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Chesapeake Utilities (CPK)

Participants
Alex Whitelam Head of Investor Relations
Jeff Householder President and Chief Executive Officer
Beth Cooper Executive Vice President, Chief Financial Officer and Assistant Corporate Secretary
Jim Moriarty Executive Vice President, General Counsel, Corporate Secretary and Chief Policy and Risk Officer
Tate Sullivan Maxim Group
Brian Russo Sidoti
Michael Gaugler Janney Montgomery Scott
Roger Liddell Clear Harbor Asset Management
Call transcript
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Operator

Greetings, and welcome to the Chesapeake Utilities Corporation 2021 Third Quarter Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, Thursday, November 4, 2021. I would now like to turn the conference over to Alex Whitelam, Head of Investor Relations. Please go ahead.

Alex Whitelam

Thank you, Grant, and good afternoon, everyone. honor all great the you a time. first was to of join for It to Utilities lead excited very I'm Chesapeake Investor Team. Relations review it's know joining year-to-date late and through our to performance we and third XX, We September quarter appreciate today, us XXXX. you financial projects our demonstrated which employees possible safe and operating keeping announced growing and executing in how customers, as but serving our our we identifying continue exciting this on and results, Yesterday, we effectively new marketplace. ever-changing investment as

X, Slide are and Executive Vice on and As Jim me today General Vice Officer; and with Executive Moriarty, shown the call Officer President, Policy and Risk Counsel, participating Jeff Officer. on Cooper, Corporate Financial Householder, Chief Secretary; Corporate President, Executive Chief Assistant Secretary President Chief Beth and

our Presentation joining Investors members prepared After virtually. our We us presentation accessed & other the remarks, website will for can the under also Events subsection. have management the team call be up on open questions. our we in of page Today's

Moving remind in you involve would and include may uncertainties. that like statements risks forward-looking to to conference call discussed this matters I Slide X. that

our Forward-looking statements actual forward-looking The XXXX could such XX-Qs Form our on section results. factors materially and information differ the actual for from our company's Form statements harbor that annual cause and could of the on XX-K third quarter from statements report to safe and results. second projections first, provide differ further

governance we in Additionally, some highlight reports. our social continue to initiatives environmental, of our quarterly key and

drivers year-to-date results remarks Jeff of provide key opening and company's over and third to call the the Jeff? quarter our performance. turn to I'll Now and some

Jeff Householder

you good today. our and call joining Alex, for you, afternoon, and thank Thank

surge and efforts territories an in COVID our the Let in our including update manage with a service cases Delta The on usual, through me variant the throughout quarter, our drove start, third continuing COVID-XX ongoing pandemic. and to as company.

of employees positive in virus. the reporting of number and we've exposure seen cases couple the past the reductions to weeks, our Over

to continue any for with side employee downtime effects. time with deal to and shots encourage vaccine off We vaccination both the

most legal utilities, the vaccination testing also mandates applicability the remote identify emergency the the federal office President's order following or many vaccination potential of state rule. may our COVID the challenges As to requirements return fall. We're that impact various and workers to companies, we're timing under result executive that NOC to working the our impact initiatives. application were from could mandate hoping or sometime the we this and Like

cases slowed However, we various increased. we a that Dealt process as

have our field that team; recall of over their pandemic. providing may well operation those report total office XX% throughout You services continued locations to the

no team, to have and to entire both to field and performed pandemic. our work well substantially current upgraded support the remotely work during designed environment our those office. technology Our the to capabilities services have back We've reason

In fact, facility there long-term be needs. future believe we significant our we will rebalance savings as

services. you our As approach any of reliability customers of of safety employees goal will disciplined in with and and changes our the ensuring the organizational well-planned end a the pandemic would of manner the expect, we

a and employees the And ways team each members internally for with communicated Prior the during ensure performance, we the one exchange pandemic objectives are beginning weekly has our conducted corporate to to month. with These calls of with our various the across locations, team week, review of most members have future conducting now holding the hall been we've first them since pandemic. all-employee We've of first opportunities has These to team XX conducting high One tent, team meetings remained for in-person accompany been the meetings personally ideas. meetings in-person provide the and this plans for and been with continuing two distance locations last contribution communications are held to their team and call socially weeks held In pandemic, of an frequent discuss our meetings the XXXX. been virtual and all continued the to to dedication priority. since to and XXXX early town me. meeting – service and leadership other weeks the two myself of senior masks, we've having territories. our and reengaging wearing and thank rewarding outside a success one each under for every been were the our ability

vision introducing value we're mission, statements. As our recently part of and these meetings, refreshed

strong through for in our energy as that simple role developing an and future. they advancing statements high-quality employees demonstrate remain third out We developing of levels as sustainable a in growth. as contribute carbon our and think existing way, well lower continuing team notably We sustainable to these laid our for earnings. energy customer care that with interest executing remarkably proud And operate various in opportunities in businesses to delivering continue pursuing Our a active quarter had a of instrumental groups members declaratory plans effective we've our survey statements. leadership higher focus I delivery

X, compared reported share third the quarter in $X.XX, the $X.XX an of XXXX. to Slide was of shown $X.XX As earnings on increase per or XX.X%

As highlighted Slide of gross $X.X X, approximately over million the increased third on margin XXXX. quarter

in difference, where quarter. during regulatory year-over-year. were quarter recognized timing QX from previous the increased from $X settlement everyone third Michael reminded the a million the we rates gross as Absent X.X% calls, adjustment and margin or year's QX included results by Hurricane our last and cumulative in Michael Hurricane However, our third

margin systems, and Energy. replacement increased Gas, for acquisitions for margins Natural of Scandia included quarter and businesses Gas the Florida Elkton gas well in Some as station, propane heater the of the our from contributions expansion in Western Aspire pipeline projects, the growth key pipeline program distribution organic natural as drivers the our

of in increase $X.XX an related Net XXXX and driven factors mentioned We of gas compared the various established by or service COVID-XX million. also growth public addition authorized COVID-XX income as nine from previously, XX.X% realized was expenses by to earnings $XX.X services. a pandemic was the assets commissions. net reduction months to to regulatory growth $X.XX XXXX. expenses normal share year-to-date weather with in more the the return first per to Year-to-date for oil all a of This $X.XX, was and and

