Good morning. Ladies and gentlemen, thank you for standing by. My name is Simon and I will be your conference operator today. At this time, I would like to welcome everyone, to the UGI Corporation Second Quarter, Full Year 2020 Earnings Call and Webcast. And after the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Thank you. Ms. Zahora, Manager of Investor Relations. You may begin your conference.

Thanks, Simon. 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'll also describe our business using certain non-GAAP financial measures. Reconciliations of these measures to the comparable GAAP measures are available on slide 11 of our presentation. Now let me turn the call over to John.

Thanks, Alanna. Good morning and welcome to our call. I hope you're all safe and well this morning. And I hope that, you've had the opportunity to review our press release reporting second quarter results. There is no doubt that, Q2 of FY 2020 was a memorable quarter for UGI. First and foremost, our company our industry and our world were challenged by the onset of the COVID-19 pandemic. In addition, we faced one of the warmest weather quarters in our history and addressed the impact of a general strike in France our largest European market which commenced in December and carried into the second quarter. Despite these unprecedented challenges, we delivered a strong performance in the quarter posting the second best Q2 adjusted EPS in our history. On today's call, I'll comment on key activities in the quarter. Then I'll turn it over to Bob Beard and Roger Perreault, who will highlight several critical business initiatives executed in Q2. Ted, will provide you with an overview of UGI's financial performance. In addition to summarizing key elements of our Q2 financials, Ted will provide details on our cash flow and liquidity position at the end of the quarter and our expectations for the balance of fiscal 2020. Cash flow and balance sheet strength have always been a key element of our strategy. That focus is crucially important now and provides us with a great foundation for continued growth and investment. I'll then follow Ted, with an update on our strategic initiatives. Turning to our financial performance, our Q2 GAAP EPS was $1.07 and our adjusted EPS was $1.56. That adjusted Q2 EPS was 9% above our fiscal 2019 Q2 adjusted EPS of $1.43. As I noted earlier this is the second best Q2 adjusted EPS in UGI's history trailing only…

Thanks, John. Our natural gas businesses performed well in Q2, especially considering the challenges brought on by the COVID-19 outbreak. And the headwind of weather that was 20% warmer than normal. While the full effect of the COVID virus on, our industry is somewhat unclear thus far both UGI Utilities and Energy Services have seen little impact on volumes and associated margins. Stripping out the effect of weather, both Utilities and Energy Services exceeded expectations in Q2, demonstrating that the underlying businesses remain quite strong. As a result of the COVID outbreak, in March, the Pennsylvania Public Utility Commission placed a moratorium on service terminations. Our team continues to closely monitor customer payment behavior and collectible balances. Through April we have not seen anything out of the ordinary relative to late payments. Because there's a degree of uncertainty around the effects of the COVID outbreak, UGI Utilities and our industry peers are investigating the possibility of seeking special regulatory treatment for COVID related costs. We will continue to work collaboratively with our regulators as together we learn more about this unprecedented situation. As we navigate the COVID outbreak, our primary focus remains on the safety of our employees and of our customers. Our teams at both natural gas companies have done an exceptional job, ensuring all critical work continues and that our key safety and customer service metrics have not degraded. Performance in these critical areas remains very strong. I continue to be proud of our teams as they work to ensure the energy needs of our customers are being met in the safest way possible. With an abundance of caution in late March, we suspended all non-emergency facility construction. I'm pleased to report that we have restarted construction activities as of May 4. We have established strict protocols to keep our employees, customers and the general public safe as we execute our work. Our plan is to execute the majority of our $400 million annual capital program at Utilities. As I mentioned during our last call in January, UGI Utilities filed a request with the Pennsylvania Public Utility Commission to increase natural gas rates by approximately $75 million. This rate increase is driven primarily by the significant amount of capital we are deploying. Utilities expects to spend $2 billion over the next four years, building rate base at a CAGR of 11.5%. The rate case process is progressing and we appreciate the efforts of all parties as they contend with the challenges of working remotely. Finally, I wanted to provide an update on UGI Appalachia formerly Columbia Midstream Group. Despite weather that was much warmer than normal and low natural gas prices in Q2, UGI Appalachia continues to perform very well. We continue to see margins outpace our investment case and we remain committed to building out these systems as additional production is brought to market. With that I will turn it over to Roger.

