UTL - Earnings call transcript Q3 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen and welcome to the Q3, 2018 Unitil Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions].

As a reminder, today's conference is being recorded. to and call Regulatory like Chong, to now Financial VP, Services. would turn over the David I Sir, you may begin.

David Chong

Affairs today President financial Good Officer Todd afternoon. Unitil With President XXXX discuss Chief Executive Vice Accounting Officer; Officer us joining of Meissner, Mark Senior and me and Black, results. Collin, Chief And thank Chief Customer Corporation's and and you third Treasurer; and for Brock, are External Controller; Chairman, Tom Relations. Vice President, Senior to Financial quarter Larry

will discuss other and financial quarter results information third We about on our this call.

in release at that website the As the we have presentation, section we Investors the www.unitil.com. posted mentioned including to a press announcing our call, of information,

We this refer will that information to during call.

on about forward-looking made Act Before Litigation two, Slide Harbor of we the start, future Securities results are events the of today as statements future under provisions Reform XXXX. or Safe see can Private operating comments the you

involve and to, call our statements Securities other should Forward-looking this our and statements and could together from to be on have Report differ we and with, cause results filed considered actual Annual Commission. contained Form with on risks predicted. made most in furnished information materially documents XX-K cautionary inherently those Statements other or uncertainties recent Exchange that the

I'll statements only turn call now said, update the today, as With and of them. we to Forward-looking that speak to assume no duty over Tom.

Tom Meissner

over quarter quarter of us million of for third third an I'm today on everyone XXXX. you, to share joining announced four today. of per of we $X.XX is a which for or David $X.X thanks and share increase income Thank where the Slide XXXX, going $X.XX the net begin

favorable per margin ended increases company driven or in compared by sales income The September reflecting period XXXX. higher unit growth, share months $XX $X.XX to of in distribution an share reported sales weather and nine were impacts XXXX on million net increase same the months customer the new of the nine For $X.XX a rates. of XX, earnings

provided are service look the we've to we a at in economic our five, growth significant Turning Slide territories. seeing

We either in planned company Greater increase for which level office have will underway XXXX of ahead. mixed-use construction identified city buildings, by In households number the or This that developments new hotels, construction, opportunities area, and are years new of well that for under there’s or planned future. the the X.X robust including housing into would units, the billion over in the generate condominiums Portland of construction, X%. of billion investment X.X growth significant

six, of we’ve slide to I’ll some focus Turning on the highlights had. recent

in price remains be connected are a Our the is oil. depending to driven last cases and to relative This gas we some seeing customer Year-to-date advantage the differential in fuel more for up expansion customers number fuel customer year, in efforts by on surpassed contracts of continue customer with part natural commercial oil XX% class to of significant relative largest than location demand customers about gas XX% strong. and already to relative successful we’ve customer XXXX.

of our year year additions. As on projects currently of those or highlighted, time Targeted customer which slide completed. to new activity are target the we’re the development robust translate Maine, track are will also in third see are In final the TAB Buildout and thousands and over as new in XXX% service prior we customers program our of Area to continuing into for Saco areas, meet

A expand request to to million Kingston month reach loads We’ve approximately returns spent customers Commission identified our a the Utilities Buildout anchor we over and TAB for our Epping, new that request the requested pending and franchise of started first in in Sanford to New of our extensions franchise Hampshire, approved final miles of franchises the have in downtown meet expect regulators is by Kingston almost currently year Public of the installed half New be Epping. on the market we we Hampshire in and those new reach made XXXX are mains anchor the X Hampshire Atkinson, Maine’s projects This two $XX completing towns customers. will three requests. XXXX. of first commercial currently New of our We to similar and also these in Atkinson potential to of the and In decision centers and city.

current within part All both, areas. ongoing is this outside expand our franchise footprint, our and of of our to growth plan

I’ll financial the quarter. discuss Collin the to over Mark Now, who our will call turn results for

Mark Collin

Good Tom. afternoon everyone. Thanks,

As this past a temperatures higher reflecting mentioned, average had third we good summer. partly than Tom just quarter,

same Third $X.XX have also earlier. quarter reflected nine year were the of same period year. $X.XX XX.X% period through the are and over of of earnings up XX.X% over Likewise, months a year, earnings per last share growth per the the first share up trend, this

increases impacted gas of gas corporate million sales reflects $XX.X months margin under of seven, gas partly the Gas $X.X due million $X.X Gas of for sales reduction first the XXXX. months first million and in million law. also revenues $X.X to XXXX respectively, winter rate new tax rates period positive million. of of in effect Now nine in the in the $X.X revenues the nine XXXX natural offset to September same million of nine tax by million, and income the growth which weather, to lower $X.X margins to slide colder lower of volume by and account XXXX the three XX, reflects of sales the $XX.X higher turning and were months were distribution natural margins ended positively in compared on XX% customer

