Unitil (UTL)

Todd Diggins Director of Finance
Tom Meissner Chairman, President & Chief Executive Officer
Bob Hevert Senior Vice President, Chief Financial Officer & Treasurer
Kody Clark Bank of America
Call transcript
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Good day and thank you for standing by. Welcome to Q3 2021 Unitil Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now today, hand Mr. would to conference I speaker your Instructions] like the to over [Operator Todd Director Diggins, of Finance. Thank you ahead. and please go

Todd Diggins

and joining for third results. thank discuss morning Corporation's financial quarter us Unitil XXXX Good to you

on and Executive President, President Chief Speaking Meissner, Officer and Senior Bob Chief call be Officer; today Tom the Treasurer. Chairman, Hevert, Financial and Vice will

We call. will discuss financial and other information on this

website information, Investors press mentioned announcing this our posted in section have the to the release unitil.com. including we presentation As we a at of call,

We will information that during this call. refer to

Moving operating to provisions Reform forward-looking the slide about two, Litigation the comments XXXX. Harbor results statements made today Safe of future Securities of are the Private or events Act under

predicted. involve that in Commission. call and filed uncertainties this on with or inherently with results should and documents can be statements to and considered to Securities recent have statements most risks Form contained made from Exchange information Statements XX-K and other other the together on actual Forward-looking Report those Annual cautionary our cause differ furnished materially we

Chairman, Forward-looking and no them. these today update financial describes to non-GAAP company and more the includes With in to financial we presentation evaluating the CEO, to and that, reconciliation turn believes its Tom information only a statements measures I contains supplemental obligation measures. measures. GAAP This as financial non-GAAP assume fully The President speak accompanying nearest of measures financial over The call performance. non-GAAP Meissner. these are useful will now

Tom Meissner

model. Maine description serving including Thanks slide business We're which utility New to attractive off on kick morning, Unitil's three, pure-play England, Thanks, Hampshire like the New distribution Todd, brief today's a and for and areas, joining a everyone. I'd Seacoast. us. in good provides discussion of

XX% customer diverse and electric customers about customers. more have states We with mix across we gas three service, that the a

by reconciling cost cost As pure-play distribution through recovery of we commission-approved energy impacted fluctuations, our not the are because mechanisms. utility, commodity a earnings recover

of or per we through the first breakeven earnings per XXXX million, $XX.X announced the margins performance Today represents the same reflecting slide and to income on net nine the share This I'd the and electric XXXX, both touch for share, gross of $X.XX year. quarter for net third updates. higher four. like Turning divisions. share increase of few income $X.XX over gas adjusted months period the a to or XX% and a strategic in also

First, to earnings relative range to to growth the long-term that XXXX reaffirm I'd of like with end guidance X% XXXX. our be of expected to earnings EPS, X% above in higher

are of capital rates Hampshire growth provide base well, divisions. initiatives temporary will X.X%. range additional the call. advancing investment in to gas rate expected, progressing is plan The about supporting regulatory company's currently long-term in as effect proceedings the with of Our New those electric both X.X% details in later Bob our and

of this the proceeds net corporate will will our make growth. We capital strong to approximately call. fourth third quarter general transaction equity through net the We're and to during quarter, debt contributions subsidiaries committed in our a public $XX.X purposes. utility million. offering used support And equity a refreshed provide five-year maintaining sheet our to capital balance company forecast a to raised investment in resulting be of repay The for proceeds to regulated

on be greater pleased Slide developing and clarity sustainability October our points summarizes I'm our some sustainability corporate report can the key strategies. our XXXX in website. responsibility Finally, which found share corporate and to of our report published five progress we our that of into provides which

greenhouse Maintaining I gas systems vision. earlier Paris to As we and our central the announced year aligns are Agreement. reliable safe reducing previously, carbon emissions this our mentioned which with commitment and Climate

and equity people and This XXXX In business of to serve our employee a to our awareness focus changing company-wide keen of reflective people advance we that we strategy the on goals. a to while diversity, succeed. opportunities having is diversity communities those successfully sustainable an needs Unitil workforce crucial the energy and campaign. At training means clean that also the way continue inclusion also ongoing with We is vision create ensuring resources transforming people the have realizing a and meet and future. grow provided their to and began

encourage metrics addition strategies full at view the to sustainability also statistics key reporting discussing report templates. our provides various and Finally report and unitil.com. I the goals, you industry-specific in in to

