0000019745falseAugust 8, 2024falseNYSE00000197452024-08-082024-08-08

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 8, 2024
  
CHESAPEAKE UTILITIES CORPORATION
(Exact name of registrant as specified in its charter)
 
 
Delaware 001-11590 51-0064146
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
500 Energy Lane, Dover, DE 19901
(Address of principal executive offices, including Zip Code)
(302) 734-6799
(Registrant's Telephone Number, including Area Code)
 
(Former name, former address and former fiscal year, if changed since last report.)
 
 Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock - par value per share $0.4867CPKNew York Stock Exchange, Inc.

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 


☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Item 2.02. Results of Operations and Financial Condition.
On August 8, 2024, Chesapeake Utilities Corporation issued a press release announcing its financial results for the quarter and six months ended June 30, 2024. A copy of the press release is attached as Exhibit 99.1 hereto and is incorporated by reference herein.

Item 7.01 Regulation FD Disclosure.    
On August 8, 2024, Chesapeake Utilities Corporation posted a presentation that will be used during its conference call on August 9, 2024, to discuss the Company’s financial results for the quarter and six months ended June 30, 2024, on its website (www.chpk.com) under the “Investors” section. This presentation is being furnished as Exhibit 99.2 to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d)   Exhibits.
Exhibit 99.1 - Press Release of Chesapeake Utilities Corporation, dated August 8, 2024.
Exhibit 99.2 - Second Quarter 2024 Earnings Call Presentation

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
 
CHESAPEAKE UTILITIES CORPORATION
/s/ Beth W. Cooper
Beth W. Cooper
Executive Vice President, Chief Financial Officer, Treasurer, and Assistant Corporate Secretary
Date: August 8, 2024




        chesapeakelogova18a.jpg                

FOR IMMEDIATE RELEASE
August 8, 2024
NYSE Symbol: CPK

CHESAPEAKE UTILITIES CORPORATION REPORTS SECOND QUARTER
2024 RESULTS

•Net income and earnings per share ("EPS")* were $18.3 million and $0.82, respectively, for the second quarter of 2024, and $64.4 million and $2.89, respectively, for the six months ended June 30, 2024
•Adjusted net income and Adjusted EPS**, which exclude transaction and transition-related expenses attributable to the acquisition and integration of Florida City Gas ("FCG"), were $19.3 million and $0.86, respectively, for the second quarter of 2024 and $66.1 million and $2.96, respectively, for the six months ended June 30, 2024
•Adjusted gross margin** growth of $61.8 million during the first half of 2024 driven by contributions from FCG, natural gas organic growth and continued pipeline expansion projects, regulatory initiatives and additional customer consumption
•Multiple pipeline projects received approval to proceed, supporting continued natural gas demand in Delaware and Florida and driving incremental margins for 2025 and beyond
•Results continue to track in line with Management's expectations, and the Company continues to affirm 2024 EPS and capital guidance

Dover, Delaware — Chesapeake Utilities Corporation (NYSE: CPK) (“Chesapeake Utilities” or the “Company”) today announced financial results for the three and six months ended June 30, 2024.

Net income for the second quarter of 2024 was $18.3 million ($0.82 per share) compared to $16.1 million ($0.90 per share) in the second quarter of 2023. Excluding transaction and transition-related expenses associated with the fourth quarter 2023 acquisition of FCG, adjusted net income was $19.3 million, or $0.86 per share compared to $16.1 million ($0.90 per share) reported in the prior-year period. The net income and adjusted net income growth represented 13.3 percent and 19.5 percent, respectively.

For the second quarter of 2024, incremental contributions from FCG, additional margin from regulated infrastructure programs, and growth in the Company's natural gas distribution businesses and continued pipeline expansion projects to support distribution growth were offset by the financing impacts of the FCG acquisition, including increased interest expense related to debt issued and additional shares outstanding.

During the first half of 2024, net income was $64.4 million ($2.89 per share) compared to $52.5 million ($2.94 per share) in the prior-year period. Excluding the transaction and transition-related expenses, adjusted net income was $66.1 million ($2.96 per share) compared to $52.5 million ($2.94 per share) for the same period in 2023.

Earnings for the first half of 2024 were primarily impacted by the factors discussed for the second quarter as well as additional adjusted gross margin from increased customer consumption experienced earlier in the year.

“Our results this quarter demonstrate the opportunities in our high-growth service areas, the value of our unregulated businesses and our commitment to operational excellence,” said Jeff Householder, chair,
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president and CEO. “We continue to remain on-track with the integration of FCG, experienced continued strong customer growth of approximately 4 percent across our Delmarva and Florida footprints and managed expenses prudently, driving 41 percent of adjusted gross margin to operating income on a year-to-date basis.”

“This performance is in line with our expectations for 2024 and is driven by our ability to execute on our growth strategy: developing and investing record levels of capital, advancing our regulatory agenda and continuing our business transformation efforts,” Householder continued. “Through the second quarter of this year, we invested $160 million in capital expenditures, received regulatory approval for three (3) new transportation projects, and are going live with a new enterprise-wide utility billing system in the third quarter. Our achievements thus far enable us to affirm our full-year 2024 adjusted EPS guidance of $5.33 to $5.45 per share and 2024 capital expenditures guidance of $300 to $360 million. The team’s consistent focus on customer service and our growth strategy positions us for continued longer-term growth as well.”

Earnings and Capital Investment Guidance

The Company continues to affirm its 2024 EPS guidance of $5.33 to $5.45 in adjusted earnings per share given the incremental margin opportunities present across the Company’s businesses, investment opportunities within and surrounding FCG, regulatory initiatives and operating synergies.

The Company also affirms its previously announced 2024 capital expenditure guidance of $300 million to $360 million, as well as the capital expenditure guidance for the five-year period ended 2028 that will range from $1.5 billion to $1.8 billion. This investment forecast is projected to result in a 2025 EPS guidance range of $6.15 to $6.35, as well as a 2028 EPS guidance range of $7.75 to $8.00. This implies an EPS growth rate of approximately 8 percent from the 2025 EPS guidance range.

*Unless otherwise noted, EPS and Adjusted EPS information are presented on a diluted basis.

Non-GAAP Financial Measures

**This press release including the tables herein, include references to both Generally Accepted Accounting Principles ("GAAP") and non-GAAP financial measures, including Adjusted Gross Margin, Adjusted Net Income and Adjusted EPS. A "non-GAAP financial measure" is generally defined as a numerical measure of a company's historical or future performance that includes or excludes amounts, or that is subject to adjustments, so as to be different from the most directly comparable measure calculated or presented in accordance with GAAP. Our management believes certain non-GAAP financial measures, when considered together with GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period.

The Company calculates Adjusted Gross Margin by deducting the purchased cost of natural gas, propane and electricity and the cost of labor spent on direct revenue-producing activities from operating revenues. The costs included in Adjusted Gross Margin exclude depreciation and amortization and certain costs presented in operations and maintenance expenses in accordance with regulatory requirements. The Company calculates Adjusted Net Income and Adjusted EPS by deducting costs and expenses associated with significant acquisitions that may affect the comparison of period-over-period results. These non-GAAP financial measures are not in accordance with, or an alternative to, GAAP and should be considered in addition to, and not as a substitute for, the comparable GAAP measures. The Company believes that these non-GAAP measures are useful and meaningful to investors as a basis for making investment decisions, and provide investors with information that demonstrates the profitability achieved by the Company under allowed rates for regulated energy operations and under the Company's competitive pricing structures for unregulated energy operations. The Company's management uses these non-GAAP financial measures in assessing a business unit and Company performance. Other companies may calculate these non-GAAP financial measures in a different manner.

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The following tables reconcile Gross Margin, Net Income, and EPS, all as defined under GAAP, to our non-GAAP measures of Adjusted Gross Margin, Adjusted Net Income and Adjusted EPS for each of the periods presented.


Adjusted Gross Margin

For the Three Months Ended June 30, 2024
(in thousands)Regulated EnergyUnregulated EnergyOther and EliminationsTotal
Operating Revenues$130,625 $41,419 $(5,772)$166,272 
Cost of Sales:
Natural gas, propane and electric costs(27,378)(18,006)5,744 (39,640)
Depreciation & amortization(14,657)(3,223)3 (17,877)
Operations & maintenance expenses (1)
(12,255)(7,893)3 (20,145)
Gross Margin (GAAP)76,335 7633512,297 (22)88,610 
Operations & maintenance expenses (1)
12,255 7,893 (3)20,145 
Depreciation & amortization14,657 3,223 (3)17,877 
Adjusted Gross Margin (Non-GAAP)$103,247 $23,413 $(28)$126,632 

For the Three Months Ended June 30, 2023
(in thousands)Regulated EnergyUnregulated EnergyOther and EliminationsTotal
Operating Revenues$101,141 $40,751 $(6,299)$135,593 
Cost of Sales:
Natural gas, propane and electric costs(23,886)(18,116)6,209 (35,793)
Depreciation & amortization(13,035)(4,269)1 (17,303)
Operations & maintenance expenses (1)
(9,240)(7,520)(2)(16,762)
Gross Margin (GAAP)54,980 10,846 (91)65,735 
Operations & maintenance expenses (1)
9,240 7,520 2 16,762 
Depreciation & amortization13,035 4,269 (1)17,303 
Adjusted Gross Margin (Non-GAAP)$77,255 $22,635 $(90)$99,800 

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For the Six Months Ended June 30, 2024
(in thousands)Regulated EnergyUnregulated EnergyOther and EliminationsTotal
Operating Revenues$299,051 $124,522 $(11,557)$412,016 
Cost of Sales:
Natural gas, propane and electric costs(77,296)(55,060)11,499 (120,857)
Depreciation & amortization(27,194)(7,704)5 (34,893)
Operations & maintenance expenses (1)
(24,991)(16,315)1 (41,305)
Gross Margin (GAAP)169,570 45,443 (52)214,961 
Operations & maintenance expenses (1)
24,991 16,315 (1)41,305 
Depreciation & amortization27,194 7,704 (5)34,893 
Adjusted Gross Margin (Non-GAAP)$221,755 $69,462 $(58)$291,159 

