UGI Corporation

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. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star and the number one on your telephone keypad. If you would like to withdraw your question, Please press the pound key. 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 Yastrzemski, CFO of UGI Corporation, Bob Beard, Executive Vice President, Natural Gas, Roger Perrault, Executive Vice President of Global LPG, 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, Alana. 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 FY20 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 Perot, 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 20. 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 19 Q2 adjusted EPS of $1.43. As I noted earlier, this is the second best Q2 adjusted EPS in UGI's history, trailing only Q2 of fiscal 18. Both the fiscal 20 and fiscal 19 quarters have been adjusted for the mark-to-market valuation of unsettled hedges, costs associated with our LPG transformation initiatives, and other items that Ted will cover later. On a year-to-date basis, our adjusted EPS of $2.73 exceeds our fiscal 19 year-to-date adjusted EPS by over 20%. We're really pleased with this strong performance given the major challenge of warm weather across our entire business. Before I address our updated guidance, I'd like to provide some details on UGI's response to COVID-19. We began to focus on COVID-19 as a potentially significant issue in February as we followed global developments and began to see the impact in several European markets where we operate. Our senior team initiated regular COVID-19 planning sessions to address critical safety, operational and business risks associated with the pandemic across all geographies. Our primary focus areas from the outset have been the safety of our teams and our 3 million customers and continuity of essential services we provide to those 3 million customers. By the conclusion of the second week in March on a global basis, we had launched our work from home plan for over 4,000 of our office space team members and revised critical work practices to drive safe operations for over 7,400 of our field-based employees and our customers. While we did see some impact of COVID-19 related customer closures in March, the impact on our Q2 results was not material. We have seen some impacted commercial customers reopen in the past few weeks and expect these reopening activities to continue for several months. We remain largely in our COVID-19 work mode today and we're developing a phase return to work plan that is location specific with phasing likely to last from three to six months, depending upon guidance provided by local authorities and the safety of our employees and customers. In addition to the actions taken to address safety for our customers and our team, we've also been focused on understanding the impact of COVID-19 on the communities we serve. As a provider of essential services, we recognize the urgent need for a broad range of key services to those impacted by the pandemic. We see particular needs in the area of food security, educational continuity, and temporary housing. For that reasons, we've announced a series of donations in the past month to food banks, educational programs, and emergency services agencies who are seeing a surge in demand as our neighbors struggle with the economic impact of rising unemployment, school closures, and a strain on available social services. Together, the company, our employees, and our directors have contributed more than $600,000 to food banks and other support agencies in our local community. While the challenges have been significant, our teams have done an outstanding job operating in this new normal work environment. Our safety and customer service performance over the past 60 days has been outstanding. We've seen a surge in demand in certain areas and have seen other categories such as restaurants, hotels, and school bus fleets where demand has declined. The overall impact has been muted thus far, but we do expect demand to be potentially impacted by the pandemic through the end of the fiscal year. Ted will provide more detail on our outlook during his remarks. I thought it would be helpful if Bob Beard and Roger Perot commented on key activities undertaken within their lines of business in Q2. Bob?