UNITIL CORP
For the period ended Sep 30, 2024. Filed Nov 4, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 4, 2024
UTL$56.38-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0000950170-24-091194
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsConsolidated Statements of Earnings—Three and Six Months Ended June 30, 2024 and 2023Consolidated Balance Sheets, June 30, 2024, June 30, 2023 and December 31, 2023Consolidated Statements of Cash Flows—Six Months Ended June 30, 2024 and 2023Consolidated Statements of Changes in Common Stock Equity – Three and Six Months Ended June 30, 2024 andNotes to Consolidated Financial StatementsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-04.
0000950170-24-120859
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsConsolidated Statements of Earnings—Three and Nine Months Ended September 30, 2024 and 2023Consolidated Balance Sheets, September 30, 2024, September 30, 2023 and December 31, 2023Consolidated Statements of Cash Flows—Nine Months Ended September 30, 2024 and 2023Consolidated Statements of Changes in Common Stock Equity – Three and Nine Months Ended September 30, 2024 and 2023Notes to Consolidated Financial StatementsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 258 previous paragraphs and 264 current paragraphs.
170 unchanged; 80 reworded; 11 added; 5 removed; 3 previous and 3 current paragraphs rearranged.
Tables are not compared: 43 previous and 44 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
The MD&A includes financial information prepared in accordance with GAAP, as well as certain non-GAAP financial measures. The Company's management believes that the non-GAAP presentations of earnings and Earnings Per Share (EPS) and Electric and Gas Adjusted Gross Margins are a more meaningful representation of the Company's financial performance and provides additional and useful information to readers of this report in analyzing the historical and future performance of the business. The non-GAAP financial measures should be viewed as a supplement to, and not a substitute for, financial measures presented in accordance with GAAP. Non-GAAP measures as presented herein may not be comparable to similarly titled measures used by other companies.
Current report
The Company's earnings discussion includes Adjusted Net Income, a non-GAAP financial measure referencing our 2024 GAAP Net Income less certain transaction costs related to the Company's acquisition of Bangor Natural Gas Company (Bangor), which it disclosed previously in 2024. The Company's management believes that the transaction costs related to the acquisition of Bangor, which are included in Operation and Maintenance expense on the Consolidated Statements of Earnings, are not indicative of the
Current report
Company's ongoing costs and not directly related to the ongoing operations of the business and therefore not an indicator of baseline operating performance.
Current report
Electric Adjusted Gross Margin (a non-GAAP financial measure) was $29.7 million and $81.7 million in the three and nine months ended September 30, 2024, respectively, increases of $0.5 million and $1.6 million, respectively, compared to the same periods in 2023. These increases reflect higher rates and customer growth.
Current report
Gas Adjusted Gross Margin (a non-GAAP financial measure) was $23.3 million and $115.6 million in the three and nine months ended September 30, 2024, respectively, increases of $1.1 million and $9.2 million, respectively, compared to the same periods in 2023. These increases reflect higher rates and customer growth.
Current report
Electric Adjusted Gross Margin (a non-GAAP financial measure) was $29.7 million and $81.7 million in the three and nine months ended September 30, 2024, respectively, increases of $0.5 million and $1.6 million, respectively, compared to the same periods in 2023. These increases reflect higher rates and customer growth.
Current report
Gas Adjusted Gross Margin (a non-GAAP financial measure) was $23.3 million and $115.6 million in the three and nine months ended September 30, 2024, respectively, increases of $1.1 million and $9.2 million, respectively, compared to the same periods in 2023. These increases reflect higher rates and customer growth.
Current report
On August 21, 2024, Unitil Corporation issued $20.0 million of Notes due 2034 at 5.99%. Fitchburg issued $12.5 million of Notes due 2034 at 5.54% and $12.5 million of Notes due 2044 at 5.99%. Unitil Energy issued $40.0 million of Bonds due 2054 at 5.69%. Northern Utilities issued $25.0 million of Notes due 2034 at 5.54% and $15.0 million of Notes due 2039 at 5.74%. Granite State issued $10.0 million of Notes due 2034 at 5.74%.
Current report
The Company used the net proceeds from these offerings to refinance existing debt and for general corporate purposes. Approximately $1.0 million of costs associated with this issuance were recorded as a reduction of Long-Term Debt for presentation purposes on the Consolidated Balance Sheet in the third quarter of 2024.
Current report
On August 21, 2024, Unitil Corporation issued $20.0 million of Notes due 2034 at 5.99%. Fitchburg issued $12.5 million of Notes due 2034 at 5.54% and $12.5 million of Notes due 2044 at 5.99%. Unitil Energy issued $40.0 million of Bonds due 2054 at 5.69%. Northern Utilities issued $25.0 million of Notes due 2034 at 5.54% and $15.0 million of Notes due 2039 at 5.74%. Granite State issued $10.0 million of Notes due 2034 at 5.74%.
Current report
The Company used the net proceeds from these offerings to refinance existing debt and for general corporate purposes. Approximately $1.0 million of costs associated with this issuance were recorded as a reduction of Long-Term Debt for presentation purposes on the Consolidated Balance Sheet in the third quarter of 2024.
Removed paragraphs (5)
Previous report
Electric Adjusted Gross Margin (a non-GAAP financial measure) was $24.9 million and $52.0 million in the three and six months ended June 30, 2024, respectively, increases of $0.7 million and $1.1 million, respectively, compared to the same periods in 2023. These increases reflect higher rates and customer growth.