$XXX to of and X% the to the Our annual our natural development XXXX, within our propane propane customers year, serve This approximately nine strategy. to growth has and into was XXXX, our XX,XXX growth achieved delivery largely and the gas executing for communities our and services expansion the portfolio. distribution driven new service We're demand organic customer our net income and are on natural nine the Growth Since fortunate income in of gas months ago. I'm a investment and added exceeds gas, electricity real is X,XXX primary our more residential growth opportunities pipelines net by been customers growth our million XXXX teams Peninsula. Delmarva three total that acquisitions driver customer commercial Florida that to provide in report happy of successfully natural our first remains for new than integrating years in through just of growth. the residential our experiencing months the territories, Over capital time, business through we've distribution, of our high. growth significant areas, energy testament operation X.X% to first that customers. of systems of rates transmission all

for investment now million capital XXXX is projected range to Our $XXX $XXX million.

in be units to capital value energy across I'll deliver. business serve more just minutes. projects our continued communities fortunate growth the that and continue about and few to We investment we appreciate our have initiatives a

our regarding So further let Beth? the call me over turn discussion Beth performance. to for

Beth Cooper

Thank you, good afternoon, everyone. Jeff, and

Turning share year-to-date $X.XX period represents to or $XX.X $X.XX, net $X.X to for Earnings same third the of million per for same XXXX compared $X.XX a $XX.X growth period grew to by Earnings compared of last in compared months Net per rate third same year. growth for last of for first share The income share, basis, increased Slide to the $X.X compared income growth EPS the the to million period XX.X%. the million. representing to nine net issuance year-to-date the our the On XXXX target This to our the half large million capitalization the latter quarter of income achieve up to and range. rates same structure last quarter stock income year. rebalanced $XX.X compared was capital of X. net a the per million the year. quarter for for was in quarter to growth both XX.X% we as reflect $X.XX of

of increased income drivers margin gross transformation As gross as Exclusive XXth. continued Slide settlement, the gross Jeff higher regulatory coupled two XX%. X, across standardization income first shown that last third The second as we Michael ended and Hurricane the result compared of with on by the months associated continue nine of while and enterprise. difference year, well drivers the margin both timing to provide operating slides highlighted the with as and XXXX collaboration September focus to the management business the expense was quarter for key and expenses quarter efficiency, grew X.X% next earlier, margin quarter business the on net

the last are For quarter quarter, Slide $X.XX X, third share the year's on growth as drivers highlighted key earnings shown. results over per in of the

Let me some additional provide color.

tax Michael quarter-over-quarter timing Gas XXXX quarter. now As the settlement. additional Contributions Public years in income periods into Act, authorized third the Western the Service settlement results. $X.XX carry negative earnings recognized by both higher. associated for generated in associated the regulatory we of per an share of tax with regulatory have an Gas months net acquisitions respective where the deferral Hurricane difference through impact and absence quarter, losses the $X.XX a mentioned, quarter, by allowed generated Michael the earnings CARES quarter federal to income of the pandemic-related with the the from operating regulatory quarter Elkton us year for was back to Commission. the Natural of in the prior from driven the $X.XX in recovery of third expenses the the which as In Hurricane incremental we Cumulatively tied favorable the impact was rate nine $X.XX

consumption $X.XX by $X.XX tied investments. items for in results, combined capital depreciation, you this regulatory year-to-date amortization pre-pandemic EPS structure property the associated demand year of was help due for expenses during Offsetting levels. gross the realign the our of again growth additional X, other amounted in increased to in year by previously margin share. earnings taxes Our acquisitions with the a our to the impact per increase and growth equity changes finally, in an generated Slide quarter. natural our headwind per by us more $X.XX capital margins previously new grid of headwind; higher third capital margin $X.XX On well net same core by for to and in gas year-to-date I $X.XX Depreciation, can expansion businesses growth $X.XX pipeline a higher bridge followed $X.XX. deferral associated see returning taxes were higher shares and core representing the mentioned with as follows: CARES $X.XX driven in that margins organic The customers as propane with were $X you drivers includes by this of And EPS. in the was growth offset gas to share. the the $X.XX our higher property delivered amortization business operations, from spoken for over the division, per COVID-XX This that in in prior core unusual the the gross higher. share; our of share to and $X.XX booked were tied natural we've impact investments growth Act items, new Operating in program generated per a of that Operating higher projects, propane electric contributions $X.XX key performance XXXX expenses expenses as and XXXX Florida acquisitions, and outstanding business our consumption, the nine gross months; EPS. to the assets this including from sale net gains offerings

a of in $X.XX tied $X.XX due impact. resulted impact share. other the operating expenses acquisitions a increase in $X.XX year-to-date Again, items an businesses and the growth our expenses shares finally, outstanding were core were in higher for to Additional period added $X.XX expenses and the incremental to operating per

we X, forecasted XXXX expenditures guidance. Slide our Moving to capital narrowed have

other Eastern Again, our RNG XX% the future of CapEx Palm approximately ensure million & associated million, be growth. which to the CNG, the and recently than increasing We balance the now priced into to to from natural expansion maintain is have with million Given growth and Meter range our Shore certainly concentrated forecasted LNG our the reported. projects to Gas Beach we Somerset Tony the meet system with capacity Light $XXX extension, transport acquisition with areas, expect capital of Landfill, announced capital expansion, the Haven of $XXX a various additional Pathway largest service pipeline Florida fleet to program, our and and which Maryland; our recently of support gas sheet we the support from $XXX Grip expansion in end in to year-to-date system project Winter electric Delmarva County, completed along the our strong in expansion built and the we lower Expansion, of in to infrastructure, more Noble regulated improvement customer activity distribution transport. projects, natural range Road Florida's in investment demand to beachside Marlin's $XXX sufficient distributions the RNG our previously including Escambia assets experienced Western Florida access energy Natural Power pipeline growth new the projects, million, the investments secondly have Ohio, we Energy fuel completed our competitively from announced, is Del-Mar with gas Station newly

