Ladies and gentlemen, thank you for standing by, and welcome to the UGI Corporation Second Quarter 2021 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. I would now like to turn the conference over to your speaker today, Tameka Morris. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us. With me today are John Walsh, President and CEO of UGI; Roger Perreault, Executive Vice President, Global LPG and, effective June 26, 2021, President and CEO of UGI; Ted Jastrzebski, CFO of UGI; and Bob Beard, Executive Vice President, Natural Gas. 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. See 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. Reconciliation of these measures to the comparable GAAP measures are available on slide six, 22 and 23 of our presentation. Now, let me turn the call over to John.

Thanks, Tameka. Good morning, and welcome to our call. I hope that you've all had the opportunity to review our press release reporting second quarter results. This was a very strong quarter for us, as we clearly demonstrated the earnings power of the company and the strength of our diverse operations. Our teams delivered record Q2 earnings, as we saw the positive impact of our growth investments, enhanced unit margins, effective OpEx management and colder weather across our service territories. While weather was colder than the prior year across the business, it was warmer than the 10-year average in each of our businesses. We also saw some incremental impact of the pandemic within certain customer segments. These headwinds were more than overcome by our teams, as we executed our growth strategies, served customers safely and efficiently, and made significant progress on our renewable solution strategies. On today's call, I'll comment on key activities in the quarter, and then turn it over to Ted who will provide you with an overview of UGI's financial performance in Q2. In addition to our strong earnings performance, our free cash flow and balance sheet metrics for the quarter were noteworthy. Ted will take you through each of these elements. Bob Beard will comment on a range of key developments across the natural gas line of business, and Roger Perreault will update you on progress in our LPG line of business. Roger, as our incoming CEO, will also provide his perspectives on the exciting prospects for UGI's future growth and success. I'll then close with a few comments, as I conclude my final earnings call. Turning to our financial performance. Our Q2 GAAP EPS was $2.33 and our adjusted EPS was $1.99. That adjusted Q2 EPS was almost 30% above our fiscal 2020 Q2 adjusted EPS of $1.56. As I noted earlier, these are record Q2 earnings for UGI. Our adjusted year-to-date EPS of $3.17 also represents record earnings through the first two quarters of the fiscal year. Both the fiscal 2021 and fiscal 2020 quarters have been adjusted for the mark-to-market valuation of unsettled hedges, costs associated with our LPG transformation initiatives, and other items that Ted will cover later. Based on this strong year-to-date performance, we are increasing our fiscal 2021 adjusted EPS guidance to $2.90 to $3.00. The midpoint of our updated guidance is $0.15 above the midpoint of our original guidance. We're really pleased with the strong performance, which demonstrates the earnings and cash flow strength of our diverse businesses. This breadth of activity is also crucially important as we develop an exciting range of renewable solutions opportunities. Bob and Roger will provide the specifics during their remarks. We're developing an attractive range of investment opportunities in renewable solutions, with a particular focus on RNG, bioLPG and renewable DME. These are compelling solutions, particularly since they can be delivered to customers utilizing existing distribution infrastructure. We've been really pleased with the investment return profile we're seeing on these projects. They are earnings accretive immediately with attractive unlevered IRRs. Finally, and most critically, there are also affordable solutions from our customer's perspective, as there is no need for families or small business owners to invest in new appliances or equipment. You'll hear more on this from Bob and Roger. I'm also excited that we'll be publishing our Third ESG Report later this month. This has been an area of intense focus for us over the past year. We're making great progress in areas that are absolutely vital for the company's future and the future of the communities we serve. Our report will contain critical long-term commitments, but we'll also include a set of shorter-term commitments that will provide us with a nice framework for updating our key stakeholders on our progress. I'll return later on the call to offer a few comments on this, my final earnings call, but at this point, I'd like to turn it over to Ted for the financial review. Ted?