X. natural support fuels lower the carbon Turning Converting presents as to we on oil nation. electrification fuel oil gasoline opportunities heating Unitil. for and The heating transportation to dependency significant have in Slide states and gas of and with the alternatives the such diesel, for fuel highest

our more than XX% of Massachusetts noteworthy overlap as service Unitil areas, In considerable service electric New provider. their addition, particularly have where there across gas Hampshire and is customers. our between electric in is This customers Massachusetts our

natural territories. it strong fuel would strategic in I pass from areas opportunities develop. who I'll will like customer growth utility will mention Bob With to opportunity heating take or system support and became results. policies New us gas. available electrification recently our financial the a our over continue prohibits municipalities and Senate as that XX diversity We're across and now continue together service that that for with towns or service details use the restricting see the that commercially of conversion economic we as the any to forward, also through Bill conditions our Hampshire including law confident additions borrowing to Looking to of potential

Bob Hevert

Slide Thank you, Tom and good will on morning everyone. I begin X.

by common operating On successful offering quarter growth partially or basis share. as $X.XX stock we compared announced net per offset adjusted earnings $X.XX by increased higher our gross today net $X share income third As per the XXXX. XX% to reflects of Tom higher That income year-to-date million a increase share Year-over-year result the and per quarter. in expenses. primarily earnings of margins third breakeven noted,

long-term relative to full XXXX expect earnings of of X% XXXX year to per $X.XX earnings EPS above continue to range end top we mentioned, Tom share. growth the our As X% our

Turning X. to slide

X.X% nine of period increase $X.X and rates the higher gross driven months million XX, million, XXXX. was XXXX, by nine-month $XX.X customer an electric increase was or compared the For The growth. ended to over September adjusted margin

commercial in and sales our service unit Our reflecting economic X.X% continuing territories. industrial growth increased

slide X. to Moving

For weather. growth to favorable the adjusted and reflects XX, and months margin ended in nine September $X.X $X.X XXXX, gas million, gross The adjusted $XX.X million $X.X or of gas compared from increase increase rates effect colder winter million gross an higher customer of of was XX.X% the margin million XXXX.

provide comparing XX. bridge Moving We XXXX XXXX. slide on an earnings to results to

XXXX higher higher $XX.X of result higher Operating sales. current reflecting income costs, higher higher by taxes. service and by by as increase million earlier, and levels adjusted million property higher to plant As costs and increased maintenance taxes increased $X.X margin plant service and operating a and is increased primarily rates and noted utility by other to fees. labor The partially gross Depreciation than increased offset utility and lower of expense. attributable taxes utility year increased million. unit professional expenses on local higher amortization in payroll amortization Taxes $X.X slightly $X.X million due higher

borrowings. Interest of the quarter of million recognized higher $X.X -- payroll third expense Act. to interest reflecting million, partially levels a of XXXX, retirement balances the higher increased by on costs. other expense debt million in CARES As on credits benefits $X.X due lower largely Other by company lower offset excuse rates associated with short-term reminder, the by interest reflecting me decreased $X.X and lower long-term

of pretax income taxes a earnings. as result Lastly, increased higher million by $X.X

progressing effective X rates of Energy at as and point, $X.X the X. New and discussed Both Unitil to been in UES, cases, At and dockets. June Northern Hampshire of XX. temporary rates in became are million At Turning expected. slide this I've which became on rate million effect Hampshire calls rate on both previous temporary temporary award effective are have New authorized Northern on October a $X.X

investments XXXX, As and temporary full in reminder, XXXX. and rates Both include capital certain reconciled made over and case one award to to a proposals the year. collected refunded decoupling filings a revenue recover final XXXX is plans rate rate usually multiyear or difference are

As schedules mentioned in case. COVID pandemic to utility's to and And back in each addressed we parties the recover associated these been Pursuant received included electric look that Tom. with fees Procedural both bad and to order, I over Public earnings an have turn for all late order New resolution. Commission stating rate costs call, that in may it forward cases proposals will and be Hampshire we in have the cases issued last cases. gas next both to quarter's with incremental that, Utilities with our working debt bringing to these

Tom Meissner

made behind growth nine ahead. to our our remain our growth We well value and the We our us, back strategies, that, now service are and on slide up the we with excited In plan create future the about Wrapping to and the Todd. our of capital company forward dividend updates for progress us policy. strategic has With allows including Bob. year-end customers. I'll turn with we you, prospects. shareholders. goals, We excellent to months will outlook, is pleased call, continue it provide plan the maintain sustainability to XXXX we're earnings investment our the positioned Thank and solid company's and our believe to look believe long-term pursue opportunities first XX, to

Todd Diggins

turn the thank material Tom. Thanks, attending. over to call who the coordinate the in Great. call, you That will wraps questions. for now this operator, will I up


Dumoulin-Smith Thank of question America. you. first line Bank from of the [Operator Julien Instructions] comes of Our

Your line is now open.

