Good morning. My name is Haidi and I will be your conference operator today. At this time, I would like to welcome everyone to the UGI Corporation and AmeriGas Fourth Quarter 2018 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. Brendan Heck, Manager of Investor Relations, you may begin your conference.

Thanks, Haidi. Good morning everyone and thank you for joining us. With me today are Ted Jastrzebski, CFO of UGI Corporation; Hugh Gallagher, President and CEO of AmeriGas Propane; 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 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 expectation. 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, Brendan. Good morning and welcome to our call. I hope that you've all had a chance to review our press releases reporting full-year results for UGI and AmeriGas. I'll comment briefly on major achievements over the course of fiscal 2018, and then turn it over to Ted, who will provide more detail on UGI’s financial performance. Hugh will cover AmeriGas's fiscal 2018 performance and fiscal 2019 outlook, and I will conclude by reviewing our fiscal 2019 guidance and progress on our strategic projects. We're pleased to once again report record earnings per share for UGI. Our full-year GAAP EPS was $4.06, while our adjusted EPS was $2.74. Our adjusted EPS was roughly 20% above the prior record adjusted EPS of $2.29 which we achieved last year. Both years have been adjusted over the mark-to-market valuation of unsettled hedges and other items that Ted will cover later in the call. The outstanding results delivered at fiscal 2018 were enabled by UGI's strong foundation for growth. This foundation is built on our commitment to identifying and developing investments that align with our core business strategies. Our consistent superior performance demonstrates the resiliency of our businesses and our determination to deliver on the performance commitments we made to our shareholders. We were also a beneficiary of the positive impact from tax reform, although I should note that fiscal 2018 adjusted EPS would have established a new record for the company, even if the benefit of tax reform was excluded. We were extremely pleased with the progress made in fiscal 2018 on our primary strategic initiatives, such as the build-out of our LNG network in the Mid-Atlantic, and the continued expansion of our European footprint. Fiscal 2018 was also noteworthy for the progress made in executing critical elements of our long-term strategies that…

Thanks, John. As John mentioned fiscal year 2018 was a very strong year with adjusted earnings of $2.74 per share, 20% higher than last year. This was our third consecutive year of record earnings. This table lays out our GAAP and adjusted earnings per share for fiscal 2018 compared to fiscal 2017. As you can see our adjusted earnings exclude a number of items such as the impact of mark-to-market changes and commodity hedging instruments, a gain of $0.39 this year versus a gain of $0.29 last year. In fiscal 2018 we have $0.11 of unrealized gains on our foreign currency derivative instruments versus a $0.08 loss last year. You can also see the final integration expenses associated with Finagaz. The acquisition is now fully integrated and our team did a great job of delivering on their stated timeline. We covered the $0.08 impairment of trademarks and trade names at AmeriGas in detail on our third quarter earnings call. Lastly, you can see the $0.07 and $0.93 deferred tax rate re-measurement impacts of the French Finance Bill and the Tax Cuts and Jobs Act. Turning to the bridge, adjusted earnings per share increased $0.45 versus last year. Our domestic businesses benefited from relatively normal weather, while our international business faced warmer weather conditions. The largest contributors to the $0.45 increase were midstream and marketing whose total margin increased 25% versus last year, leveraging our continued build-out of Marcellus infrastructure, and utilities who increased margin 10% as a result of colder weather, new customer growth, and an increase in PNG base rates. Lastly, we benefited across the businesses by $0.20 from the impacts of Tax Reform. First to the LPG side of the business. AmeriGas reported adjusted EBITDA of $606 million, a 10% increase over last year on weather that was…

