Q2 2024 Unitil Corp Earnings Call
Yeah.
Operator: Good day, and thank you for standing by. Welcome to the second quarter 2024 Unitil earnings conference call.
Speaker Change: Good day and thank you for standing by welcome to the second quarter of 2024 Unitil earnings Conference call. At this time, all participants are in listen only mode. After the speaker's presentation.
Operator: At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star-one-one on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star-one-one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker, Christopher Goulding, Vice President of Finance and Regulatory Service. Please go ahead.
Speaker Change: There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
Speaker Change: Didn't hear an automated message advising you had just raised to withdraw your question. Please press star one again.
Speaker Change: Please be advised that today's conference is being recorded I would now like to hand, the conference over to your first Speaker, Christopher Goldy, Vice President of Finance regulatory Sir. Please go ahead.
Chris Goulding: Chief Executive Officer, and Dan Hurstak, Senior Vice President, Chief Financial Officer, and Treasurer. Also with us today are Bob Hevert, President and Chief Administrative Officer, and Todd Diggins, Chief Accounting Officer and Controller.
Dan <unk>: Executive Officer, and Dan <unk>, Senior Vice President Chief Financial Officer and Treasurer.
Speaker Change: Also with US today are Bob <unk>, President and Chief administrative officer, and Todd Diggins, Chief Accounting Officer and controller.
Speaker Change: We will discuss financial and other information on this call as we mentioned in the press release announcing todays call we have posted information.
Chris Goulding: We will discuss financial and other information on this call. As we mentioned in the press release announcing today's call, we have posted information, including a presentation, to the investor section of our website at Unitil.com. We will refer to that information during this call. Moving to slide two.
Speaker Change: A presentation to the investors section of our website at <unk> Dot com, we all refer to that information during this call.
Speaker Change: Moving to slide two.
Chris Goulding: The comments made today about future operating results or events are forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risk and uncertainties that can cause actual results to differ materially from those predicted. Statements made on this call should be considered together with cautionary statements and other information contained in our most recent annual report on Form 10-K and other documents we have filed with or furnished to the Security and Exchange Commission. Forward-looking statements speak only as of today, and we assume no obligation to update them.
Speaker Change: Comments made today about future operating results or events are forward looking statements under the safe Harbor provisions of the private Securities Litigation Reform Act of 1095.
Speaker Change: Forward looking statements inherently involve risks and uncertainties that can cause actual results to differ materially from those predicted.
Speaker Change: Statements made on this call should be considered together with cautionary statements and other information contained in our most recent annual report on Form 10-K, and other documents, we have filed with or furnished to the security and Exchange Commission.
Speaker Change: Forward looking statements speak only as of today, and we assume no obligation to update them.
Speaker Change: Okay.
Chris Goulding: The presentation contains non-GAAP financial measures. The accompanying supplemental information more fully describes these non-GAAP financial measures and includes a reconciliation to the nearest GAAP financial measures. The company believes these non-GAAP financial measures are useful in evaluating its performance. With that, I will now turn the call over to Chairman and CEO, Tom Meissner.
The presentation contains non-GAAP financial measures the accompanying supplemental information more fully describes these non-GAAP financial measures and includes a reconciliation to the nearest GAAP financial measures.
Speaker Change: The company believes these non-GAAP financial measures are useful in evaluating its performance.
Speaker Change: With that I'll now turn the call over to chairman and CEO, Tom Meissner great.
Chris Goulding: Great. Thanks, Chris.
Tom Meissner: Great. Thanks, Chris Good afternoon, good afternoon, everyone and thank you for joining us.
Thomas Meissner: Good afternoon, everyone, and thank you for joining us. I'm going to begin on slide three, where we announce second quarter net income of $4.3 million, or $0.27 per share, representing an increase of $0.02 per share over the same period in 2023. Through the first half of the year, net income was $31.5 million, or $1.96 per share, representing an increase of 20 cents per share over the same period in 2023. Our results for the quarter were in line with our expectations, and we are confident that our full-year earnings will be within our long-term guidance range.
