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DATE

Tuesday, February 10, 2026 at 2 p.m. ET

CALL PARTICIPANTS

  • Chairman and Chief Executive Officer — Tom Meissner
  • Senior Vice President, Chief Financial Officer, and Treasurer — Daniel Hurstak
  • President and Chief Administrative Officer — Bob Hevert
  • Chief Accounting Officer and Controller — Todd Diggins
  • Director of Investor Relations — Christopher Goulding

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TAKEAWAYS

  • Adjusted Earnings -- $53.3 million or $3.16 per share, an increase of $0.19 per share or 6.4% compared to 2024, with transaction costs excluded.
  • Guidance for 2026 -- Estimated at $3.20 to $3.36 per share, with a midpoint of $3.28 per share, representing projected growth of 6.1% at the midpoint versus the 2025 guidance midpoint.
  • Maine Acquisitions -- Bangor Natural Gas and Maine Natural Gas acquisitions added over 15,000 customers, expected to bring approximately $29 million in annual distribution revenues and approximately $18 million in planned capital investment for 2026.
  • Gas Customer Growth -- Approximately 15,900 new gas customers added, including approximately 8,900 from Bangor Natural Gas and approximately 6,500 from Maine Natural Gas acquisitions.
  • Electric Adjusted Gross Margin -- $114.6 million, up $7.3 million, driven by higher distribution rates in New Hampshire and inflation adjustment in Massachusetts, with 600 new electric customers added.
  • Gas Adjusted Gross Margin -- $199.1 million, up $32.2 million, including $16.6 million from acquisitions and $15.6 million increase in legacy operations, with drivers cited as higher rates, customer growth, and colder weather.
  • Combined Adjusted Gross Margin Increase -- Up $39.5 million across electric and gas divisions, supported by acquisitions, higher rates, customer additions, and weather effects.
  • Operating Expenses -- Operation and maintenance expenses rose $14.9 million, including $6.1 million higher utility operating costs, $5.5 million in labor and other costs, and $3.3 million in transaction costs (excluded from adjusted net income), with $4.2 million tied to acquired Maine operations.
  • Depreciation and Amortization -- Increased by $12.6 million, with $3.3 million from the acquired Maine companies, reflecting recent rate cases, higher plant spending, and greater deferred cost amortization.
  • Interest Expense -- Up $7.4 million, primarily due to higher debt levels from acquisitions.
  • 5-Year Capital Investment Plan -- Now totals approximately $1.2 billion through 2030, up approximately $200 million or 20%, including approximately $65 million allocated for the Maine gas companies.
  • Rate Base -- Approximately $1.3 billion as of December 31, 2025, reflecting an approximately $200 million increase, and 5-year average rate base growth of 8.1%, within the 6.5%-8.5% long-term guidance range.
  • NH Electric Rate Case -- Proposed permanent rate increase of $18.5 million for Unitil Energy Systems, with a temporary rate rise of $7.8 million effective July 1, 2025, and final decision expected May 1, 2026; pro forma rate base is $289 million and includes the Kingston Solar facility placed in service in June 2025.
  • Dividend Increase -- Quarterly dividend raised by $0.025 per share, resulting in a new annualized rate of $1.90 per share for 2026, an increase of 5.6% compared to 2025.
  • Service Metrics -- Electric reliability ranked in the industry’s top quartile, with customers experiencing 16% less interruption time than regional peers and 32% less than the national average; overall customer satisfaction at 87%; highest customer trust score among Northeastern peers.
  • Regulatory and Strategic Milestones -- Management confirmed intent to file rate cases for Bangor Natural Gas and Maine Natural Gas in 2027, with decisions expected 2028; affirmed Maine and New Hampshire "fuel choice" statutes enabling customer flexibility.

SUMMARY

Management presented explicit data on transformative acquisitions and maintained visibility on future growth with clear earnings and capital allocation targets. The updated capital investment plan of $1.2 billion signals a notable acceleration, with $200 million more investment over the next five years, offering potential for enhanced regulated asset returns. Customer and rate base expansion, propelled by acquisition integration and robust utility spending, underpin the company's projected earnings and dividend trajectory. Electric and gas margin growth was clearly attributed to new customer contributions, approved rate actions, and favorable weather, highlighting drivers for both top- and bottom-line improvements.

