Good morning and welcome to the UGI AmeriGas Q1 2014 Earnings Conference Call and Webcast. Please note that this call is being recorded today Tuesday February 4, at 9 AM Eastern Time. After the presentation, we will conduct a question-and-answer session; instructions will be provided at that time. I would now like to turn the meeting over to Mr. Dan Platt, Treasurer of UGI Corporation. You may begin your conference.

Thanks Melissa. Good morning and thank you for joining us. As we begin, let me remind you that our comments today will include certain forward-looking statements, which managements of UGI and AmeriGas believe to be reasonable as of today’s date only. Actual results may differ significantly because of risks and uncertainties that are difficult to predict and many of which are beyond management's control. You should read our annual reports on Form 10-K for more extensive list of factors that could affect results, but among them are adverse weather conditions, cost volatility and availability of all energy products, increased customer conservation measures, the impact of pending and future legal proceedings, domestic and international political, regulatory and economic conditions, currency exchange rate fluctuations, the timing of development of Marcellus Shale gas production, the timing and success of our commercial initiatives and investments to grow our businesses and our ability to successfully integrate acquired businesses and achieve anticipated synergies. UGI and AmeriGas undertake no obligation to release revisions to their forward-looking statements to reflect events or circumstances occurring after today. In addition, our remarks will reference certain non-GAAP financial measures that management believes provide useful information to investors to more effectively evaluate the year-over-year results of operations of the companies. These non-GAAP financial measures are not comparable to measures used by other companies and should be considered in conjunction with performance measures such as cash flow from operating activities. 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 your host, President and CEO of UGI Corporation, John Walsh. John.

Thanks Dan. Good morning and welcome to our call, I trust that you’ve all had a chance to review our press releases reporting first quarter results for UGI and AmeriGas. It was a noteworthy quarter for us on multiple fronts. I’ll comment on our key activities in the first quarter and then I’ll turn it over to Kirk who’ll provide you with a more detailed review of UGI’s financial performance. Jerry will then follow with an overview on AmeriGas. I’ll wrap up with an update on our strategic initiative. Our Q1 GAAP earning per share were $1.05, in the quarter we incurred a $0.05 charge related to French tax legislation that was retroactive to 2013 and a favorable – and favorable $0.04 mark-to-market adjustments in our Midstream & Marketing business. This results an adjusted EPS of $1.06 which compares very favorably with our adjusted EPS of $0.88 in the first quarter of fiscal 2013. Kirk will comment in more detail on our first quarter performance in a few minutes. The strong performance in the quarter with adjusted net income up 22% reflects a positive impact of slightly colder weather in most of our service territories as well as the benefits of strong performance in the core activities that provide the foundation for our long-term performance, unit margin management, expense control, working capital management and the delivery of organic growth. Q1 was also noteworthy in terms of the strategic milestones achieved in the quarter. The Auburn II pipeline was placed in the commercial service in Q1 by our Midstream & Marketing team. This new pipeline is another significant enhancement of our asset network in the Marcellus and will directly benefit our customers in North East Pennsylvanian by providing direct access to Marcellus gas. Our gas utility continued very strong growth trajectory…

Thank you John, as mentioned, adjusted results are up $0.18 per share for the quarter, adjusted results exclude the impact of mark-to-market changes and Midstream & Marketing’s commodity hedging instruments and the effects of changes in French tax law that are retroactive to fiscal year 2013. For the first quarter we reported adjusted net income of $123.5 million or $1.6 per share compared to $101.2 million or $0.88 per share for the prior period. You can see from this Slide that we benefited from a colder than normal weather in our U.S. businesses but experience warmer than normal weather in Europe this quarter. We’re reporting operating income at AmeriGas of $179.7 million an increase of $42 million over the last year. Weather for the quarter was 3.8% colder than normal and 14% colder than last year. Total margin increased by $40 million, reflecting an increase in retail volumes sold and slightly higher average retail unit margins. Operating expenses decreased by $6 million due primarily to the absence of transition expenses incurred in the prior period, synergies associated – I’m sorry. In the prior period and synergies associated with the acquisition of Heritage Propane. UGI International contributed $49 million in income before taxes slight decrease compared to the prior year period. Weather in France was warmer than normal and approximately the same as the prior period while weather in Flaga service territory was much warmer than normal and warmer than last year. Volumes were up reflecting incremental sales associated with the acquisition of BP Poland in September partially offset by the effects of warmer weather. The increase in total margin is driven principally from higher margin at Flaga due in large part to the effects of the BP Poland acquisition, higher margin at AvantiGas reflecting higher unit margins and higher natural…

