Good morning. My name is Shawn and I will be your conference operator today. At this time, I would like to welcome everyone to the UGI Amerigas First Quarter 2016 conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star then the number one on your telephone keypad. If you’d like to withdraw your question, please press the pound key. Thank you. Mr. Ruthrauff, Director of Investor Relations, please go ahead, sir.

Thank you, Shawn. As we begin, let me remind you that our comments today will include certain forward-looking statements which management 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. Please read our earnings release and our annual report on Form 10-K for an extensive list of factors that could affect results. We assume no duty to update or revise forward-looking statements to reflect events or circumstances that are different from expectations. We will also describe our business using certain non-GAAP financial measures. Reconcilations to the comparable GAAP measures are available in the appendix of our presentation. With me today are Hugh Gallagher, CFO of Amerigas, Kirk Oliver, CFO of UGI, Jerry Sheridan, President and CEO of Amerigas, and your host, President and CEO of UGI Corporation, John Walsh. John?

Thanks Will. Good morning and welcome to our call. I trust that you’ve all had a chance to review our press releases reporting Q1 results for UGI and Amerigas. As noted in our releases, this was a quarter marked by extreme weather; however, unlike the past two winters, our extreme weather in Q1 featured temperatures nearing 70 degrees during the Christmas season. Given the major challenges presented by the weather, we were very pleased with the quality of our earnings in the quarter. On an adjusted basis, our EPS fell just below the EPS delivered in Q1 fiscal ’15 with the contributions from several of our recent major investments being the key to a very solid quarterly performance. Although demand was clearly dampened by the weather, we saw continued strong weather-adjusted demand in each of our businesses. I’ll comment on our key activities and market developments in the first quarter, then I’ll turn it over to Kirk who will provide you with a detailed overview of UGI’s financial performance. Jerry will review Q1 for Amerigas, and I’ll wrap up with an update on our strategic initiatives. Our Q1 adjusted EPS was $0.64, just below the $0.68 delivered in fiscal ’15. Both quarters have been adjusted for the mark-to-market valuation of unsettled hedges and for the acquisition and transition costs associated with the Total Gas, now rebranded as Finagaz acquisition. Our adjusted EPS reflects the earnings strength of our businesses during one of the warmest first quarters in UGI’s history. While the extremely warm weather had a significant negative impact on our quarterly performance, our results clearly reflect the positive contributions from our Finagaz acquisition as well as the contributions from our new LNG and pipeline assets that came onstream in midstream and marketing. It’s important to note - and this…

Thanks John. Good morning everybody. This table lays out our GAAP and adjusted earnings per share for this quarter compared to the same for Q1 of last year. As you can see, adjusted results exclude the impact of mark-to-market changes in commodity hedging instruments and acquisition and transition costs associated with the integration of Finagaz. Our adjusted earnings of $0.64 per share for the quarter is down only $0.04 from last year in spite of nearly record warm temperatures in all of our service territories. As you can see from this slide, we experienced warmer than normal weather in all of our businesses this quarter. Weather in the international businesses, while much warmer than normal, is fairly consistent with the warm weather we experienced there last year; however, weather in the U.S. as experienced in our utility business and Amerigas was much warmer than last year. The warmer weather experienced in the U.S. resulted in negative variances to earnings in the U.S. businesses but was measurably offset by strong results in Europe, largely due to the accretive acquisition of Finagaz in France. I’ll run through the results for each business and then spend a few minutes reviewing the results for this Q1 compared to the results of our last very warm weather period in Q1 of 2012. As mentioned earlier, Amerigas experienced much warmer weather this quarter. Volume was down 13% on weather that was 17% warmer than normal, and we still delivered operating income of $130 million, which is down only 7% versus last year. This represents a decrease of $10 million versus the first quarter of last year, where we experienced weather that was only 4% warmer than normal. Operating and administrative expenses decreased by $16.3 million, down 6.6% versus last year primarily due to lower self-insured casualty…

