Unitil Corporation · NYSE:UTL
Unitil — Q2 2024 Earnings Presentation
24 slides from Unitil's earnings presentation, Aug 6, 2024
Slide 1: Q2 2024 Financial Results and Strategic Update
Q2 2024 Financial Results and Strategic Update August 6, 2024
Slide 2: Forward-Looking Statements and Use of Non-GAAP Measures
Forward-Looking Statements and Use of Non-GAAP Measures This presentation contains “forward-looking statements” including within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included in th
Slide 3: Financial Results and Strategic Update
Financial Results and Strategic Update Strong financial results and continued strategic execution Delivering Strong Financial Results • Quarterly Net Income of $4.3 million or $0.27 per share – Increase of $0.1 million or $0.02 per share relative to 2023 • Year-to-Date Net Income of $31.5 million or
Slide 4: Bangor Natural Gas Transaction
Bangor Natural Gas Transaction Attractive tuck-in acquisition compliments Unitil’s existing natural gas operations in Maine Company Overview • Fully regulated gas distribution company serving approximately 8,500 natural gas customers in the greater Bangor region of Maine • High quality assets: ~350
Slide 5: Capital Investment Plan
Capital Investment Plan Maintaining current investment plan although potential for upward revisions likely Actual and Forecast Capital Investment(1) Potential Capital Investment Upside $s in Millions Five-year projected capital investment of ~$910 million, 47% higher than prior five years $200 Bango
Slide 6: Second Quarter 2024 Financial Results
Second Quarter 2024 Financial Results Net Income and Earnings Per Share Second quarter 2024 Net Income of $4.3 million, or $0.27 per share • Net Income increase of $0.1 million, or $0.02 per share, relative to the second quarter of 2023 • Earnings growth reflects higher Electric and Gas Adjusted Gro
Slide 7: Volume and Adjusted Gross Margin Variances
Volume and Adjusted Gross Margin Variances Year-to-Date variances in units, customers, and adjusted gross margin Electric Operations Unit Sales and Customers • Electric distribution revenue substantially decoupled (2) Weather Normalized Unit • Weather normalized Residential and C&I sales increased 0
Slide 8: Year-to-Date Earnings Reconciliation
Year-to-Date Earnings Reconciliation Variances to prior period Net Income • Adjusted Gross Margin(1) increased $9.2 million as a result of higher rates and customer growth. • Operation and Maintenance Expenses increased $0.4 million primarily due to higher labor costs. • Depreciation and Amortizatio
Slide 9: Order Received for Fitchburg Rate Cases
Order Received for Fitchburg Rate Cases Constructive outcomes in electric and natural gas cases Electric Order Highlights Gas Order Highlights • Rates effective July 1, 2024 • Rates effective July 1, 2024 • 9.4% Authorized Equity on Equity Ratio of 52.26% • 9.4% Authorized Equity on Equity Ratio of
Slide 10: FGE Performance Based Rates Overview
FGE Performance Based Rates Overview Capital trackers and Performance Based Rates should support opportunity to earn authorized ROE Performance Based Rates (PBR) Structure K-Bar Adjustment (Electric only) • Five-year PBR plan allows for timely cost recovery • The ‘K-Bar’ adjustment is included as pa
Slide 11: Balance Sheet Strength and Financing Plan
Balance Sheet Strength and Financing Plan Strategic financing plan supporting balance sheet strength Long-Term Financing Sources Responsible Financing Plan • Capital investments funded principally by Cash Flow From Equity, 13% Operations • Limited refinancing risk and no variable rate long-term debt
Slide 12: Key Elements of Unitil's Value Proposition
