10q10k10q10k.net

What changed in UNITIL CORP's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of UNITIL CORP's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+156 added−175 removedSource: 10-K (2024-02-13) vs 10-K (2023-02-14)

Top changes in UNITIL CORP's 2023 10-K

156 paragraphs added · 175 removed · 147 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

24 edited+2 added−4 removed37 unchanged
Biggest changeAs of August 1, 2022, the Company estimates that revenue decoupling applies to approximately 43% of Unitil’s total annual gas sales volumes. 5 The Company's electric and gas sales in New Hampshire and Massachusetts are now largely decoupled. The following table shows the estimated percentages of electric and gas sales that are subject to revenue decoupling for the periods presented.
Biggest changeThe Company's electric and gas sales in New Hampshire and Massachusetts are now largely decoupled. 5 The following table shows the estimated percentages, as of December 31, 2023, of electric and gas sales that are subject to revenue decoupling for the periods presented.
These revenue decoupling targets may be adjusted as a result of rate cases and other authorized adjustments that the Company files with the Massachusetts Department of Public Utilities (MDPU) and New Hampshire Public Utilities Commission (NHPUC). Fitchburg has been subject to revenue decoupling since 2011. Unitil Energy is subject to revenue decoupling as of June 1, 2022.
These revenue decoupling targets may be adjusted as a result of rate cases and other authorized adjustments that the Company files with the Massachusetts Department of Public Utilities (MDPU) and New Hampshire Public Utilities Commission (NHPUC). Fitchburg has been subject to revenue decoupling since 2011. Unitil Energy has been subject to revenue decoupling since June 1, 2022.
Revenue Decoupling Estimated Percentage of Decoupled Sales For Periods Presented Electric Before June 1, 2022 27% After June 1, 2022 Substantially All Gas Before August 1, 2022 11% After August 1, 2022 43% Non-Regulated and Other Non-Utility Operations The results of Unitil’s other non-utility subsidiaries, Unitil Service, Unitil Resources, Unitil Realty, and the holding company, are included in the Company’s consolidated results of operations.
Revenue Decoupling Estimated Percentage of Decoupled Sales For Periods Presented Electric Before June 1, 2022 27% After June 1, 2022 Substantially All Gas Before August 1, 2022 11% After August 1, 2022 42% Non-Regulated and Other Non-Utility Operations The results of Unitil’s other non-utility subsidiaries, Unitil Service, Unitil Resources, Unitil Realty, and the holding company, are included in the Company’s consolidated results of operations.
Both Northern Utilities and Fitchburg supply gas to those customers who do not obtain their supply from third-party competitive suppliers, with the approved costs associated with this gas supply recovered on a pass-through basis underregulated reconciling rate mechanisms that are periodically adjusted.
Both Northern Utilities and Fitchburg supply gas to those customers who do not obtain their supply from third-party competitive suppliers, with the approved costs associated with this gas supply recovered on a pass-through basis under regulated reconciling rate mechanisms that are periodically adjusted.
Also see Note 6 (Energy Supply) and Note 7 (Commitments and Contingencies) to the accompanying Consolidated Financial Statements for additional information regarding rates and regulation. EMPLOYEES As of December 31, 2022, the Company and its subsidiaries had 516 employees. The Company considers its relationship with employees to be good and has not experienced any major labor disruptions.
Also see Note 6 (Energy Supply) and Note 7 (Commitments and Contingencies) to the accompanying Consolidated Financial Statements for additional information regarding rates and regulation. EMPLOYEES As of December 31, 2023, the Company and its subsidiaries had 531 employees. The Company considers its relationship with employees to be good and has not experienced any major labor disruptions.
In addition, Unitil is the parent company of Granite State, an interstate natural gas transmission pipeline company that provides interstate natural gas pipeline access and transportation services to Northern Utilities in its New Hampshire and Maine service territory. Together, Unitil’s three distribution utilities serve approximately 108,100 electric customers and 87,500 natural gas customers.
In addition, Unitil is the parent company of Granite State, an interstate natural gas transmission pipeline company that provides interstate natural gas pipeline access and transportation services to Northern Utilities in its New Hampshire and Maine service territory. Together, Unitil’s three distribution utilities serve approximately 108,500 electric customers and 88,400 natural gas customers.
Unitil Energy distributes electricity to approximately 77,800 customers in New Hampshire in the capital city of Concord as well as parts of 12 surrounding towns, and all or part of 18 towns in the southeastern and seacoast regions of New Hampshire, including the towns of Hampton, Exeter, Atkinson and Plaistow. Unitil Energy’s service territory consists of approximately 408 square miles.
Unitil Energy distributes electricity to approximately 78,100 customers in New Hampshire in the capital city of Concord as well as parts of 12 surrounding towns, and all or part of 18 towns in the southeastern and seacoast regions of New Hampshire, including the towns of Hampton, Exeter, Atkinson and Plaistow. Unitil Energy’s service territory consists of approximately 408 square miles.
Northern Utilities distributes natural gas to approximately 71,200 customers in 47 New Hampshire and southern Maine communities, from Plaistow, New Hampshire in the south to the city of Portland, Maine and then extending to Lewiston-Auburn, Maine to the north. Northern Utilities has a diversified customer base both in Maine and New Hampshire. Commercial businesses include healthcare, education, government and retail.
Northern Utilities distributes natural gas to approximately 72,100 customers in 47 New Hampshire and southern Maine communities, from Plaistow, New Hampshire in the south to the city of Portland, Maine and then extending to Lewiston-Auburn, Maine to the north. Northern Utilities has a diversified customer base both in Maine and New Hampshire. Commercial businesses include healthcare, education, government and retail.
Granite State provides Northern Utilities with interconnection to major natural gas pipelines and access to domestic natural gas supplies in the south and Canadian natural gas supplies in the north. Granite State had operating revenue of $8.4 million in 2022.
Granite State provides Northern Utilities with interconnection to major natural gas pipelines and access to domestic natural gas supplies in the south and Canadian natural gas supplies in the north. Granite State had operating revenue of $8.7 million in 2023.
Unitil’s principal business is the local distribution of electricity and natural gas to approximately 195,600 customers throughout its service territories in the states of New Hampshire, Massachusetts and Maine.
Unitil’s principal business is the local distribution of electricity and natural gas to approximately 196,900 customers throughout its service territories in the states of New Hampshire, Massachusetts and Maine.
INVESTOR INFORMATION Annual Meeting The Company’s annual meeting of shareholders is scheduled to be held at the offices of the Company, 6 Liberty Lane West, Hampton, New Hampshire, on Wednesday, April 26, 2023, at 11:30 a.m.
INVESTOR INFORMATION Annual Meeting The Company’s annual meeting of shareholders is scheduled to be held at the offices of the Company, 6 Liberty Lane West, Hampton, New Hampshire, on Wednesday, May 1, 2024, at 11:30 a.m.
The following table details by subsidiary the employees covered by a collective bargaining agreement (CBA) as of December 31, 2022: Employees Covered CBA Expiration Fitchburg 41 5/31/2027 Northern Utilities NH Division 35 06/07/2025 Northern Utilities ME Division 40 03/31/2026 Granite State 4 03/31/2026 Unitil Energy 41 05/31/2023 Unitil Service - Gas Control 4 3/31/2024 Unitil Service 5 05/31/2023 The CBAs provide discrete salary adjustments, established work practices and uniform benefit packages.
The following table details by subsidiary the employees covered by a collective bargaining agreement (CBA) as of December 31, 2023: Employees Covered CBA Expiration Fitchburg 47 5/31/2027 Northern Utilities NH Division 37 06/07/2025 Northern Utilities ME Division 39 03/31/2026 Granite State 5 03/31/2026 Unitil Energy 43 5/31/2028 Unitil Service - Gas Control 6 3/31/2024 Unitil Service 5 5/31/2028 The CBAs provide discrete salary adjustments, established work practices and uniform benefit packages.
Unitil Energy’s 2022 electric operating revenue was $208.9 million, of which approximately 60% was derived from residential sales and 40% from commercial and industrial (C&I) sales. Fitchburg is engaged in the distribution of both electricity and natural gas in the greater Fitchburg area of north central Massachusetts. Fitchburg’s service territory encompasses approximately 170 square miles.
Unitil Energy’s 2023 electric operating revenue was $222.6 million, of which approximately 62% was derived from residential sales and 38% from commercial and industrial (C&I) sales. Fitchburg is engaged in the distribution of both electricity and natural gas in the greater Fitchburg area of north central Massachusetts. Fitchburg’s service territory encompasses approximately 170 square miles.
Northern Utilities’ industrial base includes manufacturers in the auto, housing, paper, printing, textile, pharmaceutical, electronics, wire and food production industries as well as a military installation. Northern Utilities’ 2022 gas operating revenue was $209.1 million, of which approximately 36% was derived from residential firm sales and 64% from C&I firm sales.
Northern Utilities’ industrial base includes manufacturers in the auto, housing, paper, printing, textile, pharmaceutical, electronics, wire and food production industries as well as a military installation. Northern Utilities’ 2023 gas operating revenue was $195.5 million, of which approximately 37% was derived from residential firm sales and 63% from C&I firm sales.
As of December 31, 2022, a total of 170 employees of certain of the Company’s subsidiaries were represented by labor unions.
As of December 31, 2023, a total of 182 employees of certain of the Company’s subsidiaries were represented by labor unions.
Fitchburg’s 2022 gas operating revenue was $47.8 million, of which approximately 58% was derived from residential firm sales and 42% from C&I firm sales. Gas Transmission Pipeline Operations Granite State is an interstate natural gas transmission pipeline company, operating 86 miles of underground gas transmission pipeline primarily located in Maine and New Hampshire.
Fitchburg’s 2023 gas operating revenue was $46.4 million, of which approximately 59% was derived from residential firm sales and 41% from C&I firm sales. Gas Transmission Pipeline Operations Granite State is an interstate natural gas transmission pipeline company, operating 85 miles of underground gas transmission pipeline primarily located in Maine and New Hampshire.
Unitil Service provides, at cost, a variety of administrative and professional services, including regulatory, financial, accounting, human resources, engineering, operations, technology and energy supply management services on a centralized basis to its affiliated Unitil companies. Unitil Realty owns and manages the Company’s corporate office in Hampton, New Hampshire.
Unitil Service provides, at cost, a variety of administrative and professional services, including regulatory, financial, accounting, human resources, engineering, operations, technology and energy supply management services on a centralized basis to its affiliated Unitil companies.
