Good day, ladies and gentlemen. And welcome to the Quarter 1 2019 Unitil 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, this call may be recorded. I would now like to introduce your host for today’s conference, Todd Diggins. Please go ahead.

Good afternoon. And thank you for joining us to discuss Unitil Corporation’s first quarter 2019 financial results. With me today are Tom Meissner, Chairman, President and Chief Executive Officer; Christine Vaughan, Senior Vice President, Chief Financial Officer and Treasurer; Larry Brock, Chief Accounting Officer and Controller; and Todd Black, Senior Vice President, External Affairs and Customer Relations. We will discuss financial and other information about our first 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 two, the comments made today about future operating results or future events are forward-looking statements under the Safe Harbor provision 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 the cautionary statements and other information contained in our most recent annual report on Form 10-K and other documents we have filed 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 will now turn the call over to Tom.

Great. Thank you, Todd, and thanks everyone for joining us. I am going to begin on slide four, where today we announced net income of $26.5 million or $1.78 per share for the first quarter of 2019. This is an increase of $10.9 million or $0.72 per share over the same quarter last year. In March, we recognized a one-time gain of $9.8 million or $0.66 per share on the divestiture of our non-regulated energy brokering advisory business, Usource. Excluding the impact of this one-time gain, the company recorded earnings of $16.7 million or $1.12 per share, which is $0.06 ahead of last year. This increase was driven largely by customer growth and higher sales margins. Moving now to slide five, I’d like to expand on the Usource transaction, which was completed on March 1st. As I mentioned, the company recognized an after-tax gain of approximately $10 million on this divestiture in the first quarter. We continue to believe Usource is a solid business. However, after a strategic review we determined that its needs going forward did not fully align with our business model and investor profile. We also felt that there are stronger growth opportunities in our regulated businesses. We plan to reinvest the proceeds of this transaction into our regulated subsidiaries to fund our strong growth prospects and increase capital expenditure program. This investment should be accretive by next year as the proceeds are invested in rate base. In the near-term, the company’s short-term borrowings are reduced by the net proceeds. Unitil is now operating as a fully rate regulated business. Moving on to slide six. To meet our customers’ growing and ever changing energy needs, the company has developed a robust capital spending plan. Our capital spending over the next three years is forecast to be about…

Thanks, Tom. Good afternoon, everyone. Turning to slide nine, natural gas margins were $43.5 million in the three months ending March 31, 2019, which is an increase of $3.6 million compared to the same period in 2018. Gas sales margins in the first quarter of 2019 were positively affected by higher natural gas distribution rates of $2.6 million and $1 million from higher therm sales, reflecting customer growth. Natural gas therm sales increased 2.1% in three months ending March 31, 2019, compared to the same period in 2018. The increase in gas therm sales in the company’s service area was again driven by customer growth. The company estimates that weather normalized gas therm sales, excluding decoupled sales were up 5% in the quarter 2019 compared to the same quarter in 2018. As of March 31, 2019, the number of natural gas customers served has increased by over 1,500 compared to the prior year. Next on slide 10, I will discuss electric units and sales margin. Electric sales margins were $23.1 million in the three months ended March 31, 2019, an increase of $0.8 million compared to the same period in 2018. Electric sales margins in the first quarter of 2019 were positively affected by higher electric distribution rates of $1.2 million, partially offset by lower sales margin of $0.4 million, reflecting lower kilowatt hour sales. The total electric kilowatt hour sales decreased 4.3% compared to the first quarter of 2018 and this decrease in kilowatt hour sales really reflects shorter billing cycles in the first quarter of 2019, combined with lower average usage, including reduced usage by our industrial customers for production purposes, partially offset by customer growth. As of March 31, 2019, the number of electric customers served has increased by about 550 over the last year. Turning to…

Thank you. [Operator Instructions] And our first question comes from the line of Julien Dumoulin-Smith with Bank of America. Your line is now open.

Hi. This is Alex Morgan calling in for Julien Dumoulin-Smith. Congratulations on the results.

