CHESAPEAKE UTILITIES CORPORATION REPORTS FIRST QUARTER 2025 RESULTS | CPK Stock News

Net income and earnings per share ("EPS")* were $50.9 million and $2.21, respectively, for the first quarter of 2025 compared to $46.2 million and $2.07, respectively, for the first quarter of 2024Adjusted net income and Adjusted EPS**, which exclude transaction and transition-related expenses attributable to the acquisition and integration of Florida City Gas ("FCG"), were $51.1 million and $2.22, respectively, for the first quarter of 2025 compared to $46.8 million and $2.10, respectively for the first quarter of 2024Adjusted gross margin** growth of $17.9 million during the first quarter of 2025 driven by customer consumption, regulatory initiatives and infrastructure programs, increased demand for virtual pipeline services, natural gas organic growth and transmission expansion projectsSignificant regulatory activity to date that will help drive the Company's results for the remainder of the yearThe Company continues to affirm 2025 and 2028 EPS and capital expenditure guidance, /PRNewswire/ -- Chesapeake Utilities Corporation (NYSE: CPK) ("Chesapeake Utilities" or the "Company") today announced financial results for the three months ended March31, 2025. Net income for the first quarter of 2025 was $50.9 million ($2.21 per share) compared to $46.2 million ($2.07 per share) in the first quarter of 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, adjusted net income was $51.1 million, or $2.22 per share compared to $2.10 per share reported in the same prior-year period.Adjusted earnings for the first quarter of 2025 were largely driven by increased customer consumption resulting from year-over-year colder temperatures experienced primarily in our Mid-Atlantic and Ohio service territories, contributions from regulatory initiatives and infrastructure programs, increased demand for virtual pipeline services, organic growth in the natural gas distribution businesses and pipeline expansion projects to support growth."Our results for the quarter are in line with our expectations and demonstrate approximately 11 percent growth in adjusted gross margin and approximately 6 percent growth in adjusted EPS relative to the first quarter of 2024. For the full year, we expect that the timing of our capital projects and regulatory initiatives, including the Florida City Gas depreciation study, will drive incremental earnings to be more heavily weighted toward the fourth quarter of 2025," said Jeff Householder, the Company's Chair of the Board, President and Chief Executive Officer. "We have already made significant progress driving value through our three growth pillars: prudently deploying capital, proactively managing our regulatory agenda and continuously driving business transformation. In the first quarter, we invested nearly $113 million in new transmission and reliability infrastructure projects, significantly advanced our three rate cases and finalized preparations for the implementation of 1CX at Florida City Gas, another phase within our consolidated technology roadmap. Our performance thus far positions us to meet our targets and reach new heights in 2025."Earnings and Capital Investment GuidanceThe Company continues to re-affirm its 2025 EPS guidance range of $6.15 to $6.35 per share, as well as the 2028 EPS guidance range of $7.75 to $8.00 per share. The 2028 guidance implies an annual EPS growth rate of approximately 8 percent from the 2025 EPS guidance, or since 2018, an 8.5 percent growth rate.These earnings projections are based upon the Company's previously announced capital expenditure guidance for the five-year period ended 2028 of $1.5 billion to $1.8 billion. The Company continues to re-affirm this five-year capital guidance and projects capital expenditures of $325 million to $375 million for 2025.*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.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 MarginFor the Three Months Ended March 31, 2025(in millions)Regulated EnergyUnregulated EnergyOther Businesses and EliminationsTotalOperating Revenues$ 199.6$ 106.7$ (7.6)$ 298.7Cost of Sales:Natural gas, propane and electric costs(71.5)(52.2)7.4(116.3)Depreciation & amortization(17.6)(4.9)—(22.5)Operations & maintenance expenses (1)(13.3)(9.7)0.3(22.7)Gross Margin (GAAP)97.239.90.1137.2Operations & maintenance expenses (1)13.39.7(0.3)22.7Depreciation & amortization17.64.9—22.5Adjusted Gross Margin (Non-GAAP)$ 128.1$ 54.5$ (0.2)$ 182.4For the Three Months Ended March 31, 2024(in millions)Regulated EnergyUnregulated EnergyOther Businesses and EliminationsTotalOperating