Thanks, John. As John mentioned, we're pleased with the record results for the quarter. Despite weather that was warmer than normal and the continued COVID-19 headwinds, we delivered adjusted diluted EPS of $1.99 compared to $1.56 in the prior fiscal quarter. Our reportable segments had EBIT of $630 million compared to $527 million in the prior year. This table lays out our GAAP and adjusted diluted earnings per share for fiscal year 2021 compared to fiscal year 2020. As you can see, our adjusted diluted earnings exclude a number of items such as the impact of mark-to-market changes and commodity hedging instruments, a gain of $0.25 this year versus a loss of $0.43 in the second quarter of fiscal 2020. Last year, we had a $0.01 gain on foreign currency derivative instruments compared to a $0.05 gain this year. We adjusted out $0.07 of expenses associated with our LPG business transformation initiatives, which is consistent with the amount in the prior year. Lastly, due to a change in the Italian tax law that came into effect this year, we had a one-time $0.11 gain in the quarter. Turning to our liquidity position. Cash flows remain strong with a 15% increase in the year-to-date cash provided by operating activities over the corresponding prior year period. As of the end of the quarter, UGI had available liquidity of $1.6 billion, $400 million more than the prior year period. We also continue to be comfortable with the financing capacity across all of our business units, are well within our debt covenants and remain committed to paying down debt at AmeriGas and reducing our overall corporate debt ratio in order to maintain a conservative capital structure. Earlier this week, we took several actions as we continue to proactively manage our balance sheet. We extended the maturity of the existing term loan due August 2022 to May 2025 and added a new four-year $300 million term loan commitment, a portion of which may be used to finance the Mountaineer acquisition. Our plan remains to finance the acquisition with a combination of equity-linked securities, existing liquidity and debt. So, we may not ultimately draw the $300 million commitment on the new term loan when we close on the transaction later in the year. Lastly, we're pleased to announce that the Board of Directors increased the quarterly dividend to $0.345 per share making this the 34th consecutive year that we've increased our annual dividend. As I mentioned earlier, for the second quarter, we delivered adjusted diluted EPS of $1.99, which was $0.43 higher than the prior year period, despite continued headwinds from the COVID-19 pandemic. This record performance was largely due to weather that was colder than the prior year in all of our service territories. Higher unit margins at our LPG businesses and the new gas base rate that went into effect at UGI Utilities at the beginning of the quarter also contributed. We also had a $0.04 pickup at corporate that was primarily driven by tax benefits from the CARES Act passed last year, as continued investments provided the ability to recreate a tax NOL position again this year. As you can see, all of our operating segments posted results that were higher than the prior year, despite the warmer-than-normal weather, reaffirming our capital deployment approach and the strength of our core set of diversified operations. Looking at the individual businesses. AmeriGas reported EBIT of $239 million compared to $206 million in the prior year. The colder-than-prior-year weather led to higher retail volume, including higher national accounts volumes. Cylinder Exchange volumes also increased and largely offset the negative effects of the COVID-19 pandemic in other customer segments and other residual volume loss. Total margin also benefited from higher average LPG unit margins due to strong margin management efforts. This was partially offset by lower fee and service income. UGI International achieved EBIT of $149 million compared to $126 million in fiscal 2020, on weather that was 11.8% colder than prior year, but this was partially offset by the continued effects of COVID-19 on the business. The improvement in total margin was driven by strong heating-related bulk volumes and higher unit margins due to a continued focus on margin management. We saw a $17 million or 13% improvement in the year-over-year constant currency performance in EBIT. Separately, our hedging strategy, which is intended to offset the multiyear impact of foreign currency changes, is working as intended and reducing the volatility associated with U.S. dollar shifts over time. Moving to the Natural Gas businesses. Midstream and Marketing reported EBIT of $100 million in the quarter compared to $79 million in fiscal 2020. This increase reflected higher margin stemming from weather that was 12% colder than the prior year. In addition to incremental contribution from the renewable energy marketing activities, primarily from GHI, and continued build-out of the Texas Creek gathering assets, GHI continues to perform well and is exceeding expectations. As a result of the current RIN prices, during the quarter we recognized expected earnout payments related to the acquisition, thereby reducing other income and expenses. This decline in other income and expenses was partially offset by the equity income from our investment in the joint venture that owns the Pine Run Midstream assets acquired during the quarter. UGI Utilities reported EBIT of $142 million, $26 million higher than the prior fiscal year on weather that was 11.8% colder than the prior year. Colder weather, continued growth in our customer base and implementation of the new gas base rate on January 1st drove the 15% increase in core market throughput, despite the continued effects of COVID-19 on volume. Depreciation expense increased due to continued distribution system and IT capital expenditure activity. Strong operating performance drove record financial results for the quarter and enhanced our full year outlook. As a result, we're increasing our 2021 fiscal year adjusted EPS guidance range from $2.65 to $2.95 to a range of $2.90 to $3.00. This increase of $0.15 in the midpoint of our guidance reflects the strong business performance due to increased volume margin, disciplined expense management, and our business transformation initiatives, which offset warmer-than-normal weather in all of our service territories. During our Q4 earnings call, we shared with you that we expected a $0.10 hit from the COVID-19 pandemic primarily in the first quarter, and while the impact persisted longer than initially anticipated, we still believe the $0.10 figure for the full fiscal year continues to be sound. We also expect non-recurring tax benefits of approximately $0.12 attributable to the increase in CARES Act tax benefits, which I previously discussed, coupled with benefits from other strategic tax planning actions. And with that, we will turn to our Natural Gas business.