Previous report
Gas Adjusted Gross Margin (a non-GAAP financial measure) was $31.3 million and $92.3 million in the three and six months ended June 30, 2024, respectively, increases of $2.0 million and $8.1 million, respectively, compared to the same periods in 2023. The increase in the three month period reflects higher rates and customer growth of $1.6 million, and the favorable effect on gas sales of $0.4 million from colder early spring weather in 2024, compared to the same period in 2023. The increase in the six month period reflects higher rates and customer growth of $8.1 million.
Previous report
Electric Adjusted Gross Margin (a non-GAAP financial measure) was $24.9 million and $52.0 million in the three and six months ended June 30, 2024, respectively, increases of $0.7 million and $1.1 million, respectively, compared to the same periods in 2023. These increases reflect higher rates and customer growth.
Previous report
Gas Adjusted Gross Margin (a non-GAAP financial measure) was $31.3 million and $92.3 million in the three and six months ended June 30, 2024, respectively, increases of $2.0 million and $8.1 million, respectively, compared to the same periods in 2023. The increase in the three month period reflects higher rates and customer growth of $1.6 million, and the favorable effect on gas sales of $0.4 million from colder early spring weather in 2024, compared to the same period in 2023. The increase in the six month period reflects higher rates and customer growth of $8.1 million.
Previous report
(1) As of July 24, 2024, these five employees are no longer covered by a collective bargaining agreement.
Reworded paragraphs (80)
Previous wording
Unitil Resources is the Company’s wholly-owned, non-regulated subsidiary. The Company’s other subsidiaries include Unitil Service Corp., which provides, at cost, a variety of administrative and professional services to Unitil’s affiliated companies; Unitil Realty Corp., which owns and manages Unitil’s corporate office building and property located in Hampton, New Hampshire; and Unitil Power Corp., which formerly functioned as the full requirements wholesale power supply provider for Unitil Energy. Unitil’s consolidated net income includes the earnings of the holding company and these subsidiaries.
Current wording
Unitil Resources is the Company’s wholly-owned, non-regulated subsidiary. The Company’s other subsidiaries include Unitil Service Corp., which provides, at cost, a variety of administrative and professional services to Unitil’s affiliated companies; Unitil Realty Corp., which owns and manages Unitil’s corporate office building and property located in Hampton, New Hampshire and land for future use located in Kensington, New Hampshire; and Unitil Power Corp., which formerly functioned as the full requirements wholesale power supply provider for Unitil Energy. Unitil’s consolidated net income includes the earnings of the holding company and these subsidiaries.
Previous wording
The Company analyzes operating results using Electric and Gas Adjusted Gross Margins, which are non-GAAP financial measures. Electric Adjusted Gross Margin is calculated as Total Electric Operating Revenue less Cost of Electric Sales. Gas Adjusted Gross Margin is calculated as Total Gas Operating Revenues less Cost of Gas Sales. The Company’s management believes Electric and Gas Adjusted Gross Margins provide useful information to investors regarding profitability. Also, the Company’s management believes Electric and Gas Adjusted Gross Margins are important financial measures to analyze revenue from the Company’s ongoing operations because the approved cost of electric and gas sales are tracked, reconciled and passed through directly to customers in electric and gas tariff rates, resulting in an equal and offsetting amount reflected in Total Electric and Gas Operating Revenue.
Current wording
The Company analyzes operating results using Electric and Gas Adjusted Gross Margins, which are non-GAAP financial measures. Electric Adjusted Gross Margin is calculated as Total Electric Operating Revenue less Cost of Electric Sales. Gas Adjusted Gross Margin is calculated as Total Gas Operating Revenues less Cost of Gas Sales. The Company’s management believes Electric and Gas Adjusted Gross Margins are important financial measures to analyze revenue from the Company’s ongoing operations because the approved cost of electric and gas sales are tracked, reconciled and passed through directly to customers in electric and gas tariff rates, resulting in an equal and offsetting amount reflected in Total Electric and Gas Operating Revenue.
Previous wording
Electric GAAP Gross Margin was $17.8 million in the three months ended June 30, 2024, essentially unchanged compared to the same period in 2023. Electric GAAP Gross Margin was $37.9 million in the six months ended June 30, 2024, a decrease of $0.1 million compared to the same period in 2023. The three month period reflects higher rates and customer growth of $0.7 million, offset by higher depreciation and amortization expense of $0.7 million. The decrease in the six month period was driven by higher depreciation and amortization expense of $1.2 million, partially offset by higher rates and customer growth of $1.1 million.
Current wording
Electric GAAP Gross Margin was $22.3 million in the three months ended September 30, 2024, a decrease of $0.3 million compared to the same period in 2023. Electric GAAP Gross Margin was $60.2 million in the nine months ended September 30, 2024, a decrease of $0.4 million compared to the same period in 2023. The three month period reflects higher depreciation and amortization expense of $0.8 million, partially offset by higher rates and customer growth of $0.5 million. The decrease in the nine month period was driven by higher depreciation and amortization expense of $2.0 million, partially offset by higher rates and customer growth of $1.6 million.
Previous wording
Gas GAAP Gross Margin was $20.5 million in the three months ended June 30, 2024, an increase of $1.1 million compared to the same period in 2023. Gas GAAP Gross Margin was $70.6 million in the six months ended June 30, 2024, an increase of $6.3 million compared to the same period in 2023. The increase in the three month period was driven by higher rates and customer growth of $1.6 million, and the favorable effect on gas sales of $0.4 million from colder early spring weather in 2024, compared to the same period in 2023, partially offset by higher depreciation and amortization of $0.9 million. The increase in the six month period was driven by higher rates and customer growth of $8.1 million, partially offset by higher depreciation and amortization of $1.8 million.
