Good morning, my name is Chris, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the UGI & AmeriGas’ Third 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 [Operator Instructions] Thank you Mr. Will Ruthrauff, Director of Investor Relations. You may begin your conference.

Thank you, Chris. Good morning, everyone and thank you for joining us. With me today are Hugh Gallagher, CFO of AmeriGas Propane; Kirk Oliver, CFO of UGI Corporation; Jerry Sheridan, President and CEO of AmeriGas; and John Walsh, President and CEO of UGI. Before we begin, let me remind you that our comments today will 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 will also describe our business using certain non-GAAP financial measures. Reconciliations of these measures to the comparable GAAP measures are available in the appendix of our presentation. Now, let me turn the call over to John.

Thanks Will. Good morning and welcome to our call. I hope that you’ve all had a chance to review our press releases reporting strong third-quarter results for UGI and AmeriGas. On today’s call, I’ll provide an overview of our financial performance and key activities in the third quarter, and then turn it over to Kirk, who provide you with a more detailed review of UGI's financial performance. Jerry will follow with an overview on AmeriGas and I’ll then wrap up with an update on our strategic initiatives. This was a very positive quarter for the company, as our businesses delivered excellent results coming out of the warm winter, and we achieved several major milestones on critical projects that will provide a solid foundation for future growth. Our adjusted EPS of $0.23 for the quarter was well above the adjusted EPS of $0.07 that we posted in the third quarter of fiscal ‘15. Our strong financial performance in the quarter can be attributed to cool weather in the early spring and superior execution by our businesses. Our very warm Q2 was followed by cooler temperatures in several of our service areas in April and early May. In addition, our LPG businesses did a great job on unit margin management in the quarter and we controlled our operating expenses very effectively across the entire company. Our performance in Europe is particularly noteworthy, as we delivered a significant year-on-year increase in earnings, driven by continued strong performance from our Finagaz acquisition and enhanced unit margins across the business. The strong performance in Q3 is likely to put us at or slightly above the upper end of our $1.95 to $2.05 guidance range that we provided on our Q2 call, assuming normal September weather. That would result in a record earnings year for the…

Thank you, John, and good morning, everyone. As John mentioned, Q3 was a strong quarter with adjusted earnings coming in at $0.23 per share, $0.16 over last year’s Q3. On this slide, we’ve laid out the adjustments to GAAP earning, which are pretty straightforward. We back out $0.16 for unrealized gains on commodity derivatives and added back $0.02 of after-tax integration expense associated with the Finagaz acquisition and $0.03 for the loss on extinguishment of debt. We experienced a loss on the extinguishment of debt in both quarters, this year for the refinancing at AmeriGas and last year in connection with the financing of the Finagaz acquisition. Although weather doesn't have as much of an impact for us in the spring months of Q3, it was generally colder than last year in all our major segments and it did help with volumes in France, and had a modest impact on throughput at utilities and volumes at AmeriGas. Moving on now to AmeriGas, you can see here that the strong results in increased adjusted EBITDA of $15.7 million, were driven primarily by effective management of unit margins and cost. Total margin increased by $9.3 million and operating expenses decreased by $6.1 million. Adjusted EBITDA for fiscal year ‘16 excludes the impact of cost of $37 million associated with the extinguishment of debt in the quarter. Jerry will go into more detail on AmeriGas operations later on the call. UGI international results are very strong, were driven by three key factors. One, the full quarter of results for Finagaz versus a partial quarter last year; two, a parachute effect on unit margins in both Finagaz and Antargaz, resulting from commodity prices that were significantly lower for the quarter and three higher volumes due to colder weather versus last year. Adjusted income before…

