Unitil Corp (NYSE:UTL) Q2 2022 Earnings Conference Call August 2, 2022 10:00 AM ET Company Participants Todd Diggins - IR Officer Thomas Meissner - Chairman, President & CEO Robert Hevert - SVP, CFO & Treasurer Conference Call Participants Kody Clark - Bank of America Merrill Lynch Operator Good day, and welcome to the Q2 2022 Unitil Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-8858 UNITIL CORPORATION (Exact name of registrant as specified in its charter) New Hampshire 02-0381573 (State or other jurisdicti ...

Financial Data and Key Metrics Changes - The company reported a net income of $21.5 million for Q1 2022, with earnings per share of $1.35, representing a 7.1% increase compared to the same period in 2021 [9][21] - The adjusted gross margin for electric operations was $24.6 million, an increase of 3.8% year-over-year, while gas adjusted gross margin was $52 million, reflecting an 8.8% increase [23][24] - Overall sales increased by 1.4% year-over-year, with commercial and industrial unit sales rising by 2.3% [23] Business Line Data and Key Metrics Changes - Electric adjusted gross margin increased due to higher distribution rates and customer growth, with a total of 551 new customers added, marking a 1.5% increase [23] - Gas adjusted gross margin growth was driven by higher rates and customer growth, with colder winter weather contributing to the increase [24] Market Data and Key Metrics Changes - The company serves regions in Maine and New Hampshire, where approximately $8 billion in construction is planned or underway, indicating robust economic development [14] - Significant projects include a $1.7 billion expansion at the Portsmouth Naval Shipyard and a new Amazon Distribution Center in Massachusetts, which are expected to create jobs and drive further investment [16][17] Company Strategy and Development Direction - The company maintains a long-term earnings growth guidance of 5% to 7%, with near-term growth expected to exceed this range [9] - A focus on sustainability includes plans to integrate renewable natural gas into the supply portfolio, supported by legislative efforts in New Hampshire [11] Management's Comments on Operating Environment and Future Outlook - Management noted that inflationary impacts are expected to affect the capital budget more significantly in future years, with current increases in equipment and materials costs [39] - The company has mechanisms in place to recover increased capital costs due to inflation through regulatory solutions [44] Other Important Information - The company has a strong investment outlook totaling about $755 million over the next five years, aimed at ensuring safety, reliability, and modernization of the distribution system [28] - A recent increase in the quarterly dividend reflects confidence in the company's strategic plan and ability to execute [30] Q&A Session Summary Question: Updates on advanced energy systems and clean energy solutions - Management indicated that updates may come later in the year, depending on legislative progress and internal evaluations [36] Question: Inflationary impacts on raw materials and measures to mitigate customer bill impacts - Management highlighted significant cost increases in the capital budget and noted that they are not yet seeing impacts on operating and maintenance expenses [39][42] Question: Customer growth and assumptions for long-term EPS CAGR - The long-term earnings growth is based on historical customer growth rates, with no significant adjustments made at this time [45]

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) This section details the company's financial performance, condition, and management's analysis for the reporting period [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=4&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For the first quarter of 2022, Unitil reported Net Income of **$21.5 million**, an increase of **$2.6 million** from Q1 2021, driven by higher Electric and Gas Adjusted Gross Margins due to new rates, customer growth, and colder weather Q1 2022 vs Q1 2021 Financial Performance | Metric | Q1 2022 | Q1 2021 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $21.5 million | $18.9 million | +$2.6 million | +13.8% | | **Earnings Per Share (EPS)** | $1.35 | $1.26 | +$0.09 | +7.1% | | **Electric Adjusted Gross Margin** | $24.6 million | $23.7 million | +$0.9 million | +3.8% | | **Gas Adjusted Gross Margin** | $52.0 million | $47.8 million | +$4.2 million | +8.8% | - The increase in Gas Adjusted Gross Margin was driven by **$2.8 million** from higher rates and **$1.4 million** from the favorable effects of customer growth and colder winter weather[43](index=43&type=chunk) - Operating & Maintenance (O&M) expenses increased by **$1.5 million**, reflecting higher labor costs (**$1.4 million**) and professional fees (**$0.6 million**), partially offset by lower utility operating costs (**$0.5 million**)[45](index=45&type=chunk) - The company declared a quarterly dividend of **$0.39 per share**, resulting in an annualized rate of **$1.56 per share**, continuing an unbroken record of quarterly dividend payments[50](index=50&type=chunk) [Overview](index=5&type=section&id=OVERVIEW) Unitil Corporation is a public utility holding company that distributes electricity and natural gas in New Hampshire, Massachusetts, and Maine, serving approximately 107,700 electric and 86,600 gas customers - Unitil's principal business is the local distribution of electricity and gas through its three wholly-owned utilities: Unitil Energy Systems, Inc., Fitchburg Gas and Electric Light Company, and Northern Utilities, Inc[16](index=16&type=chunk)[25](index=25&type=chunk) Customer Base and Assets | Metric | Value | As of Date | | :--- | :--- | :--- | | Electric Customers | ~107,700 | March 31, 2022 | | Gas Customers | ~86,600 | March 31, 2022 | | Net Utility Plant | $1,259.9 million | March 31, 2022 | [Rates and Regulation](index=6&type=section&id=RATES%20AND%20REGULATION) Unitil operates under a comprehensive regulatory framework, with oversight from federal and state commissions, utilizing a cost-of-service model and revenue decoupling for Fitchburg's operations - The company's utility operations are regulated by FERC and state public utility commissions in New Hampshire, Massachusetts, and Maine regarding rates, securities issuance, and operations[23](index=23&type=chunk) - Fitchburg's operations are subject to revenue decoupling, which eliminates the dependency of distribution revenue on the volume of electricity or gas sold[26](index=26&type=chunk) [Results of Operations](index=7&type=section&id=RESULTS%20OF%20OPERATIONS) In Q1 2022, Net Income rose to **$21.5 million** from **$18.9 million** in Q1 2021, driven by increased Electric and Gas Adjusted Gross Margins due to higher rates, customer growth, and colder weather Q1 2022 vs Q1 2021 Adjusted Gross Margin (Non-GAAP) | Metric ($ in millions) | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Electric Adjusted Gross Margin | $24.6 | $23.7 | | Gas Adjusted Gross Margin | $52.0 | $47.8 | | **Total Adjusted Gross Margin** | **$76.6** | **$71.5** | Q1 2022 vs Q1 2021 Sales Volume Change | Category | % Change YoY | | :--- | :--- | | Total Electric kWh Sales | +1.4% | | Total Gas Therm Sales | +3.8% | - The increase in gas therm sales was influenced by **4.6% more Effective Degree Days (EDD)** in Q1 2022 compared to Q1 2021, indicating colder weather[44](index=44&type=chunk) [Capital Requirements](index=13&type=section&id=CAPITAL%20REQUIREMENTS) Unitil funds capital requirements through internal cash, short-term borrowings, and equity offerings, maintaining investment-grade credit ratings and compliance with financial covenants - In August and September 2021, the company raised net proceeds of approximately **$44.5 million** ($38.6 million + $5.9 million) from a public offering of 920,000 shares of common stock[70](index=70&type=chunk)[71](index=71&type=chunk) Revolving Credit Facility Status ($ in millions) | Date | Limit | Outstanding | Available | | :--- | :--- | :--- | :--- | | March 31, 2022 | $120.0 | $64.0 | $56.0 | - The company's credit ratings are **'BBB+' from S&P** and **'Baa2'/'Baa1' from Moody's** for the corporation and its utility subsidiaries[77](index=77&type=chunk) [Employees](index=15&type=section&id=EMPLOYEES) As of March 31, 2022, Unitil had **508 employees**, with **161 represented by labor unions**, and anticipates negotiations for expiring collective bargaining agreements - The company had **508 employees** as of March 31, 2022, with **161 represented by labor unions**[83](index=83&type=chunk)[88](index=88&type=chunk) Collective Bargaining Agreement Expirations | Subsidiary | Employees Covered | CBA Expiration | | :--- | :--- | :--- | | Fitchburg | 42 | 05/31/2022 | | Unitil Energy | 38 | 05/31/2023 | | Unitil Service | 4 | 05/31/2023 | | Northern Utilities NH | 35 | 06/07/2025 | | Northern Utilities ME | 38 | 03/31/2026 | | Granite State | 4 | 03/31/2026 | [Financial Statements (Unaudited)](index=17&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited consolidated financial statements for Q1 2022 show increased operating revenues and net income, growth in total assets, and strong cash from operations [Consolidated Statements of Earnings](index=17&type=section&id=Consolidated%20Statements%20of%20Earnings) For Q1 2022, Unitil reported total operating revenues of **$192.6 