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Item 7. Management’s Discussion and Analysis

2026-02-09 compared with 2025-02-10 · 130 added, 106 removed, 281 unchanged (46% of the section changed)

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Unitil’s principal business is the local distribution of electricity and natural gas to approximately 215,100 customers throughout its service territory in the states of New Hampshire, Massachusetts and Maine.

Unitil is the parent company of three wholly-owned distribution utilities:

Unitil is the parent company of five wholly-owned distribution utilities:

i) Unitil Energy, which provides electric service in the southeastern seacoast and state capital regions of New Hampshire;

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iii) Northern Utilities, which provides natural gas service in southeastern New Hampshire and portions of southern and central Maine, including the city of Portland and the Lewiston-Auburn area;

Unitil Energy, Fitchburg and Northern Utilities are collectively referred to as the “distribution utilities.” Together, the distribution utilities serve approximately 109,400 electric customers and 89,100 natural gas customers in their service territories.

iv) Bangor, which provides natural gas service in the greater Bangor area of central Maine;

v) Maine Natural, which provides natural gas service in southern and central Maine, including the greater Portland region, as well as the capital city of Augusta.

Unitil Energy, Fitchburg, Northern Utilities, Bangor and Maine Natural are collectively referred to as the “distribution utilities.” Together, the distribution utilities serve approximately 110,100 electric customers and 105,000 natural gas customers in their service territories.

The distribution utilities are local “wires and pipes” operating companies.

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Granite State provides Northern Utilities with interconnection to three major natural gas pipelines and access to North American pipeline supplies.

Unitil had an investment in Net Utility Plant of $1,539.6 million at December 31, 2024.

Unitil had an investment in Net Utility Plant of $1.8 billion at December 31, 2025.

Unitil’s total revenue was $536.0 million in 2025, which includes revenue to recover the approved cost of purchased electricity and natural gas in rates on a fully reconciling basis.

As a result of this reconciling rate structure, the Company’s earnings are not affected by changes in the cost of purchased electricity and natural gas.

Earnings from Unitil’s utility operations are derived from the return on investment in the three distribution utilities and Granite State.

The Company’s other subsidiaries include Unitil Service, which provides, at cost, a variety of administrative and professional services to Unitil’s affiliated companies, Unitil Resources, the Company’s non-regulated subsidiary, which currently does not have any activity, and Unitil Realty, which owns and manages the Company’s corporate office in Hampton, New Hampshire and land for future use in Kingston, New Hampshire.

Earnings from Unitil’s utility operations are derived from the return on investment in the five distribution utilities and Granite State.

The Company’s other subsidiaries include Unitil Service, which provides, at cost, a variety of administrative and professional services to Unitil’s affiliated companies, Unitil Resources, the Company’s non-regulated subsidiary, which currently does not have any activity, Unitil Realty, which owns and manages the Company’s corporate office in Hampton, New Hampshire and also owns land in Kingston, New Hampshire on which Unitil Energy’s solar facility is located, which became operational in May 2025, and Unitil Water which currently does not have any activity.

Unitil’s consolidated net income includes the earnings of the holding company and these subsidiaries.

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Unitil’s distribution utilities are subject to regulation by the applicable state public utility commissions, with regard to their rates, issuance of securities and other accounting and operational matters:

Unitil Energy is subject to regulation by the NHPUC;

Energy is subject to regulation by the NHPUC;

Fitchburg is subject to regulation by the MDPU;

and Northern Utilities is regulated by the NHPUC and MPUC.

Northern Utilities is regulated by the NHPUC and MPUC;

and Bangor and Maine Natural are regulated by the MPUC.

Granite State, Unitil’s interstate natural gas transmission pipeline, is subject to regulation by the FERC with regard to its rates and operations.

Because Unitil’s primary operations are subject to rate regulation, the regulatory treatment of various matters could significantly affect the Company’s operations, financial position, and cash flows.

Unitil’s distribution utilities deliver electricity and/or natural gas to all customers in their service territories, at rates established under traditional cost of service regulation.

Under this regulatory structure, Unitil’s distribution utilities are provided the opportunity to recover the cost of providing distribution service to their customers based on a historical test year, and earn a return on their capital investment in utility assets.

Unitil Energy, Fitchburg, Northern Utilities and Maine Natural’s non-Augusta service area deliver electricity and/or natural gas to all customers in their service territories, at rates established under traditional cost of service regulation.

Under this regulatory structure, Unitil’s distribution utilities are provided the opportunity to recover the cost of providing distribution service to their customers based on a historical or forward test year, and earn a return on their capital investment in utility assets.

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.

Bangor and Maine Natural’s Augusta Service Area deliver natural gas customers at rates established under alternative rate plans, which provide multi-year rate changes designed to approximate market-based rates.

Most of Unitil’s customers have the opportunity to purchase their electricity or natural gas supplies from third-party energy suppliers.

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Unitil’s distribution utilities purchase electricity or natural gas from unaffiliated wholesale energy suppliers and recover the actual approved costs of these supplies on a pass-through basis, through reconciling rate mechanisms that are periodically adjusted.

The Company’s electric and gas sales in Massachusetts and New Hampshire are decoupled.

