Good day, thank you for standing by. Welcome to the Q3 2024 Unitil Earnings Conference call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Todd Diggins, Chief Accounting Officer and Controller.

Good morning, and thank you for joining us to discuss Unitil Corporation's third quarter 2024 financial results. Speaking on the call today will be Tom Meissner, Chairman and Chief Executive Officer, and Dan Herstack, Senior Vice President, Chief Financial Officer and Treasurer. Also with us today is Bob Hebert, President and Chief Administrative Officer. We will discuss financial and other information on this call. As we mentioned in the press release announcing today's call, we have posted information, including a presentation, to the investor section of our website at unitil.com. We will refer to that information during this call. Moving to Slide 2, the comments made today about future operating results or events are forward-looking statements under the Safe Harbor provisions of the Private Security 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 financial measures. The accompanying supplemental information more fully describes these non-GAAP financial measures and includes a reconciliation to the nearest GAAP financial measures. The company believes these non-GAAP financial measures are useful in evaluating its performance. With that, I will now turn the call over to Chairman and CEO, Tom Meissner.

Thanks, Todd and good morning, everyone. Thank you for joining us today. Beginning on Slide 3, today we announced breakeven results for the third quarter. Through the first nine months of the year, net income was $31.5 million, or $1.96 per share, representing an increase of $0.11 per share over the same period in 2023. Our results for the quarter were consistent with our expectations, and we remain confident that our full-year earnings will be within our long-term guidance range. I'll also mention that we provide a graph of the expected distribution of our quarterly earnings and the cost to supplement each quarter, and our quarterly results have been generally consistent with that guidance. Looking beyond 2024, we reaffirm our long-term earnings growth of 5% to 7%, supported by rate-based growth in the range of 6.5% to 8.5%, and a dividend payout ratio between 55% and 65%. As discussed on our previous earnings call, in July, we entered into an agreement with Hope Utilities to acquire Bangor Natural Gas. Beginning this quarter, we disclosed adjusted net income and earnings per share in our third quarter Form 10-Q to reflect the company's baseline operating performance, excluding transaction costs. Through the first nine months of the year, adjusted net income was $32.1 million, or $2 per share. We're pleased with the strong results of the first nine months and believe they reflect strong operational performance, disciplined cost management, and the successful execution of our regulatory agenda. On the regulatory front, Granite State Gas Transmission, our interstate gas transmission subsidiary, recently filed an uncontested rate case settlement with FERC. Later in the presentation, Dan will provide more detail about the settlement, as well as an update on the regulatory proceedings for our Bangor Natural Gas acquisition. Moving now to Slide 4. I'm pleased…

Thank you, Tom. Good morning, everyone. I'll begin on Slide 6. As Tom mentioned, today we announced breakeven results for the three months ended September 30th, 2024. For the first nine months of the year, net income was $31.5 million, or $1.96 per share, an increase of $0.11 per share compared to the corresponding period in 2023. Earnings growth reflects higher adjusted electric and gas margin, partially offset by higher operating expenses. We have also reported adjusted net income and EPS amounts, which exclude the effect of certain Bangor transaction costs recognized in operation and maintenance expense, and as Tom mentioned, do not reflect ongoing operating performance. Adjusted earnings per share was $0.02 per share in the third quarter and $2 per share for the first nine months of the year. Turning to Slide 7, I will discuss our electric and gas adjusted gross margin. I'll begin with our electric operations. Electric adjusted gross margin was $81.7 million for the nine months ended September 30th, 2024, an increase of $1.6 million as compared to the same period of 2023. The increase in electric adjusted gross margin reflects higher distribution rates and customer growth. The company added approximately 1,100 new electric customers compared to the same period in 2023, and as noted during prior calls, electric distribution revenues are substantially decoupled, which eliminates the dependency of distribution revenue on the volume of electricity sales. Moving to gas operations. Gas adjusted gross margin was $115.6 million for the nine months ended September 30th, 2024, an increase of $9.2 million compared to the same period in 2023. The increase in gas adjusted gross margin reflects higher distribution rates and customer growth. The company added approximately 720 new gas customers compared to the same period in 2023, approximately 60% of the company's gas customers…

Great. Thanks, Dan. Wrapping up now on Slide 13, with nine months behind us, we continue to deliver on our commitments. Our capital plan is progressing as planned, regulatory outcomes remain constructive, and we are earning our authorized returns. Looking ahead, we offer long-term earnings growth aligned with our peers while maintaining a lower-risk profile. We look forward to sharing more information on our strategies, our progress, and our investment outlook on the year-end earnings call. With that, I'll turn the call back to Todd.

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

Thank you. [Operator Instructions] One moment for questions. And I'm not showing any further questions at this time. This concludes the conference. One question. One moment. Our first question comes from Shelby Tucker with RBC. You may proceed.

Yes, good morning. Thank you. Just wanted to maybe break down a bit more the capital spending program by asset class between electric and gas. And then also, as you think about some of the policies that the states have been pursuing in your territories, where do you see the trend going between those two asset classes? Thank you.

I mean, I can -- hi, Shelby. This is Tom. I can probably take the second part of the question. I'm not sure I have the breakdown. But in terms of state policies, I mean, clearly we're seeing a big shift, I think, toward electric from gas. That's especially notable in Massachusetts in particular. Grid modernization continues to be a topic, even in New Hampshire. So we're seeing more of our spend geared towards electric than gas. That will be especially true as we start to finish up some of our pipeline replacement programs on the gas side. So I think, as you know, we completed New Hampshire some years ago. And this year, we will complete Maine. So our system will be entirely modernized in Maine. And realistically, much of our replacement in Massachusetts will be completed during the next five-year time period. So I think we do see more of our capital investment outlook shifting over to the electric side. So I'll let Dan provide any color on the breakdown.

Yeah, Shelby, I'd agree with Tom. I think when you look at the trend, it'll probably be moving more towards a mix of electric relative to the current mix. We're probably about two-thirds gas, one-third electric for rate base. So the current the short-term capital plan probably reflects that a little bit. There's probably somewhere in the neighborhood of 15% to 25% growth versus maintenance capital embedded in that plan. And when you think about Massachusetts, we have that natural hedge of gas and electric customer base in that state. So as we support the electric sector modernization plan, which we referenced, that may lend itself to a little bit more investment for the electric side in Massachusetts.

So if we think about the 6.5% to 8.5% rate-based growth target, as newer policies come out, is that additive to that number? Or do you anticipate some offsets to keep it in that 6.5% to 8.5%?

Yeah, I think there is some upside, Shelby, to the policies, particularly in Massachusetts, that a portion of the investments that are included in our electric sector modernization plan are included in that $910 million capital plan through 2028, but a portion are not. So there is definitely upside to the plan for those types of investments.

Great.

Probably also worth mentioning that it does not include any upside related to Bangor natural gas.

Sure. Okay. Thank you.

Great. Thank you.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.