UTL - Earnings call transcript Q1 2019

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Operator

Good day, ladies and gentlemen. And welcome to the Quarter 1 2019 Unitil 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 follow at that time. [Operator Instructions] As a reminder, this call may be recorded. to host like Todd today’s now Diggins. would introduce for your conference, I go Please ahead.

Todd Diggins

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

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

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

We information this will to call. during that refer

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

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

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

Tom Meissner

recognized or one-time year. share share our or the $X.XX is In going divestiture energy business, to gain share income of slide Great. over of Thank an This on of increase am March, the per or you, same $X.XX million Todd, for Usource. begin million million advisory quarter first for brokering per $X.XX I of and non-regulated of thanks on where per quarter us. $X.X last announced $XX.X today a everyone XXXX. we $XX.X four, the we net joining

is million margins. higher the share, or driven the by impact and last year. This $XX.X increase of was recorded company which $X.XX sales $X.XX gain, Excluding ahead one-time per largely earnings growth of of customer this

Moving transaction, on now Xst. like five, expand to completed was the Usource slide March I’d to on which

mentioned, first after-tax company this approximately of the quarter. divestiture on recognized the As in I gain $XX an million

believe Usource continue business. to a is solid We

a determined going did our not that we strategic after However, review needs business align forward with investor and its fully model profile.

year also our regulated We capital plan felt growth growth increase of in reinvest to transaction strong This and our We to company’s subsidiaries in next the proceeds there are the that now rate are our near-term, into prospects a Unitil invested opportunities is business. regulated as stronger the reduced this In regulated net proceeds fund program. expenditure businesses. by accretive the as be proceeds. are operating should rate base. the investment short-term fully borrowings by

growing the our and To customers’ to has spending a Moving capital robust meet company changing six. needs, energy on developed slide ever plan.

Our will next capital and to to company’s three service spending years to both years. within used about increased is gas expansion be areas. fund prior contiguous three than part in be higher investment This over the forecast the the XX%

and division, price of conversions of customer our advantage superior thousands Gas performance possible areas. XX%, divisions, expansion Electric anticipate current result service In on the the Gas economic customer a and growth We continue on gas. as of focus our the low of operational will natural in our to initiatives. to our continue penetration strong both are due given we we seven, growth slide in as to Turning execute our

both add Our TAB Sanford. customers of to progress the was Buildout phase Saco in as year. completed programs we Maine Targeted initial in Saco continue of and Construction Area the last

of is and years natural to TAB The it expect time second gas now convert businesses new to fuels. over completed. from come as X,XXX up the customers add once year to have continue to to is opportunity other will we add we now for residents construction, in Sanford However, its customers to

to Hampshire in our recently this expand approval received X new to year. into towns Epping, New was received New we approval earlier Hampshire. addition, In franchise to The expand regulatory

progresses, three areas. of all will As season new be breaking the ground we construction in franchise these

As before, will programs. better system the Massachusetts customer Hampshire will to in the and are a reliable company we result have the provide discussed implementing early of invest grid and in stages in opportunity modernization New service more electric This experience. an and

progress that we the this of on our Currently, to like is replacement fully I’d gas Finally, make modernized. on infrastructure gas continue slide, out XX% company’s point to programs. infrastructure

successes. we our briefly eight, recap slide to past Turning

customers of and decade, being overall adding satisfied service of utility have our report our on past this both Unitil. the in satisfaction execute to Unitil with and New England we demonstrates ranked our strategic surveys, their develop in believe returns customers broader Over on five past Based this average has ability in XX.X%, the peers. XX,XXX one We XX% We and outpacing customer from plans. annual years. produced the customer markets level of while number over service, achieved our

per average XX show to I’d the outage that years. Finally, mention a customer has declining past to like over trend continues time our as it

to that in programs storm invest improve continue both and We reliability day-to-day resiliency.

results turn over will I the for to Now the will Christine, discuss call quarter. financial who our

Christine Vaughan

Thanks, Tom. Good afternoon, everyone.

increased X.X% ending therm X% XXXX. The gas driven in the sales, of area again million XXXX. quarter gas growth. weather sales of same in sales the of reflecting up distribution March XXXX company’s $X.X period service compared growth. same in quarter the an million were positively customer normalized nine, therm from that company Natural sales by natural the was increase period quarter XXXX, The to first XXXX. same $XX.X $X therm excluding gas higher in to XX, in the in sales March XXXX, were by compared $X.X estimates three XXXX ending gas three million decoupled months increase in therm margins gas the customer XX, were to compared million which rates sales, affected the is Turning slide natural months in to and in margins Gas higher

