CHESAPEAKE UTILITIES CORPORATION REPORTS FISCAL YEAR 2023 RESULTS

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In this article:

  • Full Year 2023 earnings per share ("EPS")* was $4.73, including transaction-related expenses attributable to the acquisition of Florida City Gas ("FCG") of $0.58 per share, compared to $5.04 per share in 2022

  • Adjusted EPS**, which excludes the transaction-related expenses, was $5.31 for the year ended 2023, or an increase of 5.4 percent over 2022

  • EPS for the fourth quarter of 2023 was $1.26, including transaction-related expenses of $0.38 per share, versus $1.47 per share for the fourth quarter of 2022

  • Adjusted EPS** for the fourth quarter of 2023 increased by 12 percent to $1.64 compared to the fourth quarter of 2022

  • Adjusted gross margin** increased by $33.9 million during the year driven by regulatory initiatives, natural gas organic growth and continued pipeline expansion projects, increased propane margins and fees and incremental margin from FCG

  • Significantly warmer than normal temperatures impacted customer consumption throughout 2023, lowering both EPS and Adjusted EPS by approximately $0.54 per share for the full year and $0.14 for the fourth quarter

DOVER, Del., Feb. 21, 2024 /PRNewswire/ -- Chesapeake Utilities Corporation (NYSE: CPK) ("Chesapeake Utilities" or the "Company") today announced financial results for the year and the fourth quarter ended December 31, 2023. The Company's acquisition of FCG was completed on November 30, 2023, and the financial results of FCG have been included from the acquisition date.

For 2023, adjusted net income**, which excludes transaction-related expenses related to the acquisition of FCG, was $97.8 million compared to $89.8 million in 2022, representing approximately 9 percent growth. Adjusted EPS** for the year ended December 31, 2023 was $5.31 compared to $5.04 per share reported in the prior-year, representing growth of more than 5 percent.

Full year earnings were driven by contributions from the Company's regulatory initiatives, organic growth in the Company's natural gas distribution businesses and continued pipeline expansion projects, increased propane margins and fees, and contributions from FCG. These improvements were partially offset by significantly warmer weather in some of our service territories throughout the year, increased interest expense attributable to higher rates on our short-term borrowings, and the impact of new senior notes and common shares issued in connection with the FCG acquisition.

In the fourth quarter of 2023, the Company's adjusted net income was $33.1 million, compared to $26.2 million reported in the fourth quarter of 2022. Adjusted EPS in the fourth quarter of 2023 was $1.64 per share, compared to $1.47 per share reported in the same prior-year period, representing growth of approximately 12 percent.

Earnings for the fourth quarter of 2023 were primarily driven by the factors discussed for the full year, with enhanced margin contributions during the quarter partially offset by reduced customer consumption compared to the prior-year period and lower adjusted gross margin from virtual pipeline services.

"In 2023, Chesapeake Utilities delivered its 17th year of consecutive record earnings, excluding transaction costs related to our Florida City Gas acquisition, despite rising interest rates and significantly warmer temperatures," commented Jeff Householder, chairman, president and CEO. "Our team executed on all fronts, with our legacy businesses continuing to make growth investments, advance regulatory initiatives and prudently manage expenses. Our regulated natural gas distribution businesses gained customers at more than twice the national average, we executed on several opportunities to expand our natural gas transmission systems, and our non-regulated businesses also contributed meaningfully. In November, we successfully completed the FCG acquisition and immediately began to integrate the business, which will drive significant incremental earnings growth, as we deploy our operational and regulatory expertise on a broader scale. Our collective efforts resulted in year-to-date Adjusted EPS of $5.31 versus 2022 EPS of $5.04, largely driven by incremental adjusted gross margin of $33.9 million."

"Our performance in 2023, coupled with the expected contribution of FCG and validation of our financial models for 2024, reinforces our commitment to achieving our 2025 guidance of $6.15-$6.35 per share.  We are also introducing guidance of $5.33-$5.45 per share for 2024, which will be a transitional year as we begin to realize the impact of our FCG integration efforts. Across the organization, we remain committed to delivering on the attractive opportunities across our growth platforms, including executing on the incremental opportunities driven by FCG, achieving another record year of performance and driving increased shareholder value," concluded Householder.

Acquisition of Florida City Gas

On November 30, 2023, the Company completed the acquisition of FCG for $923.4 million in cash, including working capital adjustments, pursuant to the previously disclosed stock purchase agreement with Florida Power & Light Company. Upon completion of the acquisition, FCG became a wholly-owned subsidiary of the Company and is included within the Company's Regulated Energy segment.  FCG serves approximately 120,000 residential and commercial natural gas customers across eight counties in Florida, including Miami-Dade, Broward, Brevard, Palm Beach, Hendry, Martin, St. Lucie and Indian River. Its natural gas system includes approximately 3,800 miles of distribution main and 80 miles of transmission pipe.  Results for FCG are included within the Company's consolidated results from the acquisition date.

In June 2023, FCG received approval from the Florida Public Service Commission ("PSC") for a $23.3 million total increase in base revenue in connection with its May 2022 rate case filing. The new rates, which became effective as of May 1, 2023, included the transfer of its Safety, Access, and Facility Enhancement ("SAFE") program provisions from a rider clause to base rates, an increase in rates associated with a liquefied natural gas facility, and approval of FCG's proposed reserve surplus amortization mechanism ("RSAM") with a $25.0 million reserve amount. The RSAM is recorded as either an increase or decrease to accrued removal costs on the balance sheet, with a corresponding increase or decrease to depreciation and amortization expense.

Capital Investment and Earnings Guidance

Because of the significance of the FCG acquisition, the Company is providing annual guidance for 2024, the first full year as a combined company. The Company expects to generate EPS of $5.33 to $5.45 per share in 2024 given the investment opportunities within and surrounding FCG, incremental margin opportunities present across the Company's value chain, regulatory initiatives, operating synergies and other factors. The Company is also affirming its previously announced 2024 capital expenditure guidance of $300 million to $360 million.

From a longer-term EPS perspective, the Company is also reaffirming its 2025 EPS guidance range of $6.15 to $6.35, as well as the 2028 EPS guidance range of $7.75 to $8.00 per share. This would imply an EPS growth rate of approximately 8 percent from the current 2025 EPS guidance range, or since 2018, an 8.5 percent growth rate.

