QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive office) |
(Zip Code) |
Title of each class |
Trading Symbol |
Name of each exchange of which registered | ||
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☒ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☐ |
Smaller reporting company |
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(Do not check if a smaller reporting company) |
Emerging growth company |
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Class |
Outstanding at October 21, 2019 | |
Common Stock, No par value |
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Page No. |
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Part I. Financial Information |
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Item 1. |
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19 |
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20- 21 |
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22 |
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23- 24 |
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25- 51 |
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Item 2. |
3- 18 |
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Item 3. |
51 |
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Item 4. |
51 |
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Part II. Other Information |
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Item 1. |
51 |
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Item 1A. |
52 |
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Item 2. |
52 |
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Item 3. |
Inapplicable |
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Item 4. |
Inapplicable |
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Item 5. |
52 |
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Item 6. |
53 |
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55 |
• | the Company’s regulatory environment (including regulations relating to climate change, greenhouse gas emissions and other environmental matters), which could affect the rates the Company is able to charge, the Company’s authorized rate of return and the Company’s ability to recover costs in its rates; |
• | fluctuations in the supply of, demand for, and the prices of energy commodities and transmission capacity and the Company’s ability to recover energy commodity costs in its rates; |
• | customers’ preferred energy sources; |
• | severe storms and the Company’s ability to recover storm costs in its rates; |
• | the potential for disruption to the Company’s operations due to cyber-attacks, computer viruses, human errors, acts of war or terrorism or other reasons; |
• | the Company’s stranded electric generation and generation-related supply costs and the Company’s ability to recover stranded costs in its rates; |
• | declines in the valuation of capital markets, which could require the Company to make substantial cash contributions to cover its pension obligations, and the Company’s ability to recover pension obligation costs in its rates; |
• | general economic conditions, which could adversely affect (i) the Company’s customers and, consequently, the demand for the Company’s distribution services, (ii) the availability of credit and liquidity resources and (iii) certain of the Company’s counterparties’ obligations (including those of its insurers and lenders); |
• | the Company’s ability to obtain debt or equity financing on acceptable terms; |
• | increases in interest rates, which could increase the Company’s interest expense; |
• | restrictive covenants contained in the terms of the Company’s and its subsidiaries’ indebtedness, which restrict certain aspects of the Company’s business operations; |
• | variations in weather, which could decrease demand for the Company’s distribution services; |
• | long-term global climate change, which could adversely affect customer demand or cause extreme weather events that could disrupt the Company’s electric and natural gas distribution services; |
• | numerous hazards and operating risks relating to the Company’s electric and natural gas distribution activities, which could result in accidents and other operating risks and costs; |
• | catastrophic events; |
• | the Company’s ability to retain its existing customers and attract new customers; and |
• | increased competition. |
i) | Unitil Energy Systems, Inc. (Unitil Energy), which provides electric service in the southeastern seacoast and state capital regions of New Hampshire, including the capital city of Concord, New Hampshire; |
ii) | Fitchburg Gas and Electric Light Company (Fitchburg), which provides both electric and natural gas service in the greater Fitchburg area of north central Massachusetts; and |
iii) | Northern Utilities, Inc. (Northern Utilities), which provides natural gas service in southeastern New Hampshire and portions of southern and central Maine, including the city of Portland, which is the largest city in northern New England. |
Therm Sales (millions) |
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Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
2019 |
2018 |
Change |
% Change |
2019 |
2018 |
Change |
% Change |
|||||||||||||||||||||||||
Residential |
2.6 |
2.5 |
0.1 |
4.0 |
% | 36.2 |
35.9 |
0.3 |
0.8 |
% | ||||||||||||||||||||||
Commercial / Industrial |
24.9 |
23.9 |
1.0 |
4.2 |
% | 136.2 |
132.3 |
3.9 |
2.9 |
% | ||||||||||||||||||||||
Total |
27.5 |
26.4 |
1.1 |
4.2 |
% | 172.4 |
168.2 |
4.2 |
2.5 |
% | ||||||||||||||||||||||
Gas Operating Revenues and Sales Margin (millions) |
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2019 |
2018 |
$ Change |
% Change |
2019 |
2018 |
$ Change |
% Change |
|||||||||||||||||||||||||
Gas Operating Revenue: |
||||||||||||||||||||||||||||||||
Residential |
$ |
8.9 |
$ | 9.2 |
$ | (0.3 |
) | (3.3 |
%) | $ |
57.8 |
$ | 58.9 |
$ | (1.1 |
) | (1.9 |
%) | ||||||||||||||
Commercial / Industrial |
16.0 |
16.5 |
(0.5 |
) | (3.0 |
%) | 86.1 |
88.5 |
(2.4 |
) | (2.7 |
%) | ||||||||||||||||||||
Total Gas Operating Revenue |
$ |
24.9 |
$ | 25.7 |
$ | (0.8 |
) | (3.1 |
%) | $ |
143.9 |
$ | 147.4 |
$ | (3.5 |
) | (2.4 |
%) | ||||||||||||||
Cost of Gas Sales |
$ |
6.2 |
$ | 8.1 |
$ | (1.9 |
) | (23.5 |
%) | $ |
58.4 |
$ | 67.0 |
$ | (8.6 |
) | (12.8 |
%) | ||||||||||||||
Gas Sales Margin |
$ |
18.7 |
$ | 17.6 |
$ | 1.1 |
6.2 |
% | $ |
85.5 |
$ | 80.4 |
$ | 5.1 |
6.3 |
% | ||||||||||||||||
kWh Sales (millions) |
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2019 |
2018 |
Change |
% Change |
2019 |
2018 |
