UTL - Earnings call 4 2023 | Unitil Corporation

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Operator

Good day, and thank you for standing by. Welcome to the Q4 2023 earnings -- Unitil Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Todd Diggins, Chief Accounting Officer. Please go ahead.

Todd Diggins

Good morning, and thank you for joining us to discuss Unitil Corporation's fiscal year 2023 results.

today and Tom President, Dan Officer Treasurer. call Chief Chairman Chief the and Officer; Executive Hurstak, on will Meissner, be and Financial Speaking Senior Vice Administrative is Finance of Regulatory. President Also Vice and Bob us Chris Gulling, today and with Chief Officer; and President Hevert,

discuss will other this call. information We on and financial

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

We call. to will that this refer during information

today made harbor about operating to Private Slide comments Moving statements XXXX. safe the events or the Securities of forward-looking provisions future are Act X, results the Litigation under Reform of

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

statements them. of Forward-looking update obligation today, assume no speak and to we as only

contains non-GAAP financial non-GAAP company information these these The describes includes financial measures presentation measures financial useful in GAAP performance. accompanying are its The non-GAAP and nearest fully reconciliation financial more a believes supplemental measures. evaluating to measures. the This

I Tom now to Meissner. With over that, CEO, will turn and Chairman call the

Tom Meissner

our $XX.X are over X% net we above once of X. share or on Great. per announced Thanks, income increase Todd. an XXXX. long-term Good or another which to results guidance morning, X%, increase This was today. for share, joining Today, representing we Slide with $X.XX year and today. Beginning $X.XX everyone, X.X% of again us reaffirming of thanks, strong per of million

returns on equity basis earned fully return a on consolidated also We our of X.X%. with authorized

report have sustainable provide the operationally, facet across that growth. both we the successful to that our and delivered I'm will results long-term of strategies and while books on another advancing every outstanding year we close business, pleased As XXXX, financially

before up I'm going and the Dan, shareholder deliver a wrap I recap of to take to our achievements operational year of to financial our commitment us who pass will Dan? with value. it over sustainable consistent through results and details fiscal our

Daniel Hurstak

Tom. you, Slide begin I'll X. everyone. on Good Thank morning,

announced mentioned, or of share. million growth fiscal partially or income by XXXX. This $XX.X was income we per higher to operating period supported and rates XXXX expenses. million increased higher Tom Net $X.XX the in by year net $X.XX per share growth compared earnings As distribution same $X.X offset customer

gross residential as Beginning X. period million This XX, $X.X Turning down sales both of in adjusted normal compared compared the margins. classes to rates weather growth. discuss XX an million, to for growth. and will to primarily result XXXX. the Slide X.X% months Electric or unit operations, with was electric for ended and commercial increase industrial electric I in average were gross of adjusted gas December differences offset increase a and our by and electric $XXX.X usage, higher partially margin corresponding customer customer XXXX, reflects distribution and weather lower actual

decoupled electricity substantially dependency revenue volume of the on are sales. which revenues distribution eliminates of electric company's The the distribution

For by approximately margin XX, revenue the we estimate December year that decoupling supported $X.XX. ended XXXX, electric

growth future trend historical consistent customer the to to with electric expect growth We continue approximately be annual of X.X%.

to operations. Moving gas

from rates to increase This of expected. gross months XXXX, the compared million, margin fiscal XX XXXX. year large higher than in rate case primarily Maine was rates adjusted gas Northern to earlier increase December resulting X.X% $XX.X million which part XX, due higher distribution reflects or took the the For $XXX.X ended effect an

case were in of the Maine quarter XXXX. rate new call, the first for Northern second As we discussed during expected quarter originally the rates

rate base in a approved call, on October Public third our on However, took comprehensive XXXX. Maine the the Maine Commission gas and Utilities new late X, proceeding discussed settlement case in effect September, rates quarter as in

added customer service is also area, fiscal increased as X% margin XXXX. which weather-normalized to sales growth gas non-decoupled in our due increased compared we XXX approximately customers to to only And our year Gas system. Maine,

And fiscal during were weather XXXX warmer fewer weather data on areas, days gas degree year the effective Winter was XXXX. XXXX fiscal company's than in average, based compared normal. on service there collected X.X% in to year

estimate $X.XX XXXX, by per fiscal supported we For revenue margin approximately share. decoupling year gas that

XXXX. year fiscal Moving to an We bridge X. earnings to Slide provide XXXX comparing results

XXXX, New distribution warmer and quarter Hampshire For by resulting from winter in of XXXX, of rate company's margin a gas million higher gross by the second increased result fiscal case. in the $XX.X recognition XXXX million in $X.X base higher weather growth, and adjusted offset the year rates partially as customer of rates