million** and net income of **$21.5 million**, or **$1.35 per share**, significantly up from the prior year Consolidated Earnings Summary (Three Months Ended March 31) | ($ in millions, except per share data) | 2022 | 2021 | | :--- | :--- | :--- | | Total Operating Revenues | $192.6 | $138.8 | | Operating Income | $35.8 | $33.4 | | **Net Income** | **$21.5** | **$18.9** | | **Net Income Per Common Share** | **$1.35** | **$1.26** | [Consolidated Balance Sheets](index=18&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2022, total assets reached **$1,552.3 million**, driven by Net Utility Plant additions, with Total Common Stock Equity increasing to **$465.1 million** Consolidated Balance Sheet Summary ($ in millions) | Account | March 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Current Assets | $163.1 | $159.7 | | Net Utility Plant | $1,259.9 | $1,257.2 | | **Total Assets** | **$1,552.3** | **$1,540.3** | | Total Current Liabilities | $157.7 | $173.5 | | Long-Term Debt, Less Current Portion | $496.6 | $497.8 | | Total Common Stock Equity | $465.1 | $448.3 | | **Total Liabilities and Capitalization** | **$1,552.3** | **$1,540.3** | [Consolidated Statements of Cash Flows](index=20&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash provided by operating activities was **$29.1 million** in Q1 2022, funding **$15.4 million** in capital expenditures and **$13.7 million** in financing activities, with stable cash balances Consolidated Cash Flow Summary (Three Months Ended March 31) | ($ in millions) | 2022 | 2021 | | :--- | :--- | :--- | | Cash Provided by Operating Activities | $29.1 | $47.7 | | Cash (Used in) Investing Activities | $(15.4) | $(14.1) | | Cash (Used in) Financing Activities | $(13.7) | $(33.5) | | **Net Change in Cash** | **$0.0** | **$0.1** | [Notes to Consolidated Financial Statements](index=22&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, segment performance, debt, equity, regulatory matters, environmental liabilities, income taxes, and employee benefit plans, supporting the financial statements - **Note 4 (Debt):** As of March 31, 2022, the company had total long-term debt of **$508.3 million** and short-term borrowings of **$64.0 million**[156](index=156&type=chunk)[159](index=159&type=chunk) - **Note 6 (Regulatory):** The company has multiple pending rate cases and regulatory filings, including base rate cases for Northern Utilities (NH) and Unitil Energy, seeking permanent and implementing temporary rate increases[188](index=188&type=chunk)[189](index=189&type=chunk) - **Note 7 (Environmental):** The company has accrued **$2.7 million** for environmental obligations as of March 31, 2022, primarily for former manufactured gas plant (MGP) site remediation, with costs expected to be recovered through regulatory mechanisms[227](index=227&type=chunk)[228](index=228&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk on variable-rate debt, but commodity price risk is mitigated by regulatory pass-through mechanisms for supply costs - A **1% change in interest rates** on an average of **$25 million of short-term debt** would change annual interest expense by approximately **$250,000**[90](index=90&type=chunk) - Commodity price risk is limited because regulatory frameworks allow for full collection of power and gas supply costs in rates on a pass-through basis[91](index=91&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal control over financial reporting - The company's management concluded that disclosure controls and procedures were effective as of March 31, 2022[243](index=243&type=chunk) - No material changes to internal control over financial reporting occurred during the fiscal quarter[244](index=244&type=chunk) [Part II. Other Information](index=46&type=section&id=Part%20II.%20Other%20Information) This section covers legal proceedings, risk factors, equity sales, and other relevant disclosures for the reporting period [Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal and administrative proceedings, but management expects their ultimate resolution will not materially affect financial position - The company states that the resolution of ongoing legal proceedings is not expected to have a material effect on its financial position[245](index=245&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021, were reported - No material changes to risk factors were reported since the last Annual Report on Form 10-K[247](index=247&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company had no unregistered equity security sales in Q1 2022 and made no share repurchases under its Rule 10b5-1 plan for Directors' retainers - There were no sales of unregistered equity securities during the quarter[248](index=248&type=chunk) - The company has a Rule 10b5-1 trading plan to repurchase shares for Directors' retainers, but no shares were purchased under this plan in Q1 2022[249](index=249&type=chunk)[251](index=251&type=chunk) [Other Information](index=48&type=section&id=Item%205.