Revenues$ 168.4$ 83.1$ (5.8)$ 245.7Cost of Sales:Natural gas, propane and electric costs(49.9)(37.1)5.8(81.2)Depreciation & amortization(12.5)(4.5)—(17.0)Operations & maintenance expenses (1)(12.7)(8.4)—(21.1)Gross Margin (GAAP)93.333.1—126.4Operations & maintenance expenses (1)12.78.4—21.1Depreciation & amortization12.54.5—17.0Adjusted Gross Margin (Non-GAAP)$ 118.5$ 46.0$ —$ 164.5(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 GAAP.Adjusted Net Income and Adjusted EPSThree Months EndedMarch 31,(dollars in millions, shares in thousands (except per share data))20252024Net Income (GAAP)$ 50.9$ 46.2FCG transaction and transition-related expenses, net (1)0.20.6Adjusted Net Income (Non-GAAP)$ 51.1$ 46.8Weighted average common shares outstanding - diluted23,04122,306Earnings Per Share - Diluted (GAAP)$ 2.21$ 2.07FCG transaction and transition-related expenses, net (1)0.010.03Adjusted Earnings Per Share - Diluted (Non-GAAP)$ 2.22$ 2.10(1) Transaction and transition-related expenses represent non-recurring costs incurred attributable to the acquisition and integration of FCG including, but not limited to, transition services, consulting, system integration, rebranding, and legal fees.Operating Results for the Quarters Ended March 31, 2025 and 2024Consolidated ResultsThree Months EndedMarch 31,(in millions)20252024ChangePercent ChangeAdjusted gross margin**$ 182.4$ 164.5$ 17.910.9%Depreciation, amortization and property taxes31.326.15.219.9%Other operating expenses64.057.96.110.5%FCG transaction and transition-related expenses0.30.9(0.6)(66.7)%Operating income $ 86.8$ 79.6$ 7.29.0%Operating income for the first quarter of 2025 was $86.8 million, an increase of $7.2 million or 9.0 percent compared to the same period in 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $6.6 million or 8.2 percentcompared to the prior-year period. The increase in adjusted gross margin in the first quarter of 2025 was driven by increased customer consumption resulting from year-over-year colder temperatures in our Mid-Atlantic and Ohio service territories, incremental margin from regulatory initiatives and infrastructure programs, increased demand for virtual pipeline services, natural gas organic growth and pipeline expansion projects. Higher operating expenses were driven largely by the absence of a reserve surplus amortization mechanism ("RSAM") adjustment from FCG, higher depreciation attributable to growth projects, and increased payroll, benefits and other employee-related expenses. Additional expenses associated with facilities, maintenance and outside services, and higher insurance costs also contributed to the increase compared to the prior-year period.Regulated Energy SegmentThree Months EndedMarch 31,(in millions)20252024ChangePercent ChangeAdjusted gross margin** $ 128.1$ 118.5$ 9.68.1%Depreciation, amortization and property taxes25.921.04.923.3%Other operating expenses41.438.52.97.5%FCG transaction and transition-related expenses0.30.9(0.6)(66.7)%Operating income$ 60.5$ 58.1$ 2.44.1%The key components of the increase in adjusted gross margin** are shown below:(in millions)Margin from regulated infrastructure programs$ 3.4Natural gas growth including conversions (excluding service expansions)2.2Natural gas transmission service expansions, including interim services2.2Interim rates from recent rate case activities1.5Changes in customer consumption0.7Other variances(0.4)Quarter-over-quarter increase in adjusted gross margin**$ 9.6The major components of the increase in other operating expenses are as follows:(in millions)Payroll, benefits and other employee-related expenses$ 2.5Insurance related costs 0.6Credit, collections, and customer service related expenses0.5Facilities expenses, maintenance costs and outside services(0.7)Quarter-over-quarter increase in other operating expenses$ 2.9Unregulated Energy SegmentThree Months Ended March 31,(in millions)20252024ChangePercent ChangeAdjusted gross margin**$ 54.5$ 46.0$ 8.518.5%Depreciation, amortization and property taxes5.55.20.35.8%Other operating expenses22.719.43.317.0%Operating income$ 26.3$ 21.4$ 4.922.9%The major components of the increase in adjusted gross margin** are shown below:(in millions)Propane OperationsIncreased propane customer consumption $ 4.2Increased propane margins and service fees0.4CNG/RNG/LNG Transportation and Infrastructure Increased level of virtual pipeline services3.6Aspire EnergyIncreased customer consumption 0.6Other variances(0.3)Quarter-over-quarter increase in adjusted gross margin**$ 8.5The major components of the increase in other operating expenses are as follows:(in millions)Payroll, benefits and other employee-related expenses$ 2.0Facilities expenses, maintenance costs and outside services1.2Other variances0.1Quarter-over-quarter increase in other operating expenses$ 3.3Forward-Looking StatementsMatters 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 2024 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the first quarter of 2025 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 Thursday, May8, 2025, at 8:00 a.m. Eastern Time to discuss the Company's financial results for the three months ended March31, 2025. 