For the Six Months Ended June 30, 2023
(in thousands)Regulated EnergyUnregulated EnergyOther and EliminationsTotal
Operating Revenues$243,411 $123,916 $(13,605)$353,722 
Cost of Sales:
Natural gas, propane and electric costs(79,174)(58,687)13,479 (124,382)
Depreciation & amortization(25,987)(8,503)4 (34,486)
Operations & maintenance expenses (1)
(18,527)(15,996)3 (34,520)
Gross Margin (GAAP)119,723 40,730 (119)160,334 
Operations & maintenance expenses (1)
18,527 15,996 (3)34,520 
Depreciation & amortization25,987 8,503 (4)34,486 
Adjusted Gross Margin (Non-GAAP)$164,237 $65,229 $(126)$229,340 
(1) Operations & maintenance expenses within the condensed consolidated statements of income are presented in accordance with regulatory requirements and to provide comparability within the industry. Operations & maintenance expenses which are deemed to be directly attributable to revenue producing activities have been separately presented above in order to calculate Gross Margin as defined under US GAAP.
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Adjusted Net Income and Adjusted EPS
Three Months Ended
June 30,
(in thousands, except per share data)20242023
Net Income (GAAP)$18,271 $16,133 
FCG transaction and transition-related expenses, net (1)
1,006 — 
Adjusted Net Income (Non-GAAP)$19,277 $16,133 
Weighted average common shares outstanding - diluted (2)
22,335 17,852 
Earnings Per Share - Diluted (GAAP)$0.82 $0.90 
FCG transaction and transition-related expenses, net (1)
0.04 — 
Adjusted Earnings Per Share - Diluted (Non-GAAP)$0.86 $0.90 

Six Months Ended
June 30,
(in thousands, except per share data)20242023
Net Income (GAAP)$64,439 $52,477 
FCG transaction and transition-related expenses, net (1)
1,683 — 
Adjusted Net Income (Non-GAAP)$66,122 $52,477 
Weighted average common shares outstanding - diluted (2)
22,320 17,842 
Earnings Per Share - Diluted (GAAP)$2.89 $2.94 
FCG transaction and transition-related expenses, net (1)
0.07 — 
Adjusted Earnings Per Share - Diluted (Non-GAAP)$2.96 $2.94 
(1) Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to, transaction costs, transition services, consulting, system integration, rebranding and legal fees.
(2) Weighted average shares for the three and six months ended June 30, 2024 reflect the impact of 4.4 million common shares issued in November 2023 in connection with the acquisition of FCG.

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Operating Results for the Quarters Ended June 30, 2024 and 2023

Consolidated Results
Three Months Ended
June 30,
(in thousands)20242023ChangePercent Change
Adjusted gross margin**$126,632 $99,800 $26,832 26.9 %
Depreciation, amortization and property taxes26,703 23,628 3,075 13.0 %
FCG transaction and transition-related expenses1,374 — 1,374 NMF
Other operating expenses57,765 47,826 9,939 20.8 %
Operating income $40,790 $28,346 $12,444 43.9 %

Operating income for the second quarter of 2024 was $40.8 million, an increase of $12.4 million or 43.9 percent compared to the same period in 2023. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $13.8 million or 48.7 percent compared to the prior-year period. An increase in adjusted gross margin in the second quarter of 2024 was driven by contributions from the acquisition of FCG, incremental margin from regulatory initiatives, natural gas organic growth and continued pipeline expansion projects and improvements from the Company's unregulated businesses. Higher operating expenses were driven largely by the operating expenses of FCG, increased payroll, benefits and other employee-related expenses, and higher insurance and vehicle expenses compared to the prior-year period. Increases in depreciation, amortization and property taxes attributable to growth projects and FCG were partially offset by a $2.3 million reserve surplus amortization mechanism ("RSAM") adjustment from FCG and lower depreciation from our electric operations due to revised rates from an approved electric depreciation study.

Regulated Energy Segment
Three Months Ended
June 30,
(in thousands)20242023ChangePercent Change
Adjusted gross margin** $103,247 $77,255 $25,992 33.6 %
Depreciation, amortization and property taxes22,863 18,854 4,009 21.3 %
FCG transaction and transition-related expenses1,374 — 1,374 NMF
Other operating expenses38,505 29,110 9,395 32.3 %
Operating income$40,505 $29,291 $11,214 38.3 %


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The key components of the increase in adjusted gross margin** are shown below:
(in thousands) 
Contribution from FCG$23,367 
Margin from regulated infrastructure programs1,340 
Natural gas growth including conversions (excluding service expansions)1,253 
Natural gas transmission service expansions, including interim services563 
Other variances(531)
Quarter-over-quarter increase in adjusted gross margin**$25,992 
(1) Includes adjusted gross margin contributions from permanent base rates that became effective in March 2023.

The major components of the increase in other operating expenses are as follows:
(in thousands)
FCG operating expenses$8,597 
Payroll, benefits and other employee-related expenses679 
Other variances119 
Quarter-over-quarter increase in other operating expenses$9,395 


Unregulated Energy Segment
Three Months Ended June 30,
(in thousands)20242023ChangePercent Change
Adjusted gross margin**$23,413 $22,635 $778 3.4 %
Depreciation, amortization and property taxes3,843 4,777 (934)(19.6)%
Other operating expenses19,332 18,851 481 2.6 %
Operating income (loss)$238 $(993)$1,231 NMF

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The major components of the change in adjusted gross margin** are shown below:
(in thousands)
Propane Operations
Contributions from acquisition$160 
Increased propane customer consumption 117 
CNG/RNG/LNG Transportation and Infrastructure
Increased level of virtual pipeline services587 
Aspire Energy
Increased margins - rate changes and gathering fees251 
Other variances(337)
Quarter-over-quarter increase in adjusted gross margin**$778 
The major components of the increase in other operating expenses are as follows:
(in thousands)
Increased insurance related costs$283 
Increased vehicle expenses246 
Other variances(48)
Quarter-over-quarter increase in other operating expenses$481 
Operating Results for the Six Months Ended June 30, 2024 and 2023
Consolidated Results
Six Months Ended
June 30,
(in thousands)20242023ChangePercent Change
Adjusted gross margin**$291,159 $229,340 $61,819 27.0 %
Depreciation, amortization and property taxes52,813 47,118 5,695 12.1 %
FCG transaction and transition-related expenses2,295 — 2,295 NMF
Other operating expenses115,676 98,961 16,715 16.9 %
Operating income $120,375 $83,261 $37,114 44.6 %

Operating income for the first half of 2024 was $120.4 million, an increase of $37.1 million compared to the same period in 2023. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $39.4 million or 47.3 percent compared to the prior-year period. An increase in adjusted gross margin in the first half of 2024 was driven by contributions from the acquisition of FCG, natural gas organic growth and continued pipeline expansion projects, incremental margin from regulatory initiatives, higher customer consumption and contributions from the Company's unregulated businesses. Higher operating expenses largely associated with FCG were partially offset by lower payroll, benefits and other employee-related expenses compared to the prior-year period. Increases in depreciation, amortization and property taxes attributable to growth projects and FCG were partially offset by a $5.7 million RSAM adjustment from FCG and lower depreciation from our electric operations due to revised rates from an approved electric depreciation study.

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Regulated Energy Segment
Six Months Ended
June 30,
(in thousands)20242023ChangePercent Change
Adjusted gross margin** $221,755 $164,237 $57,518 35.0 %
Depreciation, amortization and property taxes43,818 37,524 6,294 16.8 %
FCG transaction and transition-related expenses2,295 — 2,295 NMF
Other operating expenses77,028 59,797 17,231 28.8 %
Operating income$98,614 $66,916 $31,698 47.4 %


The key components of the increase in adjusted gross margin** are shown below:
(in thousands) 
Contribution from FCG$48,326 
Natural gas growth including conversions (excluding service expansions)3,169 
Margin from regulated infrastructure programs2,618 
Natural gas transmission service expansions, including interim services2,154 
Rate changes associated with the Florida natural gas base rate proceeding (1)
1,630 
Other variances(379)
Period-over-period increase in adjusted gross margin**$57,518 
(1) Includes adjusted gross margin contributions from permanent base rates that became effective in March 2023.

The major components of the increase in other operating expenses are as follows:
(in thousands)
FCG operating expenses$17,887 
Payroll, benefits and other employee-related expenses(1,109)
Other variances453 
Period-over-period increase in other operating expenses$17,231 


Unregulated Energy Segment
Six Months Ended
June 30,
(in thousands)20242023ChangePercent Change
Adjusted gross margin**$69,462 $65,229 $4,233 6.5 %
Depreciation, amortization and property taxes8,998 9,598 (600)(6.3)%
Other operating expenses38,797 39,379 (582)(1.5)%
Operating income$21,667 $16,252 $5,415 33.3 %

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The major components of the change in adjusted gross margin** are shown below:
(in thousands)
Propane Operations
Increased propane customer consumption $1,505 
Contributions from acquisition598 
Increased propane margins and service fees463 
CNG/RNG/LNG Transportation and Infrastructure
Increased level of virtual pipeline services487 
Aspire Energy
Increased margins - rate changes and gathering fees1,189 
Other variances(9)
Period-over-period increase in adjusted gross margin**$4,233 
The major components of the decrease in other operating expenses are as follows:
(in thousands)
Decreased payroll, benefits and other employee-related expenses$(1,083)
Increased insurance related costs655 
Increased vehicle expenses386 
Other variances(540)
Period-over-period decrease in other operating expenses$(582)
Forward-Looking Statements

Matters included in this release may include forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements. Please refer to the Safe Harbor for Forward-Looking Statements in the Company’s 2023 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the second quarter of 2024 for further information on the risks and uncertainties related to the Company’s forward-looking statements.
Conference Call
Chesapeake Utilities (NYSE: CPK) will host a conference call on Friday, August 9, 2024 at 8:30 a.m. Eastern Time to discuss the Company’s financial results for the three and six months ended June 30, 2024. To listen to the Company’s conference call via live webcast, please visit the Events & Presentations section of the Investors page on www.chpk.com. For investors and analysts that wish to participate by phone for the question and answer portion of the call, please use the following dial-in information:

Toll-free: 800.445-7795
International: 203.518.9856
Conference ID: CPKQ224

A replay of the presentation will be made available on the previously noted website following the conclusion of the call.

