Good day, ladies and gentlemen and welcome to Unitil Corporation's Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder, today's conference is being recorded. I would now like to turn the call over to Mr. David Chong, Investor Relations. Sir, you may begin.

Good afternoon. And thank you for joining us to discuss Unitil Corporation's second quarter 2018 financial results. With me today are Tom Meissner, Chairman, President and Chief Executive Officer; Mark Collin, Senior Vice President, Chief Financial Officer and Treasurer; Larry Brock, Chief Accounting Officer and Controller; and Todd Black, Senior Vice President of External Affairs and Customer Relations. We will discuss financial and other information about our second quarter results on this call. As we mentioned in the press release announcing the call, we have posted that information, including a presentation, to the Investors section of our website at www.unitil.com. We will refer to that information during this call. Before we start, as you can see on Slide 2, the comments made today about future operating results or future 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 could cause our 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 duty to update them. With that said, I'll now turn the call over to Tom.

Thank you, David and thanks everyone for joining us today. I'm going to begin on Slide 4 where today we announced net income of $3.6 million or $0.24 a share for the second quarter of 2018, an increase of $0.5 million or $0.01 per share over the second quarter of 2017. For the six months period ending June 30, the company reported net income of $19.2 million or $1.30 a share which was an increase of $3.7 million or $0.19 per share compared to the same six months period in 2017. The increase in earnings in 2018 was driven by higher sales margin reflecting customer growth, colder winter weather and new distribution rates compared to 2017. Turning to Slide 5, we've highlighted some recent noteworthy accomplishments. We're currently earning at record levels and continue to increase our customer base. In addition to strong financial results, we are focused on superior operational performance to ensure the safe and reliable delivery of natural gas and electricity to all of our customers. We're also pleased to have achieved regulatory approval in all of our operating jurisdictions of rate adjustments related to the Tax Cuts & Jobs Act of 2017 or TCJA for short. During these proceedings we adjusted rates across multiple jurisdictions in a timely manner demonstrating the healthy relationship we have with our regulators. On a trailing 12 month basis, we're currently earning a return-on-equity of 10.1% on a consolidated basis which is in line with the authorized returns allowed by our regulators across our jurisdictions. Turning to Slide 6; we consider the location of our service areas to be a fundamental strength which generates significant growth opportunities for the company. We're fortunate to provide service in thriving regions such as Greater Portland Maine and the sea coast region of New Hampshire;…

Thanks, Tom. Good afternoon everyone. I will review our financial results at the halfway point of this year. As Tom just reviewed, we had a solid second quarter with net income of $3.6 million or $0.24 per share, and for the six month period we reported net income of $19.2 million or $1.30 per share, up $0.19 or 17% over the same six month period in 2017. Now let's take a look of how we got there. Turning to Slide 10; natural gas sales margins were $22.9 million and $62.8 million in the three and six months ended June 30, 2018 respectively, which reflect increases of $2.4 million and $4.3 million respectively compared to the same periods in 2017. Gas sales margin in the for the six months of 2018 was positively affected by higher natural gas distribution rates of $4.8 million, including as a result of the final base rate award in the company's New Hampshire gas utility, a concurrent non-recurring adjustments to increase revenue and O&M expenses by $1.2 million in the second quarter of 2018 to reconcile permanent rates and deferred cost to the temporary rates which were effective July 1, 2017. Gas margin in the for the six months of 2018 also reflects the positive effect of colder weather and customer growth on sales volume of $2 million and lower revenue of $2.5 million to account for the reduction in rates due to the lower corporate income tax rate of 21% under the TCJA. The reduction in revenues related to the TCJA also reflects a lower in offsetting provision for income taxes in the period. Natural gas therm sales increased 2.8% and 7.2% in the three and six month periods respectively compared to the same periods in 2017. The increase in gas therm sales and the…

[Operator Instructions] And our first question will come from the line of Shelby [ph] from RBC Capital Markets.