Okay. Thank you, Kirk. Good quarter for AmeriGas. EBITDA in the third quarter was $65 million, compared to $49 million reported in third quarter of last year, a $16 million improvement. Solid expense control, margin management and colder weather particular during the month of May, all contributed to the improved results. Weather in the third quarter was 7.5% warmer than normal and 5.5% colder than last year. Weather can be helpful, of course, in a shoulder quarter like Q3. Volume for Q3 was 203 million gallons, essentially even with last year. Average propane cost of Mont Belvieu was $0.49, 5% above the third quarter of last year and 26% above Q2 of this year. Despite the rising cost environment, we’re able to manage margins $0.04 above last year and propane inventories continue to be at high levels significantly above the five-year average to anticipate a relatively stable cost environment going into the fall season. Turning now to our growth initiatives, AmeriGas Cylinder Exchange experienced a very strong June, following a successful Memorial Day weekend coming out of the colder May that I described earlier. June sales were up 14% from the previous June, and overall cylinder sales were up 3% for the full quarter. National accounts volume was also up 6% on the cooler spring. Two acquisitions were completed in Q3 and one was completed in July, which collectively have added 4 million gallons annually. Year-to-date, we’ve completed six acquisitions adding 10 million gallons annually. As Kirk mentioned in the quarter, we also have completed a $1.35 billion bond refinancing with $675 million each placed with maturities of May 2024 and August 2026 respectively, to refinance the senior notes maturing in 2019 to 2021. This has extended our weighted average maturities on the $1.35 billion from 3.8 years to 9 years and reduced cash interest each year by $5 million, as we continue to focus on solid distribution coverage as a means of underpinning our annual distribution increases. We should also note that the temporary impact of the debt refinancing will be obvious in our financial statements when we file our 10-Q for June 30, in addition to the $37 million loss on extinguishment. We're carrying over $300 million in cash on the balance sheet at June 30 until the debt is in the range of $2.7 billion, including $353 million subject to mandatory redemption, scheduled to be completed during Q4. We anticipate an additional loss and extinguishment of debt of about $12 million in Q4 as a result of the completion of the mandatory redemptions. Our guidance remains at $575 million to $600 million in adjusted EBITDA for the full fiscal 2016, and we expect we’ll be well within that range, provided we get reasonably normal weather during the month of September. So, thank you, I’ll now turn the call back over to John.

Thanks, Jerry. I’d like to spend a few minutes reviewing progress on the strategic investments that provide the foundation for our future growth. Q3 was a noteworthy quarter for our major midstream projects. Our $160 million Sunbury pipeline project is in full execution mode with all required permits and approvals in hand. We expect the pipeline to be completed in early 2017 with service to the new power generation facility in Sunbury commencing next summer. The FERC issued a draft Environmental Impact Statement on the PennEast project on July 24, which found that the project isn't expected to significantly impact air quality, groundwater, surface water or wetland quality or quantity. This represents another critical milestone for the project. The FERC said December 16, 2016, is the completion date for the environmental review. We continue to anticipate an in-service date for PennEast in the second half of 2018. Our third major active project in Midstream is our new $60 million LNG liquefaction unit in Manning, Pennsylvania. I referred to the critical need for this additional liquefaction capacity earlier on the call. We’re making great progress on the construction at Manning and we’re on track to meet our targeted in-service date of January 2017. Activity at our gas utility remains at record levels. Our field crews are executing a broad range of infrastructure replacement and growth projects, and we expect this intense activity to become the new normal for us. It is important to note that UGI Gas filed for a DSIC surcharge in March, which along with the surcharges currently in place at UGI, PNG and CPG would limit the regulatory lag on these substantial infrastructure investments. Finally, I’d like to comment on the strong performance of our LPG businesses in both the US and Europe in the quarter. As Jerry…

Thank you. [Operator Instructions] And the first question is from Gabe Moreen with Bank of America, your line is open.

Hey, good morning, guys. Couple of questions for me just on the rate case settlement that’s been filed, is that unanimously supported? I was wondering if you can also talk about maybe some of the gives and takes in terms of what you're settling for versus what you’d originally asked, and then also was wondering whether there is a stay-out provision as part of the settlement? I’m just wondering if you’ll be coming back anytime soon.

Sure. On the rate case settlement, it’s a settlement, so all parties signed off and agreed so that that petition goes to the PUC, and they'll review it. We originally filed for 58, the settlement was a 27, we’re pleased with that outcome, I don’t want to get ahead of the process. Obviously, the PUC will weigh in between now and October, they’ll hold a hearing and review the settlement in detail, but it's approved by all parties, and that’s a significant achievement for us given that for UGI Gas that the first rate case we filed in 20 years, so it’s a very intense process. And to your last question, Gabe, in terms of frequency, because of the level of capital being deployed in the business now across all three entities, but specifically on UGI Gas, we’d expect to be filing rate cases with much greater frequency than we have historically. We’ll obviously utilize the dis-mechanisms that we have for all three entities now, but we’ll still be filing rate cases on much more regular intervals and has been our historical pattern.

Got it. Thanks, John. And then, turning to UGI International, a strong quarter there obviously, you mentioned kind of the parachutist fact, the integration just was running, I guess, if you can sort of handicap directionally or qualify kind of how much was due to each factor sort of on year-on-year basis, so what’s sustainable versus kind of that parachute effect?

Gabe, we - it’s hard to split out exactly. We could do the couple of positive factors. Parachute effect, you mentioned, also the timing of the Finagaz acquisition, we actually only had one month of Finagaz last year, which was June, this year we have the shoulder months which are much more positive, April and May, so that was a really material positive factor. The parachute effect certainly was a major contributor as well. Roughly half-and-half, I’d say, just as a really rough estimate, but right now we're going through the budget and plan process, we’ll look at underlying performance on margins that will be reflected in guidance. We go back to our sort of long-term view on margins which is overtime will increase with inflation. Clearly, we took a step up this year which reflects the parachute effect, we’d expect some level of normalization, but we also, over the long-term, expect to retain a portion of that as part of our commitment to increase unit margins overtime.