About Chesapeake Utilities Corporation
Chesapeake Utilities Corporation is a diversified energy delivery company, listed on the New York Stock Exchange. Chesapeake Utilities Corporation offers sustainable energy solutions through its natural gas
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transmission and distribution, electricity generation and distribution, propane gas distribution, mobile compressed natural gas utility services and solutions, and other businesses.

Please note that Chesapeake Utilities Corporation is not affiliated with Chesapeake Energy, an oil and natural gas exploration company headquartered in Oklahoma City, Oklahoma.

For more information, contact:

Beth W. Cooper
Executive Vice President, Chief Financial Officer, Treasurer and Assistant Corporate Secretary
302.734.6022

Michael D. Galtman
Senior Vice President and Chief Accounting Officer
302.217.7036

Lucia M. Dempsey
Head of Investor Relations
347.804.9067


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Financial Summary
(in thousands, except per-share data)
Three Months EndedSix Months Ended
June 30,June 30,
2024202320242023
Adjusted Gross Margin
  Regulated Energy segment$103,247 $77,255 $221,755 $164,237 
  Unregulated Energy segment23,413 22,635 69,462 65,229 
  Other businesses and eliminations(28)(90)(58)(126)
Total Adjusted Gross Margin**$126,632 $99,800 $291,159 $229,340 
Operating Income (Loss)
   Regulated Energy segment$40,505 $29,291 $98,614 $66,916 
   Unregulated Energy segment238 (993)21,667 16,252 
   Other businesses and eliminations47 48 94 93 
Total Operating Income 40,790 28,346 120,375 83,261 
Other income, net1,110 831 1,305 1,107 
Interest charges16,813 6,964 33,839 14,196 
Income Before Income Taxes25,087 22,213 87,841 70,172 
Income taxes6,816 6,080 23,402 17,695 
Net Income$18,271 $16,133 $64,439 $52,477 
Weighted Average Common Shares Outstanding: (1)
Basic22,284 17,794 22,267 17,777 
Diluted22,335 17,852 22,320 17,842 
Earnings Per Share of Common Stock
Basic$0.82$0.91$2.89$2.95
Diluted$0.82$0.90$2.89$2.94
 
Adjusted Net Income and Adjusted Earnings Per Share
Net Income (GAAP)$18,271 $16,133 $64,439 $52,477 
FCG transaction and transition-related-expenses, net (2)
1,006 — 1,683 — 
Adjusted Net Income (Non-GAAP)**$19,277 $16,133 $66,122 $52,477 
Earnings Per Share - Diluted (GAAP)$0.82 $0.90 $2.89 $2.94 
FCG transaction and transition-related-expenses, net (2)
0.04 — 0.07 — 
Adjusted Earnings Per Share - Diluted (Non-GAAP)**$0.86 $0.90 $2.96 $2.94 
(1) Weighted average shares for the three and six months ended June 30, 2024 reflect the impact of 4.4 million common shares issued in November 2023 in connection with the acquisition of FCG.
(2) Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to, transaction costs, transition services, consulting, system integration, rebranding and legal fees.

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Financial Summary Highlights

Key variances between the second quarter of 2023 and 2024 included:
(in thousands, except per share data)Pre-tax
Income		Net
Income		Earnings
Per Share
Second Quarter of 2023 Adjusted Results$22,213 $16,133 $0.90 
Increased Adjusted Gross Margins:
Contributions from acquisitions23,527 17,135 0.77 
Margin from regulated infrastructure programs*1,340 976 0.04 
Natural gas growth including conversions (excluding service expansions)1,253 912 0.04 
Increased level of virtual pipeline services587 428 0.02 
Natural gas transmission service expansions, including interim services*563 410 0.02 
Improved Aspire Energy performance - rate changes and gathering fees251 183 — 
27,521 20,044 0.89 
Increased Operating Expenses (Excluding Natural Gas, Propane, and Electric Costs):
FCG operating expenses(9,720)(7,079)(0.32)
Payroll, benefits and other employee-related expenses(772)(562)(0.02)
Insurance related costs (559)(407)(0.02)
Vehicle expenses(250)(182)(0.01)
Depreciation, amortization and property tax costs (includes FCG)(1,951)(1,421)(0.06)
(13,252)(9,651)(0.43)
Interest charges(9,849)(7,173)(0.32)
Increase in shares outstanding due to 2023 and 2024 equity offerings***— — (0.18)
Net other changes(172)(76)— 
(10,021)(7,249)(0.50)
Second Quarter of 2024 Adjusted Results**
$26,461 $19,277 $0.86 
* Refer to Major Projects and Initiatives Table for additional information.
** Transaction and transition-related expenses attributable to the acquisition and integration of FCG have been excluded from the Company’s non GAAP measures of adjusted net income and adjusted EPS. See reconciliations above for a detailed comparison to the related GAAP measures.
*** Reflects the impact of 4.4 million common shares issued in November 2023 in connection with the acquisition of FCG.








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Key variances between the six months ended June 30, 2023 and June 30, 2024 included: 
(in thousands, except per share data)Pre-tax
Income		Net
Income		Earnings
Per Share
Six months ended June 30, 2023 Adjusted Results$70,172 $52,477 $2.94 
Non-recurring Items:
Absence of benefit associated with a reduction in the PA state tax rate— (1,284)(0.06)
— (1,284)(0.06)
Increased Adjusted Gross Margins:
Contributions from acquisitions48,924 35,891 1.61 
Natural gas growth including conversions (excluding service expansions)3,169 2,325 0.10 
Margin from regulated infrastructure programs*2,618 1,921 0.09 
Natural gas transmission service expansions, including interim services*2,154 1,580 0.07 
Changes in customer consumption1,842 1,352 0.06 
Rate changes associated with the Florida natural gas base rate proceeding*1,630 1,196 0.05 
Improved Aspire Energy performance - rate changes and gathering fees1,189 872 0.04 
Increased level of virtual pipeline services487 358 0.02 
Increased propane margins and fees463 340 0.01 
62,476 45,835 2.05 
(Increased) Decreased Operating Expenses (Excluding Natural Gas, Propane, and Electric Costs):
FCG operating expenses(20,133)(14,770)(0.66)
Insurance related costs (1,084)(795)(0.04)
Vehicle expenses(403)(295)(0.01)
Payroll, benefits and other employee-related expenses2,192 1,608 0.07 
Depreciation, amortization and property tax costs (includes FCG)(3,449)(2,530)(0.11)
(22,877)(16,782)(0.75)
Interest charges(19,643)(14,410)(0.65)
Increase in shares outstanding due to 2023 and 2024 equity offerings***— — (0.59)
Net other changes8 286 0.02 
(19,635)(14,124)(1.22)
Six months ended June 30, 2024 Adjusted Results**
$90,136 $66,122 $2.96 
* Refer to Major Projects and Initiatives Table for additional information.
** Transaction and transition-related expenses attributable to the acquisition and integration of FCG have been excluded from the Company’s non GAAP measures of adjusted net income and adjusted EPS. See reconciliations above for a detailed comparison to the related GAAP measures.
*** Reflects the impact of 4.4 million common shares issued in November 2023 in connection with the acquisition of FCG.



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Recently Completed and Ongoing Major Projects and Initiatives

The Company continuously pursues and develops additional projects and initiatives to serve existing and new customers, further grow its businesses and earnings, and increase shareholder value. The following table includes all major projects and initiatives that are currently underway or recently completed. The Company's practice is to add new projects and initiatives to this table once negotiations or details are substantially final and/or the associated earnings can be estimated. Major projects and initiatives that have generated consistent year-over-year adjusted gross margin contributions are removed from the table at the beginning of the next calendar year.

The related descriptions of projects and initiatives that accompany the table include only new items and/or items where there have been significant developments, as compared to the Company's prior quarterly filings. A comprehensive discussion of all projects and initiatives reflected in the table below can be found in the Company's second quarter 2024 Quarterly Report on Form 10-Q.

Adjusted Gross Margin
Three Months EndedSix Months EndedYear EndedEstimate for
June 30,June 30,December 31,Fiscal
(in thousands)2024202320242023202320242025
Pipeline Expansions:
Southern Expansion$586 $455 $1,172 $486 $586 $2,344 $2,344 
Beachside Pipeline Expansion603 603 1,206 603 1,810 2,451 2,414 
North Ocean City Connector— — — — — — 494 
St. Cloud / Twin Lakes Expansion146 — 292 — 264 584 2,752 
Wildlight205 67 404 93 471 1,423 2,038 
Lake Wales114 38 228 38 265 454 454 
Newberry72 — 72 — — 1,364 2,585 
Boynton Beach — — — — — — 3,342 
New Smyrna Beach — — — — — — 1,710 
Central Florida Reinforcement— — — — — 476 1,182 
Warwick— — — — — 258 1,858 
Renewable Natural Gas Supply Projects— — — — — — 5,460 
Total Pipeline Expansions1,726 1,163 3,374 1,220 3,396 9,354 26,633 
CNG/RNG/LNG Transportation and Infrastructure3,505 2,905 6,940 6,426 11,181 13,500 14,500 
Regulatory Initiatives:
Florida GUARD program865 — 1,454 — 353 3,231 5,602 
FCG SAFE Program689 — 1,101 — — 2,683 5,293 
Capital Cost Surcharge Programs777 703 1,608 1,423 2,829 3,979 4,374 
Florida Rate Case Proceeding (1)
4,005 3,873 9,600 7,970 15,835 17,153 17,153 
Maryland Rate Case (2)
— — — — — TBDTBD
Electric Storm Protection Plan677 436 1,307 642 1,326 2,433 3,951 
Total Regulatory Initiatives7,013 5,012 15,070 10,035 20,343 29,479 36,373 
Total$12,244 $9,080 $25,384 $17,681 $34,920 $52,333 $77,506 

(1) Includes adjusted gross margin during 2023 comprised of both interim rates and permanent base rates which became effective in March 2023.
(2) Rate case application and depreciation study filed with the Maryland PSC in January 2024. See additional information provided below.

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Detailed Discussion of Major Projects and Initiatives

Pipeline Expansions

St. Cloud / Twin Lakes Expansion
In July 2022, Peninsula Pipeline filed a petition with the Public Service Commission ("PSC") for the State of Florida for approval of its Transportation Service Agreement with the Company's Florida subsidiary, Florida Public Utilities ("FPU"), for an additional 2,400 Dts/day of firm service in the St. Cloud, Florida area. As part of this agreement, Peninsula Pipeline constructed a pipeline extension and regulator station for FPU. The extension supports new incremental load due to growth in the area, including providing service, most immediately, to the residential development Twin Lakes. The expansion also improves reliability and provides operational benefits to FPU’s existing distribution system in the area, supporting future growth. The project went into service in July 2023.