Current wording
Gas GAAP Gross Margin was $11.8 million in the three months ended September 30, 2024, a decrease of $0.5 million compared to the same period in 2023. Gas GAAP Gross Margin was $82.4 million in the nine months ended September 30, 2024, an increase of $5.8 million compared to the same period in 2023. The decrease in the three month period was driven by higher depreciation and amortization of $1.6 million, partially offset by higher rates and customer growth of $1.1 million. The increase in the nine month period was driven by higher rates and customer growth of $9.2 million, partially offset by higher depreciation and amortization of $3.4 million.
Previous wording
The Company’s Net Income was $4.3 million, or $0.27 in Earnings Per Share (EPS) for the second quarter of 2024, an increase of $0.1 million in Net Income, or $0.02 in EPS, compared to the second quarter of 2023. The Company’s earnings in the second quarter of 2024 reflect higher rates and customer growth.
Current wording
The Company’s GAAP Net Income (Net Income) was $11 thousand, or $0.00 in EPS for the third quarter of 2024, a decrease of $1.4 million in Net Income, or $0.09 in EPS, compared to the third quarter of 2023. The Company’s Net Income was $31.5 million, or $1.96 in Earnings Per Share (EPS), for the first nine months of 2024, an increase of $1.8 million in Net Income, or $0.11 in EPS, compared to the first nine months of 2023. The Company's Adjusted Net Income (a non-GAAP financial measure) was $0.4 million, or $0.02 in EPS for the third quarter of 2024, a decrease of $1.0 million, or $0.07 in EPS, compared to the third quarter of 2023. The Company's Adjusted Net Income (a non-GAAP financial measure) was $32.1 million, or $2.00 in EPS, for the first nine months of 2024, an increase of $2.4 million, or $0.15 in EPS, compared to the first nine months of 2023. The Company’s earnings in the first nine months of 2024 reflect higher rates and customer growth.
Previous wording
Operation and Maintenance (O&M) expenses increased $0.3 million and $0.4 million, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. The increase in the three month period reflects higher labor costs of $0.6 million, partially offset by lower utility operating costs of $0.3 million. The increase in the six month period primarily reflects higher labor costs.
Current wording
Operation and Maintenance (O&M) expenses increased $0.7 million and $1.1 million in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. The increase in the three month period reflects higher labor costs of $0.4 million and higher utility operating costs of $0.3 million. The increase in the nine month period reflects higher labor costs of $0.9 million and higher utility operating costs of $0.2 million.
Previous wording
Depreciation and Amortization expense increased $1.5 million and $2.8 million in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, reflecting additional depreciation associated with higher levels of utility plant in service and higher amortization of storm costs and other deferred costs.
Current wording
Depreciation and Amortization expense increased $2.3 million and $5.1 million in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023, reflecting higher depreciation rates resulting from recent base rate cases, additional depreciation associated with higher levels of utility plant in service, and higher amortization of storm costs and other deferred costs.
Previous wording
Taxes Other Than Income Taxes increased $0.3 million and $0.7 million in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, reflecting higher local property taxes on higher utility plant in service and higher payroll taxes.
Current wording
Taxes Other Than Income Taxes increased $0.8 million and $1.5 million in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023, reflecting higher local property taxes on higher utility plant in service and higher payroll taxes.
Previous wording
Interest Expense, Net increased $0.4 million and $0.6 million in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, primarily reflecting higher interest expense on short-term borrowings and higher levels of long-term debt, partially offset by higher interest income on regulatory assets and other interest income.
Current wording
Interest Expense, Net increased $0.4 million and $1.0 million in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023, primarily reflecting higher interest expense on short-term borrowings and higher levels of long-term debt, partially offset by higher interest income on regulatory assets and other interest income.
Previous wording
Other Expense (Income), Net -Other Expense (Income), Net increased $0.2 million and $0.5 million, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, reflecting higher retirement benefit costs.
Current wording
Other (Income) Expense, Net decreased $0.3 million in the three months ended September 30, 2024, compared to the same period in 2023, reflecting lower retirement benefit costs. Other (Income) Expense, Net increased $0.2 million in the nine months ended September 30, 2024, respectively, compared to the same period in 2023, reflecting higher retirement benefit costs.
Previous wording
Federal and State Income Taxes for the three and six months ended June 30, 2024 decreased $0.1 million and increased $1.0 million, respectively, compared with the same periods in 2023. The increase in the six month period reflects higher pre-tax earnings in 2024.
Current wording
Federal and State Income Taxes for the three and nine months ended September 30, 2024 decreased $0.9 million and increased $0.1 million, respectively, compared with the same periods in 2023. The decrease in the three month period reflects lower pre-tax earnings in the third quarter of 2024. The increase in the nine month period reflects higher pre-tax earnings in the first nine months of 2024.
Previous wording
Electric Operating Revenues and Electric Adjusted Gross Margin - The following table details Total Electric Operating Revenues and Electric Adjusted Gross Margin for the three and six months ended June 30, 2024 and 2023:
Current wording
Electric Operating Revenues and Electric Adjusted Gross Margin - The following table details Total Electric Operating Revenues and Electric Adjusted Gross Margin for the three and nine months ended September 30, 2024 and 2023:
Previous wording
Total Electric Operating Revenue decreased $8.1 million, or 12.6%, and $42.7 million, or 24.7%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, reflecting lower costs of electric sales, which are tracked and reconciled to costs that are passed through directly to customers, partially offset by higher electric distribution rates.
Current wording
Total Electric Operating Revenue decreased $9.6 million, or 13.3%, and $52.3 million, or 21.4%, in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023, reflecting lower costs of electric sales, which are tracked and reconciled to costs that are passed through directly to customers, partially offset by higher electric distribution rates and higher sales of electricity.
