Good afternoon, everyone, and welcome to the Unitil Corporation 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] And as a reminder, this conference call is being recorded. I would now like to turn the conference over to your host for today, Mr. Todd Diggins.

Good afternoon, and thank you for joining us to discuss Unitil Corporation’s Second Quarter 2020 Financial Results. With me today are Tom Meissner, Chairman, President and Chief Executive Officer; Larry Brock, Senior Vice President, Chief Financial Officer and Treasurer; Dan Hurstak, Controller; and Todd Black, Senior Vice President, External Affairs and Customer Relations. Also in attendance today is Bob Hevert. Bob was recently appointed Senior Vice President, Chief Financial Officer and Treasurer, effective July 31, as we will discuss in further detail momentarily. 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. 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. This presentation contains non-GAAP measures. The accompanying supplemental information more fully describes these non-GAAP measures and includes a reconciliation to the nearest GAAP measures. The company believes these non-GAAP measures are useful in evaluating its performance. I will now turn the call over to Chairman, President and CEO, Tom Meissner.

Thank you, Todd, and thanks, everyone, for joining us today. Before we start, moving to Slide 3, I’d like to introduce Bob Hevert, who was recently appointed Senior Vice President, Chief Financial Officer and Treasurer. Bob brings over 30 years of industry experience in regulatory matters and corporate finance and has testified in over 300 proceedings as an expert witness. In fact, Bob has testified on behalf of Unitil in each of the states where we operate, including most recently as the cost of equity witness in our recent rate case in Maine. Bob was previously with ScottMadden as Partner and Practice Area Leader of Rates, Regulation and Planning. We believe that Bob’s proven track record of success and his broad industry experience will be of great value to the company and its shareholders. At this point, I’d like to give Bob the opportunity to just say a few words.

Thank you, Tom, and good afternoon, everyone. I have worked with Unitil on a variety of matters for many years. And during that time, I became familiar with the company’s employees, its culture, and its commitment to excellence, all of which I am sure have proven to be a benefit to both customers and shareholders. I’m very excited to join the Unitil team, and I look forward to helping advance the company’s long-term strategies.

Well, we’re happy to have you on board, Bob. As Todd mentioned earlier, Bob’s appointment will become effective on July 31 or tomorrow, at which point, Larry Brock will step down as CFO. Larry will continue on with company as Senior Vice President, working closely with Bob. I’d like to thank Larry for his leadership during his time as CFO and his commitment to working closely with Bob to ensure a smooth transition. With that, I’ll now move on to Slide 5, where today, we announced net income of $3.1 million or $0.21 per share for the second quarter of 2020, a decrease of $0.9 million or $0.06 per share compared to 2019. The company estimates that the ongoing COVID-19 pandemic unfavorably impacted net income by approximately $0.4 million or $0.03 per share. During the first half of 2020, net income totaled $18.3 million or $1.23 per share. As a reminder, in the first quarter of 2019, the company recognized a onetime net gain of $9.8 million or $0.66 in EPS on the company’s divestiture of its non-regulated business subsidiary, Usource. Adjusting for the divestiture gain, net income was down by $2.4 million or $0.16 per share compared to 2019, reflecting warmer winter weather in 2020. The year-to-date decrease in earnings is primarily due to the warmer-than-normal winter weather in Q1, which unfavorably affected net income by approximately $3.1 million or $0.20 per share. Turning to Slide 6. Similar to last quarter, I’d like to recap the company’s COVID-19 pandemic response. Our highest priority continues to be the safety of our customers and of our employees. In response to the COVID-19 emergency, we implemented our crisis response plan in order to execute preventive and proactive measures during this unprecedented time, and we’ve also enacted a phased opening plan. The company…

Thanks, Tom. Good afternoon, everyone. I’ll begin the sales and margin discussion on Slide 10. In the second quarter of 2020, our gas gross margin was $22.9 million, a decrease of $0.4 million from 2019. We estimate that the COVID-19 emergency unfavorably impacted gas margin by $0.8 million due to lower commercial and industrial usage. In addition, the warmer early summer weather impacted gas margin unfavorably by $0.2 million in the quarter. These decreases were partially offset by $0.6 million due to higher distribution rates and customer growth in 2020 compared to 2019. Natural gas therm sales decreased 9.0% in the second quarter of 2020 compared to the same period in 2019. The decline in gas sales units primarily reflects lower C&I usage due to the ongoing COVID-19 emergency as well as the warm early summer weather. In total, the company estimates that weather-normalized gas therm sales, excluding decoupled sales, were down 5.6% in the quarter. Commercial and industrial sales were down 10.7% and residential usage was down 2.1% in the quarter compared to prior year. On a weather-normalized basis, excluding decoupled sales, the company estimates that C&I sales were down 7.4% and residential sales would have been up 3.2% in the quarter. Moving to Slide 11. For the first six months of 2020, our gas gross margin was $65.3 million, a decrease of $1.5 million from 2019. The decrease was primarily driven by the historically warm winter weather in the first quarter of 2020 that I discussed during our last quarter’s earnings call. The company estimates that year-to-date sales margin was lower by $2.7 million due to warmer weather, partially offset by customer growth. We also estimate that the COVID-19 emergency unfavorably impacted margin by $0.8 million due to lower C&I usage. These volume variances were partially offset by…

[Operator Instructions] And first question comes from the line of Shelby Tucker of RBC Capital Markets. Shelby, your line is now open.

Thank you. Good afternoon. Bob, welcome to the team, looking forward to working with you going forward. A quick question I had was really about switching in your territory from fuel oil to gas. Any impact from either COVID-19 or the persistent lower cost of crude price – I mean, the lower crude prices in the switching rate?

Hi, Shelby, this is Tom. For the most part, we have not emphasized marketing for shifting customers from oil to gas during this time. But I would point out that our customer growth continues to be strong year-over-year, which is primarily driven by organic growth. So we have a lot of large projects that continue to come through, including a large one in Salem, New Hampshire that is proceeded as planned. So we don’t really expect to see an impact on our customer numbers year-over-year, although it will be more driven by organic growth as opposed to switching.

And then taking that answer, I’m guessing most of the growth is coming from a bit more commercial or industrial, but mostly in commercial. Does – are there any indications of a slowdown given the COVID-19 crisis?

We have not seen any indication of a slowdown. And in fact, we’ve seen commercial properties, mixed-use development and hotels continuing construction throughout this emergency.

Great. Thank you so much.

Yes, thank you.

[Operator Instructions] And there are no further questions at this time. Presenters, you may continue.

Thank you for everyone joining. I appreciate the interest that you have in Unitil. And everyone, have a great day. Thanks.

Thank you so much to our presenters and to everyone who participated. This concludes today’s conference call. You may now disconnect. Have a great day.