Kody Clark

Kody Good actually Julien. and is Bob. for on This morning, Clark Hey. Tom,

Tom Meissner

Kody. morning, Good

Bob Hevert

Good morning, Kody.

Kody Clark

and New the England, to lot a speak. price, kind been so there's focus end rising start, to the in on where especially pipe gas the So you're of of of

also, to factors and So the you're bills impact disposal? you customer and this have can that at that of the dynamic you speak can your mitigating seeing? discuss to the And you some

Bob Hevert

in about Hampshire. Hey, Kody, where be about, by me let Bob that. talking we'd this No, talk we are And to is New happy start Hevert.

orders the rates. approving As the electric you And cases and received both going Hampshire, the we rate side. New gas we on in default recently have one electric our approving have rates know, and our other in gas cost

that may the you providers, customers case New Kody, the is natural Hampshire gas side. competitive side not recall that electric on on can select but Now in the

approach the between two. our So slightly differs

rate reviewed we found meant side, that, to and we with default so on the service lowest electric those by lowest sure just the and capture provide in supplies rates procured X. design. possible we strategy Massachusetts is our did reasonable, our in we the rates found for New rate procurement approved selected market Default and cost customers be On properly October The signals to the were commission we as Hampshire our and service. market provided that

have we we goes of rates. factors those your second Now, approving in on order Kody an this the natural place. part And gas the side, received what question, last Friday, to mitigation

portfolio, prices the Supply provide the under For pipeline Commission XX% by found fixing storage our the Hampshire approach And fact, able and said, variable Hampshire. of be, fixed Northern were And Gas gas about we to New our as commendable. in to New they those, to customers contracts. effectively benefits in we peaking

commission in in our cases, the found service meant approach to cases So the both provide. reasonable provide commendable both case in to and one we're

we General approving Now in default as to electric our we're a able with orders customers. up We Hampshire received New stipulation. have for service gas our available with work in Attorney And to Massachusetts, the to which all is come cost actually rate.

to relative order about weeks deliberating hedged Hampshire, The approved fairly the in the area and little Attorney procurement we appreciated we're the -- to were Massachusetts excuse there short as came the we expect cost about found XX% rates this unique portfolio a a that cost year and awaiting for our forwards. to order General I procedural an we found simply along. with approach reasonable what those rates be done The And likewise today believe -- mitigate in issue X.X Our supply the very because of ago. we is But again our for shortly. where But commission me customers. in NYMEX to the gas had New department only again commission Maine. was worked in is get increased bit of

Kody Clark

it. Got

very helpful. That's Okay.

of, you're the question Hamster New second rate sort that, focus wondering the of back So if answers and heightened it's environment? there And case. my And in going I seeing to and been and just recent the light wondering still conversations spoke you momentum Are this rate with morning? you regulators on mentioned just the around positive to the case? that seeing calls I'm previous earlier stakeholders have was what the

Bob Hevert

have And case been are. thoroughly Discovery. the tell how been answered. that discovery. the We very electric I quickly you XX the have questions responded through rounds I'll in Nearly appreciative case, XXX and we've all UES parties think of we've to gone of

been XX from other of date going parties we number in in what of well. The things expect case. we along the testimonies the has quantity to is But parties November well. significant next receive when the that been case has discovery both that moving along So involved. are the case The terms and

On parties and pleased the the the terms thoroughness. filing again have think gas side, been again with I very our of the transparency in

So and XX were to round questions discovery far of only related we have only one principally temporary had rates. they

So best of where we of responses our forward. filings. proceeding of are we'll going appreciative have far tell cases as we see stakeholders would goes so But that as -- can and expect. both And been our the

Kody Clark

Got it.

Really it. had. Okay. all That’s helpful. very appreciate That’s I

Bob Hevert

Kody. Thanks,

Kody Clark

Thank you.


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