Previous wording
Kilowatt-hour Sales - Unitil’s total electric kWh sales increased 4.3% and 2.0% in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. Sales to Residential and Commercial and Industrial (C&I) customers increased 5.5% and 3.5%, respectively, in the three months ended June 30, 2024, compared to the same period in 2023, reflecting warmer weather in the second quarter of 2024 compared to the same period in 2023, and customer growth. Sales to Residential and C&I customers increased 1.9% and 2.0%, respectively, in the six months ended June 30, 2024, compared to the same period in 2023, reflecting warmer weather for cooling purposes in 2024 compared to 2023, and customer growth. Based on weather data collected in the Company's electric service areas, on average there were 76% more Cooling Degree Days in the first six months of 2024 compared to the same period in 2023. As of June 30, 2024, the number of electric customers increased by approximately 750 over the previous year. Sales margins derived from decoupled unit sales are not sensitive to changes in electric kWh sales. Substantially all of the Company’s electric kWh sales volumes are decoupled.
Current wording
Kilowatt-hour Sales - Unitil’s total electric kWh sales increased 2.6% and 2.2% in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. Sales to Residential and Commercial and Industrial (C&I) customers increased 4.1% and 1.5%, respectively, in the three months ended September 30, 2024, compared to the same period in 2023, reflecting warmer weather for cooling purposes in the second quarter of 2024 compared to the same period in 2023, and customer growth. Sales to Residential and C&I customers increased 2.7% and 1.9%, respectively, in the nine months ended September 30, 2024, compared to the same period in 2023, reflecting warmer weather for cooling purposes in 2024 compared to 2023, and customer growth. Based on weather data collected in the Company's electric service areas, on average there were 12.2% more Cooling Degree Days in the first nine months of 2024 compared to the same period in 2023. As of September 30, 2024, the number of electric customers increased by approximately 1,100 over the previous year. Sales margins derived from decoupled unit sales are not sensitive to changes in electric kWh sales. Substantially all of the Company’s electric kWh sales volumes are decoupled.
Previous wording
The following table details total kWh sales for the three and six months ended June 30, 2024 and 2023 by major customer class:
Current wording
The following table details total kWh sales for the three and nine months ended September 30, 2024 and 2023 by major customer class:
Previous wording
Gas Operating Revenues and Adjusted Gross Margin - The following table details Total Gas Operating Revenues and Gas Adjusted Gross Margin for the three and six months ended June 30, 2024 and 2023:
Current wording
Gas Operating Revenues and Adjusted Gross Margin - The following table details Total Gas Operating Revenues and Gas Adjusted Gross Margin for the three and nine months ended September 30, 2024 and 2023:
Previous wording
Total Gas Operating Revenue increased $0.4 million, or 1.0%, and decreased $6.5 million, or 4.3%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. The increase in the three month period reflects higher gas distribution rates and higher gas sales, partially offset by lower costs of gas sales, which are tracked and reconciled costs that are passed through directly to customers. The decrease in the six month period reflects lower costs of gas sales, which are tracked and reconciled costs that are passed through directly to customers, partially offset by higher gas distribution rates.
Current wording
Total Gas Operating Revenue decreased $1.4 million, or 4.4%, and $7.9 million, or 4.3%, in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. These decreases reflect lower costs of gas sales, which are tracked and reconciled costs that are passed through directly to customers, and lower gas sales, partially offset by higher gas distribution rates.
Previous wording
Therm Sales- Unitil’s total gas therm sales increased 2.0% and decreased 0.5% in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. In the second quarter of 2024, sales to Residential customers increased 4.9% and sales to C&I customers increased 1.3%, compared to the same period in 2023, reflecting customer growth and colder early spring weather in 2024, compared to the same period in 2023. In the first six months of 2024, sales to Residential and C&I customers decreased 1.0% and 0.4%, respectively, compared to the same period in 2023, reflecting warmer winter weather in 2024 compared to 2023 and lower average usage, partially offset by customer growth and colder early spring weather in 2024, compared to the same period in 2023. As of June 30, 2024, the number of gas customers increased by approximately 1,100 over the previous year. Sales margins derived from decoupled unit sales (currently representing approximately 42% of total annual therm sales volume) are not sensitive to changes in gas therm sales, although those sales margins are sensitive to changes in the number of customers served.
Current wording
Therm Sales- Unitil’s total gas therm sales decreased 0.4% and 0.5% in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. In the third quarter of 2024, sales to Residential customers were essentially unchanged and sales to C&I customers decreased 0.4%, compared to the same period in 2023, reflecting lower average usage, partially offset by customer growth. In the first nine months of 2024, sales to Residential and C&I customers decreased 0.9% and 0.4%, respectively, compared to the same period in 2023, reflecting warmer winter weather in 2024 compared to 2023 and lower average usage, partially offset by customer growth and colder early spring weather in 2024, compared to the same period in 2023. As of September 30, 2024, the number of gas customers increased by approximately 720 over the previous year. Sales margins derived from decoupled unit sales (currently representing approximately 42% of total annual therm sales volume) are not sensitive to changes in gas therm sales, although those sales margins are sensitive to changes in the number of customers served.
Previous wording
The following table details total firm therm sales for the three and six months ended June 30, 2024 and 2023 by major customer class:
Current wording
The following table details total firm therm sales for the three and nine months ended September 30, 2024 and 2023 by major customer class:
Previous wording
Cost of Electric Sales - Cost of Electric Sales includes the cost of electric supply and spending on energy efficiency programs. Cost of Electric Sales decreased $8.8 million, or 21.8%, and $43.8 million, or 36.0%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. These decreases reflect lower wholesale electricity prices and an increase in the amount of electricity purchased by customers directly from third-party suppliers, partially offset by higher sales of electricity. Because the Company reconciles and recovers the approved Cost of Electric Sales in its rates at cost on a pass-through basis, changes in approved expenses do not affect earnings.