Thanks Ted. Both our Natural Gas businesses experienced weather that was colder than the prior year, although still warmer than normal in Q2. Utilities saw temperatures that were more than 8% warmer than normal, while Energy Services saw weather that was 6% warmer than normal. Despite warmer-than-normal weather, we saw solid performance at both Utilities and Energy Services, as the businesses continue to execute well. Energy Services was able to take advantage of price volatility by deploying their peak shaving plants and locking in higher capacity values. While we cannot predict price volatility going forward, the Energy Services team is prepared to leverage our significant supply assets, as these opportunities arise. We also continue to be pleased with what we are seeing on the renewables front. GHI is performing well. The digester project we are partnering on in Idaho is progressing, and we are excited about our latest renewables investment in Cayuga RNG. These projects, along with other opportunities we are evaluating, will help support our commitment to make significant investments in the renewable energy space. In February, Energy Services announced the partnership with Stonehenge Resources to acquire Pine Run Midstream LLC. We believe Pine Run is a good addition to our midstream portfolio and is positioned for growth moving forward. We're pleased with this opportunity and are encouraged by the production volumes we are seeing over the short time we have owned the system. There was an increase in the level of drilling activity on our UGI Appalachian systems in Q2. As an example, we saw a 20% increase in production on one of our key gathering systems. Considering the factors that can affect our midstream business, such as weather, economic conditions, continued growth in demand and the difficulty of siting and constructing new pipeline facilities in certain areas, we remain confident that the diversity and flexibility of Energy Services' midstream assets position us very well moving forward. The team at UGI Utilities continues to execute very well. Some highlights for UGI Utilities include: the team managed through another warmer-than-normal heating season by controlling expenses, including uncollectible balances. Our Utility continues to see strong customer growth, adding more than 3,800 new heating customers in Q2. With a plan to invest more than $400 million, Utilities is on track for another record year of CapEx in FY2021. In addition, we fully expect to meet our commitment to the Pennsylvania PUC on retirement of aged infrastructure. We continue to make progress on projects that will help drive a cleaner environment. In April, we commissioned our pipeline to the UPS facility in Middletown, Pennsylvania. UPS is converting its fleet to compressed natural gas, thereby dramatically reducing their carbon footprint. This will be the largest CNG installation of its kind in the country. Utilities team is currently working on more than a dozen projects that range from sourcing environmentally friendly RNG to helping customers reduce the environmental impact of their operations. We believe our long history of being a trusted energy partner to over 700,000 customers, positions us well as the foundation for a cleaner energy future. I want to provide an update on the acquisition of Mountaineer Gas Company. Thus far, the process is progressing as expected, with the teams at Mountaineer and UGI responding to data requests from the West Virginia PSC. We continue to be very pleased with the leadership of Mountaineer and believe that they will be a great addition to the UGI team. We remain encouraged that Mountaineer will provide growth opportunities and look forward to finalizing the acquisition, which we expect will happen in the second half of calendar 2021. Both UGI Natural Gas businesses continue to experience solid growth. The teams at Energy Services and Utilities remain focused on execution. Looking at the solid performance of our natural gas businesses, despite the unfavorable weather conditions we experienced during the most recent heating season, I believe it's clear that the fundamentals of both businesses remain very strong and that natural gas, including renewables, will continue to be a significant growth platform for UGI. And with that, I'll turn it over to Roger.