In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of an amendment to its Transportation Service Agreement with FPU for an additional 10,000 Dts/day of firm service in the St. Cloud, Florida area. Peninsula Pipeline will construct pipeline expansions that will allow FPU to serve the future communities that are expected in that area. The Florida PSC approved the project in May 2024, and it is expected to be complete in the fourth quarter of 2025.

Newberry Expansion
In April 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreement with FPU for an additional 8,000 Dts/day of firm service in the Newberry, Florida area. The petition was approved by the Florida PSC in the third quarter of 2023. Peninsula Pipeline will construct a pipeline extension, which will be used by FPU to support the development of a natural gas distribution system to provide gas service to the City of Newberry. A filing to address the acquisition and conversion of existing Company owned propane community gas systems in Newberry was made in November 2023. The Florida PSC approved it in April 2024. The Company began the conversions of the community gas systems in the second quarter of 2024.

East Coast Reinforcement Projects
In December 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreements with FPU for projects that will support additional supply to communities on the East Coast of Florida. The projects are driven by the need for increased supply to coastal portions of the state that are experiencing significant population growth. Peninsula Pipeline will construct several pipeline extensions which will support FPU’s distribution system in the areas of Boynton Beach and New Smyrna Beach with an additional 15,000 Dts/day and 3,400 Dts/day, respectively. The Florida PSC approved the projects in March 2024. Construction is projected to be complete in the first and second quarters of 2025 for Boynton Beach and New Smyrna Beach, respectively.

Central Florida Reinforcement Projects
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreements with FPU for projects that will support additional supply to communities located in Central Florida. The projects are driven by the need for increased supply to communities in central Florida that are experiencing significant population growth. Peninsula Pipeline will construct several pipeline extensions which will support FPU’s distribution system around the Plant City and Lake Mattie areas of Florida with an additional 5,000 Dts/day and 8,700 Dts/day, respectively. The Florida PSC approved the projects in May 2024. Completion of the projects is projected for the fourth quarter of 2024 for Plant City and the fourth quarter of 2025 for Lake Mattie.

Warwick
In July 2024, the Company announced plans to extend Eastern Shore's transmission deliverability by constructing an additional 4.4 miles of six inch steel pipeline. The project will reinforce the supply and
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growth for our Delaware division distribution system and expand further into Maryland for anticipated future growth. The project is estimated to be in service during the fourth quarter of 2024.

Pioneer Supply Header Pipeline Project
In March 2024, Peninsula Pipeline filed a petition with the Florida PSC for its approval of Firm Transportation Service Agreements with both FCG and FPU for a project that will support greater supply growth of natural gas service in southeast Florida. The project consists of the transfer of a pipeline asset from FCG to Peninsula Pipeline. Peninsula Pipeline will proceed to provide transportation service to both FCG and FPU using the pipeline asset, which supports continued customer growth and system reinforcement of these distribution systems. The Florida PSC approved the petition in July 2024.

Renewable Natural Gas Supply Projects
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of Transportation Service Agreements with FCG for projects that will support the transportation of additional renewable energy supply to FCG. The projects, located in Florida’s Brevard, Indian River and Miami-Dade counties, will bring renewable natural gas produced from local landfills into FCG’s natural gas distribution system. Peninsula Pipeline will construct several pipeline extensions which will support FCG's distribution system in Brevard County, Indian-River County, and Miami-Dade County. Benefits of these projects include increased gas supply to serve expected FCG growth, strengthened system reliability and additional system flexibility. The Florida PSC approved the petition at it's July 2024 meeting with the projects estimated to be completed in the first half of 2025.

Regulatory Initiatives

Maryland Natural Gas Rate Case
In January 2024, the Company's natural gas distribution businesses in Maryland, CUC-Maryland Division, Sandpiper Energy, Inc., and Elkton Gas Company (collectively, “Maryland natural gas distribution businesses”) filed a joint application for a natural gas rate case with the Maryland PSC. In connection with the application, we are seeking approval of the following: (i) permanent rate relief of approximately $6.9 million; (ii) authorization to make certain changes to tariffs to include a unified rate structure and to consolidate the Maryland natural gas distribution businesses which we anticipate will be called Chesapeake Utilities of Maryland, Inc.; and (iii) authorization to establish a rider for recovery of the costs associated with our new technology systems. The outcome of the application is subject to review and approval by the Maryland PSC. Rate changes are suspended until December 2024.

Maryland Natural Gas Depreciation Study
In January 2024, the Company's Maryland natural gas distribution businesses filed a joint petition for approval of its proposed unified depreciation rates with the Maryland PSC. A settlement agreement between the Company, PSC staff and the Office of People's Counsel was reached and the final order approving the settlement agreement went into effect in July 2024 which will include an annual benefit of $1.2 million.

FCG SAFE Program
In April 2024, FCG filed a petition with the Florida PSC to more closely align the SAFE Program with FPU's GUARD program. Specifically, the requested modifications will enable FCG to accelerate remediation related to problematic pipe and facilities consisting of obsolete and exposed pipe. If approved, these efforts will serve to improve the safety and reliability of service to FCG's customers. These modifications, if approved, will result in an estimated additional $50 million in capital expenditures associated with the SAFE Program which would increase the total projected capital expenditures to $255 million over a 10-year period. The Commission decision is expected in September 2024.

Delaware Natural Gas Rate Case
In May 2024, the Company's Delaware natural gas division provided notice to the Delaware PSC of its intent to file a petition seeking a general rate base increase based on a test period ending in December 2024. The filing is expected to be submitted to the Delaware PSC in August 2024 and the outcome of the application will be subject to review and approval by the Delaware PSC.

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FPU Electric Rate Case
In June 2024, the Company provided notice to the Florida PSC of its intent to file a petition seeking a general rate base increase based on a 2025 projected test year. The filing is expected to be submitted to the Florida PSC in August 2024 and the outcome of the application will be subject to review and approval by the Florida PSC.

Other Major Factors Influencing Adjusted Gross Margin

Weather and Consumption
Weather was not a significant factor to adjusted gross margin in the second quarter of 2024 compared to the same period in 2023.

For the six months ended June 30, 2024, higher consumption which includes the effects of colder weather conditions compared to the prior-year period resulted in a $1.8 million increase in adjusted gross margin. While temperatures through June 30, 2024 were colder than the prior-year period, they were approximately 12.5 percent and 12.8 percent warmer, respectively, compared to normal temperatures in our Delmarva and Ohio service territories.

The following table summarizes HDD and CDD variances from the 10-year average HDD/CDD ("Normal") for the three and six months ended June 30, 2024 and 2023.
Three Months EndedSix Months Ended
June 30,June 30,
20242023Variance20242023Variance
Delmarva
Actual HDD319 276 43 2,281 2,050 231 
10-Year Average HDD ("Normal")387 408 (21)2,608 2,693 (85)
Variance from Normal(68)(132)(327)(643)
Florida
Actual HDD41 26 15 511 370 141 
10-Year Average HDD ("Normal")41 44 (3)511 549 (38)
Variance from Normal— (18)— (179)
Ohio
Actual HDD478 678 (200)3,137 3,062 75 
10-Year Average HDD ("Normal")631 631 — 3,596 3,596 — 
Variance from Normal(153)47 (459)(534)
Florida
Actual CDD1,115 937 178 1,296 1,260 36 
10-Year Average CDD ("Normal")978 952 26 1,195 1,144 51 
Variance from Normal137 (15)101 116 

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Natural Gas Distribution Growth
The average number of residential customers served on the Delmarva Peninsula increased by approximately 3.7 percent and 3.9 percent, respectively, for the three and six months ended June 30, 2024 while our legacy Florida Natural Gas distribution business increased by approximately 3.7 percent and 3.6 percent, respectively, during the same periods.

The details of the adjusted gross margin increase are provided in the following table:
Adjusted Gross Margin**
Three Months EndedSix Months Ended
June 30, 2024June 30, 2024
(in thousands)Delmarva PeninsulaFloridaDelmarva PeninsulaFlorida
Customer growth:
Residential$352 $647 $842 $1,527 
Commercial and industrial124 130 280 520 
Total customer growth (1)
$476 $777 $1,122 $2,047 
(1) Customer growth amounts for the legacy Florida operations include the effects of revised rates associated with the Company's natural gas base rate proceeding, but exclude the effects of FCG.

Capital Investment Growth and Capital Structure Updates

The Company's capital expenditures were $159.5 million for the six months ended June 30, 2024. The following table shows a range of the forecasted 2024 capital expenditures by segment and by business line:

2024
(in thousands)LowHigh
Regulated Energy:
Natural gas distribution$150,000 $170,000 
Natural gas transmission90,000 120,000 
Electric distribution25,000 28,000 
Total Regulated Energy265,000 318,000 
Unregulated Energy:
Propane distribution13,000 15,000 
Energy transmission5,000 6,000 
Other unregulated energy13,000 15,000 
Total Unregulated Energy31,000 36,000 
Other:
Corporate and other businesses4,000 6,000 
Total 2024 Forecasted Capital Expenditures$300,000 $360,000 