Got it, thanks. And then, last one for me is just if you can give us an update in terms of where the euro hedges stand and whether you’ve been laying on additional hedges?

Yeah, we’ve been laying on hedges just according to the way we always do it. And before these warmer weather months, we don't really hedge because we don't have a lot of earnings in those months, but we have all of next year, but - the hedge is laid in and we target about 75% of what our plan for next year is, and that's all laid in, and that's 75% of euro exposure, and about 75% of the Sterling exposure as well. And the Sterling exposure, those hedges were laid in place before BREXIT.

Okay, understood. And how far do those Sterling hedges go out? There is - ‘17 or beyond that?

Gabe, we do that the same way. So, next year we did 100% of 75%, then the following year, we do two-thirds of 75%, and then the third year we do a third.

Got it. Thanks, John.

The next question is from Chris Sighinolfi with Jefferies. Your line is open.

Hey, guys, how are you?

Good. How are you?

I’m great, John, thanks. Just a couple of quick questions I guess to hit on - or to follow on Gabe's question about some of the unit margins particularly in the International business, just I guess that's been an area sort of upside to price for us, John, so I was just wondering if you could delve into a little bit more obviously adding acquisition, the benefits of that, but just looking at what your realized unit margin was, let’s say through the first three fiscal quarters last year versus this year, the pretty pronounced jump about 20%, so was just interested, is that simply due to the type of thing that Total Gas brought or are there things that you've done across that portfolio or continue to do, you mentioned in last night’s release, for example, the auto gas exit from Poland on [indiscernible], can we just get a sense of - is this sort of a new normal expectation for us or are there things that are ongoing that are in-flight or other unique things that transpired in fiscal ‘16 which maybe drove something above what we would've seen on a normal basis? Any help there would be appreciated.

Sure. I think first is there's the impact of the timing of Finagaz, which is actually an important very important for the quarter if you look at the quarterly performance and year-to-date since up until June, we had no Finagaz business in the prior year. France is a very positive market for us in terms of underlying unit margins, so you do have a mix effect now where France is a higher percentage of our international business, so you have the uplift - the natural uplift that comes from adding a significant business in a market where unit margins are quite strong. So, you have that mix effect and timing effect of Finagaz versus prior year, so that's a significant contributor. Secondly, you do have a parachute effect where we had falling costs that helped us, that’s another material contributor because that affects every one of our businesses in Europe. And the last effect, which you noted, is in terms of just calculating unit margin, you have the other mix effect which is exit from auto gas in Poland, which was quite a large business that’s sort of high-volume transport load kind of business at very low margin that we decided to exit, so that's also contributing to unit margin improvement. So those three factors - I think the first two are significant than the auto gas, but auto gas is material enough that we noted it. Two of those are continuing, obviously where we’ve got the Finagaz business, it’s performing extremely well, that's part of our European business and we’re really pleased to have it. We’ve continued to look across our businesses and we’re taking actions on certain segments that are less attractive and that’s the auto gas piece, so those two are sort of permanent steps we’ve taken. And the third one, the parachute effect is - we’ll go through the normal process where margins will moderate to some extent, but we’ll look to retain an improved underlying unit margin that’s part of our ongoing commitment to drive unit margins in our businesses, so that's an intense process that we go through now and heading into the winter, but we feel really good about kind of where we’re sitting today in terms of our ability to deliver on that long-term commitment to move unit margins and keep pace with inflation at a minimum.

Okay. I guess with regard to auto gas, I don’t know if you have quantified it anywhere or will, but in terms of the amount of volume for example maybe that represented in last year's total, I assume that's a business that's much more relatable than the residential and commercial deliveries, meaning not insensitive to the weather dynamic or to seasonality, is that accurate?

That’s true, Chris. You have sort of different, you have sort of driving sort of seasonality which is different than our winter seasonality. I don’t think we’ve ever broken that out. It’s something we could certainly think about doing when we do our Analyst Day to give a little bit more color on the evolution of that business and sort of forward look the role auto gas will play in Europe, which won’t be a significant one, so I don’t believe we’ve broken that up before. Well, we’ll look at that because it probably will help provide some color or background as we talk about the business moving forward. It’s basically a wholesale business and we felt in Europe, there is some timing issues and transport logistics issues that sort of impacted our ability to manage that segments margins consistently, and it also tied up some balance sheet capacity and working capital, so that's what underpinned the decision to exit.

Okay. And just one final question, I guess, is related to that, John, was any of that auto gas in the third quarter or was it - when was the timing of that sale?