Speaker Change: Im going to begin on slide three where today, we announced second quarter net income of $4 3 million or 27 per share representing an increase of <unk> <unk> per share over the same period of 2023.
Through the first half of the year net income was $31 5 million or $1 96 per share representing an increase of <unk> 20 per share over the same period in 2023.
Speaker Change: Our results for the quarter were in line with our expectations and we are confident that our full year earnings will be within our long term guidance range.
Thomas Meissner: Looking beyond 2024, we reaffirm our long-term earnings growth of 5% to 7%, supported by rate-based growth in the range of 6.5% to 8.5%, and a dividend payout ratio between 55% and 65%. We continue to execute on our regulatory agenda, capital investment plan, and cost control initiatives and believe that our consolidated GAAP return on equity of 9.8% over the last 12 months reflects these efforts. Our regulatory agenda remains active, and we recently received an order in our Fitchburg electric and gas rate case. We view that order as constructive, with many items approved as filed, including the company's performance-based rate plan. Dan will provide additional detail about these rate cases later on in the call.
Speaker Change: Looking beyond 2024, we reaffirm our long term earnings growth of 5% to 7% supported by rate base growth in the range of six 5% to eight 5% and a dividend payout ratio between 55 and 65%.
Speaker Change: We continue to execute on our regulatory agenda capital investment plan and cost control initiatives and believe that our consolidated GAAP return on equity of nine 8% over the last 12 months reflects these efforts.
Speaker Change: Our regulatory agenda remains active and we recently received an order in our Fitchburg electric and gas rate cases.
Speaker Change: We view that order is constructive with many items approved as filed including the Companys performance based rate plans.
Speaker Change: Dan will provide additional detail about these rate cases later on the call.
Thomas Meissner: As I will outline in greater detail on the next slide, we reached an agreement with Hope Utilities to purchase Bangor Natural Gas Company, a fully regulated natural gas distribution utility. We expect the transaction to close by the end of the first quarter of 2025, subject to approval by the Maine Public Utilities Commission. We view Bangalore as a natural complement to our existing operations and believe our shared commitment to affordability, safety, and outstanding service will benefit Bangalore's customers and communities. Moving now to slide four, as I've talked about in prior calls, when we evaluate potential acquisitions, we look for opportunities that meet certain criteria.
As I will outline in greater detail on the next slide we reached an agreement with hope utilities to purchase Bangor natural gas company, a fully regulated natural gas distribution utility.
Dan <unk>: We expect the transaction to close by the end of the first quarter of 2025 subject to approval by the Maine Public Utilities Commission.
Dan <unk>: We view Bangor is a natural complement to our existing operations and believe our shared commitment to affordability safety and outstanding service will benefit <unk> customers and communities.
Speaker Change: Moving now to slide four as I've talked about in prior calls when we evaluate potential acquisitions, we look for opportunities that meet certain criteria.
Thomas Meissner: These include utility operations and constructive regulatory jurisdictions, proximity to our existing service areas, opportunities in colder climates where natural gas offers a cleaner and more affordable energy choice than other fuels, transactions that are accretive over the long term, and opportunities that align with our strategic objectives. Bangor natural gas meets all of these criteria. Bangor Natural Gas is a fully regulated gas distribution company that owns and operates approximately 350 miles of pipeline throughout the greater Bangor area of Maine. The Bangor distribution system is relatively new and is constructed of steel and plastic mains with no cast iron or other leak-prone pipes.
Speaker Change: These include utility operations in constructive regulatory jurisdictions.
Speaker Change: Proximity to our existing service areas.
Speaker Change: Opportunities in colder climates, where natural gas offers a cleaner and more affordable energy choice and other fuels.
Speaker Change: <unk> transactions that are accretive over the long term and opportunities that align with our strategic objectives.
Speaker Change: Vanguard natural gas meets all of these criteria.
Speaker Change: Bank of our natural gas as a fully regulated gas distribution company.
It owns and operates approximately 350 miles of pipeline throughout the greater Bangor area of Maine.
Speaker Change: The Bangor distribution system is relatively new and is constructed of steel and plastic means with no cast iron or other leak prone pipe.
