UNITIL CORP

Previous wording

See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Unitil Corporation’s 2023 Annual Report on Form 10-K for additional information.

Current wording

See Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Unitil Corporation’s 2024 Annual Report on Form 10-K for additional information.

Previous wording

Unitil’s principal business is the local distribution of electricity and gas throughout its service territory in the states of New Hampshire, Massachusetts and Maine. Unitil is the parent company of three wholly-owned distribution utilities:

Current wording

Unitil’s principal business is the local distribution of electricity and gas throughout its service territory in the states of New Hampshire, Massachusetts and Maine. Unitil is the parent company of four wholly-owned distribution utilities:

Previous wording

Fitchburg Gas and Electric Light Company (Fitchburg), which provides both electric and gas service in the greater Fitchburg area of north central Massachusetts; and

Current wording

Fitchburg Gas and Electric Light Company (Fitchburg), which provides both electric and gas service in the greater Fitchburg area of north central Massachusetts;

Previous wording

Northern Utilities, Inc. (Northern Utilities), which provides 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.

Current wording

Northern Utilities, Inc. (Northern Utilities), which provides 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; and

Previous wording

Unitil Energy, Fitchburg and Northern Utilities are collectively referred to as the “distribution utilities.” Together, the distribution utilities serve approximately 108,500 electric customers and 88,400 gas customers.

Current wording

Unitil Energy, Fitchburg, Northern Utilities, and Bangor are collectively referred to as the “distribution utilities.” Together, the distribution utilities serve approximately 109,400 electric customers and 97,600 gas customers. Included in gas customers are 8,500 customers related to the acquisition of Bangor.

Previous wording

Unitil had an investment in Net Utility Plant of $1.5 billion at September 30, 2024. Earnings from Unitil’s utility operations are derived primarily from the return on investment in the utility assets of the three distribution utilities and Granite State. Unitil’s total operating revenue includes revenue to recover the approved cost of purchased electricity and gas in rates on a fully reconciling basis. As a result of this reconciling rate structure, the Company’s earnings are not directly affected by changes in the cost of purchased electricity and gas.

Current wording

Unitil had an investment in Net Utility Plant of $1,618.9 million at March 31, 2025. Earnings from Unitil’s utility operations are derived primarily from the return on investment in the utility assets of the four distribution utilities and Granite State. Unitil’s total operating revenue includes revenue to recover the approved cost of purchased electricity and gas in rates on a fully reconciling basis.

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 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.

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 owns land on which Unitil Energy’s Kingston solar project is located in Kingston, 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

Unitil is subject to comprehensive regulation by federal and state regulatory authorities. Unitil and its subsidiaries are subject to regulation as a holding company system by the FERC under the Energy Policy Act of 2005 with regard to certain bookkeeping, accounting and reporting requirements. Unitil’s utility operations related to wholesale and interstate energy business activities are also regulated by the FERC. Unitil’s distribution utilities are subject to regulation by the applicable state public utility commissions with regard to their rates, issuance of securities and other accounting and operational matters: Unitil Energy is subject to regulation by the New Hampshire Public Utilities Commission (NHPUC); Fitchburg is subject to regulation by the Massachusetts Department of Public Utilities (MDPU); and Northern Utilities is regulated by the NHPUC and the Maine Public Utilities Commission (MPUC). Granite State, Unitil’s interstate gas transmission pipeline, is subject to regulation by FERC with regard to its rates and operations. Because Unitil’s primary operations are subject to rate regulation, the regulatory treatment of various matters could significantly affect the Company’s operations and financial position.

Current wording

Unitil is subject to comprehensive regulation by federal and state regulatory authorities. Unitil and its subsidiaries are subject to regulation as a holding company system by the FERC under the Energy Policy Act of 2005 with regard to certain bookkeeping, accounting and reporting requirements. Unitil’s utility operations related to wholesale and interstate energy business activities are also regulated by the FERC. Unitil’s distribution utilities are subject to regulation by the applicable state public utility commissions with regard to their rates, issuance of securities and other accounting and operational matters: Unitil Energy is subject to regulation by the New Hampshire Public Utilities Commission (NHPUC); Fitchburg is subject to regulation by the Massachusetts Department of Public Utilities (MDPU); Northern Utilities is regulated by the NHPUC and the Maine Public Utilities Commission (MPUC); and Bangor is subject to regulation by the MPUC. Granite State, Unitil’s interstate gas transmission pipeline, is subject to regulation by FERC with regard to its rates and operations. Because Unitil’s primary operations are subject to rate regulation, the regulatory treatment of various matters could significantly affect the Company’s operations and financial position.