Just a quick clarification on your numbers on comparability. So obviously you have this 2017 electric number of 1.4 million that was non-recurring. Are there any other numbers that we should be thinking about this year that might affect comparability for 2019?

There is two non-recurring that we mentioned in the financial report. One is the revenue adjustment that you're talking about that occurred in '17 related to temporary rates in the electric division which was set in 2016. And there was also the O&M revenue adjustment that just happened this quarter but $1.2 million which again is a non-recurring O&M adjustment increases O&M in the period relative to the prior period that also is non-recurring but those are the only two.

But as recent to '19, the -- obviously the '17 is no longer an issue, the $1.2 million is an issue and that one we do have to adjust as we think about '19. And I just want to make sure there is nothing else in the '18 of this quarter's number or last two quarters number that could not materialize in this first and second quarter of 2019?

No, there is no adjustment in '19.

And then Tom, you did mention that you saw a decade worth of investments in New England. We should be thinking about that as being a bit front-loaded or do you -- what kind of distribution of that investment activity in your territory?

I don't think we've gone through an exercise of trying to determine timing of all of that. The only thing I can say is there is a great deal of construction ongoing now, and a great deal of the construction that we've identified is planned to be in construction within the next one to three years; so I do think that we're going to see a lot of construction in the near-term.

And then I guess what re-caught my attention was the weather normalized electric unit sales, 3.3, which is quite unusual. Do you have a sense of how sustainable that is given the construction expectations that you have? Is that unusual or should we think about that number being indicative of what you might see going forward?

In terms of electric sales, in terms of new meters and new services those are up only a little over 0.5% year-over-year, so a lot of that sales figure is actually increased used among our commercial and industrial customers and I think we would attribute that to the stronger economic activity. I don't know -- I don't think we have a good handle on the extent to which internal use among those customers will continue to our pace like that.

[Operator Instructions] And our next question will come from the line of [indiscernible].

So you like a lot of development in Maine along your grand [ph] state pipeline coming at a time when the governor certainly appears frustrated with the lack of pipeline infrastructure to get more gas into the region. Recently, I know he mentioned comments about possibly getting supply of the LNG, just wondering if that's an opportunity for Unitil? And if you've had any discussions in that area or any others to increase future supply up into the main region?

In terms of LNG imports, I don't know that we see any specific opportunity for us in that area. I mean, I wouldn't say that we've had any specific conversations around LNG supply; I think we have improved our supply procurement from the northern Maine and essentially that's allowing us to continue our growth activities and meet all of our requirements going forward. I think Mark could comment on some of that supply that we've been able to improve coming into our system, but to answer your question directly, no, I think in terms of LNG.

As we've talked about in the past, one of the -- being where we are located in northern New England and particularly in Maine, we have an advantage to take gas from Canada and gain access to that without having to come up through the rest of New England and essentially get shortcut before we get to our service territory. And so we have strengthened the backbone system we have on the PNGTS [ph] system here in the U.S. and then basically the Trans-Canadian system; once we get into Canada then taking us out to the trading hubs in that area and where we have about 4 Bcf of storage. So that's really helped our gas supply position and we think we're going into the winter in a very healthy position. The Maine and northeast pipeline system is one that has -- doesn't have is richer portfolio of gas on it currently due to the shutdown of [indiscernible] in regions that it primarily relied on for gas supply. But that is a potential area that could bring in a gas that maybe used as a peaking supply in particular on a delivered basis during the winter period, so there is maybe some opportunity there. And then Boston -- the Boston market continues to rely on LNG import to serve a considerable portion of the demand during the winter period. So there is a lot of activity, not so much from us again because we're located in our supply resources but the New England region as a whole does contract for and rely upon LNG import and we hope that will continue to be a reliable lower cost to meet winter demands, in particular, given though as you cited the difficulties the states are having bringing in new pipeline supply so that we can bring in the lower cost gas from the Marcellus region and other regions. And we have been able to get those pipelines really built and that is [indiscernible] look for other options.

Thank you. And I am showing no further questions at this time. Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.