is you revolver September and debt short-term less billion, $X.X as million at which an XX, rate of was As XXth, capitalization X.XX% now fixed $XXX Slide an comprised XX% average stockholders' debt of X%. long-term total on rate interest our XX% can under approximately at $XXX average of in of than million, see equity,

line short-term facility options. new million, a to XXX-day lenders. financing long-term capital had we And our multiple facilitate few credit two three the on to which credit $XXX million continue August $XX XXX-day in the uncollateralized issue our X.XX% continue a debt revolving debt let company to a strategies, minutes of with capital, million million one-year senior into rate here. spend executed tranches company tranche In participating short-term the a no-purchase capital needs. consisting lenders of five-year entered to multi-tranche needs, facility with both debt note and extension with me senior $XXX XX-year of long-term During third meeting we and a There three both for $XXX tranche, the the issue XXth, term. multiple the note Under in a January of replaced short-term agreement agreement, order In at will notes. syndicated regards of revolving million just are our quarter, on a $XXX which syndicated

Marlin financing We of pipeline the one in quarter. was is $X.X Services third also support new business, continued secured leading of facility sustainability-linked the to This million virtual providers used Gas investments in country's of which our services.

to providing This their achieve to broader help and solutions, renewable financed natural efforts. of the soon of compressed gas. gas is sustainability to natural customers addition of poised with specific the company sustainability the liquefied its through transport complex highly goals lending as customers part In financing was its through Bank be America

earnings year earnings of certainly Chesapeake new to in reinvested grow investments and drive equity beyond about as value of increasing we enhancing local strong the speak on the efforts to financial further our remain by focused strategic while shareholder communities. to you that with equity terms this our plans increased In retained utilize new $X.X business. the we performance. and issue Thank making capitalization stock continued to opportunity Utilities for drive to equity, you our market our traditional have our of sustainability continues million our

along and year I to for of like would very guidance. We Jeff? prospects talk for of turn the solid call our on continue review future to our to achieving now about earnings to remain Jeff results. with track back a CapEx another growth record

Jeff Householder

Thank you, Beth.

strength capital speaks we capital capacity virtual gas future platforms including of five the our model. strong our optimizing well our generate business as for opportunities balance as business of to nature noted, through XX growth Marlin growth our make growth investing focus and transmission, with ability highlights we which remain organic investments, in positioned As and growth earnings RNG existing hydrogen. in propane, on through the investments and our sheet, and transformation sustainable growth, solutions the for well pipeline and businesses Beth proven Slide to

we drive initiatives of we're we few we Slide experience I've the we As highlighted, energy with see XX, excited the for already horizon our we sustainable long-term highlight to opportunities significant the that services and to On continue the growth. provide, demand continue on to on. a work major

growth As shown existing slide, projected the in territories. to of is on a capital our and capturing significant service portion the devoted our investment businesses core expanding our

XX regulatory highlights and table latest on Slide expansion, and and acquisitions projects initiatives, margin CNG transportation, including RNG, key initiatives. Our pipeline

expansions is which $XX.X Year-to-date, generate gross margin this and the XXXX XXXX total when Florida this extension projects are pipeline remind you, $XX.X of does new city are on have approximately incremental increase and expected approximately XXXX, expected is in table. years growth. to and not our include compared an for million of reflected million respectively. generate table projects million including margin next $XX As to serve we $XX.X margin Pipeline system. frequently the in the million, million in for Key $XX.X expansion to beachside organic in we distribution era the XXXX, gas XXXX to

and our for a third and are As for significant gas and we've fuel carbon-intensive we beneficiary sources building project systems We're gas the natural community, It and to to natural wood distribution Elkton example Del-Mar Somerset from accomplishment full acquisitions first Energy Gas Somerset service extend and County, for service. Gas. Natural estimates already of One the pleased and demand like populations of our significant geography and Maryland. the project for place Pathway our to margin of is XXXX, gas to said as gas in and the of time XXXX the in displacing before, consumer the grow high. particularly $X.X remains We're gas during county transmission million with Western the million demand local of the integration quarter transmission bring natural distribution customers oil to was $X a chips. section respectively

to margin Meter the Escambia the serving piping pipeline Pensacola Panhandle our increase area. Station FPU expect our contribute of million We $X further the from with acquisition recent acquisitions Florida in near

made quarter, third the of our million asset on the Under totaling regarding settlement segment, In Council regulatory On our which regulatory COVID-XX years, will gas $X.X Public for and several advances was finalized. operations. established fronts. during margin also January an the amortization the regulatory X, we recovered the mechanisms will with respective Office natural front, significant through assets regulatory be electric associated XXXX, amortized we July, rate over these offset with two and in beginning the increase be There that assets.

a We the related of this replacement an of Gas the to We program. staff of we the pipeline a Counsel Office Service Aldyl-A into the five-year proposed Maryland the with pipe and form in also charge on Under surcharge. fixed to program, some agreement accelerating Commission replacement People's are reached Public Maryland on of these recovering dive rider more projects. Elkton detail cost

Slide transportation to now XX, the we of project. were completion of renewables, RNG excited our announce first in Moving to terms

the will the third Noble During quarter, Road RNG in generated Shiloh, conventionally Ohio aspire mile displace in business transport existing XX.X to pipeline, infrastructure our used the region. produced Aspire The a to natural gas. RNG will be Energy completed Landfill which

transport The equivalents RNG remain Landfill In fueling to are million RNG year. in is stations RNG to capture We will equivalent serving that projects. to on residential vehicles. additional customers, dispensed of quantities R&D CNG the Noble and gas be fuel project focused addition to Road investing in and per gasoline X.X commercial the expected

