UTL

• Overall Financial & Operational Performance

  • Q2 2026 adjusted net income was $5.2 million ($0.29 per diluted share). For the first half of 2026, adjusted net income hit $39 million ($2.17 per diluted share), a 7% ($0.14 per share) increase over the first half of 2025.
  • Trailing 12-month return on equity is 9.6%, meeting the company's authorized return targets.
  • Overall customer satisfaction score holds at 90%, which is slightly higher than last year, ranks as the best among Northeast utilities, and falls in the top quartile nationally.

• Completed & Pending Acquisitions

  • Acquisition of Aquarian Water Company of New Hampshire and Abenaki Water Company closed on June 30, 2026, for a total purchase price of $55.8 million, including assumption of $13.7 million in long-term debt.
  • A 5-year operating and transition services agreement was signed with the Aquarian Water Authority to support seamless integration. The transaction was initially financed via a holding company term loan.
  • Unitil has signed a non-binding letter of intent to purchase Massachusetts Aquarium Company from Eversource Energy, pending resolution of a base rate case proceeding and other closing conditions.
  • The closed New Hampshire water acquisition is expected to be earnings neutral in 2026 and accretive to earnings once new distribution rates take effect.

• Capital & Infrastructure Projects

  • The advanced metering infrastructure (AMI) project to replace all electric meters was fully completed in Massachusetts last year: 31,000 meters were replaced for $10 million in total costs, which are currently being recovered in customer rates.
  • In New Hampshire, 21,000 meters have been replaced to date. The full 80,000 meter rollout is on track to be completed by the end of 2027, with total expected costs of $30 million; a portion of costs will be recovered via a future step rate adjustment.
  • The updated five-year capital investment plan through 2030 totals ~$1.2 billion, a 24% increase over the prior five-year plan. The plan allocates $65 million to the Maine gas acquisitions and $33 million to the New Hampshire water acquisitions.
  • Rate base has grown 14.9% ($200 million) year-over-year, driven by the Maine gas and New Hampshire water acquisitions. Average annual rate base growth over the past five years is 9.5%, above the long-term target range of 6.5% to 8.5%.

• Regulatory Activity

  • Two active northern utility rate cases (one in New Hampshire, one in Maine) are progressing as expected. In New Hampshire, a $9.8 million permanent rate increase was filed in April 2026, with $5.5 million in temporary rates effective June 2026. A multi-year rate plan with two-step adjustments is proposed, along with a change to the decoupling methodology. Permanent rates are targeted to take effect April 1, 2027.
  • In Maine, a $10.4 million proposed revenue increase was filed in June 2026, using a historical test year adjusted to forecast values to reduce earnings attrition, consistent with prior approved rate cases.

• Natural Gas Growth

  • Natural gas holds a significant long-term price advantage over competing fuels including fuel oil and propane, with oil prices remaining substantially elevated for an extended period. Inquiries for new natural gas service are up 50% year-over-year in the first half of 2026, with ~1,500 new customers already under contract or in active construction. Adjusted margin growth is positive across all natural gas business units compared to 2025.

• Balance Sheet Management

  • Unitil maintains a balanced capital structure to support investment-grade credit ratings, with cash flow from operations as the primary funding source for the capital plan, supplemented by long-term debt and equity issuance.
  • The FFO-to-debt ratio of 17.2% falls squarely in the middle of management's long-term target range and is well above credit downgrade thresholds. In Q2 2026, the company issued ~$11 million in equity via its at-the-market (ATM) program, with ~$37.5 million in remaining capacity as of quarter-end. In June 2026, $60 million in holding company senior notes were priced, with closing expected in September 2026; proceeds will be used to repay existing holding company debt and for general corporate purposes.

• Management reaffirms its full-year 2026 adjusted earnings per share guidance range of $3.20 to $3.36, with a midpoint of $3.28, unchanged from prior guidance.
• Long-term annual earnings per share growth guidance of 5% to 7% is also reaffirmed, unchanged from prior guidance.

For the six months ended June 30, 2026:

1. Electric segment: Adjusted gross margin of $61.2 million, a $7.9 million (14.8%) increase year-over-year. The growth was driven by higher approved rates and customer growth. All electric customers operate under decoupled rates, so distribution revenue does not depend on electricity sales volume. Electric margin contributed ~33.3% of total combined electric and gas adjusted gross margin.
2. Gas segment: Adjusted gross margin of $122.7 million, a $14.6 million (13.5%) increase year-over-year. Growth came from a $8.7 million contribution from the acquired Maine Natural Gas, $4.5 million from higher rates and customer growth, and $1.4 million from colder winter weather. The segment added ~6,600 new gas customers year-over-year, mostly from the Maine Natural Gas acquisition. As of quarter-end, 52% of gas customers are under decoupled rates, with Maine the only non-decoupled service area. Gas margin contributed ~66.7% of total combined electric and gas adjusted gross margin.

• Forward-looking statements included in the call are based on current expectations and are subject to inherent risks and uncertainties that could cause actual results to differ materially from projections. Management does not undertake an obligation to update or revise forward-looking statements.
• Completion of the proposed Massachusetts Aquarium Company acquisition is contingent on the successful resolution of a base rate case proceeding and other pre-closing conditions, creating execution uncertainty for the transaction.
• Ongoing rate case proceedings require stakeholder negotiation and regulatory approval, with final outcomes and effective dates for permanent rate changes subject to uncertainty.

Q: The guidance that the New Hampshire water acquisition is earnings neutral in 2026 was originally framed for both the New Hampshire and potential Massachusetts acquisitions. Does closing only the smaller New Hampshire transaction change the earnings outlook, and is the increased capex plan entirely tied to the New Hampshire water assets?

A: All incremental capex added to the five-year plan is for the closed New Hampshire water companies. Even with only the New Hampshire transaction completed, the acquisition is still expected to be neutral to 2026 consolidated EPS after accounting for financing costs.

Q: What is the current status and next steps for the proposed Massachusetts Aquarium acquisition from Eversource?

A: Eversource must first file a base rate case to address two unmet conditions from the previous regulatory approval order: a required stay-out provision, and resolution of the gain on sale of Hingham assets, both of which must be settled before the transaction can close.

Q: Has the extended, drawn-out regulatory process for the Massachusetts acquisition changed Unitil's risk appetite for future utility acquisitions?

A: Unitil's strategy remains unchanged. The company is still actively interested in further expansion of its regulated utility footprint so long as new opportunities align with its existing business model.

Q: Extended high oil prices have driven a large increase in inquiries for natural gas conversions. Is this now a sustained structural growth opportunity that will change long-term budget planning, and how has this shifted conversations with regulators?

A: Management expects natural gas' price advantage over alternative fuels to remain sustainable over the long term even if it narrows slightly. Regulators already recognize the opportunity for natural gas to improve customer affordability, especially in low-penetration Maine, and Unitil views this as a sustained long-term growth opportunity that will be incorporated into growth planning.