EX-99.1 2 d924068dex991.htm EX-99.1

American Gas Association Financial Forum May 2015 Exhibit 99.1

1 Safe Harbor Provision This presentation contains “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding Unitil Corporation’s (“Unitil”) financial condition, results of operations, capital expenditures, business strategy, regulatory strategy, market opportunities, and other plans and objectives. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue”, the negative of such terms, or other comparable terminology. These forward-looking statements are neither promises nor guarantees, but involve risks and uncertainties that could cause the actual results to differ materially from those set forth in the forward-looking statements. Those risks and uncertainties include: Unitil’s regulatory environment (including regulations relating to climate change, greenhouse gas emissions and other environmental matters); fluctuations in the supply of, demand for, and the prices of energy commodities and transmission capacity and Unitil’s ability to recover energy commodity costs in its rates; customers’ preferred energy sources; severe storms and Unitil’s ability to recover storm costs in its rates; general economic conditions; variations in weather; long-term global climate change; Unitil’s ability to retain its existing customers and attract new customers; Unitil’s energy brokering customers’ performance and energy used under multi-year energy brokering contracts; increased competition; integrity and security of operational and information systems; publicity and reputational risks; and other risks detailed in Unitil's filings with the Securities and Exchange Commission, including those appearing under the caption "Risk Factors" in Unitil's Annual Report on Form 10-K for the year ended December 31, 2014. Readers should not place undue reliance on any forward looking statements, which speak only as of the date they are made. Unitil undertakes no obligation to update any forward- looking statements to reflect any change in Unitil’s expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

2 Unitil Overview Unitil Service Areas • Natural gas and electric utility with operations in Maine, New Hampshire and Massachusetts • Serving approximately 181,000 gas and electric customers • Utility operations sales margin split 55% gas and 45% electric • Regulated T&D utility business model • Growing operations and customers • Regulated electric and gas rate base growth • Robust natural gas system expansion • Constructive rate plans and cost trackers • Attractive dividend yield • Experienced management team

Generating Financial Results 3 Net Income 17% CAGR ($ in millions) Earnings Per Share 12% CAGR Robust business fundamentals Improving economy Strong demand for natural gas Utility rate base growth Significant gas growth potential Infrastructure replacement and upgrade projects Constructive regulation Rate relief has provided ~50% increase to sales margin since 2010 High fixed component of rates and decoupling reduces weather volatility to earnings $18.1 $21.6 $24.7 $25.7 2012 2013 2014 LTM Q1 2015 $1.43 $1.57 $1.79 $1.86 2012 2013 2014 LTM Q1 2015

5-Year Total Shareholder Return (2010 - 2014) Market Performance 4 Unitil 5-year total return of 106% versus 105% for S&P 500 and 87% for S&P Utility 106% 105% 87% S&P 500 S&P Utility Index

Approximately 100+ years of domestic natural gas supply U.S. Shale Plays Domestic Natural Resources 5

• Numerous pipeline projects are in development to expand the Northeast pipeline system, to transport supplies from the Marcellus and Utica shale gas basins 6 Proposed Northeast Natural Gas Pipeline Projects Prepared by Northeast Gas Association based on publicly available information (2014). Locations approximate.

Gas Growth Potential 7 • The increasing demand for natural gas in our service areas provides favorable conditions for growth • Only 60% penetration on existing distribution system means more room to grow • Expansion in adjacent service areas provides new opportunities for growth each year • Convenient, clean, efficient and low cost natural gas is attracting more and more commercial and industrial high volume users Current On-the-Main Penetration 77,900 (60%) ~50,000 (40%) Current Customers On-the-Main Prospects

The total number of gas customers served grew 3% in 2014 – triple the New England peer group average growth Weather-normalized gas unit sales have grown at a 5% annual rate since 2012 Customer Growth and Gas Sales 8 Gas Customer Growth (therms, in millions) Weather-Normalized Gas Sales 5% CAGR 1% 3% 0% 1% 2% 3% 4% 5% New England Peers Unitil 0 50 100 150 200 250 300 2012 2013 2014 LTM Q1 2015

• Recent rate design changes have reduced weather volatility • 25% of gas margin is fixed (i.e. customer charge) which levels customers bills throughout the year • 17% of gas margin is decoupled – margin is unaffected by weather 2014 Gas Margin 9 Stability of Gas Margin Fixed 25% Decoupled 17% Variable 58%

4 Brentwood New Service Area 5 Dover Extension 6 Hampton Extension 1 Poland New Service Area 2 Wells Extension 3 Lewiston Extension 10 New Service Area Expansion 1 2 3 4 5 6

0 4 8 12 16 20 2012 2013 2014 2015 F 2016 F 2017 F ME NH MA Infrastructure Replacement 11 Modern gas infrastructure – Approximately 70% of gas mains are contemporary materials - polyethylene plastic and protected steel Replacing ~14 miles of remaining older leak prone mains annually across all three states to achieve continuous improvement and modernization of entire natural gas delivery system Cast Iron / Bare Steel Miles Replaced

Electric Substation Projects 12 Construction of two major electric distribution substations in New Hampshire began in 2014 Provides capacity to meet forecasted load growth in New Hampshire Enhances reliability and addresses capacity constraints at existing substations Kingston Project: Kingston, NH (Seacoast Region) Construction began 2014; in service 2016 Total cost of ~$12 million Broken Ground Project: Concord, NH (Capital Region) Construction to begin 2015; in service 2017 Total cost of ~$11 million

Capital Budget and Rate Base 13 ($ in millions) ($ in millions) Electric Rate Base 2015 Capital Budget $98 million Gas Rate Base 3% 10% ($ in millions) Total capital budget of $98 million in 2015 Gas – $58 million Electric – $31 million Information technology – $9 million Gas rate base has grown at an annual rate of 10% since 2009 Gas Distribution Expansion $21 Electric Distribution Expansion $14 Information Technology $9 Infrastructure Replacement $22 Gas & Electric Other Requirements $32 $0 $75 $150 $225 $300 $375 2009 2010 2011 2012 2013 2014 $0 $75 $150 $225 $300 $375 2009 2010 2011 2012 2013 2014

14 Balanced Capital Structure 3/31/15 Liquidity 3/31/15 Capitalization Standard and Poor’s corporate rating of BBB+ Balanced capital structure 46% equity capitalization Significant liquidity to fund growth ($ in millions) Credit Facility Limit 120.0 $ Less: Current Balance 32.0 Liquidity 88.0 $ S&P Credit Rating Unitil Consolidated Unitil Utility Subsidiaries Corporate Rating BBB+ BBB+ Long Term Debt 54% Common Equity 46% Preferred Stock <0.1%

Sales and customer growth combined with constructive rate case results and cost trackers continue to drive increases in return on equity Constructive Regulation 15 Return on Equity Achieved ~$60 million (~50% increase to sales margin) in rate relief since 2010 8.0% 8.2% 9.2% 9.2% 0.0% 3.0% 6.0% 9.0% 12.0% 15.0% 2012 2013 2014 LTM Q1 2015

16 Dividend Strength Recently increased dividend in Q1 2015 Current quarterly dividend of $0.35 (annual dividend of $1.40 per share) Current dividend yield of ~4% Since incorporation in 1984, Unitil has continuously paid quarterly dividends and has never reduced its dividend rate

17 Key Investment Highlights Regulated local distribution utility business model Diversified natural gas and electric sales Growing operations and customer base Regulated rate base growth Robust natural gas system expansion Constructive rate plans and cost trackers Dividend strength Experienced management team