The capital expenditure projection is subject to continuous review and modification. Actual capital requirements may vary from the above estimates due to a number of factors, including changing economic conditions, supply chain disruptions, capital delays that are greater than currently anticipated, customer growth in existing areas, regulation, new growth or acquisition opportunities and availability of capital.
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The Company's target ratio of equity to total capitalization, including short-term borrowings, is between 50 and 60 percent. The Company's equity to total capitalization ratio, including short-term borrowings, was approximately 48 percent as of June 30, 2024.
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Chesapeake Utilities Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
2024202320242023
(in thousands, except per share data)
Operating Revenues
   Regulated Energy$130,625 $101,141 $299,051 $243,411 
Unregulated Energy41,419 40,751 124,522 123,916 
Other businesses and eliminations (5,772)(6,299)(11,557)(13,605)
Total Operating Revenues166,272 135,593 412,016 353,722 
Operating Expenses
  Natural gas and electricity costs27,378 23,886 77,296 79,174 
  Propane and natural gas costs12,262 11,907 43,561 45,208 
  Operations52,339 42,163 103,899 86,930 
  FCG transaction and transition-related expenses1,374 — 2,295 — 
  Maintenance5,561 5,258 11,464 10,362 
  Depreciation and amortization17,877 17,303 34,893 34,486 
  Other taxes8,691 6,730 18,233 14,301 
Total operating expenses125,482 107,247 291,641 270,461 
Operating Income40,790 28,346 120,375 83,261 
Other income, net1,110 831 1,305 1,107 
Interest charges16,813 6,964 33,839 14,196 
Income Before Income Taxes25,087 22,213 87,841 70,172 
Income taxes6,816 6,080 23,402 17,695 
Net Income$18,271 $16,133 $64,439 $52,477 
Weighted Average Common Shares Outstanding:
Basic22,284 17,794 22,267 17,777 
Diluted22,335 17,852 22,320 17,842 
Earnings Per Share of Common Stock:
Basic$0.82 $0.91 $2.89 $2.95 
Diluted$0.82 $0.90 $2.89 $2.94 
Adjusted Net Income and Adjusted Earnings Per Share
Net Income (GAAP)$18,271 $16,133 $64,439 $52,477 
FCG transaction and transition-related expenses, net (1)
1,006 — 1,683 —
Adjusted Net Income (Non-GAAP)**$19,277 $16,133 $66,122 $52,477 
Earnings Per Share - Diluted (GAAP)$0.82 $0.90 $2.89 $2.94 
FCG transaction and transition-related expenses, net (1)
0.04 — 0.07 — 
Adjusted Earnings Per Share - Diluted (Non-GAAP)**$0.86 $0.90 $2.96 $2.94 
(1) Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to, transaction costs, transition services, consulting, system integration, rebranding and legal fees.
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Chesapeake Utilities Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited)
AssetsJune 30,
2024		December 31,
2023
(in thousands, except per share data)
Property, Plant and Equipment
Regulated Energy$2,515,712 $2,418,494 
Unregulated Energy420,074 410,807 
Other businesses and eliminations32,645 30,310 
Total property, plant and equipment2,968,431 2,859,611 
Less: Accumulated depreciation and amortization(546,598)(516,429)
Plus: Construction work in progress157,347 113,192 
Net property, plant and equipment2,579,180 2,456,374 
Current Assets
Cash and cash equivalents6,430 4,904 
Trade and other receivables 56,362 74,485 
Less: Allowance for credit losses(2,195)(2,699)
Trade and other receivables, net54,167 71,786 
Accrued revenue20,177 32,597 
Propane inventory, at average cost6,511 9,313 
Other inventory, at average cost19,715 19,912 
Regulatory assets19,646 19,506 
Storage gas prepayments2,801 4,695 
Income taxes receivable9,865 3,829 
Prepaid expenses12,549 15,407 
Derivative assets, at fair value1,180 1,027 
Other current assets3,236 2,723 
Total current assets156,277 185,699 
Deferred Charges and Other Assets
Goodwill507,856 508,174 
Other intangible assets, net15,910 16,865 
Investments, at fair value13,620 12,282 
Derivative assets, at fair value192 40 
Operating lease right-of-use assets 11,201 12,426 
Regulatory assets83,594 96,396 
Receivables and other deferred charges12,923 16,448 
Total deferred charges and other assets645,296 662,631 
Total Assets$3,380,753 $3,304,704 



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Chesapeake Utilities Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited)
Capitalization and LiabilitiesJune 30,
2024		December 31,
2023
(in thousands, except per share data)
Capitalization
Stockholders’ equity
Preferred stock, par value $0.01 per share (authorized 2,000 shares), no shares issued and outstanding$— $— 
Common stock, par value $0.4867 per share (authorized 50,000 shares)10,854 10,823 
Additional paid-in capital755,751 749,356 
Retained earnings525,525 488,663 
Accumulated other comprehensive loss(1,576)(2,738)
Deferred compensation obligation9,703 9,050 
Treasury stock(9,703)(9,050)
Total stockholders’ equity1,290,554 1,246,104 
Long-term debt, net of current maturities1,174,762 1,187,075 
Total capitalization2,465,316 2,433,179 
Current Liabilities
Current portion of long-term debt18,592 18,505 
Short-term borrowing207,091 179,853 
Accounts payable69,041 77,481 
Customer deposits and refunds44,775 46,427 
Accrued interest3,652 7,020 
Dividends payable14,272 13,119 
Accrued compensation12,519 16,544 
Regulatory liabilities19,677 13,719 
Income taxes payable— — 
Derivative liabilities, at fair value27 354 
Other accrued liabilities20,547 13,362 
Total current liabilities410,193 386,384 
Deferred Credits and Other Liabilities
Deferred income taxes283,322 259,082 
Regulatory liabilities192,710 195,279 
Environmental liabilities2,402 2,607 
Other pension and benefit costs16,102 15,330 
Derivative liabilities, at fair value12 927 
Operating lease - liabilities 9,341 10,550 
Deferred investment tax credits and other liabilities1,355 1,366 
Total deferred credits and other liabilities505,244 485,141 
Environmental and other commitments and contingencies (1)
Total Capitalization and Liabilities$3,380,753 $3,304,704 
(1) Refer to Note 6 and 7 in the Company's Quarterly Report on Form 10-Q for further information.
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Chesapeake Utilities Corporation and Subsidiaries
Distribution Utility Statistical Data (Unaudited)
For the Three Months Ended June 30, 2024For the Three Months Ended June 30, 2023
Delmarva NG DistributionFlorida Natural Gas DistributionFlorida City Gas DistributionFPU Electric DistributionDelmarva NG DistributionFlorida Natural Gas DistributionFPU Electric Distribution
Operating Revenues
(in thousands)
  Residential$15,930 $11,275 $12,918 $11,225 $16,878 $12,188 $11,023 
  Commercial and Industrial10,323 26,721 16,968 12,134 11,093 28,740 12,253 
  Other (1)
(2,962)1,921 2,608 (813)(3,858)(162)(242)
Total Operating Revenues$23,291 $39,917 $32,494 $22,546 $24,113 $40,766 $23,034 
Volumes (in Dts for natural gas and MWHs for electric)
  Residential823,378 525,878 427,062 71,226 765,193 472,147 66,835 
  Commercial and Industrial2,248,283 10,132,993 2,784,296 95,646 2,220,105 10,054,518 74,086 
  Other58,603 572,126 1,470,769 — 63,787 — — 
Total 3,130,264 11,230,997 4,682,127 166,872 3,049,085 10,526,665 140,921 
Average Customers
  Residential100,964 91,439 113,673 25,762 97,333 88,188 25,755 
  Commercial and Industrial8,367 8,486 8,551 7,359 8,249 8,405 7,378 
  Other25 — 110 — 22 6 — 
Total 109,356 99,925 122,334 33,121 105,604 96,599 33,133 

For the Six Months Ended June 30, 2024For the Six Months Ended June 30, 2023
Delmarva NG DistributionFlorida Natural Gas DistributionFlorida City Gas DistributionFPU Electric DistributionDelmarva NG DistributionFlorida Natural Gas DistributionFPU Electric Distribution
Operating Revenues
(in thousands)
  Residential$51,726 $26,618 $27,949 $22,651 $58,898 $28,684 $22,380 
  Commercial and Industrial27,890 57,774 36,402 22,917 32,518 54,479 23,994 
  Other (1)
(4,637)3,481 4,020 (3,058)(6,911)3,961 (603)
Total Operating Revenues$74,979 $87,873 $68,371 $42,510 $84,505 $87,124 $45,771 
Volumes (in Dts for natural gas and MWHs for electric)
  Residential3,261,532 1,366,919 1,026,399 143,247 3,056,513 1,225,903 135,352 
  Commercial and Industrial5,675,456 20,248,545 5,768,923 183,473 5,607,936 20,362,474 142,789 
  Other147,701 1,303,132 3,069,512 — 151,323 627,934 — 
Total 9,084,689 22,918,596 9,864,834 326,720 8,815,772 22,216,311 278,141 
Average Customers
  Residential100,749 90,955 113,350 25,733 96,922 87,757 25,686 
  Commercial and Industrial8,382 8,480 8,535 7,365 8,260 8,407 7,369 
  Other25 — 105 — 23 6 — 
Total 109,156 99,435 121,990 33,098 105,205 96,170 33,055 
(1) Operating Revenues from "Other" sources include unbilled revenue, under (over) recoveries of fuel cost, conservation revenue, other miscellaneous charges, fees for billing services provided to third parties and adjustments for pass-through taxes.




1 Second Quarter 2024 Earnings Call Presentation August 9, 2024 scan here for an electronic copy

 
2 Safe Harbor for Forward-Looking Statements Safe Harbor Statement Some of the statements in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable law.  Such forward-looking statements may be identified  by the use of words, such as “project,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “continue,” “potential,” “forecast” or other similar words, or future or conditional verbs such as “may,” “will,” “should,” “would” or “could.” These statements represent our intentions, plans, expectations, assumptions and beliefs about our future financial performance, business strategy, projected plans and objectives.  These statements are subject to many risks and uncertainties and actual results may materially differ from those expressed  in these forward-looking statements.  Please refer to Chesapeake Utilities Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC and other SEC filings concerning factors that could cause those results to be different than contemplated in this presentation. Non-GAAP Financial Information This presentation includes non-GAAP financial measures including Adjusted Gross Margin, Adjusted Net Income and Adjusted Earnings Per Share (“EPS*”). A "non-GAAP financial measure" is generally defined as a numerical measure of a company's historical or future performance that includes or excludes amounts, or that is subject to adjustments, so as to be different from the most directly comparable measure calculated or presented in accordance with GAAP. Our management believes certain non- GAAP financial measures, when considered together with GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. The Company calculates Adjusted Gross Margin by deducting the purchased cost of natural gas, propane and electricity and the cost of labor spent on direct revenue- producing activities from operating revenues. The costs included in Adjusted Gross Margin exclude depreciation and amortization and certain costs presented in operations and maintenance expenses in accordance with regulatory requirements. The Company calculates Adjusted Net Income and Adjusted EPS by deducting costs and expenses associated with significant acquisitions that may affect the comparison of period-over-period results. These non-GAAP financial measures are not in accordance with, or an alternative to, GAAP and should be considered in addition to, and not as a substitute for, the comparable GAAP measures. The Company believes that these non-GAAP measures are useful and meaningful to investors as a basis for making investment decisions and provide investors with information that demonstrates the profitability achieved by the Company under allowed rates for regulated energy operations and under the Company's competitive pricing structures for unregulated energy operations. The Company's management uses these non-GAAP financial measures in assessing a business unit and Company performance. Other companies may calculate these non-GAAP financial measures in a different manner. See Appendix for a reconciliation of Gross Margin, Net Income and EPS, all as defined under GAAP, to our non-GAAP measures of Adjusted Gross Margin, Adjusted Net Income, and Adjusted EPS for each of the periods presented. *Unless otherwise noted, EPS and Adjusted EPS information is presented on a diluted basis.