The Company continues to support its previously introduced capital expenditure guidance for the five-year period ended 2028 that will range from $1.5 billion to $1.8 billion.

*Unless otherwise noted, EPS and Adjusted EPS information is 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's and the overall 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 Margin




For the Year Ended December 31, 2023

(in thousands)


Regulated
Energy


Unregulated
Energy


Other and
Eliminations


Total

Operating Revenues


$               473,595


$               223,148


$                (26,139)


$               670,604

Cost of Sales:









Natural gas, propane and electric costs


(140,008)


(102,492)


26,019


(216,481)

Depreciation & amortization


(48,162)


(17,347)


8


(65,501)

Operations & maintenance expenses (1)


(27,485)


(31,507)


343


(58,649)

Gross Margin (GAAP)


257,940


71,802


231


329,973

Operations & maintenance expenses (1)


27,485


31,507


(343)


58,649

Depreciation & amortization


48,162


17,347


(8)


65,501

Adjusted Gross Margin (Non-GAAP)


$               333,587


$               120,656


$                     (120)


$               454,123

 



For the Year Ended December 31, 2022

(in thousands)


Regulated
Energy


Unregulated
Energy


Other and
Eliminations


Total

Operating Revenues


$               429,424


$               280,750


$                (29,470)


$               680,704

Cost of Sales:









Natural gas, propane and electric costs


(127,172)


(162,683)


29,349


(260,506)

Depreciation & amortization


(52,707)


(16,257)


(9)


(68,973)

Operations & maintenance expenses (1)


(35,472)


(29,825)


9


(65,288)

Gross Margin (GAAP)


214,073


71,985


(121)


285,937

Operations & maintenance expenses (1)


35,472


29,825


(9)


65,288

Depreciation & amortization


52,707


16,257


9


68,973

Adjusted Gross Margin (Non-GAAP)


$               302,252


$               118,067


$                     (121)


$               420,198

 



For the Three Months Ended December 31, 2023

(in thousands)


Regulated
Energy


Unregulated
Energy


Other and
Eliminations


Total

Operating Revenues


$               127,774


$                 64,262


$                  (6,701)


$               185,335

Cost of Sales:









Natural gas, propane and electric costs


(34,316)


(27,424)


6,736


(55,004)

Depreciation & amortization


(8,982)


(4,424)


2


(13,404)

Operations & maintenance expense (1)


(3,868)


(7,573)


46


(11,395)

Gross Margin (GAAP)


80,608


24,841


83


105,532

Operations & maintenance expenses (1)


3,868


7,573


(46)


11,395

Depreciation & amortization


8,982


4,424


(2)


13,404

Adjusted Gross Margin (Non-GAAP)


$                 93,458


$                 36,838


$                         35


$               130,331

 



For the Three Months Ended December 31, 2022

(in thousands)


Regulated
Energy


Unregulated
Energy


Other and
Eliminations


Total

Operating Revenues


$               118,360


$                 78,081


$                  (9,141)


$               187,300

Cost of Sales:









Natural gas, propane and electric costs


(38,908)


(42,207)


9,112


(72,003)

Depreciation & amortization


(13,211)


(4,232)


2


(17,441)

Operations & maintenance expenses (1)


(9,779)


(8,114)


304


(17,589)

Gross Margin (GAAP)


56,462


23,528


277


80,267

Operations & maintenance expense (1)


9,779


8,114


(304)


17,589

Depreciation & amortization


13,211


4,232


(2)


17,441

Adjusted Gross Margin (Non-GAAP)


$                 79,452


$                 35,874


$                       (29)


$               115,297


(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.

 

Adjusted Net Income and Adjusted EPS




Year Ended


Three Months Ended



December 31,


December 31,

(in thousands, except shares and per share data)


2023


2022


2023


2022

Net Income (GAAP)


$          87,212


$          89,796


$          25,328


$          26,150

FCG transaction-related expenses, net (1)


10,625


—


7,727


—

Adjusted Net Income (Non-GAAP)


$          97,837


$          89,796


$          33,055


$          26,150










Weighted average common shares outstanding - diluted


18,434,857


17,804,294


20,178,402


17,825,935










Earnings Per Share - Diluted (GAAP)


$               4.73


$               5.04


$               1.26


$               1.47

FCG transaction-related expenses, net (1)


0.58


—


0.38


—

Adjusted Earnings Per Share - Diluted (Non-GAAP)


$               5.31


$               5.04


$               1.64


$               1.47


(1) Transaction-related expenses for the year ended December 31, 2023 represent costs incurred attributable to the acquisition of FCG, including pretax operating expenses of $10.4 million associated with legal, consulting and audit fees and $4.1 million of interest charges related to pretax fees and expenses associated with the Bridge Facility.

 

Operating Results for the Years Ended December 31, 2023 and 2022 

Consolidated Results



Year Ended December 31,





(in thousands)

2023


2022


Change


Percent
Change

Adjusted gross margin**

$       454,123


$       420,198


$         33,925


8.1 %

Depreciation, amortization and property taxes

91,180


91,795


(615)


(0.7) %

FCG transaction-related expenses

10,355


—


10,355


N/A

Other operating expenses

201,785


185,470


16,315


8.8 %

Operating income

$       150,803


$       142,933


$           7,870


5.5 %

 

Operating income during 2023 was $150.8 million, an increase of $7.9 million or 5.5 percent compared to the prior year. Excluding transaction-related expenses associated with the acquisition of FCG, operating income increased $18.2 million or 12.8 percent compared to the prior year. Adjusted gross margin during 2023 was positively impacted by regulatory initiatives, organic growth in the Company's natural gas distribution businesses and continued pipeline expansion projects, increased propane margins and fees and contributions from FCG. These increases were partially offset by a $13.6 million reduction in adjusted gross margin from reduced customer consumption resulting from the significantly warmer temperatures in our northern service territories throughout the year. Higher operating expenses were largely associated with increased employee costs driven by growth initiatives, the ongoing competitive labor market and higher benefits costs compared to the prior-year period. Increases in depreciation and amortization expense attributable to growth projects that were placed into service during the current year were offset by reductions related to revised depreciation rates approved in the Company's Florida Natural Gas rate case and electric depreciation study filing, and a $5.1 million RSAM adjustment from FCG.