As a result of Unitil Energy now being subject to revenue decoupling, as of June 1, 2022, revenue decoupling now applies to substantially all of Unitil’s total annual electric sales volumes.
As a result of Unitil Energy now being subject to revenue decoupling, as of June 1, 2022, revenue decoupling now applies to substantially all of Unitil’s total annual electric sales volumes. Substantially all of Northern Utilities’ gas sales volumes in New Hampshire have been subject to decoupling since August 1, 2022.
Fitchburg’s 2022 electric operating revenue was $89.0 million, of which approximately 58% was derived from residential sales and 42% from C&I sales. Natural Gas Operations Unitil’s natural gas operations include gas distribution utility operations and interstate gas transmission pipeline operations. Revenue from Unitil’s gas operations was $265.3 million in 2022, which represents about 47% of Unitil’s total operating revenue.
Fitchburg’s 2023 electric operating revenue was $83.9 million, of which approximately 57% was derived from residential sales and 43% from C&I sales. Natural Gas Operations Unitil’s natural gas operations include gas distribution utility operations and interstate gas transmission pipeline operations. Revenue from Unitil’s gas operations was $250.6 million in 2023, which represents about 45% of Unitil’s total operating revenue.
Unitil Resources is the Company’s wholly-owned non-regulated subsidiary which currently does not have any activity. For segment information relating to each segment’s revenue, earnings and assets, see Note 2 (Segment Information) to the Consolidated Financial Statements included in Part II, Item 8 (Financial Statements and Supplementary Data) of this report.
For segment information relating to each segment’s revenue, earnings and assets, see Note 2 (Segment Information) to the Consolidated Financial Statements included in Part II, Item 8 (Financial Statements and Supplementary Data) of this report.
Revenue from Unitil’s electric utility operations was $297.9 million in 2022, which represents about 53% of Unitil’s total operating revenue. The Company’s GAAP Electric Gross Margin was $73.4 million in 2022. The Company’s Electric Adjusted Gross Margin (a non-GAAP financial measure) was $98.8 million in 2022, or 41% of Unitil’s total Adjusted Gross Margin.
Revenue from Unitil’s electric utility operations was $306.5 million in 2023, which represents about 55% of Unitil’s total operating revenue. The Company’s GAAP Electric Gross Margin was $78.1 million in 2023. The Company’s Electric Adjusted Gross Margin (a non-GAAP financial measure) was $104.1 million in 2023, or 40% of Unitil’s total Adjusted Gross Margin.
The Company’s GAAP Gas Gross Margin was $107.6 million in 2022. The Company’s Gas Adjusted Gross Margin (a non-GAAP financial measure) was $143.9 million in 2022, or 59% of Unitil’s total Adjusted Gross Margin.
The Company’s GAAP Gas Gross Margin was $114.1 million in 2023. The Company’s Gas Adjusted Gross Margin (a non-GAAP financial measure) was $154.5 million in 2023, or 60% of Unitil’s total Adjusted Gross Margin.
The Company’s total operating revenue was $563.2 million in 2022. Unitil’s operating revenue is substantially derived from regulated electric and natural gas distribution utility operations. A fifth utility subsidiary, Unitil Power, formerly functioned as the full requirements wholesale power supply provider for Unitil Energy.
The Company’s total operating revenue was $557.1 million in 2023. Unitil’s operating revenue is substantially derived from regulated electric and natural gas distribution utility operations.
Customers Served as of December 31, 2022 Residential Commercial & Industrial (C&I) Total Electric: Unitil Energy 66,500 11,300 77,800 Fitchburg 26,200 4,100 30,300 Total Electric 92,700 15,400 108,100 Natural Gas: Northern Utilities 54,300 16,900 71,200 Fitchburg 14,600 1,700 16,300 Total Natural Gas 68,900 18,600 87,500 Total Customers Served 161,600 34,000 195,600 Unitil had an investment in Net Utility Plant of $1,331.7 million at December 31, 2022.
Customers Served as of December 31, 2023 Residential Commercial & Industrial (C&I) Total Electric: Unitil Energy 66,762 11,352 78,114 Fitchburg 26,211 4,129 30,340 Total Electric 92,973 15,481 108,454 Natural Gas: Northern Utilities 55,040 17,011 72,051 Fitchburg 14,612 1,734 16,346 Total Natural Gas 69,652 18,745 88,397 Total Customers Served 162,625 34,226 196,851 Unitil had an investment in Net Utility Plant of $1,420.9 million at December 31, 2023.
Removed
In connection with the implementation of electric industry restructuring in New Hampshire, on May 1, 2003 Unitil Power ceased being the wholesale supplier of Unitil Energy and divested its long-term power supply contracts through the sale of the entitlements to the electricity associated with various electric power supply contracts it had acquired to serve Unitil Energy’s customers.
Added
A fifth utility subsidiary, Unitil Power, formerly functioned as the full requirements wholesale power supply provider for Unitil Energy, but ceased being the wholesale supplier of Unitil Energy with the implementation of industry restructuring and divested its long-term power supply contracts. Unitil has three other wholly-owned non-utility subsidiaries: Unitil Service, Unitil Realty, and Unitil Resources.
Removed
In the period since, Unitil Power continued to flow revenues and expenses from remaining contracts to Unitil Energy under the Amended Unitil System Agreement.
Added
Unitil Realty owns and manages the Company’s corporate office in Hampton, New Hampshire. 3 Unitil Resources is the Company’s wholly-owned non-regulated subsidiary which currently does not have any activity.
Removed
The last of those contracts expired October 31, 2020, and the Company no longer has material revenues or expenses associated with those contracts. 3 Unitil has three other wholly-owned non-utility subsidiaries: Unitil Service, Unitil Realty, and Unitil Resources.
Removed
As a result of the recently received final order in Northern Utilities’ base rate case in New Hampshire, substantially all of Northern Utilities’ gas sales volumes in New Hampshire are subject to decoupling as of August 1, 2022.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

7 edited+0 added−1 removed91 unchanged
Biggest changeAlso, if the Company is unable to recover in its rates a significant amount of costs associated with catastrophic events, or if the Company’s recovery of such costs in its rates is significantly delayed, the Company’s financial condition, results or operations, or cash flows may be adversely affected.
Biggest changeAlso, if the Company is unable to recover in its rates a significant amount of costs associated with catastrophic events, or if the Company’s recovery of such costs in its rates is significantly delayed, the Company’s financial condition, results or operations, or cash flows may be adversely affected. 13 The Company’s business could be adversely affected if it is unable to retain its existing customers or attract new customers, or if customers’ demand for its current products and services significantly decreases.
The inability to maintain a qualified workforce including, but not limited to, executive officers, key employees and employees with specialized skills, may negatively affect our ability to service our existing or new customers, or 9 successfully manage our business or achieve our business objectives.
The inability to maintain a qualified workforce including, but not limited to, executive officers, key 9 employees and employees with specialized skills, may negatively affect our ability to service our existing or new customers, or successfully manage our business or achieve our business objectives.
In addition, shortages in highly skilled employees coupled with competitive pressures may require the Company to incur additional employee recruiting and compensation expenses. The Company may be adversely affected by work stoppages, labor disputes, and/or pandemic illness to which it may not able to promptly respond.
In addition, shortages in highly skilled employees coupled with competitive pressures may require the Company to incur additional employee recruiting and compensation expenses. The Company may be adversely affected by work stoppages, labor disputes, and/or pandemic illness to which it may not be able to promptly respond.
Regulatory authorities also have authority with respect to the Company’s ability to recover its electricity and natural gas supply costs, as incurred by Unitil Power, Unitil Energy, Fitchburg, and Northern Utilities.
Regulatory authorities also have authority with respect to the Company’s ability to recover its electricity and natural gas supply costs, as incurred by Unitil Energy, Fitchburg, Unitil Power, and Northern Utilities.
The Company’s failure to maintain or increase its 13 customer base and/or customer demand for its products and services could adversely affect its financial condition, results of operations, and cash flows.
The Company’s failure to maintain or increase its customer base and/or customer demand for its products and services could adversely affect its financial condition, results of operations, and cash flows.
As of December 31, 2021, the Company had approximately $116.0 million in short-term debt outstanding under its revolving credit facility. If the lending counterparties under the Company’s current credit facility are unwilling or unable to meet their funding obligations, the Company may be unable to, or limited in its ability, to borrow under its credit facility.
As of December 31, 2023, the Company had approximately $162.0 million in short-term debt outstanding under its revolving credit facility. If the lending counterparties under the Company’s current credit facility are unwilling or unable to meet their funding obligations, the Company may be unable to, or limited in its ability, to borrow under its credit facility.
In addition, before the Company can pay dividends on its common stock, it must satisfy its debt obligations and comply with any statutory or contractual limitations. As of February 14, 2023, the Company’s current effective annualized dividend is $1.62 per share of common stock, payable quarterly.
In addition, before the Company can pay dividends on its common stock, it must satisfy its debt obligations and comply with any statutory or contractual limitations. As of February 13, 2024, the Company’s current effective annualized dividend is $1.70 per share of common stock, payable quarterly.
Removed
The Company’s business could be adversely affected if it is unable to retain its existing customers or attract new customers, or if customers’ demand for its current products and services significantly decreases.

Item 2. Properties

Properties — owned and leased real estate

7 edited+1 added−1 removed3 unchanged
Biggest changeNatural Gas Operations Northern Utilities Description NH ME Fitchburg Granite State Total Underground Natural Gas Mains—Miles 579 610 272 — 1,461 Natural Gas Transmission Pipeline—Miles — — — 86 86 Service Pipes 24,638 23,902 11,242 — 59,782 Unitil Energy’s electric substations are located on land owned by Unitil Energy or land occupied by Unitil Energy pursuant to perpetual easements in the southeastern seacoast and state capital regions of New Hampshire .
Biggest changeElectric Operations Description Unitil Energy Fitchburg Total Primary Transmission and Distribution Pole Miles—Overhead 1,288 452 1,740 Conduit Distribution Bank Miles—Underground 242 69 311 Transmission and Distribution Substations* 26 11 37 Transformer Capacity of Transmission and Distribution Substations** (MVA) 454.6 414.4 869.0 * Includes locations that are normally in-service sources of distribution circuits through the use of transformer(s). ** Does not include load served directly from sub-transmission. 16 Natural Gas Operations Northern Utilities Description NH ME Fitchburg Granite State Total Underground Natural Gas Mains—Miles 582 617 271 — 1,470 Natural Gas Transmission Pipeline—Miles — — — 85 85 Service Pipes 24,855 24,156 11,255 — 60,266 Unitil Energy’s electric substations are located on land owned by Unitil Energy or land occupied by Unitil Energy pursuant to perpetual easements in the southeastern seacoast and state capital regions of New Hampshire .
