CHESAPEAKE UTILITIES CORPORATION REPORTS THIRD QUARTER 2025 RESULTS

DOVER, Del., Nov. 6, 2025 /PRNewswire/ -- Chesapeake Utilities Corporation (NYSE: CPK) ("Chesapeake Utilities" or the "Company") today announced financial results for the three and nine months ended September 30, 2025.

Net income for the third quarter of 2025 was $19.4 million ($0.82 per share) compared to $17.5 million ($0.78 per share) in the third quarter of 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, adjusted net income was $19.5 million ($0.82 per share) compared to $18.1 million ($0.80 per share) in the prior-year period. The adjusted EPS growth reflects a $0.04 per share impact from $92.0 million of equity issued over the last twelve months to restore the Company's equity to total capitalization ratio closer to the target ratio.

Adjusted earnings for the third quarter of 2025 were largely driven by contributions from regulatory initiatives and infrastructure programs, organic growth in the natural gas distribution businesses and pipeline expansion projects driven by natural gas demand, and increased compressed natural gas (CNG), renewable natural gas (RNG) and liquified natural gas (LNG) services.

During the first nine months of 2025, net income was $94.2 million ($4.03 per share) compared to $81.9 million ($3.66 per share) in the prior-year period. Excluding the transaction and transition-related expenses, adjusted net income was $94.9 million ($4.06 per share) compared to $84.2 million ($3.76 per share) in the prior-year period. This resulted in EPS and adjusted EPS growth of 10.1 percent and 8.0 percent, respectively, compared to the prior-year period.

Year-to-date adjusted earnings for 2025 were primarily impacted by the factors discussed for the third quarter as well as additional adjusted gross margin from increased customer consumption experienced earlier in the year.

"Our performance in the third quarter of 2025 demonstrated continued operational excellence across our businesses to serve our customers and communities. In both the quarter and the year-to-date periods, we delivered double-digit growth in Adjusted Gross Margin and Operating Income relative to the prior year and we continued to strengthen our balance sheet with incremental long-term debt and equity issuances during the quarter," said Jeff Householder, the Company's Chair of the Board, President and Chief Executive Officer.

"These results demonstrate that we continue to deliver on our three growth pillars. Within the third quarter, we invested $123 million of capital and generated over $20 million of gross margin from transmission, infrastructure, and transportation projects. We also reached final completion of our Delaware rate case, with a settlement on tariff-related changes, including rate design. And finally, we took the next pivotal step in our continuous business transformation efforts, including officially kicking off our multi-year Enterprise Resource Plan (ERP) process, which was a primary driver in the increase and extension of our 2025 capital guidance to $425-$450 million. We remain focused on achieving our earnings and increased capital guidance in 2025, demonstrating record performance and reaching new heights of growth for the Company."

Earnings and Capital Investment Guidance

The Company continues to re-affirm its 2025 EPS guidance range of $6.15 to $6.35 per share, pending a successful outcome of the FCG excess depreciation filing. Given the Company's progress on a multitude of capital projects, the Company is further increasing and refining its 2025 capital guidance range to $425 million to $450 million.

Looking to the future, the Company also continues to re-affirm its 2028 EPS guidance range of $7.75 to $8.00 per share, as well as its capital expenditure guidance range for the five-year period ending 2028 of $1.5 billion to $1.8 billion.

*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. The Company's 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 the Company's non-GAAP measures of Adjusted Gross Margin, Adjusted Net Income and Adjusted EPS for each of the periods presented.

Adjusted Gross Margin

For the Three Months Ended September 30, 2025

(in millions)

Regulated Energy

Unregulated

Energy

Other Businesses

and Eliminations

Total

Operating Revenues

$ 146.4

$ 40.7

$ (7.5)

$ 179.6

Cost of Sales:

Natural gas, propane and

electric costs

(31.7)

(18.3)

7.6

(42.4)

Depreciation & amortization

(18.2)

(5.1)

—

(23.3)

Operations & maintenance

expenses (1)

(12.6)

(9.5)

—

(22.1)

Gross Margin (GAAP)

83.9

7.8

0.1

91.8

Operations & maintenance

expenses (1)

12.6

9.5

—

22.1

Depreciation & amortization

18.2

5.1

—

23.3

Adjusted Gross Margin (Non-

GAAP)

$ 114.7

$ 22.4

$ 0.1

$ 137.2

For the Three Months Ended September 30, 2024

(in millions)

Regulated Energy

Unregulated

Energy

Other Businesses

and Eliminations

Total

Operating Revenues

$ 130.6

$ 35.6

$ (6.0)

$ 160.2

Cost of Sales:

Natural gas, propane and

electric costs

(28.4)

(15.8)

6.0

(38.2)

Depreciation & amortization

(12.3)

(4.5)

—

(16.8)

Operations & maintenance

expenses (1)

(10.7)

(8.1)

—

(18.8)

Gross Margin (GAAP)