Thanks, Kirk. EBITDA for the quarter for AmeriGas was $230 million, 19% above the $193 million reported during the first quarter of last year and we like how it was done, we had stronger volumes, slightly higher unit margins and lower expenses. Volume for the quarter was up 23 million gallons or 7% on weather that was 14% colder than last year. However, the degree days in December are greater than October and November combined and as a result, a better comparison is to look at the volume weather relationship in the month of December. Volume in December was up 19% on weather that was 22% colder than the prior year. Despite to higher volume sold, operating expenses for the quarter were $5.9 million below last year. Even if you were to exclude the transition expenses from last year’s number, operating expenses declined $0.5 million on the higher volume. The strong and later than usual crop drying season early in the quarter followed by the on coming core vortex cold event and colder than normal weathers throughout the Midwest East and parts of the South all contributed to a significant run up in propane cost during the quarter. Propane of Mont Belvieu averaged $1.20 gallon in Q1 were 35% above the prior year. There run up in costs has been steady and prolonged. As a December 31, Mont Belvieu cost was $1.26 per gallon or 41% above last year. The increasing cost continued in the second quarter and has been compounded with shortages throughout the industry as inventories were at historically low levels. U.S. Propane inventories at the end of December were 46 million barrels or 21 million barrels below the same time last year and 11 million barrels or 19% below the five year average. In addition propane exports…

Thanks Jerry. As I mentioned earlier, we are pleased to start off fiscal 2014 with a strong quarter and we are excited about the progress we are making on the strategic investments and programs that are critical to our future. As Jerry noted, AmeriGas had a strong quarter with adjusted EBITDA up 19% due to volume growth, unit margin management, expense control. We are seeing continued strong performance from national accounts and A Cylinder Exchange. It’s clear that the expansion of our foot print following the Heritage acquisition has accelerated our growth rate in these two target segments. Our European business had the challenge of warmer weather in Q1; weather for Antargaz our business in France and the Benelux countries was 7% warmer than normal while Flaga’s weather for Central and Eastern Europe was 13% warmer than normal. Our European businesses performed well in this warmer weather environment and made solid progress on their strategic initiative including the ramp up of our oil to LPG conversion program in Northern Europe and our natural gas marketing programs in France and Belgium. While both of these programs are small in terms of fiscal 2014 contribution, we believe we are laying an important foundation for future contributions. Activity at the gas utility continues at a pace well above historical levels, we are working closely with each of the 700 municipalities we serve in Pennsylvania to ensure that our infrastructure replacement program are well planned and executed. Our CapEx levels have increased about 40% since fiscal 2012 and we expect to continue to at the expanding levels for the foreseeable future. Customer demand is quite strong with customer addition in Q1 running about 10% ahead of fiscal 2013. Demand is up across all three of our segments, new residential customers, conversions and upgrades and…

(Operator Instructions). Your first question comes from the line of Theresa Chen of Barclays Capital. Your line is open. Theresa Chen – Barclays Capital: Good morning.

Good morning. Theresa Chen – Barclays Capital: Jerry going back to your comments about the spike in wholesale propane prices, what is your expectation for margins for the winter heating season as where you had a month end change into the second quarter?

Well, as I described with the first quarter results our objective is just deal with higher cost and be able to pass them on to our customers as we have certainly every year for as long as I can remember, our expectations were always outlined future looking as with inflation so our intent is to continue to do that. Theresa Chen – Barclays Capital: Okay and your – excuse me hello.

We are breaking up. Hold it.

Go ahead. Theresa Chen – Barclays Capital: On the pushback or the question about passing the cost on to customers, are you receiving any pushback on there, do you see them in turning to conservation more or if they are paying on credit do you think they might have trouble with that later on?

I mean it’s a concern, because the bills are going to be much larger, but it’s way too early for us to see whether there is a direct increase in conversation or anything like that at this point.

Yes, we – being a distributor whether its propane or natural gas, clearly we experience overtime significant variation in product cost and we strongly prefer a lower cost just because it reduces the burden on customers, but one thing we are good at is managing through the cycles, so it requires a level of intensity whether you are talking about unit margin management or working capital management. The good thing is we have that intensity and focus there are some challenging conditions today, but we feel confident that with the focus that we have and the experience we will work through those issues and the key is execution on our end. Theresa Chen – Barclays Capital: Great, thank you very much.

Okay, thanks.

Your next question comes from the line of Shneur Gershuni of UBS. Your line is open. Shneur Gershuni – UBS: Hi, good morning guys.