XX, areas reduction Natural more heating income months reflects taxes sales service X.X% month September degree ended relates in were increased company three lower revenues and of the respectively, in XXXX. nine same months the periods to colder X.X% tax XXXX. a by nine period for compared same days X% The reminder, were the compared decreased period in winter compared XXXX in and also the in changes growth therm XXXX to As the correspondingly first law the offsetting sales period. gas and in gas periods of in provision to the the nine driven in There customer the and therm in XXXX XXXX. increase a

of As gas customers in of X,XXX the September XX months. XX, XXXX served total number increased natural approximately by the has last

and in running continues customer same connections XX% to above pace New the higher connections is last the period year. trend about

important XXXX electric like out Total in $X.X in income temporary the million nine compared by income periods. periods month in reduction point partially XXXX in also which offset for there to due in margins on on tax by customer the months than in tax corporate XXXX, we the the $X.X by data $X.X the XXXX. by revenues I summer three million sales the lower nine revenues of usage electric offsetting electric electric to law recognized by third affected Based X.X% to reduction would Again, XXXX average in $X.X the first Electric were absence company’s and wrote and service margins sales periods million. one million the rate unit endings growth $XX.X lower taxes current $XX.X for partially three margin and to related compared reconciliation period. the in $X.X a revenues the in a also affected rate customer higher the XX% lower to temperatures quarter of XX% impacts in in on revenue. period nine rates the impacts on electric sales and Next, year which kilowatt commercial and new under period These and of account to $X.X XX, electric higher collected sales favorable million adjustment positive current Reflecting customers. the the of increased XXXX. eight, period X.X% in industrial were respectively warmer sales tax that same XXXX million, in respectively margin offset changes of were same positively Electric the slide the degree more law. increases of and days of and distribution reflects weather million cooling territories, month hour provision September were of million are sales in energy reflect weather of and

September the last of in approximate of number months. the XX XXXX XX, electric As total XXX increased by customers has served

period in expenses $X.X by increase lower offset $X.X reflect utility professional cost Now the three compared turning higher of partially million. rates the costs of $X.X $X.X assets for included same lower cost to million and plant technology compared and expenses decreased increases and million and offset plant of in fees being $X.X $X.X were maintenance rate Interest which reflect offset higher of and of long-term of the expense, labor periods primarily three deferred the over interest by higher increases the levels XX, three lower utility costs higher amortized reflecting nine, cost operating to fees amortization decrease in of on in in in gas income offset operation amortization expense recovery in to increase and million slide respectively, utility $X.X higher ended $X.X and increased major to is three million three-month and the utility XXXX. by million debt. adjustment in and than tax nine-month months increased same nine-month and in service million, quarter the $X.X information nine-month non-recurring, million taxes nine-month $X.X $X.X property $X.X and increase operating XXXX O&M The labor local net increase period cost of Taxes revenue. higher respectively, utility corresponding the of in $X.X, XXXX, in taxes. rates increase multiyear reflect storm second reflect million $X.X These nine period September temporary million $X.X periods which the periods higher in of payroll and higher by the other operating professional Depreciation on partially of million nine-month lower higher million period the and periods and These for higher levels by amortization XXXX. periods. primarily -- service cost million

three-month nine-month lower decrease tax, XX, a current period income the tax earnings rate lower pretax for tax the period nine pretax law book earnings million and three $X.X taxes million new on month rate $X.X reflects changes. The the from benefit decreased of the differences federal and temporary on of decrease turning at in XXXX rate $X in XXXX. million state tax effect million from $X Lastly, by The in the tax the September lower the reflects and of periods the tax in ended XXXX. and

compared XX% to a Looking forward statutory for a maintain this expect the tax to rate remainder of effective of our due we approximately XX% book to rate XXXX, over tax lower little benefit. of

to regulatory line turning the each ranging XX.X% earn Now authorized basis provides in XX which our earn September in on our a equity from actual equity XX in jurisdictions. ended is Unitil X.X% XXXX slide to trailing on consolidated XX, of jurisdictions. regulatory months last total month on X.X% a the return this XX, returns return of with across

normalized. discussed we in the results weather have these As past are not

constructive a We is very supportive reliable service. with environment safe customers have our and growth to of regulatory investments initiatives and provide that

utility on of We trackers of have the equity us earnings help with return long-term coupled our our cost all and our growth nearly trackers across stabilize capital customer These across level utility our and subsidiaries. maintain sustained subsidiaries. plans, establish

this call concludes to questions. turn financial I the will of for will Now performance coordinate operator period. the who operator, summary the our our

Operator

RBC Thank Markets. Tucker, Shelby line you. our comes [Operator the question Instructions] Capital first from of And

Your line now is open.

