Ladies and gentlemen, thank you for standing by, and welcome to the UGI Corporation Second Quarter 2021 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to your speaker today, Tameka Morris. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us. With me today are John Walsh, President and CEO of UGI; Roger Perreault, Executive Vice President, Global LPG and effective June 26, 2021 President and CEO of UGI; Ted Jastrzebski, CFO of UGI; and Bob Beard, Executive Vice President, Natural Gas. 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 result may differ significantly because of risks and uncertainties that are difficult to predict. 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 event or circumstances that are different from expectations. We'll also describe our business using certain non-GAAP financial measures. Reconciliation of these measures to the comparable GAAP measures are available on slide six, 22 and 23 of our presentation. Now, let me turn the call over to John.

Thanks, Tameka. Good morning, and welcome to our call. I hope that you've all had the opportunity to review our press release reporting second quarter results. This was a very strong quarter for us, as we clearly demonstrated the earnings power of the company and the strength of our diverse operations. Our teams delivered record Q2 earnings, as we saw the positive impact of our growth investments, enhanced unit margins, effective OpEx management and colder weather across our service territories. While weather was colder than prior year across the business, it was warmer than the 10-year average in each of our businesses. We also saw some incremental impact of the pandemic within certain customer segments. These headwinds were more than overcome by our teams, as we executed our growth strategies, serve customers safely and efficiently, and made significant progress on our renewable solution strategies. On today's call, I'll comment on key activities in the quarter, and then turn it over to Ted who will provide you with an overview of UGI's financial performance in Q2. In addition to our strong earnings performance, our free cash flow and balance sheet metrics for the quarter were noteworthy. Ted will take you through each of these elements. Bob Beard will comment on a range of key developments across the natural gas line of business, and Roger Perreault will update you on progress in our LPG line of business. Roger, as our incoming CEO, will also provide his perspectives on the exciting prospects for UGI future growth and success. I'll then close with a few comments, as I conclude my final earnings call. Turning to our financial performance. Our Q2 GAAP EPS was $2.33 and our adjusted EPS was $1.99. That adjusted Q2 EPS was almost 30% above our fiscal 2020 Q2 adjusted EPS…

Thanks, John. As John mentioned, we're pleased with the record results for the quarter. Despite weather that was warmer than normal and the continued COVID-19 headwinds, we delivered adjusted diluted EPS of $1.99 compared to $1.56 in the prior fiscal quarter. Our reportable segments had EBIT of $630 million compared to $527 million in the prior year. This table lays out our GAAP and adjusted diluted earnings per share for fiscal year 2021 compared to fiscal year 2020, as you can see our adjusted diluted earnings exclude a number of items such as the impact of mark-to-market changes and commodity hedging instruments, a gain of $0.25 this year versus a loss of $0.43 in the second quarter of fiscal 2020. Last year, we had $0.01 gain on foreign currency derivative instruments compared to a $0.05 gain this year. We adjusted out $0.07 of expenses associated with our LPG business transformation initiatives, which is consistent with the amount in the prior year. Lastly, due to a change in the Italian tax law that came into effect this year, we had a one-time $0.11 gain in the quarter Turning to our liquidity position. Cash flows remain strong with a 15% increase in the year-to-date cash provided by operating activities over the corresponding prior year period. As of the end of the quarter, UGI had available liquidity of $1.6 billion, $400 million more than the prior year period. We also continue to be comfortable with the financing capacity across all of our business units are well within our debt covenants and remain committed to paying down debt at AmeriGas and reducing our overall corporate debt ratio in order to maintain a conservative capital structure. Earlier this week, we took several actions as we continue to proactively manage our balance sheet. We extended the…

Thanks Ted. Both our Natural Gas businesses experience weather that was colder than the prior year, although still warmer than normal in Q2. Utility saw temperatures that were more than 8% warmer than normal, while Energy Services saw weather that was 6% warmer than normal. Despite warmer than normal weather, we saw solid performance at both Utilities and Energy Services, as the businesses continue to execute well Energy Services was able to take advantage of price volatility by deploying their peak shaving plants and locking in higher capacity values. While we cannot predict price volatility going forward, the Energy Services team is prepared to leverage our significant supply assets, as these opportunities arise. We also continue to be pleased with what we are seeing on the renewables front. GHI is performing well. The digester project we are partnering on in Idaho is progressing, and we are excited about our latest renewables investment in Cayuga RNG. These projects, along with other opportunities we are evaluating, will help support our commitment to make significant investments in the renewable energy space. In February, Energy Services announced the partnership with Stonehenge Resources to acquire Pine Run Midstream LLC. We believe Pine Run is a good addition to our midstream portfolio and is position for growth moving forward. We're pleased with this opportunity and are encouraged by the production volumes we are seeing over the short time we have owned the system. There was an increase in the level of drilling activity on our UGI Appalachian systems in Q2. As an example, we saw a 20% increase in production on one of our key gathering systems. Considering the factors that can affect our midstream business, such as weather, economic conditions, continued growth in demand and the difficulty of citing and constructing new pipeline facilities in…