Regulated Energy Segment



Year Ended December 31,





(in thousands)

2023


2022


Change


Percent
Change

Adjusted gross margin**

$       333,587


$       302,252


$         31,335


10.4 %

Depreciation, amortization and property taxes

71,653


73,961


(2,308)


(3.1) %

FCG transaction-related expenses

10,355


—


10,355


N/A

Other operating expenses

125,380


112,974


12,406


11.0 %

Operating income

$       126,199


$       115,317


$         10,882


9.4 %

 

The key components of the increase in adjusted gross margin** are shown below:

(in thousands)


Rate changes associated with the Florida natural gas base rate proceeding (1)

$                        13,361

Contribution from the acquisition of FCG

8,687

Natural gas growth including conversions (excluding service expansions)

6,214

Natural gas transmission service expansions

4,812

Contributions from regulated infrastructure programs

2,597

Changes in customer consumption, driven by significantly warmer temperatures

(5,096)

Other variances

760

Year-over-year increase in adjusted gross margin**

$                        31,335


(1) Includes adjusted gross margin contributions from interim rates and permanent base rates that became effective in March 2023.

 

The major components of the increase in other operating expenses are as follows:

(in thousands)


Payroll, benefits and other employee-related expenses

$                          5,054

FCG operating expenses

4,190

Facilities expenses, maintenance costs and outside services

1,416

Customer service related costs

764

Regulatory expenses

658

Other variances

324

Year-over-year increase in other operating expenses

$                        12,406

 

Unregulated Energy Segment



Year Ended December 31,





(in thousands)

2023


2022


Change


Percent
Change

Adjusted gross margin**

$       120,656


$       118,067


$           2,589


2.2 %

Depreciation, amortization and property taxes

19,525


17,809


1,716


9.6 %

Other operating expenses

76,705


72,908


3,797


5.2 %

Operating income

$         24,426


$         27,350


$         (2,924)


(10.7) %

 

The major components of the change in adjusted gross margin** are shown below:

(in thousands)



Propane Operations



Increased propane margins and fees


$                   8,821

Propane customer consumption - primarily weather related


(8,235)

Decreased customer consumption due to conversion of customers to our natural gas system


(793)

Aspire Energy



Increase in gathering margin


1,141

Increased customer consumption


496

Eight Flags



   Increased electric generation margin


1,018

Other variances


141

Year-over-year increase in adjusted gross margin**


$                   2,589

 

The major components of the increase in other operating expenses are as follows:

(in thousands)



Increased payroll, benefits and other employee-related expenses


$                   3,959

Other variances


(162)

Year-over-year increase in other operating expenses


$                   3,797

 

Operating Results for the Quarters Ended December 31, 2023 and 2022 

Consolidated Results



Three Months Ended
December 31,





(in thousands)

2023


2022


Change


Percent
Change

Adjusted gross margin**

$       130,331


$       115,297


$         15,034


13.0 %

Depreciation, amortization and property taxes

20,262


23,274


(3,012)


(12.9) %

FCG transaction-related expenses

6,456


—


6,456


N/A

Other operating expenses

56,298


49,071


7,227


14.7 %

Operating income

$         47,315


$         42,952


$           4,363


10.2 %

 

Operating income for the fourth quarter of 2023 was $47.3 million, an increase of $4.4 million or 10.2 percent compared to the same period in 2022. Excluding transaction-related expenses associated with the acquisition of FCG, operating income increased $10.8 million or 25.2 percent compared to the same period in 2022, despite warmer temperatures in the Company's northern service territories during the quarter. Adjusted gross margin during the quarter was positively impacted by regulatory initiatives, organic growth in the Company's natural gas distribution businesses and continued pipeline expansion projects, increased propane margins and fees, and contributions from FCG. These increases were partially offset by a $3.9 million reduction in adjusted gross margin from reduced customer consumption attributable to intra-period weather volatility experienced in our northern service territories during the quarter. Also offsetting the increase in adjusted gross margin were higher employee costs driven by growth initiatives, the ongoing competitive labor market and higher benefits costs. Depreciation and amortization expense during the fourth quarter of 2023 includes the effects of the revised depreciation rates approved in the Company's Florida Natural Gas rate case and electric depreciation study filing, and the $5.1 million RSAM adjustment from FCG.

Regulated Energy Segment



Three Months Ended
December 31,





(in thousands)

2023


2022


Change


Percent
Change

Adjusted gross margin**

$         93,458


$         79,452


$         14,006


17.6 %

Depreciation, amortization and property taxes

15,238


18,736


(3,498)


(18.7) %

FCG transaction-related expenses

6,456


—


6,456


N/A

Other operating expenses

37,393


29,601


7,792


26.3 %

Operating income

$         34,371


$         31,115


$           3,256


10.5 %

 

The key components of the increase in adjusted gross margin** are shown below:

(in thousands)


Contribution from the acquisition of FCG

$                          8,687

Rate changes associated with the Florida natural gas base rate proceeding (1)

1,921

Natural gas transmission service expansions

1,836

Natural gas growth including conversions (excluding transmission service expansions)

1,536

Contributions from regulated infrastructure programs

841

Changes in customer consumption - primarily related to weather

(1,824)

Other variances

1,009

Period-over-period increase in adjusted gross margin**

$                        14,006


(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

$                          4,190

Payroll, benefits and other employee-related expenses

2,753

Other variances

849

Period-over-period increase in other operating expenses

$                          7,792

 

Unregulated Energy Segment



Three Months Ended
December 31,





(in thousands)

2023


2022


Change


Percent
Change

Adjusted gross margin**

$         36,838


$         35,874


$              964


2.7 %

Depreciation, amortization and property taxes

5,025


4,540


485


10.7 %

Other operating expenses

18,916


19,541


(625)


(3.2) %

Operating income

$         12,897


$         11,793


$           1,104


9.4 %

 

The major components of the change in adjusted gross margin** are shown below:

(in thousands)



Propane Operations



Reduced propane customer consumption


$                 (2,652)

Increased propane margins and service fees


2,432

Decreased customer consumption due to conversion of customers to our natural gas system