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: 800.579.2543International: 785.424.1789Conference ID: CPKQ125A replay of the presentation will be made available on the previously noted website following the conclusion of the call.About Chesapeake Utilities CorporationChesapeake 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 transmission and distribution, electricity generation and distribution, propane gas distribution, mobile compressed natural gas utility services and solutions, and other businesses.For more information, contact:Beth W. CooperExecutive Vice President, Chief Financial Officer, Treasurer and Assistant Corporate Secretary302.734.6022Michael D. GaltmanSenior Vice President and Chief Accounting Officer302.217.7036Lucia M. DempseyHead of Investor Relations347.804.9067Financial Summary HighlightsKey variances between the first quarter of 2024 and 2025 included:(in millions, except per share data)Pre-taxIncomeNetIncomeEarningsPerShareFirst Quarter of 2024 Adjusted Results (1)$ 63.7$ 46.8$ 2.10Increased Adjusted Gross Margins: Changes in customer consumption5.54.10.18Increased demand for virtual pipeline services3.62.60.11Contributions from regulated infrastructure programs (2) 3.42.50.11Natural gas growth (excluding service expansions)2.21.60.07Natural gas transmission service expansions, including interim services (2) 2.21.60.07Interim rates from recent rate case activities (2)1.51.10.05Increased propane margins and fees0.40.30.0118.813.80.60Increased Operating Expenses (Excluding Natural Gas, Propane, and Electric Costs): Depreciation, amortization and property tax costs(5.2)(3.8)(0.17)Payroll, benefits and other employee-related expenses(4.5)(3.3)(0.14)Credit, collections and customer service expenses(0.7)(0.5)(0.02)Facilities expenses, maintenance costs and outside services(0.5)(0.4)(0.02)Insurance related costs (0.4)(0.3)(0.01)(11.3)(8.3)(0.36)Interest charges(1.1)(0.8)(0.04)Increase in shares outstanding due to 2024 and 2025 equity offerings (3)——(0.07)Net other changes(0.5)(0.4)(0.01)(1.6)(1.2)(0.12)First Quarter of 2025 Adjusted Results (1)$ 69.6$ 51.1$ 2.22(1)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.(2)Refer to Major Projects and Initiatives Table for additional information.(3) Reflects the impact of common shares issued under the DRIP and ATM program.Recently Completed and Ongoing Major Projects and InitiativesThe Company continuously pursues and develops additional projects and regulatory 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 incremental margin associated with new projects and regulatory 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 first quarter 2025 Quarterly Report on Form 10-Q.Adjusted Gross MarginThree Months EndedYear EndedEstimate forMarch 31,December 31,Fiscal(in millions)20252024202420252026Pipeline Expansions:St. Cloud / Twin Lakes Expansion$ 0.1$ 0.1$ 0.6$ 2.8$ 3.8Wildlight0.50.21.53.04.3Newberry0.6—1.42.62.6Worcester Resiliency Upgrade————9.1Boynton Beach 0.5——3.03.4New Smyrna Beach ———1.72.6Central Florida Reinforcement0.3—0.12.04.3Warwick0.5—0.41.91.9Renewable Natural Gas Supply Projects———4.56.7Miami Inner Loop———0.63.6Total Pipeline Expansions2.50.34.022.142.3CNG/RNG/LNG Transportation and Infrastructure7.03.416.420.020.7Regulatory Initiatives:Florida GUARD program1.50.63.66.99.9FCG SAFE Program1.70.43.88.512.0Capital Cost Surcharge Programs1.50.83.25.77.1Electric Storm Protection Plan1.10.63.25.98.8Maryland Rate Case———2.03.5Delaware Rate Case (1)0.8—0.64.76.1Electric Rate Case (1)0.7—0.37.18.6Total Regulatory Initiatives7.32.414.740.856.0Total$ 16.8$ 6.1$ 35.1$ 82.9$ 119.0(1)Includes adjusted gross margin attributable to interim rates during 2024 and 2025. See additional information provided below.Detailed Discussion of Major Projects and InitiativesPipeline ExpansionsWorcester Resiliency UpgradeIn August 2023, Eastern Shore filed an application with the Federal Energy Regulatory Commission ("FERC") requesting authorization to construct the Worcester Resiliency Upgrade, which consists of a mixture of storage and transmission facilities in