Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act 1934

Date of Report (Date of earliest event reported): April 18, 2013

 

 

UNITIL CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

New Hampshire   1-8858   02-0381573

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

6 Liberty Lane West, Hampton, New Hampshire   03842-1720
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (603) 772-0775

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 7.01 Regulation FD Disclosure

At 10:30 a.m. on April 18, 2013, Unitil Corporation (the “Company”) will hold its Annual Meeting of Shareholders at its offices in Hampton, NH. Following the formal business of the meeting, the Company’s Chairman and Chief Executive Officer, Robert G. Schoenberger, plans to make a presentation to the Company’s shareholders. That presentation is attached as Exhibit 99.1 and will be available in the investor relations section of the Company’s website (www.unitil.com) subsequent to the meeting.

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

Number

 

Exhibit

99.1   Unitil Corporation’s presentation to shareholders at its Annual Meeting of Shareholders on April 18, 2013.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

UNITIL CORPORATION

 

By:

 

/s/ Mark H. Collin

  Mark H. Collin
  Senior Vice President, Chief Financial Officer and Treasurer
Date:   April 18, 2013


EXHIBIT INDEX

 

Exhibit
No.

 

Description

99.1   Unitil Corporation’s presentation to shareholders at its Annual Meeting of Shareholders on April 18, 2013.
EX-99.1
Annual Meeting of Shareholders
Presentation by
Robert G. Schoenberger
Chairman, President & Chief Executive Officer
April 18, 2013
Exhibit 99.1


1
Safe Harbor Provision
This
presentation
contains
“forward-looking
statements”
made
pursuant
to
the
safe
harbor
provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking
statements include statements regarding Unitil Corporation’s (“Unitil”) financial condition, results
of operations, capital expenditures, business strategy, regulatory strategy, market opportunities,
and other plans and objectives.  In some cases, forward-looking statements can be identified by
terminology such as “may,”
“will,”
“should,”
“expects,”
“plans,”
“anticipates,”
“believes,”
“estimates,”
“predicts,”
“potential”
or “continue”, the negative of such terms, or other comparable
terminology.
These forward-looking statements are neither promises nor guarantees, but involve risks
and uncertainties that could cause the actual results to differ materially from those set forth in
the forward-looking statements. Those risks and uncertainties include: Unitil’s regulatory
environment (including regulations relating to climate change, greenhouse gas emissions and
other environmental matters); fluctuations in the supply of, demand for, and the prices of energy
commodities and transmission capacity and Unitil’s ability to recover energy commodity costs in
its rates; customers’
preferred energy sources; severe storms and Unitil’s ability to recover
storm costs in its rates; general economic conditions; variations in weather; long-term global
climate change; Unitil’s ability to retain its existing customers and attract new customers; Unitil’s
energy brokering customers’
performance and energy used under multi-year energy brokering
contracts; increased competition; integrity and security of operational and information systems;
publicity and reputational risks; and other risks detailed in Unitil's filings with the Securities and
Exchange
Commission,
including
those
appearing
under
the
caption
"Risk
Factors"
in
Unitil's
Annual Report on Form 10-K for the year ended December 31, 2012.
Readers should not place undue reliance on any forward looking statements, which speak
only as of the date they are made.  Unitil undertakes no obligation to update any forward-
looking statements to reflect any change in Unitil’s expectations or in events, conditions, or
circumstances
on
which
any
such
statements
may
be
based,
or
that
may
affect
the
likelihood
that actual results will differ from those set forth in the forward-looking statements.


2
Our mission is to provide energy for life—safely, reliably, cost-
effectively and responsibly—to a growing number of customers
with a high-performing workforce


3
Unitil Overview
Unitil Service Areas
Electric and natural gas utility
operations in Maine, New Hampshire
and Massachusetts
176,000 total gas and electric
customers
Regulated utility business model
Growing operations and customers
Rate base growth
Natural gas system expansion
Usource
Non-regulated energy brokering
operations conducted through
Usource
Historic dividend stability
Experienced management team


2012 Net Income
4
Record Earnings Applicable to Common Shareholders of $18.1 million in 2012
Mild winter weather in 2012 negatively affected earnings by an estimated $1.7 million
Earnings Applicable to Common Shareholders
($ in millions)
$9.5
$16.3
$18.1
2010
2011
2012


5
Balanced Capital Structure
Completed public offering of
common stock in May 2012
2.76 million shares issued
$66 million in net proceeds
Net proceeds were principally
used to contribute equity to all
utility subsidiaries
Significant improvement in overall
credit statistics, including a
balanced capital structure
Capitalization Ratios
(December 31, 2012)
Preferred
Stock
<0.1%
Common
Equity
48%
Long
Term Debt
52%


Financial Highlights
6
($ in millions)
($ in millions)
($ in millions)
($ in millions)
$121
$141
$154
2010
2011
2012
$9.5
$16.3
$18.1
2010
2011
2012
$487
$517
$557
$601
2009
2010
2011
2012
$28
$37
$37
2010
2011
2012
Operating Income
Sales Margin
Net Income to Common
Net Utility Plant


