Financial Data and Key Metrics Changes - The company reported adjusted earnings per share (EPS) of $0.69 for Q3 2023, an increase from $0.54 in the prior year, bringing year-to-date adjusted EPS to $3.63, which is $0.05 higher than the previous year [56][20][11] - Adjusted gross margin increased by $7.6 million for the quarter, with operating income rising by 1.6 million, and excluding transaction-related expenses, operating income increased by 29% [57][9][36] - Interest expense rose over 13% during the quarter and more than 22% compared to the prior year, reflecting the ongoing rising rate environment [57][20] Business Line Data and Key Metrics Changes - The adjusted gross margin for the unregulated segment increased by 8.4% for the quarter and 2% year-over-year [39] - The regulated energy segment saw an adjusted gross margin increase of 8.8% for the quarter and 7.8% year-over-year, driven by new rates from Florida natural gas base rate proceedings and organic growth [59][36] - The company experienced a 5.6% increase in customer growth in Delmarva service territories and a 4% increase in Florida [34] Market Data and Key Metrics Changes - The acquisition of Florida City Gas is expected to more than double the company's regulated natural gas distribution business in Florida, with a pro forma expectation of approximately 211,000 combined customers [13][21] - The company anticipates a $40.5 million increase in margin for 2024 due to rate case settlements and pending approval of Florida City Gas' investment schedule [47] Company Strategy and Development Direction - The company has increased its capital investment plan by approximately 65% to a range of $1.5 billion to $1.8 billion for the five years ending in 2028, focusing on cost management and efficient growth [6][49] - The company is committed to a disciplined approach to mergers and acquisitions, applying the same operational rigor that has driven past successes [23][21] - The company is actively pursuing regulatory initiatives that will deliver incremental margins and provide a foundation for substantial system investment [21][11] Management's Comments on Operating Environment and Future Outlook - Management noted that warmer weather had a significant impact on results, particularly in the first half of the year, negatively affecting EPS by approximately $0.41 [20][31] - The management expressed confidence in achieving 2025 guidance despite challenging financial markets and emphasized the importance of maintaining a strong balance sheet [55][16] - The company remains focused on cost management and is optimistic about future growth opportunities, particularly in Florida [71][22] Other Important Information - The company announced its role as a project partner in the MACH2 Hydrogen Hub, which is expected to receive funding from the Bipartisan Infrastructure Law [25] - The company has received several awards for its sustainability efforts and board diversity, highlighting its commitment to corporate responsibility [48][68] Q&A Session Summary Question: Impact of weather on O&M costs - Management confirmed that the organization focused on cost management, which helped mitigate the impact of warmer temperatures on operational costs [51] Question: Regulatory approvals for Florida City Gas - Management indicated that the Hart-Scott-Rodino waiting period is set to expire soon, and they are on track to close the transaction [95][77] Question: Synergies from the Florida City Gas acquisition - Management expects to identify synergies and provide more clarity on these in February during the year-end earnings call [78][99] Question: Propane business performance - Management noted that the propane business is performing well despite weather impacts, with strong retail margins and customer growth [83][109] Question: Future growth projects and strategy - Management stated that they will continue to explore growth opportunities in both regulated and non-regulated sectors, including potential small-scale acquisitions in propane [122][121]

FORM10-Q Commission File Number: 001-11590 ☒ | --- | --- | --- | |--------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------| | C HESAPEAKE (Exact \nDelaware of incorporation or organization) (State or other jurisdiction | U TILITIES C name of registrant as specified | ...

C 2022 A Absence of gain from sales of assets -$0.08 F Depreciation, amortization and property tax costs due to new capital investments -$0.07 G Regulated Energy Segment – Financial Summary Second Quarter Change Year-to-Date Change Year-to-Date Highlights 1See appendix for GAAP to non-GAAP reconciliation of adjusted gross margin Stockholders' Equity increased $31.4 million since the end of 2022 primarily driven by: • Strong Net Income performance of $52.5 million • Continued Dividend payments of $20.2 milli ...