For transportation for million gross in estimate additional we $X margin RNG-related XXXX, projects.

to through of fertilizer create and the investments matures, development provision investments. these or renewable offtake prior electric their serve example, RNG well opportunities. also opportunities new to various equity develop the as for expect will services generation we've to biogas solar considerable in the participate gas significant in agreements, time conventional take see calls, As financing drawing as we These projects and waste-to-energy facilities market as discussed

going as entered the and Two we mentioned, projects type the that Peninsula developed facility, into first be Delmarva continue the recently get look completion. use on our closer As and of we'll of construction to to financing to funding projects projects. provide forward. CleanBay ways information to We'll energy begin additional DevCo and Bioenergy to sustainable-linked that Beth continue

will renewable produce various soil process of Following completion, and other waste significant and organic amendment projects both natural quantities poultry gas, products. fertilizer

subsidiary oil constructing RNG the we're services will interconnect gas to and gas transport Shore on natural the system. point our pipeline Our Eastern

opportunities We foremost waste we're the continue benefit our solution to to territory. situation of environmental a targeting. waste to management underlying issues projects focus provide on an management the fundamental service in environmental is Providing that projects solve

projects, including providing fleets, to but and filling CNG As the we're the with is important The and Gas. the with Savanna responsibility vehicles, greenhouse customers and biogas vehicles gas well access an station vehicles example, fuel with station that station to emissions with on logistics gas gas processing CNG an We're the produce XX% our local production lower limited natural industry by construction from gasoline and not natural and nitrogen important and of to emissions partnership is poultry natural nearing emissions ongoing of these available critically to these oxide Delmarva aligns reason sole end pursuing job providing The waste market and is diesel economic strengthen making and as plant valuable the fleet. in CNG-powered supply burning it's up Marlin certainly the company's Southern it viability The environmental XX%. of to designed refueling marketable deals. helped economy. gas. renewable to commitment clean CNG by for vehicles of Port serve reducing to a the by as port for

to provide are turbine annual completion. gross the the fully in in option, facility when flat options the to on and our side And cumulative away CNG system, intention we're introduce Slide are nearing modifications as XXXX. the is projects is with gas an margin and to ENG turbine supply interconnect renewable expansion to recent fleets fuel million renewable investment the blend through $XX.X gas shows marketing our XX provide working equipment. currently work million service. for for The note, CHP is the elect estimated customers. Florida $XXX we natural from company planned approximately Island, upstream Our contribution these opportunities mechanical to an The is last and to at hydrogen complete, fuel completing and projects be days Amelia other of

gives project We're data levels Our hydrogen. tankers a downstream program we've unique of customer a the the that approved XX% several Marlin next and four Best The hydrogen of transport with on levels. revised we air year to increasing reduced corporate discover their complete call requirements, the areas effects is some over and facilities. to Jim? with Jim for been will I'll more converted identify discuss replacement part to begin project project our our industrial at blend equipment. regulatory percentage commitment safety, we blends to our CNG in Moriarty existing scheduled turbine. in to up a Island distribution and now anticipate we of opportunity culture. I the initiatives X% of hydrogen on Amelia turn our attributes when opportunities the test our turbine hydrogen to carbon plant measurement, recent we'll prior operational of ESG availability Energy. by as and particularly on the to turbines to our We've were our solar of that mentioned as a and a together our be offered of from us proposed U.S. emission monitoring blends site, system, as usual working supporting flag conference the also call Department research hydrogen of CHP the customers

Jim Moriarty

with everyone. On both of these advancements we affairs important discussed matters supporting afternoon, our government you Jeff, is made Ohio. some am leading team and Thank Slide you, XX, both today. to have proud be previously It states. for good highlight Florida legislative and the I within again of great we and in

demand and of to provide elected available We renewable energy our viable for that mechanism on are is customer be meet working focused natural foremost natural first to diversified to with representatives a and to part portfolio. gas gas ensure a our

to and are We our resource serve stakeholders as effectively working also with are communicating a and that we our ensure to customers them.

with at our recent apprised we are similar stages in future and with commissions' to initiatives will businesses safe, of Slide public reliable in we regulatory energy our have service jurisdictions, keep while various proactively you and in of secure XX investments other and on key XX our We further where our legislative worked initiatives recovery various our supporting some working economical to activities. of customers.

XX, began Program, or Slide its XXXX. make and on Infrastructure significant GRIP Reliability Utilities continues Public to shown As Gas progress in that Florida

We have invested approximately $XXX Floridians. of mains, XXX for distribution systems miles reliability expenditures safety more than the million capital of increasing to of many our upgrade and

XXXX company annually $XX over allows period million thereafter. costs of $XX per made to approximately a allows system through our by the Panhandle. six-year program of from investment for recover this and Michael the restore million the storm year total complete end million XXXX business FPU a to electric Florida distribution expect of we and the We $X.X at latest. The in amortize interest Hurricane The our the in settlement recovery to and XXXX settlement impacting

transmission Gross authority Our mandated in costs with capital highway Eastern projects. gas has associated and with interstate margin Shore railroad unit relocation XXXX $X natural to recover relocation these XXXX or million to be is in $X.X associated projects. million expected

the of community. we of information to July order, project rework years and bad this Infrastructure upgrade swing clause purchase the equipment, us in reached XX. the reliability expenses return of to earning through a the to services Florida a capabilities. for miles by X Maryland the allowing adjustment while $X.X implemented an over continue Maryland asset of in million. the Office the incremental includes or XXXX. of be anticipate business September, service power final settlement recovery and on our systems the debts, Elkton PSC STRIDE and for businesses cleaning for will natural Maryland's regulatory In Maryland year integrity and personal Also, and our our employees July, replacement utilities XXXX with plan, amount The PSC COVID-XX-related Development amount recovered protective cost Enhancement issued to In public in Counsel, investment. we Moving fuel customers and in purchased the and mechanisms our this The enhance This enabling and the gas accelerate appropriate will Public Slide approximately we Florida plan. this Under establish and through end pipe of our division. for expand a two to electric mechanism beginning Strategic amortized gas FPU's

