $0.05 this year versus a loss of $0.46 in the first quarter of fiscal 2019. Last year, we had a $0.03 gain on foreign currency derivative instruments compared to a $0.06 loss this year. Lastly, you can see we adjusted out $0.06 of expenses associated with our LPG business transformation initiatives that we discussed in detail last quarter, and we’ll update momentarily. Before I get into the numbers on the year-on-year bridge, I wanted to take a moment to reiterate how the seasonality of the AmeriGas business impacts our earnings. As you recall from our Q4 earnings presentation, the buy-in of AmeriGas shifts the timing of the company’s earnings over the quarters. We now expect to earn roughly 110% in the first two quarters compared to only 95%, historically. This outsized performance in the first half is then balanced with lower than historical performance in the second half. Okay. Returning to the slide. We are off to a good start in fiscal 2020. We faced warm weather conditions compared to last year but benefited from our recent investments. We delivered adjusted EPS of $1.17, a $0.36 improvement versus our first fiscal quarter last year. The AmeriGas merger incremental margin from CMG, now UGI Appalachia, new base rates at the Utility, and margin management at UGI International were the biggest drivers of the year-over-year improvement. The $0.26 increase at AmeriGas was largely attributable to the full consolidation of AmeriGas results following the merger that was completed in August. In the quarter, we benefited from onetime tax adjustments, primarily in France that were largely offset by the higher tax rates at corporate. One final point, our interest expense increased versus last year as we added debt to complete both the AmeriGas merger and CMG acquisition. Turning to the AmeriGas business. The quarter got off to a cold start but warmed up in the critical month of December. December weather was 9% warmer than normal, and as a result, volumes were down slightly versus last year. AmeriGas reported EBIT of $165 million, which is roughly flat versus the prior year quarter. Total margin was also flat versus last year, as the lower volumes were largely offset by higher unit margins. OpEx increased $5 million, principally the result of higher general insurance and vehicle lease expenses, and other income increased versus the prior year period due to a gain on the sale of excess real estate. On our last call, Roger spoke about the business transformation initiatives underway at our LPG businesses. As a reminder, AmeriGas identified over $120 million of permanent operational efficiencies that we expect to be realized by the end of fiscal 2022. We called out a $0.06 adjustment to earnings in the first quarter related to LPG business transformation expenses, the majority of this expense comes from the AmeriGas business. UGI International achieved EBIT of $100 million compared to $59 million in fiscal 2019. The team delivered strong results in the face of another year of significantly warmer-than-normal weather. Total margin benefited from strong crop drying volumes and focus on margin management. The large increase in total margin was driven by propane prices that were roughly 15% lower than the prior year period, an effective recovery of costs associated with energy conservation certificates. Additionally, the international team continued to manage OpEx in the challenging conditions. I should point out that this improvement was supported by the translation effects of the weaker euro, but also lower maintenance and outside service expenses compared to the prior year period. Lastly, we broke out realized FX hedging gains from other income due to its significance in the quarter. Like AmeriGas, the international team is also making an investment in the business to drive operational efficiency. We expect these efforts to generate over €30 million of permanent annual savings. Although it’s early in the process, both AmeriGas and UGI International are on pace to deliver the operational efficiencies in the timeframe laid out on our last call. Turning to the natural gas side of the house, Midstream and Marketing reported EBIT of $62 million in the quarter compared to $43 million in Q1 last year. CMG, or UGI Appalachia, was the main driver of the year-over-year improvement. Total margin, operating and administrative expenses, depreciation and amortization, and other income, all reflect the impact of the acquisition. We also benefited from our Auburn IV expansion coming online in November, but to a much lesser extent. Capacity management margin was lower in the quarter as pipeline capacity values remain depressed, largely due to very low prices and warm weather. Pipeline restrictions did not meaningfully impact earnings in the quarter, but we still expect pipeline operators to enforce them during periods of volatile weather. Lastly, margin decreased at our Hunlock facility due to lower electric generation volumes. UGI Utilities reported EBIT of $92 million compared to $77 million in the prior year period. Total margin increased $15 million despite warm weather as a slight decrease in core market volumes was offset by increased base rates, effective October 11. We also saw higher margins from large firm and interruptible delivery service customers. As you can see, OpEx decreased $3 million versus the prior year period due to increased systems and process capabilities and collections and lower compensation and benefits expenses. Lastly, our depreciation expense increased versus the prior year quarter due to continued distribution system and IT capital expenditure activity. With that, I’ll turn the call over to Bob for an update on UGI Appalachia and our natural gas business priorities.