Previous wording

Unitil’s distribution utilities deliver electricity and/or gas to all customers in their service territory, at rates established under cost of service regulation. Under this regulatory structure, Unitil’s distribution utilities recover the cost of providing distribution service to their customers based on historical test years, and earn a return on their capital investment in utility assets. The Company’s distribution utilities and its gas transmission pipeline company also may recover certain base rate costs, including capital project spending, qualifying storm expenses and enhanced reliability and vegetation management programs, through annual step adjustments or cost tracking rate mechanisms.

Current wording

Unitil Energy, Fitchburg, and Northern Utilities deliver electricity and/or gas to all customers in their service territory, at rates established under cost of service regulation. Under this regulatory structure, Unitil’s distribution utilities recover the cost of providing distribution service to their customers based on historical test years, and earn a return on their capital investment in utility assets. The Company’s distribution utilities and its gas transmission pipeline company also may recover certain base rate costs, including capital project spending and enhanced reliability and vegetation management programs, through annual step adjustments or cost tracking rate mechanisms. Bangor has a multiyear rate plan approved by the MPUC which is designed to approximate market-based rates. The rate plan established maximum rates (price-cap rates) that form the basis for the rates that Bangor can charge for gas service during the rate plan.

Previous wording

Revenue decoupling is the term given to the elimination of the dependency of a utility’s distribution revenue on the volume of electricity or gas sales. The difference between distribution revenue amounts billed to customers and the targeted revenue decoupling amounts is recognized as an increase or a decrease in Accrued Revenue, which forms the basis for resetting rates for future cash recoveries from, or credits to, customers. These revenue decoupling targets may be adjusted as a result of rate cases and other authorized adjustments that the Company files with the MDPU and NHPUC. Fitchburg has been subject to revenue decoupling since 2011. Unitil Energy has been subject to revenue decoupling since June 1, 2022. As a result of Unitil Energy now being subject to revenue decoupling, as of June 1, 2022, revenue decoupling now applies to substantially all of Unitil’s total annual electric sales volumes. Substantially all of Northern Utilities’ gas sales volumes in New Hampshire have been subject to decoupling since August 1, 2022. The Company's electric and gas sales in New Hampshire and Massachusetts are now largely decoupled.

Current wording

The Company's electric and gas sales in Massachusetts and New Hampshire are now largely decoupled. Revenue decoupling is the term given to the elimination of the dependency of a utility’s distribution revenue on the volume of electricity or gas sales. The difference between distribution revenue amounts billed to customers and the targeted revenue decoupling amounts is recognized as an increase or a decrease in Accrued Revenue, which forms the basis for resetting rates for future cash recoveries from, or credits to, customers. These revenue decoupling targets may be adjusted as a result of rate cases and other authorized adjustments that the Company files with the MDPU and NHPUC.

Previous wording

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 wording

The MD&A includes financial information prepared in accordance with generally accepted accounting principles in the United States (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 provide 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.

Previous wording

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 wording

The Company's earnings discussion includes Adjusted Net Income, a non-GAAP financial measure referencing the Company’s 2025 GAAP Net Income adjusted for certain transaction costs related to the Company's acquisitions of Bangor Natural Gas Company and Maine Natural Gas Company (Maine Natural). The Company's management believes that the transaction costs related to the acquisitions of Bangor and Maine Natural Gas, which are included in Operation and Maintenance expense on the Consolidated Statements of Earnings, are not indicative of the Company's ongoing costs and not directly related to the ongoing operations of the business and therefore are not an indicator of baseline operating performance.

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 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 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.

Previous 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.

Current wording

Electric GAAP Gross Margin was $19.6 million in the three months ended March 31, 2025, a decrease of $0.5 million compared to the same period in 2024. The decrease was driven by higher depreciation and amortization expense of $0.9 million, partially offset by higher rates and customer growth of $0.4 million.

Previous 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.

Current wording

Gas GAAP Gross Margin was $57.1 million in the three months ended March 31, 2025, an increase of $6.9 million compared to the same period in 2024. The increase was driven by higher rates and customer growth of $7.7 million, the favorable effects of colder winter weather in 2025 of $2.2 million, partially offset by higher depreciation and amortization of $3.0 million. Included in gas operating revenue, cost of gas sales and depreciation and amortization for the three months ended March 31, 2025 is $8.6 million, $5.7 million and $0.5 million related to Bangor, respectively.

Previous 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.

Current wording

The Company’s Net Income was $27.5 million, or $1.69 in Earnings Per Share (EPS) for the first quarter of 2025, an increase of $0.3 million in Net Income, or $0.00 in EPS, compared to the first quarter of 2024. The Company's Adjusted Net Income (a non-GAAP financial measure), which excluded transaction-related costs in connection with the acquisition of Bangor and Maine Natural Gas, was $28.4 million, or $1.74 in EPS for the first quarter of 2025, an increase of $1.2 million, or $0.05 in EPS, compared to the first quarter of 2024.