Good morning. Shneur Gershuni – UBS: Just kind of a follow-up to the previous questions. If your expectations is to be able to maintain margins and to be able to recapture margins and so forth and what not, when I look at you are reaffirming your guidance yet your first quarter results were significantly higher than what they typically are for first quarter relative to the entire year, at least need to – question is to why the guidance range is not being moved higher if kind of your expectations are where they are with respect to both margins and volumes for the second quarter when January is in the books already and fairly it’s been colder than normal weather too.

Well that’s all true, but I think our view is that it’s still too early, margin is once side of the equation, but volume is a huge part of the equation and the fact that January was cold does not ensure that the second half of February or march will be, so it’s just prudent for us to cannot do anything at this point.

Yes, in terms of UGI as well as AmeriGas, there is still a lot of winter left, we are sitting here in the first week in February and weather beyond a very short window is unpredictable. So basically there is a lot of runway left, we are certainly pleased with the first quarter, solid positive weather in January but still early days in terms of Q2 and weather, certainly later February, March and even some of April are relevant so that’s all taken into consideration. Shneur Gershuni – UBS: Okay and then it’s kind of a follow-up to sort of your view on margins so forth, just given how for lack of a better word waggy the pricing has been over the last couple of weeks, is your experience had been so far that that customers have accepted the price increases and so forth or are they still about to get the bills in the mail and we’ll have to reassess that as – in the months ahead?

I think I’ll let Jerry comment as well, I mean I think in general our customers have seen overtime significant movements in terms of pricing, that’s the nature of the business, because we are distributing a commodity and historically there has been volatility in costs. so I think that’s expected, there have been some significant movements but we’ve had periods in the past where there had been significant movements as well. So I think we just – as I noted earlier we just have to stay focused and on top of it and support our customers operations, which we’ve done but also recognize that it’s an important period for us in terms of managing working capital, particularly receivables which is a big activity for us and across all of our businesses that certainly is true for AmeriGas. Shneur Gershuni – UBS: Great, thank you very much guys.

Okay. thank you.

(Operator Instructions). Your next question comes from the line of Chris Sighinolfi of Jefferies. Your line is open. Christopher Sighinolfi – Jefferies & Company: Hey guys good morning.

Good morning. Christopher Sighinolfi – Jefferies & Company: Thanks for the time John…

Sure. Christopher Sighinolfi – Jefferies & Company: And you added color this morning. I guess a quick question for you or for Kirk as it pertains to the tax issues in France, given the fact that that new legislation was enacted in December. Was that incorporated in the guidance you issued or is that something that sort of is additive and has to be sort of weighed on maybe perhaps off hand some of the positive domestic developments on weather and everything else?

Yes, I’ll just touch brief and I’ll turn over to Kirk. I mean we clearly issued guidance before that legislation was passed, so we didn’t anticipate it at the time of issuing guidance.

Yes, Chris it had a big impact in 2013, but on a go forward basis sort of normalized, I think it’s going to be less than 50 basis point impact on our effective tax rate. so it’s not going to be a big impact going forward. Christopher Sighinolfi – Jefferies & Company: Okay, great Kirk, and is there something you can do, I know it’s related to the deductibility of intercompany debt. Is there something you can do on that basis to sort of circum that what is now embedded in the French tax legislation or is it just something that we have to accept going forward?

The things you can do to optimize tax, but I think the way this law works, there are a certain part of this that you have to accept. Christopher Sighinolfi – Jefferies & Company: Okay fair enough. Switching gears a bit, I was wondering both for I guess the Marketing & Midstream business and also for Jerry and AmeriGas, you know we talked – you talked a lot, obviously we’ve talked a lot in the past about the benefits of a large system, you mentioned some of the things that you have been able to do from a supply standpoint that perhaps some of the smaller independents are not capable of doing and so I’m curious more on a qualitative basis as we move into this spring and into a summer and get out of the heating season. What if anything you think will transpire from a customer account perspective, when people suddenly reevaluate what a premium price service is worth.

Well, I think in general for us, for UGI and AmeriGas certainly what we strive to do as I noted, is to ensure that we’re maintaining high service levels particularly during challenging periods whether it’s on a natural gas side of the house or the propane side of the house and that’s first and foremost and then during that I think it helps to reinforce to people, to our customers why there is a value in working with us, and so we tried to demonstrate that every day; it sort of comes to the core when you have a challenge as we’ve had and certainly AmeriGas has seen some major challenges, on the natural gas side of the house there have been some major sort of events in the Eastern region. Involving – that have resulted in volatility in terms of natural gas costs and certainly has been beneficial for us to have a strong set – strong network of assets in the Marcellus and again we can demonstrate value to our customers by virtue of the utilization of those resources at times of need or demand. So think it reinforces to our customers the value in working with us I think it’s particularly true in AmeriGas which is a national company where you are talking about moving resources and asset, Large distances in response to customer needs. So I’ll let Jerry comment as well on it.