Shelby Tucker

Hey, guys. Good afternoon.

Tom Meissner

Hi, Shelby.

Mark Collin

Shelby. Hi,

Shelby Tucker

you’ve number should to what what Would the on Clearly, quick O&M. in question we going this just that job it quarter. a on bit details a very was mind as forward rate expect have done going a I run more level good a basis? you to and

Mark Collin

Yes.

up we’re XXX,XXX XXX,XXX. two lower is I our resulted was around you favorable XXX,XXX The items And lower professional we about were think that we driven an customer the been help, did professional in favorability fees implemented. year a of was particularly last year expenditures that. this in plus. and couple have started of fees during amount quarter it costs of our professional was items, quarter. We the we temporary related on One period to installed the that one of favorable labor first by had Shelby, system said that not there that as -- favorable in information had or the fees significant first was was -- and for

able current help period. to So that amount were reduce we in temporary the of

recognition a the XXXX operation include O&M to with Usource associated in we is accounting now at included use in in current fees that well. is down the is in there result the as channel a certain our re-class period due as that and affects O&M revenue and of In line included rules new the to up revenue. addition O&M rules partner to in recognition the Previous revenue not line in unregulated XXXX,

it's So a revenue. from netted --

So that the was about XXX,XXX.

reasons also with just expectations. some of On just timing the favorable. cost. generally and guess look shows to the inflationary to I our a items basis that year. look line maintenance goal the forward couple against professional to then netting try that turned at trend expenses The the is for way going at favorable are to out best maintain generally in labor is O&M those throughout year, our So utility was favorability, the And those year-over-year higher fees

are budgetary annual that purposes want and growth continue So our accounts for certainly we be a able X%, shooting different behind year run to But Hopefully, conservative, from think planning range we’re a O&M overall may that. we perspective that. even around from times little little if the in different a a X% for periods or X.X% purposes to ahead X% in of appropriate. to certainly you of and is modeling anything run goal

Shelby Tucker

how coming do factor And course, a term had for does O&M cost also quarter then you on -- view? our to we And long which O&M a for that also maybe higher the due – X% X.X% mentioned you of had to into you, revenue additional you the just in. second

Mark Collin

not In million deferred from O&M was in that and period adjustment type And temporary additional XXXX reoccur. previously item in some essentially costs -- in a we our resulted outlook that of to recording of O&M the the a was nine-month that rate there that expect related do was to temporary an in rates thing current $X.X XXXX. us

$X.X that O&M. So be period item for a comparison considered removed time one purposes million nine-month should or in a essentially

Shelby Tucker

to lower Got quarter in lagging seem that we we be last up? bit Anything a it. year? And trending the kind then expect toward on little fourth you to of Or relative a the to results? Usource make should here --

Mark Collin

about the revenue be careful that, thing I’d a just bit, I same we’re little because standard… at think recognition actually Yes. a little ahead looking I talked that but the

Shelby Tucker

Got it.

Mark Collin

channel year. but running a level revenue little And lower the revenue being of account are reported fees now fees at channel take revenue, once netted in a those just you against because last partner partner the actually is ahead

Shelby Tucker

Got it.

Okay. Thank guys. you,

Tom Meissner

You’re welcome. Thank you.

Operator

further I’m great Instructions]. all program. today’s day. you showing disconnect. this at in This you conference. have for thank conclude a time. [Operator participating may gentlemen And the And no questions Ladies does and Everyone

David Chong	VP, Financial and Regulatory Services
Tom Meissner	Chairman, President and Chief Executive Officer
Mark Collin	Senior Vice President, Chief Financial Officer and Treasurer
Larry Brock	Chief Accounting Officer and Controller
Todd Black	Senior Vice President of External Affairs and Customer Relations
Shelby Tucker	RBC Capital Markets

Unitil (UTL) 25 Oct 182018 Q3 Earnings call transcript