Current wording
Cost of Electric Sales - Cost of Electric Sales includes the cost of electric supply and spending on energy efficiency programs. Cost of Electric Sales decreased $10.1 million, or 23.5%, and $53.9 million, or 32.7%, in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. These decreases reflect lower wholesale electricity prices and an increase in the amount of electricity purchased by customers directly from third-party suppliers, partially offset by higher sales of electricity. Because the Company reconciles and recovers the approved Cost of Electric Sales in its rates at cost on a pass-through basis, changes in approved expenses do not affect earnings.
Previous wording
Cost of Gas Sales - Cost of Gas Sales includes the cost to supply the Company’s total gas requirements and spending on energy efficiency programs. Cost of Gas Sales decreased $1.6 million, or 16.7%, and $14.6 million, or 21.9%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. These decreases primarily reflect lower wholesale gas commodity prices and an increase in the amount of gas purchased by customers directly from third-party suppliers. Because the Company reconciles and recovers the approved Cost of Gas Sales in its rates at cost on a pass-through basis, changes in approved expenses do not affect earnings.
Current wording
Cost of Gas Sales - Cost of Gas Sales includes the cost to supply the Company’s total gas requirements and spending on energy efficiency programs. Cost of Gas Sales decreased $2.5 million, or 26.0%, and $17.1 million, or 22.4%, in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. These decreases primarily reflect lower wholesale gas commodity prices, lower gas therm sales and an increase in the amount of gas purchased by customers directly from third-party suppliers. Because the Company reconciles and recovers the approved Cost of Gas Sales in its rates at cost on a pass-through basis, changes in approved expenses do not affect earnings.
Previous wording
Operation and Maintenance (O&M) -O&M expense includes electric and gas utility operating costs, and the operating cost of the Company’s corporate and other business activities. O&M expense increased $0.3 million, or 1.6%, and $0.4 million, or 1.1%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. The increase in the three month period reflects higher labor costs of $0.6 million, partially offset by lower utility operating costs of $0.3 million. The increase in the six month period primarily reflects higher labor costs.
Current wording
Operation and Maintenance (O&M) -O&M expense includes electric and gas utility operating costs, and the operating cost of the Company’s corporate and other business activities. O&M expense increased $0.7 million, or 3.6%, and $1.1 million, or 2.0%, in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. The increase in the three month period reflects higher labor costs of $0.4 million and higher utility operating costs of $0.3 million. The increase in the nine month period reflects higher labor costs of $0.9 million and higher utility operating costs of $0.2 million.
Previous wording
Depreciation and Amortization - Depreciation and Amortization expense increased $1.5 million, or 9.0%, and $2.8 million, or 8.4%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, reflecting additional depreciation associated with higher levels of utility plant in service and higher amortization of storm costs and other deferred costs.
Current wording
Depreciation and Amortization - Depreciation and Amortization expense increased $2.3 million, or 13.7%, and $5.1 million, or 10.2%, in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023, reflecting higher depreciation rates resulting from recent base rate cases, additional depreciation associated with higher levels of utility plant in service, and higher amortization of storm costs and other deferred costs.
Previous wording
Taxes Other Than Income Taxes - Taxes Other Than Income Taxes increased $0.3 million, or 4.4%, and $0.7 million, or 5.0%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, reflecting higher local property taxes on higher utility plant in service and higher payroll taxes.
Current wording
Taxes Other Than Income Taxes - Taxes Other Than Income Taxes increased $0.8 million, or 11.4%, and $1.5 million, or 7.1%, in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023, reflecting higher local property taxes on higher utility plant in service and higher payroll taxes.
Previous wording
Other Expense (Income), Net increased $0.2 million and $0.5 million, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, reflecting higher retirement benefit costs.
Current wording
Other (Income) Expense, Net -Other (Income) Expense, Net decreased $0.3 million in the three months ended September 30, 2024, compared to the same period in 2023, reflecting lower retirement benefit costs. Other (Income) Expense, Net increased $0.2 million in the nine months ended September 30, 2024, respectively, compared to the same period in 2023, reflecting higher retirement benefit costs.
Previous wording
Provision for Income Taxes - Federal and State Income Taxes for the three and six months ended June 30, 2024 decreased $0.1 million and increased $1.0 million, respectively, compared with the same periods in 2023. The increase in the six month period reflects higher pre-tax earnings in 2024.
Current wording
Provision for Income Taxes - Federal and State Income Taxes for the three and nine months ended September 30, 2024 decreased $0.9 million and increased $0.1 million, respectively, compared with the same periods in 2023. The decrease in the three month period reflects lower pre-tax earnings in the third quarter of 2024. The increase in the nine month period reflects higher pre-tax earnings in the first nine months of 2024.
Previous wording
Interest Expense, Net increased $0.4 million, or 5.7%, and $0.6 million, or 4.3%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, primarily reflecting higher interest expense on short-term borrowings and higher levels of long-term debt, partially offset by higher interest income on regulatory assets and other interest income.
Current wording
Interest Expense, Net increased $0.4 million, or 5.7%, and $1.0 million, or 4.7%, in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023, primarily reflecting higher interest expense on short-term borrowings and higher levels of long-term debt, partially offset by higher interest income on regulatory assets and other interest income.