Revenue decoupling is the term given to the elimination of the dependency of a utility’s distribution revenue on the volume of electricity or gas sales.

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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.

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's electric and gas sales in New Hampshire and Massachusetts are now largely decoupled.

Northern Utilities’ gas sales volumes in Maine are not subject to decoupling.

Also see Regulatory Matters in this section and Note 8 (Commitments and Contingencies) to the accompanying Consolidated Financial Statements for additional information on rates and regulation.

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Non-GAAP measures as presented herein may not be comparable to similarly titled measures used by other companies.

The Company's earnings discussion includes Adjusted Net Income, a non-GAAP financial measure referencing the Company’s 2024 GAAP Net Income adjusted for certain transaction costs related to the Company's acquisition of Bangor Natural Gas Company (Bangor), which it disclosed previously in 2024.

The Company's management believes that the transaction costs related to the acquisition of Bangor, which are included in Operation and Maintenance expense on the Consolidated Statements of Earnings, are

not indicative of the Company's ongoing costs and not directly related to the ongoing operations of the business and therefore are not an indicator of baseline operating performance.

The Company's earnings discussion includes Adjusted Net Income, a non-GAAP financial measure referencing the Company’s 2025 GAAP Net Income adjusted for certain transaction costs related to the Company's acquisitions of Bangor Natural Gas Company (transaction closed on January 31, 2025), Maine Natural Gas Corporation (transaction closed on October 31, 2025), Aquarion Water Company of Massachusetts, Inc., Aquarion Water Company of New Hampshire, Inc., and Abenaki Water Co., Inc.

(the Aquarion Companies) (pending certain regulatory approvals and satisfaction of closing conditions).

The Company's management believes that the transaction costs related to the acquisitions of Bangor, Maine Natural and the Aquarion Companies, which are included in Operation and Maintenance expense on the Consolidated Statements of Earnings, are not indicative of the Company's ongoing costs and not directly related to the ongoing operations of the business and therefore are not an indicator of baseline operating performance.

In the following tables the Company has reconciled Adjusted Net Income to GAAP Net Income, which we believe to be the most comparable GAAP financial measure.

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The Company calculates Electric and Gas Adjusted Gross Margin as Revenue less Cost of Sales.

The Company believes excluding Depreciation and Amortization, which are period costs and not related to volumetric sales, is a meaningful financial measure to inform investors of the Company’s profitability from electric and gas sales in the period.

The Company believes excluding Depreciation and Amortization, which are period costs and not related to

volumetric sales, is a meaningful financial measure to inform investors of the Company’s profitability from electric and gas sales in the period.

Twelve Months Ended December 31, 2025 ($ millions)

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Adjusted Gross Margin

Electric GAAP Gross Margin was $78.0 million in 2024, a decrease of $0.1 million compared to 2023.

The decrease was driven by higher depreciation and amortization expense of $3.3 million, largely offset by higher rates and customer growth of $3.2 million.

Electric GAAP Gross Margin was $82.7 million in 2025, an increase of $4.7 million compared to 2024.

The increase was driven by higher rates and customer growth of $7.3 million, partially offset by higher depreciation and amortization expense of $2.6 million.

Electric GAAP Gross Margin was $78.0 million in 2024, a decrease of $0.1 million compared to 2023.

The decrease was driven by higher depreciation and amortization expense of $3.3 million, largely offset by higher rates and customer growth of $3.2 million.

Gas GAAP Gross Margin was $142.3 million in 2025, an increase of $22.2 million compared to 2024.

The increase was driven primarily by higher rates and customer growth of $32.2 million, partially offset by higher depreciation and amortization of $10.0 million.

The increases attributable to Bangor and Maine Natural for gas operating revenue, cost of gas sales and depreciation and amortization for 2025 were $36.2 million, $19.6 million and $3.3 million, respectively.

Gas GAAP Gross Margin was $120.1 million in 2024, an increase of $6.0 million compared to 2023.

The increase was driven by higher rates and customer growth of $14.1 million, partially offset by the unfavorable effects of warmer winter weather in 2023 of $1.1 million, higher depreciation and amortization of $4.1 million, and the recognition, in the second quarter of 2022, of $2.4 million in higher rates resulting from the Company’s base rate case in New Hampshire.

The increase was driven primarily by higher rates, and customer growth, of $12.4 million, partially offset by higher depreciation and amortization of $6.4 million.

Net Income and EPS Overview

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The increase was driven primarily by higher rates, and customer growth.

Operation and Maintenance (O&M) expenses increased $2.0 million in 2024 compared to 2023, reflecting higher labor costs of $2.5 million, partially offset by lower utility operating costs of $0.5 million.

Depreciation and Amortization expense increased $8.7 million in 2024 compared to 2023, reflecting higher depreciation rates from recent base rate cases, additional depreciation associated with higher levels of utility plant in service and higher amortization of rate case and other deferred costs.

Taxes Other Than Income Taxes increased $1.4 million in 2024 compared to 2023, reflecting higher local property taxes on higher utility plant in service and higher payroll taxes.