Thanks, Alex.

And thanks for taking my question. I first wanted to just base touch on Massachusetts, I know you just mentioned that there is the law that requires a rate case to be filed by 2020. I was wondering if you have any color on the potential trajectory of earned ROEs, especially considering you are currently at the 5.1 percentage points?

Currently, the Maine utility, our Maine -- Northern Maine has the highest deficiency number. That’s because of the stronger rate -- absolute number in rate base there. The earned ROEs in Massachusetts can be improved. Typically, we usually file the electric and the gas rate case together, we will make a decision on that shortly. But the gas division is the one that’s contributing to the lower ROEs in that company.

Okay. Thank you so much. And one other question from me, I was just wondering if we are potentially going to see any CapEx opportunities this year in terms of pulling forward some of the gas modernization efforts?

Hi, Alex. This is Tom. Realistically, I don’t think we will have another update to our capital plan until January.

Okay. Thank you so much and thanks again.

Thank you.

Thank you. And our next question comes from the line of Shelby Tucker with RBC Capital Markets. Your line is now open.

Hi. Good afternoon. Just following up on Alex’ question, do you have breakdown for the ROEs between New Hampshire and Maine for Northern Utilities?

I don’t think I have that with me.

Hi, Shelby. It doesn’t sound like we have that handy right here.

Got it. Okay. And then the -- as it relates to the recent expansion opportunities, you mentioned that you have expanded three new franchises in New Hampshire. Could you maybe give us some more color as to how do you identify opportunities and what might be the backlog opportunity?

Sure. In terms of those three towns, in each of those cases, there’s anchor loads that are justifying the cost of the mains extensions into those areas. So in all three cases we are extending mains to reach anchor loads to justify the projects. Longer term, I think, our strategy is to franchise the Route 125 corridor in New Hampshire from Massachusetts up to Rochester, so it sort of bisects the western half of our territory as we are expecting more commercial development to be expanding in that direction as the seacoast gets more and more expensive.

And I guess these anchor, I will call it, anchor tenants tend to be more larger industrial, big commercial or is it more of a expansion of talent or residential in that area?

In one case, it’s a large industrial customer and in another town it’s a very large residential community, and in another town, it’s actually an existing commercial corridor that has quite a few existing customers on propane.

Got it. Okay. And the last question I have is also following up on Alex’ question about the Fitchburg and the timing on the filing. What criteria do you look at to determine whether you would be willing to file prior to 2021?

Generally, we look at where the ROEs are, the particular regulatory environment and what’s going on internally with the company.

Okay. Because on the ROE point of view it seems that you are already there.

Correct. But Northern Utilities has a large common equity. NU has $200 million of equity, whereas Fitchburg only has $78 million. So Northern Utilities really is the big company in the overall consolidated company and it makes a big dent in the deficiency.

Shelby, just to clarify as well, we have to file by 2020 not 2021.

Oh! I am sorry, I meant, ‘20.

Yeah.

Okay. Okay. Thank you very much. Appreciated it.

Yeah. Thank you, Shelby.

And our next question comes from the line of Kelvin Jiang with Monarch Partners. Your line is now open.

Hi. Thanks. Thank you for taking my question. Congrats on the quarter. And this question is for Christine. I am wondering what your top priorities are since joining Unitil and what your thoughts are on hosting analyst days going forward? Thank you.

Our priorities is to continue to invest in safe, reliable systems and continue to be responsible to shareholders going forward. We also intend to increase our contact with analysts over prior periods and we had a couple of investor meetings scheduled. I am not adverse to doing an Analyst Day next year, we can think about that going forward.

Okay. That’s great. Thank you.

Thank you.

Thank you. And I am not showing any further questions in today’s question-and-answer queue. So I’d like to turn the back -- the call back to Todd Diggins for any further remarks.

I’d like to thank everyone for joining us today and I hope that you found the information helpful. Thanks.

Ladies and gentlemen…

Thanks everyone.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude today’s program. You may all disconnect. Everyone have a great day.