Previous 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.

Current wording

Operation and Maintenance (O&M) expenses increased $4.4 million in the three months ended March 31, 2025, compared to the same period in 2024. The increase reflects higher utility operating costs of $1.6 million, higher labor costs of $1.5 million and higher professional fees of $1.3 million. Included in O&M expense for the three months ended March 31, 2025 is $0.7 million related to Bangor O&M expenses and $1.2 million in acquisition transaction costs.

Previous 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.

Current wording

Depreciation and Amortization expense increased $3.7 million in the three months ended March 31, 2025, compared to the same period in 2024, reflecting higher depreciation rates from recent base rate cases, additional depreciation associated with higher levels of utility plant in service and higher amortization of recoverable storm costs and other deferred costs. Included in Depreciation and Amortization for the three months ended March 31, 2025 is $0.5 million related to Bangor.

Previous 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.

Current wording

Taxes Other Than Income Taxes increased $0.2 million in the three months ended March 31, 2025, compared to the same period in 2024, reflecting $0.2 million in property taxes related to Bangor.

Previous 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.

Current wording

Interest Expense, Net increased $1.8 million in the three months ended March 31, 2025, compared to the same period in 2024, primarily reflecting higher levels of long-term debt, higher interest expense on regulatory liabilities and lower interest income on AFUDC and other, partially offset by lower interest expense on short-term borrowings.

Previous 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.

Current wording

Other Expense (Income), Net decreased $0.2 million in the three months ended March 31, 2025, compared to the same period in 2024, reflecting lower retirement benefit costs.

Previous wording

At its January 2024, May 2024, July 2024 and October 2024 meetings, the Unitil Corporation Board of Directors declared quarterly dividends on the Company’s common stock of $0.425 per share. These quarterly dividends result in a current effective annualized dividend rate of $1.70 per share, representing an unbroken record of quarterly dividend payments since trading began in Unitil’s common stock.

Current wording

At its January 2025 and May 2025 meetings, the Unitil Corporation Board of Directors declared quarterly dividends on the Company’s common stock of $0.45 per share. These quarterly dividends result in a current effective annualized dividend rate of $1.80 per share, representing an unbroken record of quarterly dividend payments since trading began in Unitil’s common stock.

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 nine months ended September 30, 2024 and 2023:

Current wording

Electric Operating Revenues and Electric Adjusted Gross Margin(a non-GAAP financial measure) - The following table details Total Electric Operating Revenues and Electric Adjusted Gross Margin for the three months ended March 31, 2025 and 2024:

Previous 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.

Current wording

Total Electric Operating Revenue decreased $13.4 million, or 18.2%, in the three months ended March 31, 2025, compared to the same period in 2024, 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.

Previous 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.

Current wording

Kilowatt-hour Sales - Unitil’s total electric kWh sales increased 10.0% in the three month period ended March 31, 2025, compared to the same period in 2024. Sales to Residential increased 11.1% and sales to Commercial and Industrial (C&I) customers increased 3.7% in the three month period ended March 31, 2025, compared to the same period in 2024, reflecting colder winter weather for heating purposes in 2025 compared to 2024. As of March 31, 2025, the number of electric customers increased by approximately 970 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 nine months ended September 30, 2024 and 2023 by major customer class:

Current wording

The following table details total kWh sales for the three months ended March 31, 2025 and 2024 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 nine months ended September 30, 2024 and 2023:

Current wording

Gas Operating Revenues and Adjusted Gross Margin(a non-GAAP financial measure) - The following table details Total Gas Operating Revenues and Gas Adjusted Gross Margin for the three months ended March 31, 2025 and 2024:

Previous 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.

Current wording

The increase in Total Gas Operating Revenue of $5.5 million, or 5.2%, in the three months ended March 31, 2025, compared to the same period in 2024, includes $8.6 million gas operating revenue for Bangor, higher rates and customer growth and favorable impact of colder winter weather in 2025, partially offset by lower costs of gas sales, which are tracked and reconciled costs that are passed through directly to customers.

Previous 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.

Current wording

Therm Sales- Unitil’s total gas therm sales increased 26.1% in the three month period ended March 31, 2025, compared to the same period in 2024. In the first quarter of 2025, sales to Residential and C&I customers increased 33.5% and 23.8%, respectively, compared to the same period in 2024, reflecting colder winter weather in 2025 compared to 2024 and customer growth. Included in the total gas therm sales increase is 10.4 million therms related to Bangor. Based on weather data collected in the Company’s gas service areas, on average there were 13.3% higher effective degree days in the first quarter of 2025 compared to the same period in 2024. The Company estimates weather-normalized gas therm sales for Northern Utilities' Maine division, the Company's largest non-decoupled gas service area, increased 2.4% in the first three months of 2025 compared to the same period in 2024. As of March 31, 2025, the number of gas customers increased by approximately 9,230 over the previous year. Included in this increase is 8,700 customers related to Bangor. Sales margins derived from decoupled unit sales (currently representing approximately 43% 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 nine months ended September 30, 2024 and 2023 by major customer class:

Current wording

The following table details total firm therm sales for the three months ended March 31, 2025 and 2024 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 $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.