All right, thanks Kirk. Good morning everyone. For Amerigas, adjusted EBITDA in the first quarter was $178 million or 6% below the $189 million we reported in the first quarter of fiscal 2015. As you’ve heard, weather is the story of the quarter. Q1 degree days came in 20% warmer than normal nationally, and the month of December alone was 24% warmer than normal. Volume was down 13% for Amerigas in the quarter on weather that was 17% warmer than last year. A continued positive note is that the propane cost environment was significantly lower than in the prior year and continued to fall during the quarter, with pricing at Mont Belvieu of $0.42 for the quarter or 45% below the $0.77 per gallon last year. As a result of this falling cost environment, we were able to manage a $0.10 improvement in margin for the quarter versus last year. Early in the quarter, we moved into our warm weather operational plan and were able to keep our expenses $16 million or 6% below last year. One good example of our expense management efforts can be found in a program we refer to as Amerigas Airborne. In response to colder temperatures that we saw in the west, we were able to flex staffing during the quarter and relocate drivers on a rotating basis from the eastern part of the country, where we were experiencing record warmth, over to the west. This enabled us to meet peak day service needs in the west while more fully utilizing our delivery reps and eliminating the need for overtime. All in all, given 17% warmer weather and the 13% weather-induced reduction in volume, we were pleased that our expense and margin management resulted in EBITDA that was only 6% below the prior year. Given…

Thanks Jerry. As I mentioned in my opening remarks, we were pleased with the solid financial performance in our weather-challenged Q1. We were also encouraged with the progress on our portfolio’s strategic investments. The PennEast and Sunbury pipeline projects continue to move through the FERC approval process. These projects provide critically needed pipeline infrastructure to serve the increasing demand for natural gas in our region. Sunbury is expected to be completed early in fiscal ’17 and PennEast is targeting completion at the end of calendar ’17. I mentioned the rate case submission by UGI Gas earlier on the call. This is a milestone for us following a two decade period of growth and investment in our systems. That process should conclude this fall and we’ll keep you updated on our progress. Our integration planning work for the Finagaz acquisition is clearly reaping benefits. We’ve made exceptionally good progress over the past eight months. The business more than met our expectations in Q1 despite the warm weather. We’ve added a talented team of people, a strong customer base and a network of high quality assets to our largest business in Europe. As noted on our prior call, we expect this acquisition to be highly accretive in fiscal ’16 and beyond. As Jerry just noted, Amerigas is a strong MLP with no exposure to commodity prices and no need to access the capital markets to meet its growth objectives. We continue to leverage Amerigas’ scale as the largest LPG distributor in the U.S. In Q1, Amerigas grew its customer base in both national accounts and cylinder exchange and completed three highly profitable acquisitions. In midstream and marketing, we remain committed to pursuing and developing investment opportunities in the Marcellus. While most of our activity over the past three to five years has…

[Operator instructions] Your first question comes from the line of Nathan Judge from Janney. Your line is now open.

Good morning all. Just wanted to ask a little bit more about the improvement at margins, specifically in the European markets. As you see them today, there were some nice improvements. Could you kind of dissect the improvement from mix? I know you’ve obviously done the acquisitions, but also just pure uplift from lower propane or LPG prices.

Sure Nathan. I think primarily what you’re saying--as you know, there’s a little bit of mix effect, although the weather being the same, virtually the same this quarter as last year, the mix hasn’t changed too much. We did add the Finagaz volume, which was important and kind of mirrors what we already had in France. I think primarily what you’re seeing is a little bit of the parachute effect with costs dropping, which enables us to enhance margins. Over time they’ll tend to normalize but still be on an upward trajectory. I think the supply environment--the biggest change in Europe over the last two or three years is the supply environment, which is crucial. As a distributor, increased availability of LPGs for Europe, with the U.S. now being a major exporter and additional LPG volumes coming onstream elsewhere in West Africa and in the Middle East, it’s really enhanced our options for supply in Europe, and we’re seeing less volatility in our underlying costs and we’re seeing premiums that are paid for delivered or landed costs in Europe coming off what were all-time highs if you go back three or four years ago. So we’re really pleased with, from our standpoint, the improved supply environment in Europe. We benefited from the parachute effect, but we’re really excited to have a sounder and lower volatility supply environment right now for Europe which is really conducive to positive results for our distribution business.