%20Other%20Information) On May 3, 2022, the company issued a press release announcing its financial results for the three-month period ended March 31, 2022, furnished as Exhibit 99.1 - A press release announcing Q1 2022 earnings was issued on May 3, 2022, and is included as an exhibit[252](index=252&type=chunk) [Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications from key officers, the earnings press release, and XBRL data files - Exhibits filed include Sarbanes-Oxley certifications (31.1, 31.2, 31.3, 32.1), the earnings press release (99.1), and XBRL data files[254](index=254&type=chunk)

Financial Data and Key Metrics Changes - For fiscal year 2021, the company reported net income of $36.1 million and earnings per share of $2.35, reflecting an increase of $0.20 per share or 9.3% compared to 2020 [6][10] - The adjusted gross margin for electric operations was $97.4 million, an increase of $4.5 million or 4.8% from fiscal year 2020, driven by higher rates and customer growth [11] - The adjusted gross margin for gas operations was $133.1 million, an increase of $10.5 million or 8.6% compared to fiscal year 2020, attributed to higher rates and customer growth [12] Business Line Data and Key Metrics Changes - Electric adjusted gross margin increased due to a 3.5% rise in commercial and industrial unit sales, reflecting improving economic conditions [11] - Gas adjusted gross margin growth was supported by $9.4 million from higher rates and customer growth, along with $1.1 million from colder winter weather [12] Market Data and Key Metrics Changes - The company expects over 80% of its customers to be served under decoupled rate mechanisms by year-end, minimizing revenue fluctuations due to weather and business cycles [5] - The company operates in areas with significant economic development, particularly in New Hampshire and Maine, which have high dependency on fuel oil for home heating [19] Company Strategy and Development Direction - The company is focused on electrification opportunities, particularly expanding EV infrastructure and exploring solar energy projects [27] - The long-term rate-based growth is anticipated to be between 6.5% to 8.5%, with a balanced investment mix between gas and electric operations [16][17] - Sustainability is embedded in the company's business strategy, with a commitment to reducing emissions and enhancing customer experience [8][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its strategic and financial plans, highlighting strong customer growth and operational excellence [23] - The company is well-positioned for future growth, with a robust investment plan aimed at ensuring safety and reliability of the distribution system [16][23] Other Important Information - The company declared a quarterly dividend of $0.39 per share, reflecting confidence in its financial performance and ability to execute on strategic plans [18] - The five-year investment plan totals approximately $755 million, focusing on safety, reliability, and grid modernization initiatives [16] Q&A Session Summary Question: Can you provide details on potential strategic projects around advanced energy systems? - The company is focused on electrification opportunities, particularly expanding EV infrastructure and exploring solar energy projects [27] Question: What was the nature of the agreement in the UES settlement? - The settlement agreement is comprehensive in scope, covering various issues included in the filing, but specifics cannot be disclosed until it is filed [28] Question: What are the assumptions for electric and gas growth within the EPS growth rate? - The EPS growth rate is based on rate-based growth and anticipated investments, with an uptick in customer conversions to natural gas observed [30] Question: What resources are available for renewable natural gas within your territories? - The company has access to diverse feedstocks such as dairy, food waste, and biomass for renewable natural gas projects [34] Question: How much of Maine and New Hampshire is reachable through your natural gas pipes? - Currently, the penetration in Northern New Hampshire is around 60%, with opportunities for further customer conversions in existing service areas [35] Question: How is the CapEx trend expected to change between gas and electric investments? - As gas pipe replacement projects conclude, the company anticipates a shift in CapEx towards electric investments, reflecting more opportunities in electrification [36]