79.2

7.2

—

86.4

Operations & maintenance

expenses (1)

10.7

8.1

—

18.8

Depreciation & amortization

12.3

4.5

—

16.8

Adjusted Gross Margin (Non-

GAAP)

$ 102.2

$ 19.8

$ —

$ 122.0

For the Nine Months Ended September 30, 2025

(in millions)

Regulated Energy

Unregulated

Energy

Other Businesses

and Eliminations

Total

Operating Revenues

$ 497.8

$ 195.3

$ (22.0)

$ 671.1

Cost of Sales:

Natural gas, propane and

electric costs

(137.3)

(93.4)

22.0

(208.7)

Depreciation & amortization

(52.6)

(15.1)

—

(67.7)

Operations & maintenance

expenses (1)

(40.5)

(29.0)

(0.1)

(69.6)

Gross Margin (GAAP)

267.4

57.8

(0.1)

325.1

Operations & maintenance

expenses (1)

40.5

29.0

0.1

69.6

Depreciation & amortization

52.6

15.1

—

67.7

Adjusted Gross Margin (Non-

GAAP)

$ 360.5

$ 101.9

$ —

$ 462.4

For the Nine Months Ended September 30, 2024

(in millions)

Regulated Energy

Unregulated

Energy

Other Businesses

and Eliminations

Total

Operating Revenues

$ 429.7

$ 160.1

$ (17.6)

$ 572.2

Cost of Sales:

Natural gas, propane and

electric costs

(105.7)

(70.9)

17.5

(159.1)

Depreciation & amortization

(39.5)

(12.2)

—

(51.7)

Operations & maintenance

expenses (1)

(35.7)

(24.4)

—

(60.1)

Gross Margin (GAAP)

248.8

52.6

(0.1)

301.3

Operations & maintenance

expenses (1)

35.7

24.4

—

60.1

Depreciation & amortization

39.5

12.2

—

51.7

Adjusted Gross Margin (Non-

GAAP)

$ 324.0

$ 89.2

$ (0.1)

$ 413.1

(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 EPS

Three Months Ended

Nine Months Ended

September 30,

(dollars in millions, shares in thousands (except per share

data))

2025

2024

2025

2024

Net Income (GAAP)

$ 19.4

$ 17.5

$ 94.2

$ 81.9

FCG transaction and transition-related expenses,

net (1)

0.1

0.6

0.7

2.3

Adjusted Net Income (Non-GAAP)

$ 19.5

$ 18.1

$ 94.9

$ 84.2

Weighted average common shares outstanding -

diluted

23,629

22,564

23,360

22,402

Earnings Per Share - Diluted (GAAP)

$ 0.82

$ 0.78

$ 4.03

$ 3.66

FCG transaction and transition-related expenses,

net (1)

—

0.02

0.03

0.10

Adjusted Earnings Per Share - Diluted (Non-

GAAP)

$ 0.82

$ 0.80

$ 4.06

$ 3.76

(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 September 30, 2025 and 2024

Consolidated Results

Three Months Ended

September 30,

(in millions)

2025

2024

Change

Percent

Change

Adjusted gross margin**

$ 137.2

$ 122.0

$ 15.2

12.5 %

Depreciation, amortization and property taxes (1)

32.7

25.0

(7.7)

(30.8) %

Other operating expenses

59.3

55.3

(4.0)

(7.2) %

FCG transaction and transition-related expenses

0.2

0.8

0.6

NMF

Operating income

$ 45.0

$ 40.9

$ 4.1

10.0 %

(1) Includes the absence of an RSAM adjustment from FCG which represented a $3.2 million benefit in the third quarter of 2024.

Operating income for the third quarter of 2025 was $45.0 million, an increase of $4.1 million or 10.0 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 $3.5 million or 8.4 percent compared to the prior-year period. The increase in adjusted gross margin in the third quarter of 2025 was driven by incremental margin from regulatory initiatives and infrastructure programs, pipeline expansion projects, increased CNG, RNG and LNG services and natural gas organic growth. The increase in operating expenses was driven largely by higher depreciation attributable to growth projects and the absence of a reserve surplus amortization mechanism ("RSAM") adjustment from FCG (which represented a $3.2 million benefit in the third quarter of 2024). Higher expenses associated with facilities, maintenance and outside services compared to the prior-year period also contributed to the increase.

Regulated Energy Segment

Three Months Ended

September 30,

(in millions)

2025

2024

Change

Percent

Change

Adjusted gross margin**

$ 114.7

$ 102.2

$ 12.5

12.2 %

Depreciation, amortization and property taxes (1)

26.9

19.8

(7.1)

(35.9) %

Other operating expenses

38.7

37.6

(1.1)

(2.9) %

FCG transaction and transition-related expenses

0.2

0.8

0.6

NMF

Operating income

$ 48.9

$ 44.0

$ 4.9

11.1 %

(1) Includes the absence of an RSAM adjustment from FCG which represented a $3.2 million benefit in the third quarter of 2024.