Thank you. Just on the UGI utilities rate case, could you just provide a few details, in particular what your last 12 months’ earned ROE was on a comparable basis to what you filed and what you’re asking for, and what that represents as far as a percentage increase in base rates?

Yes, in terms of the increase itself, the increase that we requested represents about a $10 a month increase in total bill, total average monthly bill for a UGI residential customer. That’s about a 19% increase. That should be put in context, though. If you look at the total average monthly gas bill of our average residential customer, that’s dropped probably close to 50% since 2008, so it’s a much lower base. It’s a 19% increase, so those are the basics of the rate request. I think our reported ROEs, you have actual and adjusted ROEs. Clearly, our adjusted ROEs, which are the basis for the rate case, are well below the targeted level, right around 5%, and the big adjustment there, Nathan, is that it’s a projected test year, so that has a pretty big impact on it.

What are you asking for as far as--in the rate case, as far as your allowed ROE?

Eleven percent is the requested ROE in terms of the rate case submission.

And on what kind of equity slice?

Fifty-five percent equity.

Great, thank you very much.

Okay, thanks Nathan.

Your next question comes from the line of Chris Sighinolfi from Jefferies. Your line is now open.

Hey John, how are you?

Hey, good. How are you?

I’m great, thanks. Just to follow up real quickly on that, anything that you’re anticipating--I mean, it’s been quite some time, as you noted earlier, since you’ve last been in front of the regulators in a formal rate case proceeding. Is there anything, given just the tenure of that time frame, that might be different as we think about this rate case process than a company who maybe is there every three to five years?

No, nothing fundamentally different. I think as your question kind of rightly points out, lots of things change in two decades, so we would anticipate extended discussions around the impact of this increase on the various constituencies, but that’s not abnormal. We have for PNG and CPG, our other two gas utilities, gone through the rate case process within the last five to six years, and we’re very active and engaged with the PUC on a broad range of issues around infrastructure replacement and all of our enhancement in terms of capital spending, so we feel really connected to the PUC in terms of the level of engagement, so we don’t anticipate any surprises. Any rate case is a very substantial process, probably a little bit more so because of the length of time that’s transpired, but our hope, our goal would be a settlement, and typically that’s what we’ve achieved and others have achieved over the course of the spring and summer here. But nothing unique about this filing, other than it has been a very long time, so you just have to look in detail at each sort of customer segment and the impact, and certainly we’ll work through that with the PUC, their advisors and the various constituents that are part of this process.

Okay, that’s helpful. Thanks. I guess switching gears a bit, and I really appreciate Jerry’s slide about the unique attributes of Amerigas, you kind of mentioned in that, obviously, the lack of capital market need for Amerigas, given its self-funding nature. That’s also an attribute largely normally shared by UGI - obviously you have the large capital budget for this year. But I’m just curious, John, with what we have seen transpire broadly speaking with some of your competitors in midstream, in the MLP framework with the fact that some of them found themselves in over-levered positions, we’ve seen some seek to partner on things, seek to divest assets perhaps to shore up their financial positions, is any of that falling your way? Have there been conversations, or are you inclined to want to participate if there is projects in Pennsylvania or things within Amerigas competitors’ slate? Can you just talk about that, given the disconnect in how you’re positioned versus some of the peers?

Sure, absolutely Chris. Yes, we are definitely interested in continuing to invest in assets that would fit within our network in UGI, that could potentially also be a fit for Amerigas on the NGL side. We, as--you know, PennEast is a good example, but we’ve got many other examples in our history. We’re a company that doesn’t hesitate to partner if partnering makes sense on a particular project or around a particular grouping of assets. So yes, we see, or I see and I think the company sees what’s going on in the market as potentially favorable in terms of creating opportunities to acquire assets after having spent the last five years in the midstream segment investing in greenfield assets for the most part, and augmenting our own assets like with the LNG facilities. So we’ll definitely be focused on any opportunities that arise as things progress here. It’s a challenging time for many. The good news about us is we have very strong balance sheets, we consistently generate cash, so we do have the capacity to take advantage of opportunities as they arise.