Filing Information Registrant: **UNITIL CORPORATION**, New Hampshire, (603) 772-0775, with the fiscal year ending December 31, 2021[2](index=2&type=chunk) Registered Classes of Stock | Title of each class | Trading Symbol | Name of each exchange of which registered | | :--- | :--- | :--- | | Common Stock, no par value | UTL | New York Stock Exchange | - Filer Status: **Large accelerated filer**[5](index=5&type=chunk) - Aggregate market value of common stock held by non-affiliates as of June 30, 2021: **$785,923,009**[5](index=5&type=chunk) - Number of common shares outstanding as of January 28, 2022: **15,978,791**[6](index=6&type=chunk) PART I [Business Overview](index=5&type=section&id=Item%201.%20Business) Unitil Corporation is a public utility holding company distributing electricity and natural gas to 194,275 customers across three states [Company Structure and Services](index=5&type=section&id=Unitil%20Corporation) Unitil operates as a public utility holding company through subsidiaries, serving 194,275 customers and managing a $1.26 billion net utility plant - Unitil is a public utility holding company incorporated in New Hampshire in 1984[20](index=20&type=chunk) Key Subsidiaries and Principal Business | Company Name | Principal Business | | :--- | :--- | | Unitil Energy Systems, Inc. (Unitil Energy) | Electric Distribution Utility | | Fitchburg Gas and Electric Light Company (Fitchburg) | Electric & Natural Gas Distribution Utility | | Northern Utilities, Inc. (Northern Utilities) | Natural Gas Distribution Utility | | Granite State Gas Transmission, Inc. (Granite State) | Natural Gas Transmission Pipeline | | Unitil Power Corp. (Unitil Power) | Wholesale Electric Power Utility (formerly) | | Unitil Service Corp. (Unitil Service) | Utility Service Company | | Unitil Realty Corp. (Unitil Realty) | Real Estate Management | | Unitil Resources, Inc. (Unitil Resources) | Non-regulated Energy Services (formerly Usource) | Customers Served as of December 31, 2021 | Service Type | Residential | Commercial & Industrial (C&I) | Total | | :--- | :--- | :--- | :--- | | Electric | 92,314 | 15,366 | 107,680 | | Natural Gas | 68,182 | 18,413 | 86,595 | | **Total Customers Served** | **160,496** | **33,779** | **194,275** | - Investment in Net Utility Plant: **$1,257.2 million** at December 31, 2021[22](index=22&type=chunk) [Business Operations](index=7&type=section&id=Operations) This section details Unitil's electric and natural gas distribution utility operations, including revenue and gross margin [Electric Distribution Utility Operations](index=6&type=section&id=Electric%20Distribution%20Utility%20Operations) Electric utility operations generated $248.5 million in 2021 revenue, contributing 53% of total, with a $97.4 million Adjusted Gross Margin - Revenue from electric utility operations was **$248.5 million** in 2021, representing about **53%** of Unitil's total operating revenue[25](index=25&type=chunk) - GAAP Electric Gross Margin was **$71.5 million** in 2021; Electric Adjusted Gross Margin (non-GAAP) was **$97.4 million**[25](index=25&type=chunk) - Unitil Energy (NH) 2021 electric operating revenue: **$172.3 million** (56% residential, 44% C&I)[27](index=27&type=chunk) - Fitchburg (MA) 2021 electric operating revenue: **$76.2 million** (58% residential, 42% C&I)[30](index=30&type=chunk) [Natural Gas Operations](index=7&type=section&id=Natural%20Gas%20Operations) This section details Unitil's natural gas distribution and transmission operations, including revenue and gross margin [Natural Gas Distribution Utility Operations](index=7&type=section&id=Natural%20Gas%20Distribution%20Utility%20Operations) Natural gas distribution operations generated $224.8 million in 2021 revenue, contributing 47% of total, with a $133.1 million Adjusted Gross Margin - Revenue from gas operations was **$224.8 million** in 2021, representing about **47%** of Unitil's total operating revenue[31](index=31&type=chunk) - GAAP Gas Gross Margin was **$100.4 million** in 2021; Gas Adjusted Gross Margin (non-GAAP) was **$133.1 million**[31](index=31&type=chunk) - Northern Utilities (NH/ME) 2021 gas operating revenue: **$176.7 million** (38% residential, 62% C&I)[33](index=33&type=chunk) - Fitchburg (MA) 2021 gas operating revenue: **$40.1 million** (58% residential, 42% C&I)[34](index=34&type=chunk) [Gas Transmission Pipeline Operations](index=7&type=section&id=Gas%20Transmission%20Pipeline%20Operations) Granite State operates 86 miles of interstate natural gas transmission pipeline, generating $8.0 million in 2021 operating revenue - Granite State operates **86 miles** of interstate natural gas transmission pipeline in Maine and