As to positively back permanent the rate are and for the awards date reminder, of recoupment the related which case of treatment temporary XXXX. electric the rate results margin orders, reconciled which affected amounts recognition the XXXX company's case Hampshire regulatory Recruitment rate is to a a in included effective award. gas New in

higher a period. operating maintenance operating over higher expenses increase and professional the inflation higher X.X% due largely million, Operating labor in increased is which lower than maintenance operating compared -- costs. XXXX, in and costs, maintenance fees This same to expenses to and $X.X utility XXXX change represents

rate plant million deferred by of Depreciation higher service case and other higher $X.X amortization amortization levels in reflecting utility costs. and of and increased

taxes increased payroll taxes income than higher higher and by in $X.X plan other million taxes. service due to Taxes and utility higher property

retirement offset to higher interest expense $X.X benefit Interest largely certain expense decreased reflecting assets. on higher by interest income increased partially borrowings, on regulatory due expense short-term costs. million, Other million, lower $X.X

as increased income earnings company's of result the deferred the orders. in taxes XXXX as a as electric accumulated Hampshire case gas income of taxes excess higher and of first pretax higher reflecting flowback half lastly, New rate well $X And million,

to Turning X. Slide

for to the approximately expected revenues and rate on requested return for electric parties increase collected million as work million of of continue base layer are be we final $XX.X net XX.XX% The are XX.X% Our gas requested through Pittsburgh electric $X.X all currently with are that the the proceedings electric to equity revenue The and these with the for division and division revenue progressing and dockets. in is trackers. certain gas for expected gross equity division capital and The gas an increases XX.XX%. division. is

$X.X proposed rates, million $X.X the revenues, currently inclusion electric have recovered base We of are million of which trackers. in and and through gas capital respectively,

the amounts, electric these of the revenue approximately consideration division. million be gas $X for After the and increase would net division for $X.X million

gas making and with electric performance-based multiyear proposals adjustments. inflation-based revenue include plans Our annual also rate

this Evidentiary hearings began throughout continue will February early month. and

regarding our during additional updates proceedings next We will provide these earnings call.

and companies each as modernization sector electric among to of Commonwealth an distribution a The which electric We well to resiliency summary required distribution to Moving future assessments develop of of Slide the increase in our X. recently Massachusetts through plan, includes as improvements are demand. things, filed the investments XXXX of adoption system reliability believe necessary building to final Commonwealth investments electric resources, sector we and order distributed electric modernization which energy its goals. electrification. addresses in $XX outlines The assist plan, that submission climate support vehicle achieving the million approximately totaling other

approved revision represent investment this the spending capital in our filed, upward to capital If a plan. of current an plan would as portion

tracker capital plan also for investments. submission a electric Our a recover sector to proposal includes these modernization

solar the would plan, to on project. like update sector provide electric to New I also the an modernization In Hampshire addition Kingston,

in determination Public commence previous As work calls, the a public the necessary has Hampshire this from Commission site we the company facility New quarter of for The of in at interest to company received to Utilities begin construction, May received the this earnings and discussed most XXXX. permits during XXXX. to expect first

Slide XX. to Turning

and years totals approximately higher reflects We have investment system updated now we spending X expect we our total make and than approximately systems. $XXX to safe maintaining made investments. nearly which to capital $XXX the electric million plan, reliable plan over and million. gas projected is capital In prior necessary essential strategic investment This X-year investment investments continue the the to and as XX% be continued XXXX,

support in serve. clean As energy the upside slide, states noted investment remains the there on we the as transition we previous potential

Moving to Slide XX.

sheet our cash managing maintain to and continue flows. credit on responsibly operating strong focus generating our We through the ratings balance investment-grade

Over a debt being financing long-term operating a ensure years, comprised to flows structure, of majority less financing at of of the approach capital equity. our cash and coming through XX% to equity. This debt the needs balanced dividends plan the XXXX end XX% vast remaining which the helps we was met combination and expect fund with of

metrics top such debt. balance a as our Maintaining other credit to ratings strong companies believe sheet and to investment-grade priority, utility and FFO our compare certain on favorably we credit remain we

We have to changes our not in we credit maturities do no significant expect XXXX, current any ratings. and debt

XXXX. annualized an by Next This XX. share increase increase continued of Board share increase share the execute XXXX or a per on $X.XX strategic brings The to reflects dividend Slide I on our which am to confidence Directors to plan. the increase voted ability has per dividend dividend $X.XX, to pleased that the is X% per in our $X.XX to share quarterly on our compared basis.

XXXX, have payout raised payout XX ratio XX%. range target each a our We ratio in within of our achieved is now to And XX%, the of dividend years. dividend past of in which XX% dividend

our the We in expect line able growth annual rate. to to dividend long-term increase be with to continue earnings

over I turn Tom. back will to the now call

Tom Meissner

Great. Thanks, Dan.

for again top-tier both and to we safe in on utility. surpassed pride is response great a and reliable time. something operationally, remain Providing electric reliability benchmark take XXXX, and Moving performance emergency we our Slide service once levels that XX. we gas In

of Our U.S. were Northeast third customer and out utility customers these consecutive the in seem the XX satisfaction in year, Eastern fourth the we region to utilities for top-ranked results for the and appreciate

results our the are and We these tireless of of proud dedication employees.

continue expect and the customers of stakeholders of excellence standard We to our will us. deliver that high other

Slide to now XX. Moving

X% As guidance X% per I reaffirming our earnings growth of we in long-term are to share. earlier, mentioned