Thanks Ted. AmeriGas's fourth quarter EBITDA came in at $35 million which was below our expectations. This was driven by a warm September which, as you know, makes up just about all of the heating degree days in the fourth quarter. Volume for the quarter was 8 million gallons or 5% below last year and all of this shortfall occurred in the month of September. For the fiscal year, we finished with adjusted EBITDA of $606 million, $54 million or 10% higher than last year and slightly below the low-end of our revised guidance primarily due to the September results. Weather for the fiscal year was just about normal but variable with a very cold period in late December, a warm February, and a cool spring. Year-over-year unit margin management was solid up $0.014 over the prior year despite a 19% increase in the average cost of propane during the year. Adjusted operating expenses were slightly higher than the prior year primarily related to an increase in sales activities and a return to more normal operating conditions during the year. However adjusted operating expense per gallon which we look as a key measure of operational efficiency was in fact lower than last year, and as Ted alluded to, it's worth mentioning that these comparisons exclude the $75 million non-cash adjustment for trade names which we disclosed earlier this year, and the $7.5 million environmental reserve adjustment recorded last year both of which are also excluded from adjusted EBITDA. Capital spending was $3 million higher than last year. This is primarily driven by technology investments. Despite higher spending year-over-year, we ended the year $11 below our planned level of capital spending for the year largely due to our continued efforts to allocate capital efficiently. Looking ahead to fiscal 2019, we do…

Thank you. Our guidance for fiscal 2019 of $2.75 and $2.95 assumes normal weather and volatility in our service territories. As was the case in fiscal 2018, we're using 15-year normal weather as the basis for our guidance. The mid-point of our fiscal 2019 guidance represents a 40% increase in EPS over just the past three years. Our strong EPS growth trajectory is directly linked to the contributions from our recent strategic investments and organic growth across our businesses all further amplified by beneficial changes in tax laws. We mentioned the new fiscal year in strong position with a broad portfolio of new investment opportunities. We've made noteworthy progress on a range of strategic investments over the past five years, as we focus on new opportunities that leverage our skills, capabilities, and existing asset networks, while also pushing our boundaries to seize new opportunities as our markets evolve. This relentless but disciplined focus on growth has resulted in a five-year EPS compound annual growth rate of 11.2% for the fiscal 2013 through fiscal 2018 period above the top end of our 6% to 10% long-term EPS growth target. We're excited about our pipeline of high quality investment opportunities. Our portfolio of projects in development and execution is stronger than ever due to the scale and reach of our businesses. As we look forward and assess the growth drivers, we see continued opportunities to invest in new projects that serve the strong underlying demand for natural gas. Our Midstream and Utilities teams see extremely strong natural gas demand across the Mid-Atlantic region and in New England. Most natural gas LDCs are seeing growth in their customer base and setting new record daily send-out levels each winter. We saw this early in January 2018 during a 10 day cold period when record…

Thank you. [Operator Instructions]. And your first question in the queue comes from the line of Chris Sighinolfi with Jefferies. Please go ahead.

John, lots of successes obviously in 2018. I think you laid them out well. I mean I appreciate Ted the comments with regard to AmeriGas structure it's obviously become I think more in focus just given some of the weather patterns and performances in the last year. I was curious. I trust you're going to have more to offer on this dynamic at the Analyst Day next month. But I was just curious AmeriGas is the only UGI sub that trades publicly. And so I'm just curious if we could just revisit that for a moment what sort of the rationale was for that and if that view has changed, over the course of time it's clearly outside of heritage at least the time I've covered something not really accessed public equity markets and so I'm just curious if the board's view if your guys view has changed on whether, it still makes sense to have a few trade separately given that none of the other entities do.

Sure, Chris. I would say the rationale for launching AmeriGas as an MLP in the mid-90s remains the same rationale that underpins why it's still a really positive and constructive story in terms of basic cash flow ends and that's represented by AmeriGas. It's as opposed to many other MLPs that were created in the last 20-plus-years AmeriGas is a company that consistently generates cash or ideally -- was ideally suited and remains well suited to MLP structure where you share that cash flow with your partners. That fundamental characteristic for the business remains unchanged. So the rationale for having a separate entity that trades as an MLP is still there. We look at weather closely one thing, one conclusion, I've drawn about weather after looking at it closely for the last 30 years is -- it's very difficult, it's really impossible to use any weather patterns, rich patterns to predict future weather. So we basically use as I noted the 15-year weather as our norm for planning which we think is the soundest basis for making our plans for all our businesses next year as opposed to using a much shorter timeframe. So we feel good about our ability to meet our commitments in AmeriGas that underpin the MLP based on the plan for 2019 and kind of the focus in areas that Hugh outlined.