New Hampshire[35](index=35&type=chunk) - Granite State's operating revenue was **$8.0 million** in 2021, primarily from transportation services to Northern Utilities and third-party suppliers[35](index=35&type=chunk) [Seasonality](index=7&type=section&id=Seasonality) Annual gas revenues are substantially realized during colder weather seasons, while electricity sales are less weather-sensitive - Annual gas revenues are substantially realized during colder weather seasons (Q1 and Q4) due to higher sales for heating[36](index=36&type=chunk) - Electricity sales are generally less sensitive to weather than natural gas sales but can still be affected by winter and summer temperatures[37](index=37&type=chunk) [Non-Regulated and Other Non-Utility Operations](index=8&type=section&id=Non-Regulated%20and%20Other%20Non-Utility%20Operations) The non-regulated energy brokering subsidiary Usource was divested in 2019, with other non-utility results included in consolidated financials - The non-regulated subsidiary Usource, which provided energy brokering and advisory services, was divested in the first quarter of 2019[39](index=39&type=chunk) - Results of Unitil Service, Unitil Realty, and the holding company are included in consolidated results, primarily from income earned on short-term investments and real property[40](index=40&type=chunk) [Rates and Regulation](index=8&type=section&id=Rates%20and%20Regulation) Unitil and its subsidiaries are subject to comprehensive federal and state regulation, with costs recovered through cost-of-service and tracking mechanisms - Unitil and its subsidiaries are subject to comprehensive regulation by federal (FERC) and state (NHPUC, MDPU, MPUC) regulatory authorities[41](index=41&type=chunk) - Distribution utilities recover service costs and earn a return on capital investment through cost-of-service regulation, with some costs recovered via annual step adjustments and cost tracking mechanisms[42](index=42&type=chunk) - Fitchburg is subject to revenue decoupling, which eliminates the dependency of distribution revenue on sales volume for approximately **27%** of electric and **11%** of natural gas sales volumes[43](index=43&type=chunk) [Employees](index=9&type=section&id=Employees) As of December 31, 2021, the Company and its subsidiaries had 508 employees, with a significant portion covered by collective bargaining agreements - As of December 31, 2021, the Company and its subsidiaries had **508 employees**[46](index=46&type=chunk) Employees Covered by Collective Bargaining Agreements (CBA) as of December 31, 2021 | Subsidiary | Employees Covered | CBA Expiration | | :--- | :--- | :--- | | Fitchburg | 43 | 05/31/2022 | | Northern Utilities NH Division | 37 | 06/07/2025 | | Northern Utilities ME Division | 38 | 03/31/2026 | | Granite State | 4 | 03/31/2026 | | Unitil Energy | 40 | 05/31/2023 | | Unitil Service | 5 | 05/31/2023 | [Available Information](index=9&type=section&id=Available%20Information) The Company's SEC reports and Code of Ethics are publicly available on its website, and its common stock is listed on the NYSE - Company's SEC reports (10-K, 10-Q, 8-K) and Code of Ethics are available free of charge on unitil.com[51](index=51&type=chunk)[52](index=52&type=chunk) - Unitil's common stock is listed on the New York Stock Exchange under the ticker symbol 'UTL'[53](index=53&type=chunk) [Investor Information](index=9&type=section&id=Investor%20Information) The Annual Meeting of Shareholders is scheduled for April 27, 2022, with Computershare Investor Services acting as the transfer agent - The Annual Meeting of Shareholders is scheduled for April 27, 2022[54](index=54&type=chunk) - Computershare Investor Services is the transfer agent for shareholder records, stock issuance, and dividend administration[55](index=55&type=chunk) [Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) The Company identifies various risks categorized into operational, regulatory, financial, and general - Operational risks include disruptions in natural gas pipeline and electric transmission

Unitil Corporation (NYSE:UTL) Q3 2021 Earnings Conference Call November 2, 2021 10:00 AM ET Company Participants Todd Diggins - Director of Finance Tom Meissner - Chairman, President & Chief Executive Officer Bob Hevert - Senior Vice President, Chief Financial Officer & Treasurer Conference Call Participants Kody Clark - Bank of America Operator 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 spea ...

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q For the transition period from to Commission File Number 1-8858 UNITIL CORPORATION (Exact name of registrant as specified in its charter) New Hampshire 02-0381573 (State or other juris ...