Great. Thanks, Ted. Our natural gas businesses continue to focus on growth opportunities we are seeing at both our Utility and our Midstream and Marketing companies, and we continue to identify opportunities to drive efficiencies across both businesses by sharing best practices. And as always, we emphasize safety in everything we do. At energy services, we’re very pleased with the quality of the team that joined us from Columbia Midstream Group. I remain encouraged about the growth potential of what is now UGI Appalachia. Performance of these assets was solid in Q1. This performance was driven primarily by throughput contracts and efficiency gains, which helped control operating expenses. While warmer-than-normal temperatures are helping drive lower natural gas prices, the forecast is for continued growth in the natural gas production from the Marcellus and Utica. When UGI announced the acquisition of CMG, we indicated we would spend between $300 million and $500 million on growth projects over the next five years. Having owned these assets for approximately six months, we continue to believe this level of growth capital is likely, and we continue to work with our existing and potential customers to identify expansion opportunities. Our midstream activities in northeastern and central Pennsylvania remains strong as well. Of note, on November 1, we placed into service our Auburn IV project, which increased the throughput of the system by over 40% or 150,000 dekatherms per day. The build-out of our Auburn system is just one example of how energy services continues to find growth opportunities in the Marcellus and Utica basins. On January 30, FERC issued the declaratory order agreeing with PennEast’s view that the Natural Gas Act properly gives for the authority to grant power of condemnation, including against parcels in which states hold an interest to certificate holders. PennEast believes this is important information for the U.S. Supreme Court to consider when PennEast filed its cert petition later in February. Also, on January 30, PennEast filed a request with FERC to face construction of the PennEast project. While demand for the overall project has not declined, legal and regulatory delays, primarily in New Jersey, have delayed the start of construction on the overall project. In response to these delays, PennEast has received significant market interest and commitments for a phased project, with initial delivery points in Pennsylvania. In addition to two delivery points that were initially planned with UGI Utilities in Columbia pipeline, PennEast intends to connect to the recently approved Adelphia Gateway pipeline, which provides new supply to southeastern Pennsylvania. If approved, this first phase would come online in November of 2021, with the balance of the project estimated to be completed in 2023. Our Utility business continued to perform well in Q1 despite weather that was 4.2% warmer than normal. Utilities recently filed a request with the Pennsylvania Public Utility Commission to increase natural gas rates by approximately $75 million. This requested rate increase is driven by the record level of capital UGI Utilities is deploying. Utilities expects to spend nearly $2 billion over the next five years to upgrade and expand our piping systems and enhance our IT systems. Our infrastructure upgrade programs have significant impact on carbon emissions. Our CO2 equivalent emissions have been reduced by approximately 30% since 2009, and we expect a further 30% reduction from current levels over the next 10 years. Growth at utilities remains robust as conversions from fuel oil to natural gas remains strong, and we see an increasing interest in the use of natural gas for electric generation, industrial processes, and vehicle fuel. Over the last 10 years, Utility has added nearly 150,000 new heating customers. The majority of this growth has come from conversions, as customers choose natural gas to replace fuel oil. These conversions provide our customers with meaningful savings and reduce carbon emissions for each converted customer by almost 50%. So in summary, we’re very pleased with the performance of both natural gas businesses and see meaningful growth opportunities, as demand for natural gas remains strong. And with that, I’ll turn it back to John.