Chesapeake and and understands XX importance leadership and in Slides environmental, our of role XX, the social matters. Utilities on provided As governance commitment

customers, that over commitment of to decreasing our the change listening inaugural We year, our continued to to our our justice fostered governance the sustainable our our principles. and and emissions sound have also and look communities. social report dedication and while of forward other growth before and highlighting serving each sustainability leading responsibility corporate we decades end our Our releasing

wanted of We highlight foundation our XX. unique Slide and to our which our success to culture, way of business. Turning corporate doing is the

Chesapeake a recognized awards. was number of the with Utilities quarter, During

We tenth company the we in recognized for the dedication were was customers units, We on workplace recognized year by journal XXXX. which Award, offer. year. the news a XX role we were and additional active our resource last a in recognized Stars has our as top named call, the celebrates row. Delaware top being over constant We and workplace to U.S. also several business company Across an Delaware those companies of best As Delaware best for playing our discussed in people, communities. our a earlier the this awards regarded with to in reflecting received were the for as the

the as operations service in to These were propane the our are our and commitment beginning we or for service which ERGs territories. equity, constant awards engagement best on focus our speak our resource slide. by have inclusion, our pandemic, of to engagement, safety groups this EDI. culture propane UC increase diversity worked the their recognized exceptional across of and Since six employee step and the the the to These elevating employee expanding company customer is Additionally, for to a Board. management employee next

have believe contributes our a William we and and brings enhance the we As of EDI Houston Chief Most and William including mentioned Chief leadership role and the Resources Diversity societal his experiences our and prior company experience to team numerous recently, drawing of advancement. of senior to inclusive we team key combination culture Officer to President welcomed that from an members to success as a Vice team. times, previous Human tremendous our team, diverse member Officer. as

that Prestigious and Additionally, diversity award bar our for Lisa's in third that announced Lisa Award addition Ethical to October, appointment serve. of Director ensure to the of governance steady This of in stakeholders. gender receipt the represents contributes outstanding Boardroom's our worldwide communities raised progress sector recognizes in that leadership announced North we value to America. for strong we long-term the the governance in corporate September, the Bisaccia. corporate best female enhancing our In utility companies for continues ethnic we Directors, have of daily Board all

of dedication each employee-centric and that the of to other. communities result promotes and direct customers, the our strong our culture and is diversity our and success Board supports Our commitment equity, inclusion our

learned businesses we continues most their commitment focus, remain four and our Engagement Safety Gas recognized building remains local strong. by heavily governance invested for have in recently safety of primary our to and were Association the we to continue Finally, our our that to safety. culture. communities American

three more in $X.X contributed Over of have the we years, million than last communities. local our support

our communities Additionally, through Sharing and of their Chesapeake organizations local employees Program, choice. support

and Children's the of comments. Memories some our closing Jeff? Jeff supports all will Life call business highlight, our back for being walk the company. few Program. through a a Child to I you propane highlights and you turn now with As appreciate energy their annually today I sharp Hospital

Jeff Householder

Jim. you, Thank

solid, years. strategy the XX above XX been years performance Our the long has our generate pretty returns regulated equity past for of our opportunity on been build returns. a to foundation last XX return Slide a fundamental invest regulated on for businesses successful stable in time period offer that We've related non-regulated businesses the CAP executing of and the shows over strategy. consolidated to

year exceeded for that As we've period. see, each you XX% entire

contribution Our guidance our On XXXX such that $X growth, Slide driven period to the Energy five-year enable of XX, solid and regulated our and to Aspire for that the businesses, strategies businesses. prudent performance reaffirm we billion. our as prudent by million continue continued is Propane, regulatory investments capital to unregulated $XXX and and Maryland ROE XXXX complement acquisitions, of growth customer margin

that guidance of earlier, investment discussed significant $XXX we to growth. to As discussed our XXXX Directors opportunities our driving finalizing $XXX we CapEx last strategic million our continue actually yesterday. of have just to narrowed us million. Board ahead we which We're In plan update, future confident we with

we our representing to per XXXX to from Moving our growth range and continue approximately to slide; of of the XXXX. share, EPS EPS also XX% of next guidance average $X.XX from end guidance the an $X.XX initiation support

express also person, optimistic to to XX Gene state throughout we been to for energy the Board today's I energy was future. key of him. Sunday, forward-thinking, Before hard my To He just company's for believe and be our family of He deliver. I'd up gas team. value remain strategy. condolences close our October Gene take sincere management counsel services a we Bayer. that and Gene will a we will component XX, Slide a will and of shoes country's we wonderful moment has have extremely always Board like miss The on was Gene well long-term the XX, passed fill, the to connected serve the markets natural a finish valuable provided on about over recognize member years. long-time presentation, Delaware.

on At delivery in capitalize our both natural and rates the opportunities, gas given bring and political growth Maryland, customer have new the new the to natural communities strategic customer gas. continued business like Our same we energy time, contribute that Somerset investments to approach support mix reflect expertise to interest County, carbon committed XX top five, growth earnings XX% and performance, XX, to quartile XXXX. through to years shareholder continuing to We're compound the one, has exceeded a lower October deliver each company. and which annual for on strategy. three, XX period return, including increase future focused We're for growth to our

Our our now address to targets Alex, you. we performance, financial focus our superior and operational investment quartile on excellence performance. that proposition continued with as and any top is our based Thank objectives can questions. well upon strategy, to ongoing of commitment pursuit execution as our our support