Change |
% Change |
|||||||||||||||||||||||||
Residential |
180.9 |
195.0 |
(14.1 |
) | (7.2 |
%) | 498.3 |
527.8 |
(29.5 |
) | (5.6 |
%) | ||||||||||||||||||||
Commercial / Industrial |
257.7 |
268.3 |
(10.6 |
) | (4.0 |
%) | 718.5 |
755.9 |
(37.4 |
) | (4.9 |
%) | ||||||||||||||||||||
Total |
438.6 |
463.3 |
(24.7 |
) | (5.3 |
%) | 1,216.8 |
1,283.7 |
(66.9 |
) | (5.2 |
%) | ||||||||||||||||||||
Electric Operating Revenues and Sales Margin (millions) |
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2019 |
2018 |
$ Change |
% Change |
2019 |
2018 |
$ Change |
% Change |
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Electric Operating Revenue: |
||||||||||||||||||||||||||||||||
Residential |
$ |
34.4 |
$ | 35.5 |
$ | (1.1 |
) | (3.1 |
%) | $ |
101.9 |
$ | 95.7 |
$ | 6.2 |
6.5 |
% | |||||||||||||||
Commercial / Industrial |
26.0 |
25.9 |
0.1 |
0.4 |
% | 75.1 |
71.9 |
3.2 |
4.5 |
% | ||||||||||||||||||||||
Total Electric Operating Revenue |
$ |
60.4 |
$ | 61.4 |
$ | (1.0 |
) | (1.6 |
%) | $ |
177.0 |
$ | 167.6 |
$ | 9.4 |
5.6 |
% | |||||||||||||||
Cost of Electric Sales |
$ |
35.3 |
$ | 35.5 |
$ | (0.2 |
) | (0.6 |
%) | $ |
106.4 |
$ | 97.1 |
$ | 9.3 |
9.6 |
% | |||||||||||||||
Electric Sales Margin |
$ |
25.1 |
$ | 25.9 |
$ | (0.8 |
) | (3.1 |
%) | $ |
70.6 |
$ | 70.5 |
$ | 0.1 |
0.1 |
% | |||||||||||||||
Other Revenue (000’s) |
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2019 |
2018 |
$ Change |
% Change |
2019 |
2018 |
$ Change |
% Change |
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Other |
$ |
— |
$ | 1.1 |
$ | (1.1 |
) | N/M |
$ |
0.9 |
$ | 3.5 |
$ | (2.6 |
) | (74.3 |
%) | |||||||||||||||
Total Other Revenue |
$ |
— |
$ | 1.1 |
$ | (1.1 |
) | N/M |
$ |
0.9 |
$ | 3.5 |
$ | (2.6 |
) | (74.3 |
%) | |||||||||||||||
Interest Expense, Net (Millions) |
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
2019 |
2018 |
Change |
2019 |
2018 |
Change |
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Interest Expense |
||||||||||||||||||||||||
Long-term Debt |
$ |
5.7 |
$ | 5.7 |
$ | — |
$ |
17.0 |
$ | 17.3 |
$ | (0.3 |
) | |||||||||||
Short-term Debt |
0.6 |
0.7 |
(0.1 |
) | 2.4 |
1.6 |
0.8 |
|||||||||||||||||
Regulatory Liabilities |
0.2 |
0.2 |
— |
0.5 |
0.5 |
— |
||||||||||||||||||
Subtotal Interest Expense |
6.5 |
6.6 |
(0.1 |
) | 19.9 |
19.4 |
0.5 |
|||||||||||||||||
Interest (Income) |
||||||||||||||||||||||||
Regulatory Assets |
(0.2 |
) |
(0.2 |
) | — |
(0.6 |
) |
(0.6 |
) | — |
||||||||||||||
AFUDC (1) and Other |
(0.5 |
) |
(0.4 |
) | (0.1 |
) | (1.4 |
) |
(0.9 |
) | (0.5 |
) | ||||||||||||
Subtotal Interest (Income) |
(0.7 |
) |
(0.6 |
) | (0.1 |
) | (2.0 |
) |
(1.5 |
) | (0.5 |
) | ||||||||||||
Total Interest Expense, Net |
$ |
5.8 |
$ | 6.0 |
$ | (0.2 |
) | $ |
17.9 |
$ | 17.9 |
$ | — |
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(1) |
AFUDC – Allowance for Funds Used During Construction. |
Revolving Credit Facility ($ millions) |
||||||||||||
September 30, |
December 31, |
|||||||||||
2019 |
2018 |
2018 |
||||||||||
Limit |
$ |
120.0 |
$ | 120.0 |
$ | 120.0 |
||||||
Short-Term Borrowings Outstanding |
49.2 |
69.1 |
82.8 |
|||||||||
Letter of Credit Outstanding |
0.1 |
— |
— |
|||||||||
Available |
$ |
70.7 |
$ | 50.9 |
$ | 37.2 |
||||||
Employees Covered |
CBA Expiration |
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Fitchburg |
44 |
05/31/2022 |
||||||
Northern Utilities NH Division |
37 |
06/05/2020 |
||||||
Northern Utilities ME Division |
36 |
03/31/2021 |
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Granite State |
4 |
03/31/2021 |
||||||
Unitil Energy |
36 |
05/31/2023 |
||||||
Unitil Service |
5 |
05/31/2023 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
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Operating Revenues |
||||||||||||||||
Gas |
$ |
$ | $ |
$ | ||||||||||||
Electric |
||||||||||||||||
Other |
— |
|||||||||||||||
Total Operating Revenues |
||||||||||||||||
Operating Expenses |
||||||||||||||||
Cost of Gas Sales |
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Cost of Electric Sales |
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Operation and Maintenance |
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Depreciation and Amortization |
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Taxes Other Than Income Taxes |
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Total Operating Expenses |
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Operating Income |
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Interest Expense, Net |
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Other Expense (Income), Net |
( |
) |
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Income Before Income Taxes |
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Provision for Income Taxes |
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Net Income |
$ |
$ | $ |
$ | ||||||||||||
Net Income Per Common Share (Basic and Diluted) |
$ |
$ | $ |
$ | ||||||||||||
Weighted Average Common Shares Outstanding – (Basic and Diluted) |
September 30, |
December 31, |
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2019 |
2018 |
2018 |
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ASSETS: |
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Current Assets |
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Cash and Cash Equivalents |
$ |
|
$ | |
$ | |
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Accounts Receivable, Net |
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Accrued Revenue |
|
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Exchange Gas Receivable |
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Refundable Taxes |
|
— |
|
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Gas Inventory |
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Materials and Supplies |
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Prepayments and Other |
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Total Current Assets |
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Utility Plant: |
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Gas |
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Electric |
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Common |
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|
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Construction Work in Progress |
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Utility Plant |
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Less: Accumulated Depreciation |
