UGI Corporation

Ladies and gentlemen, thank you for standing by and welcome to the UGI Corporation's second quarter earnings conference call. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's call is being recorded. If you require any further assistance, please press star zero. 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 Perrault, Executive Vice President, Global LPG, and effective June 26, 2021, President and CEO of UGI, Ted Yastrzemski, 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 results may differ significantly because of risks and uncertainties that are difficult to predict. for earnings relief 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 slides 6, 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, served customers safely and efficiently, and made significant progress on our renewable solutions strategies. On today's call, I'll comment briefly 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's 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 20 Q2 adjusted EPS of $1.56. As I noted earlier, these are record Q2 earnings for UGI. Our adjusted year-to-date EPS of $3.17 also represents record earnings through the first two quarters of the fiscal year. Both the fiscal 21 and fiscal 20 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. Based on this strong year-to-date performance, we are increasing our fiscal 21 adjusted EPS guidance to $2.90 to $3. The midpoint of our updated guidance is 15 cents above the midpoint of our original guidance. We're really pleased with this strong performance, which demonstrates the earnings and cash flow strength of our diverse businesses. This breadth of activity is also crucially important as we develop an exciting range of renewable solutions opportunities. Bob and Roger will provide the specifics during their remarks. We're developing an attractive range of investment opportunities in renewable solutions, with a particular focus on RNG, BioLPG, and renewable DME. These are compelling solutions, particularly since they can be delivered to customers utilizing existing distribution infrastructure. We've been really pleased with the investment return profile we're seeing on these projects. They are earnings accretive immediately with attractive, unlevered IRRs. Finally, and most critically, they are also affordable solutions from our customers' perspective as there is no need for families or small business owners to invest in new appliances or equipment. You'll hear more on this from Bob and Roger. I'm also excited that we'll be publishing our third ESG report later this month. This has been an area of intense focus for us over the past year. We're making great progress in areas that are absolutely vital for the company's future and the future of the communities we serve. Our report will contain critical long-term commitments, but will also include a set of shorter-term commitments that will provide us with a nice framework for updating our key stakeholders on our progress. I'll return later in the call to offer a few comments on this, my final earnings call, but at this point, I'd like to turn it over to Ted for the financial review. Ted?