Unitil(UTL) - 2021 Q4 - Annual Report

Filing Information Registrant: UNITIL CORPORATION, New Hampshire, (603) 772-0775, with the fiscal year ending December 31, 2021[2] 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] - Aggregate market value of common stock held by non-affiliates as of June 30, 2021: $785,923,009[5] - Number of common shares outstanding as of January 28, 2022: 15,978,791[6] PART I Business Overview Unitil Corporation is a public utility holding company distributing electricity and natural gas to 194,275 customers across three states Company Structure and Services 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] 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] Business Operations This section details Unitil's electric and natural gas distribution utility operations, including revenue and gross margin Electric Distribution Utility Operations 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] - GAAP Electric Gross Margin was $71.5 million in 2021; Electric Adjusted Gross Margin (non-GAAP) was $97.4 million[25] - Unitil Energy (NH) 2021 electric operating revenue: $172.3 million (56% residential, 44% C&I)[27] - Fitchburg (MA) 2021 electric operating revenue: $76.2 million (58% residential, 42% C&I)[30] Natural Gas Operations This section details Unitil's natural gas distribution and transmission operations, including revenue and gross margin Natural Gas Distribution Utility Operations 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] - GAAP Gas Gross Margin was $100.4 million in 2021; Gas Adjusted Gross Margin (non-GAAP) was $133.1 million[31] - Northern Utilities (NH/ME) 2021 gas operating revenue: $176.7 million (38% residential, 62% C&I)[33] - Fitchburg (MA) 2021 gas operating revenue: $40.1 million (58% residential, 42% C&I)[34] Gas Transmission Pipeline Operations 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] - Granite State's operating revenue was $8.0 million in 2021, primarily from transportation services to Northern Utilities and third-party suppliers[35] 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] - Electricity sales are generally less sensitive to weather than natural gas sales but can still be affected by winter and summer temperatures[37] Non-Regulated and Other Non-Utility Operations 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] - 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] Rates and Regulation 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] - 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] - 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] 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] 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 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][52] - Unitil's common stock is listed on the New York Stock Exchange under the ticker symbol 'UTL'[53] Investor Information 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] - Computershare Investor Services is the transfer agent for shareholder records, stock issuance, and dividend administration[55] Risk Factors The Company identifies various risks categorized into operational, regulatory, financial, and general - Operational risks include disruptions in natural gas pipeline and electric transmission