Thanks Bob. The Global LPG businesses delivered robust results in the second quarter, despite marginally lower commercial and industrial volumes, driven by the ongoing COVID pandemic in both Europe and the United States. With weather that trended slightly warmer than normal, but colder than prior year, our Global LPG line of business delivered second quarter EBIT in excess of prior year by US$56 million or 17%. We're very pleased with this result, as it demonstrates our business' vital underpinnings, which include the value of our diversified portfolio of customers, applications, geographies, and our ability to manage our core fundamentals to offset headwinds, such as the impact of the COVID pandemic and rising commodity costs. Both U.S. and European teams experienced some cooler weather versus prior year that increased demand in heating segments and achieved margin expansion due to focused margin management during the higher price commodity environment. We continued to experience increased demand in our Cylinder Exchange business, including our home delivery service branded Cynch in the U.S., and increased demand in the higher-margin home cooking cylinder segment in Europe. Now, let's move to more specifics at AmeriGas. We are progressing with our reengineering of key processes and systems that are part of the transformation efforts. In fact, in the second quarter, our operating model relied on the use of a centralized customer engagement services center and new customer management tools and a new routing and logistics tool, all with the goal of satisfying our customers in the most efficient way possible. The second quarter was the first winter season that we were fully operational with our new operating model with weather that was close to normal. We experienced service issues in certain areas of the country during this first 120 days of operating in the new model. We are pleased with how our teams have addressed these issues, and we continue to make solid progress towards continuous improvement in all areas. We anticipate positive impacts of process improvements to become more evident as we move through the warmer season and prepare for the winter ahead. Digitized business processes are a key component of driving efficiencies and, more importantly, a differentiated and better customer experience. I would like to highlight a few additional items that will be beneficial in the remainder of the year and beyond. Through Q2, Cynch had been rolled out in 21 cities across the USA, and we will continue the rollout to three additional markets this spring, with the intent to reach a total of 40 cities by the end of fiscal 2022. Overall, our Cylinder Exchange program experienced a 5% increase in volume over prior year in Q2. Our national accounts program continues to see solid growth and experienced the second quarter volume increase of over 15% over prior year. We're excited about the work that has been achieved with our transformation initiatives, and we look forward to continuously improving the various customer touchpoints with our new digital tools in our customer engagement services center. As demonstrated previously, our teams will continue the diligent management of discretionary expenses to offset the lingering effects of COVID-19. And we will now keep our focus on finishing the year strong. Now moving onto our International business. As mentioned in previous earnings calls, our International team is also focused on driving efficiencies and improving the customer experience. In addition to the focus on driving efficiencies, our International team continued to demonstrate tremendous resilience in the second quarter and more than offset the headwind generated by COVID in Europe, where, in general, shutdowns continue to be much more restrictive than in the U.S. Our investments in transformation are providing us with a solid foundation for continued strong EBIT performance. As mentioned during our last earnings call, another component of our international transformation effort is organizational design. We have established two centers of excellence that are now fully in place and delivering value. The first brings operational excellence. This center is focused on the sharing and implementation of best practices between our various operating entities, including AmeriGas. The other center of excellence is focused on commercial excellence, which includes renewable solutions. We're excited about having the renewables team in place, and we're pleased with the very recent announcement of the Ekobenz partnership for the supply and development of renewable bioLPG in Europe. We received shipment of bioLPG from Ekobenz, which marks a historic moment in our journey to renewable solutions. This effort is instrumental in leveraging our existing assets and capabilities as we continue to decarbonize our supply infrastructure. In closing, the second quarter continued to bring challenges to our operations in the U.S. and Europe, as the COVID pandemic persisted and commodity costs increased. We are pleased that despite these challenges, our performance demonstrated the high level of commitment of our employees. Our continued focus on operational excellence, cost management and ongoing customer experience improvements, all contributed to the solid results in the quarter. Our strategy of geographic diversification across 18 countries and multiple customer segments, again, proved successful. And all of this was underpinned by the dedication of our 9,000-plus employees to safety, our customers and the communities we serve. Before I hand it back to John, I just wanted to formally thank him for his years of service to this company. His dedication and efforts have left its mark on every aspect of our business. I am excited to be his successor as John transitions into his new capacity on UGI's Board. While there may be a change of CEO, I wanted to take a few minutes to highlight that our strategic and long-term commitments will remain unchanged. UGI has a strong history of creating growth and tremendous value for its shareholders. Built on a culture of innovation and delivering on long-term commitments, we continue to embrace our core values of safety, respect, integrity, responsibility, reliability, and excellence, which is evident in all we do. While we will continue to innovate and evolve, I wanted to assure you that the key areas of focus that we previously shared will continue to be a priority. We are committed to rebalancing our portfolio through disproportionate investments in the Natural Gas business, leaning heavily into renewable energy solutions and acquisitions. Disciplined focus and our continuous improvement programs will also maintain the pipeline of strong cash flows from the business. We are excited about the opportunities for growth in renewables, whether in renewable Natural Gas, bioLPG, renewable DME and hydrogen as we look to the future. Over the past several months, we have strengthened our focus on environmental, social, and governance and our BIDE—Belonging, Inclusion, Diversity & Equity—imperatives, as these are areas that are critical to our future success. These initiatives will reduce our carbon footprint and expand our investment in renewable energy, as well as ensure that our company continues to create value for its employees, customers, and shareholders. We are committed to influencing change and addressing systemic racism that exists in the communities that we serve. Lastly, the long-term commitments that we shared with you over the past two decades remain unchanged. We strive to deliver EPS growth in the 6% to 10% range and dividend growth of 4%. To do this, we will remain disciplined, innovative and entrepreneurial, as we identify the best paths for continued growth. We have a very bright future ahead of us. And I am personally excited about what these opportunities represent for UGI, its customers, employees, and shareholders. And now, I will hand it back over to John.