Financial Data and Key Metrics Changes - The company reported earnings per share (EPS) of $0.90 for Q2 2023, down from $0.96 in the prior year, impacted by warmer weather and higher interest costs [59][60] - Year-to-date EPS for 2023 was $2.94 compared to $3.04 in the previous year, reflecting a margin impact of approximately $0.38 due to significantly warmer weather [60][61] - Adjusted gross margin increased by $7.4 million and operating income increased by $1.9 million for Q2 2023, despite weather impacts [39][40] Business Line Data and Key Metrics Changes - Adjusted gross margin for the Regulated Energy segment increased by 9.4% for the quarter and 7.3% year-over-year [43] - The Unregulated segment saw a 4% increase in adjusted gross margin for the quarter, remaining relatively constant compared to the prior year [64] - The propane business experienced volume declines due to warmer weather, but margins were managed effectively [32][111] Market Data and Key Metrics Changes - Customer growth rates in natural gas distribution were 5.5% in Delmarva and 4% in Florida, indicating strong demand for natural gas [51][108] - Heating degree-days were down by over 30% year-over-year in Florida, significantly impacting volumes [30][50] - The company continues to see growth in residential and commercial infrastructure, particularly in areas like Middletown, Delaware, and Wildlight, Florida [55][56] Company Strategy and Development Direction - The company remains committed to its growth strategy, focusing on capital investments projected between $200 million to $230 million for 2023 [27][71] - Investments in renewable natural gas and pipeline expansions are key components of the company's strategy for sustainable growth [20][33] - The company is also enhancing its technology platform to improve service delivery and operational efficiency [98] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by warmer weather and rising interest rates but emphasized the team's focus on cost savings and margin acceleration [26][29] - The company expects to recognize close to $17.2 million in projected margin impact from permanent rates in Florida in 2024 [67] - Management remains optimistic about future growth opportunities driven by customer demand and ongoing infrastructure projects [46][99] Other Important Information - The company has initiated several new investment projects to meet strong customer demand for energy delivery services [47] - The Florida Public Service Commission approved the GUARD program, which is expected to enhance safety and deliverability in the distribution systems [49][93] - The company published its second Sustainability Report, highlighting a 16% decrease in emissions compared to 2019 [94] Q&A Session Summary Question: Can you provide context on the growth in Middletown and Wildlight? - Management highlighted the significant growth opportunities in these areas, supported by community development and infrastructure projects [76][77] Question: How does the Newberry expansion fit into the overall growth strategy? - The Newberry project is a new expansion that will convert propane customers to natural gas, reflecting the company's strategy to meet customer demand [80][102] Question: What are the criteria for evaluating acquisitions? - The company looks for earnings per share accretion, cultural fit, and operational synergies when considering acquisitions [112][126] Question: How will the GUARD program impact margins post-2024? - Management indicated that while the GUARD program's margins could be linear, they may vary based on other ongoing projects [114]

Financial Performance - For the three months ended June 30, 2023, total operating revenues were $139.47 million, with regulated energy contributing $92.19 million and unregulated energy contributing $53.46 million[250]. - Gross margin (GAAP) for the regulated energy segment for the six months ended June 30, 2023, was $119.7 million, an increase of $9.4 million, or 8.5% compared to the same period in 2022[253]. - Gross margin (GAAP) for the unregulated energy segment for the six months ended June 30, 2023, was $40.7 million, a decrease from $43.3 million in the same period in 2022[254]. Debt and Borrowings - The company reported a carrying value of long-term debt at June 30, 2023, of approximately $666.8 million, compared to an estimated fair value of $573.3 million[257]. - As of June 30, 2023, the company had $95.8 million in short-term borrowings outstanding at a weighted average interest rate of 5.33%[261]. - The company has entered into amended Shelf Agreements with Prudential and MetLife, expanding total borrowing capacity and extending the term for an additional three years[259]. Growth Strategy - The company’s growth strategy includes optimizing earnings growth in existing businesses and pursuing additional pipeline expansions[247]. - The company is focused on expanding its Marlin Gas Services' CNG transport business and entering LNG and RNG transport markets[247]. Lease Information - The weighted-average remaining lease term for operating leases as of June 30, 2023, was 8.37 years, with a weighted-average discount rate of 3.5%[267]. - Operating cash flows from operating leases for the six months ended June 30, 2023, were $1.465 million, compared to $1.428 million for the same period in 2022[267].