Speaker Change: Okay.
Thomas Meissner: The company serves about 8,500 customers and has historically experienced strong customer growth with an average growth rate of roughly 5% annually over the last five years. This strong customer growth is supported by the lowest natural gas rates in Maine. In fact, based on recent fuel prices, the cost to heat a home with natural gas in the Bangalore area is less than half the cost of heating a home with fuel oil and about a third the cost of heating with propane.
Speaker Change: The company serves about 8500 customers and has historically experienced strong customer growth with an average growth rate of roughly 5% annually over the last five years.
Speaker Change: This strong customer growth is supported by the lowest natural gas rates in Maine.
Speaker Change: In fact based on recent fuel prices the cost to heat a home with natural gas in the <unk> area is less than half the cost of heating a home with fuel oil and about a third the cost of heating with protein propane.
Thomas Meissner: Bangor also has an interconnection agreement in place with a renewable natural gas facility capable of delivering meaningful levels of pipeline-quality natural gas, which we believe can support Maine's climate policy. The purchase price is $70.9 million, subject to customary adjustments for working capital and transaction expenses.
Speaker Change: <unk> also has an interconnection agreement in place with the renewable natural gas facility capable of delivering meaningful levels of pipeline quality natural gas, which we believe can support means climate policies.
Speaker Change: The purchase price of $70 9 million subject to customary adjustments for working capital and transaction expenses.
Thomas Meissner: The enterprise value represents a multiple of approximately 1.2 times the estimated rate base as of year-end 2023. S&P views the transaction as credit-neutral, even if it is financed primarily with debt, although we expect to finance this transaction with a balanced mix of equity and debt similar to our other regulated utilities. We look forward to working with other interested parties during the pendency of the approval proceeding before the Maine Public Utilities Committee. Turning now to slide five, our capital investment plan through 2028 totals approximately $910 million, with opportunities for additional investment. As one example, we previously discussed the high penetration of fuel oil and propane in Maine and the financial and environmental benefits that natural gas can bring to residential customers heating with those fuels.
Speaker Change: The enterprise value represents a multiple of approximately one two times estimated rate base as of year end 2023.
Speaker Change: S&P views of transaction as credit neutral even if it is financed primarily with debt. Although we expect to finance this transaction with a balanced mix of equity and debt similar to our other regulated utilities.
Speaker Change: We look forward to working with other interested parties during the pendency of the approval proceeding before the Maine Public Utilities Commission.
Speaker Change: Turning now to slide five our capital investment plan through 2028 totals approximately $910 million with opportunities for additional investments.
Speaker Change: As one example, we previously discussed the high penetration of fuel oil and propane in Maine, and the financial and environmental benefits of natural gas can bring to residential customers heating with those fuels.
Thomas Meissner: We see the Bangalore transactions providing additional opportunities for conversions and expansion. We also believe that further electric system modernization investments will be required to satisfy the increasing demand for electrification and customer growth, and also to enhance grid resilience and to enable smart technologies that will provide customers with information to more effectively control their energy use and cost. These requirements may provide further upside to our capital plan.
Speaker Change: We see the Vanguard transaction is providing additional opportunities for conversions and expansion.
Speaker Change: We also believe that further electric system modernization investments will be required to satisfy the increasing demand for electrification and customer growth and also to enhance grid resiliency and to enable smart technologies will provide customers with information to more effectively control their energy use and costs.
Speaker Change: These requirements may provide further upside to our capital plan.
Thomas Meissner: Lastly, I'd like to provide an update on our utility-scale solar project here in New Hampshire. Site work is on schedule and is expected to be completed in the third quarter of 2024, with facility construction beginning shortly thereafter. We expect the project to be placed in service by the end of the second quarter of 2025. With that, I will now pass it over to Dan, who will provide greater detail on the second quarter results. Dan? Thank you.
Speaker Change: Lastly, I'd like to provide an update on our utility scale solar project here in New Hampshire.
Speaker Change: Site work is on schedule and is expected to be completed in the third quarter of 2024 with facility construction beginning shortly thereafter.
Speaker Change: We expect the project to be placed in service by the end of the second quarter of 2025.