Thanks, Bob. I’d now like to highlight developments in key areas that are crucial to our long-term success. From a strategic perspective, the first quarter was noteworthy in several respects. We continue to see significant demand for LNG peaking as LDCs focus on accessing viable natural gas supply options to meet their peak demand. Our latest storage and vaporization project in Bethlehem, Pennsylvania remains on schedule, and we expect to bring that unit online later this year. In addition to our large permanent units, we’ve also seen significant interest in portable LNG systems, which can be utilized to address short-term supply challenges created by pipeline constraints or supply shortfalls due to construction activities. Our LNG network remains a critical element of our midstream strategy and an area of strength for UGI. The Midstream and Marketing team is active in the northeast Marcellus, in addition to the UGI Appalachia activities in the southwest Marcellus that I referenced earlier on the call. As Bob noted, our Auburn IV expansion project was placed in service on November 1, supported by a 10-year take-or-pay commitment. As Bob noted in his remarks, we remain focused on our PennEast project. Our partnership will continue to pursue the development of PennEast with a two-phased execution plan. We’re encouraged by the continued strong interest in this project. PennEast is a noteworthy project in our portfolio of investment opportunities for the company. This portfolio, in addition to PennEast, includes LNG expansion, capacity additions on our existing systems, continued growth investment at Utilities, and the initial development of renewable natural gas and bio LPG projects. The diversity of our portfolio is critically important as energy policy at the state and federal level evolves. We made significant progress in Q1 on the transformation programs underway at AmeriGas and UGI International. As Roger Perreault noted on last quarter’s call, these initiatives are expected to yield $120 million of permanent operational efficiencies in AmeriGas, and €30 million of permanent efficiencies in UGI International. In both cases, we’ll realize the full benefits by the end of fiscal 2022. We continue to be on track with these key programs and expect to achieve our fiscal 2020 commitments for savings related to these efficiency initiatives. As Bob noted, we filed our latest rate request for our gas utility in late January, for a total of just under $75 million. We look forward to working with the PUC and all the rate case constituents in the coming months. We’re hopeful that this process will conclude by early fall, and new rates will go into effect on or about October 1. Given that Q2 is the most significant earnings quarter of the year, I thought I should comment on weather to date in the quarter. In short, the weather challenges that we saw in December continued through January. Weather in the eastern U.S. and in Europe was over 50% warmer than normal in January. The higher temperatures and plentiful supply also dampened pipeline capacity values in January, consistent with our December experience. As we did in Q1, we’ll look for every opportunity to take actions to help offset the short-term impact of the challenging weather. The long-term strategic investments that I’ve described and the critical transformation programs underway in the company provide us with a great foundation for future growth. We’re excited about the opportunities that lie ahead for the company. With that, I’ll turn the call back over to Kenzie, who will open it up for your questions.

Thank you. Our first question comes from Shneur Gershuni at UBS Investment. Please go ahead; your line is open.

Hi, good morning, everyone.

Good morning.

Maybe, just to start off with literally your last comment on the prepared remarks. Given the fact that January makes up the bulk of the weather for this quarter, and it’s a bigger weather quarter. Are you still comfortable with your guidance range for this year? Do you feel that enough of the margin offset that you successfully achieved during last quarter, you were able to extend this quarter and it can sort of partially offset where we are? Just sort of any comments as to how you think about it.

Sure. As you know, we typically, and this year will be no exception, kind of revisit that at the end of the second quarter when the basically the degree days for the year, the winter season is over. January is significant, but February and March are material as well. So yes, we don’t have any comment in terms of guidance and would just stick to our normal practice of waiting, at least, until the end of the winter season to comment on that.

Okay, fair enough. And then my follow-up question is with respect to the update that you provided about the assets. When we sort of see all the producers slowing their CapEx spends, rig counts are falling and so forth, you sort of talked about you still see opportunities for growth capital. I was kind of wondering if – what kind of capital is it? Is it really just connection capital to existing facilities and so forth? And is there an opportunity to actually defer some of the CapEx that you’d intended to spend and redirect some of the capital towards buybacks or further deleveraging?