Part I. Financial Information [Management's Discussion and Analysis (MD&A) of Financial Condition and Results of Operations](index=5&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20(MD%26A)%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Unitil's Q2 2021 net income decreased due to higher operating expenses, while the first six months saw increased net income driven by higher gas and electric margins and customer growth [Overview](index=5&type=section&id=Overview) Unitil Corporation is a public utility holding company distributing electricity and gas in New Hampshire, Massachusetts, and Maine, with earnings primarily from utility asset returns and pass-through energy costs - Unitil's principal business is the local distribution of electricity and gas through its three wholly-owned distribution utilities: Unitil Energy Systems, Inc., Fitchburg Gas and Electric Light Company, and Northern Utilities, Inc[15](index=15&type=chunk)[16](index=16&type=chunk) - The company serves approximately **107,100 electric customers** and **85,600 gas customers** across its service territories in New Hampshire, Massachusetts, and Maine[17](index=17&type=chunk) - As of June 30, 2021, Unitil had a Net Utility Plant investment of **$1,209.8 million**. The company's earnings are not directly affected by changes in the cost of purchased electricity and gas due to a reconciling rate structure[19](index=19&type=chunk) [Results of Operations](index=7&type=section&id=Results%20of%20Operations) Net income for the first six months of 2021 increased to $21.6 million, driven by higher gas and electric margins, despite increased O&M and depreciation expenses, while Q2 net income slightly decreased Earnings Summary ($ millions, except per share data) | Period | Net Income ($ millions) | EPS ($) | Change (Net Income, $ millions) | Change (EPS, $) | | :--- | :--- | :--- | :--- | :--- | | **Q2 2021 vs Q2 2020** | $2.7 | $0.18 | -$0.4 | -$0.03 | | **6M 2021 vs 6M 2020** | $21.6 | $1.44 | +$3.3 | +$0.21 | Adjusted Gross Margin (Non-GAAP) Performance ($ millions) | Segment | Period | 2021 ($ millions) | 2020 ($ millions) | Change ($ millions) | Key Drivers | | :--- | :--- | :--- | :--- | :--- | :--- | | **Gas** | 3 Months | $25.0 | $22.9 | +$2.1 | Higher rates, customer growth, warmer weather | | **Gas** | 6 Months | $72.8 | $65.3 | +$7.5 | Higher rates, customer growth, colder winter | | **Electric** | 3 Months | $24.3 | $22.4 | +$1.9 | Higher rates, customer growth, warmer weather | | **Electric** | 6 Months | $48.0 | $45.5 | +$2.5 | Higher rates, customer growth, colder winter | - Operation and Maintenance (O&M) expenses increased by **$2.9 million in Q2 2021** and **$2.0 million in the first six months of 2021**, primarily due to higher labor costs, utility operating costs, and professional fees[45](index=45&type=chunk) - Depreciation and Amortization expense rose by **$2.7 million** for the six-month period, reflecting higher levels of utility plant in service[46](index=46&type=chunk) [Capital Requirements](index=15&type=section&id=Capital%20Requirements) Unitil funds capital needs via internal cash and a $120 million credit facility, with $90.3 million available as of June 30, 2021, and maintains investment-grade credit ratings Revolving Credit Facility Status ($ millions) | Date | Limit ($ millions) | Outstanding Borrowings ($ millions) | Available ($ millions) | | :--- | :--- | :--- | :--- | | **June 30, 2021** | $120.0 | $29.7 | $90.3 | | **June 30, 2020** | $120.0 | $74.9 | $45.0 | | **Dec 31, 2020** | $120.0 | $54.7 | $65.2 | - In September 2020, subsidiaries Northern Utilities, Fitchburg, and Unitil Energy collectively issued **$95 million in long-term notes and bonds** to repay short-term debt and for general corporate purposes[79](index=79&type=chunk) - Unitil Corporation and its utility subsidiaries hold investment-grade credit ratings, with a **'BBB+' from S&P** and ratings of **'Baa1' or 'Baa2' from Moody's**[80](index=80&type=chunk) [Financial Statements - Unaudited](index=19&type=section&id=Item%201.%20Financial%20Statements%20-%20Unaudited) Unaudited financial statements for H1 2021 show increased operating revenues and net income, stable total assets, significantly higher operating cash flow, and continued dividend payments [Consolidated Statements of Earnings](index=19&type=section&id=Consolidated%20Statements%20of%20Earnings) For H1 2021, total operating revenues increased to $235.4 million, with net income rising to $21.6 million, while Q2 net income decreased to $2.7 million Consolidated Earnings Summary ($ millions, except per share data) | Metric | Six Months Ended June 30, 2021 ($ millions) | Six Months Ended June 30, 2020 ($ millions) | | :--- | :--- | :--- | | **Total Operating Revenues** | $235.4 | $214.3 | | **Operating Income** | $44.2 | $38.7 | | **Net Income** | $21.6 | $18.3 | | **Net Income Per Share** | $1.44 | $1.23 | [Consolidated Balance Sheets](index=20&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2021, total assets were $1,477.1 million, with Net Utility Plant at $1,209.8 million and total common stock equity at $400.6 million Key Balance Sheet Items ($ millions) | Item | June 30, 2021 ($ millions) | Dec 31, 2020 ($ millions) | | :--- | :--- | :--- | | **Total Current