Interest Expense, Net increased $0.6 million in 2024 compared to 2023 primarily reflecting higher interest on higher levels of long-term debt and higher interest on short-term borrowings, partially offset by higher interest income on regulatory assets and other.

Other Expense (Income), Net increased $0.2 million in 2024 compared to 2023, reflecting higher retirement benefit costs.

Gas Adjusted Gross Margin included $16.6 million related to Bangor and Maine Natural in 2025.

Operation and Maintenance (O&M) expenses increased $14.9 million in 2025 compared to 2024, reflecting higher utility operating costs of $6.1 million, higher labor and other costs of $5.5 million and higher acquisition costs of $3.3 million.

O&M expenses included $4.2 million of utility operating costs for Bangor and Maine Natural in 2025.

Depreciation and Amortization expense increased $12.6 million in 2025 compared to 2024, reflecting higher depreciation rates from recent base rate cases, additional depreciation associated with higher levels of utility plant in service and higher amortization of other deferred costs.

Depreciation and Amortization expense included $3.3 million related to Bangor and Maine Natural in 2025.

Taxes Other Than Income Taxes increased $1.4 million in 2025 compared to 2024, reflecting higher local property taxes on higher utility plant in service associated with the Company’s completed acquisitions of Bangor and Maine Natural.

Interest Expense, Net increased $7.4 million in 2025 compared to 2024 primarily reflecting higher interest on higher levels of debt from the acquisitions of Bangor and Maine Natural and lower interest income on regulatory assets and allowance for funds used during construction.

Other Expense (Income), Net decreased $1.2 million in 2025 compared to 2024, reflecting lower retirement benefit costs.

Federal and State Income Taxes increased $1.3 million in 2025 compared to 2024, reflecting higher pre-tax earnings in 2025.

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At a January 2026 meeting of the Unitil Corporation Board of Directors (the “Board”), the Board declared a quarterly dividend on the Company’s common stock of $0.475 per share, an increase of $0.025 per share on a quarterly basis, resulting in an increase in the effective annualized dividend rate to $1.90 per share from $1.80 per share.

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’s earnings in 2023 reflect higher Electric and Gas Adjusted Gross Margins (a non-GAAP financial measure), partially offset by higher operating expenses.

2024 Compared to 2023— The Company’s GAAP Net Income was $47.1 million, or $2.93 in EPS, for the year ended December 31, 2024, an increase of $1.9 million in Net Income, or $0.11 in EPS, compared to 2023.

The Company’s Adjusted Net Income (a non-GAAP financial measure) was $47.8 million, or $2.97 in EPS, for the year ended December 31, 2024, an increase of $2.6 million, or $0.15 in EPS, compared to 2023.

The Company’s earnings in 2024 reflect higher rates and customer growth.

Electric Revenues, Adjusted Gross Margin and Sales

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Electric Adjusted Gross Margin

The decrease in Total Electric Operating Revenue of $58.2 million, or 19.0%, in 2024 compared to 2023 reflects lower costs of electric sales, which are tracked and reconciled costs as a pass-through to customers, partially offset by higher electric distribution rates and higher sales of electricity.

The decrease in Total Electric Operating Revenue of $11.9 million, or 4.8%, in 2025 compared to 2024 reflects lower costs of electric sales due to the increase in the amount of electricity purchased by customers directly from third-party suppliers, which are tracked and reconciled costs as a pass-through to customers, partially offset by higher electric distribution rates.

Electric GAAP Gross Margin is discussed above in the section entitled “Use of GAAP and Non-GAAP Financial Measures”.

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The increase was driven by higher rates and customer growth.

The increase in Total Electric Operating Revenue of $8.6 million, or 2.9%, in 2023 compared to 2022 reflects higher costs of electric sales, which are tracked and reconciled costs as a pass-through to customers, and higher electric distribution rates.

Electric Adjusted Gross Margin (a non-GAAP financial measure) was $107.3 million in 2024, an increase of $3.2 million compared with 2023.

The increase was driven by higher rates and customer growth.

Kilowatt-hour Sales— Unitil’s total electric kilowatt-hour (kWh) sales increased 1.3% in 2024 compared to 2023.

Sales to Residential customers increased 1.6% and sales to C&I customers increased 1.1% in 2024 compared to 2023, reflecting warmer weather for cooling purposes in the second quarter of 2024 compared to the same period in 2023, and customer growth.

Based on weather data collected in the Company’s electric service areas, on average there were 12.2% more Cooling Degree Days in 2024 compared to 2023.

Kilowatt-hour Sales— Unitil’s total electric kilowatt-hour (kWh) sales decreased 0.6% in 2025 compared to 2024.

Sales to Residential customers increased 4.1% reflecting colder weather for heating purposes in the first and fourth quarter of 2025 compared to the same periods in 2024 and customer growth, partially offset by cooler weather for cooling purposes in the third quarter of 2025 compared to the same period in 2024.

Sales to C&I customers decreased 4.0% in 2025 compared to 2024, reflecting the loss of a large industrial customer in the Fitchburg area in 2025, partially offset by customer growth.

Based on weather data collected in the Company’s electric service areas, on average there were 13.7% more Heating Degree days and 6.6% less Cooling Degree Days in 2025 compared to 2024.