  • CFO Daniel Hurstak said, "We are reporting adjusted earnings that exclude transaction costs related to our Maine acquisitions and the announced water transaction, which we view as not indicative of the company's ongoing costs and operations."
  • CEO Tom Meissner emphasized, "Our value proposition remains strong as we continue to invest in low-risk regulated assets that generate predictable earnings and dividend growth while delivering exceptional service to our customers."
  • Management disclosed that 52% of gas customers are under decoupled rates, isolating most revenue from sales volume fluctuations, while Maine remains non-decoupled and subject to volumetric risk.
  • The company clarified that the five-year capital plan excludes investments associated with the announced Aquarion Water Companies acquisition, indicating further future growth potential beyond current guidance.

INDUSTRY GLOSSARY

  • Decoupled Rates: Utility regulatory mechanism in which allowed distribution revenues are separated from changes in sales volumes, reducing volumetric risk to earnings.

Full Conference Call Transcript

Christopher Goulding: Good afternoon, and thank you for joining us to discuss Unitil Corporation's Fourth Quarter 2025 Financial Results. Speaking on the call today will be Tom Meissner, Chairman and Chief Executive Officer; and Dan Hurstak, Senior Vice President, Chief Financial Officer and Treasurer. Also with us today are Bob Hevert, President and Chief Administrative Officer; and Todd Diggins, Chief Accounting Officer and Controller. We will discuss financial and other information on this call. As we mentioned in the press release announcing today's call, we have posted information including a presentation to the Investors section of our website at unitil.com. We will refer to that information during this call. Moving to Slide 2.

The comments made today about future operating results or events are forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that can cause actual results to differ materially from those predicted. Statements made on this call should be considered together with cautionary statements and other information contained in our most recent annual report on Form 10-K and other documents we have filed with or furnished to the Securities and Exchange Commission. Forward-looking statements speak only as of today, and we assume no obligation to update them. This presentation contains non-GAAP financial measures.

The accompanying supplemental information more fully describes these non-GAAP financial measures and includes a reconciliation to the nearest GAAP financial measures. The company believes these non-GAAP financial measures are useful in evaluating its performance. With that, I will now turn the call over to Chairman and CEO, Tom Meissner.

Tom Meissner: Thank you, Chris, and good afternoon, everyone. Thank you for joining us today. Beginning on Slide 3, I'm pleased to report that 2025 was another successful year. Yesterday, we announced full year adjusted earnings of $53.3 million or $3.16 per share. These results represent an increase of $0.19 per share or 6.4% over our 2024 adjusted earnings per share, placing us in the upper half of our long-term earnings guidance of 5% to 7%. We expanded our gas operations in Maine by acquiring 2 highly complementary distribution companies at attractive valuations, which will support our long-term earnings growth. We're excited to be the largest gas utility in Maine, a state with ample growth opportunities in a constructive regulatory environment.

In New Hampshire, our electric rate case is on schedule, and we expect permanent rates to take effect in the second quarter of 2026. Operationally, we achieved strong performance across key metrics, including electric reliability, gas safety and customer satisfaction. Looking ahead, we expect 2026 earnings to be in the range of $3.20 to $3.36 per share with a midpoint of $3.28 per share. At the midpoint, this is an increase of 6.1% compared to the midpoint of our 2025 guidance. Longer term, we continue to see robust investment opportunities in our electric and gas operations and reaffirm our long-term guidance for earnings, dividend and rate base growth. Turning now to Slide 4.

In 2025, we completed the acquisitions of Bangalore Natural Gas and Maine Natural Gas. These transactions added over 15,000 customers in a state with strong growth prospects and constructive regulation. In addition to being highly complementary to our legacy operations in Maine, the acquired companies will bring annual distribution revenues of approximately $29 million and planned capital investment of approximately $18 million in 2026. Historically, these companies have experienced annual customer growth in the range of 4% to 5%. Looking forward, natural gas continues to enjoy a significant price advantage over competing fuels like fuel oil and propane.

Maine has the highest percentage of homes heated with fuel oil in the nation and fully 2/3 of Maine homes are heated with oil, propane or kerosene. We believe natural gas conversions offer a compelling opportunity for customers to lower their energy costs while also helping Maine achieve its climate objectives. As a reminder, both Maine and New Hampshire have fueled choice statutes in place to preserve customers' rights to select their preferred energy source, including natural gas. I'll also mention that we anticipate filing a base rate case for both Banglore Natural Gas and Maine Natural Gas in 2027, with final rate decisions expected in 2028. Turning now to Slide 5.