 
3 Safety Moment: Hurricane & General Emergency Preparedness • Being prepared means having your own food, water and other supplies to last for at least 72 hours • A disaster supplies kit is a collection of basic items your household may need in the event of an emergency • Visit Ready.gov for a checklist of supplies, including a printable version from FEMA • Completed its annual Hurricane Season Preparedness Drill in July • Lessons learned were already put to the test this past week with Hurricane Debby • While there were significant impacts to communities in Florida and beyond, we are grateful that outages have been limited • Our teams have responded efficiently to ensure safe and reliable service for our customers • FPU continues to show improved electric reliability metrics, including reducing the frequency and duration of outages by ~10% Personal Emergency Preparedness

 
4 Today’s Presenters Jeff Householder Chair of the Board, President & Chief Executive Officer Beth Cooper Executive Vice President, Chief Financial Officer, Treasurer & Asst. Corporate Secretary Lucia Dempsey Head of Investor Relations Jim Moriarty Executive Vice President, General Counsel, Corporate Secretary & Chief Policy and Risk Officer

 
5 Adjusted Diluted EPS1 Continued Strong Financial Performance in 2024 1 Adjusted Diluted Earnings Per Share Growth from Continuing Operations; 2024 excludes transaction / transition-related costs associated with the FCG acquisition. $2.04 $2.10 $0.90 $0.86 $2.94 $2.96 YTD 2023 YTD 2024 Q1 Q2 Q2 2024 Results • Adjusted Gross Margin: $126.6M, up 27% from Q2 2023 • Adjusted Net Income: $19.3M, up 19% from Q2 2023 Earnings Guidance Reaffirmed • FY 2024 Adjusted EPS of $5.33 - $5.45 per share • FY 2025 Adjusted EPS of $6.15 - $6.35 per share • FY 2028 Adjusted EPS of $7.75 - $8.00 per share CapEx Guidance Reaffirmed • YTD 2024 Capital Expenditures of $160M • 2024 Capital Expenditure Guidance: $300M - $360M • 2024 - 2028 5-Year CapEx Guidance: $1.5B - $1.8B Key Financial Highlights

 
6 3.7% 1.4% 3.7% 1.0% 3.9% 1.5% 3.6% 0.4% Residential Commercial & Industrial Residential Commercial & Industrial Residential Commercial & Industrial Residential Commercial & Industrial Q2 2024 vs Q2 2023 D el m ar va YTD 2024 vs YTD 2023 Fl or id a • CPK began gas transmission expansion in 2018 to serve initial commercial growth • To date, at least 28 miles of transmission infrastructure have been installed • This increased capacity attracted a number of industrial and commercial businesses to the area, driving significant economic growth for Cecil County High-Growth Service Areas Drive Investment Opportunities D el m ar va Fl or id a Cecil County Case Study Natural Gas Capacity Growth Attracts New Businesses to Cecil County: "Chesapeake Utilities' infrastructure investments have expanded availability of natural gas along U.S. Route 40, benefiting a wide range of current and future customers in this designated growth corridor, and we look forward to a continued partnership with Chesapeake Utilities for years to come." — Cecil County Economic Development Commission Strong Customer Growth

 
7 Growth in earnings to support dividend growth and increased shareholder value Foundation of operational excellence across the organization Executing On Our Long-Term Growth Plan Continually execute on business transformation Proactively manage regulatory agenda Prudently deploy investment capital

 
8 We have already made significant progress identifying capital projects, many of which are also already underway 5-Year Capex Guidance is On-Track and Achievable ~$1.3 billion of identified capital projects support our 5-year CapEx guidance of $1.5 - $1.8 billion Identified Regulated CapEx 5-Year Spend Natural Gas LDC Organic Growth $625M Newberry, Wildlight Phase 2 $28M Boynton Beach, New Smyrna $36M Lake Mattie, St. Cloud, Plant City $42M Other Approved Pipeline Projects $49M Worcester Resiliency $80M GUARD / SAFE Programs1 $230M Eastern Shore Capital Surcharge $75M Florida Electric Storm Protection Plan $50M Technology Transformation $80M Total Identified & Ongoing Capital ~$1.3B Segment 5-Year Guidance Regulated Distribution $600 - $645M Regulated Transmission $435 - $590M Regulated Infrastructure $300 - $340M Unregulated Businesses $140 - $165M Technology $70 - $90M Total $1.5 - $1.8B 1 Includes $50 million requested in April 2024 but not yet approved.

 
9 YTD 2024 Capital Spend Progress 48% in 1H 2024 2024 Capital Investment On Track to Drive Margin Growth Year-to-date capital expenditures on track, with $160M in spending on strategic growth opportunities and technology transformation $300 - $360M 2024E Capital Expenditures Regulated Energy CapEx: $265 - $318M ◦ Natural Gas Distribution: $150 - $170M ◦ Natural Gas Transmission: $90 - $120M ◦ Electric Distribution: $25 - $28M Unregulated Energy CapEx: $31 - $36M ◦ Propane Distribution: $13 - $15M ◦ Energy Transmission: $5 - $6M ◦ Other Unregulated: $13 - $15M General Corporate CapEx: $4 - $6M We remain on track for 5-Year CapEx Plan of $1.5 – $1.8B in 2H 202452%

 
10 Organic Growth Driving Delmarva + Florida Investments # Project Name Status In-Service Total CapEx Adj. Gross Margin ($M) 2024E 2025E 1 Southern Expansion In-Service Q4 2023 ~$14M $2.3 $2.3 2 North Ocean City Connector In-Service Q2 20231 ~$6M — $0.5 3 Worcester Resiliency Upgrade (WRU) Pending Approval Q3 2025 ~$80M — — 4 Warwick Extension In-Progress Q4 2024 ~$9M $0.3 $1.9 5 Beachside Expansion In-Service Q2 2023 ~$11M $2.5 $2.4 6 St. Cloud / Twin Lakes In-Service Q3 2023 ~$4M $0.6 $0.6 7 Wildlight Phase 1 & 2 In-Progress 2023-2025 ~$25M $1.4 $2.0 8 Lake Wales In-Service Q2 2023 ~$2M $0.5 $0.5 9 Newberry Expansion In-Progress Q2 2024 ~$15M $1.4 $2.6 10 Boynton Beach In-Progress Q1 2025 ~$21M — $3.3 11 New Smyrna Beach In-Progress Q2 2025 ~$15M — $1.7 12 St. Cloud Expansion In-Progress Q2 2025 ~$20M — $2.2 13 Lake Mattie In-Progress Q4 20252 ~$18M — — 14 Plant City In-Progress Q4 2024 ~$4M $0.5 $1.2 15 Indian River RNG3 In-Progress 2025 ~$18M — $5.516 Brevard RNG3 In-Progress ~$6M 17 Medley RNG3 In-Progress ~$22M 18 Pioneer Supply Header In-Service Q3 2024 — — — Totals: $290M $9.4 $26.7 1 Regulatory recovery through the Maryland General Rate Case so no margin impact in 2024. 2 Expected in-service in late December 2025 so no 2025 margin expected. 3 Approval received in July 2024 from the Florida PSC for these RNG transportation projects, which facilitate additional capacity from landfills through FCG’s system.

 
11 Achieving Operational Synergies Consolidating processes and resources and incorporating operations into existing systems Accelerating Investment Opportunities Moving forward on regulatory approvals and construction to support FCG service area growth Optimizing Operations "Best of Both" approach to identify and implement efficiencies and operations throughout Florida In August 2024, CPK is implementing an SAP customer information system to enhance our service platforms, streamline processes and improve efficiency across 4 key workstreams: • Billing & Invoicing • Customer Service • Device and Work Management • Finance and Contracting (FICA) SAP will be implemented for FCG in Spring 2025 Making Strides with Business Transformation We are continually evaluating and improving our people, processes, systems and structures in order to ensure long-term success and growth in an ever-changing environment.

 
12 +44% $99.8 $126.6 Q2 2023 Q2 2024 $16.1 $19.3 Q2 2023 Q2 2024 +19% $28.3 $40.8 Q2 2023 Q2 2024 Increasing Adj. Gross Margin Driving Bottom-Line Growth 1 See appendix for a reconciliation of non-GAAP metrics. 2 Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to, transaction costs, transition services, consulting, system integration, rebranding and legal fees. Gross margin growth drove higher operating income and bottom-line net income, averaging 30%+ growth. Excluding transaction & transition-related expenses2, Q2 2024 operating income increased $13.8M, or 49% Adjusted Gross Margin1 Operating Income Adjusted Net Income1 +27% YTD: $229.3 $291.2 $83.3 $120.4 $52.5 $66.1

 
13 Key Drivers of Performance – Three Months Ended June 30, 2024 1 See appendix for GAAP to non-GAAP reconciliation for adjusted diluted earnings per share. 2 Includes a benefit from RSAM of $2.3 million, pre-tax, or $0.08 per share. Adjusted EPS for the second quarter benefited from our core business performance and recent acquisition of Florida City Gas; offset primarily by financing costs related to the FCG acquisition. Adjusted Diluted Earnings Per Share1 $0.90 $0.77 $0.09 $0.04 $(0.32) $(0.05) $(0.06) $(0.32) $(0.18) $0.86 Q2 2023 Adj. EPS FCG Gross Margin Natural Gas Growth and Infrastructure Margin Natural Gas Transmission Margin FCG Operating Expenses Payroll, Benefits, Insurance & Other D&A and Property Taxes Interest Expense Shares Outstanding: FCG Financing Q2 2024 Adj. EPS 2

 
14 Regulated Energy Segment Generates Operating Income Growth •$23.4M from FCG operations & growth •$1.8M from natural gas growth, conversions and service expansions •$1.3M from transmission expansions and regulated infrastructure programs Partially offset by primarily $8.6M of FCG operating expenses $29.3 $40.5$77.3 $103.2 Q2 2023 Q2 2024 Adjusted Gross Margin1 $ 77.3 $ 103.2 D&A + Property Taxes 18.9 22.9 Transaction + Transition Expense2 — 1.4 Other Operating Expenses 29.1 38.5 Operating Income (Loss) $ 29.3 $ 40.5 Adj. Gross Margin1 up 34% & Operating income up 38%, driven by: Note: Dollars in millions. Table may not foot due to rounding. 1 See appendix for a reconciliation of non-GAAP metrics. 2 Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to, transaction costs, transition services, consulting, system integration, rebranding and legal fees.