Previous wording
The Company utilizes the Credit Facility for cash management purposes related to its short-term operating activities. Total gross borrowings were $133.2 million for the six months ended June 30, 2024. Total gross repayments were $137.4 million for the six months ended June 30, 2024. The following table details the borrowing limits, amounts outstanding and amounts available under the Credit Facility as of June 30, 2024, June 30, 2023 and December 31, 2023:
Current wording
The Company utilizes the Credit Facility for cash management purposes related to its short-term operating activities. Total gross borrowings were $229.9 million for the nine months ended September 30, 2024. Total gross repayments were $327.6 million for the nine months ended September 30, 2024. The following table details the borrowing limits, amounts outstanding and amounts available under the Credit Facility as of September 30, 2024, September 30, 2023 and December 31, 2023:
Previous wording
Northern Utilities enters into asset management agreements under which Northern Utilities releases certain gas pipeline and storage assets, sells to an asset manager and subsequently repurchases the gas over the course of the gas heating season at the same price at which it sold the gas to the asset manager. There was $5.5 million of natural gas storage inventory and corresponding obligations at June 30 2024 related to these asset management agreements. The amount of natural gas inventory released in June 2024, which was payable in July 2024, was $0.1 million and was recorded in Accounts Payable at June 30 2024.
Current wording
Northern Utilities enters into asset management agreements under which Northern Utilities releases certain gas pipeline and storage assets, sells to an asset manager and subsequently repurchases the gas over the course of the gas heating season at the same price at which it sold the gas to the asset manager. There was $8.8 million of natural gas storage inventory and corresponding obligations at September 30, 2024 related to these asset management agreements. The amount of natural gas inventory released in September 2024, which was payable in October 2024, was less than $0.1 million and was recorded in Accounts Payable at September 30, 2024.
Previous wording
As of June 30, 2024, the Company and its subsidiaries had 536 employees. The Company considers its relationship with employees to be good and has not experienced any major labor disruptions.
Current wording
As of September 30, 2024, the Company and its subsidiaries had 541 employees. The Company considers its relationship with employees to be good and has not experienced any major labor disruptions.
Previous wording
As of June 30, 2024, a total of 179 employees of certain of the Company’s subsidiaries were represented by labor unions. The following table details by subsidiary the employees covered by a collective bargaining agreement (CBA) as of June 30, 2024:
Current wording
As of September 30, 2024, a total of 173 employees of certain of the Company’s subsidiaries were represented by labor unions. The following table details by subsidiary the employees covered by a collective bargaining agreement (CBA) as of September 30, 2024:
Previous wording
Unitil meets its external financing needs by issuing short-term and long-term debt. The majority of debt outstanding represents long-term notes or bonds bearing fixed rates of interest. Changes in market interest rates do not affect interest expense resulting from these outstanding long-term debt securities. However, the Company periodically repays its short-term debt borrowings through the issuance of new long-term debt securities. Changes in market interest rates may affect the interest rate and corresponding interest expense on any new issuances of long-term debt securities. In addition, short-term debt borrowings bear a variable rate of interest. As a result, changes in short-term interest rates will increase or decrease interest expense in future periods. For example, if the average amount of short-term debt outstanding was $25 million for the period of one year, a change in interest rates of 1% would result in a change in annual interest expense of approximately $250,000. The average interest rates on the Company’s short-term borrowings and intercompany money pool transactions for the three months ended June 30, 2024 and June 30, 2023 were 6.7% and 6.3%, respectively. The average interest rates on the Company’s short-term borrowings and intercompany money pool transactions for the six months ended June 30, 2024 and June 30, 2023 were 6.7% and 6.1%, respectively. The average interest rate on the Company’s short-term borrowings for the twelve months ended December 31, 2023 was 6.4%.
Current wording
Unitil meets its external financing needs by issuing short-term and long-term debt. The majority of debt outstanding represents long-term notes or bonds bearing fixed rates of interest. Changes in market interest rates do not affect interest expense resulting from these outstanding long-term debt securities. However, the Company periodically repays its short-term debt borrowings through the issuance of new long-term debt securities. Changes in market interest rates may affect the interest rate and corresponding interest expense on any new issuances of long-term debt securities. In addition, short-term debt borrowings bear a variable rate of interest. As a result, changes in short-term interest rates will increase or decrease interest expense in future periods. For example, if the average amount of short-term debt outstanding was $25 million for the period of one year, a change in interest rates of 1% would result in a change in annual interest expense of approximately $250,000. The average interest rates on the Company’s short-term borrowings and intercompany money pool transactions for the three months ended September 30, 2024 and September 30, 2023 were 6.6% and 6.4%, respectively. The average interest rates on the Company’s short-term borrowings and intercompany money pool transactions for the nine months ended September 30, 2024 and September 30, 2023 were 6.6% and 6.2%, respectively. The average interest rate on the Company’s short-term borrowings for the twelve months ended December 31, 2023 was 6.4%.
Previous wording
Basis of Presentation - The accompanying unaudited consolidated financial statements of Unitil have been prepared in accordance with the instructions to Form 10-Q and include the information and footnotes required by generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024. For additional information, refer to Note 1 of Part II to the Consolidated Financial Statements – “Summary of Significant Accounting Policies” of the Company’s Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (SEC) on February 13, 2024, for a description of the Company’s Basis of Presentation.
Current wording
Basis of Presentation - The accompanying unaudited consolidated financial statements of Unitil have been prepared in accordance with the instructions to Form 10-Q and include the information and footnotes required by generally accepted accounting principles (GAAP). In the opinion of management, all adjustments considered necessary for a fair presentation have been included. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024. For additional information, refer to Note 1 of Part II to the Consolidated Financial Statements – “Summary of Significant Accounting Policies” of the Company’s Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (SEC) on February 13, 2024, for a description of the Company’s Basis of Presentation.