The Company’s natural gas operations property includes two liquefied propane gas plants and two liquid natural gas (LNG) plants. Northern Utilities also owns a propane air gas plant and an LNG storage and vaporization facility.
The Company’s natural gas operations property includes two liquefied propane gas plants and two liquid natural gas plants. Northern Utilities also owns a propane air gas plant and an LNG storage and vaporization facility.
Item 2. Properties As of December 31, 2022, Unitil owned through its natural gas and electric distribution utilities, five utility operating centers located in New Hampshire, Maine and Massachusetts. The Company’s real estate subsidiary, Unitil Realty, owns the Company’s corporate headquarters building and the land on which it is located in Hampton, New Hampshire.
Item 2. Properties As of December 31, 2023, Unitil owned through its natural gas and electric distribution utilities, five utility operating centers located in New Hampshire, Maine and Massachusetts. The Company’s real estate subsidiary, Unitil Realty, owns the Company’s corporate headquarters building and the land on which it is located in Hampton, New Hampshire.
Fitchburg owns a propane air gas plant and an LNG storage and vaporization facility, both of which are located on land owned by Fitchburg in north central Massachusetts. Northern Utilities’ gas mains are primarily made up of polyethylene plastic(83.4%), coated and wrapped cathodically protected steel (15.4%), cast/wrought iron (1.1%), and unprotected bare and coated steel (0.1%).
Fitchburg owns a propane air gas plant and an LNG storage and vaporization facility, both of which are located on land owned by Fitchburg in north central Massachusetts. Northern Utilities’ gas mains are primarily made up of polyethylene plastic (83.8%), coated and wrapped cathodically protected steel (15.2%), cast/wrought iron (0.9%), and unprotected bare and coated steel (0.1%).
Fitchburg’s gas mains are primarily made up of coated steel (43.9%), bare steel (1.3%), polyethylene plastic (42.2%), cast iron (12.1%) and wrought and ductile iron (0.5%). Granite State’s underground natural gas transmission pipeline, regulated by the FERC, is located primarily in Maine and New Hampshire. The Company believes its facilities are currently adequate for their intended uses.
FG&E’s gas mains are primarily made up of polyethylene plastic (45.0%), coated steel (43.3%), cast iron (10.4%), bare steel (1.1%), and wrought and ductile iron (0.2%). Granite State’s underground natural gas transmission pipeline, regulated by the FERC, is located primarily in Maine and New Hampshire. The Company believes that its facilities are currently adequate for their intended uses.
In the case of certain distribution lines, Unitil Energy owns only a part interest in the poles upon which its wires are installed, the remaining interest being owned by telecommunication companies. 14 The physical utility properties of Unitil Energy, with certain exceptions, and its franchises are subject to its indenture of mortgage and deed of trust under which the respective series of first mortgage bonds of Unitil Energy are outstanding.
In the case of certain distribution lines, Unitil Energy owns only a part interest in the poles upon which its wires are installed, the remaining interest being owned by telecommunication companies.
The following tables detail certain of the Company’s electric and natural gas operations properties.
Unitil Realty also owns land for future use in Kingston, New Hampshire. The following tables detail certain of the Company’s electric and natural gas operations properties.
Removed
Electric Operations Description Unitil Energy Fitchburg Total Primary Transmission and Distribution Pole Miles—Overhead 1,284 450 1,734 Conduit Distribution Bank Miles—Underground 239 69 308 Transmission and Distribution Substations 35 15 50 Transformer Capacity of Transmission and Distribution Substations* (MVA) 470.1 429.4 899.5 * Does not include load served directly from sub-transmission.
Added
The physical utility properties of Unitil Energy, with certain exceptions, and its franchises are subject to its indenture of mortgage and deed of trust under which the respective series of first mortgage bonds of Unitil Energy are outstanding.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

12 edited+0 added−0 removed1 unchanged
Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs 10/1/22 – 10/31/22 9,449 $ 46.770 9,449 $ 145,027 11/1/22 – 11/30/22 — — — $ 145,027 12/1/22 – 12/31/22 — — — $ 145,027 Total 9,449 $ 46.770 9,449 Item 6.
Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs 10/1/23 – 10/31/23 14,680 $ 41.788 14,680 $ 547 11/1/23 – 11/30/23 — — — $ 547 12/1/23 – 12/31/23 — — — $ 547 Total 14,680 $ 41.788 14,680 Item 6.
The Company may suspend or terminate this trading plan at any time, so long as the suspension or termination is made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Exchange Act, or other applicable securities laws. 17 The following table provides information regarding repurchases by the Company of shares of its common stock pursuant to the trading plan for each month in the quarter ended December 31, 2022.
The Company may suspend or terminate this trading plan at any time, so long as the suspension or termination is made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Exchange Act, or other applicable securities laws. 19 The following table provides information regarding repurchases by the Company of shares of its common stock pursuant to the trading plan for each month in the quarter ended December 31, 2023.
Equity Compensation Plan Information (a) (b) (c) Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders (1) — — 143,941 Equity compensation plans not approved by security holders — — — Total — — 143,941 NOTES: (also see Note 5 (Equity) to the accompanying Consolidated Financial Statements) (1) Consists of the Second Amended and Restated 2003 Stock Plan (the Plan).
Equity Compensation Plan Information (a) (b) (c) Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders (1) — — 91,893 Equity compensation plans not approved by security holders — — — Total — — 91,893 NOTES: (also see Note 5 (Equity) to the accompanying Consolidated Financial Statements) (1) Consists of the Second Amended and Restated 2003 Stock Plan (the Plan).
The Peer Group is comprised of the S&P 500 Utilities Index. Unregistered Sales of Equity Securities and Uses of Proceeds There were no sales of unregistered equity securities by the Company for the fiscal period ended December 31, 2022.
The Peer Group is comprised of the S&P 500 Utilities Index. Unregistered Sales of Equity Securities and Uses of Proceeds There were no sales of unregistered equity securities by the Company for the fiscal period ended December 31, 2023.
Stock Performance Graph The following graph compares Unitil Corporation’s cumulative stockholder return since December 31, 2017 with the Peer Group index, comprised of the S&P 500 Utilities Index, and the S&P 500 index.
Stock Performance Graph The following graph compares Unitil Corporation’s cumulative stockholder return since December 31, 2018 with the Peer Group index, comprised of the S&P 500 Utilities Index, and the S&P 500 index.
Issuer Purchases of Equity Securities Pursuant to the written trading plan under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the Exchange Act), adopted and announced by the Company on May 1, 2022, the Company will periodically repurchase shares of its Common Stock on the open market related to the stock portion of the Directors’ annual retainer for those Directors who elected to receive common stock.
Issuer Purchases of Equity Securities Pursuant to the written trading plan under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the Exchange Act), adopted and announced by the Company on June 1, 2023, the Company will periodically repurchase shares of its Common Stock on the open market related to the stock portion of the Directors’ annual retainer for those Directors who elected to receive common stock.
Information regarding securities authorized for issuance under our equity compensation plans, as of December 31, 2022, is set forth in the following table.
Information regarding securities authorized for issuance under our equity compensation plans, as of December 31, 2023, is set forth in the following table.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is listed on the New York Stock Exchange under the symbol “UTL.” As of December 31, 2022, there were 1,193 shareholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is listed on the New York Stock Exchange under the symbol “UTL.” As of December 31, 2023, there were 1,143 shareholders of record of our common stock.
The graph assumes that the value of the 16 investment in the Company’s common stock and each index (including reinvestment of dividends) was $100 on December 31, 2017. NOTE: (1) The graph above assumes $100 invested on December 31, 2017, in each category and the reinvestment of all dividends during the five-year period.
The graph assumes that the value of the 18 investment in the Company’s common stock and each index (including reinvestment of dividends) was $100 on December 31, 2018. NOTE: (1) The graph above assumes $100 invested on December 31, 2018, in each category and the reinvestment of all dividends during the five-year period.
Common Stock Data Dividends per Common Share 2022 2021 1st Quarter $ 0.39 $ 0.38 2nd Quarter 0.39 0.38 3rd Quarter 0.39 0.38 4th Quarter 0.39 0.38 Total for Year $ 1.56 $ 1.52 See “Dividends” in Part II, Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations).
Common Stock Data Dividends per Common Share 2023 2022 1st Quarter $ 0.405 $ 0.39 2nd Quarter 0.405 0.39 3rd Quarter 0.405 0.39 4th Quarter 0.405 0.39 Total for Year $ 1.62 $ 1.56 See “Dividends” in Part II, Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations).
There is no pool or maximum number of shares related to these purchases; however, the trading plan will terminate when $587,000 in value of shares have been purchased or, if sooner, on May 1, 2023.
There is no pool or maximum number of shares related to these purchases; however, the trading plan will terminate when $614,000 in value of shares have been purchased or, if sooner, on May 31, 2024.
A total of 503,745 shares of restricted stock have been awarded and 43,764 restricted stock units have been settled and issued as shares of common stock by Plan participants through December 31, 2022. As of December 31, 2022, a total of 13,950 shares of restricted stock were forfeited and once again became available for issuance under the Plan.