Speaker Change: With that I will now pass it over to Dan who will provide greater detail on our second quarter results Dan. Thank.
Daniel Hurstak: Thank you, Tom. Good afternoon, everyone. I'll begin on slide six. As Tom mentioned, today we announced a second quarter net income of $4.3 million, or 27 cents per share, an increase of two cents per share compared to the same period in 2023. For the first six months of the year, net income was $31.5 million, an increase of $3.2 million, or 20 cents per share, compared to the corresponding period in 2023. Earnings growth reflects higher adjusted electric and gas margins, partially offset by higher operating costs. Our results for the first half of 2024 are consistent with the quarterly earnings per share distribution discussed in the past and provided in the appendix of this presentation. We expect the results for the remainder of 2024 will be largely consistent with this quarterly distribution. Turning to slide seven.
Dan <unk>: Thank you Tom good afternoon, everyone.
Dan <unk>: I'll begin on slide six as.
Dan <unk>: As Tom mentioned today, we announced second quarter net income of $4 3 million or 27 per share.
Speaker Change: The increase of <unk> <unk> per share compared to the same period in 2023.
Dan <unk>: For the first six months of the year net income was $31 5 million, an increase of $3 2 million or <unk> 20 per share compared to the corresponding period in 2023.
Earnings growth reflects higher adjusted electric and gas margin.
Dan <unk>: Partially offset by higher operating expenses.
Dan <unk>: Our results for the first half of 2024 are consistent with the quarterly earnings per share distribution discussed in the past and provided in the appendix of this presentation.
Dan <unk>: We expect the results for the remainder of 2024 will be largely consistent with this quarterly distribution.
Dan <unk>: Turning to slide seven I.
Daniel Hurstak: I will discuss our electric and gas-adjusted gross margin. I will start with our electric operation. Electric adjusted gross margin was $52 million for the six months ended June 30, 2024, an increase of $1.1 million compared to the same period in 2023. This increase in electric adjusted gross margin reflects higher distribution rates and customer growth. The company added approximately 750 new electric customers compared to the same period in 2023. As a reminder, the company's electric distribution revenues are substantially decoupled, which eliminates the dependency of distribution revenue on the volume of electricity sales, moving the gas operation.
Speaker Change: I will discuss our electric and gas adjusted gross margins.
Speaker Change: I'll start with our electric operations.
Speaker Change: Electric adjusted gross margin was $52 million for the six months ended June 32024, and an increase of $1 1 million compared to the same period in 2023.
This increase in electric adjusted gross margin reflects higher distribution rates and customer growth.
Speaker Change: The company added approximately 750, new electric customers compared to the same period in 2023.
Speaker Change: As a reminder, the company's electric distribution revenues are substantially decoupled, which eliminates the dependency of distribution revenue on the volume of electricity sales.
Speaker Change: Moving to gas operations.
Daniel Hurstak: Gas adjusted gross margin was $92.3 million for the first six months ended June 30th, 2024, an increase of $8.1 million, or approximately 10% compared to the same period in 2023. The increasing gas-adjusted gross margin reflects higher distribution rates and customer growth. The company added approximately 1,100 new gas customers compared to the same period in 2020. Approximately 60% of the company's gas customers are under decoupled.
Speaker Change: <unk> adjusted gross margin was $92 3 million for the first six for the first six months ended June 32024 and.
Speaker Change: An increase of $8 1 million or approximately 10% compared to the same period in 2023.
Speaker Change: The increase in gas adjusted gross margin reflects higher distribution rates and customer growth.
Speaker Change: Company added approximately 100, new gas customers compared to the same period in 2023.
Approximately 60% of the company's gas customers are under decoupled rates.
Speaker Change: Moving to slide eight we provide an earnings bridge comparing year to date 2024 results to 2023.
Daniel Hurstak: Moving to slide 8, we provide an earnings bridge comparing year-to-date 2024 results to 2023. As I just discussed, adjusted gross margin for the first six months of the year increased by $9.2 million, primarily driven by higher distribution rates and customer growth. Operation and maintenance expenses increased $0.4 million, primarily reflecting higher labor costs. This nominal increase of approximately 1.1% is well below broader inflation of about 3% over the same period.