(137)

CNG/RNG/LNG Transportation and Infrastructure



Lower level of virtual pipeline services


(1,258)

Aspire Energy



Increased gathering margins


1,646

Increased customer consumption


750

Other variances


183

Quarter-over-quarter increase in adjusted gross margin**


$                      964

 

The major components of the increase in other operating expenses are as follows:

(in thousands)



Increased payroll, benefits and other employee-related expenses


$                      356

Decreased facilities expenses, maintenance costs and outside services


(613)

Other variances


(368)

Quarter-over-quarter increase in other operating expenses


$                    (625)

 

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 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, February 22, 2024 at 8:30 a.m. Eastern Time to discuss the Company's financial results for the fourth quarter and year ended December 31, 2023. 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: 800.267.6316
International: 203.518.9848
Conference ID: CPKQ423

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 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

Financial Summary

(in thousands, except shares and per-share data)



Year Ended


Three months ended


December 31,


December 31,


2023


2022


2023


2022

Adjusted Gross Margin








  Regulated Energy segment

$     333,587


$   302,252


$      93,458


$      79,452

  Unregulated Energy segment

120,656


118,067


36,838


35,874

  Other businesses and eliminations

(120)


(121)


35


(29)

Total Adjusted Gross Margin**

$     454,123


$   420,198


$    130,331


$    115,297









Operating Income








   Regulated Energy segment

$     126,199


$   115,317


$      34,371


$      31,115

   Unregulated Energy segment

24,426


27,350


12,897


11,793

   Other businesses and eliminations

178


266


47


44

Total Operating Income

150,803


142,933


47,315


42,952

Other income, net

1,438


5,051


402


597

Interest charges

36,951


24,356


15,679


6,952

Income Before Income Taxes

115,290


123,628


32,038


36,597

Income taxes

28,078


33,832


6,710


10,447

Net Income

$       87,212


$     89,796


$      25,328


$      26,150









Earnings Per Share of Common Stock








Basic

$          4.75


$        5.07


$         1.26


$         1.47

Diluted

$          4.73


$        5.04


$         1.26


$         1.47









Adjusted Net Income and Adjusted Earnings Per Share







Net Income (GAAP)

$       87,212


$     89,796


$      25,328


$      26,150

FCG transaction-related-expenses, net (1)

10,625


—


7,727


—

Adjusted Net Income (Non-GAAP)**

$       97,837


$     89,796


$      33,055


$      26,150









Weighted average common shares outstanding - diluted

18,434,857


17,804,294


20,178,402


17,825,935









Earnings Per Share - Diluted (GAAP)

$            4.73


$          5.04


$           1.26


$           1.47

FCG transaction-related-expenses, net (1)

0.58


—


0.38


—

Adjusted Earnings Per Share - Diluted (Non-GAAP)**

$            5.31


$          5.04


$           1.64


$           1.47


(1) Transaction-related expenses for the year and quarter ended December 31, 2023 represent costs incurred attributable to the acquisition of FCG, including operating expenses associated with legal, consulting and audit fees and interest charges related to fees and expenses associated with the Bridge Facility.

 

Financial Summary Highlights

Key variances in operations between 2022 and 2023 included:

(in thousands, except per share data)


Pre-tax

Income


Net

Income


Earnings

Per Share

Year ended December 31, 2022 Adjusted Results**


$    123,628


$      89,796


$           5.04








Non-recurring Items:







One-time benefit associated with reduction in state tax rate


—


2,469


0.13

Absence of interest income from federal income tax refund


(826)


(600)


(0.03)

Absence of gain from sales of assets


(1,902)


(1,382)


(0.07)



(2,728)


487


0.03








Increased (Decreased) Adjusted Gross Margins:







Contribution from rate changes associated with Florida Natural Gas base rate proceeding*


13,361


9,820


0.53

Increased propane margins per gallon and fees


8,821


6,483


0.34

Contribution from the acquisition of FCG


8,687


6,385


0.35

Natural gas growth (excluding service expansions)


6,214


4,567


0.25

Natural gas transmission service expansions*


4,812


3,537


0.19

Contributions from regulated infrastructure programs*


2,597


1,909


0.10

Increased margins from Aspire Energy


1,141


839


0.05

Increased adjusted gross margin from off-system natural gas capacity sales


960


706


0.04

Customer consumption primarily resulting from weather


(13,627)


(10,016)


(0.54)



32,966


24,230


1.31








(Increased) Decreased Operating Expenses (Excluding Natural Gas, Propane, and Electric Costs):







Payroll, benefits and other employee-related expenses


(9,013)


(6,625)


(0.36)

FCG operating expenses


(4,190)


(3,080)


(0.17)

Facilities expenses, maintenance costs and outside services


(1,756)


(1,290)


(0.07)

Customer service related costs


(820)


(603)


(0.03)

Regulatory expenses


(658)


(484)


(0.03)

Depreciation, amortization and property tax costs


615


452


0.02

Decreased vehicle expenses


577


424


0.02



(15,245)


(11,206)


(0.62)








Interest charges


(8,494)


(6,243)


(0.34)

Change in pension expense


(1,453)


(1,068)


(0.06)

Increase in shares outstanding due to 2023 and 2022 equity offerings


—


—


(0.17)

Net other changes


1,070


1,841


0.12



(8,877)


(5,470)


(0.45)

Year ended December 31, 2023 Adjusted Results**


$    129,744


$      97,837


$           5.31


*    Refer to Major Projects and Initiatives Table for additional information.

** Transaction-related expenses attributable to the acquisition of FCG have been excluded from the Company's non-GAAP measures of adjusted net income and adjusted EPS. See previous tables for a reconciliation of these items against the related GAAP measures.