Thanks, Bob. There is little doubt that the second quarter has provided us with some important insights on our strengths and on our strategic initiatives. Let me begin by giving you an update on our transformation program at AmeriGas. We previously announced an initiative that included an investment of $175 million that will provide permanent benefits that will exceed $120 million over 24 months, of which $30 million will be realized in fiscal year 2020. We are pleased to say that during Q2, we didn't lose any momentum. And if anything, the new way of working in a COVID-19 environment amplified the need for technology enabled processes. Digitized business processes are a key component of driving efficiencies and a better customer experience. The need to adapt to COVID-19 protocols validated both the strategic direction and the need to continue to deploy resources and redesign processes as quickly as possible. I would like to emphasize that propane is an essential service for our customers and despite challenges introduced by the pandemic, safely and reliably delivering our products has been and will remain our top priority. Our reengineering efforts on work processes with the center-led team have been instrumental in operating during the COVID-19 environment. While our desired IT platform is not fully implemented, our teams were able to adjust. As we continue to develop our tools to streamline processes, we will use the learnings from our COVID-19 experience to shape our path forward as we seek to be more efficient and improve the customer experience. We are very pleased with the team's resourcefulness and ability to quickly adapt to a new way of working and serve our customers at such a critical time. During March, we did see segments of our U.S.-based business decrease while COVID-related lockdowns were rolled out. More…

Thanks Roger. With respect to guidance, we feel that it's best to provide guidance with and without our estimated impact of COVID-19 over the balance of the year. We're updating our pre-COVID guidance to an adjusted EPS range of $2.45 to $2.55. While the impact of COVID-19 is still a challenge to fully determine at this time, we estimate that this impact will reduce EPS by approximately $0.20 to $0.30 over the balance of the year. The primary impact will be reduced volumes in our commercial sector with the most significant volume reductions in the restaurant hotel and transportation categories. We're providing a range due to difficulty in forecasting the exact timing and duration of recovery for the impacted commercial customers. 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. Ted?

Thanks, John. Before we get into quarterly results, I wanted to spend a moment talking about our liquidity position. Our philosophy has always been to maintain a strong balance sheet and this approach serves us especially well as we anticipate the challenges of the COVID-19 situation. On a consolidated basis, UGI Corporation had $1.2 billion in available liquidity as of March 31. Equally important, the financing capacity is well distributed across all of our business units. We are comfortably within our debt covenants and expect to remain so and there are no significant long-term debt maturity -- maturities until 2024. Like earnings, our working capital requirements and cash generation, are seasonal. We consume working capital during the first and second quarters as we build inventory for the heating season. The third and fourth quarters tend to have low working capital requirements and higher cash generation. Well from a timing perspective, we're entering the period when we're generating cash. Additionally, we're entering our cash generation period with greater capacity due to the historically low commodity prices in the first two quarters and we're benefiting from the incremental cash generated through our AmeriGas merger and the acquisition of the CMG assets now named UGI Appalachia. Altogether, these factors leave us confident with our ability to address any COVID-19 liquidity challenges. As mentioned, COVID-19 has impacted the timing of some of our capital expenditures not eliminated that. We expect to catch up on some of the projects still this fiscal year and execute on others next year. The delay in timing supports free cash flow in the current fiscal year. Lastly, we're proud to announce that we increased our quarterly dividend to $0.33 per share. This is the 33rd consecutive year that we've increased our annual dividend. We're proud to honor our commitment…

