Good day and thank you for standing by. Welcome to the UGI Corporation's Third Quarter 2021 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After speaker presentation, there will be a question-and-answer session. Operator instructions were provided. 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 our third quarter 2021 earnings call. With me this morning are Roger Perreault, President and CEO; Ted Jastrzebski, CFO; and Bob Beard, Executive Vice President, Natural Gas. Roger and Ted will provide an overview of our results and the entire team will then be available to answer your questions. 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'll also describe our business using certain non-GAAP financial measures. Reconciliation of these measures to the comparable GAAP measures are available within our presentation. And with that, I'll turn the call over to Roger.

Thanks Tameka and good morning everyone. UGI delivered strong third quarter results and performed well while managing the ongoing impact of the COVID-19 pandemic. Our third quarter GAAP EPS was $0.71, while adjusted earnings per share was $0.13, $0.05 over a $0.08 performance in the comparable prior year period, reflecting strong execution across our diversified business and increased margins at UGI International. On a year-to-date basis, our GAAP EPS of $4.48 and adjusted EPS of $3.30 represent record earnings through the first three quarters of the fiscal year. We are really pleased with this performance, which demonstrates the earnings strength of our diversified business. During the Q2 earnings call, we shared the revised EPS guidance of $2.90 to $3 for this fiscal year. Given the strong year-to-date performance, we expect to be at the top end of our guidance range. Next, I'll comment briefly on several key accomplishments during the quarter before turning it over to Ted, who will provide you with an overview of UGI's financial performance. I'll return to cover other key operational highlights before opening it up for questions. During the quarter, our teams continued to execute on our major business initiatives as we deliver reliable earnings growth, progress incremental opportunities related to renewables, and make investments to rebalance our portfolio. We are well-positioned to meet our objectives and are pleased with the pipeline of opportunities ahead. Turning to the key highlights for the quarter. UGI Utilities is on track for another record year of capital expenditure, where we will invest in infrastructure replacement and reinforcement. These investments, which are primarily focused on replacement of cast iron and bare steel, are expected to drive continued reliable earnings growth as our PA utility has seen a rate base CAGR of 11.4% over the past five years. The Utilities team also continues to focus on adding new customers across our system with more than 2,200 new residential heating and commercial customers added in Q3 and roughly 10,000 added on a year-to-date basis. Our Midstream and Marketing business continues to leverage our supply assets to take advantage of opportunities that arise, and we continue to expect that we will invest substantial capital over the next several years. Our recent investments in the UGI Appalachia system, including our interest in the Pine Run system continue to perform well, and we were pleased with the strong production volumes during the quarter. As we continue to see growth in demand and rising prices, we remain confident that our midstream assets position us well for future opportunities. Our LPG businesses had a strong quarter of execution as we continue to deliver on the business transformation initiatives we previously outlined. We will drive efficiencies within our operations, improve the customer experience, and remain focused on operational and commercial excellence. We are on track to deliver the previously targeted benefits for both AmeriGas and UGI International. And expect that this strategy, coupled with continuous improvement, will generate customer and shareholder value. Our teams are progressing on exciting and attractive range of investment opportunities in renewable solutions as we execute against the renewable strategy that we previously shared with you. Yesterday, we announced that UGI Energy Services has entered into definitive agreements to develop innovative food waste digestive projects to produce renewable natural gas in Ohio and Kentucky through the Hamilton RNG joint venture. In conjunction with that project, pipeline quality RNG will be injected into a local natural gas pipeline that serves a regional distribution system. In addition, we are able to leverage GHI, which will be the exclusive off-taker and marketer of RNG for Hamilton RNG, similar to the arrangement with Cayuga RNG. In addition, during our last investor update, we discussed the intent to create a joint venture for the production and use of renewable dimethyl ether. We have started the regulatory filing process with the European authorities, and we will provide an update on our future calls as we progress on this venture. As you can see, we are making strong progress on a number of initiatives across our businesses. We will remain focused on executing against our strategy of delivering reliable earnings growth, exploring renewables opportunities and rebalancing our portfolio. We are confident that this will allow us to continue to deliver long-term EPS growth of 6% to 10% and 4% dividend growth. I'll return later on the call to discuss other business updates. But at this point, I'd like to turn it over to Ted for the financial review. Ted?