As of December 31, 2025, the number of electric customers served increased by approximately 610 over the previous year.

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Substantially all of the Company's electric kWh sales volumes are decoupled.

Unitil’s total electric kWh sales decreased 3.2% in 2023 compared to 2022.

Sales to Residential customers decreased 4.6% and sales to C&I customers decreased 2.1% in 2023 compared to 2022.

The decreases in electric kWh sales reflect lower average usage, partially offset by customer growth.

Unitil’s total electric kWh sales increased 1.3% in 2024 compared to 2023.

Based on weather data collected in the Company’s electric service areas, on average there were 12.2% more Cooling Degree Days in 2024 compared to 2023.

As of December 31, 2024, the number of electric customers served increased by approximately 990 over the previous year.

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Gas Adjusted Gross Margin

The decrease in Total Gas Operating Revenues of $4.1 million, or 1.6%, in 2024 compared to 2023 reflects lower costs of gas sales, which are tracked and reconciled as a pass-through to customers, and lower sales of gas, partially offset by higher gas distribution rates.

The increase in Total Gas Operating Revenues of $53.1 million, or 21.5%, in 2025 compared to 2024 reflects $36.2 million of sales for Bangor and Maine Natural, higher gas distribution rates and customer growth, the favorable impact of colder winter weather in 2025 and higher costs of gas sales, which are tracked and reconciled as a pass-through to customers.

Gas GAAP Gross Margin is discussed above in the section entitled “Use of GAAP and Non-GAAP Financial Measures”.

Gas Adjusted Gross Margin (a non-GAAP financial measure) was $199.1 million in 2025, an increase of $32.2 million compared to 2024.

The increase was driven primarily by higher rates, and customer growth.

The decrease in Total Gas Operating Revenues of $14.7 million, or 5.50%, in 2023 compared to 2022 reflects lower costs of gas sales, which are tracked and reconciled as a pass-through to customers, partially offset by higher gas distribution rates.

The increase includes $16.6 million for Bangor and Maine Natural, higher rates gas distribution rates, the favorable impact of winter weather in 2025 and customer growth.

Gas Adjusted Gross Margin (a non-GAAP financial measure) was $166.9 million in 2024, an increase of $12.4 million compared to 2023.

The increase reflects higher rates and customer growth of $14.1 million, partially offset by the unfavorable effects of warmer winter weather in 2023 of $1.1 million and the recognition, in the second quarter of 2022, of $2.4 million in higher rates resulting from the Company’s base rate case in New Hampshire.

Therm Sales —Unitil’s total gas therm sales decreased 0.7% in 2024 compared to 2023.

Sales to Residential customers decreased 1.4% and sales to C&I customers decreased 0.5% in 2024 compared to 2023, reflecting lower average usage, partially offset by customer growth.

As of December 31, 2024, the number of gas customers served increased by approximately 730 over the previous year.

The increase was driven primarily by higher rates, and customer growth.

Therm Sales —Unitil’s total gas therm sales increased 26.6% in 2025 compared to 2024.

Sales to Residential customers increased 34.0% and sales to C&I customers increased 24.8% in 2025 compared to 2024, reflecting colder winter weather and customer growth.

Total gas therm sales included 40.0 million therms related to Bangor and Maine Natural in 2025.

Based on weather data collected in the Company’s gas service areas, on average there were 12.2% higher Effective Degree Days (EDD) in 2025 compared to 2024.

The Company estimates weather-normalized gas therm sales for Northern Utilities' Maine division, the Company's largest non-decoupled gas service area, increased 3.5% in 2025 compared to 2024.

As of December 31, 2025, the number of gas customers served increased by approximately 15,930 over the previous year, with 15,360 customers at Bangor and Maine Natural.

Sales margins derived from decoupled unit sales (currently representing approximately 38% 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.

In 2024 and 2023, there were 9.5% and 11.0% fewer Effective Degree Days (EDD) than normal, respectively.

In 2025, there were 2.7% more EDD than normal.

In 2024, there were 9.5% fewer EDD than normal.

Unitil’s total gas therm sales decreased 0.7% in 2024 compared to 2023.

Sales to Residential customers decreased 3.8% and sales to C&I customers decreased 0.9% in 2023 compared to 2022.

The decreases in gas therm sales reflect warmer winter weather in 2023 compared to 2022, partially offset by customer growth.

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.

Sales to Residential customers decreased 1.4% and sales to C&I customers decreased 0.5% in 2024 compared to 2023, reflecting lower average usage, partially offset by customer growth.

As of December 31, 2024, the number of gas customers served increased by approximately 730 over the previous year.

Sales margins derived from decoupled unit sales (currently representing approximately 43% 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.

In 2024 and 2023, there were 9.5% and 11.0% fewer Effective Degree Days (EDD) than normal, respectively.

The following table details total therm sales for the last three years, by major customer class:

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Total Therm Sales

The Company transported 53.1 million therms in 2025 to two electric generation facilities in Maine.

As these facilities were charged fixed fees and utilized third-party energy suppliers for natural gas, the therms were not included in the above table.