Speaker Change: As I just discussed adjusted gross margin for the first six months of the year increased by $9 $2 million.
Speaker Change: Primarily driven by higher distribution rates and customer growth.
Speaker Change: Operation and maintenance expenses increased <unk> $4 million primarily.
Speaker Change: Reflecting higher labor costs.
Speaker Change: This nominal increase of approximately one 1% is well below broader inflation of about 3% over the same period.
Speaker Change: Depreciation and amortization increased $2 8 million.
Daniel Hurstak: Appreciation and amortization increased $2.8 million, reflecting higher levels of utility plan service and higher amortization of storm costs. Taxes, other than income taxes, increased $0.7 million. Reflecting higher local property taxes on higher utility plan service as well as higher payroll tax, Interest expense increased $0.6 million, reflecting higher interest expense on short-term borrowings and higher levels of long-term debt, partially offset by higher interest income on regulatory assets. Other expenses increased by $0.5 million, largely due to higher retirement benefit costs. And lastly, income taxes increased by $1 million, reflecting higher pre-tax earnings. Turn to slide 9.
Speaker Change: Reflecting higher levels of utility plant in service and higher amortization of storm costs.
Speaker Change: Taxes other than income taxes increased zero point $7 million.
Speaker Change: Reflecting higher local property taxes on higher utility plant and service as well as higher payroll taxes.
Speaker Change: Interest expense increased <unk> 6 million.
Speaker Change: Reflecting higher interest expense on short term borrowings and higher levels of long term debt, partially offset by higher interest income on regulatory assets.
Speaker Change: Other expense increased by zero point $5 million, largely due to higher retirement benefit costs.
Speaker Change: And lastly income taxes increased $1 million, reflecting higher pretax earnings.
Speaker Change: Turning to slide nine.
Daniel Hurstak: As Tom noted, we recently received the rate case order for our electric and gas divisions in Massachusetts, and new base distribution rates for both divisions took effect on July 1. We believe the order, which approves many of the company's proposals, is constructive for all stakeholders. With our continuing focus on operating efficiency, the order should provide Fitchburg with the opportunity to earn its authorized return equity over the five-year term. The order approved return equity of 9.4% for both the electric and gas divisions and the company's actual capital structure, which includes 52.26% common equity.
Speaker Change: As Tom noted.
Speaker Change: We recently received the rate case order for our electric and gas divisions in Massachusetts, and new base distribution rates for both divisions took effect on July one.
Tom Meissner: We believe the order, which approved many of the company's proposals is constructive for all stakeholders.
Pittsburgh: With our continuing focus on operating efficiency the order should provide pittsburgh with the opportunity to earn its authorized return on equity over the five year term.
Pittsburgh: The order approved a return on equity of nine 4% for both the electric and gas divisions and the company's actual capital structure, which includes 50 to two 6% common equity.
Daniel Hurstak: Revenue decoupling remains in place for both divisions, with the gas division moving from a revenue-per-customer model to a revenue-target model. The rate case order also approved five-year performance-based rate plans, which I will discuss in greater detail on the next slide. The annual distribution rate award for the electric division was $4.7 million.
Pittsburgh: Revenue decoupling remains in place for both divisions with the gas division moving from a revenue per customer model to a revenue target model.
Pittsburgh: The rate case order also approved five year performance based rate plans, which I will discuss in greater detail on the next slide.
Pittsburgh: The annual distribution rate of award for the Electric Division was $4 7 million.
Daniel Hurstak: This award includes revenue transfers between capital tracker mechanisms and base rates, which total $2.5 million. Net of these revenue transfers, the annualized revenue increase is approximately $2.2 million; the Annual Distribution Rate Award for the Gas Division is $10.1 million. Similar to the electric division, this amount includes the transfer of revenues from capital tracker mechanisms to base distribution rates. Net of the $4.9 million transfer for the gas division, the net annualized revenue increase is $5.2 million.