Just to follow up there quickly, have there been any discussions of that nature with anybody that you’re presently partnered with, or any asset in, let’s say, the Pennsylvania areas where you are presently active?

We’re looking at sort of the nature of our business and our business model and activity. We’re constantly looking at investment opportunities, so I wouldn’t comment specifically about individual assets. The only thing I would say is, and I touched on it in my remarks, I think the market right now and what’s going on has created more realistic opportunities for us to acquire assets than if you go back one or two years, say. So I think the environment has shifted, we’re aware of that, so we’re making sure we just remain active in the course of our normal intensive business development activities to be thinking about and looking at any assets that might come to market.

Okay, great.

We’re staying very proactive.

Okay. Final question from me, and this is perhaps for Kirk, there was a small footnote to your table, the movement of electric utility and HVAC from corporate to some of the other segments. I was just curious if you had it offhand, the relative magnitude of those different line items.

It’s very small, Chris. I don’t have it on hand what that amount is.

Okay, and is there maybe a rationale, just why you did that, or was that something the accountants asked for? Is there better alignment somehow now that you’ve put that into--

Yes, well when you report segments, you tend to try to report the segments according to the way the decision-making around what’s happening in the business works, so the decision-making around HVAC, we moved the key decision-maker there, so it comes under that segment.

Yes, this is John. I just think it’s--the realignment is a better fit with the way we manage the business, where we’re making investments. Just as an example, in the electric utility, income before tax in a quarter was a couple million dollars, so it’s a really small piece of the utility, and to a great extent a lot of the back office activities are purged in common, so we just felt it better reflected the way we manage the business, the way we make our decisions, and enables our investors to focus on the material elements of the business as we [indiscernible].

Great, well thanks a lot for the added color today, guys, and congrats on the performance given the weather challenges, which we all could see and feel. Nice job.

Thanks Chris.

Again, if you have a question, star then one on your telephone keypad. Your next question comes from the line of Robert Balsamo from UBS. Your line is now open.

How you doing? Thanks for taking my question.

Morning.

Just some housekeeping items. On the cost savings at Amerigas, it sounds like that’s almost exclusively tied to efficiencies, given the warm weather. Are any of these savings able to be retained in a more normalized environment, or is it safe to assume that that would increase on a per-gallon basis?

Some of the things are as a result of the environment itself, so when we have lower prices, we obviously have lower selling prices to our customers. I mentioned that that’s a very good thing, but that does tend to lower our bad debt expense naturally. We’re also experiencing lower diesel costs, so those are things that happened to us and would have happened to us naturally. I think the hard work that we’ve done is try to keep our guys as productive as possible and keep overtime to a minimum, and that’s been the biggest impact on the quarter.

Great. Regarding the new locations for the cylinder exchange, it looks like around 2,500 locations would be about a 5% increase. Is that something I can look at from a modeling perspective that’s almost linear, like proportionate growth in cash flow, or are there other trends there that might be offsetting?

No, no. You’re accurate in that it’s about a 4 to 5% increase in our number of active locations. When we go into new locations, the number of cylinders, the turns per cage has to ramp up as we improve our marketing with our end customers, so the velocity with which we move cylinders through new cages is a little slower than mature cages, so that’s the only thing to keep an eye out for. But usually, by year two or three, they're up to the normal pace.

Great, that’s all I had. Thanks a lot, guys.

Thank you.

Your next question comes from the line of John Edwards from Credit Suisse. Your line is now open.

Hey guys, my question was actually just answered. Thanks.

All right.

There are currently no further questions. I turn the call back to Mr. Walsh for closing remarks.

Okay, thank you very much. Thank you all for your time and attention this morning, and we look forward to talking to you again after our second quarter results are reported. Take care.

This concludes today’s conference call. You may now disconnect.