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Net Utility Plant |
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Other Noncurrent Assets: |
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Regulatory Assets |
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Operating Lease Right of Use Assets |
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— |
— |
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Other Assets |
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Total Other Noncurrent Assets |
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TOTAL ASSETS |
$ |
|
$ | |
$ | |
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September 30, |
December 31, |
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2019 |
2018 |
2018 |
||||||||||
LIABILITIES AND CAPITALIZATION: |
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Current Liabilities: |
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Accounts Payable |
$ |
|
$ | |
$ | |
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Short-Term Debt |
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Long-Term Debt, Current Portion |
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Regulatory Liabilities |
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Energy Supply Obligations |
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Interest Payable |
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Other Current Liabilities |
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Total Current Liabilities |
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Noncurrent Liabilities: |
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Retirement Benefit Obligations |
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Deferred Income Taxes, net |
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Cost of Removal Obligations |
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Regulatory Liabilities |
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Other Noncurrent Liabilities |
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Total Noncurrent Liabilities |
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Capitalization: |
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Long-Term Debt, Less Current Portion |
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Stockholders’ Equity: |
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Common Equity (Authorized: |
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Retained Earnings |
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Total Common Stock Equity |
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Preferred Stock |
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Total Stockholders’ Equity |
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Total Capitalization |
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Commitments and Contingencies (Notes 6 & 7) |
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TOTAL LIABILITIES AND CAPITALIZATION |
$ |
|
$ | |
$ | |
||||||
Nine Months Ended September 30, |
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2019 |
2018 |
|||||||
Operating Activities: |
||||||||
Net Income |
$ |
|
$ | |
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Adjustments to Reconcile Net Income to Cash |
||||||||
Provided by Operating Activities: |
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|
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Depreciation and Amortization |
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|
||||||
Deferred Tax Provision |
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|
||||||
Gain on Divestiture, Net (See Note 1) |
( |
) |
— |
|||||
Changes in Working Capital Items: |
||||||||
Accounts Receivable |
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|
||||||
Accrued Revenue |
|
|
||||||
Exchange Gas Receivable |
( |
) | ( |
) | ||||
Regulatory Liabilities |
|
|
||||||
Accounts Payable |
( |
) |
( |
) | ||||
Other Changes in Working Capital Items |
( |
) |
|
|||||
Deferred Regulatory and Other Charges |
( |
) |
( |
) | ||||
Other, net |
|
( |
) | |||||
Cash Provided by Operating Activities |
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|
||||||
Investing Activities: |
||||||||
Property, Plant and Equipment Additions |
( |
) |
( |
) | ||||
Proceeds from Divestiture, Net (See Note 1) |
|
— |
||||||
Cash (Used in) Investing Activities |
( |
) |
( |
) | ||||
Financing Activities: |
||||||||
(Repayment of) Proceeds from Short-Term Debt, net |
( |
) |
|
|||||
Repayment of Long-Term Debt |
( |
) |
( |
) | ||||
Issuance of Long-Term Debt |
|
|
|
|
|
|
— |
|
Decrease in Capital Lease Obligations |
( |
) |
( |
) | ||||
Net Increase in Exchange Gas Financing |
|
|
||||||
Dividends Paid |
( |
) |
( |
) | ||||
Proceeds from Issuance of Common Stock, net |
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|
||||||
Cash (Used in) Provided by Financing Activities |
( |
) |
|
|||||
Net Decrease in Cash and Cash Equivalents |
( |
) |
( |
) | ||||
Cash and Cash Equivalents at Beginning of Period |
|
|
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Cash and Cash Equivalents at End of Period |
$ |
|
$ | |
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Supplemental Cash Flow Information: |
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Interest Paid |
$ |
|
$ | |
||||
Income Taxes Paid |
$ |
|
$ | |
||||
Payments on Capital Leases |
$ |
|
$ | |
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Non-cash Investing Activity: |
||||||||
Capital Expenditures Included in Accounts Payable |
$ |
|
$ | |
||||
Right-of-Use Assets Obtained in Exchange for Lease Obligations |
$ |
|
$ | — |
Common Equity |
Retained Earnings |
Total |
||||||||||
Three Months Ended September 30, 2019 |
||||||||||||
Balance at July 1, 2019 |
$ | |
$ | |
$ |
|
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Net Income |
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|
||||||||||
Dividends on Common Shares ($ |
( |
) | ( |
) | ||||||||
Stock Compensation Plans |
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||||||||||
Issuance of |
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|
||||||||||
Balance at September 30, 2019 |
$ |
|
$ |
|
$ |
|
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Three Months Ended September 30, 2018 |
||||||||||||
Balance at July 1, 2018 |
$ | |
$ | |
$ |
|
||||||
Net Income |
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|
||||||||||
Dividends on Common Shares ($ |
( |
) | ( |
) | ||||||||
Stock Compensation Plans |
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||||||||||