Chesapeake Utilities Corporation (NYSE:CPK) Q1 2023 Results Conference Call May 4, 2023 8:30 AM ET Company Participants Alex Whitelam - Head, IR Jeff Householder - President, CEO Beth Cooper - EVP, CFO, Treasurer & Assistant Corporate Secretary Jim Moriarty - EVP, General Counsel, Corporate Secretary & Chief Policy and Risk Officer Conference Call Participants Brian Russo - Sidoti Tate Sullivan - Maxim Group Operator Welcome to the Chesapeake Utilities First Quarter 2023 Earnings Conference Call. At this ti ...

[PART I—FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Chesapeake Utilities Corporation for Q1 2023 and 2022, including income, comprehensive income, balance sheets, cash flows, and stockholders' equity, with detailed notes [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial results, covering acquisitions, revenue breakdowns, regulatory updates, segment performance, debt, equity, and derivative instruments * Acquired Davenport Energy's Siler City, North Carolina propane assets for approximately **$2.0 million**, adding 850 customers and 0.4 million gallons of annual propane distribution[180](index=180&type=chunk)[181](index=181&type=chunk) * Acquired Planet Found Energy Development, LLC for **$9.5 million** to accelerate efforts in converting poultry waste to renewable natural gas (RNG)[203](index=203&type=chunk)[231](index=231&type=chunk) Operating Revenues by Segment (Q1 2023 vs Q1 2022) | (in thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | **Regulated Energy** | **$142,270** | **$127,891** | | **Unregulated Energy** | **$83,166** | **$101,292** | | Other and Eliminations | ($7,307) | ($6,303) | | **Total Operating Revenues** | **$218,129** | **$222,880** | * In February 2023, Shelf Agreements with Prudential and MetLife were amended, expanding total borrowing capacity to **$605.0 million** and extending the term for three years[36](index=36&type=chunk)[334](index=334&type=chunk) Condensed Consolidated Statements of Income (Unaudited) | (in thousands, except per share data) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | **Total Operating Revenues** | **$218,129** | **$222,880** | | **Operating Income** | **$54,915** | **$54,865** | | **Net Income** | **$36,344** | **$36,933** | | **Diluted Earnings Per Share** | **$2.04** | **$2.08** | Condensed Consolidated Balance Sheet Highlights (Unaudited) | (in thousands) | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$2,197,551** | **$2,215,037** | | Net property, plant and equipment | $1,836,695 | $1,810,473 | | Total current assets | $159,504 | $193,976 | | **Total Capitalization and Liabilities** | **$2,197,551** | **$2,215,037** | | Total stockholders' equity | $858,588 | $832,801 | | Long-term debt, net | $656,284 | $578,388 | | Short-term borrowing | $94,079 | $202,157 | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | (in thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$81,667** | **$69,120** | | Net cash used in investing activities | ($42,654) | ($29,935) | | Net cash used in financing activities | ($42,152) | ($38,953) | | **Net (Decrease) Increase in Cash** | **($3,139)** | **$232** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports Q1 2023 net income of **$36.3 million** (**$2.04 per share**), a slight decrease from Q1 2022, with stable operating income despite warmer weather, driven by rate cases, higher propane margins, and expansion projects, offset by increased expenses and interest charges * The company's strategy focuses on growing earnings from its stable regulated energy base while investing in related, higher-return unregulated businesses, emphasizing midstream and downstream opportunities, including sustainable energy initiatives[44](index=44&type=chunk) Adjusted Gross Margin Reconciliation (Non-GAAP) | (in thousands) | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Gross Margin (GAAP) | $94,599 | $93,083 | | Operations & maintenance expense | $17,758 | $15,640 | | Depreciation & amortization | $17,183 | $16,977 | | **Adjusted Gross Margin (Non-GAAP)** | **$129,540** | **$125,700** | * Lower consumption, primarily due to weather more than **20% warmer** than historical averages in northern service territories, resulted in a **$6.9 million** decrease in adjusted gross margin compared to Q1 2022[91](index=91&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) For Q1 2023, operating income remained flat at **$54.9 million**, with adjusted gross margin increasing by **$3.8 million** due to the Florida rate case, higher propane margins, and customer growth, largely offset by a **$6.9 million** weather impact and increased operating expenses and interest charges Key Drivers of Adjusted Gross Margin Change (Q1 2023 vs Q1 2022) | (in thousands) | Pre-tax Income Impact | EPS Impact | | :--- | :--- | :--- | | Customer consumption (weather) | ($5,241) | ($0.29) | | Florida natural gas base rate proceeding | $3,104 | $0.17 | | Increased propane margins and fees | $2,322 | $0.13 | | Natural gas growth | $1,153 | $0.06 | | Increased demand for CNG/RNG/LNG services | $976 | $0.05 | * Interest charges increased by **$1.9 million** year-over-year, primarily due to the weighted-average interest rate on Revolver borrowings rising from **1.17% in Q1 2022 to 5.17% in Q1 2023**[397](index=397&type=chunk) * The effective income tax rate was **24.2% in Q1 2023**, down from **26.8% in Q1 2022**, mainly due to a **$1.3 million benefit** from a reduction in the Pennsylvania state income tax rate[398](index=398&type=chunk) [Segment Results](index=48&type=section&id=Segment%20Results) The Regulated Energy segment's operating income grew **8.5% to $37.6 million**, driven by rate relief and customer growth, while the Unregulated Energy segment's operating income fell by **$2.8 million to $17.2 million** due to warmer weather impacts Regulated Energy Segment Performance (Q1 2023 vs Q1 2022) | (in thousands) | Q1 2023 | Q1 2022 | Change | | :--- | :--- | :--- | :--- | | Revenue | $142,270 | $127,891 | $14,379 | | Adjusted gross margin | $86,982 | $82,449 | $4,533 | | **Operating income** | **$37,625** | **$34,681** | **$2,944** | Unregulated Energy Segment Performance (Q1 2023 vs Q1 2022) | (in thousands) | Q1 2023 | Q1 2022 | Change | | :--- | :--- | :--- | :--- | | Revenue | $83,165 | $101,292 | ($18,127) | | Adjusted gross margin | $42,594 | $43,284 | ($690) | | **Operating Income** | **$17,245** | **$20,046** | **($2,801)** | [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$81.7 million** in Q1 2023 operating cash flow, **$41.8 million** in capital expenditures, and a full-year forecast of **$200-$230 million**, reducing short-term borrowings by **$107.8 million** through an **$80.0 million** Senior Notes issuance, maintaining a **53%** equity to total capitalization ratio 2023 Forecasted Capital Expenditures | (in thousands) | Low | High | | :--- | :--- | :--- | | Total Regulated Energy | $152,000 | $175,000 | | Total Unregulated Energy | $46,000 | $52,000 | | Corporate and other | $2,000 | $3,000 | | **Total 2023 Forecast** | **$200,000** | **$230,000** | * The company's target equity to total capitalization ratio (including short-term debt) is **50-60%**, with the ratio standing at **53%** as of March 31, 2023[424](index=424&type=chunk) * In Q1 2023, the company issued **$80.0 million of 5.43% Senior Notes due 2038** and used proceeds to reduce short-term borrowings under its Revolver credit facility[57](index=57&type=chunk)[368](index=368&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages interest rate risk through swaps and limits commodity price risk for regulated operations via fuel cost recovery mechanisms, while unregulated propane operations mitigate price fluctuations using storage, forward contracts, and derivatives * The company is exposed to interest rate risk on its debt, which is mitigated using interest rate swap agreements to manage potential increases in costs for new debt and variable-rate borrowings[374](index=374&type=chunk)[458](index=458&type=chunk) * Regulated energy distribution operations have limited commodity price risk due to authorized fuel cost recovery mechanisms[459](index=459&type=chunk) * Unregulated propane operations are exposed to commodity price risk, which is mitigated through storage, forward supply contracts, and the use of financial derivatives (fair value and cash flow hedges)[386](index=386&type=chunk)[437](index=437&type=chunk) [Item 4. Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting during the quarter * The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2023[463](index=463&type=chunk) * No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[441](index=441&type=chunk) [PART II—OTHER INFORMATION](index=59&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in legal actions, claims, and regulatory proceedings in the normal course of business, which management believes will not materially affect its financial position, results of operations, or cash flows * The company is involved in legal and regulatory proceedings in the normal course of business, but management does not expect them to have a material financial impact[391](index=391&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2022, and investors are advised to consider those factors * Refers to the risk factors described in the company's 2022 Annual Report on Form 10-K, indicating no material changes during the quarter[465](index=465&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2023, the company purchased **503 shares** of its common stock on the open market at an average price of **$114.94 per share** for dividend reinvestment in the Rabbi Trust for the Non-Qualified Deferred Compensation Plan, not as part of a publicly announced repurchase program Share Repurchases (Q1 2023) | Period | Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 1 - Jan 31, 2023 | 503 | $114.94 | | Feb 1 - Feb 28, 2023 | — | — | | Mar 1 - Mar 31, 2023 | — | — | | **Total** | **503** | **$114.94** | * Share purchases were made for the Rabbi Trust related to the Non-Qualified Deferred Compensation Plan and not as part of a formal buyback plan[396](index=396&type=chunk)