7
Premier Storm Response
Unitil selected as one of the winners of the 2012
Emergency Recovery Award from the Edison
Electric Institute for extraordinary recovery
efforts following Hurricane Sandy
Unitil received praise from customers, 
municipalities, elected officials and regulators
In October 2012, Hurricane Sandy struck with
flooding rain and damaging winds
During the storm, approximately 69,000 customer
outages were reported, representing 70% of
electric customer base
Responded to 40,000-plus calls during the event;
99% of those calls picked up in 20 seconds or less
All impacted customers were back online in less
than 48 hours
Hurricane Sandy
Edison Electric Institute Award
[Unitil’s] storm management is now a model for other New Hampshire companies.”
-
New Hampshire Public Utilities Commission


$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Annual Residential Heating Cost ($)
Gas
Fuel Oil
8
Source: Energy Information Administration
U.S. Natural Gas Production, 1990-2035
Retail Cost Comparison
Source: Unitil estimates
Gas Growth -
Fundamentals
Natural gas is
currently ~50%
the cost of
retail fuel oil
Changing natural gas fundamentals are creating significant opportunities for growth in the
local natural gas distribution industry
Increase in domestic natural gas production driven largely by shale gas resources
On a retail-delivered basis, natural gas is approximately 50% the cost of retail fuel oil
Typical residential customer saves on average ~$1,500 / year with natural gas
0
5
10
15
20
25
30
Shale
Tight
Non-associated offshore
Associated with oil
Non-associated onshore
Coalbed methane
Alaska


9
Gas Growth -
Market Potential
Current On-the-Main Penetration (2012)
Projected On-the-Main Penetration (2016)
Serving 74,000 total gas customers currently
Identified
55,000
potential
new
customers
who
are
“on-the-main”,
but
not
currently
taking
gas
service  
-
(90% residential / 10% C&I)
Over 250,000 homes and businesses within existing service areas do not have natural gas
Growth plan target is to serve 92,000 total customers by 2016
Represents 5% CAGR in customer growth
74,000
(57%)
55,000
(43%)
Current Customers
On-the-Main Prospects
92,000
(71%)
37,000
(29%)
Projected Customers
On-the-Main Prospects


10
Gas Customer Additions
Gas Growth -
Customers
Gas customer additions significantly increasing since 2008 acquisition of Northern Utilities
Added and converted over 2,000 customers in 2012, up approximately 50% from 2011
In 2013, plan to target 4,000 customer additions and conversions
700
800
1,100
1,800
250
250
350
350
950
1,050
1,450
2,150
4,000
5,000
2009
2010
2011
2012
2013F
2014F+
Net Additions
Conversions


11
Rate Cases
Strong
regulatory
track
record
base
rate
relief
to
date
has
increased
sales
margins over 30%
Continue to have favorable longer term rate plans including cost
tracker
mechanisms at Unitil Energy and Granite State through 2014
Base Rate Relief
($ in millions)
$11.7
$3.7
$3.3
$2.5
$8.7
$3.7
$33.6
Unitil Energy
5/1/2011 &
5/1/2012
Fitchburg Gas
8/1/2011
Fitchburg Electric
8/1/2011
Granite State
1/1/2011
8/1/2011
8/1/2012
Northern ME
1/1/2012 &
5/1/2012
Northern NH
5/1/2012
Total to Date


12
2013 Rate Case Filings
Rate
Relief
2013
2014
Company
Requested
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Northern Utilities (New Hampshire)
$5.2mm
Northern Utilities (Maine)
$4.6mm
Fitchburg (Electric)
TBD
Rates
Expected
Q2 2014
~9 mos.
Rates
Expected
Q1 2014
~10 mos.
~3 mos.
Temporary Rates Expected Q3 2013
Permanent Rates
Expected Q2 2014
~10 mos.
Total of $9.8 million of rate relief requested for Northern Utilities in Maine and New
Hampshire
Both filings include a comprehensive multi-year rate plan with cost tracker
Fitchburg Electric rate case to be filed early third quarter 2013


Usource
13
Competitive Energy Markets
Customers
Connecticut
Minnesota
Delaware
New Hampshire
Florida
New Jersey
Georgia
New York
Illinois
Ohio
Indiana
Pennsylvania
Maine
Rhode Island
Maryland
Texas
Massachusetts
West Virginia
Gas & Electric
Gas
only
Not
fully
open
Manages over $660 million annually
in electric and gas energy contracts
Serves over 1,200 customers
>90%
customer retention rate
Currently serves electricity and/or
natural gas clients in 18 states
2012 revenue of $5.5 million
Year-end 2012 forward book of
revenue at an all-time high of $8.2
million


14
Key Investment Highlights
Regulated local distribution utility
business model
Diversified natural gas and electric sales
Growing operations and customer base
Utility rate base growth
Natural gas system expansion
Usource contribution
Historic dividend stability
Experienced management team


Question & Answer Session
15