Alex Whitelam

line Thanks, you Jeff. questions Brent, have. please any for the open may

Operator

have Maxim our first Thank Group. you. Tate from with [Operator we question with Sullivan the Please question. Instructions] proceed your And

Tate Sullivan

would Thank conversions at that you. driver not fleet side? businesses. say? a Jeff, Or remarks regulated Good your afternoon. as gas? press your and is that looked distribution I a the it large is as your leading and business well. before week increasing, you Hi. there at conversion business But more have And CNG heard propane mentioned to auto you in for you to mention is CNG prepared I in release in on

Jeff Householder

it's things. of think a I Well, combination

we're that those propane few and done certainly, auto we've I the over other and have expanded of years a think focused last the some and conversions, number Florida fleet into now gas on our significant focus places. of

of And a so propane see propane proportion growing a that going as we our of significant forward our and portion business business.

that we're fleets into – mid-February X,XXX on that use working on station that inside port. station Savannah. the mentioned the that of past that that I Savannah variety with station we'll or On every some, a I go think; CNG they are the there service, day Port past now believe, actually the year. we're the various Georgia sometime gas focused in also with X,XXX move And fleet that of vehicles contracting actually in And of bring natural and it's in side, vehicles next I

going Georgia of we're I ground as move that future. our CNG fueling that CNG mentioned, that, into is a to use, know don't to is for major a facility efforts Beyond Carolinas. staging with the I and Marlin our part

phrase. the facility we cheaply the opportunity, more take Hopefully, of advance Marlin's your markets we Savannah many actually and to day, a find interesting it's moving – the like that. ability where question, an to if are and And access opportunistic see we'll Georgia opportunities in and in that answered vehicles we then to a think do also Carolinas, cheaply happen fast so I Tate. I easily where advantage more that can in use

Tate Sullivan

the that – separating and gross Yes. that detail. very to you the part to a project particularly small, years, the the for And look Ohio, next of No. two CNG Noble RNG on correct side? that is right can R&D it's like mostly looks Thank table, margin or mean, in pipeline much incremental transportation, that tell it Marlin at I now transportation a in small it way? RNG, you the very is transportation additional then going be

Jeff Householder

aren't a describe tell way that to to we've you based the opportunities And that that Marlin's able on in see we just and growth of look would opportunities We're It's what at of today. transport. publicly focused disclosed largely provide really this service correct point. at working there on on we to that variety that sort of are RNG future we across a believe country. the number opportunities I

currently provides. for marketing operation. so find forward. that But an services with We'll we're the provide it highly on us other certainly as Marlin focus that a Marlin lines we'll I RNG focused transport real going RNG – along Marlin can is And think

Tate Sullivan

from turning be it going can CNG last margin the or capacity the been me next Transportation fleet to or from with X.X that And growth you before X.X you. over. Thank Marlin Okay. year growth gross that your than high see? has higher roughly,

Jeff Householder

added we two I four we as opportunity we've Marlin. Marlin's We've existing growing trailers. Yes, number to trailers number over for our years. been mentioned able of and vehicles added frankly, to capacity see, and that be a transport a fleet capabilities emerging cab last of the which hydrogen, we've an converted two of

investment absorb to and businesses Marlin's it. than the continue doesn't grow our more overburden margins. and we've so I support in all we carefully carefully think we'll more trying they outstrip as typically don't carefully sure over capital grown to to of we with our they that margins to grow But produce business ensure vehicles to could ability fleet that the time their that adding business as continue been that to make them And

Tate Sullivan

very you Thank Jeff. much,

Jeff Householder

Sure.

Operator

And line with the next question Russo Sidoti. comes of proceed Please with question. Brian the from your

Brian Russo

is position have generating rising propane. with margin I this could understanding sharp of overall propane about business both technology you more particular, Hi. was wondering business a that kind capabilities if my the How going or rising of prices, in we environment. the propane into the Good afternoon. It's in propane price talk winter? Hey,

that on So can dynamic? you elaborate

Jeff Householder

then of over to things, couple she weigh and turn can I'll that in. A Beth and

down on We the as gallons. have peninsula well millions total but assets, Florida the into storage especially of significant with

well so positioned. are we And

And certainly able and recognize have also add hedging Beth, been something the to good be shape in might I that think in We good the we feel you fuel that winter. but that's in I a years, want our propane increasing, to that? to this management shape. successful we'll move group the through very like quite we're over into products active pretty winter prices pretty are think

Beth Cooper

would several what Brian, you. advance where what Thank I we have to be in and was up walk Sure. also basically paying programs going they're through just to add what customers in sign the season. mentioning, upcoming Jeff

programs. also when locking walking in customers are those supply programs, so the are those we behind under And in those

programs, locked up signed for have that the was those supply customers in under So ago months that.

the having contracts we two entered winter addition, as regards that also In have into coming in season. ago the in supply mentioned, diversity of months our Jeff supply the diversity we've of us peninsula, supply for across beyond to

diversity of spend we a of suppliers what as risk to committee management a we're a looking going into, going the that propane time So lot from. at get enter we're contracts to

gas markets, of our the greater at look you players cost to diversity some that when other are in see local is of weighted relative what so supply. And will our of you a

those way we're where localized retail going more typically based so unlike the we taken the more market price we've to And as are, – you going be we've supply into going done to on And come then prices are go, points. heating to actions. is the teams

prices in supply response we retail to market point, to the can regards at terms where your what multiple opportunity retail in up so pricing. where, our that's locked is doing coming in are. more may supply in, certainly little of sources have costs our if go a bit look cost already And we supply We've is to but from

being we've actually well multiple part lot as of competition. opportunity into find there's upcoming have that a things or But times, And supply provide of having – the play. we local the to certainly season. in of Jeff come planned So an indicated, some to the for we ourselves advance