Pittsburgh: This award includes revenue transfers between capital tracker mechanisms and base rates, which totaled $2 5 million.
Pittsburgh: Net of these revenue transfers the annualized revenue increase is approximately $2 $2 million.
Pittsburgh: The annual distribution rate of award for the gas Division.
It was $10 1 million Sim.
Pittsburgh: Similar to the electric Division. This amount includes the transfer of revenues from capital tracker mechanisms to base distribution rates.
Pittsburgh: Net of the $4 9 million transfer for the gas Division.
Pittsburgh: Net annualized revenue increase is $5 2 million.
Daniel Hurstak: The order also approved higher depreciation rates, which will result in an annual depreciation expense increase of about $2.6 million. This increase in gas depreciation expense will not affect earnings as it is offset with higher revenue. Our regulatory agenda remains busy, and we expect to file a major state gas transmission rate case with FERC before the end of the year. Moving now to slide 10.
Pittsburgh: The order also approved higher depreciation rates, which.
Pittsburgh: Will result in an annual depreciation expense increase of about $2 6 million.
Pittsburgh: This increase in gas depreciation expense will not affect earnings as it is offset with higher revenues.
Pittsburgh: Our regulatory agenda remains busy and we expect to file a granite state gas transmission rate case with FERC before the end of the year.
Pittsburgh: Moving now to slide 10.
Daniel Hurstak: I would like to provide an overview of the performance-based rate plans approved for a five-year term for PITS. We believe the performance-based rate plans support the clean energy transition while reducing the regulatory burden and promoting efficiencies and cost control. Annual rate changes will take effect each July 1st from 2025 through 2028. These annual rate changes include inflation increases tied to the GDP Price Index with a 0% floor and a 5% cap.
Pittsburgh: I'd like to provide an overview of the performance based rate plans approved for a five year term for Pittsburgh.
Pittsburgh: We believe the performance based rate plans support the clean energy transition, while reducing regulatory burden and promoting efficiencies and cost control.
Pittsburgh: Annual rate changes will take effect July one from 2025 through 2020.
These annual rate changes include inflation increases tied to the GDP price index with a zero percent floor and a 5% cap.
Daniel Hurstak: If inflation increases exceed 2%, a 25 basis point consumer dividend will be applied. Exogenous cost adjustments can be included for certain events if the effect is outside of our control and surpasses $110,000 for the electric division and $60,000 for the gas division. The return equity exceeds 100 basis points above the authorized return. An earnings sharing mechanism would be triggered, and 75% of excess earnings above 10.4% would be shared with customers. With regard to the electric division, a KBAR mechanism that recovers property taxes and the return on and of capital investment. It's part of the annual base rate increase and effectively replaces the previous electric capital cost recovery mechanism.
Pittsburgh: If if inflation increases exceed 2%, a 25 basis point consumer dividend will be applied.
Pittsburgh: Exogenous cost adjustments can be included for certain events. If the effect is outside of our control and surpasses $110000 for the electric division and $60000 for the gas Division.
Pittsburgh: If the return equity exceeds 100 basis points above the authorized return.
Pittsburgh: An earnings sharing mechanism would be triggered and 75% of excess earnings above 10, 4% would be shared with customers.
Pittsburgh: With regards to the electric division, a KBR mechanism that recovers property taxes, and the return on and of capital investment as part of the annual base rate increase and effectively replaces the previous electric capital cost recovery mechanism.
Daniel Hurstak: The KBAR mechanism contributes to the predictability of electric revenues while mitigating the regulatory burden to all parties. The grid modernization capital tracker remains in place outside of the electric PBR structure. Because the gas infrastructure replacement tracker remains in place, there is no KBAR mechanism for the company's gas operation. Turn to slide 11.
Pittsburgh: The KBR mechanism contributes to the predictability of electric revenues, while mitigating the regulatory burden to all parties.
Pittsburgh: The grid modernization capital tracker remains in place outside of the electric PBR structure.
Pittsburgh: Because the gas infrastructure replacement tracker remains in place there is no KBR mechanism for the company's gas operations.
Pittsburgh: Turning to slide 11.