A total of 541,285 shares of restricted stock have been awarded and 58,272 restricted stock units have been settled and issued as shares of common stock by Plan participants through December 31, 2023. As of December 31, 2023, a total of 13,950 shares of restricted stock were forfeited and once again became available for issuance under the Plan.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

95 edited+6 added−22 removed63 unchanged
Biggest changeThe following table details total kWh sales for the last three years by major customer class: Change 2022 vs. 2021 2021 vs. 2020 kWh Sales (millions) 2022 2021 2020 kWh % kWh % Residential 680.5 694.2 690.6 (13.7 ) (2.0 )% 3.6 0.5 % Commercial & Industrial 933.9 936.8 905.3 (2.9 ) (0.3 )% 31.5 3.5 % Total kWh Sales 1,614.4 1,631.0 1,595.9 (16.6 ) (1.0 )% 35.1 2.2 % Electric Operating Revenues and Electric Adjusted Gross Margin —The following table details Total Electric Operating Revenue and Electric Adjusted Gross Margin for the last three years by major customer class: Change Electric Operating Revenues and Electric Adjusted Gross Margin 2022 vs. 2021 2021 vs. 2020 (millions) 2022 2021 2020 $ % $ % Electric Operating Revenue: Residential $ 174.8 $ 140.8 $ 134.7 $ 34.0 24.1 % $ 6.1 4.5 % Commercial & Industrial 123.1 107.7 92.5 15.4 14.3 % 15.2 16.4 % Total Electric Operating Revenue $ 297.9 $ 248.5 $ 227.2 $ 49.4 19.9 % $ 21.3 9.4 % Cost of Electric Sales $ 199.1 $ 151.1 $ 134.3 $ 48.0 31.8 % $ 16.8 12.5 % Electric Adjusted Gross Margin $ 98.8 $ 97.4 $ 92.9 $ 1.4 1.4 % $ 4.5 4.8 % Electric Adjusted Gross Margin (a non-GAAP financial measure) was $98.8 million in 2022, an increase of $1.4 million compared with 2021.
Biggest changeThe Company’s earnings in 2022 reflect higher Electric and Gas Adjusted Gross Margins (a non-GAAP financial measure), partially offset by higher operating expenses. 24 Electric Revenues, Adjusted Gross Margin and Sales Electric Operating Revenues and Electric Adjusted Gross Margin —The following table details Total Electric Operating Revenue and Electric Adjusted Gross Margin for the last three years by major customer class: Change Electric Operating Revenues and Electric Adjusted Gross Margin 2023 vs. 2022 2022 vs. 2021 (millions) 2023 2022 2021 $ % $ % Electric Operating Revenue: Residential $ 184.5 $ 174.8 $ 140.8 $ 9.7 5.5 % $ 34.0 24.1 % Commercial & Industrial 122.0 123.1 107.7 (1.1 ) (0.9 )% 15.4 14.3 % Total Electric Operating Revenue $ 306.5 $ 297.9 $ 248.5 $ 8.6 2.9 % $ 49.4 19.9 % Cost of Electric Sales $ 202.4 $ 199.1 $ 151.1 $ 3.3 1.7 % $ 48.0 31.8 % Electric Adjusted Gross Margin $ 104.1 $ 98.8 $ 97.4 $ 5.3 5.4 % $ 1.4 1.4 % Electric Adjusted Gross Margin (a non-GAAP financial measure) was $104.1 million in 2023, an increase of $5.3 million compared with 2022.
Total O&M expenses increased $5.0 million, or 7.3%, in 2022 compared to 2021, reflecting higher labor costs of $1.9 million, higher utility operating costs of $1.6 million, and higher professional fees of $1.5 million.
In 2022, total O&M expenses increased $5.0 million, or 7.3%, compared to 2021, reflecting higher labor costs of $1.9 million, higher utility operating costs of $1.6 million, and higher professional fees of $1.5 million.
Depreciation and Amortization— Depreciation and Amortization expense increased $3.1 million, or 5.2%, in 2022 compared to 2021, reflecting additional depreciation associated with higher levels of utility plant in service and higher amortization of rate case costs.
In 2022, Depreciation and Amortization expense increased $3.1 million, or 5.2%, compared to 2021, reflecting additional depreciation associated with higher levels of utility plant in service and higher amortization of rate case costs.
There are restrictions on, among other things, Unitil’s and its subsidiaries’ ability to permit liens or incur indebtedness, and restrictions on Unitil’s ability to merge or consolidate with another entity or change its line of business.
There are restrictions on, among other things, Unitil’s and its subsidiaries’ ability to permit liens or incur indebtedness, and restrictions on Unitil’s ability to merge or consolidate with another entity or change its line of business.
In addition, the ability of the Company’s 29 subsidiaries to pay dividends or make distributions to Unitil, and, therefore, Unitil’s ability to pay dividends, depends on, among other things: • the actual and projected earnings and cash flow, capital requirements and general financial condition of the Company’s subsidiaries; • the prior rights of holders of existing and future preferred stock, mortgage bonds, long-term notes and other debt issued by the Company’s subsidiaries; • the restrictions on the payment of dividends contained in the existing loan agreements of the Company’s subsidiaries and that may be contained in future debt agreements of the Company’s subsidiaries, if any; and • limitations that may be imposed by New Hampshire, Massachusetts and Maine state regulatory agencies.
In addition, the ability of the Company’s subsidiaries to pay dividends or make distributions to Unitil, and, therefore, Unitil’s ability to pay dividends, depends on, among other things: • the actual and projected earnings and cash flow, capital requirements and general financial condition of the Company’s subsidiaries; • the prior rights of holders of existing and future preferred stock, mortgage bonds, long-term notes and other debt issued by the Company’s subsidiaries; • the restrictions on the payment of dividends contained in the existing loan agreements of the Company’s subsidiaries and that may be contained in future debt agreements of the Company’s subsidiaries, if any; and • limitations that may be imposed by New Hampshire, Massachusetts and Maine state regulatory agencies.
If regulation provides assurance that incurred costs will be recovered in the future, these costs would be recorded as deferred charges or “regulatory assets.” If revenues are 30 recorded for costs that are expected to be incurred in the future, these revenues would be recorded as deferred credits or “regulatory liabilities.” The Company’s principal regulatory assets and liabilities are included on the Company’s Consolidated Balance Sheet and a summary of the Company’s Regulatory Assets is provided in Note 1 (Summary of Significant Accounting Policies) to the consolidated financial statements.
If regulation provides assurance that incurred costs will be recovered in the future, these costs would be recorded as deferred charges or “regulatory assets.” If revenues are recorded for costs that are expected to be incurred in the future, these revenues would be recorded as deferred credits or “regulatory liabilities.” The Company’s principal regulatory assets and liabilities are included on the Company’s Consolidated Balance Sheet and a summary of the Company’s Regulatory Assets is provided in Note 1 (Summary of Significant Accounting Policies) to the consolidated financial statements.
The Company and its subsidiaries have material energy supply commitments that are discussed in Note 6 (Energy Supply) and Note 7 (Commitments and Contingencies) to the accompanying Consolidated Financial Statements. Cash outlays 27 for the purchase of electricity and natural gas to serve customers are subject to reconciling recovery through periodic changes in rates, with carrying charges on deferred balances.
The Company and its subsidiaries have material energy supply commitments that are discussed in Note 6 (Energy Supply) and Note 7 (Commitments and Contingencies) to the accompanying Consolidated Financial Statements. Cash outlays for the purchase of electricity and natural gas to serve customers are subject to reconciling recovery through periodic changes in rates, with carrying charges on deferred balances.
The Company believes it has sufficient sources of working capital to fund its operations. Contractual Obligations The Company and its subsidiaries have material obligations for payment of principal and interest on its long-term debt as well as for operating and capital leases that are discussed in Note 4 (Debt and Financing Arrangements).
The Company believes it has sufficient sources of working capital to fund its operations. 29 Contractual Obligations The Company and its subsidiaries have material obligations for payment of principal and interest on its long-term debt as well as for operating and capital leases that are discussed in Note 4 (Debt and Financing Arrangements).
These revenue decoupling targets may be adjusted as a result of rate cases and other authorized adjustments that the Company files with the MDPU and NHPUC. Fitchburg has been subject to revenue decoupling since 2011. Unitil Energy is subject to revenue decoupling as of June 1, 2022.
These revenue decoupling targets may be adjusted as a result of rate cases and other authorized adjustments that the Company files with the MDPU and NHPUC. Fitchburg has been subject to revenue decoupling since 2011. Unitil Energy has been subject to revenue decoupling since June 1, 2022.
The Cash Pool is the financing vehicle for day-to-day cash borrowing and investing. The Cash Pool allows for an efficient exchange of cash among the Company and its subsidiaries. The interest rates charged to the subsidiaries for borrowing from the Cash Pool are based on actual interest costs from lenders under the Company’s revolving Credit Facility.
The Cash Pool is the financing vehicle for day-to-day cash borrowing and investing. The Cash Pool allows for an efficient exchange 28 of cash among the Company and its subsidiaries. The interest rates charged to the subsidiaries for borrowing from the Cash Pool are based on actual interest costs from lenders under the Company’s revolving Credit Facility.
The underwriters exercised the option and purchased an additional 120,000 shares of the Company’s common stock on September 8, 2021. The Company’s net increase to Common Equity and Cash proceeds from the exercise of the option was approximately $5.9 million.
The underwriters exercised the option and purchased an additional 120,000 shares of the Company’s common stock on September 8, 2021. The Company’s net increase to Common Equity and Cash proceeds from the exercise of the option was approximately 22 $5.9 million.
In addition, the Company’s distribution utilities and its natural gas transmission pipeline company also may recover certain base rate costs, including capital project spending and enhanced reliability and vegetation management programs, through annual step adjustments and cost tracker rate mechanisms. 19 Most of Unitil’s customers have the opportunity to purchase their electricity or natural gas supplies from third-party energy suppliers.
In addition, the Company’s distribution utilities and its natural gas 21 transmission pipeline company also may recover certain base rate costs, including capital project spending and enhanced reliability and vegetation management programs, through annual step adjustments and cost tracker rate mechanisms. Most of Unitil’s customers have the opportunity to purchase their electricity or natural gas supplies from third-party energy suppliers.
Revenue Decoupling Estimated Percentage of Decoupled Sales For Periods Presented Electric Before June 1, 2022 27% After June 1, 2022 Substantially All Gas Before August 1, 2022 11% After August 1, 2022 43% Also see Regulatory Matters in this section and Note 7 (Commitments and Contingencies) to the accompanying Consolidated Financial Statements for additional information on rates and regulation.
Revenue Decoupling Estimated Percentage of Decoupled Sales For Periods Presented Electric Before June 1, 2022 27% After June 1, 2022 Substantially All Gas Before August 1, 2022 11% After August 1, 2022 42% Also see Regulatory Matters in this section and Note 7 (Commitments and Contingencies) to the accompanying Consolidated Financial Statements for additional information on rates and regulation.
In addition, Unitil is the parent company of Granite State, a natural gas transmission pipeline, regulated by the FERC, operating 86 miles of underground gas transmission pipeline primarily located in Maine and New Hampshire. Granite State provides Northern Utilities with interconnection to three major natural gas pipelines and access to North American pipeline supplies.