 

Key variances between the fourth quarter of 2022 and the fourth quarter of 2023 included:

(in thousands, except per share data)


Pre-tax

Income


Net

Income


Earnings

Per Share

Fourth quarter of 2022 Adjusted Results**


$ 36,597


$ 26,150


$           1.47








Non-recurring Items:







One-time benefit associated with reduction in state tax rate


—


1,185


0.06

Absence of interest income from federal income tax refund


(197)


(141)


(0.01)



(197)


1,044


0.05








Increased (Decreased) Adjusted Gross Margins:







Contribution from the acquisition of FCG


8,687


6,547


0.32

Increased propane margins and fees


2,432


1,833


0.09

Contribution from rate changes associated with Florida natural gas base rate proceeding


1,921


1,448


0.07

Natural gas transmission service expansions


1,836


1,384


0.07

Increased margins from Aspire Energy


1,646


1,240


0.06

Natural gas growth including conversions (excluding service expansions)


1,536


1,157


0.06

Contributions from regulated infrastructure programs


841


634


0.03

Customer consumption primarily resulting from weather


(3,862)


(2,911)


(0.14)

Reduced demand for CNG/RNG/LNG services


(1,258)


(948)


(0.05)



13,779


10,384


0.51








(Increased) Decreased Operating Expenses (Excluding Natural Gas, Propane, and Electric Costs):







FCG operating expenses


(4,190)


(3,158)


(0.16)

Payroll, benefits and other employee-related expenses


(3,109)


(2,343)


(0.12)

Depreciation, amortization and property tax costs


3,012


2,270


0.11

Facilities expenses, maintenance costs and outside services


277


209


0.01



(4,010)


(3,022)


(0.16)








Interest charges


(4,627)


(3,487)


(0.17)

Increase in shares outstanding due to 2023 equity offering


—


—


(0.17)

Net other changes


1,051


1,986


0.11



(3,576)


(1,501)


(0.23)

Fourth quarter of 2023 Adjusted Results**


$ 42,593


$ 33,055


$           1.64


** Transaction-related expenses attributable to the acquisition of FCG have been excluded from the Company's non-GAAP measures of adjusted net income and adjusted EPS. See previous tables for a reconciliation of these items against the related GAAP measures.

 

Recently Completed and Ongoing Major Projects and Initiatives

The Company constantly 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 the major projects and initiatives recently completed and currently underway. 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 discussion of the Company's major projects accompanying this table, includes those projects which began generating adjusted gross margin in the current year, or those which are expected to contribute adjusted gross margin beginning in future years. A comprehensive discussion of all projects reflected below can be found in the Company's 2023 Annual Report on Form 10-K. 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.


Adjusted Gross Margin**


Year Ended December 31,


Estimate for Calendar Year

(in thousands)

2022


2023


2024


2025

Pipeline Expansions:








Guernsey Power Station

$           1,377


$           1,478


$           1,482


$           1,478

Southern Expansion

—


586


2,344


2,344

Winter Haven Expansion

260


637


626


626

Beachside Pipeline Expansion

—


1,810


2,451


2,414

North Ocean City Connector

—


—


—


494

St. Cloud / Twin Lakes Expansion

—


264


584


584

Clean Energy (1)

126


1,064


1,009


1,079

Wildlight

—


471


2,000


2,038

Lake Wales

—


265


454


454

Newberry

—


—


862


2,585

Total Pipeline Expansions

1,763


6,575


11,812


14,096









CNG/RNG/LNG Transportation and Infrastructure

11,100


11,181


12,500


13,969









Regulatory Initiatives:








Florida GUARD Program

—


353


2,421


5,136

FCG SAFE Program

—


—


2,683


5,293

Capital Cost Surcharge Programs

2,001


2,829


3,979


4,374

Florida Rate Case Proceeding (2)

2,474


15,835


17,153


17,153

Maryland Rate Case (3)

—


—


TBD


TBD

Electric Storm Protection Plan

486


1,326


2,433


3,951

Total Regulatory Initiatives

4,961


20,343


28,669


35,907









Total

$         17,824


$         38,099


$         52,981


$         63,972


(1) Includes adjusted gross margin generated from interim services through the project in-service date in September 2023.

(2) Includes adjusted gross margin during 2023 comprised of both interim rates and permanent base rates which became effective in March 2023.

(3) Rate case application filed with the Maryland PSC in January 2024.  See additional information provided below.

 

Discussion of Major Projects and Initiatives

Pipeline Expansions

Southern Expansion
Eastern Shore installed a new natural gas driven compressor skid unit at its existing Bridgeville, Delaware compressor station that provides 7,300 Dts/d of incremental firm transportation pipeline capacity. The project was placed in service in the fourth quarter of 2023.

Beachside Pipeline Expansion
In June 2021, Peninsula Pipeline and FCG entered into a Transportation Service Agreement for an incremental 10,176 Dts/d of firm service in Indian River County, Florida, to support Florida City Gas' growth along the Indian River's barrier island. As part of this agreement, Peninsula Pipeline constructed approximately 11.3 miles of pipeline from its existing pipeline in the Sebastian, Florida area east under the Intercoastal Waterway and southward on the barrier island. The project was completed and went into service in April 2023. Subsequent to the acquisition of FCG, the agreement is now an affiliate agreement.

North Ocean City Connector
During the second quarter of 2022, the Company began construction of an extension of service into North Ocean City, Maryland. The Company's Delaware natural gas division and its subsidiary, Sandpiper Energy, Inc. installed approximately 5.4 miles of pipeline across southern Sussex County, Delaware to Fenwick Island, Delaware and Worcester County, Maryland. The project reinforces the Company's existing system in Ocean City, Maryland and enables incremental growth along the pipeline. Construction of this project was completed in the second quarter of 2023. The Company filed a natural gas rate case application with the PSC for the state of Maryland in January 2024 as discussed below.  Adjusted gross margin in connection with this project is contingent upon the completion of the rate case and inclusion of the project in rate base.

St. Cloud / Twin Lakes Expansion
In July 2022, Peninsula Pipeline filed a petition with the Florida PSC 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. Construction is complete and the project went into service in July 2023.

Wildlight Expansion
In August 2022, Peninsula Pipeline and FPU filed a joint petition with the Florida PSC for approval of its Transportation Service Agreement associated with the Wildlight planned community located in Nassau County, Florida. The project enables the Company to meet the significant growing demand for service in Yulee, Florida. The agreement allows the Company to build the project during the construction and build-out of the community, and charge the reservation rate as each phase of the project goes into service. Construction of the pipeline facilities will occur in two separate phases. Phase one consists of three extensions with associated facilities, and a gas injection interconnect with associated facilities. Phase two will consist of two additional pipeline extensions. Various phases of the project commenced in the first quarter of 2023, with construction on the overall project continuing through 2025.