Sussex County, DE and Wicomico, Worcester, and Somerset Counties in Maryland. The project will provide long-term incremental supply necessary to support the growing demand of the participating shippers. In January 2025, the FERC approved the project, and construction is expected to be complete in the second quarter of 2026.East Coast Reinforcement Projects (Boynton Beach and New Smyrna Beach)In December 2023, Peninsula Pipeline filed a petition with the Florida Public Service Commission ("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 second and fourth quarters of 2025 for New Smyrna Beach and Boynton Beach, respectively.Central Florida Reinforcement Projects (Plant City and Lake Mattie)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. The Plant City project was completed in the fourth quarter of 2024, and the Lake Mattie project is projected to be completed during the fourth quarter of 2025.Renewable Natural Gas Supply ProjectsIn 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 its July 2024 meeting with the projects estimated to be completed throughout 2025.Miami Inner Loop Pipeline ProjectsIn September 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of the Transportation Service Agreement with FCG for a series of projects that will enhance the infrastructure in Miami-Dade county. The proposed expansion consists of the development of several pipeline projects to support growth and support FCG's distribution system in the area and also enhance FCG's ability to obtain gas from various access points in the Miami-Dade county area. The expansion was approved in February 2025 and construction is expected to be complete in the second half of 2025.Regulatory InitiativesMaryland Natural Gas Rate CaseIn January 2024, the Company's natural gas distribution businesses in Maryland, CUC-Maryland Division, Sandpiper Energy, Inc., and Elkton Gas Company (collectively, the "Maryland natural gas distribution businesses"), filed a joint application for a natural gas rate case with the Maryland PSC. In connection with the application, the Company sought approval of the following: (i) permanent rate relief of approximately $6.9million with a return on equity of 11.5 percent; (ii) authorization to make certain changes to tariffs to include a unified rate structure and to consolidate the Maryland natural gas distribution businesses; and (iii) authorization to establish a rider for recovery of the costs associated with the Company's new technology systems. In August 2024, the Maryland natural gas distribution businesses, the Maryland Office of People's Counsel (the "Maryland OPC") and PSC staff reached a settlement which provided for, among other things, an increase in annual base rates of $2.6 million. In September 2024, the Maryland Public Utility Judge issued an order approving the related settlement agreement in part. The $2.6 million increase in annual base rates was approved and the Company filed a Phase II filing in November 2024 to determine rate design across the Maryland natural gas distribution businesses, consolidation of the applicable tariffs and recovery of technology costs. The hearing was held in March 2025, during which Phase II was approved, including an additional $0.9 million in revenue requirement, for a total cumulative increase of $3.5 million. A final order was issued in April 2025 and included approval of the consolidation of the operations of CUC-Maryland Division, Sandpiper Energy, and Elkton Gas into one entity which was renamed and will operate as Chesapeake Utilities of Maryland, Inc.Maryland Natural Gas Depreciation StudyIn 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 among the Company, PSC staff and the Maryland OPC was reached and the final order approving the related settlement agreement went into effect in July 2024, with new depreciation rates effective as of January 1, 2023. The approved depreciation rates resulted in an annual reduction in depreciation expense of approximately $1.2 million.Delaware Natural Gas Rate CaseIn August 2024, the Company's Delaware natural gas division filed an application for a natural gas rate case with the Delaware PSC seeking approval of the following: (i) permanent rate relief of approximately $12.1 million with a return on equity of 11.5 percent; (ii) proposed changes to depreciation rates which were part of a depreciation study also submitted with the filing; and (iii) authorization to make certain changes to tariffs. Annualized interim rates were approved by the Delaware PSC in the amount of $2.5 million and became effective October 2024. A settlement among the Company, PSC staff and the