In addition, Unitil is the parent company of Granite State, a natural gas transmission pipeline, regulated by the FERC, operating 85 miles of underground gas transmission pipeline primarily located in Maine and New Hampshire. Granite State provides Northern Utilities with interconnection to three major natural gas pipelines and access to North American pipeline supplies.
The only financial covenant in the Credit Facility provides that Unitil’s Funded Debt to Capitalization (as each term is defined in the Credit Facility) cannot exceed 65%, tested on a quarterly basis. At December 31, 2022 and December 31, 2021, the Company was in compliance with the covenants contained in the Credit Facility in effect on that date.
The only financial covenant in the Credit Facility provides that Unitil’s Funded Debt to Capitalization (as each term is defined in the Credit Facility) cannot exceed 65%, tested on a quarterly basis. At December 31, 2023 and December 31, 2022, the Company was in compliance with the covenants contained in the Credit Facility in effect on that date.
The only financial covenant in the Credit Facility provides that Unitil’s Funded Debt to Capitalization (as each term is defined in the Credit Facility) cannot exceed 65%, tested on a quarterly basis. At December 31, 2022 and December 31, 2021, the Company was in compliance with the covenants contained in the Credit Facility in effect on that date.
The only financial covenant in the Credit Facility provides that Unitil’s Funded Debt to Capitalization (as each term is defined in the Credit Facility) cannot exceed 65%, tested on a quarterly basis. At December 31, 2023 and December 31, 2022, the Company was in compliance with the covenants contained in the Credit Facility in effect on that date.
The proceeds were used to make equity capital contributions to the Company’s regulated utility subsidiaries, to 20 repay debt and for other general corporate purposes. Overall, the results of operations and earnings for the years ended December 31, 2022 and December 31, 2021 reflect the higher number of average shares outstanding.
The proceeds were used to make equity capital contributions to the Company’s regulated utility subsidiaries, to repay debt and for other general corporate purposes. Overall, the results of operations and earnings for the years ended December 31, 2023, December 31, 2022 and December 31, 2021 reflect the higher number of average shares outstanding.
This increase reflects higher sales of electricity and higher wholesale electricity prices, partially offset by an increase in the amount of electricity purchased by customers directly from third-party suppliers. Cost of Gas Sales— Cost of Gas Sales includes the cost of natural gas purchased to supply the Company’s total gas supply requirements and spending on energy efficiency programs.
This increase reflects higher wholesale electricity prices, partially offset by lower electric sales and an increase in the amount of electricity purchased by customers directly from third-party suppliers. Cost of Gas Sales— Cost of Gas Sales includes the cost of natural gas purchased to supply the Company’s total gas supply requirements and spending on energy efficiency programs.
Unitil may increase the borrowing limit under the Credit Facility by up to $75 million under certain 26 circumstances.
Unitil may increase the borrowing limit under the Credit Facility by up to $75 million under certain circumstances.
Similarly, a change of 0.50% in the expected long-term rate of return on plan assets would have resulted in an increase or decrease of approximately $726,000 in the Net Periodic Benefit Cost for the Pension Plan.
Similarly, a change of 0.50% in the expected long-term rate of return on plan assets would have resulted in an increase or decrease of approximately $713,000 in the Net Periodic Benefit Cost for the Pension Plan.
Interest Expense, Net decreased $0.1 million in 2022 compared to 2021 primarily reflecting lower interest on long-term debt and higher interest income, on regulatory assets, partially offset by higher interest on short-term borrowings. Other Expense (Income), Net decreased $2.2 million in 2022 compared to 2021, reflecting lower retirement benefit costs.
Interest Expense, Net decreased $0.1 million, or 0.4%, in 2022 compared to 2021 primarily reflecting lower interest on long-term debt and higher interest income, on regulatory assets, partially offset by higher interest on short-term borrowings. Other (Income) Expense, Net Other Expense (Income), Net decreased $2.4 million in 2023 compared to 2022, reflecting lower retirement benefit costs.
At December 31, 2022 and December 31, 2021, the Company and all of its subsidiaries were in compliance with the regulatory requirements governing participation in the Cash Pool.
At December 31, 2023 and December 31, 2022, the Company and all of its subsidiaries were in compliance with the regulatory requirements governing participation in the Cash Pool.
Unitil is subject to regulation as a holding company system by the FERC under the Energy Policy Act of 2005. Unitil’s principal business is the local distribution of electricity and natural gas to approximately 195,600 customers throughout its service territory in the states of New Hampshire, Massachusetts and Maine.
Unitil is subject to regulation as a holding company system by the FERC under the Energy Policy Act of 2005. Unitil’s principal business is the local distribution of electricity and natural gas to approximately 196,900 customers throughout its service territory in the states of New Hampshire, Massachusetts and Maine.
Gas Adjusted Gross Margin (a non-GAAP financial measure) was $143.9 million in 2022, an increase of $10.8 million compared to 2021. The increase was driven by higher rates of $9.0 million, and $1.8 million from customer growth and the favorable effect of colder winter weather in 2022. Gas therm sales increased 1.3% in 2022 compared to 2021.
Gas Adjusted Gross Margin (a non-GAAP financial measure) was $143.9 million in 2022, an increase of $10.8 million compared to 2021. The increase was driven by higher rates of $9.0 million, and $1.8 million from customer growth and the favorable effect of colder winter weather in 2022.
The Company and its subsidiaries are currently in compliance with all such covenants in these debt instruments. DIVIDENDS Unitil’s annual common dividend was $1.56 per common share in 2022, $1.52 per common share in 2021, and $1.50 per share in 2020. Unitil’s dividend policy is reviewed periodically by the Board of Directors.
The Company and its subsidiaries are currently in compliance with all such covenants in these debt instruments. DIVIDENDS Unitil’s annual common dividend was $1.62 per common share in 2023, $1.56 per common share in 2022, and $1.52 per share in 2021. Unitil’s dividend policy is reviewed periodically by the Board of Directors.
The higher spending in 2022 is primarily related to normal utility capital expenditures for electric and gas utility system additions.
The higher spending in 2023 is primarily related to normal utility capital expenditures for electric and gas utility system additions.
Unitil Energy, Fitchburg and Northern Utilities are collectively referred to as the “distribution utilities.” Together, the distribution utilities serve approximately 108,100 electric customers and 87,500 natural gas customers in their service territories. The distribution utilities are local “wires and pipes” operating companies.
Unitil Energy, Fitchburg and Northern Utilities are collectively referred to as the “distribution utilities.” Together, the distribution utilities serve approximately 108,500 electric customers and 88,400 natural gas customers in their service territories. The distribution utilities are local “wires and pipes” operating companies.
For the year ended December 31, 2022, a change in the discount rate of 0.25% would have resulted in an increase or decrease of approximately $672,000 in the Net Periodic Benefit Cost for the Pension Plan.
For the year ended December 31, 2023, a change in the discount rate of 0.25% would have resulted in an increase or decrease of approximately $113,000 in the Net Periodic Benefit Cost for the Pension Plan.
The Company's electric and gas sales in New Hampshire and Massachusetts are now largely decoupled. The following table shows the estimated percentages of electric and gas sales that are subject to revenue decoupling for the periods presented.
The Company's electric and gas sales in New Hampshire and Massachusetts are now largely decoupled. The following table shows the estimated percentages of electric and gas sales, as of December 31, 2023, that are subject to revenue decoupling for the periods presented.
The increase was driven by higher rates of $9.0 million and $1.8 million from customer growth and the favorable effect of colder winter weather in 2022, partially offset by higher depreciation and amortization of $3.7 million. 21 Gas GAAP Gross Margin was $100.5 million in 2021, an increase of $7.7 million compared to 2020.
Gas GAAP Gross Margin was $107.6 million in 2022, an increase of $7.1 million compared to 2021. The increase was driven by higher rates of $9.0 million and $1.8 million from customer growth and the favorable effect of colder winter weather in 2022, partially offset by higher depreciation and amortization of $3.7 million.
Other changes in financing activities in 2022 total a use of ($1.5) million. FINANCIAL COVENANTS AND RESTRICTIONS The agreements under which the Company and its subsidiaries issue long-term debt contain various covenants and restrictions. These agreements do not contain any covenants or restrictions pertaining to the maintenance of financial ratios or the issuance of short-term debt.
Other changes in financing activities in 2023 total a use of 0.8 million. FINANCIAL COVENANTS AND RESTRICTIONS The agreements under which the Company and its subsidiaries issue long-term debt contain various covenants and restrictions. These agreements do not contain any covenants or restrictions pertaining to the maintenance of financial ratios or the issuance of short-term debt.
The following table details the borrowing limits, amounts outstanding and amounts available under the revolving Credit Facility as of December 31, 2022 and December 31, 2021: December 31, Revolving Credit Facility (millions) 2022 2021 Limit $ 200.0 $ 120.0 Short-Term Borrowings Outstanding $ 116.0 $ 64.1 Available $ 84.0 $ 55.9 The Credit Facility contains customary terms and conditions for credit facilities of this type, including affirmative and negative covenants.
The following table details the borrowing limits, amounts outstanding and amounts available under the revolving Credit Facility as of December 31, 2023 and December 31, 2022: December 31, Revolving Credit Facility (millions) 2023 2022 Limit $ 200.0 $ 200.0 Short-Term Borrowings Outstanding $ 162.0 $ 116.0 Available $ 38.0 $ 84.0 The Credit Facility contains customary terms and conditions for credit facilities of this type, including affirmative and negative covenants.
Off-Balance Sheet Arrangements The Company and its subsidiaries do not currently use, and are not dependent on the use of, off-balance sheet financing arrangements such as securitization of receivables or obtaining access to assets or cash through special purpose entities or variable interest entities.
Off-Balance Sheet Arrangements The Company and its subsidiaries do not currently use, and are not dependent on the use of, off-balance sheet financing arrangements such as securitization of receivables or obtaining access to assets or cash through special purpose entities or variable interest entities. As of December 31, 2023 there were no guarantees outstanding.
The Company reconciles and recovers the approved Cost of Electric Sales in its rates at cost on a pass through basis and therefore changes in approved expenses do not affect earnings. In 2021, Cost of Electric Sales increased $16.8 million, or 12.5%, compared to 2020.
The Company reconciles and recovers the approved Cost of Electric Sales in its rates at cost on a pass through basis and therefore changes in approved expenses do not affect earnings. In 2022, Cost of Electric Sales increased $48.0 million, or 31.8%, compared to 2021.
Unitil had an investment in Net Utility Plant of $1,331.7 million at December 31, 2022. Unitil’s total revenue was $563.2 million in 2022, which includes revenue to recover the approved cost of purchased electricity and natural gas in rates on a fully reconciling basis.