Lake Wales
In February 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreement with the Company's Florida natural gas distribution business, FPU, for an additional 9,000 Dt/d of firm service in the Lake Wales, Florida area. The PSC approved the petition in April 2023. Approval of the agreement enabled Peninsula Pipeline to complete the acquisition of an existing pipeline in May 2023 that is being utilized to serve the Company's current and new natural gas customers.

Newberry
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 Dt/d 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 propane community gas systems in Newberry was made in November 2023, and the Florida PSC is scheduled to vote on this in March 2024. The Company anticipates beginning the conversions of the community gas systems in the second quarter of 2024.

Worcester Resiliency Upgrade
In August 2023, Eastern Shore filed an application with the 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. Eastern Shore has requested certificate authorization by December 2024, with a target in-service date by the third quarter of 2025.

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 have experienced an increase in 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 is scheduled to vote on the projects in March 2024.

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 have experienced an increase in population growth. Peninsula Pipeline will construct several pipeline extensions which will support FPU's distribution system in the areas of Plant City and Lake Mattie with an additional 5,000 Dts/day and 8,700 Dts/day, respectively.

CNG/RNG/LNG Transportation and Infrastructure

The Company has made a commitment to meet customer demand for CNG, RNG and LNG in the markets we serve. This has included making investments within Marlin Gas Services to be able to transport these products through its virtual pipeline fleet to customers. To date, the Company has also made an infrastructure investment in Ohio, enabling RNG to fuel a third-party landfill fleet and to transport RNG to end use customers off its pipeline system. Similarly, the Company announced in March 2022, the opening of a high-capacity CNG truck and tube trailer fueling station in Port Wentworth, Georgia. As one of the largest public access CNG stations on the East Coast, it will offer a RNG option to customers in the near future. The Company constructed the station in partnership with Atlanta Gas Light, a subsidiary of Southern Company Gas.

The Company is also involved in various other projects, all at various stages and all with different opportunities to participate across the energy value chain. In many of these projects, Marlin will play a key role in ensuring the RNG is transported to one of the Company's many pipeline systems where it will be injected. The Company includes its RNG transportation services and infrastructure related adjusted gross margin from across the organization in combination with CNG and LNG projects.

As new projects are finalized, we will provide additional detail on those projects at that time. Discussed below is a current project in which we are in the construction phase:

Full Circle Dairy
In February 2023, the Company announced plans to construct, own and operate a dairy manure RNG facility at Full Circle Dairy in Madison County, Florida. The project consists of a facility converting dairy manure to RNG and transportation assets to bring the gas to market. The first injection of RNG is projected to occur in the first half of 2024.

Regulatory Initiatives

Florida Gas Utility Access and Replacement Directive ("GUARD") Program
In February 2023, FPU filed a petition with the Florida PSC for approval of the GUARD program. GUARD is a ten-year program to enhance the safety, reliability, and accessibility of portions of the Company's natural gas distribution system. The Company identified various categories of projects to be included in GUARD, which include the relocation of mains and service lines located in rear easements and other difficult to access areas to the front of the street, the replacement of problematic distribution mains, service lines, and maintenance and repair equipment and system reliability projects. In August 2023, the Florida PSC approved the GUARD program, which included $205 million of capital expenditures projected to be spent over a 10-year period.

FCG SAFE Program
In June 2023, the Florida PSC issued the approval order for the continuation of the SAFE program beyond its 2025 expiration date and inclusion of 150 miles of additional mains and services located in rear property easements. The SAFE program is designed to relocate certain mains and facilities associated with rear lot easements to street front locations to improve FCG's ability to inspect and maintain the facilities and reduce opportunities for damage and theft. In the same order, the Commission approved a replacement of 160 miles of pipe that was used in the 1970s and 1980s and shown through industry research to exhibit premature failure in the form of cracking. The program includes projected capital expenditures of $205 million over a 10-year period.

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 under the new corporate entity 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.

Other Major Factors Influencing Adjusted Gross Margin

Weather and Consumption
Weather had a significant impact on adjusted gross margin during 2023, driven largely by significantly warmer weather in some of the Company's service territories resulting in reduced consumption. This resulted in adjusted gross margin being negatively impacted by approximately $13.6 million compared to 2022.

The following table summarizes HDD and CDD variances from the 10-year average HDD/CDD ("Normal") for the year and quarter-to-date periods ended December 31, 2023 compared to the respective 2022 periods.

HDD and CDD Information


Year Ended




Quarter Ended




December 31,




December 31,




2023


2022


Variance


2023


2022


Variance

Delmarva












Actual HDD

3,416


4,088


(672)


1,347


1,485


(138)

10-Year Average HDD ("Normal")

4,161


4,147


14


1,430


1,437


(7)

Variance from Normal

(745)


(59)




(83)


48















Florida












Actual HDD

664


836


(172)


293


301


(8)

10-Year Average HDD ("Normal")

826


828


(2)


276


285


(9)

Variance from Normal

(162)


8




17


16















Ohio












Actual HDD

5,043


5,532


(489)


1,895


1,918


(23)

10-Year Average HDD ("Normal")

5,594


5,557


37


1,933


1,943


(10)

Variance from Normal

(551)


(25)




(38)


(25)















Florida












Actual CDD

3,101


2,826


275


308


340


(32)

10-Year Average CDD ("Normal")

2,934


2,929


5


399


394


5

Variance from Normal

167


(103)




(91)


(54)



 

Natural Gas Distribution Growth

The average number of residential customers served on the Delmarva Peninsula and in our legacy Florida operations increased by approximately 5.4 percent and 3.9 percent, respectively, during 2023.

On the Delmarva Peninsula, a larger percentage of the adjusted gross margin growth was generated from residential growth given the expansion of gas into new housing communities and conversions to natural gas as our distribution infrastructure continues to build out. In Florida, as new communities continue to build out due to population growth and the additional infrastructure to support the growth, there is increased load from both residential customers as well as new commercial and industrial customers. The details on adjusted gross margin attributable to customer growth for our legacy natural gas distribution operations are provided in the following table:


Adjusted Gross Margin**


For the Year Ended December 31, 2023

(in thousands)

Delmarva
Peninsula


Florida (1)

Customer growth:




Residential

$                        1,895


$                        1,599

Commercial and industrial

589


2,131

Total customer growth

$                        2,484


$                        3,730


(1) Customer growth amounts for our legacy Florida operations include the effects of revised rates associated with the Company's natural gas base rate proceeding, but exclude the effects of the FCG acquisition.