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

(in millions)

Natural gas transmission service expansions, including interim services

$ 5.6

Contributions from regulated infrastructure programs

3.9

Rate changes associated with recent rate case activities (1)

3.6

Natural gas growth including conversions (excluding service expansions)

1.5

Changes in customer consumption

(0.9)

Other variances

(1.2)

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

$ 12.5

(1) Includes adjusted gross margin contributions from both interim and permanent base rates. Refer to Major Projects and Initiatives discussion for additional information.

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

(in millions)

Facilities expenses, maintenance costs and outside services

$ (2.1)

Payroll, benefits and other employee-related expenses

0.9

Other variances

0.1

Quarter-over-quarter increase in other operating expenses

$ (1.1)

Unregulated Energy Segment

Three Months Ended

September 30,

(in millions)

2025

2024

Change

Percent

Change

Adjusted gross margin**

$ 22.4

$ 19.8

$ 2.6

13.1 %

Depreciation, amortization and property taxes

5.8

5.1

(0.7)

(13.7) %

Other operating expenses

20.5

17.8

(2.7)

(15.2) %

Operating income (loss)

$ (3.9)

$ (3.1)

$ (0.8)

25.8 %

Operating results for the second and third quarters historically have been lower due to reduced customer demand during warmer periods of the year. The impact to operating income may not align with the seasonal variations in adjusted gross margin as many of the operating expenses are recognized ratably over the course of the year.

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

(in millions)

Propane Operations

Change in propane margins and service fees

$ (0.7)

CNG/RNG/LNG Transportation and Infrastructure

Increased CNG/RNG/LNG services

3.1

Aspire Energy

Increased performance from Aspire Energy

0.4

Other variances

(0.2)

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

$ 2.6

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

(in millions)

Payroll, benefits and other employee-related expenses

$ (1.5)

Facilities expenses, maintenance costs and outside services

(1.3)

Other variances

0.1

Quarter-over-quarter increase in other operating expenses

$ (2.7)

Operating Results for the Nine Months Ended September 30, 2025 and 2024

Consolidated Results

Nine Months Ended

September 30,

(in millions)

2025

2024

Change

Percent

Change

Adjusted gross margin**

$ 462.4

$ 413.1

$ 49.3

11.9 %

Depreciation, amortization and property taxes (1)

95.2

77.8

(17.4)

(22.4) %

Other operating expenses

184.1

170.9

(13.2)

(7.7) %

FCG transaction and transition-related expenses

1.0

3.1

2.1

NMF

Operating income

$ 182.1

$ 161.3

$ 20.8

12.9 %

(1) Includes the absence of an RSAM adjustment from FCG which represented an $8.9 million benefit during the nine months ended September 30, 2024.

Operating income for the nine months ended September 30, 2025 was $182.1 million, an increase of $20.8 million or 12.9 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 $18.7 million or 11.4 percent compared to the prior-year period. The increase in adjusted gross margin in the first nine months of 2025 was driven by incremental margin from regulatory initiatives and infrastructure programs, increased CNG, RNG and LNG services, pipeline expansion projects and natural gas organic growth, and increased customer consumption resulting from year-over-year colder temperatures in the Company's Mid-Atlantic and Ohio service territories. These increases were partially offset by lower margins per gallon and related fees in the Company's propane distribution business and a reduced volume of off-system sales and service fees in its natural gas business. Higher operating expenses were driven largely by the absence of an RSAM adjustment from FCG (which represented an $8.9 million benefit during the nine months ended September 30, 2024) and higher depreciation attributable to growth projects. Higher facilities, maintenance and outside services, insurance, and payroll, benefits and other employee-related expenses compared to the prior-year period also contributed to the increase.

Regulated Energy Segment

Nine Months Ended

September 30,

(in millions)

2025

2024

Change

Percent

Change

Adjusted gross margin**

$ 360.5

$ 324.0

$ 36.5

11.3 %

Depreciation, amortization and property taxes (1)

78.3

63.6

(14.7)

(23.1) %

Other operating expenses

120.0

114.7

(5.3)

(4.6) %

FCG transaction and transition-related expenses

1.0

3.1

2.1

NMF

Operating income

$ 161.2

$ 142.6

$ 18.6

13.0 %

(1) Includes the absence of an RSAM adjustment from FCG which represented an $8.9 million benefit during the nine months ended September 30, 2024.

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

(in millions)

Natural gas transmission service expansions, including interim services

$ 11.7

Contributions from regulated infrastructure programs

11.0

Rate changes associated with recent rate case activities (1)

9.2

Natural gas growth including conversions (excluding service expansions)

5.5

Changes in customer consumption

0.9

Change in off-system natural gas capacity sales

(0.7)

Other variances

(1.1)

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

$ 36.5

(1) Includes adjusted gross margin contributions from both interim and permanent base rates. Refer to Major Projects and Initiatives discussion for additional information.