Unitil had an investment in Net Utility Plant of $1,420.9 million at December 31, 2023. Unitil’s total revenue was $557.1 million in 2023, which includes revenue to recover the approved cost of purchased electricity and natural gas in rates on a fully reconciling basis.
The increase was driven by higher rates and customer growth of $1.7 million and lower depreciation and amortization expense of $0.5 million, partially offset by the unfavorable effect on sales from cooler spring weather of $0.3 million when rates were not yet decoupled. Electric GAAP Gross Margin was $71.5 million in 2021, an increase of $2.4 million compared to 2020.
The increase was driven by higher rates and customer growth of $1.7 million and lower depreciation and amortization expense of $0.5 million, partially offset by the unfavorable effect on sales from cooler spring weather of $0.3 million when rates were not yet decoupled. Gas GAAP Gross Margin was $114.1 million in 2023, an increase of $6.5 million compared to 2022.
The change in working capital in 2022 compared to 2021 is primarily 28 related to the change in accounts payable and exchange gas receivable and is reflective of the effect of the current macroeconomic environment including higher commodity costs on business and operating conditions.
The change in working capital in 2023 compared to 2022 is primarily related to the net change in accrued revenue, accounts payable and exchange gas receivable and is reflective of the effect of the current macroeconomic environment including lower commodity costs on business and operating conditions.
Cost of Electric Sales increased $48.0 million, or 31.8%, in 2022 compared to 2021. This increase reflects higher wholesale electricity prices, partially offset by lower electric sales and an increase in the amount of electricity purchased by customers directly from third-party suppliers.
Cost of Electric Sales increased $3.3 million, or 1.7%, in 2023 compared to 2022. This increase reflects higher wholesale electricity prices, partially offset by lower electric sales and an increase in the amount of electricity purchased by customers directly from third-party suppliers.
The Company utilizes the Credit Facility for cash management purposes related to its short-term operating activities. Total gross borrowings were $295.9 million and $239.1 million for the years ended December 31, 2022 and December 31, 2021, respectively. Total gross repayments were $244.0 million and $229.7 million for the years ended December 31, 2022 and December 31, 2021, respectively.
The Company utilizes the Credit Facility for cash management purposes related to its short-term operating activities. Total gross borrowings were $327.2 million and $295.9 million for the years ended December 31, 2023 and December 31, 2022, respectively. Total gross repayments were $281.2 million and $244.0 million for the years ended December 31, 2023 and December 31, 2022, respectively.
At its January 2023 meeting, the Unitil Corporation Board of Directors declared a quarterly dividend on the Company’s common stock of $0.405 per share, an increase of $.015 per share on a quarterly basis, resulting in an increase in the effective annualized dividend rate to $1.62 from $1.56.
At its January 2024 meeting, the Unitil Corporation Board of Directors declared a quarterly dividend on the Company’s common stock of $0.425 per share, an 31 increase of $0.02 per share on a quarterly basis, resulting in an increase in the effective annualized dividend rate to $1.70 from $1.62.
Operation and Maintenance (O&M) expenses increased $5.0 million in 2022 compared to 2021, reflecting higher labor costs of $1.9 million, higher utility operating costs of $1.6 million, and higher professional fees of $1.5 million.
Operation and Maintenance (O&M) expenses increased $1.9 million, or 2.6%, in 2023 compared to 2022, reflecting higher utility operating costs of $1.2 million, higher professional fees of $0.4 million and higher labor costs of $0.3 million.
In 2021, Taxes Other Than Income Taxes increased $0.6 million, or 2.5%, compared to 2020, reflecting higher payroll taxes and higher local property taxes on higher utility plant in service. Interest Expense, Net Interest expense is presented in the Consolidated Financial Statements net of interest income.
In 2022, Taxes Other Than Income Taxes increased $1.4 million, or 5.7%, compared to 2021, reflecting higher payroll taxes and higher local property taxes on higher utility plant in service. 27 Interest Expense, Net Interest expense is presented in the Consolidated Financial Statements net of interest income.
For additional information regarding the foregoing matters, see Note 1 (Summary of Significant Accounting Policies), Note 6 (Energy Supply), Note 7 (Commitments and Contingencies), Note 8 (Income Taxes), and Note 9 (Retirement Benefit Plans) to the Consolidated Financial Statements. 32
For additional information regarding the foregoing matters, see Note 1 (Summary of Significant Accounting Policies), Note 6 (Energy Supply), and Note 9 (Retirement Benefit Plans) to the Consolidated Financial Statements. 33
The increase was driven by higher rates and customer growth of $4.5 million, partially offset by higher depreciation and amortization expense of $2.1 million. Gas GAAP Gross Margin was $107.6 million in 2022, an increase of $7.1 million compared to 2021.
The increase was driven by higher rates and customer growth of $5.3 million, partially offset by higher depreciation and amortization expense of $0.6 million. Electric GAAP Gross Margin was $73.4 million in 2022, an increase of $1.9 million compared to 2021.
Refer to “Recently Issued Pronouncements” in Note 1 of the Notes of Consolidated Financial Statements for information regarding recently issued accounting standards.
(See Note 9 (Retirement Benefit Plans) to the accompanying Consolidated Financial Statements.) Refer to “Recently Issued Pronouncements” in Note 1 of the Notes of Consolidated Financial Statements for information regarding recently issued accounting standards.
The Company reconciles and recovers the approved Cost of Gas Sales in its rates at cost on a pass through basis and therefore changes in approved expenses do not affect earnings. In 2021, Cost of Gas increased $22.9 million, or 33.3%, compared to 2020.
The Company reconciles and recovers the approved Cost of Gas Sales in its rates at cost on a pass through basis and therefore changes in approved expenses do not affect earnings. In 2022, Cost of Gas increased $29.7 million, or 32.4%, compared to 2021.
Cash flow from Net Income, adjusted for the total of non-cash charges was $115.0 million in 2022 compared to $106.4 million in 2021, an increase of $8.6 million. The change to Net Income is primarily attributable to increases in electric and gas sales margin and customer growth.
Cash flow from Net Income, adjusted for the total of non-cash charges was $120.0 million in 2023 compared to $115.0 million in 2022, an increase of $5.0 million. The change to Net Income is primarily attributable to increases in electric and gas sales margin.
Deferred Regulatory and Other Charges decreased by $3.8 million in 2022 compared to 2021, primarily driven by changes in Regulatory Assets and Liabilities, and the change in Other, net in 2022 compared to 2021 was ($2.7) million. 2022 2021 Cash Used in Investing Activities $ (122.1 ) $ (115.0 ) Cash Used in Investing Activities - Cash Used in Investing Activities was ($122.1) million in 2022 compared to ($115.0) million in 2021, an increase of $7.1 million.
Deferred Regulatory and Other Charges decreased by $2.0 million in 2023 compared to 2022, primarily driven by changes in Regulatory Assets and Liabilities, and the change in Other, net in 2023 compared to 2022 was $4.9 million. 2023 2022 Cash Used in Investing Activities $ (141.0 ) $ (122.1 ) Cash Used in Investing Activities - Cash Used in Investing Activities was ($141.0) million in 2023 compared to ($122.1) million in 2022, an increase of $18.9 million.
In 2021, total O&M expenses increased $3.0 million, or 4.6% compared to 2020, reflecting higher labor costs of $1.6 million and higher utility operating costs of $1.4 million.
Total O&M expenses increased $1.9 million, or 2.6%, in 2023 compared to 2022, reflecting higher utility operating costs of $1.2 million, higher professional fees of $0.4 million and higher labor costs of $0.3 million.
The Company’s projected capital spending range for 2023 is $135 million to $145 million. 2022 2021 Cash Provided by Financing Activities $ 26.9 $ 7.7 Cash Provided by Financing Activities - Cash Provided by Financing Activities was $26.9 million in 2022 compared to cash provided of $7.7 million in 2021.
The Company’s projected capital spending range for 2024 is $165 million to $170 million. 2023 2022 Cash Provided by Financing Activities $ 31.5 $ 26.9 Cash Provided by Financing Activities - Cash Provided by Financing Activities was $31.5 million in 2023 compared to cash provided of $26.9 million in 2022.
Net Income and EPS Overview 2022 Compared to 2021— The Company’s Net Income was $41.4 million, or $2.59 in Earnings Per Share (EPS), for the year ended December 31, 2022, an increase of $5.3 million in Net Income, or $0.24 in EPS, compared to 2021.
Net Income and EPS Overview 2023 Compared to 2022— The Company’s Net Income was $45.2 million, or $2.82 in Earnings Per Share (EPS), for the year ended December 31, 2023, an increase of $3.8 million in Net Income, or $0.23 in EPS, compared to 2022.
The Company provides limited guarantees on certain energy and natural gas storage management contracts entered into by the distribution utilities. The Company’s policy is to limit the duration of these guarantees. As of December 31, 2022, there were approximately $ 1.2 million of guarantees outstanding with a duration of less than one year.
The Company provides limited guarantees on certain energy and natural gas storage management contracts entered into by the distribution utilities. The Company’s policy is to limit the duration of these guarantees. As of December 31, 2023 there were no guarantees outstanding.
As of December 31, 2021, the number of electric customers served increased by approximately 600 over the previous year. Sales margins derived from decoupled unit sales (representing approximately 27% of total annual sales volume in 2020 and 2021) are not sensitive to changes in kWh sales, although those sales margins are sensitive to changes in the number of customers served.
As of December 31, 2023, the number of gas customers served increased by approximately 950 over the previous year. Sales margins derived from decoupled unit sales (currently representing approximately 42% of total annual therm sales volume) are not sensitive to changes in gas therm sales, although those sales margins are sensitive to changes in the number of customers served.
At its January 2023 meeting, the Unitil Corporation Board of Directors declared a quarterly dividend on the Company’s common stock of $0.405 per share, an increase of $0.015 per share on a quarterly basis, resulting in an increase in the effective annualized dividend rate to $1.62 per share from $1.56 per share. 22 2021 Compared to 2020— The Company’s Net Income was $36.1 million, or $2.35 in Earnings Per Share (EPS), for the year ended December 31, 2021, an increase of $3.9 million in Net Income, or $0.20 in EPS, compared to 2020.