March of the over customers compared served XXXX, of number X,XXX by natural As prior has the year. XX, gas to increased

kilowatt margin. will margins ended I electric lower sales million period The units higher of by margins including discuss combined decreased partially distribution XXXX, XX, XX, in the margin average slide our total $XX.X on usage million shorter offset in rates were to Electric three kilowatt quarter compared in of purposes, were first for the $X.X kilowatt million, XXXX. hour XXXX billing in sales cycles Electric reduced hour sales growth. really March lower reflecting quarter of production of X.X% first of the usage, sales. and reflects offset sales to by sales affected $X.X customer with increase positively decrease customers Next the XXXX, of electric same and months hour in this an by compared the sales first quarter million, XXXX by lower partially industrial $X.X electric

XX, March XXX number customers XXXX, of by increased As the served about last year. has electric of over the

counted operation in of million increased reduction Turning first to months same expenses a three in to and case Hampshire to in XX, filed the XXXX, ending of the non-recurring There O&M. the compared million quarter New in the slide was connection XXXX as with period adjustment as $X.X XXXX $X.X an was XXXX. adjustment maintenance where rate a in

net higher other divestiture. reflects of an quarter gain in $X.X compared If levels the and million utility three divestiture costs subsidiary, same expenses of first change the of expense the business expense reflected change quarter million in XXXX, first XXXX from three and of in the increased interest Usource. you the trailing partially reflecting O&M company’s on changed million period property equity And change Slide this XX XXXX XX, higher million adjustment, regulatory Depreciation of expense $X.X return exclude higher assets compared service. XXXX and on total offset $X.X operating our pre-tax XX.X% the on in period XXXX and of expense $X.X O&M primarily the taxes compared the Taxes rates earned amortization in jurisdictions. lower includes a and $X.X months on levels expenses service, in compared income increased higher Usource. XXXX, returns period labor Interest debt. earned by higher XX-month XX, the taxes a to amortization. months higher this of local divestiture million to in increased short-term to of of March -- months increased from XXXX, ending on in of $X.X short-term of debt, consolidated costs interest of million. the primarily in XXXX, the months in lower long-term offset three income higher three plant a Other basis, same provides ending utility this $XX.X to increased gain reflect the the and than to March one-time largely same ending million of XX, related reflecting months taxes primarily of by the first utility $XX.X of $X.X reflecting in income ROE to the lastly, last XXXX, million $X.X period in non-regulated XX a income of These Unitil on actual million million, the in partially each March taxes same the increases XXXX, this XXXX. plant

weather case in effective Maine, our range to second to provided of an million, company of its the to the rates to the areas, Maine increase X.X% has submitted the these highest and XXXX. in Public new file is our gain, expected revenues X.X% notice has general $X in subsidiaries. On XXrd, of in our are exclude one-time are Northern close due not the Utilities in gas resulted to a to case activity. XX, Maine elected The rate service all intent is and earning Commission. to of corresponding revenue normalized. distribution expects On base operating slide become base deficiency request we file substantial Unitil you update subsidiary a gas to a quarter general currently Utility, investment results If Maine approximately in growth X.X%, annual which returns which an authorized from regulatory company’s with April company rate

As our summarize evaluate slide service. electric provide for Fitchburg’s like to to supportive our out division we of XXXX company with constructive file point at a usual, need general growth that general and will and regulatory case rate On is rate subsidies latest. by cases continue investments the to to safe initiatives to law is the our customers that environment required forward, going the file I’d XX, reliable by all

We our this subsidiaries Electric and Gas rate other or and update extend nearly utility are proceedings trackers cases cost rate In these Combined is $X.X programs established company plans rate $X help rate in prepared the the be will and and million relief long-term through to anticipates attrition. appropriate. million all respectively, in to of have through over million, that earnings mechanisms. as divisions, reduce $X.X cost accelerated relief awarded and recovery

earlier, mentioned level a Tom operating Unitil and strong financial of performance. As has shown

XX, highlight and we slide positioned to our are Moving investment to in we believe why thesis the future. well continue this success we

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

Operator

Dumoulin-Smith first Thank And America. our comes the Julien of with Bank you. Instructions] from question [Operator line of

open. Your now line is

Alex Morgan

Hi. This on Julien Dumoulin-Smith. results. Alex is in calling Morgan for the Congratulations

Tom Meissner

Alex. Thanks,

Alex Morgan

the have currently first you is thanks ROEs, case filed just any I rate that law at by the touch trajectory taking are XXXX. on you there was I a question. I you be points? on X.X wanted considering for And requires know especially color base to of Massachusetts, that earned percentage to the wondering my just potential if mentioned

Christine Vaughan

Currently, The the Maine in and the we of Typically, gas rate contributing utility, because rate number in make on usually the That’s number. to can that stronger Maine that’s has highest there. be Northern earned -- the decision the the company. our that rate we ROEs Massachusetts together, Maine in the -- base is electric shortly. the one absolute will deficiency file a But case lower ROEs gas division improved.