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

(in millions)

Facilities expenses, maintenance costs and outside services

$ (4.5)

Insurance related costs

(1.1)

Other variances

0.3

Period-over-period increase in other operating expenses

$ (5.3)

Unregulated Energy Segment

Nine Months Ended

September 30,

(in millions)

2025

2024

Change

Percent

Change

Adjusted gross margin**

$ 101.9

$ 89.2

$ 12.7

14.2 %

Depreciation, amortization and property taxes

16.8

14.1

(2.7)

(19.1) %

Other operating expenses

64.2

56.4

(7.8)

(13.8) %

Operating income

$ 20.9

$ 18.7

$ 2.2

11.8 %

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

(in millions)

Propane Operations

Increased propane customer consumption

$ 2.8

Change in propane margins and service fees

(1.3)

CNG/RNG/LNG Transportation and Infrastructure

Increased CNG/RNG/LNG services

10.1

Aspire Energy

Increased customer consumption

1.1

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

$ 12.7

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

(in millions)

Payroll, benefits and other employee-related expenses

$ (3.9)

Facilities expenses, maintenance costs and outside services

(3.7)

Other variances

(0.2)

Period-over-period increase in other operating expenses

$ (7.8)

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 2024 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the third 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 Friday, November 7, 2025, at 8:30 a.m. Eastern Time to discuss the Company's financial results for the three and nine months ended September 30, 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: 800.579.2543

International: 785.424.1789

Conference ID: CPKQ325

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.

For more information, contact:

Beth W. Cooper

Executive Vice President, Chief Financial Officer, Treasurer and Assistant Corporate Secretary

302.363.2467

Michael D. Galtman

Senior Vice President and Chief Accounting Officer

302.217.7036

Lucia M. Dempsey

Head of Investor Relations

347.804.9067

Financial Summary Highlights

Key variances between the third quarter of 2024 and 2025 included:

(in millions, except per share data)

Pre-tax

Income

Net

Income

Earnings

Per Share

Third Quarter of 2024 Adjusted Results (1)

$ 25.1

$ 18.1

$ 0.80

Change in Adjusted Gross Margins:

Natural gas transmission service expansions, including interim services (2)

5.6

4.0

0.17

Contributions from regulated infrastructure programs (2)

3.9

2.8

0.12

Rate changes associated with recent rate case activities (2)

3.6

2.6

0.11

Increased CNG/RNG/LNG services (2)

3.1

2.2

0.09

Natural gas growth (excluding service expansions)

1.5

1.1

0.05

Increased Aspire Energy performance - rate changes and gathering fees

0.4

0.3

0.01

Changes in customer consumption

(0.9)

(0.6)

(0.03)

Change in propane margins and service fees

(0.7)

(0.5)

(0.02)

16.5

11.9

0.50

Increased Operating Expenses (Excluding Natural Gas, Propane, and

Electric Costs):

Depreciation, amortization and property tax costs

(7.7)

(5.6)

(0.24)

Facilities expenses, maintenance costs and outside services

(3.4)

(2.5)

(0.10)

Payroll, benefits and other employee-related expenses

(0.6)

(0.4)

(0.01)

Insurance related costs

(0.4)

(0.3)

(0.01)

(12.1)

(8.8)

(0.36)

Interest charges

(1.1)

(0.8)

(0.03)

Increase in shares outstanding due to 2024 and 2025 equity offerings (3)

—

(0.04)

Net other changes

(1.3)

(0.9)

(0.05)

(2.4)

(1.7)

(0.12)

Third Quarter of 2025 Adjusted Results (1)

$ 27.1

$ 19.5

$ 0.82

(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 Dividend Reinvestment and Direct Stock Purchase Plan ("DRIP") and At-the-market ("ATM") program.

Key variances between the nine months ended September 30, 2024 and September 30, 2025 included:

(in millions, except per share data)

Pre-tax

Income

Net

Income

Earnings

Per Share

Nine months ended September 30, 2024 Adjusted Results (1)

$ 115.2

$ 84.2

$ 3.76

Change in Adjusted Gross Margins:

Natural gas transmission service expansions, including interim services (2)

11.7

8.5

0.37

Contributions from regulated infrastructure programs (2)

11.0

8.0

0.34

Increased CNG/RNG/LNG services (2)

10.1

7.3

0.31

Rate changes associated with recent rate case activities (2)

9.2

6.7

0.29

Natural gas growth including conversions (excluding service expansions)

5.5

4.0

0.17

Changes in customer consumption

4.8

3.5

0.15

Increased Aspire Energy performance - rate changes and gathering fees

0.2

0.01

Change in propane margins and service fees

(1.3)

(0.9)

(0.04)

Change in service fees and off-system sales

(0.7)

(0.5)

(0.02)

50.5

36.8

1.58

Increased Operating Expenses (Excluding Natural Gas, Propane, and

Electric Costs):

Depreciation, amortization and property taxes

(17.4)

(12.7)

(0.54)