 
15 Improvement in Unregulated Energy Segment Relative to Q2 2023 Note: Dollars in millions. 1See appendix for GAAP to non-GAAP reconciliation of adjusted gross margin. $(1.0) $0.2$22.6 $23.4 Q2 2023 Q2 2024 Adjusted Gross Margin1 $ 22.6 $ 23.4 D&A + Property Taxes 4.8 3.8 Other Operating Expenses 18.9 19.3 Operating Income (Loss) $ (1.0) $ 0.2 •$0.6M from higher Marlin virtual pipeline services •$0.3M from increased margins for Aspire Energy in Ohio •$0.3M from propane operations Partially offset by $0.5M of increased insurance and vehicle expenses Adjusted Gross Margin1 up 3%, driven by:

 
16 Strong Balance Sheet Supports Growth Plan $2,632 $2,691 $1,187 $1,175 $198 $226 $1,246 $1,291 12/31/2023 6/30/2024 Total Capitalization Equity Short-Term Debt1 Long-Term Debt 47% 8% 45% 48% 8% 44% Total Liquidity2 70% 30% 1 Short-term debt for both periods includes short-term borrowing as well as the current portion of long-term debt. 2 Total liquidity includes the upsized $450M Revolver and $255M of Private Placement Shelves. Recent Financing Activity • Upsized, amended and extended our Revolving Credit Facility ("Revolver") by $75M to $450M • Entered into an interest rate swap on $50 million for five years at 3.97% Total available liquidity of $491M out of Total Capacity of $705M $ in millions

 
17 Three Decades of Dividend Growth Drive Shareholder Return Annualized Dividend per Share 1 Calculated through 12/31/2023. 10-Year Dividend CAGR of 9% Dividend Increases in 29 of the last 31 Years – Since 1994 64 Consecutive Years of Dividend Payments – Since 1960 21 Consecutive Years of Dividend Increases – Since 2004 12%+ Compounded Annual Shareholder Return over 10 years1 Increase of 8.5% Targeting Long-Term Dividend Payout Ratio of 45 - 50% enables CPK to reinvest to support growth plan

 
18 Driving Increased Shareholder Value; Reaffirming Earnings Guidance Earnings Per Share - Diluted • YTD 2024 Adjusted Earnings Per Share of $2.961 • 2024 Adj. EPS Guidance of $5.33 to $5.45   • 2025 Adj. EPS Guidance of $6.15 to $6.35 • 2028 Adj. EPS Guidance of $7.75 to $8.00 • Annual shareholder return >95th percentile among peer group2 the past 5, 10, 15 & 20 year periods • >300% increase in stock price over the past 15 years drives a $2.1B Increase in Market Cap 1 Adjusted EPS excludes transaction and transition-related expenses incurred attributable to the acquisition of FCG. 2 Peer Group includes select group of 10 CPK peer companies. Details can be found in the Annual Report on Form 10-K. 1 +8.4 – 8.7% 10-Year CAGR Guidance Earnings Growth Driven by Capital Investment... … Leading to Best in Class Shareholder Return

 
19 Pathway to 2024 EPS1 Guidance Our 2024 target is based on continued growth from our legacy businesses, a full year of contribution from FCG, and additional opportunities we have identified. 1 See appendix for GAAP to non-GAAP reconciliation for adjusted diluted earnings per share; 2023 excludes transaction-related costs associated with the FCG acquisition. Adjusted Diluted Earnings Per Share1 $5.33 $5.31 $5.45 2023A Adj. EPS Legacy Business Growth FCG Operations + Growth Additional Opportunities Dilution from FCG Equity Issuance 2024E Adj. EPS $0.40 - $0.50 $0.35 - $0.45 $0.20 - $0.30 ~$(1.00) Additional Opportunities • Cost & Operating Synergies • Acceleration of new capital projects / infrastructure • New margin through value chain • Asset optimization • Technology enhancements • Regulatory strategies • Financing opportunities

 
20 Significant Regulatory Progress on Recent Florida Transmission Projects Newberry Expansion, Wildlight Phase 2 Indian River RNG, Brevard RNG, & Medley RNG Approved Under Review Q 4 20 23 CapEx: ~$28M Boynton Beach & New Smyrna Beach PipelinesQ 1 20 24 CapEx: ~$36M Lake Mattie, Plant City and St. CloudM ay 2 02 4 CapEx: ~$42M Pioneer Supply Header Pipeline Worcester Resiliency Upgrade ProjectQ 3 20 23 CapEx: ~$80MProjects: $152M11 CapEx: ~$46M CapEx: N/A Q 3 20 24 Q 3 20 24

 
21 Worcester Resiliency Upgrade Project Proceeding On Schedule Eastern Shore Natural Gas LNG Storage project designed to meet critical energy service to customers during the peak winter heating season. • $80 million planned liquefied natural gas storage facility in Bishopville, MD • Project consists of five low-profile horizontal storage tanks allowing for up to 500 thousand gallons of storage plus pipeline looping and additional upgrades • Incremental storage capacity will help protect against weather-related disruptions, to support affordable energy prices Note: FERC = Federal Energy Regulatory Commission. • • Easements now complete • Discussions for tank delivery plan are underway • Equipment purchase orders and engineering / designs being organized • Expecting FERC Approval by year-end 2024 for construction start Q1 2025 380M3 Liquified Natural Gas Storage Tanks

 
22 Approved Infrastructure Programs Support Capital Growth • April 2024: Filed petition to more closely align SAFE program with FPU’s GUARD program to accelerate remediation for problematic, obsolete, and exposed pipe • Proposal represents an incremental $50 million, leading to total project capital expenditures of $255 million over 10 years SAFE Program • August 2023: GUARD program approved, to improve safety, reliability and accessibility of portions of the natural gas distribution system, including relocation, replacement, and/or repair of equipment and assets • Represents $205 million of capital expenditures over 10 years GUARD Program • February 2018: Received approval for program that allows recovery of costs for highway or railroad relocation projects related to equipment replacements Capital Cost Surcharge Eastern Shore Florida City Gas 10-Year CapEx $205M 2024E Gross Margin $3.2M 2025E Gross Margin $5.6M 10-Year CapEx1 $255M 2024E Gross Margin $2.7M 2025E Gross Margin $5.3M 1 Includes $50 million requested in April 2024; approval expected from the Florida PSC in September 2024. Gas Electric 5-Year CapEx $50-100M ‘24E Gross Margin $4.0M ‘25E Gross Margin $4.4M Elkton Gas • Aldyl-A pipeline replacement recently completed under PSC-Approved STRIDE filing Florida Public Utilities • Q4 2022: Received approval for FPU Electric’s Storm Protection Plan and associated Storm Protection Plan Cost Recovery Mechanism 5-Year CapEx $50-75M ‘24E Gross Margin $2.4M ‘25E Gross Margin $4.0M Storm Protection

 
23 • Submitted an “Intent to File” with Delaware PSC in May 2024 • Projected to file in August 2024 Constructive Regulatory Environments for Rate Cases • Rates effective May 1, 2023 • $14.1 million rate increase; allowed ROE of 8.5% -10.5% Florida City Gas • Rates effective March 1, 2023 • $17.2 million rate increase; ROE of 10.25% and equity of 55% Florida Public Utilities Complete • Filed January 30, 2024, proposing a $6.9M rate increase & requesting an 11.5% ROE • Reached a finalized settlement in the depreciation study, representing depreciation expense savings of $1.2 million per year, retroactive to January 2023 • Proposed consolidation of our three MD natural gas distribution entities into one legal entity: “Chesapeake Utilities of Maryland, Inc.” • Proposing other tariff changes, including establishing a new technology cost recovery rider, rolling certain investments into base rates, establishing a regulatory asset for an anticipated energy efficiency filing, and establishing an under-served area (USA) rate and a program for evaluating extensions to multi-family projects • Settlement conferences occurring this month, with constructive conversations thus far Maryland LDCs: Chesapeake Utilities, Sandpiper Energy & Elkton Gas Company In Progress Delaware LDCs Soon-to-be Filed • Submitted an “Intent to File” with Florida PSC in June 2024 • Projected to file in August 2024 Florida Electric

 
24 Full Circle Dairy in Production & Commissioning Phase • Project is now producing RNG and in commissioning phase • During June 2024, the first month of production, ~4,700 dekatherms of RNG have been captured and transported for use • This RNG is then transported and injected into the Chesapeake Utilities system in Yulee, Florida by CPK subsidiary Marlin Gas Service, via their virtual pipeline capabilities • Once fully operational, Full Circle Dairy is expected to produce an average of 100,000 dekatherms annually • This represents an emissions reduction equivalent to over 6,000 gasoline-powered vehicles Full Circle Dairy RNG Facility We are poised to execute on opportunities that enable us to use our existing transportation services and construction expertise to provide market pathways for RNG producers.