 

Capital Investment Growth and Capital Structure Updates

The Company's capital expenditures were $1.1 billion, which includes $923.4 million attributable to the purchase of FCG and $3.9 million related to an acquisition in the propane distribution business. The following table shows total capital expenditures for the year ended December 31, 2023 by segment and by business line:



For the Year Ended

(in thousands)


December 31, 2023

Regulated Energy:



Natural gas distribution


$                               109,245

Natural gas transmission


40,179

Electric distribution


19,745

Total Regulated Energy


169,169

Unregulated Energy:



Propane distribution


14,287

Energy transmission


5,469

Other unregulated energy


20,508

Total Unregulated Energy


40,264

Other:



Corporate and other businesses


1,762

Total Other


1,762

Legacy capital expenditures


211,195

FCG Acquisition (1)


926,702

Total 2023 Capital Expenditures


$                           1,137,897


(1) Includes amounts for the acquisition of FCG net of cash acquired and their capital expenditures from the date of the acquisition through December 31, 2023. For additional information regarding acquisitions refer to Note 4 in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

 

The following table shows a range of the forecasted 2024 capital expenditures by segment and by business line:


2024

(in thousands)

Low


High

Regulated Energy:




Natural gas distribution

$      150,000


$       170,000

Natural gas transmission

90,000


120,000

Electric distribution

25,000


28,000

Total Regulated Energy

265,000


318,000

Unregulated Energy:




Propane distribution

13,000


15,000

Energy transmission

5,000


6,000

Other unregulated energy

13,000


15,000

Total Unregulated Energy

31,000


36,000

Other:




Corporate and other businesses

4,000


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 and availability of capital. Historically, actual capital expenditures have typically lagged behind the forecasted amounts. See "Capital Investment and Earnings Guidance" discussed above for additional information on our capital expenditure forecast.

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 47 percent as of December 31, 2023 and included the impacts associated with financing the FCG acquisition.

Chesapeake Utilities Corporation and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)




Year Ended


Three months ended



December 31,


December 31,



2023


2022


2023


2022

(in thousands, except shares and per share data)









Operating Revenues









Regulated Energy


$      473,595


$     429,424


$      127,774


$     118,360

Unregulated Energy


223,148


280,750


64,262


78,081

Other businesses and eliminations


(26,139)


(29,470)


(6,701)


(9,141)

Total Operating Revenues


670,604


680,704


185,335


187,300

Operating Expenses









Natural gas and electricity costs


140,008


127,172


34,316


38,908

Propane and natural gas costs


76,474


133,334


20,688


33,095

Operations


178,437


164,505


50,290


43,526

Transaction-related expenses


10,355


—


6,456


—

Maintenance


20,401


18,176


4,914


4,903

Depreciation and amortization


65,501


68,973


13,405


17,441

Other taxes


28,625


25,611


7,951


6,475

Total operating expenses


519,801


537,771


138,020


144,348

Operating Income


150,803


142,933


47,315


42,952

Other income, net


1,438


5,051


402


597

Interest charges


36,951


24,356


15,679


6,952

Income Before Income Taxes


115,290


123,628


32,038


36,597

Income Taxes


28,078


33,832


6,710


10,447

Net Income


$        87,212


$       89,796


$        25,328


$       26,150










Weighted Average Common Shares Outstanding:









Basic


18,370,758


17,722,227


20,112,530


17,741,166

Diluted


18,434,857


17,804,294


20,178,402


17,825,935










Earnings Per Share of Common Stock:









Basic


$            4.75


$           5.07


$            1.26


$           1.47

Diluted


$            4.73


$           5.04


$            1.26


$           1.47










Adjusted Net Income and Adjusted Earnings Per Share









Net Income (GAAP)


$        87,212


$       89,796


$        25,328


$       26,150

Transaction-related expenses, net (1)


10,625


—


7,727


—

Adjusted Net Income (Non-GAAP)**


$        97,837


$       89,796


$        33,055


$       26,150










Earnings Per Share - Diluted (GAAP)


$            4.73


$           5.04


$            1.26


$           1.47

Transaction-related expenses, net (1)


0.58


—


0.38


—

Adjusted Earnings Per Share - Diluted (Non-GAAP)**


$            5.31


$           5.04


$            1.64


$           1.47


(1) Transaction-related expenses for the year and quarter ended December 31, 2023 represent costs incurred attributable to the acquisition of FCG, including operating expenses associated with legal, consulting and audit fees and interest charges related to fees and expenses associated with the Bridge Facility.

 

Chesapeake Utilities Corporation and Subsidiaries

Consolidated Balance Sheets (Unaudited)




As of December 31,

Assets


2023


2022

(in thousands, except shares and per share data)





Property, Plant and Equipment





Regulated Energy


$           2,418,494


$           1,802,999

Unregulated Energy


410,807


393,215

Other businesses and eliminations


30,310


29,890

Total property, plant and equipment


2,859,611


2,226,104

Less: Accumulated depreciation and amortization


(516,429)


(462,926)

Plus: Construction work in progress


113,192


47,295

Net property, plant and equipment


2,456,374


1,810,473

Current Assets





Cash and cash equivalents


4,904


6,204

Trade and other receivables


74,485


65,758

Less: Allowance for credit losses


(2,699)


(2,877)

Trade receivables, net


71,786


62,881

Accrued revenue


32,597


29,206

Propane inventory, at average cost


9,313


9,365

Other inventory, at average cost


19,912


16,896

Regulatory assets


19,506


41,439

Storage gas prepayments


4,695


6,364

Income taxes receivable


3,829


2,541

Prepaid expenses


15,407


15,865

Derivative assets, at fair value


1,027


2,787

Other current assets


2,723


428

Total current assets


185,699


193,976

Deferred Charges and Other Assets





Goodwill


508,174


46,213

Other intangible assets, net


16,865


17,859

Investments, at fair value


12,282


10,576

Derivative assets, at fair value


40


982

Operating lease right-of-use assets


12,426


14,421

Regulatory assets


96,396


108,214

Receivables and other deferred charges


16,448


12,323

Total deferred charges and other assets


662,631


210,588

Total Assets


$           3,304,704


$           2,215,037

 