Brian Russo

figured financing, the Got That's first growth acquisitions, Thank for opportunity? last and million there's just Marlins, that for quarter, designated $X.X it. I on trucks of kind million I that. anything mentioned Is possible $X.X Marlin, a think On specifically of that? seems sustainable that's You you Right. that that. for get of you what you it for I'm the its wondering lot in mentioned or trailers or your particular? to thoughts

Beth Cooper

Sure.

specifically of gas. particular talked making that related entered transporting the is tranche about as is to this that we going renewable begin we So to financing Marlin is to that concept Marlin investments natural the around, the and thought

other we some Bank America or financial have a as entered some that of as other institutions well with financing. like We this month opportunities sustainability-linked into

can as on Marlin So financing incremental projects. tied this Brian, investments. take But that other sustainability-linked $X.X to million you're those we we is totally consider absolutely right,

Brian Russo

projects? how in bit into your a just relationships projects. very think, RNG. might CleanBay, that with Thanks. know, Okay. just you And just active I you the particular, leverage lastly, future in markets curious, you have on I I'm talk RNG? in do CleanBay. And is existing pipeline Can project relationship various little U.S. new in about your the

Beth Cooper

maybe Well I'll start here…

Jeff Householder

go talk that Beth. to You ahead, want yes. Yes,

Beth Cooper

Delmarva. would Well, projects on this. I certainly seeking I'll Jeff then announced that certainly add is, we're start mean, to and I Brian, what we've say, to the want I here two

certainly engaged I potential our parties with as those lots there other are as projects. But including are with for service projects on projects, call We would what well those investors across particular, of areas. other very

footprint And that very like same. pipeline. looking we're tell What aggressively – the first that's is and we've is been announced Ohio no project very we a even that so got I a the you our project in robust think can I one completed, think, across I

terms the of So and basically both they're each of and viewed the how market. terms is in outputs project inputs are how different, in coming to

So lot. we've a learned

we've ones partnership And to for you I'll continuing to learn but it we're that the think the I a Jeff, develop. well made more with to continue thoughts. positioned and we're We lot, already turn

Jeff Householder

of I just we the that, earlier. just things and past would add Well, this couple a to discussion mentioned and in have the had I

is energy projects in fundamental view management projects really Our issue waste renewable serve. to We're that we natural have service environmental waste gas the out a not find hunting quantities. of specifically that territories

Delmarva we fundamental off as to that such example the perspective, a environmentally you manage the different managing with driver that Peninsula at waste politically, we ago, that a potential waste issue, the look CleanBay an of behind interest industry. the little look think said, and that we And in I Devco good looking poultry projects the to moment that industry on there's projects hunting some bit for assistance the the live real waste those projects. the those Peninsula, or the the natural profit a provide produced territory, service couple way projects, a it's deal whatever that that, on to first to us. an the that the in gas a we're are in We Bioenergy products fundamental from that's coming economically to issues mentioned are of to that's come are and and waste when Delmarva drivers those we're is renewable landfill for the clean think and real out people issue cattle may underpinning, marketable waste of at RNG fundamentally manage but We have the that then these at And work being from economic when really great whether in projects. making And be, And looking our or other at underlying for participate and primarily, the or to facilities valuable those up cleaning driver waste looking it's up projects, fundamentally, viable. that's out those side helping R&D that plant. of popery not it and comes company the products

Brian Russo

Okay. much. Great. Thank you very

Operator

from the next of Michael Scott. with comes Please proceed Montgomery question Gaugler with your And the question. line Janney

Michael Gaugler

Alex. Welcome, everyone. afternoon good Hey,

Alex Whitelam

Michael. you, Thank

Michael Gaugler

thinking of projects, I'm up time, million point capital investments in Jeff, to wondering, at that's on you growth? in wide pipeline million. for where projects new forward? about see just project about you $X.X size changing the of pipeline range how you going anything this Are in going areas north Florida? or to different are Do detailed Slide $XX provides a XX, you still the does larger be heavy landscape

Jeff Householder

in think I the six we'll expansions still that for Florida still have four, expansion Yes, to We see We projects over opportunities near Delmarva for pipeline not anywhere find we've seen engaged the that's large projects been few are in meaningful type last has last as the as serious They're interest six years. five Peninsula. Peninsula. that five, on or over the the the next years. Peninsula it. years exactly there that in the of But remaining

the works dots interstate between how of that in million relatively connect we gas million. areas to small additional Florida scale projects larger-scale potentially, $X $XX they're of So of supply projects existing couple we'll actually are But need opportunities a projects. the of a see also and little see outside that sort bit this that for

there's Mississippi. natural to of related us. the the the finished Florida out think in And we of one are the primarily projects in for So coming of still like activity Ohio, some sense intrastate at some makes the we we're just especially side some looking Eastern facilities ground renewable gas that that

so for opportunities hard various still at some projects. think those us in is there states to look some of types we And of

Michael Gaugler

Okay.

be looking Just currently that – be and out... south figure where expansion, Shore would operate? Eastern you try or West? the are On pushing within you further you Would are the

Jeff Householder

those. Yes. those And they're are where exactly

at Eastern years. over issues Shore are systems there. have capacity over address going and and peak Delmarva there and some. the some see the think expansion Michael, to we're Again, I believe find west seeing of But last made going So we're investments they're south that we'll think don't to for continue the our to always think, I opportunities, few distribution the next on meaningful I kind projects in the looking years. do to We're we've I that few we're to

will Eastern Shore. be And so at projects some there compressor I think

I we grow be requirements help customers add peak other some up there as and meet the can think continuing are those that more Peninsula. that there'll down to and more things us

we through projects no continue any go will I but on the you'll very there large again, think see be So Delmarva, projects I the years. next to as several some smaller – don't think meaningful

Michael Gaugler

say had. I all congrats to That's really I a quarter. on also what Alright. wanted was strong

Jeff Householder

you. Thank

Operator

question Roger is of Clear the Instructions] [Operator with And Asset the question. from line proceed Please next with Harbor your Management. Liddell

Roger Liddell

good and afternoon you, guys. Thank

Jeff Householder

Hello.