Issuance of |
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|
||||||||||
Balance at September 30, 2018 |
$ |
|
$ |
|
$ |
|
||||||
Common Equity |
Retained Earnings |
Total |
||||||||||
Nine Months Ended September 30, 2019 |
||||||||||||
Balance at January 1, 2019 |
$ | |
$ | |
$ |
|
||||||
Net Income |
|
|
||||||||||
Dividends on Common Shares ($ |
( |
) | ( |
) | ||||||||
Stock Compensation Plans |
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||||||||||
Issuance of |
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|
||||||||||
Balance at September 30, 2019 |
$ |
|
$ |
|
$ |
|
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Nine Months Ended September 30, 2018 |
||||||||||||
Balance at January 1, 2018 |
$ | |
$ | |
$ |
|
||||||
Net Income |
|
|
||||||||||
Dividends on Common Shares ($ |
( |
) | ( |
) | ||||||||
Stock Compensation Plans |
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|
||||||||||
Issuance of |
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|
||||||||||
Balance at September 30, 2018 |
$ |
|
$ |
|
$ |
|
||||||
Three Months Ended September 30, 2019 |
||||||||||||
Gas and Electric Operating Revenues ($ millions): |
Gas |
Electric |
Total |
|||||||||
Billed and Unbilled Revenue: |
||||||||||||
Residential |
$ | $ | $ | |||||||||
C&I |
||||||||||||
Other |
||||||||||||
Total Billed and Unbilled Revenue |
||||||||||||
Rate Adjustment Mechanism Revenue |
||||||||||||
Total Gas and Electric Operating Revenues |
$ |
$ |
$ |
|||||||||
Three Months Ended September 30, 2018 |
||||||||||||
Gas and Electric Operating Revenues ($ millions): |
Gas |
Electric |
Total |
|||||||||
Billed and Unbilled Revenue: |
||||||||||||
Residential |
$ | $ | $ | |||||||||
C&I |
||||||||||||
Other |
||||||||||||
Total Billed and Unbilled Revenue |
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Rate Adjustment Mechanism Revenue |
||||||||||||
Total Gas and Electric Operating Revenues |
$ |
$ |
$ |
|||||||||
Nine Months Ended September 30, 2019 |
||||||||||||
Gas and Electric Operating Revenues ($ millions): |
Gas |
Electric |
Total |
|||||||||
Billed and Unbilled Revenue: |
||||||||||||
Residential |
$ | $ | $ | |||||||||
C&I |
||||||||||||
Other |
||||||||||||
Total Billed and Unbilled Revenue |
||||||||||||
Rate Adjustment Mechanism Revenue |
( |
) | ( |
) | ||||||||
Total Gas and Electric Operating Revenues |
$ |
$ |
$ |
|||||||||
Nine Months Ended September 30, 2018 |
||||||||||||
Gas and Electric Operating Revenues ($ millions): |
Gas |
Electric |
Total |
|||||||||
Billed and Unbilled Revenue: |
||||||||||||
Residential |
$ | $ | $ | |||||||||
C&I |
||||||||||||
Other |
||||||||||||
Total Billed and Unbilled Revenue |
||||||||||||
Rate Adjustment Mechanism Revenue |
( |
) | ( |
) | ( |
) | ||||||
Total Gas and Electric Operating Revenues |
$ |
$ |
$ |
|||||||||
($ millions) |
||||||||||||
September 30, |
December 31, |
|||||||||||
2019 |
2018 |
2018 |
||||||||||
Allowance for Doubtful Accounts |
$ |
$ | |
$ | ||||||||
September 30, |
December 31, |
|||||||||||
Accrued Revenue ($ millions) |
2019 |
2018 |
2018 |
|||||||||
Regulatory Assets – Current |
$ |
$ | $ | |||||||||
Unbilled Revenues |
||||||||||||
Total Accrued Revenue |
$ |
$ | |
$ |
September 30, |
December 31, |
|||||||||||
Exchange Gas Receivable ($ millions) |
2019 |
2018 |
2018 |
|||||||||
Northern Utilities |
$ |
$ | $ | |||||||||
Fitchburg |
||||||||||||
Total Exchange Gas Receivable |
$ |
$ | $ | |||||||||
September 30, |
December 31, |
|||||||||||
Gas Inventory ($ millions) |
2019 |
2018 |
2018 |
|||||||||
Natural Gas |
$ |
$ | $ | |||||||||
Propane |
||||||||||||
Liquefied Natural Gas & Other |
||||||||||||
Total Gas Inventory |
$ |
$ | $ | |||||||||
September 30, |
December 31, |
|||||||||||
Regulatory Assets consist of the following ($ millions) |
2019 |
2018 |
2018 |
|||||||||
Retirement Benefits |
$ |
$ | $ | |||||||||
Energy Supply & Other Rate Adjustment Mechanisms |
||||||||||||
Deferred Storm Charges |
||||||||||||
Environmental |
||||||||||||
Income Taxes |
||||||||||||
Other |
||||||||||||
Total Regulatory Assets |
||||||||||||
Less: Current Portion of Regulatory Assets (1) |
||||||||||||
Regulatory Assets – noncurrent |
$ |
$ | $ | |||||||||
(1) |
Reflects amounts included in Accrued Revenue, discussed above, on the Company’s Consolidated Balance Sheets. |
September 30, |
December 31, |
|||||||||||
Regulatory Liabilities consist of the following ($ millions) |
2019 |
2018 |
2018 |
|||||||||
Income Taxes (Note 8) |
$ |
$ | $ | |||||||||
Energy Supply & Other Rate Adjustment Mechanisms |
||||||||||||
Total Regulatory Liabilities |
||||||||||||
Less: Current Portion of Regulatory Liabilities |
||||||||||||
Regulatory Liabilities—noncurrent |
$ |
$ | $ | |||||||||
September 30, |
December 31, |
|||||||||||
Fair Value of Marketable Securities ($ millions) |
2019 |
2018 |
2018 |
|||||||||
Equity Funds |
$ |
— |
$ | $ | — |
|||||||
Fixed Income Funds |
— |
— |
||||||||||
Money Market Funds |
— |
|||||||||||
Total Marketable Securities |
$ |
$ | $ | |||||||||
September 30, |
December 31, |
|||||||||||
Fair Value of Marketable Securities ($ millions) |
2019 |
2018 |
2018 |
|||||||||
Equity Funds |
$ |
— |
$ | — |
$ | — |
||||||
Money Market Funds |
— |
— |
||||||||||
Total Marketable Securities |
$ |
$ | — |
$ | — |
|||||||
September 30, |
December 31, |
|||||||||||
Energy Supply Obligations ($ millions) |
2019 |
2018 |
2018 |
|||||||||
Current: |
||||||||||||
Exchange Gas Obligation |
$ |
$ | $ | |||||||||
Renewable Energy Portfolio Standards |
||||||||||||
Power Supply Contract Divestitures |
||||||||||||
Total Energy Supply Obligations – Current |
||||||||||||
Noncurrent: |
||||||||||||
Power Supply Contract Divestitures |
||||||||||||
Total Energy Supply Obligations |
$ |
$ | $ | |||||||||
Declaration Date |
Date Paid (Payable) |
Shareholder of Record Date |
Dividend Amount | |||
$ | ||||||
$ | ||||||
$ | ||||||
$ | ||||||
$ | ||||||
$ | ||||||
$ | ||||||
$ |
Gas |
Electric |
Non- Regulated |
Other |
Total |
||||||||||||||||
Three Months Ended September 30, 2019 |
||||||||||||||||||||
Revenues: |
||||||||||||||||||||
Billed and Unbilled Revenue |
$ |
$ |
$ |
— |
$ |
— |
$ |
|||||||||||||
Rate Adjustment Mechanism Revenue |
— |
— |
||||||||||||||||||
Other Operating Revenue – Non-Regulated |
— |
— |
— |
— |
— |
|||||||||||||||
Total Operating Revenues |
$ |
$ |
$ |
— |
$ |
— |
$ |
|||||||||||||
Segment Profit |
( |
) | — |
|||||||||||||||||
Capital Expenditures |
— |
|||||||||||||||||||
Three Months Ended September 30, 2018 |