Thanks Roger. Before we open it up for questions, I'd like to offer a few comments as my time as UGI CEO comes to a close and I transition to a board role. It has been an absolute privilege for me to serve as UGI COO and CEO over the past 16 years. I have been extremely fortunate to work with great teams across the company who are so committed to serving our customers, growing our company and keeping our communities and their colleagues safe. We have a spirit of innovation at UGI that has positioned the company well, as we enter this next phase of investment and growth in a rapidly evolving energy sector. Our Board is a huge strength for the company and they have provided me with great support, insight and guidance over the past 16 years. They made an outstanding decision in appointing Roger as our CEO, and I am very confident that UGI will thrive under Roger's leadership in the years ahead. I would like to close by thanking you, our investors and analysts for the time you spent with me as we've discussed UGI's business over the past decade and a half. I appreciate the commitment you've made to UGI by your investment in our company and value the perspectives you brought to all those discussions over the years. With that, we'll open it up for your questions.

Thank you. We have a question from the line of Marc Solecitto with Barclays. Your question, please.

Hi. Good morning. Just wanting to clarify on the $0.15 increase at the midpoint in fiscal 2021 guidance, does that largely reflect the $0.12 benefit you called out from non-recurring tax items?

Yeah. I'll comment briefly, Marc. And then I'll let Ted comment as well. I mean, it's a combination of factors; certainly that was helpful. It also reflects, I think, a lot of work across the businesses to offset what has been a warmer-than-normal winter. So, it's a variety of actions and proactive efforts that enabled us to increase guidance. But I'll also let Ted provide some color on that as well.

No. That's exactly right. I mean, there's a lot of moving parts, but overall we had really strong operational results that overcame COVID, overcame warmer-than-normal weather, although, quite a bit colder than it was a year ago. Those generally net out. The piece that does stand out is the non-recurring tax item, primarily driven by our ability to take a second year hit at CARES as we were able to establish an NOL position this year, given certain acquisitions and investments we've made, including our investments in the renewable space. And so, CARES Act benefits as you know, go away next year. So, it is a one-time benefit and that makes up most of that change versus what we had expected to see when we gave our original guidance.

Okay. Great. And then, just wondering—pro forma for the Mountaineer acquisition—do you have an updated sense of seasonal weighting between the fiscal first half and fiscal second half?

At this point, Marc, I don't think we're in a position to provide additional comments beyond what we've said before in terms of it being accretive. Certainly by the time the team—Roger and the team—provides the guidance for next year, we anticipate the acquisition will be closed, and we'll be able to provide a lot more detail in terms of specifics. The basic earnings profile of Mountaineer will look similar to our own gas utility in that geographically we're in the same area. And the customer base is actually quite similar, which is one of the things that attracted us to Mountaineer.

Great. Thanks for the time.

Sure. Thank you.

And this concludes today's conference call. Thank you for your participation and you may now disconnect. Have a wonderful day.