Pittsburgh: We consider our balance sheet, a strategic asset and continue to expect operating cash flows less dividends to fund the vast majority of our capital investment plan with the remaining financing needs met through a combination of debt and equity.
Daniel Hurstak: We consider our balance sheet a strategic asset and continue to expect operating cash flows less dividends to fund the vast majority of our capital investment plan, with the remaining financing needs met through a combination of debt and equity. We continue to maintain investment grade credit ratings through our focus on responsibly managing the balance sheet and generating strong cash flow. Our financing plan supports our investment-grade credit ratings, and in 2023, we were 500 basis points above our FFO2Debt downgrade threshold.
Pittsburgh: We continue to maintain investment grade credit ratings through our focus on our responsibly managing the balance sheet and generating strong cash flows.
Pittsburgh: Our financing plan supports our investment grade credit ratings and in 2023, we were 500 basis points above our <unk> to debt downgrade threshold.
Consistent with past practice, we expect to recapitalize portions of our short term debt with long term debt to reduce interest rate volatility and enhance our liquidity profile by reducing the outstanding balance on our revolving credit facility.
Daniel Hurstak: Consistent with past practice, we expect to recapitalize portions of our short-term debt with long-term debt to reduce interest rate volatility and enhance our liquidity profile by reducing the outstanding balance on our revolving credit facility. Maintaining our strong balance sheet and our investment grade credit ratings remain a top priority. I'll now turn the call back over to Tom.
Pittsburgh: Maintaining a strong balance sheet and our investment grade credit ratings remain a top priority.
I'll now turn the call back over to Tom.
Thomas Meissner: Thanks, Dan. Wrapping up on slide 12, we've enjoyed a strong first half of the year, and we're currently earning our authorized returns on a consolidated basis. Recent regulatory outcomes remain constructive, and our capital investment plan remains on track. Our credit metrics continue to compare favorably to our peers, ensuring access to capital to support our growth. I'm excited about the future and look forward to providing additional details about the Bangor acquisition on future calls. With that, I'll pass this on to Chris.
Tom Meissner: Thanks, Dan.
Tom Meissner: Wrapping up on slide 12, we've enjoyed a strong first half of the year and were currently earning our authorized returns on a consolidated basis.
Tom Meissner: Recent regulatory outcomes remain constructive in our capital investment plan remains on track.
Speaker Change: Our credit metrics continue to compare favorably to our peers, ensuring access to capital to support our growth.
Speaker Change: I am excited about the future and look forward to providing additional details about the <unk> acquisition on future calls.
Speaker Change: With that I'll pass it back to Chris.
Chris Goulding: Thanks, Tom. That wraps up the prepared materials for this call. Thank you for attending. I'll now turn the call over to the operator who will coordinate questions. Thank you. At this time...
Chris: Thanks, Tom that wraps up the prepared materials for this call. Thank you for attending I will now turn the call over to the operator, who will coordinate questions.
Operator: Thank you. At this time, we will now conduct the question and answer session. As a reminder, to ask a question, you'll need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Anne Alonzo from Alonzo Advisory, LLC. The floor is yours. Our next question comes from the line of Ken Sheldon with Bank of America.
Speaker Change: Thank you at this time, we will now conduct the question and answer session.
As a reminder to ask a question you will need to press star one on your telephone.
Speaker Change: And wait for your name to be announced to withdraw your question. Please press star one again, please standby, while we compile the Q&A roster.
Speaker Change: Our first question.
Speaker Change: Comes from the line.
Speaker Change: I'm Anne Alonzo from Alonso advisors LLC the floor is yours.
Operator: The floor is yours. You may go ahead, Ken. The floor is yours. I'm not asking any further questions at this time. We would now like to close out the meeting. Thank you for your participation in today's meeting, www.unitil.co.uk
Ken <unk>: Our next question comes from the line of Ken <unk> with Bank of America. The floor is yours.
Speaker Change: Yes.
Speaker Change: You May go ahead, Tim the floor is yours.
Speaker Change: I'm showing no further question so at this time.
Speaker Change: We would now like to close out the meeting. Thank you for your participation in today's meeting.
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