I'd like to again emphasize the affordability benefits of natural gas for home heating in the cold northern New England region where we operate. As I already mentioned, natural gas enjoys a significant price advantage over competing fuels like oil and propane. Natural gas heating systems are also more affordable than electric heat pumps in a region where cold winters and high electricity costs by offering customers a reliable and affordable option to heat their homes. We are confident natural gas will continue to play an important role providing customers with affordable heat, while also delivering significant environmental benefits relative to other fuels. Moving to Slide 6.

As a company, we pride ourselves on delivering exceptional service to our customers and 2025 was no exception. Our electric service reliability again ranked in the top quartile of our industry peers with electric customers experiencing 16% less interruption time than our New England peers and 32% less compared to the national average. Our gas emergency response ranked among the best in the nation, and our customer satisfaction remains strong. We achieved 87% overall customer satisfaction and earned the highest customer trust score among all Northeastern peers. While we take great pride in delivering this level of service, we remain focused on continuous improvement in delivering even higher levels of service reliability.

With that, I'll now pass it over to Dan, who will provide greater detail on our 2025 financial results.

Daniel Hurstak: Thank you, Tom. Good afternoon, everyone. I'll begin on Slide 7. As Tom mentioned, we announced fiscal year 2025 adjusted net income of $53.3 million and adjusted earnings per share of $3.16, representing an increase of $5.5 million in adjusted net income or $0.19 per share compared to 2024. We are reporting adjusted earnings that exclude transaction costs related to our Maine acquisitions and the announced water transaction, which we view as not indicative of the company's ongoing costs and operations. Our 2025 results were supported by the Maine acquisitions, higher distribution rates and customer growth, partially offset by higher operating expenses and additional common shares issued in August. Turning to Slide 8.

I will discuss our electric and gas adjusted gross margins. I'll begin with our electric operations. Electric adjusted gross margin for the year was $114.6 million an increase of $7.3 million compared to 2024. The increase in electric adjusted gross margin reflects higher distribution rates in New Hampshire related to the temporary rate award of $7.8 million, which took effect in July 2025 as well as the 2025 inflation adjustment under our performance-based rates in Massachusetts. The company added approximately 600 electric customers in 2025 compared to 2024. As noted during prior calls, substantially all of our electric customers are under decoupled rates which eliminates the dependency of distribution revenue on the volume of electricity sales. Moving to gas operations.

Gas adjusted gross margin for the year was $199.1 million an increase of $32.2 million compared to 2024. The increase in gas adjusted gross margin includes the addition of $16.6 million associated with the Bangor natural gas and Maine natural gas acquisitions. Legacy gas operations adjusted gross margin increased $15.6 million due to higher rates and customer growth and the effects of colder winter weather compared to 2024. Contributing to higher rates was the annualized effect of the 2024 rate case awards at Fitchburg and Granite State as well as the annual inflation adjustment under performance-based rates in Fitchburg.

The company added approximately 15,900 new gas customers compared to the same period in 2024 and including approximately 8,900 customers from the acquisition of Bangor Natural Gas and approximately 6,500 customers from the acquisition of Maine Natural Gas. Approximately 52% of the company's gas customers are under decoupled rates with Maine being our only non-decoupled service area. Moving to Slide 9. We provide an earnings bridge comparing 2025 results to 2024. The combined adjusted gross margin for our electric and gas divisions increased by $39.5 million. As I just discussed, the increase in adjusted gross margin is due to the Maine gas acquisitions, higher rates, customer growth and colder winter weather.

Operation and maintenance expenses increased $14.9 million compared to the same period in 2024. The increase in operation and maintenance expenses includes higher utility operating costs of $6.1 million higher labor and other costs of $5.5 million and higher transaction costs of $3.3 million. Transaction costs are excluded from adjusted net income and adjusted earnings per share. Operation and maintenance expense in 2025 includes $4.2 million of utility operating costs for Bangor Natural Gas and Maine Natural Gas. Excluding Bangor Natural Gas, Maine Natural Gas and transaction costs, operation and maintenance expenses increased $7.4 million compared to 2024. In 2025, certain transmission expenses were higher due to approved formula rates in our Fitchburg service area.

