Good afternoon and welcome to the Q1 2021 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 conference is being recorded. I would now like to turn the conference over to your host, Todd Diggins, Director of Finance. Please go ahead.

Good afternoon and thank you for joining us to discuss Unitil Corporation's First Quarter 2021 Financial Results. Speaking on the call today will be Tom Meissner, Chairman, President and Chief Executive Officer; and Bob Hevert, Senior Vice President, Chief Financial Officer and Treasurer. We will discuss financial and other information on this call. As we mentioned in the press release announcing this call, we have posted information, including a presentation, to the Investors section of our website at www.unitil.com. We will refer to that information during this call. Moving to slide two. 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 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 measures. The accompanying supplemental information more fully describes these non-GAAP measures and includes a reconciliation to the nearest GAAP measure. The company believes these non-GAAP measures are useful in evaluating its performance. And with that, I'll now turn the call over to Chairman, President and CEO, Tom Meissner.

Thanks, Todd, and good afternoon, everyone. I'm going to begin on slide four. Today, we are pleased to announce net income of $18.9 million or $1.26 per share for the first quarter of 2021. This represents an increase of $3.7 million or $0.24 per share compared to 2020. I'm also pleased to note that on April 2, we filed a strategic multiyear rate plan at our New Hampshire electric utility which, in addition to requesting a base rate increase, includes a number of proposals to support the evolving energy needs of our customers and stakeholders. Bob will discuss the details of this filing later in the call. Looking forward, we're encouraged by signs of economic growth in the states we serve. In fact, as of March, New Hampshire is now home to the two hottest housing markets as well as two of the top 10 emerging housing markets in the nation. Finally, we remain committed to our long-term guidance of 5% to 7% growth in earnings per share. Our first quarter results reflect our on-going operating and regulatory initiatives as well as sustained customer growth that will help us to achieve strong results in the future. Now moving on to slide five. I'll provide an update on some of the latest economic conditions in the areas we serve, which we view with growing optimism. It's hard to believe that the onset of this pandemic was just over a year ago, but I want to again mention how pleased I've been with the dedication, resilience and sheer determination of our employees in responding to this crisis. It's been a trying time, but we're now seeing encouraging signs of an accelerating economic recovery across our service areas. Employment data has improved significantly since the onset of the pandemic. And with the on-going…

Thank you, Tom, and good afternoon, everyone. I will begin on slide seven. As Tom noted, this morning, we announced first quarter earnings per share of $1.26. Net income for the quarter increased by $3.7 million or $0.24 per share compared to the same quarter in 2020. Our strong year-over-year earnings growth principally is a result of higher sales margins, which increased as a result of higher distribution rates, colder winter weather and continued customer growth. As you recall, weather in the first quarter of 2020 was historically warm and affected earnings by an estimated $0.20 per share. By comparison, the winter weather in the first quarter of 2021, although somewhat warmer than normal, was significantly colder than the first quarter of 2020. Turning to slide eight. Electric adjusted gross margin for the quarter ended March 31, 2021, was $23.7 million, an increase of $0.6 million or 2.6% over 2020. The increase in electric margin reflects higher residential unit sales of 7.3%, partially offset by lower commercial and industrial unit sales of 4.1%. Customers increased 0.9% over the first quarter of 2020, reflecting a combination of growth in both the residential and commercial customer classes. As Tom noted earlier, our current expectations are that sales volumes will return to pre-pandemic levels by the end of 2021 as our service area economies continue to recover. Turning now to slide nine. For the quarter ended March 31, gas adjusted gross margin was $47.8 million, an increase of $5.4 million or 12.7% compared to 2020. The increase in gas margin reflects higher rates of $3.3 million and the combined net effect of $2.1 million from colder winter weather, customer growth and lower commercial and industrial sales. The first quarter of 2021 was 8.1% colder year-over-year, contributing to higher natural gas therm sales of…

Thanks Bob. Now wrapping up with slide 14. With the first quarter of 2021 behind us, we're pleased with the company's results as well as the broader economic recovery. The foundation of our business is strong, and we view the future with increasing optimism. Unitil offers long-term sustainable shareholder growth, paired with an attractive dividend and robust investment opportunities. As I mentioned earlier, we expect long-term EPS growth of 5% to 7%, with near-term earnings growth likely at the higher end of the long-term range relative to our 2020 earnings. Thank you for your participation today. And with that, I'll turn it back to you, Todd.

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

Thank you, Todd.[Operator Instructions] Your first question comes from the line of Michael Gaugler with Janney Montgomery.

Good afternoon, everyone.

Hi, Mike.

Hi, Mike.

So given your housing market, just wondering what your organic growth outlook is going out, let's say, for the next few years?

Yes. Mike, this is Bob Hevert. We're looking at the housing market, and we do think it's very hot. As Tom mentioned, we have in New Hampshire, two of the hottest and emerging housing markets in the country. Now as we're looking at organic growth going forward, we think we're retaining our existing projections. So we're not really extrapolating what we're seeing right now, Mike, going forward. But that said, as we mentioned earlier, we do see some potential upside in the capital investment plan for issues such as grid modernization, electric vehicles, and there could be also upside potential in the investment plan relating to customer growth. So as for now, we are maintaining our growth targets, which manifest themselves in the 6.5% to 8.5% rate base growth. But we certainly do see potential upside, and we'll keep an eye on that as we go forward.

All right, so I had. Gentlemen, thank you.

Thank you, Mike.

[Operator Instructions] Your next question comes from the line of Shelby Tucker with RBC Capital Markets.

Good afternoon. On your rate case for New Hampshire, can you remind me if there is a precedence of multiyear decisions?

Hey Shelby, it's Bob Hevert. Yes, there is. The last two cases that we filed in New Hampshire, both had multiyear plans, both three years in duration, and both were very comparable to what we've proposed here in terms of the step adjustments reflecting non-growth related capital investments. So yes, there is precedent. And we did try to follow that precedent quite closely as we developed our filing in this case.

Got it. And then picking up on Mike's question. If there's a change in pace of build-out, are there adjustments that can be made to the multiyear plan? Or are you kind of -- you're positioned that way going for the next three years?

No. That's a great question. No, we -- each year, Shelby, we will propose the step adjustment. And we are not bound by what we expect right now. And in fact, in our current filing, the step adjustments we show are effectively illustrative. They're our best estimate of what the adjustments will be going forward 1, two and three years, but they're not definitive. And as those years come up, as we make those filings, we certainly would reflect the conditions at the time.

Got it. Okay, thank you very much.

Thank you.

[Operator Instructions]