Roger Liddell

Yes. Hello.

Jeff Householder

Go ahead, Roger.

Roger Liddell

to a it. my But available congratulated It just that note before. want quarter. all I ones was the It other obviously shareholder getting this great complete good. that you on I question information the has been to is major call before remarkably made and and

have shoes So has Alex to some got to improve what fill been doing. tough you all on

Now risk. comes that Jeff, with a

of the service a does might Alex's in customer visibility you of in bring peaked? partially-owned company gas would And term. up cutoff Energy Board on attention go people an the certainly the to want if it have yours may subsidiary lot sure the he little it's understand a – be a that the get to drive I company, stuff. alert not He and prominent that, to to So making to for Chesapeake a for attempt that

Jeff Householder

close keep him, I eye on a assure you. I'll Roger.

Roger Liddell

by game. the put me, off energy gas is Ohio in preemption to there bands. you legislation gas exhibit a of an to if That, good you opinion of deafness on lose law, the a of example can the preventing XX, where industry tone public not in Page activity state because was have and then to court go the that's don't I It's it. win you the but particular court in – there's on natural Okay. the

to for you're not blame So this.

write legislation, like grenade. me, not didn't this You to a it's But hand assuming.

thing washing just of You want as because people with a that aligned industry interests And now leave tell a Methane on in absence doesn't be the you. not – say right just ours. know I that data. move at to are big green could and are actual and I hear it to question. when kind I there this deal, construed indeed future look never their my emissions But have of

XX% miles. asking company any the And for the some unaccounted was the And XXX-mile on, delta think I if has mean of number number, would to losses? Can took anyway that? What were. whole it's group gas, not but they the investments that's example, data the I methane currently don't are emissions a data you can a in Florida. down issue. separate where related, figure for that's is so in say large I'm issue where from the XX%, to I love have respond you

Jeff Householder

model Yes, line methane sure. pipeline information to we improve will described of of There mean is things. pipeline fairly on the on the pipe, – one instance the those that our track in service we as based track have significant project I line maintenance all replacement And of some and those replacements. data, with just to line service replacements do We the sorts we breaks in underway efforts be measurements. Florida And data try we reporting soon.

running we'll now, and report inaugural touches through like ESG compiling next over first the been that on right providing a final that, information the have we've we're putting company We few and that months. be the

our damaging is that staffing other the you that but kind yes, so pretty a I'll that. our are We're one get have to damage contractors hit somebody I And occurs that it's think compare room there. the you our Most work per actually for thing of out we're perfect, resources in We're are – pretty system that typically We methane with occurs doing, of from and us significant providing the distribution hit day is not system there. utilities. It's by generally good. other that to the of leakage actually pack I times and the And construction. local when of data tell there's when think doing the middle Roger, prevention any of we improvement lines program. facilities. really we're number facilities initiated the

so we're to that considerably. And going up tighten

two next all So see us we till three months. coming data the over to from to some begin

Roger Liddell

talked carried but – publicity to locations, and using theirs of usually, aircraft Environmental several West New on flown seen Defense in The camera Texas, over whatever big the going for were technology Fund or have their infrared a compressor example, and from and articles data of leeks some producers is that was. actually York reporters there incontrovertible roadside, may Times in the You leaks from whole there Permian operations. denied methane story areas has station about And Times about coming it who flatly

satellite on leads, And are so or can have mean are data, slightly they well, problem oh, we suddenly see didn't we aircraft go hunt utilities store saying, get awkward not the for and as We'll are you or the so confronted with as they looking that. running you're are industry system examples But properly, who really I if just preliminary never love that. roadside ones Utilities these I guys regulated like down particularly mean, caught unaware those that a producers they haven't flights Chesapeake for for things much of your of over something. just

a date, comment that, corrective We you and action. want we we started. of can such, on You do started to were on And aware say always that? such

Jeff Householder

about. talking we surveys we leak go identify our you're extensive the really entire on kinds very do exactly They continuously leak never that of Well, stop. and system, to of

distribution side, Now we're small scale mains, pressure on lower running obviously. the

And we're the the time don't them. all issues have there of you're out describing, but looking types so that we leak for

in distribution plastic. Delmarva vintage and systems. the some We our pipe of very also Most business new our operate is

a steel there. mentioned ago, had very issues leaked is moments We whatever it of you Florida. as XXX we've low so level older mains unprotected now And miles or vintage replaced, our of in

toward we're thousands with service end of of that the lines. So along many getting

it's of plastic as truly so and pipe replacements well. And lot significantly up tightened those system with were the a

that identifying think find them, a we those are folks them. repairing them. dedicated think, that. good doing We've job with job pretty good leaks, looking we're those got pretty to And fixing so I of we leaks And at a are, I when doing

ESG pretty some the in shape document our inaugural we're indicate see good you'll there. that data think I that will of in report we

Roger Liddell

keep the applaud call, and them efforts are Okay. applaud you. cordially I up how for good Well, I thank – this and example. emphasizing in the you're that you work, taking

Jeff Householder

you. Thank

Operator

questions time. [Operator this the Instructions] at on are phone no There

Alex Whitelam

some that, with Jeff, for remarks. closing you to

Jeff Householder

and joining know appreciate this I long-standing long thank is colleagues my to Chesapeake a their afternoon. serving at and customers also our of end you all guys to us providing exceptional day. our to Yes. about talented returns ever, this past really of great More for our I on want of the at I how dedication It reminded our the of personally couple company. is. was great of team workforce I'm be shareholders. reconnect the over confident for than weeks future

very and forward you with So we safe, stay please Goodbye. soon. again talking look to

Operator

participation ask We And and conference. please that your lines. you your for does today's disconnect you that thank conclude