Auto gas, not - very little auto gas business in the third quarter this year.

Okay, and so that sale was completed at this point?

We just basically didn’t renew contracts, so we didn’t - we just exited the activity.

I just had two other real quick questions if I could, one was just if you could remind me the updated in-service timeline expectation for PennEast?

PennEast is latter half of 2018. No change there and obviously we’re pleased with the draft Environmental impact statement, but that process is ongoing with the FERC. So, we’ll be involved in the process will ensue over the next few months culminating in December.

Okay. And then, the final one from me, I think I asked about something similar on last quarter's call, but it was again an area of sort of outside surprise for us, is the other segment incorporate another which obviously in your GAAP financials, I think you put back in the showcase the derivative stuff in there, if we strip all of that out, I mean that's a business that historically was modestly lossmaking and this year has been significantly positive in a contribution sense, so I was just wondering if there's anything that you could identify to us and help explain, a, why that happened, b, the unsustainability of year-to-date numbers in that group or anything to kinder that would be really helpful.

I believe as you noted, Chris, it’s primarily mark-to-market, but I’ll let Kirk comment on that.

Yeah, I mean it’s Chris, that’s what it is - it’s overwhelmingly mark-to-market…

Well, I mean, Kirk, my point is stripping away those mark-to-markets, my comments don't hope that it went from modestly lossmaking to significantly positive.

Well, I’m not seeing what that is, let’s say…

Maybe we can just - we can follow up offline or maybe discuss it maybe as part of the anticipated Analyst Day this fall, but it’s…

Yeah, I think it’s really pretty much, Chris, if you look at it, I think it really is all commodity driven, but we can take it offline. There are other items in there, but they tend to kind of cancel each other out and the other thing that might be kind of confusing is there is a non-controlling interest component. So, when you look at the number for - like if you look at the income statement for UGI, there is a gross number on there of around 60 something million about $68 million of that is unrealized gains and losses, but $20 million of that goes to AmeriGas when you take out the non-controlling interest piece, and then you have a similar phenomenon in the prior period, so I think if you get what's going to AmeriGas right, you'll see that there - it really is primarily all - it’s primarily all gains and losses on commodity.

And then, there is nothing, Chris, there is nothing that we are seeing that we comment on that’s impacting that segment. So, from a business standpoint - from our view, the business - nothing is fundamentally changed, it’s worthy of comment that’s flowing through that portion of the income statement.

Well, I’ll seek to follow up with [indiscernible] Kirk about maybe just the convention of how we’re looking at it versus maybe how it’s reported in the changes that we’re seeing, but I appreciate…

Yeah, we can show you what what's going on there.

Okay, appreciate the time.

Thanks, Chris.

The next question is from Michael Gaugler with Janney Montgomery Scott, your line is open.

Hey, good morning, everyone.

Good morning.

Congrats on a nice quarter across the board. John, one big quick picture question, in terms of the mid-Atlantic midstream landscape and we look at PennEast essentially fully subscribed, strong demand for LNG, it all indicates a significant need as you pointed out, so I’m wondering as you look out beyond 2018 and some of these projects being completed, are there other large projects like PennEast needed or are the needs essentially addressed by those projects in LNG? And if so, well, new demand likely be served by smaller incremental investments in existing assets?

Yeah, it’s a good question. I think we have been and I noted in my remarks, we've been very sort of impressed by the continued increase in demand for natural gas, so clearly it is going to be, there will be a series of sort of follow on investments that enhance existing assets ours and others, and we’re well-positioned to participate as we did for example on the Auburn project, so I would see that happening, but I think there is need for more investment and additional sort of greenfield investment just based on what we've seen over the last three or four years in terms of increased end-user demand and the delays or timing issues that we’re seeing with new infrastructure projects. So, I think for sure we’ll see a significant round of capacity expansion utilizing existing assets or assets like PennEast that we’re putting the ground, we would be very hopeful that we’d have follow on investments there, but I personally believe that there's likely to be additional capacity required if we continue to see increase in end-use demand and we haven't seen that abating, and particularly with what's going on the power sector, I think there is going to be more demand for - to serve power generation. So, I think still got a period here that's been extended because of some of the timelines for new investments; we have a period here where there is going to be some new greenfield investment, and I think over the next decade, significant work in terms of enhancing capacity on existing assets.

Alright, that’s all I had, John. Thank you.

Great, thank you.

Showing no further questions at this time, we’ll turn the call back to the presenters.

Okay. Thank you very much. Thank you, Chris, thank you all for joining us on the call. We very much look forward to talking to you at the end of the next quarter and bring you up-to-date on all the developments that will take place in Q4. Thank you.

This concludes today’s conference, you may now disconnect.