Facilities expenses, maintenance costs and outside services

(8.2)

(6.0)

(0.26)

Payroll, benefits and other employee-related expenses

(3.8)

(2.8)

(0.12)

Insurance related costs

(0.7)

(0.5)

(0.02)

(30.1)

(22.0)

(0.94)

Interest charges

(3.2)

(2.4)

(0.10)

Increase in shares outstanding due to 2024 and 2025 equity offerings (3)

—

(0.17)

Net other changes

(2.3)

(1.7)

(0.07)

(5.5)

(4.1)

(0.34)

Nine months ended September 30, 2025 Adjusted Results (1)

$ 130.1

$ 94.9

$ 4.06

(1)

(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 Initiatives

The 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 third quarter 2025 Quarterly Report on Form 10-Q.

Adjusted Gross Margin

Three Months Ended

Nine Months Ended

Year Ended

Estimate for

September 30,

December 31,

Fiscal

(in millions)

2025

2024

2025

2024

2025

2026

Pipeline Expansions:

St. Cloud / Twin Lakes

Expansion

$ 1.0

$ 0.1

$ 1.9

$ 0.4

$ 0.6

$ 2.8

$ 3.8

Wildlight

0.5

0.6

1.5

1.0

1.5

3.0

4.3

Newberry

0.6

1.8

0.7

1.4

2.6

Worcester Resiliency Upgrade

—

10.2

Boynton Beach

0.9

—

2.3

—

3.0

3.4

New Smyrna Beach

0.6

—

0.9

—

1.6

2.6

Central Florida Reinforcement

0.9

—

1.5

—

0.1

2.6

4.3

Warwick

0.5

—

1.5

—

0.4

1.9

Renewable Natural Gas Supply

Projects

1.0

—

1.5

—

2.5

5.4

Miami Inner Loop

0.9

—

0.9

—

2.8

7.6

Duncan Plains

—

Total Pipeline Expansions

6.9

1.3

13.8

2.1

4.0

22.8

46.1

CNG/RNG/LNG Transportation

and Infrastructure

6.6

3.5

20.5

10.4

16.4

25.5

26.5

Regulatory Initiatives:

Florida GUARD program

1.9

0.9

5.1

2.4

3.6

6.9

9.9

FCG SAFE Program

2.3

1.1

6.2

2.2

3.8

8.5

12.0

Capital Cost Surcharge

Programs

1.4

0.8

4.3

2.4

3.2

5.7

7.1

Electric Storm Protection Plan

1.8

0.7

4.4

2.0

3.2

5.9

8.8

Maryland Rate Case

0.5

—

1.1

—

1.5

3.5

Delaware Rate Case (1)

0.7

—

2.9

—

0.6

4.5

6.1

Electric Rate Case (1)

2.4

—

5.2

—

0.3

7.1

8.6

Total Regulatory Initiatives

11.0

3.5

29.2

9.0

14.7

40.1

56.0

Total

$ 24.5

$ 8.3

$ 63.5

$ 21.5

$ 35.1

$ 88.4

$ 128.6

(1)

Includes adjusted gross margin attributable to interim rates during 2024 and 2025. See additional information provided below.

Detailed Discussion of Major Projects and Initiatives

Pipeline Expansions

Worcester Resiliency Upgrade

In 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, Delaware 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. Construction has commenced and the project is expected to be placed into service in mid-2026 dependent on final FERC approval.

In June 2025, Eastern Shore filed a limited amended application with the FERC requesting revised initial transportation rates for the project. The revised rates reflected increased capital costs associated with unanticipated changes in global markets and supply chains, including the availability of skilled laborers with the requisite certifications to work on this project. Eastern Shore requested expedited action by the FERC in relation to this matter and an approved order was issued in July 2025. The project is expected to generate $10.2 million in adjusted gross margin in 2026 and $17.6 million in 2027 and thereafter.

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 Florida Public Utilities Company ("FPU") for projects that will provide additional supply to coastal communities on the East Coast of Florida, which are experiencing significant population growth. Peninsula Pipeline proposed several pipeline extensions to 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. New Smyrna Beach was placed into service during May 2025 and construction is projected to be complete for Boynton Beach in the fourth quarter of 2025.

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 which are also experiencing significant population growth. Peninsula Pipeline proposed to 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 went into service in July 2025.

Renewable Natural Gas Supply Projects

In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of Transportation Service Agreements with FCG for projects that will support the transportation of additional renewable energy supply to FCG. The projects, located in Florida's Brevard, Indian River and Miami-Dade counties, will bring renewable natural gas produced from local landfills into FCG's natural gas distribution system. Peninsula Pipeline will construct several pipeline extensions which will support FCG's distribution system in Brevard County, Indian River County, and Miami-Dade County. Benefits of these projects include increased gas supply to serve expected FCG growth, strengthened system reliability and additional system flexibility. The Florida PSC approved the petition at its July 2024 meeting with the projects estimated to be completed in the first half of 2026. In October 2025, the Florida PSC approved amendments to the Transportation Service Agreements that were filed to include Peninsula Pipeline as a party to the related interconnection agreements.