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 $13.8 million, or 29.7%, in the three months ended March 31, 2025, compared to the same period in 2024. This decrease reflectsan increase in the amount of electricity purchased by customers directly from third-party suppliers, partially offset by higher wholesale electricity prices. 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 $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.

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 $4.4 million, or 10.0%, in the three months ended March 31, 2025, compared to the same period in 2024. This decrease reflects lower wholesale gas commodity prices partially offset by higher gas therm sales. 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 $0.7 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.

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 $4.4 million, or 24.2%, in the three months ended March 31, 2025, compared to the same period in 2024. The increase reflects higher utility operating costs of $1.6 million, higher labor costs of $1.5 million and higher professional fees of $1.3 million. Included in O&M expense for the three months ended March 31, 2025 is $0.7 million related to Bangor O&M expenses and $1.2 million in acquisition transaction costs.

Previous 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.

Current wording

Depreciation and Amortization - Depreciation and Amortization expense increased $3.7 million, or 20.6%, in the three months ended March 31, 2025, compared to the same period in 2024, reflecting higher depreciation rates from recent base rate cases, additional depreciation associated with higher levels of utility plant in service and higher amortization of recoverable storm costs and other deferred costs. Included in Depreciation and Amortization expense for the three months ended March 31, 2025 is $0.5 million related to Bangor.

Previous 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.

Current wording

Taxes Other Than Income Taxes - Taxes Other Than Income Taxes increased $0.2 million, or 2.6%, in the three months ended March 31, 2025, compared to the same period in 2024, reflecting $0.2 million in property taxes related to Bangor.

Previous 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.

Current wording

Other Expense (Income), Net -Other Expense (Income), Net decreased $0.2 million in the three months ended March 31, 2025, compared to the same period in 2024, reflecting lower retirement benefit costs.

Previous 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.

Current wording

Provision for Income Taxes - Federal and State Income Taxes for the three months ended March 31, 2025 increased $0.1 million compared with the same period in 2024, reflecting higher pre-tax earnings in 2025.

Previous 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.

Current wording

Interest Expense, Net increased $1.8 million in the three months ended March 31, 2025, compared to the same period in 2024, primarily reflecting higher levels of long-term debt, higher interest expense on regulatory liabilities and lower interest income on AFUDC and other, partially offset by lower interest expense on short-term borrowings.

Previous wording

On September 29, 2022, the Company entered into a Third Amended and Restated Credit Agreement with a syndicate of lenders (collectively, the "Credit Facility”), which amended and restated in its entirety the prior credit facility. Unitil may borrow under the 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.

Current wording

On September 29, 2022, the Company entered into a Third Amended and Restated Credit Agreement with a syndicate of lenders (collectively, the "Credit Facility”), which amended and restated in its entirety the prior credit facility. On January 29, 2025, the Company entered into an amendment to the Credit Facility, which (among other things) increased the borrowing limit under the Credit Facility from $200 million to $275 million and extended the term of the Credit Facility from September 29, 2027 until September 29, 2028. Unitil may borrow under the Credit Facility until September 29, 2028, subject to two one-year extensions under certain circumstances.

Previous wording

The Credit Facility has a borrowing limit of $200 million, which includes a $25 million sublimit for the issuance of standby letters of credit. Unitil may increase the borrowing limit under the Credit Facility by up to $75 million under certain circumstances. The Credit Facility generally provides Unitil with the ability to elect that borrowings under the Credit Facility bear interest under several options, including a daily fluctuating rate equal to (a) the forward-looking secured overnight financing rate (as administered by the Federal Reserve Bank of New York) term rate with a term equivalent to one month beginning on that date, plus (b) 0.1000%, plus (c) a margin of 1.125% to 1.375% (based on Unitil’s credit rating).

Current wording

The Credit Facility has a borrowing limit of $275 million ($200 million as of December 31, 2024), which includes a $25 million sublimit for the issuance of standby letters of credit. Unitil may increase the borrowing limit under the Credit Facility by up to $75 million under certain circumstances. The Credit Facility generally provides Unitil with the ability to elect that borrowings under the Credit Facility bear interest under several options, including a daily fluctuating rate equal to (a) the forward-looking secured overnight financing rate (as administered by the Federal Reserve Bank of New York) term rate with a term equivalent to one month beginning on that date, plus (b) 0.1000%, plus (c) a margin of 1.125% to 1.375% (based on Unitil’s credit rating).