Thanks Roger. As Roger mentioned, we're pleased with the strong third quarter results. We delivered adjusted diluted EPS of $0.13, an increase of $0.05 over the prior year fiscal quarter. Our reportable segments had EBIT of $98 million compared to $81 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 in commodity hedging instruments, a gain of $1.09 this year versus $0.55 in the third quarter of fiscal 2020. Last year, we recorded an $0.18 impairment of our ownership interest in the Conemaugh Station. This interest was divested as of September 30, 2020. Also last year, we had a $0.02 loss on foreign currency derivative instruments. We adjusted out $0.07 of expenses associated with our LPG business transformation initiatives compared to $0.02 in the prior year. Lastly, we had a $0.44 impairment related to our PennEast assets. In June, the U.S. Supreme Court ruled in favor of PennEast, which is categorically good news for the industry and consumers. Natural gas will continue to play an important role in meeting our energy needs. However, even with this positive news, it is unclear when other remaining issues, such as a decision by FERC on the request to phase the project will be resolved allowing the project to be brought into service. This has led us to impair our investment. While there is uncertainty regarding the timing of PennEast, we have ample opportunity to deploy capital in other areas that meet our return objectives as we have discussed in the past. Looking at our year-over-year quarterly performance, this chart provides some additional color to the $0.05 improvement in earnings we achieved versus the prior year period. This performance was largely due to higher volumes at our international LPG business on weather that was almost 55% colder than prior year. There was also an increase due to the new gas base rate that went into effect at Utilities at the beginning of this calendar year as well as continued discipline in margin and OpEx management throughout our businesses. Our domestic businesses saw warmer weather than prior year, which impacted demand at AmeriGas and the Utilities. At the corporate level, we saw a $0.15 decrease versus the prior year period, largely due to CARES Act tax benefits that were realized last year. When we shared our revised FY 2021 guidance range of $2.90 to $3, we noted that this included $0.10 of anticipated COVID headwind in tax benefits of roughly $0.12 from CARES and other strategic tax planning actions. Our experience during the quarter continues to align with the amounts we previously projected. And as Roger shared, we expect to deliver at the top end of our guidance range. Delivering at the top end of our guidance range and given our year-to-date non-GAAP results of $3.30, we expect that Q4 will see a sizable reduction that is primarily driven by tax items when compared to the prior year period. In FY 2020, the entire GILTI tax benefit was realized in Q4, while that benefit is reflected in the quarterly results of FY 2021. In addition, our leverage of the CARES Act is reduced with our strong performance this year. Looking at the individual businesses. AmeriGas reported EBIT of $11 million compared to $19 million in the prior year. There was a slight increase in total retail volume driven by an 18% increase in national account volumes in comparison to the prior year period. This volume increase fully offset a 19% decrease in cylinder exchange volume that we saw as sales normalized after a significant uptick in Q3 of FY 2020. When compared to 2019 third quarter, there was a 5% increase in cylinder exchange volume this quarter. Overall, the business saw a decline of $14 million in total margin that was largely attributable to customer mix. We saw lower volumes in the higher margin residential and cylinder exchange customer segments that was partially offset by the higher volumes from lower-margin commercial and motor fuel customer segments. Other income increased by $7 million, largely due to higher finance charges, which were suspended in response to the COVID pandemic in the prior year period and one-time gains on asset sales in the current period. UGI International generated EBIT of $41 million compared to $21 million in fiscal 2020. Retail volumes increased by 21%, largely due to the significantly colder than prior year weather that I described earlier. And recovery on certain volumes that were impacted by the COVID-19 pandemic last year. This increase in bulk and cylinder volumes drove the higher total margin and offset the slightly lower unit margins given the 81% increase in average wholesale propane prices over prior year. We saw roughly an $18 million or 86% 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 exchanges 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 $21 million, which was fairly consistent with fiscal 2020. The business experienced improved margins from capacity management, gas gathering and renewable energy marketing activities in comparison to the prior year period. Our recent investment in Pine Run continues to deliver in line with our expectations and is the primary driver for the increase in this quarter's EBIT versus prior year. UGI Utilities delivered a strong performance for the quarter and reported EBIT of $25 million, $4 million higher than the prior fiscal year. This increase was largely attributable to continued growth in our customer base and implementation of increased gas base rates on January 1st. Depreciation expense increased due to continued distribution system and IT capital expenditure activity. Turning to our liquidity. Cash flows remained strong with a 9% 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 $2.4 billion, approximately $800 million more than the prior year period. Our balance sheet remains strong. We continue to be comfortable with the financing capacity across all of our business units and are well within our debt covenants. We have now completed the financing needed to close the Mountaineer acquisition, and that includes a mix of debt and equity units consisting in part of convertible preferred stock, which is consistent with the financing mix that we shared in the past. And with that, I'll hand the call back over to Roger.