||||||||||||||||||||
Revenues: |
||||||||||||||||||||
Billed and Unbilled Revenue |
$ | $ | $ | — |
$ | — |
$ | |||||||||||||
Rate Adjustment Mechanism Revenue |
— |
— |
||||||||||||||||||
Other Operating Revenue – Non-Regulated |
— |
— |
— |
|||||||||||||||||
Total Operating Revenues |
$ | $ | $ | $ | — |
$ | ||||||||||||||
Segment Profit (Loss) |
( |
) | ||||||||||||||||||
Capital Expenditures |
— |
|||||||||||||||||||
Nine Months Ended September 30, 2019 |
||||||||||||||||||||
Revenues: |
||||||||||||||||||||
Billed and Unbilled Revenue |
$ |
$ |
$ |
— |
$ |
— |
$ |
|||||||||||||
Rate Adjustment Mechanism Revenue |
( |
) |
— |
— |
( |
) | ||||||||||||||
Other Operating Revenue – Non-Regulated |
— |
— |
— |
|||||||||||||||||
Total Operating Revenues |
$ |
$ |
$ |
$ |
— |
$ |
||||||||||||||
Segment Profit |
||||||||||||||||||||
Capital Expenditures |
— |
|||||||||||||||||||
Segment Assets |
||||||||||||||||||||
Nine Months Ended September 30, 2018 |
||||||||||||||||||||
Revenues: |
||||||||||||||||||||
Billed and Unbilled Revenue |
$ | $ | $ | — |
$ | — |
$ | |||||||||||||
Rate Adjustment Mechanism Revenue |
( |
) | ( |
) | — |
— |
( |
) | ||||||||||||
Other Operating Revenue – Non-Regulated |
— |
— |
— |
|||||||||||||||||
Total Operating Revenues |
$ | $ | $ | $ | — |
$ | ||||||||||||||
Segment Profit |
||||||||||||||||||||
Capital Expenditures |
— |
|||||||||||||||||||
Segment Assets |
($ millions) |
September 30, |
December 31, |
||||||||||
2019 |
2018 |
2018 |
||||||||||
Unitil Corporation: |
||||||||||||
$ |
$ | $ | ||||||||||
Unitil Energy First Mortgage Bonds: |
||||||||||||
— |
||||||||||||
Fitchburg: |
||||||||||||
Northern Utilities: |
||||||||||||
— |
— |
|||||||||||
— |
— |
|||||||||||
Granite State: |
||||||||||||
— |
— |
|||||||||||
Total Long-Term Debt |
||||||||||||
Less: Unamortized Debt Issuance Costs |
||||||||||||
Total Long-Term Debt, net of Unamortized Debt Issuance Costs |
||||||||||||
Less: Current Portion (1) |
||||||||||||
Total Long-term Debt, Less Current Portion |
$ |
$ | $ | |||||||||
(1) |
The Current Portion of Long-Term Debt includes sinking fund payments. |
($ millions) |
September 30, |
December 31, |
||||||||||
2019 |
2018 |
2018 |
||||||||||
Estimated Fair Value of Long-Term Debt |
$ | $ | $ |
Revolving Credit Facility ($ millions) |
||||||||||||
September 30, |
December 31, |
|||||||||||
2019 |
2018 |
2018 |
||||||||||
Limit |
$ |
$ | $ | |||||||||
Short-Term Borrowings Outstanding |
||||||||||||
Letter of Credit Outstanding |
— |
— |
||||||||||
Available |
$ |
$ | $ |
September 30, |
December 31, |
|||||||||||
Lease Obligations ($ millions) |
2019 |
2018 |
2018 |
|||||||||
Operating Lease Obligations: |
||||||||||||
Other Current Liabilities (current portion) |
$ |
$ | — |
$ | — |
|||||||
Other Noncurrent Liabilities (long-term portion) |
— |
— |
||||||||||
Total Operating Lease Obligations |
4.2 |
— |
— |
|||||||||
Capital Lease Obligations: |
||||||||||||
Other Current Liabilities (current portion) |
||||||||||||
Other Noncurrent Liabilities (long-term portion) |
||||||||||||
Total Capital Lease Obligations |
0.6 |
|||||||||||
Total Lease Obligations |
$ |
$ | $ | |||||||||
Lease Payments ($000’s) Year Ending December 31, |
Operating Leases |
Capital Leases |
||||||||
Rest of 2019 |
$ | |
$ | |
||||||
2020 |
|
|
||||||||
2021 |
|
|
||||||||
2022 |
|
|
||||||||
2023 |
|
|
||||||||
2024-2028 |
|
— |
||||||||
Total Payments |
|
|
||||||||
Less: Interest |
|
|
||||||||
Amount of Lease Obligations Recorded on Consolidated Balance Sheets |
$ |
|
$ |
|
||||||
Lease Payments ($000’s) Year Ending December 31, |
Operating Leases |
Capital Leases |
||||||||
2019 |
$ | |
$ | |
||||||
2020 |
|
|
||||||||
2021 |
|
|
||||||||
2022 |
|
|
||||||||
2023 |
|
|
||||||||
2024-2028 |
|
— |
||||||||
Total Payments |
$ |
|
$ |
|
||||||
Restricted Stock Units (Equity Portion) |
| |||||||
Units |
Weighted Average Stock Price |
|||||||
Restricted Stock Units as of December 31, 2018 |
|
$ |
|
|||||
Restricted Stock Units Granted |
|
|
||||||
Dividend Equivalents Earned |
|
$ |
|
|||||
Restricted Stock Units Settled |
|
|
||||||
Restricted Stock Units as of September 30, 2019 |
|
$ |
|
|||||
Environmental Obligations |
($ millions) |
||||||||||||||||||||||||
Fitchburg |
Northern Utilities |
Total |
||||||||||||||||||||||
Nine months ended September 30, |
||||||||||||||||||||||||
2019 |
2018 |
2019 |
2018 |
2019 |
2018 |
|||||||||||||||||||
Total Balance at Beginning of Period |
$ |
— |
$ | $ |
$ | $ |
$ | |||||||||||||||||
Additions |
— |
— |
||||||||||||||||||||||
Less: Payments / Reductions |
— |
|||||||||||||||||||||||
Total Balance at End of Period |
— |
— |
||||||||||||||||||||||
Less: Current Portion |
— |
— |
||||||||||||||||||||||
Noncurrent Balance at End of Period |
$ |
— |
$ | $ |
$ | $ |
$ | |||||||||||||||||
Used to Determine Plan Costs |
2019 |
2018 |
||||||
Discount Rate |
% |
% | ||||||
Rate of Compensation Increase |
% |
% | ||||||
Expected Long-term rate of return on plan assets |
% |
% | ||||||
Health Care Cost Trend Rate Assumed for Next Year |
% |
% | ||||||
Ultimate Health Care Cost Trend Rate |
% |
% | ||||||
Year that Ultimate Health Care Cost Trend Rate is reached |
Pension Plan |
PBOP Plan |
SERP Plan |
||||||||||||||||||||||
Three Months Ended September 30, |
2019 |
2018 |
2019 |
2018 |
2019 |
2018 |
||||||||||||||||||
Service Cost |
$ |
$ | $ |
$ | $ |
$ | ||||||||||||||||||
Interest Cost |
||||||||||||||||||||||||
Expected Return on Plan Assets |
( |
) |
( |
) | ( |
) |
( |
) | — |
— |
||||||||||||||
Prior Service Cost Amortization |
||||||||||||||||||||||||
Actuarial Loss Amortization |
||||||||||||||||||||||||
Sub-total |
||||||||||||||||||||||||
Amounts Capitalized and Deferred |
( |
) |
( |
) | ( |
) |
( |
) | ( |
) |
( |
) | ||||||||||||
Net Periodic Benefit Cost Recognized |
$ |
$ | $ |
$ | $ |
$ | ||||||||||||||||||
Pension Plan |
PBOP Plan |
SERP Plan |
||||||||||||||||||||||
Nine Months Ended September 30, |
2019 |
2018 |
2019 |
2018 |
2019 |
2018 |
||||||||||||||||||
Service Cost |
$ |
$ | $ |
$ | $ |
$ | ||||||||||||||||||
Interest Cost |
||||||||||||||||||||||||
Expected Return on Plan Assets |
( |
) |
( |
) | ( |
) |
( |
) | — |
— |
||||||||||||||
Prior Service Cost Amortization |
||||||||||||||||||||||||
Actuarial Loss Amortization |
||||||||||||||||||||||||
Sub-total |
||||||||||||||||||||||||
Amounts Capitalized and Deferred |
( |
) |
( |
) | ( |
) |
( |
) | ( |
) |
( |
) | ||||||||||||
Net Periodic Benefit Cost Recognized |
$ |
$ | $ |
$ | $ |
$ | ||||||||||||||||||
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs |
|||||||||||||
7/1/19 – 7/31/19 |
— |
— |
— |
$ | 195,000 |
|||||||||||
8/1/19 – 8/31/19 |
— |
— |
— |
$ | 195,000 |
|||||||||||
9/1/19 – 9/30/19 |
— |
— |
— |
$ | 195,000 |
|||||||||||
Total |
— |
— |
— |
|||||||||||||
Exhibit No. |
Description of Exhibit |
Reference (1) |
||||||
4.1 |
Exhibit 4.1 to Form 8-K datedSeptember 12, 2019 (SEC File No. 1-8858 |
) | ||||||
4.2 (2) |
Exhibit 4.2 to Form 8-K datedSeptember 12, 2019 (SEC File No. 1-8858) |
|||||||
11 |
Filed herewith |
|||||||
31.1 |
Filed herewith |
|||||||
31.2 |
Filed herewith |
|||||||
31.3 |
Filed herewith |
|||||||
32.1 |
Filed herewith |
|||||||
99.1 |
Filed herewith |
|||||||
101.INS |
XBRL Instance Document—the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
Filed herewith |
||||||
101.SCH |
XBRL Taxonomy Extension Schema Document. |
Filed herewith |
||||||
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document. |
Filed herewith |
||||||
101.DEF |
XBRL Taxonomy Extension Definition Linkbase Document |
Filed herewith |
101.LAB |
XBRL Taxonomy Extension Label Linkbase Document. |
Filed herewith |
||||||
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document. |
Filed herewith |
||||||
104 |
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
Filed herewith |
UNITIL CORPORATION | ||||
(Registrant) | ||||
Date: October 24, 2019 |
/s/ Christine L. Vaughan | |||
Christine L. Vaughan | ||||
Chief Financial Officer | ||||
Date: October 24, 2019 |
/s/ Laurence M. Brock | |||
Laurence M. Brock | ||||
Chief Accounting Officer |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Net Income |
$ |
2.3 |
$ | 2.8 |
$ |
32.8 |
$ | 22.0 |
||||||||
Weighted Average Number of Common Shares Outstanding – Basic (000’s) |
14,898 |
14,829 |
14,889 |
14,818 |
||||||||||||
Dilutive Effect of Stock Options and Restricted Stock (000’s) |
8 |
5 |
6 |
5 |
||||||||||||
Weighted Average Number of Common Shares Outstanding – Diluted (000’s) |
14,906 |
14,834 |
14,895 |
14,823 |
||||||||||||
Earnings Per Share – Basic and Diluted |
$ |
0.15 |
$ | 0.19 |
$ |
2.20 |
$ | 1.49 |
EXHIBIT 11
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
COMPUTATION OF EARNINGS PER WEIGHTED AVERAGE COMMON SHARE OUTSTANDING
(Millions except common shares and per share data)
(UNAUDITED)
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net Income |
$ | 2.3 | $ | 2.8 | $ | 32.8 | $ | 22.0 | ||||||||
Weighted Average Number of Common Shares Outstanding Basic (000s) |
14,898 | 14,829 | 14,889 | 14,818 | ||||||||||||
Dilutive Effect of Stock Options and Restricted Stock (000s) |
8 | 5 | 6 | 5 | ||||||||||||
Weighted Average Number of Common Shares Outstanding Diluted (000s) |
14,906 | 14,834 | 14,895 | 14,823 | ||||||||||||
Earnings Per Share Basic and Diluted |
$ | 0.15 | $ | 0.19 | $ | 2.20 | $ | 1.49 |
Exhibit 31.1
CERTIFICATION UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Thomas P. Meissner, Jr., certify that:
1) | I have reviewed this quarterly report on Form 10-Q of Unitil Corporation; |
2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4) | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any changes in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the registrants internal controls over financial reporting; and |
5) | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: October 24, 2019 |
/s/ Thomas P. Meissner, Jr. |
Thomas P. Meissner, Jr. |
Chief Executive Officer and President |
Exhibit 31.2
CERTIFICATION UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Christine L. Vaughan, certify that:
1) | I have reviewed this quarterly report on Form 10-Q of Unitil Corporation; |
2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4) | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any changes in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the registrants internal controls over financial reporting; and |
5) | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: October 24, 2019 |
/s/ Christine L. Vaughan |
Christine L. Vaughan |
Chief Financial Officer |
Exhibit 31.3
CERTIFICATION UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Laurence M. Brock, certify that:
1) | I have reviewed this quarterly report on Form 10-Q of Unitil Corporation; |
2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4) | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any changes in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the registrants internal controls over financial reporting; and |
5) | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: October 24, 2019 |
/s/ Laurence M. Brock |
Laurence M. Brock |
Chief Accounting Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Unitil Corporation (the Company) on Form 10-Q for the period ending September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the Report), each of the undersigned Thomas P. Meissner, Jr., Chief Executive Officer and President, Christine L. Vaughan, Chief Financial Officer and Laurence M. Brock, Chief Accounting Officer, certifies, to the best knowledge and belief of the signatory, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Signature |
Capacity |
Date | ||
/s/ Thomas P. Meissner, Jr. | ||||
Thomas P. Meissner, Jr. | Chief Executive Officer and President | October 24, 2019 | ||
/s/ Christine L. Vaughan | ||||
Christine L. Vaughan | Chief Financial Officer | October 24, 2019 | ||
/s/ Laurence M. Brock | ||||
Laurence M. Brock | Chief Accounting Officer | October 24, 2019 |
Exhibit 99.1
Page 1 of 6
FOR RELEASE
UNITIL REPORTS THIRD QUARTER EARNINGS
HAMPTON, N.H., OCTOBER 24, 2019 Unitil Corporation (NYSE: UTL) (www.unitil.com) today announced Net Income of $2.3 million, or $0.15 in Earnings Per Share (EPS), for the third quarter of 2019, a decrease of $0.5 million, or $0.04 in EPS, compared to the third quarter of 2018. For the nine months ended September 30, 2019, the Company reported Net Income of $32.8 million, or $2.20 in EPS, an increase of $10.8 million, or $0.71 in EPS, compared to the same nine month period in 2018. In the first quarter of 2019, the Company recognized a one-time net gain of $9.8 million, or $0.66 in EPS, on the Companys divestiture of its non-regulated business subsidiary, Usource. In addition, the Companys earnings in the first nine months 2019 were driven by higher natural gas and electric sales margins as well as customer growth. Earnings for the Companys utility operations were Net Income of $23.0 million, or $1.54 in EPS, for the first nine months of 2019, an increase of $1.0 million in Net Income, or $0.05 in EPS, compared to the first nine months of 2018.