Previous wording
Cash and Cash Equivalents - Cash and Cash Equivalents includes all cash and cash equivalents to which the Company has legal title. Cash equivalents include short-term investments with original maturities of three months or less and interest bearing deposits. The Company’s cash and cash equivalents are held at financial institutions and at times may exceed federally insured limits. The Company has not experienced any losses in such accounts. Under the Independent System Operator—New England (ISO-NE) Financial Assurance Policy (Policy), Unitil’s subsidiaries Unitil Energy, Fitchburg and Unitil Power are required to provide assurance of their ability to satisfy their obligations to ISO-NE. Under this Policy, Unitil’s subsidiaries provide cash deposits covering approximately 2-1/2 months of outstanding obligations, less credit amounts that are based on the Company’s credit rating. As of June 30, 2024, June 30, 2023 and December 31, 2023, the Unitil subsidiaries had deposited $2.3 million, $3.3 million and $3.3 million, respectively to satisfy their ISO-NE obligations.
Current wording
Cash and Cash Equivalents - Cash and Cash Equivalents includes all cash and cash equivalents to which the Company has legal title. Cash equivalents include short-term investments with original maturities of three months or less and interest bearing deposits. The Company’s cash and cash equivalents are held at financial institutions and at times may exceed federally insured limits. The Company has not experienced any losses in such accounts. Under the Independent System Operator—New England (ISO-NE) Financial Assurance Policy (Policy), Unitil’s subsidiaries Unitil Energy, Fitchburg and Unitil Power are required to provide assurance of their ability to satisfy their obligations to ISO-NE. Under this Policy, Unitil’s subsidiaries provide cash deposits covering approximately 2-1/2 months of outstanding obligations, less credit amounts that are based on the Company’s credit rating. As of September 30, 2024, September 30, 2023 and December 31, 2023, the Unitil subsidiaries had deposited $5.8 million, $3.5 million and $3.3 million, respectively to satisfy their ISO-NE obligations.
Previous wording
Accounts Receivable, Net includes$2.2 million,$2.2 million, and $2.3 million of the Allowance for Doubtful Accounts at June 30, 2024, June 30, 2023 and December 31, 2023, respectively. Unbilled Revenues, net (a component of Accrued Revenue) includes less than $0.1 million, less than $0.1 million and $0.1 million of the Allowance for Doubtful Accounts at June 30, 2024, June 30, 2023 and December 31, 2023, respectively.
Current wording
Accounts Receivable, Net includes$1.9 million, $2.0 million, and $2.3 million of the Allowance for Doubtful Accounts at September 30, 2024, September 30, 2023 and December 31, 2023, respectively. Unbilled Revenues, net (a component of Accrued Revenue) includes less than $0.1 million, less than $0.1 million and $0.1 million of the Allowance for Doubtful Accounts at September 30, 2024, September 30, 2023 and December 31, 2023, respectively.
Previous wording
Utility Plant -The cost of additions to Utility Plant and the cost of renewals and betterments are capitalized. Cost consists of labor, materials, services and certain indirect construction costs, including an allowance for funds used during construction (AFUDC). The costs of current repairs and minor replacements are charged to appropriate operating expense accounts. The original cost of utility plant retired or otherwise disposed of is charged to the accumulated provision for depreciation. The Company includes in its mass asset depreciation rates, which are periodically reviewed as part of its ratemaking proceedings, cost of removal amounts to provide for future negative salvage value. At June 30, 2024, June 30, 2023 and December 31, 2023, the cost of removal amounts, which are recorded on the Consolidated Balance Sheets in Cost of Removal Obligations, were estimated to be $134.9 million,$123.2 million, and $126.3 million, respectively.
Current wording
Utility Plant -The cost of additions to Utility Plant and the cost of renewals and betterments are capitalized. Cost consists of labor, materials, services and certain indirect construction costs, including an allowance for funds used during construction (AFUDC). The costs of current repairs and minor replacements are charged to appropriate operating expense accounts. The original cost of utility plant retired or otherwise disposed of is charged to the accumulated provision for depreciation. The Company includes in its mass asset depreciation rates, which are periodically reviewed as part of its ratemaking proceedings, cost of removal amounts to provide for future negative salvage value. At September 30, 2024, September 30, 2023 and December 31, 2023, the cost of removal amounts, which are recorded on the Consolidated Balance Sheets in Cost of Removal Obligations, were estimated to be $139.3 million,$125.8 million, and $126.3 million, respectively.
Previous wording
Regulatory Accounting - The Company’s principal business is the distribution of electricity and natural gas by the three distribution utilities: Unitil Energy, Fitchburg and Northern Utilities. Unitil Energy and Fitchburg are subject to regulation by the FERC. Fitchburg is also regulated by the MDPU, Unitil Energy is regulated by the NHPUC and Northern Utilities is regulated by the Maine Public Utilities Commission (MPUC) and NHPUC. Granite State, the Company’s natural gas transmission pipeline, is regulated by the FERC. Accordingly, the Company uses the Regulated Operations guidance as set forth in the FASB Codification. The Company has recorded Regulatory Assets and Regulatory Liabilities which will be recovered from customers, or applied for customer benefit, in accordance with rate provisions approved by the applicable public utility regulatory commission. The electric and gas divisions of Fitchburg are authorized to recover through rates past due amounts associated with hardship accounts that are protected from shut-off. As of June 30, 2024, June 30, 2023 and December 31, 2023, the Company has recorded $7.2 million, $6.0 millionand $6.0 million, respectively, of hardship accounts in Regulatory Assets. These amounts are included in “Other Deferred Charges” in the following table. The Company currently receives recovery in rates or expects to receive recovery of these hardship accounts in future rate cases.