Operating Expenses

Cost of Electric Sales —Cost of Electric Sales includes the cost of electric supply as well as other energy supply related restructuring costs, including power supply buyout costs, and spending on energy efficiency programs.

Cost of Electric Sales —Cost of Electric Sales includes the cost of electric supply as well as other energy supply related costs and spending on energy efficiency programs.

Cost of Electric Sales decreased $19.2 million, or 13.6%, in 2025 compared to 2024.

This decrease reflects lower wholesale electricity prices and an increase in the amount of electricity purchased by customers directly from third-party suppliers, partially offset by higher electric sales.

This decrease reflects an increase in the amount of electricity purchased by customers directly from third-party

suppliers, partially offset by higher wholesale electricity prices.

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 2023, Cost of Electric Sales increased $3.3 million, or 1.7%, 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.

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.

Cost of Gas Sales decreased $16.5 million, or 17.2%, in 2024 compared to 2023.

This decrease reflects lower gas sales, lower wholesale gas commodity prices and an increase in the amount of gas purchased by customers directly from third-party suppliers.

In 2024, Cost of Electric Sales decreased $61.4 million, or 30.3%, compared to 2023.

Cost of Gas Sales— Cost of Gas Sales includes the cost of natural gas purchased to supply the Company’s total gas supply requirements as well as other energy supply related costs and spending on energy efficiency programs.

Cost of Gas Sales increased $20.9 million, or 26.3%, in 2025 compared to 2024.

This increase reflects higher gas sales primarily from the Bangor and Maine Natural acquisitions.

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 2024, Cost of Gas Sales decreased $16.5 million, or 17.2%, compared to 2023.

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.

This decrease reflects lower gas sales, lower wholesale gas commodity prices and an increase in the amount of gas purchased by customers directly from third-party suppliers.

Operation and Maintenance— O&M expense includes electric and gas utility operating costs, and the operating costs of the Company’s other subsidiaries.

Total O&M expenses increased $2.0 million, or 2.6%, in 2024 compared to 2023, reflecting higher labor costs of $2.5 million, partially offset by lower utility operating costs of $0.5 million.

In 2023, total O&M expenses increased $1.9 million, or 2.6%, 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.

Depreciation and Amortization— Depreciation and Amortization expense increased $8.7 million, or 12.9%, in 2024 compared to 2023, reflecting higher depreciation rates from recent base rate cases, additional depreciation associated with higher levels of utility plant in service and higher amortization of rate case and other deferred costs.

In 2023, Depreciation and Amortization expense increased $4.8 million, or 7.7%, 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.

Taxes Other Than Income Taxes— Taxes Other Than Income Taxes increased $1.4 million, or 4.9%, in 2024 compared to 2023, reflecting higher local property taxes on higher utility plant in service and higher payroll taxes.

In 2023, Taxes Other Than Income Taxes increased $2.6 million, or 10.0%, compared to 2022, reflecting higher local property taxes on higher utility plant in service and higher payroll, excise and other taxes.

Interest Expense, Net

Interest expense is presented in the Consolidated Financial Statements net of interest income.

Total O&M expenses increased $14.9 million, or 19.2%, in 2025 compared to 2024, reflecting higher utility operating costs of $6.1 million, higher labor and other costs of $5.5 million and higher acquisition costs of $3.3 million.

O&M expenses included $4.2 million of utility operating costs for Bangor and Maine Natural in 2025.

In 2024, total O&M expenses increased $2.0 million, or 2.6%, compared to 2023, reflecting higher labor costs of $2.5 million, partially offset by lower utility operating costs of $0.5 million.

Depreciation and Amortization— Depreciation and Amortization expense increased $12.6 million, or 16.6%, in 2025 compared to 2024, reflecting higher depreciation rates from recent base rate cases, additional depreciation associated with higher levels of utility plant in service and higher amortization of other deferred costs.

Depreciation and Amortization expense included $3.3 million related to Bangor and Maine Natural in 2025.

In 2024, Depreciation and Amortization expense increased $8.7 million, or 12.9%, compared to 2023, reflecting higher depreciation rates from recent base rate cases, additional depreciation associated with higher levels of utility plant in service and higher amortization of rate case and other deferred costs.

Taxes Other Than Income Taxes— Taxes Other Than Income Taxes increased $1.4 million, or 4.7%, in 2025 compared to 2024, reflecting higher local property taxes on higher utility plant in service associated with the Company’s completed acquisitions of Bangor and Maine Natural.

In 2024, Taxes Other Than Income Taxes increased $1.4 million, or 4.9%, compared to 2023, reflecting higher local property taxes on higher utility plant in service and higher payroll taxes.

Interest Expense, Net— Interest expense is presented in the Consolidated Financial Statements net of interest income.

Interest expense is mainly comprised of interest on long-term debt and short-term borrowings (See Note 4 (Debt and Financing Arrangements) to the accompanying Consolidated Financial Statements).

Certain reconciling rate mechanisms used by the Company’s distribution utilities give rise to regulatory assets and regulatory liabilities on which interest is calculated.