Our third quarter results reflect milder summer weather in 2019 but we continue to see solid customer growth, said Thomas P. Meissner, Jr., Unitils Chairman and Chief Executive Officer. We are positioned well to continue this growth for the foreseeable future.
Natural gas sales margins were $18.7 million and $85.5 million in the three and nine months ended September 30, 2019, respectively, increases of $1.1 million and $5.1 million, respectively, compared to the same periods in 2018. Gas sales margins in the third quarter of 2019 were positively affected by higher natural gas distribution rates of $0.8 million and by $0.3 million from higher therm sales, reflecting customer growth and increased average consumption by Commercial and Industrial (C&I) and Residential customers.
Gas sales margins in the first nine months of 2019 were positively affected by higher natural gas distribution rates of $4.6 million and by $1.7 million from higher therm sales, reflecting customer growth and increased average consumption by C&I and Residential customers. The positive effect of the higher rates and customer growth was partially offset by the absence in the current period of a $1.2 million non-recurring adjustment recognized in the second quarter of 2018 to increase gas revenue in connection with a then ongoing base rate case for the Companys New Hampshire natural gas utility.
6 Liberty Lane West
Hampton, NH 03842
T 603.772.0775
www.unitil.com
Page 2 of 6
Natural gas therm sales increased 4.2% and 2.5% in the three and nine month periods ended September 30, 2019, respectively, compared to the same periods in 2018. The increase in gas therm sales in the Companys service areas was driven by customer growth and increased average consumption by C&I and Residential customers. The Company estimates that weather-normalized gas therm sales, excluding decoupled sales, were up 5.5% in the first nine months of 2019 compared to the same period in 2018. As of September 30, 2019, the number of total natural gas customers served has increased by 1,468 over the last year.
Electric sales margins were $25.1 million and $70.6 million in the three and nine months ended September 30, 2019, respectively, a decrease of $0.8 million and an increase of $0.1 million, respectively, compared to the same periods in 2018. The decrease in electric sales margins in the third quarter were due to lower kWh sales, reflecting milder summer weather in 2019 and overall lower average usage, including reduced usage by some industrial customers for production purposes, partially offset by positive customer growth. Electric sales margins in the first nine months of 2019 were positively affected by higher electric distribution rates of $1.4 million, partially offset by a decrease of $1.3 million from lower kWh sales, for the reasons noted above.
Total electric kilowatt-hour (kWh) sales decreased 5.3% and 5.2%, respectively in the three and nine month periods ended September 30, 2019 compared to the same periods in 2018. For the third quarter, the decrease reflects milder summer weather in 2019 compared to 2018. Based on weather data collected in the Companys electric service areas, there were 19% fewer Cooling Degree Days in the third quarter of 2019 compared to the same period in 2018. The decreases in the three and nine month periods also reflect overall lower average usage due to both energy efficiency purposes and aforementioned reduced usage by some industrial customers, but were partially offset by overall customer growth. As of September 30, 2019, the number of total electric customers served has increased by 554 over the last year.
Operation and Maintenance (O&M) expenses decreased $0.9 million and $1.6 million in three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018. Excluding a non-recurring adjustment to increase O&M expenses by $1.2 million in the second quarter of 2018 in connection with a then ongoing base rate case for the Companys New Hampshire natural gas utility; O&M expenses decreased $0.4 million in the nine months ended
6 Liberty Lane West
Hampton, NH 03842
T 603.772.0775
www.unitil.com
Page 3 of 6
September 30, 2019 compared to the same period in 2018. The decrease in the three month period reflects lower labor and other costs of $0.8 million, resulting from the divestiture of the Companys non-regulated business subsidiary, Usource. In addition, in the three month period, the decrease in O&M expenses reflects lower professional fees of $0.4 million, partially offset by higher compensation and benefit costs of $0.3 million. The decrease in the nine month period reflects lower labor and other costs of $1.7 million, resulting from the divestiture of the Companys non-regulated business subsidiary, Usource. O&M expenses in the nine month period also reflect higher compensation and benefit costs of $0.9 million, higher utility operating costs of $0.3 million and higher professional fees of $0.1 million.
Depreciation and Amortization expense increased $0.4 million and $1.6 million in the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018. These increases reflect increased depreciation on higher levels of utility plant in service, partially offset by lower amortization.
Taxes Other Than Income Taxes in the three months ended September 30, 2019 was essentially unchanged compared to the same period in 2018, reflecting higher local property tax rates on higher levels of utility plant in service, offset by property tax abatements. Taxes Other Than Income Taxes increased $0.5 million in the nine months ended September 30, 2019 compared to the same period in 2018. The increase in the nine month period reflects higher local property tax rates on higher levels of utility plant in service, partially offset by property tax abatements.
Interest Expense, Net decreased $0.2 million in the three months ended September 30, 2019, compared to the same period in 2018, reflecting lower interest on short-term borrowings and higher interest income. For the nine months ended September 30, 2019, Interest Expense, Net was essentially unchanged compared to the same period in 2018, reflecting lower interest on long-term debt and higher interest income, offset by interest on higher levels of short-term borrowings.
Other Expense (Income), Net decreased by $0.1 million for the three months ended September 30, 2019 compared to the same period in 2018. Other Expense (Income), Net changed from an expense of $4.1 million in the first nine months of 2018 to income of $9.8 million in the first nine months of 2019, a net change of $13.9 million. This change primarily reflects a pre-tax gain of $13.4 million on the Companys divestiture of Usource, discussed above, and lower retirement benefit costs in the current period. The Usource divestiture generated a capital gain to the Company and a $3.6 million provision is included in the Companys income tax expense for the nine months ended September 30, 2019.
6 Liberty Lane West
Hampton, NH 03842
T 603.772.0775
www.unitil.com
Page 4 of 6
Federal and State Income Taxes increased by $0.5 million and $5.2 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018. The increase in the nine month period reflects income taxes associated with the Companys divestiture of its non-regulated business subsidiary, Usource, discussed above.