Chesapeake Utilities Corporation (NYSE:CPK) Q4 2022 Results Conference Call February 23, 2022 8:30 AM ET Company Participants Alex Whitelam - Head, IR Jeff Householder - President, CEO Beth Cooper - EVP, CFO, Treasurer & Assistant Corporate Secretary Jim Moriarty - EVP, General Counsel, Corporate Secretary & Chief Policy and Risk Officer Conference Call Participants Brian Russo - Sidoti & Company Chris Ellinghaus - Siebert Williams Shank Tate Sullivan - Maxim Group Operator Good day, everyone, and welcome ...

Chesapeake Utilities Corporation 2022 Form 10-K Page 8 Propane Operations - Operational Highlights Table of Contents Chesapeake Utilities Corporation 2022 Form 10-K Page 11 Table of Contents The risks described below fall into three broad categories related to (1) financial risks, (2) operational risks, and (3) regulatory, legal and environmental risks, all of which may affect our operations and/or the financial performance of our regulated and unregulated energy businesses. These are not the only risks we ...

Chesapeake Utilities Corporation (NYSE:CPK) Q3 2022 Earnings Conference Call November 3, 2022 4:00 PM ET Company Participants Alex Whitelam - Investor Relations Jeff Householder - President and Chief Executive Officer Beth Cooper - Executive Vice President, Chief Financial Officer, Treasurer and Assistant Corporate Secretary Jim Moriarty - Executive Vice President, General Counsel, Corporate Secretary and Chief Policy and Risk Officer Conference Call Participants Tate Sullivan - Maxim Group Brian Russo - Si ...