Thanks Ted. Before we move to Q&A, I'll share with you some other key business updates since our last call. First, the Mountaineer acquisition continues to progress smoothly. In July, we completed a key milestone in the regulatory process by filing an agreement for settlement as well as providing testimony in a hearing before the commission. Our next step will be to file a proposed order by August 10th, seeking the commission's approval. While the precise timing of the commission's approval is uncertain, we have completed several key steps in the regulatory approval process, and now expect to close well before the end of the calendar year and even potentially within this fiscal year. We continue to expect the transaction will be accretive to earnings in the first full year of operation and believe Mountaineer will provide meaningful growth opportunities moving forward. During the quarter, our UGI Utilities Electric division reached a settlement agreement on its rate case and filed a joint petition for approval of that agreement with the Pennsylvania PUC on July 19th. Under the terms of the settlement agreement, the Electric division would be permitted to increase base rates by $6.15 million, and we anticipate new rates going into effect in November 2021. Separately, the second phase of the gas base rate increase of $10 million went into effect on July 1st. In July, UGI Utilities completed construction of a new state-of-the-art centralized safety training facility. Safety is our top priority and a core value at UGI. We are pleased to place this new facility in service as it reinforces our commitment to safety across the organization. Lastly, our AmeriGas team continues to increase the footprint of our home delivery service, Cynch. During the quarter, we launched Cynch in three additional markets, bringing the total to 23 cities across the U.S. As we look forward to the remaining quarter in this fiscal year and fiscal year 2022, we are pleased with the strong year-to-date performance and the investment opportunities available to us as we execute on our strategy. We have demonstrated our resiliency and our ability to operate effectively despite a challenging and volatile macro environment. I remain confident that we're well positioned both strategically and financially to continue executing and delivering reliable long-term EPS growth of 6% to 10% and return capital to shareholders through a robust dividend that we expect to grow at 4% over the long-term. To do this, we will remain committed to our core businesses, driving continuous improvements, and efficiencies in our operations and lean into investment opportunities in our natural gas business and in renewable energy solutions. And with that, we will open it up for questions.

Operator instructions were provided. Our first question will come from the line of Marc Solecitto from Barclays. You may begin.

Hi, good morning. So, your gross margin percentage came in a bit light at APU this quarter. Just wondering, was that a function of LPG prices sharply rising during the quarter, business mix with lower cylinder sales or perhaps with your LPG transformation? I know part of the strategy was to share some of your cost savings with customers. So, just wondering if you could comment on the drivers there?

Yes, good morning Marc. Thank you for that question. I think you hit it during your question. The main element that drove margins down is what we've seen in the quarter is an increase in national account activity as the economies continue to improve. While at the same time, we've seen a decrease in cylinder volumes as, obviously, the utilization of cylinders for propane for heating and patios, et cetera, has decreased. So, a large component of the margin period-over-period is really due to a mix effect. We continue to have good pricing control as we see commodity prices come up. We continue to always have an approach where we will go recover that. There could be a small timing gap between when commodity prices are coming up and when we're effectively able to drive the prices through to the market. But as we've shown in the past, we continue to see good margin and consistent margin evolution as commodities go up and down.

Got it. And then on your guidance, it seems like there's some nice momentum in the business with you now tracking toward the upper end of the revised range. But obviously, sometimes it's a bit opaque in terms of quantifying weather impacts versus more structural drivers, at least from an outside perspective. So, just wondering if you could comment on how underlying or weather-normalized results year-to-date as compared to your budget, and how that's trending for next year?

Yes. So, I'll start and I'll pass it over to Ted for a few additional comments. So, as we've highlighted during the quarter and now it's been several quarters in a row, we continue to have very good performance. We continue to track well compared to our budgets, our plans and the guidance that we've provided to investors. It's driven with a lot of components. And I think one point that I'd like to highlight is it demonstrates the power of the diversification we have as a business. The fact that we operate across 17 European countries, we operate across the U.S., not only geographic diversification, but also business activity. So, we continue to see all of these puts and takes provide us with very solid robust earnings growth, and it really largely explains the strong performance we've had now over several quarters. But I'll pass it to Ted for additional comments.

Yes, the only thing I would add is, I think it's very fair to say that we have underlying strong momentum. It has been enhanced with really great weather in Europe. So, international is especially strong, but the underlying momentum is strong. We are very much on track on our transformation efforts at LPG, our capital spending and therefore, our ratable spending at the Utilities continues to be strong. We're hitting yet another record year in investments in Utilities. And while we may be a little bit short on capital spending against our initial projections, we will be delivering on the mileage expectations for replacement and betterment that get charged through our rate base. And so yes, very strong momentum for the business.

Great. And then maybe just lastly on PennEast. Would you be able to just provide an update with where that project stands? And I guess, steps forward following the Supreme Court ruling?

Yes. Well, certainly. And Bob Beard is on the call, so I'll let him add further color. But certainly, this really does not change our belief that PennEast is an important project for the region, and that it's a project that should be built. And we certainly remain committed to the partnership agreement. But with that, what I'd like to do is to let Bob explain in a little more detail as to the decisions we made and how we see the future on that project. Bob?

Yes. Thanks Roger. Yes, I agree with Roger. I think the partnership still firmly believes that New Jersey needs another source of natural gas. But what's in question now is the timing. Even though we got what we consider to be a necessary ruling from the Supreme Court, there still remains quite a few hurdles from a regulatory standpoint. So, the timing of the project remains in question.

Great. Thanks for the time.

Sure.

Operator instructions were provided. I'm currently not showing any further questions in the queue at this moment.

Great. Thank you. Well, I'd like to just thank everybody for joining us on the call today and we certainly look forward to seeing you on our next call. Thanks and have a good day.

This concludes the conference call. You may now disconnect.