Key Elements of Unitil’s Value Proposition Delivering consistent results through a reliable, regulated strategy 8%-10% Expected Annual Total Shareholder Return (1) 5%-7% 6.5%-8.5% $910 million 55%-65% 17%-19% Cost Net Zero Expected Annual EPS Growth Expected Annual Utility Rate Base Growth Planned E
Slide 13: Appendix
Appendix Slide 14 About Unitil 15 GAAP ROE 16 Rate Relief Summary 17 Investment Grade Credit Ratings 86,600 Natural Gas Customers 18 10-Year Financial Performance 19 Long-Term Earnings Growth 20 Dividend Increase and Expected Payout 21 Dividend History 22 Key Regulatory Recovery Mechanisms 23-24 GAA
Slide 14: About Unitil
About Unitil Pure play New England utility creating long-term sustainable value Local distributor of electricity and natural gas in attractive service areas along the New Hampshire and Maine Seacoast • Fully regulated electric and gas operations • Growing customer base supported by strong regional e
Slide 15: GAAP Return on Average Common Equity
GAAP Return on Average Common Equity GAAP Return on Equity over the last twelve months Company Average Common Equity LTM ROACE (1) Northern Utilities $263 9.2% Unitil Energy Systems $125 8.6% Fitchburg Gas and Electric 86,600$128 10.4% Natural Gas Customers Granite State Gas $22 7.3% Unitil Corporat
Slide 16: Rate Relief Summary
Rate Relief Summary Successful regulatory strategy resulting in awards from both capital trackers and rate cases Company Activity Millions Date Effective Base Rate Case Increase $7.6 Q4 2023 Northern Utilities (Maine) Capital Tracker $2.4 Q2 2024 Grid Modernization $1.3 Q2 2024 Grid Modernization(1)
Slide 17: Investment Grade Credit Ratings
Investment Grade Credit Ratings Stable ratings across all subsidiaries from both S&P and Moody’s Issuer Rating S&P Moody’s Unitil Energy Systems Inc.(1) Stable / BBB+ Stable / Baa1 Northern Utilities Inc. Stable / BBB+ Stable / Baa1 86,600 Fitchburg Gas and Electric Light Co.Natural Gas Customers St
Slide 18: Recapping Financial Performance Over the Past Decade
Recapping Financial Performance Over the Past Decade Historical earnings growth at mid-point of long-term guidance Performance Over Last 10 Years Historical Earnings per Share (1) $3.00 7.7% Net Income 2.1x Net Income Annual Growth Compared to 2013 $2.50 $2.00 6.0% Earnings Per Share 1.8x EPS Annual
Slide 19: Maintaining Long-Term Earnings Growth
Maintaining Long-Term Earnings Growth Long-term growth expectation remaining in the range of 5% to 7%(1) $4.00 2024 Expectations $3.80 • 2024 earnings expected to be within long-term growth range • Decoupled margin provides stability and visibility – $3.60 over 80% of customers under decoupled rates
Slide 20: Dividend Increase and Expected Payout
Dividend Increase and Expected Payout Consecutive years of accelerated dividend rate increases Historical Dividend and Payout Ratio $1.75 100% $1.70 • Balancing dividend sustainability with capital 90% investment opportunities $1.65 $1.62 80% $1.56 70% • Expected dividend payout ratio to remain in $
Slide 21: Continuous Dividend Payment Since Incorporation
Continuous Dividend Payment Since Incorporation Steadily increasing dividend per share since 2015 Reliable Dividend is Key Tenet to Value Proposition $1.80 $1.60 $1.40 $1.20 $1.00 86,600 Natural Gas Customers $0.80 $0.60 $0.40 $0.20 $0.00 SLIDE 21
Slide 22: Key Regulatory Recovery Mechanisms
Key Regulatory Recovery Mechanisms Timely Rate Recovery Unitil Energy Fitchburg - Electric Fitchburg - Gas Northern - ME Northern - NH Revenue Decoupling Power/Gas Supply Supply Related Bad Debt Energy Efficiency Transmission Net Metering Credits 86,600 Sp
Slide 23: GAAP Reconciliation of Adjusted Gross Margin
GAAP Reconciliation of Adjusted Gross Margin Three Months Ended June 30, 2024 86,600 Natural Gas Customers SLIDE 23
Slide 24: GAAP Reconciliation of Adjusted Gross Margin
GAAP Reconciliation of Adjusted Gross Margin Six Months Ended June 30, 2024 86,600 Natural Gas Customers SLIDE 24