Interest Expense, Net increased $7.4 million, or 25.3%, in 2025 compared to 2024 primarily reflecting higher interest on higher levels of debt from the acquisitions of Bangor and Maine Natural and lower interest income on regulatory assets and allowance for funds used during construction.

Interest Expense, Net increased $0.6 million, or 2.1%, in 2024 compared to 2023 primarily reflecting higher interest on higher levels of long-term debt and higher interest on short-term borrowings, partially offset by higher interest income on regulatory assets and other.

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.

Other (Income) Expense, Net

Other Expense (Income), Net increased $0.2 million in 2024 compared to 2023, reflecting higher retirement benefit costs.

Other Expense (Income), Net decreased $2.4 million in 2023 compared to 2022, reflecting lower retirement benefit costs.

Provision for Income Taxes

Other (Income) Expense, Net— Other Expense (Income), Net decreased $1.2 million in 2025 compared to 2024, reflecting lower retirement benefit costs.

Other Expense (Income), Net increased $0.2 million in 2024 compared to 2023, reflecting lower retirement benefit costs.

Provision for Income Taxes— Federal and State Income Taxes increased $1.3 million in 2025 compared to 2024, reflecting higher pre-tax earnings in 2025.

Federal and State Income Taxes increased $0.8 million in 2024 compared to 2023, reflecting higher pre-tax earnings in 2024.

Federal and State Income Taxes increased $2.0 million in 2023 compared to 2022, reflecting higher pre-tax earnings in 2023 and higher flow back, in 2022, of excess Accumulated Deferred Income Taxes per regulatory orders in New Hampshire.

LIQUIDITY, COMMITMENTS AND CAPITAL REQUIREMENTS

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The amount, type and timing of any future financing will vary from year to year based on capital needs and maturity or redemptions of securities.

On August 18, 2025, the Company issued and sold 1,602,358 shares of its common stock at a price of $46.65 per share in a registered public offering (Offering).

The Company’s net increase to Common Equity and Cash proceeds from the Offering was approximately $71.8 million.

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 in 2025 reflect the higher number of average shares outstanding.

On June 3, 2025, the Company entered into an at-the-market equity offering program (the ATM program) with sales agents under which the Company may, from time to time, offer and sell shares of Unitil's common stock having an aggregate offering price of up to $50 million.

Sales of common stock under the ATM program, if any, are made pursuant to a shelf registration statement on Form S-3 (File No.

333-287753) and a related prospectus supplement filed with the Securities and Exchange Commission.

As of December 31, 2025, the Company had sold an aggregate of 27,620 shares under the ATM program for net proceeds of $1.4 million.

As of December 31, 2025, approximately $48.5 million remains available for future sales under the program.

The Company and its subsidiaries are individually and collectively members of the Unitil Cash Pool (Cash Pool).

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At December 31, 2025 and December 31, 2024, the Company and all of its subsidiaries were in compliance with the regulatory requirements governing participation in the Cash Pool.

On January 29, 2025, the Company entered into an amendment to the Credit Facility, which (among other things) increased the borrowing limit under the Credit Facility from $200 million to $275 million and extended the term of the Credit Facility from September 29, 2027 until September 29, 2028.

Unitil may borrow under the Credit Facility until September 29, 2028, subject to two one-year extensions under certain circumstances.

The Credit Facility has a borrowing limit of $275 million ($200 million as of December 31, 2024), which includes a $25 million sublimit for the issuance of standby letters of credit.

Unitil may increase the borrowing limit under the Credit Facility by up to $75 million under certain circumstances.

The Credit Facility generally provides Unitil with the ability to elect that borrowings under the Credit Facility bear interest under several options, including a daily fluctuating rate equal to (a) the forward-looking secured overnight financing rate (as administered by the Federal Reserve Bank of New York) term rate with a term equivalent to one month beginning on that date, plus (b) 0.1000%, plus (c) a margin of 1.125% to 1.375% (based on Unitil’s credit rating).

On September 29, 2022, the Company entered into a Third Amended and Restated Credit Agreement with a syndicate of lenders (collectively, the “Credit Facility”), which amended and restated the prior facility in full, and on January 29, 2025, the Company executed an amendment that increased the borrowing limit from $200 million to $275 million and extended the maturity date from September 29, 2027 to September 29, 2028.

Unitil may borrow under the Credit Facility through September 29, 2028, with the option for two additional one‑year extensions under certain conditions.

The Credit Facility provides for a $275 million borrowing limit, including a $25 million sublimit for standby letters of credit, and permits Unitil to increase the borrowing limit by up to an additional $75 million under certain circumstances.

Borrowings under the Credit Facility may bear interest at various rate options, including a daily fluctuating rate equal to the forward‑looking one‑month SOFR term rate (as administered by the Federal Reserve Bank of New York), plus 0.1000%, plus a margin ranging from 1.125% to 1.375% based on Unitil’s credit rating.

The Company utilizes the Credit Facility for cash management purposes related to its short-term operating activities.

Total gross borrowings were $308.4 million and $327.2 million for the years ended December 31, 2024 and December 31, 2023, respectively.

Total gross borrowings were $476.4 million and $308.4 million for the years ended December 31, 2025 and December 31,

2024, respectively.