Current wording
Regulatory Accounting - The Company’s principal business is the distribution of electricity and natural gas by the three distribution utilities: Unitil Energy, Fitchburg and Northern Utilities. Unitil Energy and Fitchburg are subject to regulation by the FERC. Fitchburg is also regulated by the MDPU, Unitil Energy is regulated by the NHPUC and Northern Utilities is regulated by the Maine Public Utilities Commission (MPUC) and NHPUC. Granite State, the Company’s natural gas transmission pipeline, is regulated by the FERC. Accordingly, the Company uses the Regulated Operations guidance as set forth in the FASB Codification. The Company has recorded Regulatory Assets and Regulatory Liabilities which will be recovered from customers, or applied for customer benefit, in accordance with rate provisions approved by the applicable public utility regulatory commission. The electric and gas divisions of Fitchburg are authorized to recover through rates past due amounts associated with hardship accounts that are protected from shut-off. As of September 30, 2024, September 30, 2023 and December 31, 2023, the Company has recorded $6.8 million, $6.0 millionand $6.0 million, respectively, of hardship accounts in Regulatory Assets. These amounts are included in “Other Deferred Charges” in the following table. The Company currently receives recovery in rates or expects to receive recovery of these hardship accounts in future rate cases.
Previous wording
Investments in Marketable Securities - The Company maintains a trust through which it invests in a money market fund. This fund is intended to satisfy obligations under the Company’s Supplemental Executive Retirement Plan (SERP) (See additional discussion of the SERP in Note 9).
Current wording
Investments in Marketable Securities - The Company maintains a trust through which it invests in money market and fixed income funds. These funds are intended to satisfy obligations under the Company’s Supplemental Executive Retirement Plan (SERP) (See additional discussion of the SERP in Note 9).
Previous wording
At June 30, 2024, June 30, 2023 and December 31, 2023, the fair value of the Company’s investments in these trading securities, which are recorded on the Consolidated Balance Sheets in Other Assets, was $5.8 million, $5.8 millionand $6.0 million, respectively, as shown in the following table. These investments are valued based on quoted prices from active markets and are categorized in Level 1 as they are actively traded and no valuation adjustments have been applied. Changes in the fair value of these investments are recorded in Other Expense, Net.
Current wording
At September 30, 2024, September 30, 2023 and December 31, 2023, the fair value of the Company’s investments in these trading securities, which are recorded on the Consolidated Balance Sheets in Other Assets, was $5.8 million, $5.9 millionand $6.0 million, respectively, as shown in the following table. These investments are valued based on quoted prices from active markets and are categorized in Level 1 as they are actively traded and no valuation adjustments have been applied. Changes in the fair value of these investments are recorded in Other Expense, Net.
Previous wording
At June 30, 2024, June 30, 2023 and December 31, 2023, the fair value of the Company’s investments in these trading securities related to the DC Plan, which are recorded on the Consolidated Balance Sheets in Other Assets, were $1.9 million, $1.1 millionand $1.3 million, respectively, as shown in the following table. These investments are valued based on quoted prices from active markets and are categorized in Level 1 as they are actively traded and no valuation adjustments have been applied. Changes in the fair value of these investments are recorded in Other Expense, Net.
Current wording
At September 30, 2024, September 30, 2023 and December 31, 2023, the fair value of the Company’s investments in these trading securities related to the DC Plan, which are recorded on the Consolidated Balance Sheets in Other Assets, were $2.1 million, $1.1 million and $1.3 million, respectively, as shown in the following table. These investments are valued based on quoted prices from active markets and are categorized in Level 1 as they are actively traded and no valuation adjustments have been applied. Changes in the fair value of these investments are recorded in Other Expense, Net.
Showing the first 40 of 80 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
In the following tables the Company has reconciled Adjusted Net Income to GAAP Net Income, which we believe to be the most comparable GAAP financial measure.
Current report — wording carried from elsewhere
On October 4, 2024, Granite State filed an uncontested rate settlement with the FERC which provides for an increase in annual revenues of $3.0 million, effective November 1, 2024. The Settlement Agreement permits the filing of limited Section 4 rate adjustments for capital cost projects eligible for cost recovery in 2025, 2026, and 2027, and sets forth an overall cap of $29.9 million on the capital costs recoverable under such filings. Under the Settlement Agreement, Granite State may not file a new general rate case earlier than April 30, 2028 with rates to be effective no earlier than September 1, 2028 based on a test year ending no earlier than December 31, 2027.
Current report — wording carried from elsewhere
2023 winter storms over a five-year period. On December 19, 2023, the MDPU allowed the associated rate increase to become effective on January 1, 2024, subject to further investigation and reconciliation. This matter remains pending before the MDPU.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
The Company’s Net Income was $31.5 million, or $1.96 in Earnings Per Share (EPS) for the first six months of 2024, an increase of $3.2 million in Net Income, or $0.20 in EPS, compared to the first six months of 2023. The Company’s earnings in the first six months of 2024 reflect higher rates and customer growth. Operation and Maintenance expenses include $0.3 million in both the three and six months ended June 30, 2024 for transaction costs associated with the Company’s recently announced acquisition of Bangor Natural Gas Company.
Previous report — wording carried elsewhere
Credit Facility until September 29, 2027, subject to two one-year extensions under certain circumstances. The Credit Facility terminates and all amounts outstanding thereunder are due and payable on September 29, 2027, subject to the potential extension discussed in the prior sentence.
Previous report — wording carried elsewhere
FERC Transmission Formula Rate Proceedings- Pursuant to Section 206 of the Federal Power Act, there are several pending proceedings before the FERC concerning the justness and reasonableness of the Return on Equity (ROE) component of the ISO-New