Chesapeake Utilities Corporation and Subsidiaries

 Consolidated Balance Sheets (Unaudited)




As of December 31,

Capitalization and Liabilities


2023


2022

(in thousands, except shares and per share data)





Capitalization





Stockholders' equity





Preferred 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)


10,823


8,635

Additional paid-in capital


749,356


380,036

Retained earnings


488,663


445,509

Accumulated other comprehensive loss


(2,738)


(1,379)

Deferred compensation obligation


9,050


7,060

Treasury stock


(9,050)


(7,060)

Total stockholders' equity


1,246,104


832,801

Long-term debt, net of current maturities


1,187,075


578,388

Total capitalization


2,433,179


1,411,189

Current Liabilities





Current portion of long-term debt


18,505


21,483

Short-term borrowing


179,853


202,157

Accounts payable


77,481


61,496

Customer deposits and refunds


46,427


37,152

Accrued interest


7,020


3,349

Dividends payable


13,119


9,492

Accrued compensation


16,544


14,660

Regulatory liabilities


13,719


5,031

Derivative liabilities, at fair value


354


585

Other accrued liabilities


13,362


13,618

Total current liabilities


386,384


369,023

Deferred Credits and Other Liabilities





Deferred income taxes


259,082


256,167

Regulatory liabilities


195,279


142,989

Environmental liabilities


2,607


3,272

Other pension and benefit costs


15,330


16,965

Derivative liabilities at fair value


927


1,630

Operating lease - liabilities


10,550


12,392

Deferred investment tax credits and other liabilities


1,366


1,410

Total deferred credits and other liabilities


485,141


434,825

Environmental and other commitments and contingencies (1)





Total Capitalization and Liabilities


$           3,304,704


$           2,215,037


(1) Refer to Note 19 and 20 in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 for further information.

 

Chesapeake Utilities Corporation and Subsidiaries

Distribution Utility Statistical Data (Unaudited)




For Three Months Ended December 31, 2023


For the Three Months Ended December 31, 2022



Delmarva NG
Distribution


Florida
Natural Gas
Distribution (1)


Florida City
Gas
Distribution (2)


FPU Electric
Distribution


Delmarva NG
Distribution


Florida
Natural Gas
Distribution (1)


FPU Electric
Distribution

Operating Revenues
(in thousands)











  Residential


$            20,148


$            12,246


$              5,042


$            10,195


$            21,643


$            12,265


$              8,417

  Commercial and Industrial


12,625


28,413


5,872


12,134


14,005


25,895


9,758

  Other (3)


5,697


2,255


1,159


(1,310)


7,569


6,154


(1,054)

Total Operating Revenues


$            38,470


$            42,914


$            12,073


$            21,019


$            43,217


$            44,314


$            17,121
















Volumes (in Dts for natural gas and MWHs for electric)










  Residential


1,087,809


529,697


157,884


62,067


1,052,182


513,623


62,252

  Commercial and Industrial


2,707,601


10,451,908


940,028


144,801


2,648,324


8,447,631


76,298

  Other


79,586


—


549,132


—


76,384


944,334


—

Total


3,874,996


10,981,605


1,647,044


206,868


3,776,890


9,905,588


138,550
















Average Customers













  Residential


98,974


89,383


112,585


25,722


94,535


86,304


25,563

  Commercial and Industrial


8,256


8,434


8,587


7,370


8,130


8,360


7,369

  Other


23


6


6


—


4


6


—

Total


107,253


97,823


121,178


33,092


102,669


94,670


32,932
















 



For the Twelve Months Ended December 31, 2023


For the Twelve Months Ended December 31, 2022



Delmarva NG
Distribution


Florida
Natural Gas
Distribution (1)


Florida
City Gas
Distribution (2)


FPU Electric
Distribution


Delmarva NG
Distribution


Florida
Natural Gas
Distribution (1)


FPU Electric
Distribution

Operating Revenues
(in thousands)











  Residential


$            87,709


$            50,792


$              5,042


$            49,542


$            83,373


$            46,824


$            38,954

  Commercial and Industrial


54,261


108,913


5,872


52,047


53,083


98,419


40,110

  Other (3)


(997)


8,655


1,159


(2,115)


2,803


10,627


2,650

Total Operating Revenues


$          140,973


$          168,360


$            12,073


$            99,474


$          139,259


$          155,870


$            81,714
















Volumes (in Dts for natural gas and MWHs for electric)








  Residential


4,389,934


2,081,045


157,884


300,118


4,645,336


2,086,597


305,593

  Commercial and Industrial


10,230,662


41,498,921


940,028


384,306


10,402,091


37,902,801


325,785

  Other


293,186


627,934


549,132


—


307,397


3,418,788


5,978

Total


14,913,782


44,207,900


1,647,044


684,424


15,354,824


43,408,186


637,356
















Average Customers













  Residential


97,666


88,384


112,585


25,719


92,694


85,074


25,516

  Commercial and Industrial


8,246


8,415


8,587


7,372


8,121


8,322


7,351

  Other


23


6


6


—


4


6


—

Total


105,935


96,805


121,178


33,091


100,819


93,402


32,867

















(1) In accordance with the Florida PSC approval of our natural gas base rate proceeding, effective March 1, 2023, our natural gas distribution businesses in Florida (FPU, FPU-Indiantown division, FPU-Fort Meade division and Chesapeake Utilities CFG division) have been consolidated and amounts above are now being presented on a consolidated basis consistent with the final rate order.

   (2) Operating revenues and volumes for FCG include amounts from the acquisition date. Customer totals for FCG reflect actual amounts at December 31, 2023 since the period from the acquisition covered only one month. 

   (3) 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.


 

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View original content:https://www.prnewswire.com/news-releases/chesapeake-utilities-corporation-reports-fiscal-year-2023-results-302068039.html

SOURCE Chesapeake Utilities Corporation

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