Thanks, Ted. While we're highly focused on continuing to successfully fulfill all of our critical obligations during the pandemic, I want to turn now to look forward to fiscal 2021 and beyond. One very significant development during the past quarter has been the dramatic fall in oil prices and the impact of that drop on production activities. This is particularly relevant to UGI's Midstream business, due to the significant reduction in associated natural gas production that will occur as oil production declines. We believe that the upward movement of the future strip for natural gas will have a positive impact on production activity in both the Northeast and Southwest regions of the Marcellus. We've already seen upward movement on nat gas pricing as the market adjusted to the new normal for oil production over the past month. UGI's gathering assets are well-positioned to efficiently serve increased production across our producer base. We can provide ready access to an improving market through expansion of existing networks that serve some of the most proliferate acreage in the Marcellus. One of the regions that is likely to see increased activity is the Southwest Marcellus. Last year's acquisition of the Columbia Midstream assets, now known as UGI Appalachia, positions us well to serve an increase in production activity. As Ted noted earlier and Bob, we're very pleased with the performance of our UGI Appalachia assets since the acquisition. Over the first six months of fiscal 2020 total volume shipped on those five systems increased 14% from prior year levels. The strength of our shipper volumes during a period of low commodity prices provides us with significant confidence that our systems will be a preferred route to market for the producers we serve. Our systems in the Northeast Marcellus will also benefit from the significant…

Thank you. [Operator Instructions] And we have a question from the line of Shneur Gershuni with UBS. Your line is open.

Good morning. This is Aga Zmigrodzka on Shneur's behalf. Thank you for the color on the UGI Appalachia. Could you please provide more updates on your latest discussions with producers? Are your customers will capitalize and potentially could accelerate activity in 2021 if natural gas prices remain at current strip?

Sure. Thanks, Aga. Yes we're in active discussion with producers. Obviously, every producer is in the process of assessing the impact of the most recent movements on their own capital deployment plans. I think the important factor for us is we have available capacity on certain systems. So we can accommodate additional flow immediately for some of these producers, which is really attractive with minimal incremental capital investment on their part, or it certainly represents in many cases their most efficient option for increasing production or increasing flow from their acreage to our systems and onward to market. So I would say the discussions are quite active. They're looking at the movement and some of the positive movement, particularly over the last month. And we're really happy with kind of the experience we had over the first six months in terms of continued growth in the flows in our systems. So I would characterize them as active discussions. The market is dynamic. I think those could accelerate as the impact of the shutdown of oil drilling in other basins has the incremental impact on nat gas valuations. So we'll just stay in active contact with our producer customers and make sure they fully understand the options we have to move additional volumes for them.

Perfect. You discussed some scenarios assumptions included in the $0.20 to $0.30 range of COVID-19 impact. How will it impact your leverage? And what is expected leverage at the end of this fiscal year?

Sure. I'll comment on that briefly Aga and then I'll let Ted comment as well. Obviously, the – trying to estimate the impact of COVID is challenging. What we wanted to do was use our experience that we're seeing in Europe and provide a basis – provide an estimate of that impact, assuming that it will be a sort of a moderated reopening of activities, which is what we're seeing in Europe. So it's certainly a challenge to forecast but we wanted to be as specific as we could be. Assuming that the impacted commercial activities would over the balance of this fiscal year kind of return to normal levels that's certainly subject to change. And we would keep investors updated, if for example, those activities accelerated across the U.S. at a pace that's faster than we've seen thus far in Europe. With that I'll let Ted comment.

Yes. Good morning, Aga. I guess, what I would say is there's really nothing that's changed about our strategy for managing leverage and managing our ratios. What may change about that is the timing on how we see that affected. We continue to expect to be paying debt down over time. As we see cash flow increase from our investments in Appalachia for example, we may see the leverage rates come down at a little bit slower rate than what we had anticipated previously. But nothing has really changed about the prioritization. We expect to see AmeriGas paying down debt over time. We expect to see our corporate debt be reduced over time also as our cash flows continue to increase with the investment opportunities that we have.

Thank you for taking my questions.

And there appears to be no further questions at this time. I will now turn it back over to Mr. Walsh for any closing remarks.

Okay. Thank you, Simon and thank you all for your time this morning. We'll certainly keep you updated as things progress and look forward to speaking to all of you again very soon. Take care.

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