Miami Inner Loop Pipeline Projects

In 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 FCG's distribution system in the area, as well as enhance FCG's access to obtain gas from various points in the Miami-Dade County area. The expansion was approved in February 2025 and interim services began in August 2025 with permanent facilities expected to be in service by the second quarter of 2026.

Duncan Plains Pipeline Project

In July 2025, Aspire Energy Express entered into an agreement with American Electric Power to construct and operate an intrastate natural gas pipeline in central Ohio to serve a new fuel-cell facility, which will provide on-site electric power to a data center. This new transmission infrastructure is expected to be in service in the first half of 2027.

Regulatory Initiatives

Maryland Natural Gas Rate Case

In January 2024, the Company's natural gas distribution businesses in Maryland, CUC-Maryland Division, Sandpiper Energy, Inc., and Elkton Gas Company (collectively, 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 $6.9 million with a return on equity ("ROE") 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 and the assets 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 Study

In January 2024, the Company's natural gas distribution businesses in Maryland 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 Case

In 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 ROE 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 in October 2024. A settlement among the Company, PSC staff and the Delaware Division of the Public Advocate was reached and approved by the Delaware PSC in June 2025 providing an annual revenue increase of $6.1 million, as well as dividing the rate case into two phases. Rates set to recover the approved components of the increase were effective in March 2025. In October 2025, a settlement among the Company, PSC staff and the Delaware Division of the Public Advocate was reached for Phase II of the rate case addressing tariff-related changes including rate design and approved by the Delaware Public Service Commission with rates effective as of October 15, 2025.

FPU Electric Rate Case

In 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 which was approved by the Florida PSC in July 2025, provides for a total revenue increase of approximately $8.6 million on an annual basis, with $1.0 million of the increase deferred from the first year's base rate increase and recovered over three years. A step-up rate increase was also approved for up to $0.7 million, upon completion of the purchase and refurbishment of certain substations, which is expected in December 2026.

FCG Depreciation Study

In February 2025, FCG filed a depreciation study with the Florida PSC. The application is requesting approval of revised annual depreciation rates, as well as a reduction related to a reserve imbalance that would be amortized over a two-year period. The outcome of the application is subject to review and approval by the Florida PSC. The Florida OPC filed a motion to hold this filing in abeyance, which was denied in April 2025. The OPC has since filed motions to reconsider and dismiss the docket, which were denied by the Florida PSC in September 2025. At this time, the docket is set for hearing in December 2025.

Other Major Factors Influencing Adjusted Gross Margin

Weather and Consumption

For the nine months ended September 30, 2025, increased customer consumption, which includes the effects of colder weather conditions, largely in the Company's Ohio and Delmarva service areas, compared to the prior-year period resulted in a $4.8 million increase in adjusted gross margin.

The following table summarizes heating degree-day (HDD) and cooling degree-day (CDD) variances from the 10-year average HDD/CDD ("Normal") for the three and nine months ended September 30, 2025 and 2024.

Three Months Ended

Nine Months Ended

September 30,

2025

2024

Variance

2025

2024

Variance

Delmarva Peninsula

Actual HDD

(2)

2,505

2,287

218

10-Year Average HDD ("Normal")

(8)

2,538

2,635

(97)

Variance from Normal

(15)

(21)

(33)

(348)

Florida

Actual HDD

—

611

511

100

10-Year Average HDD ("Normal")

—

526

512

Variance from Normal

—

(1)

Florida City Gas

Actual HDD

—

310

231

10-Year Average HDD ("Normal")

—

234

239

(5)

Variance from Normal

—

(8)

Ohio

Actual HDD

107

3,881

3,180

701

10-Year Average HDD ("Normal")

(10)

3,480

3,661

(181)

Variance from Normal

(22)

401

(481)

Florida

Actual CDD

1,298

1,528

(230)

2,602

2,824

(222)

10-Year Average CDD ("Normal")

1,429

1,420

2,624

2,615

Variance from Normal

(131)

108

(22)

209

Natural Gas Distribution Growth

The average number of residential customers served on the Delmarva Peninsula increased by approximately 4.3 percent for both the three and nine months ended September 30, 2025. The average number of residential customers served by Florida Public Utilities Company increased by approximately 3.5 percent and 3.9 percent for the three and nine months ended September 30, 2025, respectively, while the average number of residential customers served by Florida City Gas increased by approximately 2.2 percent and 2.1 percent for the three and nine months ended September 30, 2025, respectively.