Total gross repayments were $412.5 million and $364.6 million for the years ended December 31, 2025 and December 31, 2024, respectively.

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(See also “Credit Arrangements” in Note 4 Debt and Financing Arrangements.)

Issuance of Long-Term Debt- On July 6, 2023, Fitchburg issued $12.0 million of Notes due July 2, 2033 at 5.70% and $13.0 million of Notes due July 2, 2053 at 5.96%.

Fitchburg used the net proceeds from these offerings to refinance existing debt and for general corporate purposes.

On October 31, 2025, the Company entered into a senior unsecured delayed-draw term loan facility with The Bank of Nova Scotia.

The proceeds of the $86.0 million facility were used to initially fund the acquisition of Maine Natural on October 31, 2025.

The facility provides that the Company has an option for determining whether interest on loans under the facility will bear interest based on a Base Rate plus an applicable margin of 0.25% or based on a one month Term SOFR plus a SOFR adjustment of 0.10% plus an applicable margin of 1.25%.

The Base Rate is equal to the highest of the (a) Federal Funds Rate plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by The Bank of Nova Scotia as its "prime rate", or (c) one month Term SOFR plus a SOFR adjustment of 0.10% plus 1.00%.

The facility has a maturity date of October 31, 2026.

Issuance of Long-Term Debt— On July 8, 2025, Bangor issued $14.0 million of Notes due 2030 at 5.70% and $18.0 million of Notes due 2035 at 6.31%.

Bangor used the net proceeds to refinance existing debt and for general corporate purposes.

Approximately $0.2 million of costs associated with this issuance were recorded as a reduction of Long-Term Debt for presentation purposes on the Consolidated Balance Sheet in the third quarter of 2025.

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Granite State issued $10.0 million of Notes due 2034 at 5.74%.

The Company used the net proceeds from these

offerings to refinance existing debt and for general corporate purposes.

The Company used the net proceeds from these offerings to refinance existing debt and for general corporate purposes.

Approximately $1.0 million of costs associated with this issuance were recorded as a reduction of Long-Term Debt for presentation purposes on the Consolidated Balance Sheet in the third quarter of 2024.

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 its utility subsidiaries, Fitchburg, Unitil Energy, Northern Utilities, and Granite State are currently rated “BBB+” and Bangor is 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.

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Rate recovery mechanisms are typically designed to collect the under-recovered cash or refund the over-collected cash over subsequent periods 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 provides limited guarantees on certain energy and natural gas asset management contracts entered into by the distribution utilities.

The Company’s policy is to limit the duration of these guarantees.

As of December 31, 2024, there were no guarantees outstanding.

Northern Utilities enters into asset management agreements under which Northern Utilities releases certain natural gas pipeline and storage assets, resells the natural gas storage inventory to an asset manager and subsequently repurchases the inventory over the course of the natural gas heating season at the same price at which it sold the natural gas inventory to the asset manager.

As of December 31, 2025, there were $50.3 million of guarantees outstanding.

Northern Utilities and Bangor enter into asset management agreements under which Northern Utilities and Bangor release certain natural gas pipeline and storage assets, resell the natural gas storage inventory to an asset manager and subsequently repurchase the inventory over the course of the natural gas heating season at the same price at which it sold the natural gas inventory to the asset manager.

There was $9.3 million of natural gas storage inventory and corresponding obligations at December 31, 2025, related to these asset management agreements.

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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, 2024, there were no guarantees outstanding.

As of December 31, 2025, other than the energy and natural gas asset management contract guarantees noted above, there were no other guarantees outstanding.

See Note 4 (Debt and Financing Arrangements) to the accompanying Consolidated Financial Statements.

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Cash flow from Net Income, adjusted for the total of non-cash charges was $148.5 million in 2025 compared to $136.4 million in 2024, an increase of $12.1 million.

The change to Net Income is primarily attributable to increases in electric and gas sales margin.

The increase in depreciation and amortization of $8.7 million in 2024 compared to 2023 reflects higher rates and additional depreciation on higher utility plant in service.

The increase in the deferred tax provision of $5.8 million in 2024 compared to 2023 is primarily driven by higher tax depreciation in 2024.

Changes in working capital items resulted in a ($1.6) million use of cash in 2024 compared to a ($4.6) million use of cash in 2023, representing an increase in sources of cash of $3.0 million.

The change in working capital in 2024 compared to 2023 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 and the timing of cash receipts and disbursements in the normal course of business.

The change to Net Income is primarily attributable to increases in electric and gas sales margin partially offset by higher operating expense.

The increase in depreciation and amortization of $12.6 million in

2025 compared to 2024 reflects higher rates and additional depreciation on higher utility plant in service.

The decrease in the deferred tax provision of ($3.6) million in 2025 compared to 2024 is primarily driven by lower tax depreciation in 2025.

Changes in working capital items resulted in a ($20.6) million use of cash in 2025 compared to a ($1.6) million use of cash in 2024, representing a decrease in use of cash of ($19.0) million.

The change in working capital in 2025 compared to 2024 is primarily related to the net change in accounts receivable, exchange gas receivable, and regulatory liabilities and is reflective of the effect of the current macroeconomic environment and the timing of cash receipts and disbursements in the normal course of business.