Yes. I mean the way things should turn out this year, I think we will build loyalty with our customer base. I do think there is going to be independent marketers who will suffer a bit as result of maybe letting their customers down, but there is always another side of the coin and that is it’s a very competitive industry and as earlier questions have indicated bills will be higher and some customers may view AmeriGas as having charging too much when in fact anyone of the suppliers would have charged the same amount, but it so competitive and customers have so many choice that there could be turn on the other side. So I think we are going to gain a lot and keep a lot and I expect there is going to be some customers that are going to assess the market. So I don’t know it will be a bonanza, but we’re certainly very well positioned with our story coming out of the winter. Christopher Sighinolfi – Jefferies & Company: Okay great, well I guess final question for me and I know it’s one of that probably annoys you guys basically I don’t know on a regular basis. But we hear from client, Philadelphia Gas Works any additional update or commentary you can provide relative to what you have said in the past about that business in particular some of the asset house within it.

Yes. No, no Chris we can’t really comment on that or speculate on sort of M&A topic, so no further comment on our side – from me on that. Christopher Sighinolfi – Jefferies & Company: Okay, thanks John, thanks guys.

All right, thanks.

Your next question comes from the line of Sharon Lui of Wells Fargo. Your line is open. Sharon Lui – Wells Fargo: Hi good morning.

Good morning Sharon. Sharon Lui – Wells Fargo: I’m just wondering if you guys can just touch on AmeriGas’ relationship with its propane suppliers and your confidence and your ability I guess procure additional or adequate supplies going forward.

Yes, this has been another case where that would go to a company that’s 50% larger, so we are a bigger deal I guess to number of our suppliers. We have been able to call in a number of favors this winter where we’ve gotten barge shipments, we bought entire ships that were export bound, we are one of the few companies could even say yes to an offer like that because of our size. I think our suppliers have treated us very well through this period and our supply groups relationship with them is quite strong and we continue to come through, we just have not had serious additives in any parts of the company that have been prolonged at all.

And I think as a distributor one of the basic elements of our strategy is supply diversity, so you have a diversity of supply options and then a strong execution focus so that when you have extreme conditions or unexpected events you are able to move quickly and as Jerry noted with the sort of balance sheet strength AmeriGas has we are able to make commitments and address issues and take care of – seize opportunities rapidly. So it’s a combination of basic strength of focus and then concentration on serving customers well. Sharon Lui – Wells Fargo: Okay, I guess can you also touch on liquidity at AmeriGas and the ability to handle I guess the higher working capital requirements given the increase in propane prices.

Sure.

Yes well, this is Hugh Sharon, our liquidity – we had a slide on that at the end of the quarter which was strong and our revolver is not significantly different than it was then. So liquidity is not a real concern right now. We’ve got a large credit facility, we’ve got plenty of room on it, we will be pretty rapidly towards the tail end of this quarter we will be coming into the period where working capital is coming down. so I don’t have any major concerns on liquidity.

Yes, the table shows that we have over 280 million of available liquidity at the end of the quarter. Sharon Lui – Wells Fargo: Okay, great. Thank you.

Okay, thank you.

Your next question comes from the line of Nathan Judge of Atlantic Equity. Your line is open. Nathan Judge – Atlantic Equity: Good morning.

Good morning. Nathan Judge – Atlantic Equity: Just for gas – propane prices in Europe came down about 15% year-on-year, yet margins were up only very small as 0.4%. I just wanted – to typically margins wind when propane prices or LPG prices call. Could you just discuss what is going on there and I know it’s quite warn but just why wasn’t there have been quieter and better margin expansion.

Sure Nathan, yes I think the primary impact there is you have sort of a mix effect due to the acquisition in Poland. So if – as we look across the businesses we are executing as we expect when we look by country by segment in terms of our unit margin performance. We added a lot of volume in Poland with the BP Poland acquisition that would tend to be lower than average unit margins that are added to that overall sort of pool so to speak and that would result in combined lower or moderation of the average unit margin. So when we sort of disseminated and break it into its element the teams are doing a good job with managing unit margins and you are seeing the positive impact – when costs moderate during the season, but it’s that mix effect when you add that significant volume which wasn’t present in this quarter last year. Nathan Judge – Atlantic Equity: As we look forward at 2014 are we – do you expect to see pretty similar margin growth or do you, would you expect there is some type of reason why it would change throughout the year?