Delaware Division of the Public Advocate was reached providing an annual revenue increase of $6.1 million, dividing the rate case into two phases and suspending the procedural schedule. The related, fully executed settlement agreement has been filed in the docket and awaits Delaware PSC approval, with a hearing scheduled in May 2025. Interim rates, set to recover the $6.1 million increase, went into effect in March 2025. A procedural schedule is pending in Phase II which will address tariff-related changes including rate design.FPU Electric Rate CaseIn August 2024, the Company's Florida Electric division filed a petition with the Florida PSC seeking a general base rate increase of $12.6 million with a ROE of 11.3 percent based on a 2025 projected test year. Annualized interim rates of approximately $1.8 million were approved with an effective date of November 1, 2024. In March 2025, the Florida PSC approved the permanent rate increase, but the order was subsequently protested. In May 2025, the Company reached a settlement agreement with the interested parties to resolve all outstanding issues in its current base rate case, which was filed as a joint motion for approval with the Florida PSC. This settlement allows for a total revenue increase of approximately $8.6 million on an annual basis. The Company anticipates this agreement to be on the Florida PSC hearing agenda for review and approval in June 2025.Other Major Factors Influencing Adjusted Gross MarginWeather and ConsumptionFor the three months ended March31, 2025, higher consumption which includes the effects of colder weather conditions, largely in our Ohio and Delmarva service areas, compared to the prior-year period resulted in a $5.5 million increase in adjusted gross margin.The following table summarizes HDD and CDD variances from the 10-year average HDD/CDD ("Normal") for the three months ended March 31, 2025 and 2024.Three Months EndedMarch 31,20252024VarianceDelmarva PeninsulaActual HDD2,2101,96224810-Year Average HDD ("Normal")2,1462,221(75)Variance from Normal64(259)Florida Natural GasActual HDD58047011010-Year Average HDD ("Normal")48347013Variance from Normal97—Florida City GasActual HDD3002148610-Year Average HDD ("Normal")221227(6)Variance from Normal79(13)OhioActual HDD3,0872,65942810-Year Average HDD ("Normal")2,8012,965(164)Variance from Normal286(306)Florida ElectricActual CDD189181810-Year Average CDD ("Normal")217217—Variance from Normal(28)(36)Natural Gas Distribution GrowthThe average number of residential customers served on the Delmarva Peninsula and within the Company's Florida natural gas distribution service territories, increased by approximately 4.0 percent and 3.0 percent, respectively, for the three months ended March 31, 2025.The details of the adjusted gross margin increase are provided in the following table:Three Months EndedMarch 31, 2025(in millions)Delmarva PeninsulaFloridaCustomer Growth:Residential$ 0.6$ 1.1Commercial and industrial0.10.4Total Customer Growth$ 0.7$ 1.5Capital Investment Growth and Capital Structure UpdatesThe Company's capital expenditures were $112.9 million for the three months ended March 31, 2025. The following table shows a range of the forecasted 2025 capital expenditures by segment and by business line:2025(in millions)LowHighRegulated Energy:Natural gas distribution$ 135.0$ 155.0Natural gas transmission135.0145.0Electric distribution35.045.0Total Regulated Energy305.0345.0Unregulated Energy:Propane distribution12.015.0Energy transmission5.010.0Other unregulated energy2.03.0Total Unregulated Energy19.028.0Other:Corporate and other businesses1.02.0Total 2025 Forecasted Capital Expenditures$ 325.0$ 375.0The 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.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 49 percent as of March 31, 2025.Chesapeake Utilities Corporation and SubsidiariesCondensed Consolidated Statements of Income (Unaudited)Three Months EndedMarch 31,20252024(in millions, except shares and per share data)Operating Revenues Regulated Energy$ 199.6$ 168.4Unregulated Energy106.783.1Other Businesses and Eliminations (7.6)(5.8)Total Operating Revenues298.7245.7Operating Expenses Regulated natural gas and electricity costs71.549.9 Unregulated propane and natural gas costs44.831.3 Operations58.051.6 Maintenance5.45.9 Depreciation and amortization22.517.0 Other taxes9.49.5 FCG transaction and transition-related expenses0.30.9Total operating expenses211.9166.1Operating Income86.879.6Other income, net0.60.2Interest charges18.117.0Income Before Income Taxes69.362.8Income taxes18.416.6Net Income$ 50.9$ 46.2Weighted Average Common Shares