 
25 Working Toward Excellence on All Fronts Second Micro-Sustainability Report on Environmental Stewardship to be issued in Q3 2024 For the second time, CPK named Best for Corporate Governance in the U.S. by World Finance Escalent Names Florida City Gas "Easiest to Do Business With" Su st ai na bi lit y R ep or ti ng Sharp Energy recognized as 2024 Best Gas Company by Metropolitan Magazine C or po ra te A w ar ds

 
26 Why Chesapeake Utilities? CPK’s unique combination of operational expertise, growth potential and consistent delivery of long-term shareholder return connects our strong historical track record with our future success. Innovative & diligent team focused on operational execution & delivering results Nimble, yet powerful, organization with an experienced management team that gets things done Expertise Growth since 2003: • 10x Asset Growth • 10x Adj. Net Income Growth • 5x Customers Served Expected to spend $1.5 - $1.8 billion in Capital Expenditures from 2024 - 2028 Attractive & diversified geographical exposure, with multiple sources of organic & acquisitive growth Growth Delmarva: Growing demand for natural gas distribution Florida: Strong residential growth and favorable environment 45-50% Long-Term Dividend Payout Ratio supports growth and return on capital Focused on best-in-class shareholder return, balancing earnings growth and dividend growth Return EPS 10-Year CAGR of 8+% Dividend 10-Year CAGR: 9% >95th Percentile for Peer TSR

 
27 Appendix Q2 2024 Earnings Call August 9, 2024

 
28 GAAP to Non-GAAP Reconciliation – Consolidated Results Second Quarter Results Year-to-Date Results Consolidated Reconciliation Q2 2024 Q2 2023 $ % YTD 2024 YTD 2023 $ % GAAP Operating Revenues $ 166.3 $ 135.6 $ 30.7 23% $ 412.0 $ 353.7 $ 58.3 16% Cost of Sales Nat Gas, Propane, & Electric (39.6) (35.8) (3.8) 11% (120.9) (124.4) 3.5 (3)% Operating Expense1 (20.1) (16.8) (3.4) 20% (41.3) (34.5) (6.8) 20% D&A (17.9) (17.3) (0.6) 3% (34.9) (34.5) (0.4) 1% GAAP Gross Margin $ 88.6 $ 65.7 $ 22.9 35% $ 215.0 $ 160.3 $ 54.6 34% Add Back: Operating Expense1 20.1 16.8 3.4 20% 41.3 34.5 6.8 20% Add Back: D&A 17.9 17.3 0.6 3% 34.9 34.5 0.4 1% Adjusted Gross Margin $ 126.6 $ 99.8 $ 26.8 27% $ 291.2 $ 229.3 $ 61.8 27% 1 Operations & maintenance expenses within the Consolidated Statements of Income are presented in accordance with regulatory requirements and to provide comparability within the industry. Operations & maintenance expenses which are deemed to be directly attributable to revenue producing activities have been separately presented above in order to calculate Gross Margin as defined under US GAAP. See Chesapeake Utilities’ Annual Report on Form 10-K for the year ended December 31, 2023 for additional details. $ in millions

 
29 GAAP to Non-GAAP Reconciliation – Regulated Energy Segment 1 Operations & maintenance expenses within the Consolidated Statements of Income are presented in accordance with regulatory requirements and to provide comparability within the industry. Operations & maintenance expenses which are deemed to be directly attributable to revenue producing activities have been separately presented above in order to calculate Gross Margin as defined under US GAAP. See Chesapeake Utilities’ Annual Report on Form 10-K for the year ended December 31, 2023 for additional details. Second Quarter Results Year-to-Date Results Regulated Segment Q2 2024 Q2 2023 $ % YTD 2024 YTD 2023 $ % GAAP Operating Revenues $ 130.6 $ 101.1 $ 29.5 29% $ 299.1 $ 243.4 $ 55.6 23% Cost of Sales Nat Gas, Propane, & Electric (27.4) (23.9) (3.5) 15% (77.3) (79.2) 1.9 (2)% Operating Expense1 (12.3) (9.2) (3.0) 33% (25.0) (18.5) (6.5) 35% D&A (14.7) (13.0) (1.6) 12% (27.2) (26.0) (1.2) 5% GAAP Gross Margin $ 76.3 $ 55.0 $ 21.4 39% $ 169.6 $ 119.7 $ 49.8 42% Add Back: Operating Expense1 12.3 9.2 3.0 33% 25.0 18.5 6.5 35% Add Back: D&A 14.7 13.0 1.6 12% 27.2 26.0 1.2 5% Adjusted Gross Margin $ 103.2 $ 77.3 $ 26.0 34% $ 221.8 $ 164.2 $ 57.5 35% Unregulated Segment Q2 2024 Q2 2023 $ % YTD 2024 YTD 2023 $ % GAAP Operating Revenues $ 41.4 $ 40.8 $ 0.7 2% $ 124.5 $ 123.9 $ 0.6 —% Cost of Sales Nat Gas, Propane, & Electric (18.0) (18.1) 0.1 (1)% (55.1) (58.7) 3.6 (6)% Operating Expense1 (7.9) (7.5) (0.4) 5% (16.3) (16.0) (0.3) 2% D&A (3.2) (4.3) 1.0 (25)% (7.7) (8.5) 0.8 (9)% GAAP Gross Margin $ 12.3 $ 10.8 $ 1.5 13% $ 45.4 $ 40.7 $ 4.7 12% Add Back: Operating Expense1 7.9 7.5 0.4 5% 16.3 16.0 0.3 2% Add Back: D&A 3.2 4.3 (1.0) (25)% 7.7 8.5 (0.8) (9)% Adjusted Gross Margin $ 23.4 $ 22.6 $ 0.8 3% $ 69.5 $ 65.2 $ 4.2 6% $ in millions

 
30 GAAP to Non-GAAP Reconciliation – Adjusted Net Income and EPS 1 Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to, transition services, consulting, system integration, rebranding and legal fees. 2 Weighted average shares for the quarter ended June 30, 2024 primarily reflects the impact of 4.4 million common shares issued in November 2023 in connection with the acquisition of FCG. Second Quarter Results Year-to-Date Results Non-GAAP Reconciliation: NI /EPS Q2 2024 Q2 2023 $ % YTD 2024 YTD 2023 $ % GAAP Net Income $ 18.3 $ 16.1 $ 2.1 13% $ 64.4 $ 52.5 $ 12.0 23% FCG Transaction+Transition Expenses1 $ 1.0 $ — $ 1.0 NM $ 1.7 $ — $ 1.7 NM Adjusted Net Income $ 19.3 $ 16.1 $ 3.1 19% $ 66.1 $ 52.5 $ 13.6 26% Diluted Weighted Avg. Common Shares Outstanding2 22,335 17,852 22,320 17,842 GAAP Diluted EPS $0.82 $0.90 $ — (9)% $2.89 $2.94 $ — (2)% FCG Transaction+Transition Expenses1 $0.04 — $ — NM $0.07 — $ — NM Diluted Adjusted EPS $0.86 $0.90 $ — (4)% $2.96 $2.94 $ — 1% $ in millions except per-share amounts shares in thousands

 
31 Weather Has Generally Been Warmer than Normal (32)% (18)% 7% (24)% (41)% —% Q2 2023 Q2 2024 Q2 2023 Q2 2024 Q2 2023 Q2 2024 Se co nd Q ua rt er Ye ar to D at e OhioDelmarva Florida NORMAL (24)% (13)% (15)% (13)% (33)% —% YTD 2023 YTD 2024 YTD 2023 YTD 2024 YTD 2023 YTD 2024 NORMAL Note: Normal reflects 10-Year Average Heating Degree Days (HDD). Percentages reflect actual HDD above / (below) Normal divided by Normal. MILDER COOLER MILDER

 
32 Long-Term Debt Profile – Positioned to Execute Growth Plan $6 $26 $135 $132 $137 $57 $162 $62 $58 $159 $59 $206 $6 $26 $35 $32 $37 $52 $57 $57 $53 $54 $54 $186 $100 $100 $100 $5 $105 $5 $5 $105 $5 $20 Legacy CPK Debt FCG Acquisition Debt 2024* 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035+ • Execute on a robust growing organic capital plan • Fully integrate Florida City Gas and capitalize on commercial synergies & opportunities • Navigate through the uncertain economic environment Minimal maturities over next 2 years enables CPK the flexibility to: $ in millions

 
33 Quarterly Earnings Cadence Year Q1   Q2 Q3 Q4 FY 2023 $2.04 $0.90 $0.692 $1.64 $5.31 % of FY 38% 17% 13% 31% 2022  $2.08   $0.96   $0.54   $1.47   $5.04  % of FY 41% 19% 11% 29% 2021  $1.96   $0.78   $0.71   $1.28   $4.73  % of FY 41% 16% 15% 27% 2020  $1.77  $0.64  $0.56  $1.24  $4.21 % of FY 42% 15% 13% 29% 2019  $1.75   $0.54  $0.38  $1.04 $3.72 % of FY 47% 15% 10% 28% 5yr % Band 38% - 47% 15% - 19% 10% - 15% 27% - 31% Note: Historic Adjusted EPS presented from continuing operations. 1 Beginning in the third quarter of 2023, the Company’s earnings per share metric was adjusted to exclude transaction-related expenses attributable to the announced acquisition of FCG including, but not limited to, legal, consulting, audit and financing fees. 2 The sum of the four quarters does not equal the full year amount due to rounding and the impact of average share counts Adjusted EPS1

 
34 Aligning our Work with a Higher-Level Purpose Our Vision We will be a leader in delivering energy that contributes to a sustainable future. Our Values Care Integrity Excellence We deliver energy that makes life better for the people and communities we serve. Our Mission We put people first. We tell the truth. We achieve great things together.

 
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Aug. 08, 2024
Cover [Abstract]  
Title of 12(b) Security Common Stock - par value per share $0.4867
Document Type 8-K
Document Period End Date Aug. 08, 2024
Entity Registrant Name CHESAPEAKE UTILITIES CORPORATION
Entity Incorporation, State or Country Code DE
Entity File Number 001-11590
Entity Tax Identification Number 51-0064146
Entity Address, Address Line One 500 Energy Lane
Entity Address, City or Town Dover
Entity Address, State or Province DE
Entity Address, Postal Zip Code 19901
City Area Code 302
Local Phone Number 734-6799
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Central Index Key 0000019745
Amendment Flag false
Entity Emerging Growth Company false
Trading Symbol CPK
Security Exchange Name NYSE
Document Information [Line Items]  
Entity Central Index Key 0000019745
Amendment Flag false
Document Period End Date Aug. 08, 2024
Entity Emerging Growth Company false
Security Exchange Name NYSE
Entity Registrant Name CHESAPEAKE UTILITIES CORPORATION
Chesapeake Utilities (NYSE:CPK)
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Chesapeake Utilities (NYSE:CPK)
過去 株価チャート
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