UNITIL CORP Q4 FY2024 earnings call

• Acquisition: Completed acquisition of Bangor Natural Gas on January 31st, 2024. Viewed as complementary to existing gas operations in Maine, expected to be earnings accretive long-term with integration underway. - Customer Satisfaction: 90% of customers reported being satisfied with service in 2024, highest rated among 23 eastern utilities. - Operational Performance: Maintained top quartile electric reliability with fifth lowest service interruption time in 20 years. Gas emergency response top tier; received Northeast Gas Association's Excellence in Safety Award. Completed gas infrastructure modernization program in Maine (replaced aging infrastructure). AMI project: Massachusetts subsidiary meter replacement complete this year, New Hampshire by 2027, ~$40 million cost.

Electric operations: Electric adjusted gross margin for 2024 was $107.3 million, an increase of $3.2 million compared to 2023. The company added approximately 990 electric customers. Gas operations: Gas adjusted gross margin for 2024 was $166.9 million, an increase of $12.4 million compared to 2023. The company added approximately 730 new gas customers. At the end of 2024, approximately 60% of the company's gas customers were under decoupled rates, and decoupling supported gas adjusted gross margin by approximately $0.28 per share in 2024.

• 2025 adjusted earnings per share guidance: $3.01 to $3.17. - Long-term EPS growth guidance: 5% to 7%. From 2022-2024, earnings grew 7.1%, slightly above upper end of long-term guidance. - Five-year investment plan: ~$980 million, 46% higher than prior five years. Expected to grow rate base 6.5%-8.5%. Capital spending in 2025 ~$176 million.

Forward-looking statements inherently involve risks and uncertainties that can cause actual results to differ materially from those predicted. Statements should be considered together with cautionary statements and other information in recent annual reports and SEC filings.

Q: Just on the intent to file the distribution rate case at UES, can you just walk through the strategy there? And also just get a sense of what the customer bill impact could be? And then also just from a procedural standpoint, you know, anything we should be looking out for in terms of important filing dates?

A: Sure. So the customer billing impacts, we won't know until we file the case. So while we're assessing the revenue deficiency, we don't have specific customer bill impacts by class to share just yet. I mentioned, we are looking to file the case at some point in the second quarter. So whether that's May 1st or June 1st, that's when you can sort of expect the timing of the filing of the case. As we highlight in the slide deck, you can see the current earned ROE for UES, which is slightly less than the allowed ROE, which is driving us towards having to file that case in 2025.

Q: And just as a follow-up, just as you think about the five-year capital plan, just on that 13% coming from equity, sort of how should we think about the timing and the means of which you issue equity? I know some of which will come from the DRIP and internal fund, but is there any way to size that?

A: Sure. So as I covered, we do have a strong balance sheet. We do have strong credit metrics. The increase in the revolver does provide us with financing flexibility. So as you mentioned, to fund the capital plan, roughly 13% of that is going to come with equity. But we have no immediate plans to do that right now.