Outstanding:Basic22,95722,250Diluted23,04122,306Earnings Per Share of Common Stock:Basic$ 2.22$ 2.07Diluted$ 2.21$ 2.07Adjusted Net Income and Adjusted Earnings Per ShareNet Income (GAAP)$ 50.9$ 46.2FCG transaction and transition-related expenses, net (1)0.20.6Adjusted Net Income (Non-GAAP)**$ 51.1$ 46.8Earnings Per Share - Diluted (GAAP)$ 2.21$ 2.07FCG transaction and transition-related expenses, net (1)0.010.03Adjusted Earnings Per Share - Diluted (Non-GAAP)**$ 2.22$ 2.10(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.Chesapeake Utilities Corporation and SubsidiariesConsolidated Balance Sheets (Unaudited)AssetsMarch 31,2025December 31,2024(in millions, except shares and per share data)Property, Plant and EquipmentRegulated Energy$ 2,737.1$ 2,661.8Unregulated Energy472.1463.7Other Businesses and Eliminations38.229.9Total property, plant and equipment3,247.43,155.4Less: Accumulated depreciation and amortization(585.8)(567.6)Plus: Construction work in progress166.6148.1Net property, plant and equipment2,828.22,735.9Current AssetsCash and cash equivalents0.77.9Trade and other receivables 101.280.0Less: Allowance for credit losses(4.2)(3.3)Trade and other receivables, net97.076.7Accrued revenue31.437.8Propane inventory, at average cost9.18.9Other inventory, at average cost19.018.0Regulatory assets17.323.9Storage gas prepayments0.93.8Income taxes receivable4.96.8Prepaid expenses15.517.3Derivative assets, at fair value0.60.6Other current assets3.22.6Total current assets199.6204.3Deferred Charges and Other AssetsGoodwill507.7507.7Other intangible assets, net14.615.0Investments, at fair value14.414.4Derivative assets, at fair value0.10.1Operating lease right-of-use assets 9.710.5Regulatory assets77.377.4Receivables and other deferred charges13.011.7Total deferred charges and other assets636.8636.8Total Assets$ 3,664.6$ 3,577.0Chesapeake Utilities Corporation and SubsidiariesConsolidated Balance Sheets (Unaudited)Capitalization and LiabilitiesMarch 31,2025December 31,2024(in millions, except shares and per share data)CapitalizationStockholders' equityPreferred stock, par value $0.01 per share (authorized 2,000,000 shares), no shares issued and outstanding$ —$ —Common stock, par value $0.4867 per share (authorized 50,000,000 shares)11.211.1Additional paid-in capital852.0830.5Retained earnings586.4550.3Accumulated other comprehensive loss(2.3)(1.7)Deferred compensation obligation12.29.8Treasury stock(12.2)(9.8)Total stockholders' equity1,447.31,390.2Long-term debt, net of current maturities1,260.01,261.7Total capitalization2,707.32,651.9Current LiabilitiesCurrent portion of long-term debt25.525.5Short-term borrowing215.4196.5Accounts payable76.678.3Customer deposits and refunds42.045.7Accrued interest16.24.8Dividends payable14.714.7Accrued compensation9.523.9Regulatory liabilities16.416.1Derivative liabilities, at fair value0.1—Other accrued liabilities17.313.9Total current liabilities433.7419.4Deferred Credits and Other LiabilitiesDeferred income taxes312.3296.1Regulatory liabilities185.3184.0Environmental liabilities2.32.2Other pension and benefit costs13.013.2Derivative liabilities, at fair value0.90.1Operating lease - liabilities 8.48.7Deferred investment tax credits and other liabilities1.41.4Total deferred credits and other liabilities523.6505.7Environmental and other commitments and contingencies (1)Total Capitalization and Liabilities$ 3,664.6$ 3,577.0(1) Refer to Note 6 and 7 in the Company's Quarterly Report on Form 10-Q for further information.Chesapeake Utilities Corporation and SubsidiariesDistribution Utility Statistical Data (Unaudited)For the Three Months Ended March 31, 2025For the Three Months Ended March 31, 2024Delmarva NG DistributionFlorida Natural Gas DistributionFPU Electric DistributionDelmarva NGDistributionFlorida Natural Gas DistributionFPU Electric DistributionOperating Revenues (in millions) Residential$ 46.8$ 33.4$ 12.2$ 35.8$ 30.4$ 11.4 Commercial and Industrial22.251.19.517.650.510.8 Other (1)(1.4)10.41.5(1.7)2.9(2.2)Total Operating Revenues$ 67.6$ 94.9$ 23.2$ 51.7$ 83.8$ 20.0Volumes (in Dts for natural gas and MWHs for electric) Residential3,099,7841,493,45281,0032,438,1541,440,37872,021 Commercial and Industrial3,956,30812,646,60384,2843,427,17313,100,17987,827 Other90,0881,712,708—89,0982,329,749—Total 7,146,18015,852,763165,2875,954,42516,870,306159,848Average Customers Residential104,602209,64025,966100,534203,49825,704 Commercial and Industrial8,52117,2837,4578,39716,9937,371 Other27127—25100—Total 113,150227,05033,423108,956220,59133,075(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.SOURCE Chesapeake Utilities Corporation