Yes. Sure. As we look at it today, and we’re talking to our customers or producers all the time, we still have meaningful discussions underway, essentially about expansion of existing systems. So, as – and each producer is in their own unique position, but as they look at optimizing their capital spend and in almost every case, trimming the capital spend, in many instances, their best option is an expansion in existing acreage that’s been developed and has already supported by gathering infrastructure. So, most of what we’re doing is looking at the expansions to our existing systems, which provide the producer with an efficient incremental production opportunity, which can be very attractive at a time where some other production expansion opportunities require a lot more capital investment on their part. So that’s the nature. Clearly, we’re going to be – our path and the timing of our spend will be determined in the end by the producers’ decisions around their production levels and where they want to bring that product to market, but we’re encouraged by the discussions we’ve had, even with the lower commodity prices. So, we haven’t fundamentally changed our outlook on capital spend, CapEx levels, but obviously, we’re going to monitor that, and we’re going to be working closely with our customers as they finalize their plans around capital spend and production levels.

Just to paraphrase a little bit. So you’re basically saying the capital spend will be driven by what the growth plans are of your customers. So if they end up deferring or slowing down their pace, what do you do with the saved CapEx? Is it – do you consider buybacks? Do you consider leverage reduction? What’s the priority?

Sure, sure. We consider all those alternatives. Certainly, for us, and we – particularly for the last several quarters here, as the two transactions were executed, we talked about the prioritization of paying down debt in AmeriGas, but it’s important UGI Corp. as well, but we’ll look across all those alternatives in terms of incremental cash being available to deploy. We’ll look at paying down some of the debt. We’ll look at other new investments that could emerge. So, the full range of opportunities remain and you saw last year, we obviously bumped our dividends significantly last year. So, we’ll look at that full range to – and deploy any incremental available cash in the end and discussions with the Board in what we see is the most effective way possible.

All right. Perfect. Well, thank you very much and I will jump back in the queue.

Great. Thanks, Shneur.

Our next question comes from the line of Christine Cho from Barclays. Your line is open. Please go ahead.

Good morning, everyone.

Good morning.

If I could start with the lower LPG costs in International, can you just provide some more color on what drove it lower? And how we should expect this to continue through the remainder of the year?

Yes. I can’t provide you with a commodity forecast. But generally, what’s been happening internationally, and we’re specifically focused on Europe is that the increased production levels of propane and butane, particularly in the U.S., have resulted in commodity costs dropping pretty considerably over the last year, especially because now the market for both propane and butane has become much more global and fluid, we’re seeing the benefits of that in Europe. So, we’ve seen a pretty solid drop in our costs, which has helped and enhanced margins. And the outlook, as far as we can see in terms of the current future strip, it remains attractive. Now that obviously can change, but it’s a pretty positive outlook. And with warmer weather, LPG storage levels of LPG are quite high, because demand is less, weather-sensitive demand. So again, that’s probably a positive indicator, at least for the short-term on costs remaining low, but as a company, we’re ready to move if we need to if costs move in the opposite direction or unexpectedly. But it’s a very healthy supply environment as a distribution company, and Europe – as I noted earlier, Europe has become much more liquid over the last five years, primarily due to the availability of propane and butane produced in the U.S. It’s had a huge impact on the global market. And as a distributor, we benefited from that.

Well, like with the Saudi outage in September, like some global supply of propane and butane were brought offline. Did that impact Europe at all?

No. I mean, you probably noticed it for a day or two. There was almost a very minimal impact. I think that’s a great example of how the market has changed. Europe used to be a lot more volatile with supply interruptions, because Europe was more dependent on product coming from the east and some from the Gulf. Now, you’ve got product coming from the west, from the U.S., in addition to some of these other supply options. So, there’s a resiliency now in Europe that wasn’t there five or seven years ago in terms of supply.

Okay. And then if I could just move on to the PennEast Phase One. How do we think about economics here now that you split the project in two? Should we think that you’re earning the full 14% ROE on the Phase One capital cost and assume like a 50-50 equity debt capitalization?

I think at a high level, you could make that kind of assumption, we’re going to – you can make that assumption. Obviously, we’ll progress that. We’ve just made the filing with FERC. We’ll progress that and advise as we move forward. But the fundamental economics of the project haven’t changed materially.

Okay, great. Thank you.

There are no further questions at this time. I’ll turn the call back over to John Walsh for closing remarks.

Okay. Thank you for your time and attention this morning. We look forward to keeping you updated on our progress and to speaking with you again on our second quarter call. Take care.

This concludes today’s conference call. Thank you for your participation. You may now disconnect.