At its January 2024 meeting, the Unitil Corporation Board of Directors declared a quarterly dividend on the Company’s common stock of $0.425 per share, an increase of $0.02 per share on a quarterly basis, resulting in an increase in the effective annualized dividend rate to $1.70 per share from $1.62 per share. 2022 Compared to 2021— The Company’s Net Income was $41.4 million, or $2.59 in Earnings Per Share (EPS), for the year ended December 31, 2022, an increase of $5.3 million in Net Income, or $0.24 in EPS, compared to 2021.
Twelve Months Ended December 31, 2022 ($ millions) Electric Gas Other Total Total Operating Revenue $ 297.9 $ 265.3 $ — $ 563.2 Less: Cost of Sales (199.1 ) (121.4 ) — (320.5 ) Less: Depreciation and Amortization (25.4 ) (36.3 ) (0.9 ) (62.6 ) GAAP Gross Margin 73.4 107.6 (0.9 ) 180.1 Depreciation and Amortization 25.4 36.3 0.9 62.6 Adjusted Gross Margin $ 98.8 $ 143.9 $ — $ 242.7 Twelve Months Ended December 31, 2021 ($ millions) Electric Gas Other Total Total Operating Revenue $ 248.5 $ 224.8 $ — $ 473.3 Less: Cost of Sales (151.1 ) (91.7 ) — (242.8 ) Less: Depreciation and Amortization (25.9 ) (32.6 ) (1.0 ) (59.5 ) GAAP Gross Margin 71.5 100.5 (1.0 ) 171.0 Depreciation and Amortization 25.9 32.6 1.0 59.5 Adjusted Gross Margin $ 97.4 $ 133.1 $ — $ 230.5 Twelve Months Ended December 31, 2020 ($ millions) Electric Gas Other Total Total Operating Revenue $ 227.2 $ 191.4 $ — $ 418.6 Less: Cost of Sales (134.3 ) (68.8 ) — (203.1 ) Less: Depreciation and Amortization (23.8 ) (29.8 ) (0.9 ) (54.5 ) GAAP Gross Margin 69.1 92.8 (0.9 ) 161.0 Depreciation and Amortization 23.8 29.8 0.9 54.5 Adjusted Gross Margin $ 92.9 $ 122.6 $ — $ 215.5 Electric GAAP Gross Margin was $73.4 million in 2022, an increase of $1.9 million compared to 2021.
Twelve Months Ended December 31, 2023 ($ millions) Electric Gas Other Total Total Operating Revenue $ 306.5 $ 250.6 $ — $ 557.1 Less: Cost of Sales (202.4 ) (96.1 ) — (298.5 ) Less: Depreciation and Amortization (26.0 ) (40.4 ) (1.0 ) (67.4 ) GAAP Gross Margin 78.1 114.1 (1.0 ) 191.2 Depreciation and Amortization 26.0 40.4 1.0 67.4 Adjusted Gross Margin $ 104.1 $ 154.5 $ — $ 258.6 Twelve Months Ended December 31, 2022 ($ millions) Electric Gas Other Total Total Operating Revenue $ 297.9 $ 265.3 $ — $ 563.2 Less: Cost of Sales (199.1 ) (121.4 ) — (320.5 ) Less: Depreciation and Amortization (25.4 ) (36.3 ) (0.9 ) (62.6 ) GAAP Gross Margin 73.4 107.6 (0.9 ) 180.1 Depreciation and Amortization 25.4 36.3 0.9 62.6 Adjusted Gross Margin $ 98.8 $ 143.9 $ — $ 242.7 Twelve Months Ended December 31, 2021 ($ millions) Electric Gas Other Total Total Operating Revenue $ 248.5 $ 224.8 $ — $ 473.3 Less: Cost of Sales (151.1 ) (91.7 ) — (242.8 ) Less: Depreciation and Amortization (25.9 ) (32.6 ) (1.0 ) (59.5 ) GAAP Gross Margin 71.5 100.5 (1.0 ) 171.0 Depreciation and Amortization 25.9 32.6 1.0 59.5 Adjusted Gross Margin $ 97.4 $ 133.1 $ — $ 230.5 Electric GAAP Gross Margin was $78.1 million in 2023, an increase of $4.7 million compared to 2022.
As a result of Unitil Energy now being subject to revenue decoupling, as of June 1, 2022, revenue decoupling now applies to substantially all of Unitil’s total annual electric sales volumes.
As a result of Unitil Energy now being subject to revenue decoupling, as of June 1, 2022, revenue decoupling now applies to substantially all of Unitil’s total annual electric sales volumes. Substantially all of Northern Utilities’ gas sales volumes in New Hampshire have been subject to decoupling since August 1, 2022.
The Company estimates that weather-normalized gas therm sales, excluding decoupled sales, were 2.8% higher in 2021 compared to 2020.
The Company estimates that weather-normalized gas therm sales, excluding decoupled sales, were essentially unchanged in 2022 compared to 2021.
Unitil Corporation and its utility subsidiaries, Fitchburg, Unitil Energy, Northern Utilities, and Granite State are currently rated “BBB+” by Standard & Poor’s Ratings Services. Unitil Corporation and Granite State are currently rated “Baa2”, and Fitchburg, Unitil Energy and Northern Utilities are currently rated “Baa1” by Moody’s Investors Services.
Unitil Corporation and Granite State are currently rated “Baa2”, and Fitchburg, Unitil Energy and Northern Utilities are currently rated “Baa1” by Moody’s Investors Services.
The increase in Total Gas Operating Revenues of $40.5 million, or 18.0%, in 2022 compared to 2021 reflects higher cost of gas sales, which are tracked and reconciled costs as a pass-through to customers, and higher gas sales volumes. Gas Adjusted Gross Margin (a non-GAAP financial measure) was $133.1 million in 2021, an increase of $10.5 million compared to 2020.
The increase in Total Gas Operating Revenues of $40.5 million, or 18.0%, in 2022 compared to 2021 reflects higher cost of gas sales, which are tracked and reconciled costs as a pass-through to customers, and higher gas sales volumes. Therm Sales —Unitil’s total gas therm sales decreased 1.5% in 2023 compared to 2022.
There was $20.1 million and $8.3 million of natural gas storage inventory at December 31, 2022 and 2021, respectively, related to these asset management agreements. The amount of natural gas inventory released in December 2022, which was payable in January 2023, was $3.8 million and was recorded in Accounts Payable at December 31, 2022.
There was $10.9 million of natural gas storage inventory and corresponding obligations at December 31, 2023 related to these asset management agreements. The amount of natural gas inventory released in December 2023, which was payable in January 2024, was $2.2 million and was recorded in Accounts Payable at December 31, 2023.
The tables below summarize the major sources and uses of cash (in millions) for 2022 and 2021. 2022 2021 Cash Provided by Operating Activities $ 97.7 $ 107.8 Cash Provided by Operating Activities - Cash Provided by Operating Activities was $97.7 million in 2022, a decrease of $10.1 million compared to 2021.
The tables below summarize the major sources and uses of cash (in millions) for 2023 and 2022. 2023 2022 Cash Provided by Operating Activities $ 107.0 $ 97.7 Cash Provided by Operating Activities - Cash Provided by Operating Activities was $107.0 million in 2023, an increase of $9.3 million compared to 2022.
The increase was driven by higher rates and customer growth of $1.7 million , partially offset by the unfavorable effect on sales from cooler spring weather of $0.3 million when rates were not yet decoupled. Electric kilowatt-hour (kWh) sales decreased 1.0% in 2022 compared to 2021.
Electric Adjusted Gross Margin (a non-GAAP financial measure) was $98.8 million in 2022, an increase of $1.4 million compared with 2021. The increase was driven by higher rates and customer growth of $1.7 million, partially offset by the unfavorable effect on sales from cooler spring weather of $0.3 million when rates were not yet decoupled.
The following table details total therm sales for the last three years, by major customer class: Change 2022 vs. 2021 2021 vs. 2020 Therm Sales (millions) 2022 2021 2020 Therms % Therms % Residential 44.6 44.4 44.7 0.2 0.5 % (0.3 ) (0.7 )% Commercial & Industrial 180.2 177.5 170.1 2.7 1.5 % 7.4 4.4 % Total Therm Sales 224.8 221.9 214.8 2.9 1.3 % 7.1 3.3 % Gas Operating Revenues and Adjusted Gross Margin — The following table details total Gas Operating Revenue and Gas Adjusted Gross Margin for the last three years by major customer class: Change Gas Operating Revenues and Gas Adjusted Gross Margin 2022 vs. 2021 2021 vs. 2020 (millions) 2022 2021 2020 $ % $ % Gas Operating Revenue: Residential $ 103.4 $ 90.6 $ 78.0 $ 12.8 14.1 % $ 12.6 16.2 % Commercial & Industrial 161.9 134.2 113.4 27.7 20.6 % 20.8 18.3 % Total Gas Operating Revenue $ 265.3 $ 224.8 $ 191.4 $ 40.5 18.0 % $ 33.4 17.5 % Cost of Gas Sales $ 121.4 $ 91.7 $ 68.8 $ 29.7 32.4 % $ 22.9 33.3 % Gas Adjusted Gross Margin $ 143.9 $ 133.1 $ 122.6 $ 10.8 8.1 % $ 10.5 8.6 % Gas Adjusted Gross Margin (a non-GAAP financial measure) was $143.9 million in 2022, an increase of $10.8 million compared to 2021.
The following table details total kWh sales for the last three years by major customer class: Change 2023 vs. 2022 2022 vs. 2021 kWh Sales (millions) 2023 2022 2021 kWh % kWh % Residential 649.3 680.5 694.2 (31.2 ) (4.6 )% (13.7 ) (2.0 )% Commercial & Industrial 914.2 933.9 936.8 (19.7 ) (2.1 )% (2.9 ) (0.3 )% Total kWh Sales 1,563.5 1,614.4 1,631.0 (50.9 ) (3.2 )% (16.6 ) (1.0 )% 25 Gas Revenues, Adjusted Gross Margin and Sales Gas Operating Revenues and Adjusted Gross Margin — The following table details total Gas Operating Revenue and Gas Adjusted Gross Margin for the last three years by major customer class: Change Gas Operating Revenues and Gas Adjusted Gross Margin 2023 vs. 2022 2022 vs. 2021 (millions) 2023 2022 2021 $ % $ % Gas Operating Revenue: Residential $ 100.7 $ 103.4 $ 90.6 $ (2.7 ) (2.6 )% $ 12.8 14.1 % Commercial & Industrial 149.9 161.9 134.2 (12.0 ) (7.4 )% 27.7 20.6 % Total Gas Operating Revenue $ 250.6 $ 265.3 $ 224.8 $ (14.7 ) (5.5 )% $ 40.5 18.0 % Cost of Gas Sales $ 96.1 $ 121.4 $ 91.7 $ (25.3 ) (20.8 )% $ 29.7 32.4 % Gas Adjusted Gross Margin $ 154.5 $ 143.9 $ 133.1 $ 10.6 7.4 % $ 10.8 8.1 % Gas Adjusted Gross Margin (a non-GAAP financial measure) was $154.5 million in 2023, an increase of $10.6 million compared to 2022.