The details of the adjusted gross margin increase are provided in the following table:

Three Months Ended

Nine Months Ended

September 30, 2025

(in millions)

Delmarva

Peninsula

Florida

Delmarva

Peninsula

Florida

Customer Growth:

Residential

$ 0.3

$ 0.6

$ 1.2

$ 2.4

Commercial and industrial

—

0.6

0.2

1.7

Total Customer Growth

$ 0.3

$ 1.2

$ 1.4

$ 4.1

Capital Investment Growth and Capital Structure Updates

The Company's capital expenditures were $335.6 million for the nine months ended September 30, 2025. The following table shows a range of the forecasted 2025 capital expenditures by segment and by business line:

2025

(in millions)

Low

High

Regulated Energy:

Natural gas distribution

$ 170.0

$ 175.0

Natural gas transmission

170.0

175.0

Electric distribution

35.0

40.0

Total Regulated Energy

375.0

390.0

Unregulated Energy:

Propane distribution

12.0

15.0

Energy transmission

8.0

10.0

Other unregulated energy

12.0

15.0

Total Unregulated Energy

32.0

40.0

Other:

Corporate and other businesses

18.0

20.0

Total 2025 Forecasted Capital Expenditures

$ 425.0

$ 450.0

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 political and 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. At September 30, 2025, the Company further increased and refined its 2025 capital guidance range to $425 million to $450 million given progress on its capital projects.

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 September 30, 2025, as the Company continues to remain focused on moving back closer to this target ratio. In the last twelve months, the Company has issued $92.0 million of new equity via its DRIP and ATM program, representing 729 thousand incremental shares.

Chesapeake Utilities Corporation and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

Three Months Ended

Nine Months Ended

September 30,

2025

2024

2025

2024

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

Operating Revenues

Regulated Energy

$ 146.4

$ 130.6

$ 497.8

$ 429.7

Unregulated Energy

40.7

35.6

195.3

160.1

Other Businesses and Eliminations

(7.5)

(6.0)

(22.0)

(17.6)

Total Operating Revenues

179.6

160.2

671.1

572.2

Operating Expenses

Regulated natural gas and electricity costs

31.7

28.4

137.3

105.7

Unregulated propane and natural gas costs

10.7

9.8

71.4

53.4

Operations

53.6

49.5

166.5

153.4

Maintenance

6.1

5.1

17.5

16.6

Depreciation and amortization

23.3

16.8

67.7

51.7

Other taxes

9.0

8.9

27.6

27.0

FCG transaction and transition-related expenses

0.2

0.8

1.0

3.1

Total Operating Expenses

134.6

119.3

489.0

410.9

Operating Income

45.0

40.9

182.1

161.3

Other income, net

0.2

0.5

1.2

1.7

Interest charges

18.2

17.1

54.1

50.9

Income Before Income Taxes

27.0

24.3

129.2

112.1

Income taxes

7.6

6.8

35.0

30.2

Net Income

$ 19.4

$ 17.5

$ 94.2

$ 81.9

Weighted Average Common Shares Outstanding:

Basic

23,526

22,501

23,265

22,346

Diluted

23,629

22,564

23,360

22,402

Earnings Per Share of Common Stock:

Basic

$ 0.82

$ 0.78

$ 4.05

$ 3.67

Diluted

$ 0.82

$ 0.78

$ 4.03

$ 3.66

Adjusted Net Income and Adjusted Earnings Per Share

Net Income (GAAP)

$ 19.4

$ 17.5

$ 94.2

$ 81.9

FCG transaction and transition-related expenses, net (1)

0.1

0.6

0.7

2.3

Adjusted Net Income (Non-GAAP)**

$ 19.5

$ 18.1

$ 94.9

$ 84.2

Earnings Per Share - Diluted (GAAP)

$ 0.82

$ 0.78

$ 4.03

$ 3.66

FCG transaction and transition-related expenses, net (1)

—

0.02

0.03

0.10

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

$ 0.82

$ 0.80

$ 4.06

$ 3.76

(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 Subsidiaries

Consolidated Balance Sheets (Unaudited)

Assets

September 30,

2025

December 31,

2024

(in millions, except shares and per share data)

Property, Plant and Equipment

Regulated Energy

$ 2,848.6

$ 2,661.8

Unregulated Energy

481.8

463.7

Other Businesses and Eliminations

38.4

29.9

Total property, plant and equipment

3,368.8

3,155.4

Less: Accumulated depreciation and amortization

(617.7)

(567.6)

Plus: Construction work in progress

254.4

148.1

Net property, plant and equipment

3,005.5

2,735.9

Current Assets

Cash and cash equivalents

1.8

7.9

Trade and other receivables

82.3

80.0

Less: Allowance for credit losses

(4.2)

(3.3)