Thanks Bob. The Global LPG businesses delivered robust results in the second quarter, despite marginally lower commercial and industrial volumes, driven by the ongoing COVID pandemic in both Europe and the United States. With weather that trended slightly warmer than normal, but colder than prior year, our Global LPG line of business delivered second quarter EBIT in excess of prior year by US$56 million or 17%. We're very pleased with this result, as it demonstrates our businesses vital underpinnings, which include the value of our diversified portfolio of customers, applications, geographies, and our ability to manage our core fundamentals to offset headwinds, such as the impact of the COVID pandemic and rising commodity costs. Both U.S. and European teams experienced some cooler weather versus prior year that increased demand in heating segments and achieved margin expansion due to focus margin management during the higher price commodity environment. We continued to experience increased demand in our Cylinder Exchange business, including our home delivery service branded Cynch in the U.S. and increased demand in the higher margin home cooking cylinder segment in Europe. Now, let's move to more specifics at AmeriGas. We are progressing with our reengineering of key processes and systems that are part of the transformation efforts. In fact, in the second quarter, our operating model relied on the use of a centralized customer engagement services center and has customer management tools and a new routing and logistics tool, all with the goal of satisfying our customers in the most efficient way possible. The second quarter was the first winter season that we were fully operational with our new operating model with weather that was close to normal. We experienced service issues in certain areas of the country during this first 120 days of operating in the new model. We…

Thanks Roger. Before we open it up for questions, I'd like to offer a few comments as my time as UGI CEO comes to a close and I transitioned to a board role. It has been an absolute privilege for me to serve as UGI COO and CEO over the past 16 years. I have been extremely fortunate to work with great teams across the company who are so committed to serving our customers, growing our company and keeping our communities and their colleagues safe. We have a spirit of innovation at UGI that has positioned the company well, as we enter this next phase of investment and growth in a rapidly evolving energy sector. Our Board is a huge strength for the company and they have provided me with great support, insight and guidance over the past 16 years. They made an outstanding decision in appointing Roger as our CEO, and I am very confident that UGI will thrive under Roger's leadership in the years ahead. I would like to close by thanking you, our investors and analysts for the time you spent with me as we've discussed UGI's business over the past decade and a half. I appreciate the commitment you've made to UGI by your investment in our company and value the perspectives you brought to all those discussions over the years. With that, we'll open it up for your questions.

Thank you. [Operator Instructions] We have a question from the line of Marc Solecitto with Barclays. Your question, please.

Hi. Good morning. Just wanting to clarify on the $0.15 increase at the midpoint in fiscal 2021 guidance, does that largely reflect the $0.12 benefit you called out from non-recurring tax items?

Yeah. I'll comment briefly, Marc. And then I'll let Ted comment as well. I mean, it's a combination of factors, certainly that was helpful. It also reflects, I think, a lot of work across the businesses to offset what has been a warmer than normal winter. So, it's a variety of actions and proactive efforts that enabled us to increase guidance. But I'll also let Ted provide some color on that as well.

No. That's exactly right. I mean, there's a lot of moving parts, but overall we had really strong operational results that overcame COVID, overcame warmer than normal weather, although, quite a bit colder than it was a year ago. Those generally net out in the piece that does stand out is the non-recurring tax item, primarily driven by our ability to take a second year hit at CARES as we were able to establish an NOL position this year, given certain acquisitions and investments we've made, including our investments in the renewable space. And so, CARES Act as you know, goes away next year. So, it is a one-time benefit and that makes up the most of that change versus what we had expected to see when we gave our regional guidance.

Okay. Great. And then, just wondering -- pro forma for the Mountaineer acquisition, just wondering if you might have an updated guidance as far as like seasonal weighting before the -- between the fiscal first half and fiscal second half.

At this point, Marc, I don't think we're in a position to provide additional comments beyond what we've said before in terms of it being accretive. Certainly by the time the team -- Roger and the team provides the guidance for next year, we anticipate the acquisition will be closed, and we'll be able to provide a lot more detail in terms of specifics. The basic earnings profile of Mountaineer will look similar to our own gas utility in that. Geographically, we're in the same area. And the customer base is actually quite similar, which is one of the things that attracted us to Mountaineer.

Great. Thanks for the time.

Sure. Thank you.

Thank you. [Operator Instructions] And sir, I'm not showing any further questions in the queue.

Okay. Well, thank you very much. I will, again, thank all of you for the time you spent with me over the years. This is my final earnings call. So, I'd encourage you and invite you to join Roger and the team at our upcoming Investor Day, and also on our third quarter earnings call. So, thank you again for your time this morning. Take care.

And this concludes today's conference call. Thank you for your participation and you may now disconnect. Have a wonderful day.