Alex Morgan

opportunities CapEx terms much. me, gas I so we And of modernization wondering year the you one of from just going if question to potentially see Thank are this was some any in forward pulling other efforts? Okay.

Tom Meissner

This Alex. Hi, I Tom. we update don’t have to will our another is capital until January. Realistically, think plan

Alex Morgan

again. thanks and much so you Thank Okay.

Tom Meissner

you. Thank

Operator

Thank from comes line you. Shelby And Tucker next Capital RBC the of our Markets. question with

Your now open. is line

Shelby Tucker

afternoon. Good Hi.

have the question, up Northern do for Maine Hampshire breakdown ROEs following Alex’ between and Utilities? Just for you on New

Christine Vaughan

I I with me. that don’t have think

Tom Meissner

Shelby. that doesn’t Hi, like here. sound have It right we handy

Shelby Tucker

it. Got

might to be you Could how have relates do as opportunities, it what you as and -- expanded the then And Okay. more new recent you expansion the the opportunities identify three you give in franchises to us New that backlog maybe some mentioned color Hampshire. opportunity?

Tom Meissner

Sure.

each anchor mains In the those of that into three cost those justifying areas. there’s are of of towns, those extensions the terms in cases, loads

sort up mains the expecting anchor three projects. to Hampshire are Longer is loads to are be we So western Massachusetts as the bisects to expensive. think, franchise direction development more strategy Rochester, so Route to half to territory our extending we in expanding gets cases New term, XXX in the in of it that all more more corridor justify from reach our I of as and commercial seacoast the

Shelby Tucker

And I commercial of guess or anchor anchor, talent in it, larger or more industrial, to I call a of tend these expansion that tenants big more residential is area? will it be

Tom Meissner

on quite that community, in in large case, industrial another and customer and few propane. an existing very commercial has actually customers corridor it’s a In one town it’s large it’s another town, a residential a existing

Shelby Tucker

it. Got

following the the last criteria filing. file about to the would to at timing Fitchburg question on look the you I And up be also do What willing is to Alex’ determine whether prior Okay. on have and you question XXXX?

Christine Vaughan

Generally, and on look what’s where going are, the environment regulatory with company. the internally the we particular at ROEs

Shelby Tucker

of ROE already point it that are there. Because seems view on Okay. the you

Christine Vaughan

has $XXX has common Utilities million. of equity, million NU a $XX equity. Northern has whereas Fitchburg But Correct. large only

So the big company overall deficiency. Northern company Utilities and in it in really dent a makes is big the the consolidated

Tom Meissner

Shelby, clarify XXXX just as to have file we not to XXXX. well, by

Shelby Tucker

‘XX. sorry, am I Oh! I meant,

Tom Meissner

Yeah.

Shelby Tucker

Okay.

much. Thank Okay. you Appreciated it. very

Tom Meissner

you, Thank Shelby. Yeah.

Operator

Monarch the And Kelvin our from Partners. of next comes Jiang question line with

open. Your line now is

Kelvin Jiang

question this Christine. am forward? Thank for I on Thank priorities on question. are your what Thanks. are and Congrats And Unitil taking my days quarter. joining wondering since what your is Hi. analyst top thoughts the for you hosting you. going

Christine Vaughan

continue safe, responsible systems Our priorities to is to to in invest continue reliable and going to shareholders forward. be

an going investor forward. not We periods also of am with intend Day adverse can and scheduled. think I couple we analysts we doing next prior over to had that year, Analyst a increase our contact meetings to about

Kelvin Jiang

great. That’s Thank Okay. you.

Tom Meissner

you. Thank

Operator

am I in further questions queue. Thank question-and-answer you. And today’s not showing any

So Todd the remarks. like any call to turn to further I’d -- back back the for Diggins

Todd Diggins

to thank joining hope like helpful. and that Thanks. the for I’d found information you everyone I us today

Operator

gentlemen… and Ladies

Tom Meissner

Thanks everyone.

Operator

Ladies you conference. today’s program. for does and participating today’s conclude This thank gentlemen, in

have great a may Everyone You disconnect. all day.

Todd Diggins	Investor Relations
Tom Meissner	Chairman, President and CEO
Christine Vaughan	Senior Vice President, Chief Financial Officer and Treasurer
Larry Brock	Chief Accounting Officer and Controller
Todd Black	Senior Vice President, External Affairs and Customer Relations
Alex Morgan	Bank of America
Shelby Tucker	RBC Capital Markets
Kelvin Jiang	Monarch Partners

Unitil (UTL) 26 Apr 192019 Q1 Earnings call transcript