Assets** | $114.2 | $139.3 | | **Net Utility Plant** | $1,209.8 | $1,193.2 | | **TOTAL ASSETS** | $1,477.1 | $1,477.9 | | **Total Current Liabilities** | $133.3 | $136.1 | | **Long-Term Debt, Less Current Portion** | $505.3 | $523.1 | | **Total Common Stock Equity** | $400.6 | $389.0 | | **TOTAL LIABILITIES AND CAPITALIZATION** | $1,477.1 | $1,477.9 | [Consolidated Statements of Cash Flows](index=22&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For H1 2021, operating cash flow significantly increased to $84.4 million, while investing activities used $42.5 million and financing activities used $42.9 million Cash Flow Summary ($ millions) | Activity | Six Months Ended June 30, 2021 ($ millions) | Six Months Ended June 30, 2020 ($ millions) | | :--- | :--- | :--- | | **Cash Provided by Operating Activities** | $84.4 | $58.3 | | **Cash (Used in) Investing Activities** | ($42.5) | ($48.8) | | **Cash (Used in) Financing Activities** | ($42.9) | ($10.5) | | **Net Decrease in Cash** | ($1.0) | ($1.0) | [Notes to Consolidated Financial Statements](index=25&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, segment performance, debt, stock plans, and regulatory matters, including segment revenue growth and updates on state-level rate cases Segment Profit (Loss) for Six Months Ended June 30 ($ millions) | Segment | 2021 ($ millions) | 2020 ($ millions) | | :--- | :--- | :--- | | Gas | $16.2 | $12.2 | | Electric | $6.3 | $5.7 | | Non-Regulated | $0.1 | $— | | Other | ($1.0) | $0.4 | | **Total** | **$21.6** | **$18.3** | - On April 2, 2021, Unitil Energy filed a base rate case with the NHPUC, requesting a permanent annual revenue increase of **$12.0 million**. A temporary rate increase of **$4.5 million** was approved effective June 1, 2021[197](index=197&type=chunk) - Fitchburg's gas division received approval for a two-phase rate increase totaling **$4.6 million**, with the second phase of **$0.9 million** becoming effective on March 1, 2021[202](index=202&type=chunk) - The company is actively involved in regulatory proceedings regarding the financial effects of the COVID-19 pandemic, including the deferral of bad debt expense[211](index=211&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk primarily stems from interest rate fluctuations on variable-rate short-term debt, with commodity price risk limited by pass-through regulatory frameworks - The company's primary market risk is interest rate risk on its short-term, variable-rate debt. A **1% change in interest rates** on an average short-term debt balance of **$25 million** would change annual interest expense by approximately **$250,000**[93](index=93&type=chunk) - Commodity price risk is considered limited because the regulatory framework allows for the full collection of electric power and natural gas supply costs from customers on a pass-through basis[95](index=95&type=chunk) [Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2021, management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - Management concluded that as of June 30, 2021, the company's disclosure controls and procedures were **effective**[251](index=251&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[253](index=253&type=chunk) Part II. Other Information [Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, which management believes will not materially affect its financial position - The company states that ongoing legal proceedings, which arise in the ordinary course of business, are **not expected to have a material effect** on its financial position[254](index=254&type=chunk) [Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's 2020 Form 10-K were reported for the quarter - No material changes to the risk factors disclosed in the company's 2020 Form 10-K were reported for the quarter ended June 30, 2021[255](index=255&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity securities were sold in Q2 2021, and no shares were repurchased under the Rule 10b5-1 trading plan adopted for Directors' retainers - There were no sales of unregistered equity securities during the fiscal quarter ended June 30, 2021[256](index=256&type=chunk) - A Rule 10b5-1 trading plan was adopted on May 1, 2021, to repurchase shares for Directors' retainers, with a value limit of **$350,500**. No shares were purchased under this plan in the quarter[257](index=257&type=chunk)[259](index=259&type=chunk) [Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including executive certifications, an employment agreement, and the earnings press release - Exhibits filed with the report include CEO and CFO certifications (**31.1, 31.2, 32.1**), an employment agreement (**10.1**), and the earnings press release dated August 3, 2021 (**99.1**)[261](index=261&type=chunk)

Unitil Corporation. (NYSE:UTL) Q1 2021 Results Earnings Conference Call May 4, 2021 2:00 PM ET Company Participants Todd Diggins - Director of Finance Tom Meissner - President, Chairman of the Board, Chief Executive Officer Robert Hevert - Senior Vice President, Chief Financial Officer and Treasurer Conference Call Participants Michael Gaugler - Janney Montgomery Shelby Tucker - RBC Capital Markets Operator Good afternoon and welcome to the Q1 2021 Unitil Earnings Conference Call. At this time all participa ...