At its January 2019, April 2019, July 2019 and October 2019 meetings, the Unitil Corporation Board of Directors declared quarterly dividends on the Companys common stock of $0.37 per share. These quarterly dividends result in a current effective annualized dividend rate of $1.48 per share, representing an unbroken record of quarterly dividend payments since trading began in Unitils common stock.
The Companys earnings are seasonal and are typically higher in the first and fourth quarters when customers use natural gas for heating purposes.
The Company will hold a quarterly conference call to discuss third quarter 2019 results on Thursday, October 24, 2019, at 2:00 p.m. Eastern Time. This call is being webcast and can be accessed in the Investor Relations section of Unitils website, www.unitil.com.
About Unitil Corporation
Unitil Corporation provides energy for life by safely and reliably delivering natural gas and electricity in New England. We are committed to the communities we serve and to developing people, business practices, and technologies that lead to the delivery of dependable, more efficient energy. Unitil Corporation is a public utility holding company with operations in Maine, New Hampshire and Massachusetts. Together, Unitils operating utilities serve approximately 105,600 electric customers and 82,700 natural gas customers. For more information about our people, technologies, and community involvement please visit www.unitil.com.
Forward-Looking Statements
This press release may contain forward-looking statements. All statements, other than statements of historical fact, included in this press release are forward-looking statements. Forward-looking statements include declarations regarding Unitils beliefs and current expectations. These forward-looking statements are subject to the inherent risks and uncertainties in predicting future results and conditions that could cause the actual results to differ materially from those projected in these forward-looking statements. Some, but not all, of the risks and uncertainties include the following: Unitils regulatory environment (including regulations relating to climate change, greenhouse gas emissions and other environmental matters); fluctuations in the supply of, the demand for, and the prices of, gas and electric energy
6 Liberty Lane West
Hampton, NH 03842
T 603.772.0775
www.unitil.com
Page 5 of 6
commodities and transmission and transportation capacity and Unitils ability to recover energy supply costs in its rates; customers preferred energy sources; severe storms and Unitils ability to recover storm costs in its rates; general economic conditions; variations in weather; long-term global climate change; Unitils ability to retain its existing customers and attract new customers; increased competition; and other risks detailed in Unitils filings with the Securities and Exchange Commission. These forward looking statements speak only as of the date they are made. Unitil undertakes no obligation, and does not intend, to update these forward-looking statements.
For more information please contact:
Todd Diggins Investor Relations | Alec OMeara Media Relations | |
Phone: 603-773-6504 | Phone: 603-773-6404 | |
Email: diggins@unitil.com | Email: omeara@unitil.com |
6 Liberty Lane West
Hampton, NH 03842
T 603.772.0775
www.unitil.com
Page 6 of 6
Selected financial data for 2019 and 2018 is presented in the following table:
Unitil Corporation Condensed Consolidated Financial Data
(Millions, except Per Share data) (Unaudited)
Three Months Ended Sept. 30, | Nine Months Ended Sept. 30, | |||||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | |||||||||||||||||||
Gas Therm Sales |
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Residential |
2.6 | 2.5 | 4.0 | % | 36.2 | 35.9 | 0.8 | % | ||||||||||||||||
Commercial/Industrial |
24.9 | 23.9 | 4.2 | % | 136.2 | 132.3 | 2.9 | % | ||||||||||||||||
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Total Gas Therm Sales |
27.5 | 26.4 | 4.2 | % | 172.4 | 168.2 | 2.5 | % | ||||||||||||||||
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Electric kWh Sales |
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Residential |
180.9 | 195.0 | (7.2 | %) | 498.3 | 527.8 | (5.6 | %) | ||||||||||||||||
Commercial/Industrial |
257.7 | 268.3 | (4.0 | %) | 718.5 | 755.9 | (4.9 | %) | ||||||||||||||||
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Total Electric kWh Sales |
438.6 | 463.3 | (5.3 | %) | 1,216.8 | 1,283.7 | (5.2 | %) | ||||||||||||||||
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Gas Revenues |
$ | 24.9 | $ | 25.7 | $ | (0.8 | ) | $ | 143.9 | $ | 147.4 | $ | (3.5 | ) | ||||||||||
Cost of Gas Sales |
6.2 | 8.1 | (1.9 | ) | 58.4 | 67.0 | (8.6 | ) | ||||||||||||||||
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Gas Sales Margin |
18.7 | 17.6 | 1.1 | 85.5 | 80.4 | 5.1 | ||||||||||||||||||
Electric Revenues |
60.4 | 61.4 | (1.0 | ) | 177.0 | 167.6 | 9.4 | |||||||||||||||||
Cost of Electric Sales |
35.3 | 35.5 | (0.2 | ) | 106.4 | 97.1 | 9.3 | |||||||||||||||||
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Electric Sales Margin |
25.1 | 25.9 | (0.8 | ) | 70.6 | 70.5 | 0.1 | |||||||||||||||||
Other Revenues |
| 1.1 | (1.1 | ) | 0.9 | 3.5 | (2.6 | ) | ||||||||||||||||
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Total Sales Margin |
43.8 | 44.6 | (0.8 | ) | 157.0 | 154.4 | 2.6 | |||||||||||||||||
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Operation & Maintenance Expenses |
15.5 | 16.4 | (0.9 | ) | 49.9 | 51.5 | (1.6 | ) | ||||||||||||||||
Depreciation & Amortization |
12.8 | 12.4 | 0.4 | 39.0 | 37.4 | 1.6 | ||||||||||||||||||
Property & Other Taxes |
5.5 | 5.5 | | 17.0 | 16.5 | 0.5 | ||||||||||||||||||
Other Expense (Income), Net |
1.0 | 1.1 | (0.1 | ) | (9.8 | ) | 4.1 | (13.9 | ) | |||||||||||||||
Interest Expense, Net |
5.8 | 6.0 | (0.2 | ) | 17.9 | 17.9 | | |||||||||||||||||
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Income Before Income Taxes |
3.2 | 3.2 | | 43.0 | 27.0 | 16.0 | ||||||||||||||||||
Income Tax Expense |
0.9 | 0.4 | 0.5 | 10.2 | 5.0 | 5.2 | ||||||||||||||||||
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Net Income |
$ | 2.3 | $ | 2.8 | $ | (0.5 | ) | $ | 32.8 | $ | 22.0 | $ | 10.8 | |||||||||||
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Earnings Per Share |
$ | 0.15 | $ | 0.19 | $ | (0.04 | ) | $ | 2.20 | $ | 1.49 | $ | 0.71 |
6 Liberty Lane West
Hampton, NH 03842
T 603.772.0775
www.unitil.com
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