Depreciation and Amortization expense increased $3.1 million in 2022 compared to 2021, reflecting additional depreciation associated with higher levels of utility plant in service and higher amortization of rate case costs. Taxes Other Than Income Taxes increased $1.4 million in 2022 compared to 2021, reflecting higher payroll taxes and higher local property taxes on higher utility plant in service.
Depreciation and Amortization expense increased $4.8 million in 2023 compared to 2022, reflecting additional depreciation associated with higher levels of utility plant in service and higher amortization of rate case and other deferred costs.
As of December 31, 2022, the number of electric customers served increased by approximately 400 over the previous year. Sales margins derived from decoupled unit sales are not sensitive to changes in electric kWh sales, although those sales margins are sensitive to changes in the number of customers served.
Sales margins derived from decoupled unit sales are not sensitive to changes in electric kWh sales, although those sales margins are sensitive to changes in the number of customers served.
Taxes Other Than Income Taxes— Taxes Other Than Income Taxes increased $1.4 million, or 5.7%, in 2022 compared to 2021, reflecting higher payroll taxes and higher local property taxes on higher utility plant in service.
Taxes Other Than Income Taxes— Taxes Other Than Income Taxes increased $2.6 million, or 10.0%, in 2023 compared to 2022, reflecting higher local property taxes on higher utility plant in service and higher payroll, excise and other taxes.
The Company’s earnings in 2022 reflect higher Electric and Gas Adjusted Gross Margins (a non-GAAP financial measure), partially offset by higher operating expenses. Electric Adjusted Gross Margin (a non-GAAP financial measure) was $98.8 million in 2022, an increase of $1.4 million compared with 2021.
The Company’s earnings in 2023 reflect higher Electric and Gas Adjusted Gross Margins (a non-GAAP financial measure), partially offset by higher operating expenses. Electric Adjusted Gross Margin (a non-GAAP financial measure) was $104.1 million in 2023, an increase of $5.3 million compared with 2022. The increase was driven by higher rates from base rate cases and capital tracker mechanisms.
The Company, along with its subsidiaries, contributed $12.2 million and $8.9 million to Voluntary Employee Benefit Trusts (VEBTs) in 2022 and 2021, respectively. The Company, along with its subsidiaries, expects to continue to make contributions to its Pension Plan and the VEBTs in 2023 and future years at least at minimum required amounts.
Benefit Plan Funding The Company, along with its subsidiaries, made cash contributions to its Pension Plan in the amounts of $3.9 million and $3.8 million in 2023 and 2022, respectively. The Company, along with its subsidiaries, contributed $2.8 million and $12.2 million to Voluntary Employee Benefit Trusts (VEBTs) in 2023 and 2022, respectively.
Federal and State Income Taxes increased $1.3 million in 2021 compared to 2020, reflecting higher pre-tax earnings in the current period. LIQUIDITY, COMMITMENTS AND CAPITAL REQUIREMENTS Sources of Capital Unitil requires capital to fund utility plant additions, working capital and other utility expenditures recovered in subsequent periods through regulated rates.
Federal and State Income Taxes decreased $0.3 million in 2022 compared to 2021, reflecting lower taxes associated with the flowback of excess Accumulated Deferred Income Taxes. LIQUIDITY, COMMITMENTS AND CAPITAL REQUIREMENTS Sources of Capital Unitil requires capital to fund utility plant additions, working capital and other utility expenditures recovered in subsequent periods through regulated rates.
In accordance with the FASB Codification, the Company has recorded Regulatory Assets and Regulatory Liabilities which will be recovered from customers, or applied for customer benefit, in accordance with rate provisions approved by the applicable public utility regulatory commission.
In accordance with the FASB Codification, the Company has recorded Regulatory Assets and Regulatory Liabilities which will be recovered from customers, or applied for customer benefit, in accordance with rate provisions approved by the applicable public utility regulatory commission. 32 The FASB Codification specifies the economic effects that result from the cause and effect relationship of costs and revenues in the rate-regulated environment and the related accounting for a regulated enterprise.
Sales to Residential customers increased 0.5% and sales to C&I customers increased 1.5% in 2022 compared to 2021. The overall increase in gas therm sales reflects customer growth and colder winter weather in 2022. As of December 31, 2022, the number of gas customers served increased by approximately 850 over the previous year.
Unitil’s total gas therm sales increased 1.3% in 2022 compared to 2021. Sales to Residential customers increased 0.5% and sales to C&I customers increased 1.5% in 2022 compared to 2021. The overall increase in gas therm sales reflects customer growth and colder winter weather in 2022.
The increase in depreciation and amortization of $3.1 million in 2022 compared to 2021 reflects higher depreciation on higher utility plant in service. The increase in the deferred tax provision of $0.2 million in 2022 compared to 2021 is primarily driven by higher tax depreciation.
The increase in depreciation and amortization of $4.8 million in 2023 compared to 2022 reflects higher 30 depreciation on higher utility plant in service. The decrease in the deferred tax provision of $3.6 million in 2023 compared to 2022 is primarily driven by the use of net operating loss carryforwards in 2023.
The higher cash provided from financing activities in 2022 compared to 2021 of $19.2 million is primarily attributable to higher proceeds from short-term debt of $42.5 million, lower repayment of long-term debt of $15.4 million, an increase in exchange gas financing of $7.3 million and lower proceeds from the issuance of common stock of ($44.5) million.
The higher cash provided from financing activities in 2023 compared to 2022 of $4.6 million is primarily attributable to, proceeds from the issuance of long-term debt of $25.0 million, lower repayment of long-term debt of $3.5 million, a decrease in exchange gas financing of $17.2 million, and lower proceeds from short-term borrowings of 5.9 million.
The increase in Total Electric Operating Revenue of $49.4 million, or 19.9%, in 2022 compared to 2021 primarily reflects higher cost of electric sales, which are tracked and reconciled costs as a pass-through to customers. Electric Adjusted Gross Margin (a non-GAAP financial measure) was $97.4 million in 2021, an increase of $4.5 million compared with 2020.
The increase in Total Electric Operating Revenue of $49.4 million, or 19.9%, in 2022 compared to 2021 primarily reflects higher cost of electric sales, which are tracked and reconciled costs as a pass-through to customers. Kilowatt-hour Sales— Unitil’s total electric kWh sales decreased 3.2% in 2023 compared to 2022.
Cash Flows Unitil’s utility operations, taken as a whole, are seasonal in nature and subject to seasonal fluctuations in cash flows.
See Note 4 (Debt and Financing Arrangements) to the accompanying Consolidated Financial Statements. Cash Flows Unitil’s utility operations, taken as a whole, are seasonal in nature and subject to seasonal fluctuations in cash flows.
Changes in working capital items resulted in a ($6.0) million use of cash in 2022 compared to a $6.2 million source of cash in 2021, representing a decrease of $12.2 million.
Changes in working capital items resulted in a ($4.6) million use of cash in 2023 compared to a ($6.0) million use of cash in 2022, representing an increase in sources of cash of $1.4 million.
Interest Expense, Net decreased $0.1 million, or 0.4%, in 2022 compared to 2021 primarily reflecting lower interest on long-term debt and higher interest income, on regulatory assets, partially offset by higher interest on short-term borrowings.
Interest Expense, Net increased $3.2 million, or 12.6%, in 2023 compared to 2022 primarily reflecting higher interest on short-term borrowings, partially offset by higher interest income on regulatory assets and other.
Cost of Gas Sales increased $29.7 million, or 32.4%, in 2022 compared to 2021. This increase reflects higher gas sales and higher wholesale gas commodity prices, partially offset by an increase in the amount of gas purchased by customers directly from third-party suppliers.
Cost of Gas Sales decreased $25.3 million, or 20.8%, in 2023 compared to 2022. This decrease reflects lower gas sales, lower wholesale gas commodity prices, partially offset by a decrease in the amount of gas purchased by customers directly from third-party suppliers.
Based on weather data collected in the Company’s gas service areas, on average there were 2.6% more EDD in 2022 compared to 2021, although 5.1% fewer EDD compared to normal. The Company estimates that weather-normalized gas therm sales, excluding decoupled sales, were essentially unchanged in 2022 compared to 2021.
Based on weather data collected in the Company’s gas service areas, on average there were 6.5% fewer EDD in 2023 compared to 2022. The Company estimates that weather-normalized gas therm sales for Northern Utilities’ Maine division, the Company’s only non-decoupled gas service area, increased 3.0% in 2023 compared to 2022.
In 2021, Depreciation and Amortization expense increased $5.0 million, or 9.2%, compared to 2020, reflecting additional depreciation associated with higher levels of utility plant in service and higher amortization.
Depreciation and Amortization— Depreciation and Amortization expense increased $4.8 million, or 7.7%, in 2023 compared to 2022, reflecting additional depreciation associated with higher levels of utility plant in service and higher amortization of rate case and other deferred costs.

… 43 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed5 unchanged
Biggest changeThe average interest rate on short-term borrowings and intercompany money pool transactions was 3.3%, 1.2%, and 1.7% during 2022, 2021, and 2020, respectively.
Biggest changeThe average interest rate on short-term borrowings and intercompany money pool transactions was 6.4%, 3.3%, and 1.2% during 2023, 2022, and 2021, respectively.
Additionally, as discussed in the section entitled Rates and Regulation in Part I, Item 1 (Business) and in Note 7 (Commitments and Contingencies) to the accompanying Consolidated Financial Statements, the Company has divested its long-term power supply contracts and therefore, further reduced its exposure to commodity risk. 33
Additionally, as discussed in the section entitled Rates and Regulation in Part I, Item 1 (Business) and in Note 7 (Commitments and Contingencies) to the accompanying Consolidated Financial Statements, the Company has divested its long-term power supply contracts and therefore, further reduced its exposure to commodity risk. 34

Other UTL 10-K year-over-year comparisons