No we feel across our businesses that we are well positioned, you never know where the underlying costs are going to move, but that’s part of the business we are in, you have to be ready to move regardless of what happens to the underlying commodity. So we have a high degree of confidence in our businesses – business teams and their ability to manage unit margins in any given period and across the year, so we feel good about unit margin management for the balance of 2014. Nathan Judge - Atlantic Equity Okay. I guess just do we have – do you have the number of what the margin would have been without a LPG – BP acquisition in Europe?

No I don’t have that off the top of my head Nathan, we obviously we note it because it was a very – at a variance because of the timing of that acquisition. We typically don’t go into a lot of detail on margin by country and off the top of my head; I don’t know what that impact was of blending that in, in the first quarter. Nathan Judge – Atlantic Equity: Okay and just going to hedging from customer standpoint given the volatility I think you do offer a customer opportunity to buy in I think for $100 or something to lock in prices for the year. Well can you just walk through how that could change if you see that as a margin opportunity or is that something that may change the way you buy propane?

We – I’ll comment and Jerry can as well. I mean basically when we offer that sort of fixed price option it’s for the segment of customer that value that certainty and year-in year-out there is a varying results, some years they hedge and they fix their cost and cost fall this year, costs have risen. Overtime, we haven’t seen a big correlation, where there – basically there is a certain subset of customer that like this certainty and are willing to pay a premium as you mentioned in terms of the fee to lock in the result and if you go over the last 10 years or 15 years and you look at what happens in the year when that cost move up versus the years when costs moved down, it’s a pretty consistent subset of customers. So personally I don’t think there is going to be a big impact in terms of buying behavior or customer behavior this year on it.

Hugh and I would agree, I think you just can’t perfectly guarantee these, these are just customers that wants certainty and on the commercial side even there is commercial businesses that’s wants certainty in their cost structure and that’s just a need that they have regardless of where propane is. Nathan Judge – Atlantic Equity: Okay, okay and just finally from me very interested with your comments on the share buyback, I just wanted to know as we – you considered the share buyback versus other investment opportunities, I guess number one, are you looking at how you compare that to perhaps growing dividend more quickly or other organic opportunities that you have out there, just why you came up with the share buyback and when do you expect to actually start buying back shares?

Yes Nathan there is no definitive timeframe; basically what we announced is that the board granted us permission to repurchase up to 10 million shares over a four year period. when I think about it I think it – I think about it broadly as part of our capital allocation process. We – that includes several key elements. One, our business consistently generate significant amounts of cash. Two, we have our policy that’s part of that capital allocation. Three, we are looking at a broad range of capital investment opportunities and frankly we are in an exciting period in terms of those opportunities and now four this is an option for us and we’ve gotten permission to do it. So I think it’s part of that overall process, so that’s why the time period is extended, it’s just one element that will balance and incorporate, it’s great to have that as an option for us as we think about the most effective and efficient capital allocation for our shareholders. So the good thing is we’ve got from our perspective lots of good opportunities for utilization of the cash that we generate this being one – new option now. so that’s what we think about it, its apart of a broader question on capital allocation that’s a fundamental part of what we do as the leadership team for the company. Nathan Judge – Atlantic Equity: Just thinking back to your 2012 analyst day, you drew a graph where you were talking about your base growth rate will be in 6% and then you add on stock repurchases which gets you up to 8%. Is there anything today that you see that would change you not being able to achieve those higher growth rates then?

Now the – this announcement is in no way is a reflection of any change in our future view. Our future view is very strong, we feel really good about sort of the condition or the state of our businesses and the opportunities that have emerged and we believe we’ll continue to emerge for investment. So we really view this as another option for us which we think it’s important to assess, we try to be a company that assess all of our options as we did I guess it was in 2010 when we ratcheted up our dividend payout at that point. We want to make sure we are assessing – actively assessing all the alternatives but we feel very good about the range of opportunities and some of the developments recently in the market in particular on the natural gas side of house and what we’ve seen across the Marcellus and the region as I mentioned in my remarks I think are beneficial in that they really highlight the need for additional infrastructure to support the significant increase in demand and all that will mean hopefully quality investment opportunities for the company moving forward. So we feel very good about the range of investments – investment opportunities we have for UGI and AmeriGas. Nathan Judge – Atlantic Equity: Thank you very much for your time, appreciate it.

Okay. thank you Nathan.

And there are no further questions in queue. I’ll now turn the call back over to Mr. John Walsh for any closing comments.

Okay. Thank you, Melissa. Thank you all for your time this morning, we look forward to our next call where we’ll update you on Q2 and we’ll be through the winter. So look forward to our next discussion. Take care.

Ladies and gentlemen this concludes today's conference call. You may now disconnect.