Trade and other receivables, net

78.1

76.7

Accrued revenue

25.2

37.8

Propane inventory, at average cost

6.7

8.9

Other inventory, at average cost

18.2

18.0

Regulatory assets

30.0

23.9

Storage gas prepayments

5.6

3.8

Income taxes receivable

28.7

6.8

Prepaid expenses

21.4

17.3

Derivative assets, at fair value

0.1

0.6

Other current assets

3.0

2.6

Total current assets

218.8

204.3

Deferred Charges and Other Assets

Goodwill

507.5

507.7

Other intangible assets, net

13.7

15.0

Investments, at fair value

16.8

14.4

Derivative assets, at fair value

—

0.1

Operating lease right-of-use assets

9.6

10.5

Regulatory assets

75.3

77.4

Receivables and other deferred charges

14.2

11.7

Total deferred charges and other assets

637.1

636.8

Total Assets

$ 3,861.4

$ 3,577.0

Chesapeake Utilities Corporation and Subsidiaries

Consolidated Balance Sheets (Unaudited)

Capitalization and Liabilities

September 30,

2025

December 31,

2024

(in millions, 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)

11.5

11.1

Additional paid-in capital

913.2

830.5

Retained earnings

597.2

550.3

Accumulated other comprehensive loss

(3.2)

(1.7)

Deferred compensation obligation

12.5

9.8

Treasury stock

(12.5)

(9.8)

Total stockholders' equity

1,518.7

1,390.2

Long-term debt, net of current maturities

1,437.9

1,261.7

Total capitalization

2,956.6

2,651.9

Current Liabilities

Current portion of long-term debt

34.5

25.5

Short-term borrowing

95.8

196.5

Accounts payable

89.2

78.3

Customer deposits and refunds

44.9

45.7

Accrued interest

17.4

4.8

Dividends payable

16.1

14.7

Accrued compensation

12.1

23.9

Regulatory liabilities

13.1

16.1

Derivative liabilities, at fair value

0.5

—

Other accrued liabilities

27.6

13.9

Total current liabilities

351.2

419.4

Deferred Credits and Other Liabilities

Deferred income taxes

338.8

296.1

Regulatory liabilities

186.4

184.0

Environmental liabilities

2.8

2.2

Other pension and benefit costs

15.0

13.2

Derivative liabilities, at fair value

1.3

0.1

Operating lease - liabilities

8.0

8.7

Deferred investment tax credits and other liabilities

1.3

1.4

Total deferred credits and other liabilities

553.6

505.7

Environmental and other commitments and contingencies (1)

Total Capitalization and Liabilities

$ 3,861.4

$ 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 Subsidiaries

Distribution Utility Statistical Data (Unaudited)

For the Three Months Ended September 30, 2025

For the Three Months Ended September 30, 2024

Delmarva NG

Distribution

Florida

Natural Gas

Distribution

FPU Electric

Distribution

Delmarva NG

Distribution

Florida

Natural Gas

Distribution

FPU Electric

Distribution

Operating Revenues

(in millions)

Residential

$ 9.3

$ 23.2

$ 15.4

$ 8.3

$ 21.6

$ 16.0

Commercial and Industrial

8.6

46.0

12.9

7.1

38.6

14.4

Other (1)

1.6

13.9

2.4

10.1

(0.5)

Total Operating Revenues

$ 19.5

$ 83.1

$ 30.7

$ 17.8

$ 70.3

$ 29.9

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

Residential

254,152

705,262

99,088

237,744

689,005

100,207

Commercial and Industrial

1,900,478

11,068,460

110,078

1,913,091

11,757,062

118,214

Other

70,386

1,772,152

—

59,512

2,156,255

—

Total

2,225,016

13,545,874

209,166

2,210,347

14,602,322

218,421

Average Customers

Residential

106,028

212,061

26,067

101,635

206,325

25,776

Commercial and Industrial

8,445

17,331

7,504

8,322

17,061

7,354

Other

131

—

118

—

Total

114,500

229,523

33,571

109,984

223,504

33,130

For the Nine Months Ended September 30, 2025

For the Nine Months Ended September 30, 2024

Delmarva NG

Distribution

Florida

Natural Gas

Distribution

FPU Electric

Distribution

Delmarva NG

Distribution

Florida

Natural Gas

Distribution

FPU Electric

Distribution

Operating Revenues

(in millions)

Residential

$ 74.2

$ 84.0

$ 39.5

$ 60.0

$ 76.2

$ 38.7

Commercial and Industrial

40.8

145.4

32.7

35.0

132.8

37.3

Other (1)

(1.7)

34.7

7.9

(2.2)

17.6

(3.6)

Total Operating Revenues

$ 113.3

$ 264.1

$ 80.1

$ 92.8

$ 226.6

$ 72.4

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

Residential

4,142,289

3,158,849

253,347

3,499,276

3,082,323

243,454

Commercial and Industrial

7,906,328

35,529,998

281,913

7,588,547

37,774,530

301,687

Other

223,124

5,038,164

—

207,213

6,528,899

—

Total

12,271,741

43,727,011

535,260

11,295,036

47,385,752

545,141

Average Customers

Residential

105,344

210,928

26,031

101,045

204,978

25,747

Commercial and Industrial

8,480

17,315

7,493

8,361

17,029

7,361

Other

129

—

109

—

Total

113,850

228,372

33,524

109,432

222,116

33,108

(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