Unitil Corporation · NYSE:UTL
Unitil — BofA Securities 2020 Power, Gas and Solar Leaders Conference
24 slides from Unitil's conference presentation, Mar 4, 2020
Slide 1: BofA Securities 2020 Power, Gas and Solar Leaders Conference
BofA Securities 2020 Power, Gas and Solar Leaders Conference March 4, 2020 Exhibit 99.1
Slide 2: Safe Harbor Provision
SAFE HARBOR PROVISION This presentation contains “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding Unitil Corporation’s (“Unitil”) financial condition, result
Slide 3: About Unitil
Unitil Corporation is a public utility holding company whose mission is to safely and reliably deliver energy for life and provide our customers with affordable and sustainable energy solutions Investment grade utility Diversified Net Utility Plant of more than $1.1 billion Gas 64%, Electric 36% NH
Slide 4: 2019 Financial Results
2019 FINANCIAL RESULTS For the year ended December 31, 2019 Net Income is $44.2 million or $2.97 per share Excluding the divestiture gain for the sale of Usource of $9.8 million or $0.66 per share, Net Income is up $1.4 million or $0.08 per share PAGE Twelve Months Ended December 31, 2019 2018 Net I
Slide 5: Financial Summary
FINANCIAL SUMMARY Q4 2019 EPS Growth PAGE Seventh consecutive year of increasing earnings 7.1% CAGR (1) 2019 EPS excludes the divestiture gain of $0.66 per share Usource Divestiture Successfully divested of non-regulated energy brokering and advisory business Recognized after-tax gain of $9.8 millio
Slide 6: Operational Summary
OPERATIONAL SUMMARY Q4 2019 PAGE Electric Reliability 99.9% 2019 was lowest recorded system average interruption time in Company history Percentage of calls responded to in under 60 minutes Gas Emergency Response Time Additional Gas Mains 2019 v. 2018 23 mile Increase Successfully added 23 miles of
Slide 7: Customer & Investment Opportunities
CUSTOMER & INVESTMENT OPPORTUNITIES PAGE Gas service area expansion in NH as a result of new franchise areas and Targeted Area Buildouts (TAB) in Maine Franchise and Territory Expansion Low on-the-main penetration rate of 62% allows for continued low cost gas customer conversions Natural gas has a p
Slide 8: Strong Shareholder Return
STRONG SHAREHOLDER RETURN PAGE Annualized Returns 1-Year 5-Year 10-Year Unitil 25.3% 14.5% 15.2% Dow Jones Utility 27.3% 11.0% 12.4% S&P 500 31.5% 11.7% 13.6% Received the Edison Electric Institute Index award for Outstanding Stock Performance over the past five years for small market capitalization
Slide 9: Financing Activity
FINANCING ACTIVITY PAGE The proceeds reduced short term borrowings and reduced exposure to interest rate volatility The remaining proceeds invested as equity into the regulated subsidiaries Considering a prepayment option for $20 million of 6.33% Corporate Notes in Q2 2020 Maturing Debt (1) Principl
Slide 10: Fitchburg Rate Case
FITCHBURG RATE CASE Both Gas and Electric divisions filed rate cases December, 2019 PAGE Settlement Settlement moves the effective date for new gas distribution rates forward 8 months to March 1st Collecting ~80% of gas deficiency beginning March 1st 2020, with remaining balance beginning March 1st
Slide 11: Northern Utilities Rate Case
NORTHERN UTILITIES RATE CASE PAGE Rate Case - Maine Northern Utilities (ME only) gas base rate case continues to progress as planned Requesting Filing includes request for an alternative rate mechanism to recover non-growth utility investments for a period of three years This mechanism would be in a
Slide 12: Other Regulatory Activity
OTHER REGULATORY ACTIVITY PAGE Limited exposure to new transmission FERC base ROE methodology (MISO Complaint (1)) Electric transmission less than 1% of total rate base Regulatory approval received for long-term capacity agreement increasing gas supply 11% in NH and Maine The MA DPU recently allowed
Slide 13: Investment Outlook
INVESTMENT OUTLOOK Increasing investment program to support gas system growth and distribution system modernization 25.6% more spending planned in the next 5 years compared to prior 5 years Capital spending forecast of $128 million in 2020 PAGE Capital Spending: Actual and Forecast $ in Millions $54
Slide 14: Rate Base Growth
RATE BASE GROWTH PAGE Rate Base Growth $ in Millions 7.9% CAGR Forecasting 7.5% to 8.5% rate base growth over the next 5 years Gas growth rate about 70-100 basis points higher than electric Growth could be accelerated as a result of additional investment in: Grid modernization program in NH Electric
Slide 15: Capital Sources Five-Year Plan
CAPITAL SOURCES FIVE-YEAR PLAN Capital investment funded primarily from cash flow from operations less dividend payments Declining payout ratio reinvests income and reduces external financing requirements The remaining investment program is funded through both Debt and Common Equity to maintain a ba
Slide 16: Dividend Policy
DIVIDEND POLICY Strategically reducing the payout ratio to plowback earnings into the investment program PAGE Dividend and Payout Ratio (1) 2019 payout ratio excludes the Usource divestiture gain of $0.66 per share DPS $1.50/share (annual) Target 55%-65% Payout Ratio
Slide 17: Key Investment Highlights
Regulated local distribution utility business model Growing service areas and customer base Diversified natural gas and electric operations Dividend strength Experienced management team Regulated local distribution utility business model Growing service areas and customer base Diversified natural ga
Slide 18: Appendix
APPENDIX PAGE
Slide 19: 2019 Return on Equity
2019 RETURN ON EQUITY Company Average Common Equity 2019 ROE (1) Northern Utilities (New Hampshire) $211 7.7% Northern Utilities (Maine) Unitil Energy $91 8.4% Fitchburg (Electric) $82 6.7% Fitchburg (Gas) Granite State $17 7.8% Unitil Corporation(2) $364 12.2% PAGE ROE calculated by dividing last t
Slide 20: 2019 Rate Relief Summary
2019 RATE RELIEF SUMMARY Company Activity Dollars (in Millions) Date Effective Northern Utilities (New Hampshire) 2018 Rate Relief (Net of TCJA) Capital Tracker - 2019 $0.6 $1.4 Q1/Q2 2018 Q2 2019 Northern Utilities (Maine) 2018 Rate Relief (Net of TCJA) Capital Tracker – 2019 $1.0 $1.0 Q1/Q2 2018 Q
Slide 21: Gas Customer Growth
GAS CUSTOMER GROWTH Growth Statistics Average gas customer growth of 1.6% each year since 2015 Average gas sales margin growth of 4.6% since 2015 Natural Gas Opportunity Cleaner and more affordable than fuel oil Residential customer can save ~30% by converting from oil to gas Natural gas emits ~30%
Slide 22: Sustained Economic Expansion
SUSTAINED ECONOMIC EXPANSION Seacoast economy is attracting new development and jobs resulting in population growth Significant housing and hospitality developments indicating population growth may continue into the future Identified $7.8 billion of new construction planned or underway within servic
Slide 23: Expansion Opportunities
EXPANSION OPPORTUNITIES Approximately 70 miles of additional gas mains have been installed since 2015 Growing economies and populations in service area states can better support natural gas investments NH gas franchise expansions Received regulatory approval for three new franchise requests to serve
Slide 24: Infrastructure Modernization
INFRASTRUCTURE MODERNIZATION PAGE Regulatory initiatives in MA and NH support new investments to modernize the electric system MA – total spending of ~$25 million over ten years with strong cost recovery NH – plan under development, with estimated spending of ~$60 million Electric Grid Modernization
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