Okay, that's helpful. Thanks John. I guess as my follow-up you guys did talk about in fiscal 2018, it being sort of the first year in the last three or four where HDDs were normal as an aggregate total, but the way in which they occurred changed customer consumption behavior versus how you had anticipated. I'm just curious as we think about fiscal 2019 guidance maybe both for AmeriGas and UGI Utility, was there some because you had switched to a 15-year, a change from a 30-year I said last year. So I'm just curious as you think about 2019 having experienced that volatility in 2018 was there some adjustment made for the fact that customer consumption was different given the volatility and weather that may have not been fully captured by just the aggregate 15-year trailing now a dataset?

Chris, yes, I think it's a good question because you never get an ideal sort of spacing and delivery of heating degree days. It's always we got some unique movements within the heating season. So we did take the opportunity to in over the past year since we had relatively normal national weather to look at our forecast basis for volume consumption related to degree days and incorporate some of the learning from the abnormal but reoccurring degree day pattern, so that's reflected particularly in AmeriGas where we have national weather patterns. Hugh, a few if you want to comment at all on that front.

I would just say sustained modest cold is always better than the arctic blast but when it -- if and when it happens perfectly it'll be the first time. I think you put it well John.

Yes, so we did try to address that incorporate the learning we have from this past winter in our forecast or basis for budget, budgeted volumes for FY 2019.

Your next question comes from the line of Ben Brownlow with Raymond James. Please go ahead.

Hugh, on the CapEx the $11 million variance versus your plan, can you talk about what's shifted there and then on the $117 million guidance for next year just the split between maintenance and growth?

I will take the second one first. The split between maintenance and growth is usually around 50:50, it doesn't vary all that much. The main reason for the reduction this year we had a few -- primarily a terminal project that we had planned that we delayed in the Northeast that we're planning on spending that capital this coming year. But that was the largest part and the rest of it was just continued effort to better allocate capital and scrutinize capital more closely.

Yes, that's helpful. And when you think about 15 fiscal year 2019, just how are you structurally thinking about propane unit margins given the growth in the National Accounts business and the cylinder exchange, just can you talk about -- around that and tie that into the competitive landscape as well?

Yes, so it's a highly competitive market as always 3,000 competitors all over the world and we compete. We have competitors in every states we operate in. We are good at margin management and we will I wouldn't expect that to change. The cost landscape has become favorable more recently with the drop in Mont Belvieu that that’s lower prices are good for our customers; therefore they are good for us as a distributor. So we always prefer that. Although our history indicates that we will manage margin in whatever market comes our way, high price, low price, cold, warm. So I wouldn’t expect you to see us change our way of managing margins and heating in the business. You should see modest margin increase over the long-term.

So I guess when you look at the September quarter, was there anything when you're trying to manage margin against the 19% growth in propane costs, was there anything structural year-over-year that benefited that or was that just purely just inventory, better inventory and was there shift over the residential or anything notable there?

No. I would say the -- you probably had a modest mix impact because it was a more normal winter. So you probably had -- you would have a mixed impact of little bit more in the residential side of the House, so that might have been a nice tailwind but the headwinds of 19% increase to cost, that's real. So it's just -- it’s just what we do and it’s nothing fancy, it's strong up your sleeves and getting after that every day.

Great, thank you, and congrats on the promotion.

Thank you.

There are no further questions in the queue. I will turn the call back over to the presenters.

Okay, thank you all for your time and attention this morning. We look forward to seeing many of you at the Analyst Day and to speaking with you on the next call. Thank you.