Depreciation and amortization increased $12.6 million, reflecting higher depreciation rates from recent base rate cases, additional depreciation associated with higher levels of utility plant in service and higher amortization of deferred costs. Depreciation and amortization expense includes $3.3 million related to Bangor Natural Gas and Maine Natural Gas in 2025. Taxes other income taxes increased $1.4 million, reflecting higher local property taxes on higher utility plant and service primarily driven by property tax expense associated with Bangor Natural Gas and Maine Natural Gas. Interest expense increased $7.4 million, primarily reflecting higher interest on higher levels of debt related to Bangor Natural Gas and Maine Natural Gas. Other expense decreased by $1.2 million, largely due to lower retirement benefit costs.

Income taxes increased $1.3 million, reflecting higher pretax earnings. Lastly, transaction costs net of tax of $3.1 million are added back to GAAP net income to arrive at 2025 adjusted net income of $53.3 million. We believe excluding transaction costs when reviewing earnings provides a better representation of the company's ongoing financial performance. Moving to Slide 10. As discussed on previous calls, we filed a base rate case for Unitil Energy Systems, our electric distribution company in New Hampshire on May 2, 2025. The proposed permanent rate increase is $18.5 million and our requested temporary rate increase of $7.8 million took effect July 1, 2025.

We are proposing a 2-year rate adjustment plan to provide for accelerated cost recovery of 2025 and 2026 capital investments. A final rate award is expected to take effect on May 1, 2026. As a reminder, in New Hampshire permanent rate case awards are reconciled back to the effective date of the temporary rate award and are subject to recruitment or refund. The pro forma rate base included in this filing is approximately $289 million and includes the company's Kingston Solar facility that was placed in service in June 2025. We are actively engaged in constructive settlement discussions with other parties through this proceeding. Turning to Slide 11.

We have updated our 5-year capital investment plan through 2030, which now totals approximately $1.2 billion, an increase of $200 million or 20% compared to our previous 5-year plan. This updated investment plan includes approximately $65 million for Bangor Natural Gas and Maine Natural Gas. Rate base as of December 31, 2025, was approximately $1.3 billion representing an increase of approximately $200 million compared to 2024. Our 5-year historical rate base growth rate has averaged 8.1% which is towards the upper end of our long-term 6.5% to 8.5% rate base growth guidance range. This capital plan does not include any investments related to the announced acquisition of the Aquarion Water Companies. Moving to Slide 12.

Maintaining our strong balance sheet and investment-grade credit ratings remain top priorities, and we continue to generate low-risk cash flows while prudently managing risk. Our total capitalization consists of a balanced mix of common equity and long-term debt. Our stable cash flows and balance sheet strength support credit metrics that are well above our downgrade thresholds and higher than the average of our peers. The primary financing source for our investment plan continues to be cash flows from operations. On January 28, our Board of Directors approved an increase to the quarterly dividend of $0.025 per share or $0.10 per share on an annual basis.

This increase results in an annualized dividend for 2026 of $1.90 per share which is an increase of 5.6% compared to 2025. Looking forward, we remain committed to delivering predictable and sustainable returns while retaining the financial flexibility to fund capital investments as efficiently as possible. Turning to Slide 13. We are announcing 2026 earnings guidance of $3.20 to $3.36 per share with a midpoint of $3.28 per share. The midpoint of our 2026 guidance represents 6.1% growth relative to the midpoint of our 2025 guidance. We have also presented our expected 2026 quarterly EPS distribution, which highlights the seasonal nature of our earnings. I will now turn the call back over to Tom.

Tom Meissner: Thanks, Dan. Ending now on Slide 14. 2025 marked another year of strong financial performance, operational excellence and outstanding customer service. As we look ahead to 2026 and beyond, we remain confident in our ability to continue delivering value for all stakeholders. Our value proposition remains strong as we continue to invest in low-risk regulated assets that generate predictable earnings and dividend growth while delivering exceptional service to our customers. With that, I'll pass the call back to Chris.

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

Operator: [Operator Instructions] This concludes today's question-and-answer session and conference call. Thank you for participating. You may now disconnect.