We expenses control our our earnings. cost of On provided have of seasonality an ability distribution inflationary to business. on equal operating this our approximate than manage maintenance slide, and results, less in to continued or also our be increases, broader expect the we reflecting expected the quarterly and focus to increases reflecting

like our Turning decade. XX. recap to I over now some of Slide achievements past the to would

on than income have And Looking first basis, at of the grown has at long-term doubled. our midpoint annually, earnings. share X% Net we to per a corresponding guidance. more

at base our Our rate XX consistent range. just over years, X% also with than over growing annually, has long-term more doubled

XXXX, support enabling XXXX to from earnings the XXXX. in to Over years, we ratio dividend investment us increasing reinvest in the this to accomplished to while past brought XXXX program. XX% our our XX We down XX% payout from XX%

that validation earnings. We aligns our results believe XX GAAP the unadjusted mention last the of results. past record over guidance, which should also provides were of these our basis current I track with years on our all closely

to for the goals to We committed and strive Turning set consistent, to Slide deliver we are shareholder value XX. sustainable ourselves.

past the the As I consistently X% years in line of we've earnings being range. end grown guidance with above over mentioned, X% our the to decade few with already last high

Our our maintained strategy and disciplined base credit program. strategically we range as to XX% favorably rate dividend our of to investment committed of our credit compare We've support ratings target payout range, others to in achieved and even lowered to to remain our the above metrics the midpoint the investment-grade our XX% growth investment growth we industry.

focus on inflation. control below or to has that in achieve us Our resulted enabled efficiencies at cost increases O&M

We've our fully rate on basis majority last regulators. decoupled agenda, our earning X in healthy with We regulatory for relationships cases our returns our settlements structures of customers. rate also able were a while maintaining to the authorized achieve implemented on executed our and consolidated

ourselves an perform exceed pride exceptional establish Lastly, stakeholder ourselves to setting meet to or the we clear and continue level will service on measuring expectations. operationally holding we progress as noted at expectations, goals, and earlier, to accountable By we provide to customers. continue

exceptional our while for Ending now Slide was again yet service financial and results customers. delivered company. We exceptional solid another on to year the operational XX. XXXX delivering

opportunities well pleased We will what very clean be energy our XXXX, and in we with in XXXX. player the and ahead. embrace I'm optimistic results and in key are achieve a to the about transition excited I'm positioned

With that, I'll turn it back to Todd.

Todd Diggins

will this That who Tom. call. to I you will operator call wraps coordinate for Thank now for questions. the over attending. material turn the up Thanks, the

Operator

coming be from coming Tucker be Infosys. will And question question Fannie will [Operator Suri first of our next our RBC CM. from And Instructions] [Operator Instructions] of Shelby

Shelby Tucker

that phasing stands A gas the maybe Trying natural sense also given a the of out as issues. of potentially maybe heating a more, we're quick of where in source. that bit could some been question get looking given evolve There natural policy the Massachusetts. a have policy embracing nation we've across and to gas reliability on moving over natural chance that move time? in Massachusetts in some gas Any seen policy at towards

Tom Meissner

think Public and to Utilities was I gas. future the envision electrification. of time, of others Department that in. start over is the is correct an issue I'll natural say of to that in did face And out can proceeding they Tom. But Shelby, gas this it jump referred in phasing as order

we've our electric the we're we well One clear tried is positioned feel the of of things I'll Massachusetts overlap mention between in be because that and to high customers. gas about

our of XX% us also electric. around gas Somewhere have for customers

So standpoint, well we're from that positioned.

In to occurring slow don't to to move realistically, to and that policy, be electricity terms of And to very full be think our shift other the we for we to it's heating electrification think quickly. we headwind aspects of see about And still concerns customers. have going trying affordability a are going I that, of that to evolve.

terms in, other let jump the I'll in of question. to responding So

Robert Hevert

to are X made. hear me. can points Shelby, or is this other you Hevert. be Bob There X Hope probably

me, first looking value concern The at really right? no interest that of clear have department assets, they value commission the excuse of that the to the So no the made whatsoever -- in as is infrastructure. have existing we existing the

are the paths forward, a open. have keep available path to they and noted that They those there department multiple Looking also to options preferred don't necessarily decarbonization. understand want that

are said, things To specifically is of the pilot. do electrification there order that Although end, of electrification. an do one order a must to the as under the portions Tom project, demonstration we look that

do for a at that the example, to the we're full study. replacing such of overlap fact and that leak-prone this our program versus for gone that way by the using of we've Massachusetts, given We so pipe. to decarbonized be at and And be really and a cost between the operations, looking in a terms we that system study, broad purpose. of we electric portion have amenable think long that actively given that good in of gas, gas think electrification existing system will pilot looking understand that And very type would

the that keeping way So with in some cost-effective really we Commonwealth to do objectives. it options us help think order decarbonize most have in explore the the does to policy

Operator

I'm [Operator for further today's showing questions. you Thank conference Instructions] This And participating. call. no concludes

You may now disconnect.

Unitil (UTL) 13 Feb 242023 Q4 Earnings call transcript