Deferred Regulatory and Other Charges changed by $3.3 million in 2025 compared to 2024, primarily driven by changes in Regulatory Assets and Liabilities, and the change in Other, net in 2025 compared to 2024 was $9.0 million.

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Cash Used in Investing Activities - Cash Used in Investing Activities was ($345.5) million in 2025 compared to ($169.9) million in 2024, an increase of $175.6 million.

The higher spending in 2024 is primarily related to normal utility capital expenditures for electric and gas utility system additions.

The higher spending in 2025 is primarily related to $160.4 million for the acquisitions of Bangor Natural Gas and Maine Natural Gas.

Normal utility capital expenditures for electric and gas utility system additions increased $15.2 million compared to 2024.

The Company’s projected capital spending for 2026 is $221 million.

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Cash Provided by Financing Activities - Cash Provided by Financing Activities was $223.5 million in 2025 compared to cash provided of $43.8 million in 2024.

The higher cash provided from financing activities in 2024 compared to 2023 of $12.3 million is primarily attributable to, higher proceeds from the issuance of long-term debt of $110.0 million, lower repayment of long-term debt of $2.0 million, a change in exchange gas financing of $5.0 million, and higher repayment of short-term borrowings of ($102.2) million.

Other changes in financing activities in 2024 total a use of ($2.5) million.

The higher cash provided from financing activities in 2025 compared to 2024 of $179.7 million is primarily attributable to higher proceeds from short-term debt of $206.1 million and higher proceeds from issuance of common stock of $72.4 million.

Offsetting these cash sources was lower proceeds from the issuance of long-term debt of $103.0 million compared to 2024.

Other changes in financing activities in 2025 provided higher cash of $4.2 million compared to 2024.

FINANCIAL COVENANTS AND RESTRICTIONS

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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.

The affirmative and negative covenants under the Credit Facility apply to Unitil until the Credit Facility terminates and all

amounts borrowed under the Credit Facility are paid in full (or with respect to letters of credit, they are cash collateralized).

The affirmative and negative covenants under the Credit Facility apply to Unitil until the Credit Facility terminates and all amounts borrowed under the Credit Facility are paid in full (or with respect to letters of credit, they are cash collateralized).

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.

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The following is a summary of the Company’s most critical accounting policies, which are defined as those policies where judgments or uncertainties could materially affect the application of those policies.

For a complete

discussion of the Company’s significant accounting policies, refer to the financial statements and Note 1 (Summary of Significant Accounting Policies).

Regulatory Accounting— The Company’s principal business is the distribution of electricity and natural gas by the three distribution utilities:

Unitil Energy, Fitchburg and Northern Utilities.

For a complete discussion of the Company’s significant accounting policies, refer to the financial statements and Note 1 (Summary of Significant Accounting Policies).

Regulatory Accounting— The Company’s principal business is the distribution of electricity and natural gas by the five distribution utilities:

Unitil Energy, Fitchburg, Northern Utilities, Bangor and Maine Natural.

Unitil Energy and Fitchburg are subject to regulation by the FERC.

Fitchburg is also regulated by the MDPU, Unitil Energy is regulated by the NHPUC, and Northern Utilities is regulated by the MPUC and NHPUC.

Fitchburg is also regulated by the MDPU, Unitil Energy is regulated by the NHPUC, Northern Utilities is regulated by the MPUC and NHPUC, and Bangor and Maine Natural are regulated by the MPUC.

Granite State, the Company’s natural gas transmission pipeline, is regulated by the FERC.

Accordingly, the Company uses the Regulated Operations guidance as set forth in the Financial Accounting Standards Board Accounting Standards Codification (FASB Codification).

Accordingly, the Company uses the

Regulated Operations guidance as set forth in the Financial Accounting Standards Board Accounting Standards Codification (FASB Codification).

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.

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The FASB Codification requires companies to record on their balance sheets as an asset or liability the overfunded or underfunded status of their retirement benefit obligations (RBO) based on the projected benefit obligation.

The Company has recognized a corresponding Regulatory Asset, to recognize the future collection of these obligations in electric and gas rates.

The Company has recognized a corresponding Regulatory Asset, to recognize the future collection of the PBOP Plan and SERP obligations in electric and gas rates.

The Company has recognized a corresponding Regulatory Liability, to recognize the future flow back of the Pension Plan obligation in electric and gas rates.

The Company’s RBO and reported costs of providing retirement benefits are dependent upon numerous factors resulting from actual plan experience and assumptions of future experience.

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The discount rate assumptions used in determining retirement plan costs and retirement plan obligations are based on an assessment of current market conditions using high quality corporate bond interest rate indices and pension yield curves.

For the year ended

December 31, 2024, a change in the discount rate of 0.25% would have resulted in an increase or decrease of approximately $450,800 in the Net Periodic Benefit Cost for the Pension Plan.

For the year ended December 31, 2025, a change in the discount rate of 0.25% would have resulted in an increase or decrease of approximately $428,700 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 $700,300 in the Net Periodic Benefit Cost for the Pension Plan.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis