What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-03 compared with 2023-05-03 · 221 added, 148 removed, 719 unchanged (34% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Income (Unaudited)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(in thousands, except shares and per share data)

26 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(in thousands)

2 unchanged sentences

Employee Benefits, net of tax:

Reclassifications of amortization of prior service credit and actuarial loss, net of tax of $3 and $6, respectively 10 18

Reclassifications of amortization of prior service credit and actuarial loss, net of tax of $3 and $6, $5 and $13, respectively 12 18 21 35

Cash Flow Hedges, net of tax:

Net gain on commodity contract cash flow hedges, net of tax of $7 and $937, respectively 22 2,498

Reclassifications of net (gain) on commodity contract cash flow hedges, net of tax $(166) and $(752), respectively ( 440 ) ( 1,969 )

Net (loss) on interest rate swap cash flow hedges, net of tax of $(52) and $0, respectively ( 148 ) —

Net (loss) gain on commodity contract cash flow hedges, net of tax of $(784), $(110), $(775) and $826, respectively ( 2,065 ) ( 293 ) ( 2,045 ) 2,206

Reclassifications of net loss (gain) on commodity contract cash flow hedges, net of tax $119, $(78), $(48) and $(830), respectively 313 ( 205 ) ( 126 ) ( 2,174 )

Net gain on interest rate swap cash flow hedges, net of tax of $267, $0, $213 and $0, respectively 758 — 612 —

Reclassifications of net (gain) on interest rate swap cash flow hedges, net of tax of $(33), $0, $(50) and $0, respectively ( 94 ) — ( 142 ) —

4 unchanged sentences

Condensed Consolidated Balance Sheets (Unaudited)

Assets March 31,

Assets June 30,

2023 December 31,

36 unchanged sentences

Condensed Consolidated Balance Sheets (Unaudited)

Capitalization and Liabilities March 31,

Capitalization and Liabilities June 30,

2023 December 31,

21 unchanged sentences

Regulatory liabilities 12,894 5,031

Income taxes payable 7,554 —

Derivative liabilities, at fair value 2,178 585

15 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

Three Months Ended

Six Months Ended

(in thousands)

6 unchanged sentences

Realized gain on commodity contracts and sale of assets ( 1,032 ) ( 6,980 )

Unrealized loss (gain) on investments/commodity contracts ( 551 ) 541

Unrealized (gain) loss on investments/commodity contracts ( 1,131 ) 1,956

Employee benefits and compensation 218 ( 520 )

14 unchanged sentences

Proceeds from sale of assets 2,034 3,367

Acquisitions, net of cash acquired — ( 2,006 )

Environmental expenditures ( 760 ) ( 441 )

23 unchanged sentences

Compensation Treasury

Balance at March 31, 2022 17,719,388 $ 8,624 $ 373,694 $ 421,344 $ 1,850 $ 6,477 $ ( 6,477 ) $ 805,512

Net income — — — 17,051 — — — 17,051

Other comprehensive loss — — — — ( 480 ) — — ( 480 )

Dividend declared ($0.535 per share) — — — ( 9,562 ) — — — ( 9,562 )

Issuance under various plans (3)

8,886 5 1,203 — — — — 1,208

Share-based compensation and tax benefit (4) (5)

6,520 3 1,969 — — — — 1,972

Treasury stock activities — — — — — 541 ( 541 ) —

Balance at June 30, 2022 17,734,794 $ 8,632 $ 376,866 $ 428,833 $ 1,370 $ 7,018 $ ( 7,018 ) $ 815,701

Balance at December 31, 2021 17,655,410 $ 8,593 $ 371,162 $ 393,072 $ 1,303 $ 7,240 $ ( 7,240 ) $ 774,130

7 unchanged sentences

Treasury stock activities — — — — — ( 222 ) 222 —

Balance at June 30, 2022 17,734,794 $ 8,632 $ 376,866 $ 428,833 $ 1,370 $ 7,018 $ ( 7,018 ) $ 815,701

Balance at March 31, 2023 17,789,856 $ 8,659 $ 379,703 $ 472,209 $ ( 1,983 ) $ 8,816 $ ( 8,816 ) $ 858,588

Net income — — — 16,133 — — — 16,133

Other comprehensive loss — — — — ( 1,076 ) — — ( 1,076 )

Dividend declared ($0.590 per share) — — — ( 10,547 ) — — — ( 10,547 )

Issuance under various plans (3)

— — ( 8 ) — — — — ( 8 )

Share-based compensation and tax benefit (4) (5)

6,885 3 1,135 — — — — 1,138

Treasury stock activities — — — — — 185 ( 185 ) —

Balance at June 30, 2023 17,796,741 $ 8,662 $ 380,830 $ 477,795 $ ( 3,059 ) $ 9,001 $ ( 9,001 ) $ 864,228

Balance at December 31, 2022 17,741,418 $ 8,635 $ 380,036 $ 445,509 $ ( 1,379 ) $ 7,060 $ ( 7,060 ) $ 832,801

7 unchanged sentences

Treasury stock activities — — — — — 1,941 ( 1,941 ) —

Balance at March 31, 2023 17,789,856 $ 8,659 $ 379,703 $ 472,209 $ ( 1,983 ) $ 8,816 $ ( 8,816 ) $ 858,588

Balance at June 30, 2023 17,796,741 $ 8,662 $ 380,830 $ 477,795 $ ( 3,059 ) $ 9,001 $ ( 9,001 ) $ 864,228

(1) 2,000,000 shares of preferred stock at $ 0.01 par value have been authorized.

1 unchanged sentence

accordingly, no information has been included in the statements of stockholders’ equity.

(2) Includes 109,687 , 108,143 , 107,518 , and 116,238 shares at March 31, 2023, December 31, 2022, March 31, 2022 and December 31, 2021, respectively, held in a Rabbi Trust related to our Non-Qualified Deferred Compensation Plan.

(2) Includes 110,277 , 108,143 , 110,835 , and 116,238 shares at June 30, 2023, December 31, 2022, June 30, 2022 and December 31, 2021, respectively, held in a Rabbi Trust related to our Non-Qualified Deferred Compensation Plan.

(3) Can include shares issued under the Retirement Savings Plan, DRIP and ATM equity issuances.

(4) Includes amounts for shares issued for directors’ compensation.

(5) The shares issued under the SICP are net of shares withheld for employee taxes.

For the three months ended March 31, 2023 and 2022, we withheld 19,859 and 21,832 shares, respectively, for employee taxes.

(5) Can include shares issued under the Retirement Savings Plan, DRIP and ATM equity issuances.

For the six months ended June 30, 2023 and 2022, we withheld 19,859 and 21,832 shares, respectively, for employee taxes.

The accompanying notes are an integral part of these condensed consolidated financial statements.

11 unchanged sentences

FASB Statements and Other Authoritative Pronouncements

Recent Accounting Standards

There are no pending or recently effective accounting standards which have had, or are expected to have, a material impact to our consolidated financial statements or disclosures.

Calculation of Earnings Per Share

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(in thousands, except shares and per share data)

12 unchanged sentences

In June 2022, Sharp acquired the propane operating assets of Davenport Energy's Siler City, North Carolina propane division for approximately $ 2.0 million.

Through this acquisition, we expanded our operating footprint further into North Carolina, where customers are served by Sharp Energy’s Diversified Energy division.

approximately 850 customers, along with distribution of approximately 0.4 million gallons of propane annually.

Through this acquisition, we expanded our operating footprint further into

North Carolina, where customers are served by Sharp Energy’s Diversified Energy division.

Sharp added approximately 850 customers, along with distribution of approximately 0.4 million gallons of propane annually.

We recorded $ 1.5 million in property plant and equipment, $ 0.5 million in goodwill, and immaterial amounts associated with customer relationships and non-compete agreements, all of which are deductible for income tax purposes.

The amounts recorded in conjunction with the acquisition are preliminary, and subject to adjustment based on contractual provisions and finalization prior to the first anniversary of the transaction closing.

All amounts initially recorded in connection with this acquisition are now final as a result of the conclusion of the measurement period;

no further adjustments were necessary.

The financial results associated with this acquisition are included within our propane distribution operations within our Unregulated Energy segment.

5 unchanged sentences

The transaction will accelerate our efforts in converting poultry waste to renewable, sustainable energy while simultaneously improving the local environments in our service territories.

The operating revenues and operating income of Planet Found were not material to our consolidated results for the three months ended March 31, 2023.

The operating revenues and operating income of Planet Found were not material to our consolidated results for the three and six months ended June 30, 2023.

In connection with this acquisition, we recorded $ 4.4 million in intangible assets associated primarily with intellectual property and non-compete agreements, $ 4.0 million in property plant and equipment, $ 1.1 million in goodwill, and less than $ 0.1 million in working capital, all of which are deductible for income tax purposes.

4 unchanged sentences

Typically, our customers pay for the goods and/or services we provide in the month following the satisfaction of our performance obligation.

The following table displays our revenue by major source based on product and service type for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31, 2023 Three Months Ended March 31, 2022

The following table displays our revenue by major source based on product and service type for the three months ended June 30, 2023 and 2022:

Three Months Ended June 30, 2023 Three Months Ended June 30, 2022

(in thousands) Regulated Energy Unregulated Energy Other and Eliminations Total Regulated Energy Unregulated Energy Other and Eliminations Total

27 unchanged sentences

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

(2) Total operating revenues for the three months ended March 31, 2023 include other revenue (revenues from sources other than contracts with customers) of $ 0.6 million and $ 0.1 million for our Regulated and Unregulated Energy segments, respectively and $ 0.1 million for both our Regulated and Unregulated Energy segments, respectively, for the three months ended March 31, 2022.

( 2) Total operating revenues for the three months ended June 30, 2023 include other revenue (revenues from sources other than contracts with customers) of $ 0.2 million and $ 0.1 million for our Regulated and Unregulated Energy segments, respectively and $( 0.1 ) million and $ 0.1 million for our Regulated and Unregulated Energy segments, respectively, for the three months ended June 30, 2022.

The sources of other revenues include revenue from alternative revenue programs related to revenue normalization for the Maryland division and Sandpiper Energy and late fees.

The following table displays our revenue by major source based on product and service type for the six months ended June 30, 2023 and 2022:

Six Months Ended June 30, 2023 Six Months Ended June 30, 2022

(in thousands) Regulated Energy Unregulated Energy Other and Eliminations Total Regulated Energy Unregulated Energy Other and Eliminations Total

Energy distribution

Delaware natural gas division $ 51,016 $ — $ — $ 51,016 $ 47,568 $ — $ — $ 47,568

Florida natural gas distribution (1)

87,124 — — 87,124 75,722 — — 75,722

FPU electric distribution 45,771 — — 45,771 39,394 — — 39,394

Maryland natural gas division 16,884 — — 16,884 14,836 — — 14,836

Sandpiper natural gas/propane operations 11,161 — — 11,161 11,885 — — 11,885

Elkton Gas 5,444 — — 5,444 5,071 — — 5,071

Total energy distribution 217,400 — — 217,400 194,476 — — 194,476

Energy transmission

Aspire Energy — 19,680 — 19,680 — 28,844 — 28,844

Aspire Energy Express 733 — — 733 632 — — 632

Eastern Shore 40,302 — — 40,302 39,196 — — 39,196

Peninsula Pipeline 14,504 — — 14,504 13,549 — — 13,549

Total energy transmission 55,539 19,680 — 75,219 53,377 28,844 — 82,221

Energy generation

Eight Flags — 9,832 — 9,832 — 11,455 — 11,455

Propane operations

Propane delivery operations — 87,295 — 87,295 — 110,075 — 110,075

Compressed Natural Gas Services

Marlin Gas Services — 7,238 — 7,238 — 4,589 — 4,589

Other and eliminations

Eliminations ( 29,528 ) ( 129 ) ( 13,696 ) ( 43,353 ) ( 27,769 ) ( 207 ) ( 12,706 ) ( 40,682 )

Other — — 91 91 — — 216 216

Total other and eliminations ( 29,528 ) ( 129 ) ( 13,605 ) ( 43,262 ) ( 27,769 ) ( 207 ) ( 12,490 ) ( 40,466 )

Total operating revenues (2)

$ 243,411 $ 123,916 $ ( 13,605 ) $ 353,722 $ 220,084 $ 154,756 $ ( 12,490 ) $ 362,350

(2) Total operating revenues for the six months ended June 30, 2023 include other revenue (revenues from sources other than contracts with customers) of $ 0.8 million and $ 0.2 million for our Regulated and Unregulated Energy segments, respectively and $ 0.1 million and $ 0.2 million for our Regulated and Unregulated Energy segments, respectively, for the six months ended June 30, 2022.

The sources of other revenues include revenue from alternative revenue programs related to revenue normalization for the Maryland division and Sandpiper Energy and late fees.

Contract Balances

The timing of revenue recognition, customer billings and cash collections results in trade receivables, unbilled receivables (contract assets), and customer advances (contract liabilities) in our condensed consolidated balance sheets.

The balances of our trade receivables, contract assets, and contract liabilities as of March 31, 2023 and December 31, 2022 were as follows:

The balances of our trade receivables, contract assets, and contract liabilities as of June 30, 2023 and December 31, 2022 were as follows:

Trade Receivables Contract Assets (Current) Contract Assets (Non-current) Contract Liabilities (Current)

10 unchanged sentences

Our performance obligation is satisfied over the term of the respective customer retail program on a ratable basis.

For the three months ended March 31, 2023 and 2022, we recognized revenue of $ 0.2 million and $ 0.4 million, respectively.

For the three months ended June 30, 2023 and 2022, we recognized revenue of $ 0.2 million and $ 0.3 million, respectively.

For the six months ended June 30, 2023 and 2022, we recognized revenue of $ 0.4 million and $ 0.7 million, respectively.

Remaining Performance Obligations

Our businesses have long-term fixed fee contracts with customers in which revenues are recognized when performance obligations are satisfied over the contract term.

Revenue for these businesses for the remaining performance obligations, at March 31, 2023, are expected to be recognized as follows:

Revenue for these businesses for the remaining performance obligations, at June 30, 2023, are expected to be recognized as follows:

(in thousands) 2023 2024 2025 2026 2027 2028 2029 and thereafter

7 unchanged sentences

and Peninsula Pipeline and Aspire Energy Express, our intrastate pipeline subsidiaries, are subject to regulation (excluding cost of service) by the Florida PSC and Public Utilities Commission of Ohio, respectively.

Refer to the below discussion pertaining to the COVID-19 impact and Customer Information System Regulatory Asset Petition.

Customer Information System Regulatory Asset Petition:

In July 2022, we filed a joint petition for our natural gas divisions in Maryland (Maryland Division, Sandpiper, and Elkton Gas) for the approval to establish a regulatory asset for non-capitalizable expenses related to the initial development and implementation of our new Customer Information System ("CIS") system.

The petition was approved by the Maryland PSC in August 2022.

A similar petition for our Florida Regulated Energy businesses was filed during the same time frame and was initially denied.

The Florida PSC subsequently approved capitalization of these expenses.

Additionally, our Delaware Division has the ability to defer these costs as a regulatory asset.

We have completed the system selection process and the CIS implementation began during the first quarter of 2023.

Refer to the additional details below pertaining to the Customer Information System Regulatory Asset Petition and COVID-19 impact.

Ocean City Maryland Reinforcement:

2 unchanged sentences

The project will increase the reliability of the existing distribution system in those areas while also expanding infrastructure to serve new customers.

Construction has been initiated with estimated completion in the first half of 2023.

Construction was completed during the second quarter of 2023.

Wildlight Expansion:

28 unchanged sentences

The expansion will also improve reliability and provide operational benefits to FPU's existing distribution system in the area, supporting future growth.

The petition was approved by the Florida PSC on October 4, 2022.

We expect this expansion to be in service by the second quarter of 2023.

The petition was approved by the Florida PSC in October 2022.

We expect this expansion to be placed into service during the third quarter of 2023.

Storm Protection Plan:

5 unchanged sentences

In February 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreement with FPU for an additional 9,000 Dt/d of firm service in the Lake Wales, Florida area.

Approval of the agreement by the Florida PSC will enable Peninsula Pipeline to begin executing on the acquisition of an existing pipeline in the area that will be utilized to serve our current natural gas customers as well as new customers.

The Commission approved the petition in April 2023.

Approval of the agreement allowed Peninsula Pipeline to complete the acquisition of the existing pipeline in May 2023 which is being utilized to serve our current natural gas customers as well as enable us to serve new customers.

In February 2023, FPU filed a petition with the Florida PSC for approval of the GUARD program.

GUARD is a proposed ten-year program to enhance the safety, reliability and accessibility of portions of our natural gas distribution system.

FPU has identified various categories of eligible projects to be included in GUARD, which includes the relocation of mains and service lines located in rear easements and other difficult to access areas to the front of the street;

the replacement of problematic distribution mains, service lines and M&R equipment;

and system reliability projects.

The petition is currently under review by the Florida PSC.

GUARD is a ten-year program to enhance the safety, reliability, and accessibility of portions of our natural gas distribution system.

We have identified various categories of projects to be included in GUARD, which include the relocation of mains and service lines located in rear easements and other difficult to access areas to the front of the street, the replacement of problematic distribution mains, service lines, and M&R equipment and system reliability projects.

In August 2023, the Florida PSC approved the GUARD program, with the exception of reliability projects with an approximate value of $10 million.

The remainder of the program was approved as filed, which included $205 million of capital expenditures projected to be spent over a 10-year period.

Newberry Expansion :

In April 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreement with FPU for an additional 8,000 Dt/d of firm service in the Newberry, Florida area.

In July 2023, the Florida PSC approved the company's recommendation to proceed with this project.

Peninsula Pipeline will construct a pipeline extension which will be used by FPU to support the development of a natural gas distribution system to provide gas service to the City of Newberry.

Amendment to Escambia County Agreement :

In April of 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of an amendment to an existing contract with FPU.

This amendment will allow Peninsula Pipeline to construct an additional delivery point on a pipeline located in Escambia County.

The additional delivery point comes at the request of an FPU customer and will be used to enhance natural gas service in the area.

Currently, the petition is under review by the Florida PSC.

A decision is expected in the third quarter of 2023.

Florida Electric Depreciation Study :

The Florida PSC requires electric utilities to file a depreciation study every four years to reevaluate and set depreciation rates for the utility's plant assets.

In June 2023, FPU filed a petition with the Florida PSC for approval of it’s proposed depreciation rates.

If approved, new rates will become effective retroactively on January 1, 2023.

Eastern Shore

9 unchanged sentences

The combined revised surcharge became effective January 1, 2023.

Various Jurisdictional Activity Related to the Joint Customer Information System Project

The petition was approved by the Maryland PSC in August 2022.

A similar petition for our Florida Regulated Energy businesses was filed during the same time frame and was initially denied.

The Florida PSC subsequently approved capitalization of these expenses.

Additionally, our Delaware Division has the ability to defer these costs as a regulatory asset.

We have completed the system selection process and the CIS implementation began during the first quarter of 2023.

COVID-19 Impact

8 unchanged sentences

The order allowed us to establish a regulatory asset in a total amount of $ 2.1 million as of June 30, 2021 for natural gas and electric distribution operations.

The regulatory asset is being amortized over two years and is

recovered through the Purchased Gas Adjustment and Swing Service mechanisms for our natural gas distribution businesses and through the Fuel Purchased Power Cost Recovery clause for our electric division.

As of March 31, 2023 and December 31, 2022, our total COVID-19 regulatory asset balance was $ 1.0 million and $ 1.2 million, respectively.

In 2021 and 2022, restrictions were gradually lifted as vaccines became widely available in the United States.

The various state of emergencies associated with the COVID-19 pandemic that were previously declared in our service territories have been terminated and we have adjusted our operating practices accordingly to ensure the safety of our operations and will take the necessary actions to comply with the CDC, and the Occupational Safety and Health Administration, as new developments may occur.

The regulatory asset is being amortized over two years and is recovered through the Purchased Gas Adjustment and Swing Service mechanisms for our natural gas distribution businesses and through the Fuel Purchased Power Cost Recovery clause for our electric division.

As of June 30, 2023 and December 31, 2022, our total COVID-19 regulatory asset balance was $ 0.7 million and $ 1.2 million, respectively.

Summary TCJA Table

Customer rates for our regulated businesses were adjusted, as approved by the regulators, prior to 2020 with the exception of Elkton Gas, which implemented a one-time bill credit in May 2020.

The following table summarizes the regulatory liabilities related to accumulated deferred taxes ("ADIT") associated with TCJA for our regulated businesses as of March 31, 2023 and December 31, 2022:

The following table summarizes the regulatory liabilities related to accumulated deferred taxes ("ADIT") associated with TCJA for our regulated businesses as of June 30, 2023 and December 31, 2022:

Amount (in thousands)

Operation and Regulatory Jurisdiction March 31, 2023 December 31, 2022 Status

Operation and Regulatory Jurisdiction June 30, 2023 December 31, 2022 Status

Eastern Shore (FERC) $ 34,190 $ 34,190 Will be addressed in Eastern Shore's next rate case filing.

14 unchanged sentences

and Winter Haven, Key West, Pensacola, Sanford and West Palm Beach, Florida.

As of March 31, 2023 and December 31, 2022, we had approximately $ 3.5 million and $ 4.3 million, respectively, in environmental liabilities related to the former MGP sites.

As of March 31, 2023 and December 31, 2022, we have cumulative regulatory assets of $ 0.5 million and $ 0.8 million, respectively, for future recovery of environmental costs for customers.

Specific to FPU’s four MGP sites in Key West, Pensacola, Sanford and West Palm Beach, FPU has approval to recover, from insurance and through customer rates, up to $ 14.0 million of its environmental costs related to its MGP sites.

The total $ 14.0 million was fully recovered as of March 31, 2023.

As of June 30, 2023 and December 31, 2022, we had approximately $ 3.4 million and $ 4.3 million, respectively, in environmental liabilities related to the former MGP sites.

As of June 30, 2023 and December 31, 2022, we have cumulative regulatory assets of $ 0.5 million and $ 0.8 million, respectively, for future recovery of environmental costs for customers.

Specific to FPU’s four MGP sites in Key West, Pensacola, Sanford and West Palm Beach, FPU has approval for and has recovered, through a combination of insurance and customer rates, $ 14.0 million of its environmental costs related to its MGP sites as of June 30, 2023.

Environmental liabilities for our MGP sites are recorded on an undiscounted basis based on the estimate of future costs provided by independent consultants.

9 unchanged sentences

The agreements were effective as of April 1, 2023 and expire in March 2026.

Our Florida natural gas distribution operations and Eight Flags have separate asset management agreements with Emera Energy Services, Inc.

Our Florida natural gas distribution operations and Eight Flags generation facility have separate asset management agreements with Emera Energy Services, Inc.

to manage their natural gas transportation capacity.

10 unchanged sentences

If FPU fails to meet the requirements, it has to provide the supplier a written explanation of actions taken, or proposed to be taken, to become compliant.

Failure to comply with the ratios specified in the Gulf Power agreement could also result in FPU having to provide an irrevocable letter of credit.

As of March 31, 2023, FPU was in compliance with all of the requirements of its fuel supply contracts.

Failure to comply with the ratios specified

in the Gulf Power agreement could also result in FPU having to provide an irrevocable letter of credit.

As of June 30, 2023, FPU was in compliance with all of the requirements of its fuel supply contracts.

Eight Flags provides electricity and steam generation services through its CHP plant located on Amelia Island, Florida.

4 unchanged sentences

The Board of Directors has authorized us to issue corporate guarantees securing obligations of our subsidiaries and to obtain letters of credit securing our subsidiaries' obligations.

The maximum authorized liability under such guarantees and letters of credit as of March 31, 2023 was $ 20.0 million.

The aggregate amount guaranteed related to our subsidiaries at March 31, 2023 was approximately $ 14.2 million with the guarantees expiring on various dates through March 30, 2024.

The maximum authorized liability under such guarantees and letters of credit as of June 30, 2023 was $ 20.0 million.

The aggregate amount guaranteed related to our subsidiaries at June 30, 2023 was approximately $ 14.2 million with the guarantees expiring on various dates through May 2024.

In addition, the Board has authorized us to issue specific purpose corporate guarantees.

The amount of specific purpose guarantees outstanding at March 31, 2023 was $ 4.0 million.

As of March 31, 2023, we have issued letters of credit totaling approximately $ 5.8 million related to the electric transmission services for FPU's electric division, the firm transportation service agreement between TETLP and our Delaware and Maryland divisions, the capacity agreement between NEXUS and Aspire, and our current and previous primary insurance carriers.

These letters of credit have various expiration dates through October 25, 2023 and to date, none have been used.

The amount of specific purpose guarantees outstanding at June 30, 2023 was $ 4.0 million.

As of June 30, 2023, we have issued letters of credit totaling approximately $ 5.9 million related to the electric transmission services for FPU's electric division, the firm transportation service agreement between TETLP and our Delaware and Maryland divisions, the capacity agreement between NEXUS and Aspire, and our current and previous primary insurance carriers.

These letters of credit have various expiration dates through April 2024 and to date, none have been used.

We do not anticipate that the counterparties will draw upon these letters of credit, and we expect that they will be renewed to the extent necessary in the future.

10 unchanged sentences

These operations are unregulated as to their rates and services.

The remainder of our operations is presented as “Other businesses and eliminations,” which consists of unregulated subsidiaries that own real estate leased to Chesapeake Utilities, as well as certain corporate costs not allocated to other operations.

The remainder of our operations are presented as “Other businesses and eliminations,” which consists of unregulated subsidiaries that own real estate leased to Chesapeake Utilities, as well as certain corporate costs not allocated to other operations.

The following table presents financial information about our reportable segments:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(in thousands)

19 unchanged sentences

(1) All significant intersegment revenues are billed at market rates and have been eliminated from consolidated operating revenues.

(in thousands) March 31, 2023 December 31, 2022

(in thousands) June 30, 2023 December 31, 2022

Identifiable Assets

7 unchanged sentences

Depending on our capital needs and subject to market conditions, in addition to other possible debt and equity offerings, we may issue additional shares under the direct stock purchase component of the DRIP.

Under our current ATM equity program we may issue and sell shares of our common stock up to an aggregate offering price of $ 75.0 million through June 2023.

In 2022, we issued less than 0.1 million shares at an average price per share of $ 136.26 and received net proceeds of $ 4.5 million under the DRIP.

In the first three months of 2023, there were no issuances under the DRIP.

In the first six months of 2023, there were no issuances under the DRIP.

Our most recent ATM equity program, which allowed us to issue and sell shares of our common stock up to an aggregate offering price of $ 75.0 million, expired in June 2023.

We expect to execute a new ATM during the third quarter of 2023.

We use the net proceeds from our share issuances, after fees, for general corporate purposes, including, but not limited to, financing of capital expenditures, repayment of short-term debt, financing acquisitions, investing in subsidiaries, and general working capital purposes.

1 unchanged sentence

Defined benefit pension and postretirement plan items, unrealized gains (losses) of our propane swap agreements designated as commodity contracts cash flow hedges, and the unrealized gains (losses) of our interest rate swap agreements designated as cash flow hedges are the components of our accumulated other comprehensive income (loss).

The following tables present the changes in the balance of accumulated other comprehensive gain (loss) as of March 31, 2023 and 2022.

The following tables present the changes in the balance of accumulated other comprehensive income (loss) components as of June 30, 2023 and 2022.

All amounts in the following tables are presented net of tax.

8 unchanged sentences

Net current-period other comprehensive income (loss) 21 ( 2,171 ) 470 ( 1,680 )

As of March 31, 2023 $ ( 2,496 ) $ 674 $ ( 161 ) $ ( 1,983 )

As of June 30, 2023 $ ( 2,485 ) $ ( 1,079 ) $ 505 $ ( 3,059 )

As of December 31, 2021 $ ( 3,268 ) $ 4,571 $ — $ 1,303

2 unchanged sentences

Net prior-period other comprehensive income 35 32 — 67

As of March 31, 2022 $ ( 3,250 ) $ 5,100 $ — $ 1,850

As of June 30, 2022 $ ( 3,233 ) $ 4,603 $ — $ 1,370

Deferred gains or losses for our commodity contracts and interest rate swap cash flow hedges are recognized in earnings upon settlement.

Prior service credit and net loss related to the defined benefit pension plan and postretirement plans are included in the computation of net periodic costs (benefits).

Amortization of the net loss related to the defined benefit pension plan and postretirement plans is included in the computation of net periodic costs (benefits).

See Note 10, Employee Benefit Plans , for additional details.

1 unchanged sentence

See Note 12, Derivative Instruments , for additional details.

Amortization of defined benefit pension and postretirement plan items are included in other expense, net gains and losses on propane swap agreements contracts are included in revenue and unregulated propane and natural gas, the

realized gain or loss on interest rate swap agreements is recognized as a component of interest charges in the accompanying condensed consolidated statements of income.

Amortization of defined benefit pension and postretirement plan items are included in other expense, net, gains and losses on propane swap agreement contracts are included in revenue and unregulated propane and natural gas costs, and the realized gain or loss on interest rate swap agreements is recognized as a component of interest charges in the accompanying condensed consolidated statements of income.

The income tax benefit is included in income tax expense in the accompanying condensed consolidated statements of income.

Employee Benefit Plans

Net periodic benefit costs for the FPU Pension Plan for the three months ended March 31, 2023 and 2022 is set forth in the following table:

For the Three Months Ended March 31, 2023 2022

Net periodic benefit costs for the FPU Pension Plan for the three and six months ended June 30, 2023 and 2022 is set forth in the following table:

Three Months Ended Six Months Ended

June 30, June 30,

FPU Pension Plan 2023 2022 2023 2022

(in thousands)

3 unchanged sentences

Total periodic cost (benefit) $ 75 $ ( 284 ) $ 150 $ ( 568 )

The following table presents the amounts included in the regulatory asset and accumulated other comprehensive income that were recognized as components of the FPU Pension Plan's net periodic benefit cost during the three months ended March 31, 2023 and 2022:

For the Three Months Ended March 31, 2023 2022

The following table presents the amounts included in the regulatory asset and accumulated other comprehensive income (loss) that were recognized as components of the FPU Pension Plan's net periodic benefit cost during the three and six months ended June 30, 2023 and 2022:

Three Months Ended Six Months Ended

June 30, June 30,

FPU Pension Plan 2023 2022 2023 2022

(in thousands)

Net loss $ 110 $ 124

Total recognized in net periodic benefit cost 110 124

Recognized from accumulated other comprehensive (income) loss (1)

$ 21 $ 24 $ 42 $ 48

Recognized from regulatory asset 89 100 178 200

Total $ 110 $ 124

Total net loss in net periodic benefit cost $ 110 $ 124 $ 220 $ 248

(1) See Note 9 , Stockholders' Equity .

Net periodic benefit cost for our other pension and post-retirement benefit plans were not material for the three months ended March 31, 2023 and 2022.

Net periodic benefit cost for our other pension and post-retirement benefit plans were not material for the three and six months ended June 30, 2023 and 2022.

The components of our net periodic costs have been recorded or reclassified to other expense, net in the condensed consolidated statements of income.

Pursuant to their respective regulatory orders, FPU and Chesapeake Utilities continue to record, as a regulatory asset, a portion of their unrecognized postretirement benefit costs related to their regulated operations.

The portion of the unrecognized pension and postretirement benefit costs related to FPU’s unregulated operations and Chesapeake Utilities' operations is recorded to accumulated other comprehensive income.

During the three months ended March 31, 2023, there were no contributions to the FPU Pension Plan and we do not expect to contribute to the FPU Pension Plan during 2023.

During the three and six months ended June 30, 2023, there were no contributions to the FPU Pension Plan and we do not expect to contribute to the FPU Pension Plan during 2023.

The Chesapeake SERP, the Chesapeake Postretirement Plan and the FPU Medical Plan are unfunded and are expected to be paid out of our general funds.

Cash benefits paid under these other post retirement benefit plans for the three months ended March 31, 2023 were immaterial.

We expect to pay total cash benefits of approximately $ 0.2 million for the Chesapeake SERP, approximately $ 0.1 million for the Chesapeake Postretirement Plan, and approximately $ 0.1 million under the FPU Medical Plan in 2023.

Cash benefits paid under these other post retirement benefit plans for the three and six months ended June 30, 2023 were approximately $ 0.2 million and $ 0.3 million, respectively.

We expect to pay total cash benefits of approximately $ 0.4 million for these other post retirement benefit plans in 2023.

Non-Qualified Deferred Compensation Plan

Members of our Board of Directors and officers of the Company are eligible to participate in the Non-Qualified Deferred Compensation Plan.

Directors can elect to defer any portion of their cash or stock compensation and officers

can defer up to 80 percent of their base compensation, cash bonuses or any amount of their stock bonuses (net of required withholdings).

Directors can elect to defer any portion of their cash or stock compensation and officers can defer up to 80 percent of their base compensation, cash bonuses or any amount of their stock bonuses (net of required withholdings).

Officers may receive a matching contribution on their cash compensation deferrals up to 6 percent of their compensation, provided it does not duplicate a match they receive in the Retirement Savings Plan.

2 unchanged sentences

The participants are credited with gains or losses on those investments.

Assets held in the Rabbi Trust, recorded as Investments on the consolidated balance sheet, had a fair value of $ 10.8 million at March 31, 2023 and $ 10.6 million at December 31, 2022.

Assets held in the Rabbi Trust, recorded as Investments on the condensed consolidated balance sheet, had a fair value of $ 11.7 million at June 30, 2023 and $ 10.6 million at December 31, 2022.

The assets of the Rabbi Trust are at all times subject to the claims of our general creditors.

Share-Based Compensation

Our non-employee directors and key employees have been granted share-based awards through our SICP.

Our key employees and non-employee directors have been granted share-based awards through our SICP.

We record these share-based awards as compensation costs over the respective service period for which services are received in exchange for an award of equity or equity-based compensation.

The compensation cost is based primarily on the fair value of the shares awarded, using the estimated fair value of each share on the date it was granted, and the number of shares to be issued at the end of the service period.

The table below presents the amounts included in net income related to share-based compensation expense for the three months ended March 31, 2023 and 2022:

Three Months Ended

The table below presents the amounts included in net income related to share-based compensation expense for the three and six months ended June 30, 2023 and 2022:

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

(in thousands)

10 unchanged sentences

For the market-based conditions, we used the Monte Carlo valuation to estimate the fair value of each share granted.

The table below presents the summary of the stock activity for awards to key employees for the three months ended March 31, 2023:

The table below presents the summary of the stock activity for awards to key employees for the six months ended June 30, 2023:

Number of Shares Weighted Average

3 unchanged sentences

Expired ( 2,053 ) $ 94.64

Outstanding—March 31, 2023 214,345 $ 117.23

During the three months ended March 31, 2023, we granted awards of 80,551 shares of common stock to key employees under the SICP, including awards granted in February 2023 to key employees appointed in officer positions.

Outstanding—June 30, 2023 214,546 $ 116.04

During the six months ended June 30, 2023, we granted awards of 80,752 shares of common stock to key employees under the SICP, including awards granted in February 2023 to key employees appointed in officer positions.

The shares granted are multi-year awards that will vest no later than the three-year service period ending December 31, 2025.

6 unchanged sentences

Total combined payments for the employees’ tax obligations to the taxing authorities were approximately $ 2.5 million.

At March 31, 2023, the aggregate intrinsic value of the SICP awards granted to key employees was approximately $ 27.4 million.

At March 31, 2023, there was approximately $ 11.1 million of unrecognized compensation cost related to these awards, which will be recognized through 2025.

At June 30, 2023, the aggregate intrinsic value of the SICP awards granted to key employees was approximately $ 25.5 million.

At June 30, 2023, there was approximately $ 8.7 million of unrecognized compensation cost related to these awards, which will be recognized through 2025.

Non-employee Directors

3 unchanged sentences

Accordingly, our directors that served on the Board as of May 2023 each received 765 shares of common stock, respectively, with a weighted average fair value of $ 124.12 per share.

In July 2022, we announced the appointment of two new non-employee directors to our Board.

These newly appointed directors were each granted a prorated share-based award of 526 shares through the SICP in accordance with the beginning of their service period.

The associated expense is being recognized consistent with the methodology described above.

At March 31, 2023, there was approximately $ 0.1 million of unrecognized compensation expense related to shares granted to non-employee directors.

At June 30, 2023, there was approximately $ 0.8 million of unrecognized compensation expense related to shares granted to non-employee directors.

This expense will be recognized over the remaining service period ending in May 2024.

6 unchanged sentences

Occasionally, we may enter into interest rate swap agreements to mitigate risk associated with changes in short-term borrowing rates.

As of March 31, 2023, our natural gas and electric distribution operations did not have any outstanding derivative contracts.

As of June 30, 2023, our natural gas and electric distribution operations did not have any outstanding derivative contracts.

Volume of Derivative Activity

As of March 31, 2023, the volume of our commodity derivative contracts were as follows:

As of June 30, 2023, the volume of our commodity derivative contracts were as follows:

Business unit Commodity Contract Type Quantity hedged (in millions) Designation Longest Expiration date of hedge

Sharp Propane (gallons) Purchases 13.5 Cash flow hedges August 2025

Sharp Propane (gallons) Purchases 21.3 Cash flow hedges June 2026

Sharp Propane (gallons) Sales 3.2 Cash flow hedges December 2023

Sharp entered into futures and swap agreements to mitigate the risk of fluctuations in wholesale propane index prices associated with the propane volumes that are expected to be purchased and/or sold during the heating season.

Under the futures and swap agreements, Sharp will receive the difference between (i) the index prices (Mont Belvieu prices in March 2023 through August 2025) and (ii) the per gallon propane swap prices, to the extent the index prices exceed the contracted prices.

Under the futures and swap agreements, Sharp will receive the difference between (i) the index prices (Mont Belvieu prices in June 2023 through June 2026) and (ii) the per gallon propane swap prices, to the extent the index prices exceed the contracted prices.

If the index prices are lower than the contract prices, Sharp will pay the difference.

1 unchanged sentence

The change in the fair value of the swap agreements is recorded as unrealized gain (loss) in other comprehensive income (loss) and later recognized in the statement of income in the same period and in the same line item as the hedged transaction.

We expect to reclassify approximately $ 1.0 million from accumulated other comprehensive income (loss) related to our commodity cash flow hedges to earnings during the next 12 -month period ended March 31, 2024.

We expect to reclassify unrealized losses of approximately $ 1.1 million from accumulated other comprehensive income (loss) related to our commodity cash flow hedges to earnings during the next 12 -month period ended June 30, 2024.

Interest Rate Swap Activities

2 unchanged sentences

Prior to August 2022, our short-term borrowing was based on the 30-day LIBOR rate.

In August 2022, we amended and restated our revolver and transitioned the benchmark interest rate to the 30-day SOFR as a result of the impending expiration of LIBOR.

In August 2022, we amended and restated our revolver and transitioned the benchmark interest rate to the 30-day SOFR as a result of the expiration of LIBOR.

Our prior interest rate swaps were cash settled monthly as the counter-party paid us the 30-day LIBOR rate less the fixed rate.

6 unchanged sentences

Margin requirements consist of initial margin that is posted upon the initiation of a position, maintenance margin that is usually expressed as a percent of initial margin, and variation margin that fluctuates based on the daily mark-to-market relative to maintenance margin requirements.

We currently maintain a broker margin account for Sharp which was classified within our Other Current Assets on the consolidated balance sheet with a balance of $ 0.1 million as of March 31, 2023.

We currently maintain a broker margin account for Sharp which was classified within our Other Current Assets on the consolidated balance sheet with a balance of $ 1.4 million as of June 30, 2023.

At December 31, 2022, $ 0.1 million was classified in Other Current Liabilities on the consolidated balance sheet.

2 unchanged sentences

We did not have any derivative contracts with a credit-risk-related contingency.

Fair values of the derivative contracts recorded in the consolidated balance sheets as of March 31, 2023 and December 31, 2022, are as follows:

Fair values of the derivative contracts recorded in the consolidated balance sheets as of June 30, 2023 and December 31, 2022, are as follows:

Derivative Assets

Fair Value As Of

(in thousands) Balance Sheet Location March 31, 2023 December 31, 2022

(in thousands) Balance Sheet Location June 30, 2023 December 31, 2022

Derivatives designated as cash flow hedges

3 unchanged sentences

$ 1,844 $ 3,769

(1) Derivative assets, at fair value include $ 1.2 million and $ 2.8 million in current assets in the condensed consolidated balance sheet at March 31, 2023 and December 31, 2022, respectively, with the remainder of the balance classified as long-term.

(1) Derivative assets, at fair value include $ 1.7 million and $ 2.8 million in current assets in the condensed consolidated balance sheet at June 30, 2023 and December 31, 2022, respectively, with the remainder of the balance classified as long-term.

Derivative Liabilities

Fair Value As Of

(in thousands) Balance Sheet Location March 31, 2023 December 31, 2022

(in thousands) Balance Sheet Location June 30, 2023 December 31, 2022

Derivatives designated as cash flow hedges

3 unchanged sentences

$ 2,652 $ 2,215

(1) Derivative liabilities, at fair value include $ 0.8 million and $ 0.6 million in current liabilities in the condensed consolidated balance sheet at March 31, 2023 and December 31, 2022, respectively, with the remainder of the balance classified as long-term.

(1) Derivative liabilities, at fair value include $ 2.2 million and $ 0.6 million in current liabilities in the condensed consolidated balance sheet at June 30, 2023 and December 31, 2022, respectively, with the remainder of the balance classified as long-term.

The effects of gains and losses from derivative instruments on the condensed consolidated financial statements are as follows:

Amount of Gain (Loss) on Derivatives

Location of Gain For the Three Months Ended March 31,

Location of Gain For the Three Months Ended June 30, For the Six Months Ended June 30,

(in thousands) (Loss) on Derivatives 2023 2022 2023 2022

19 unchanged sentences

Financial Assets and Liabilities Measured at Fair Value

The following tables summarize our financial assets and liabilities that are measured at fair value on a recurring basis and the fair value measurements, by level, within the fair value hierarchy as of March 31, 2023 and December 31, 2022:

Fair Value Measurements Using:

As of March 31, 2023 Fair Value Quoted Prices in

As of June 30, 2023 Fair Value Quoted Prices in

Active Markets

22 unchanged sentences

Derivative liabilities $ 2,215 $ — $ 2,215 $ —

The following table sets forth the summary of the changes in the fair value of Level 3 investments for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

The following table sets forth the summary of the changes in the fair value of Level 3 investments for the six months ended June 30, 2023 and 2022:

Six months ended June 30,

(in thousands)

6 unchanged sentences

Investment income from the Level 3 investments is reflected in other income, net in the condensed consolidated statements of income.

At March 31, 2023, there were no non-financial assets or liabilities required to be reported at fair value.

At June 30, 2023, there were no non-financial assets or liabilities required to be reported at fair value.

We review our non-financial assets for impairment at least on an annual basis, as required.

4 unchanged sentences

The fair value of short-term debt approximates the carrying value due to its near-term maturities and because interest rates approximate current market rates (Level 2 measurement).

At March 31, 2023, long-term debt, which includes current maturities but excludes debt issuance costs, had a carrying value of approximately $ 678.8 million, compared to the estimated fair value of $ 597.5 million.

At June 30, 2023, long-term debt, which includes current maturities but excludes debt issuance costs, had a carrying value of approximately $ 666.8 million, compared to the estimated fair value of $ 573.3 million.

At December 31, 2022, long-term debt, which includes the current maturities but excludes debt issuance costs, had a carrying value of approximately $ 600.8 million, compared to a fair value of approximately $ 505.0 million.

3 unchanged sentences

Our outstanding long-term debt is shown below:

March 31, December 31,

June 30, December 31,

(in thousands) 2023 2022

22 unchanged sentences

Note Purchase Agreements

On March 15, 2022 we issued 2.95 percent Senior Notes due March 15, 2042 to MetLife in the aggregate principal amount of $ 50.0 million.

We used the proceeds received from the issuances of the Senior Notes to reduce short-term borrowings under the Revolver and to fund capital expenditures.

These Senior Notes have similar covenants and default provisions as our other Senior Notes, and have an annual principal payment beginning in the eleventh year after the issuance.

On March 14, 2023 we issued 5.43 percent Senior Notes due March 14, 2038 in the aggregate principal amount of $ 80.0 million and used the proceeds received from the issuances of the Senior Notes to reduce short-term borrowings under our Revolver credit facility and to fund capital expenditures.

4 unchanged sentences

The amended agreements expand the total borrowing capacity and extend the term of the agreements for an additional three years from the effective dates.

The following table summarizes the current available capacity under our Shelf Agreements at March 31, 2023:

The following table summarizes the current available capacity under our Shelf Agreements at June 30, 2023:

(in thousands) Total Borrowing Capacity Less:

4 unchanged sentences

MetLife Shelf Agreement 200,000 ( 50,000 ) — 150,000

Total Shelf Agreements as of March 31, 2023

Total Shelf Agreements as of June 30, 2023

$ 605,000 $ ( 350,000 ) $ — $ 255,000

3 unchanged sentences

We are authorized by our Board of Directors to borrow up to $ 400.0 million of short-term debt, as required.

At March 31, 2023 and December 31, 2022, we had $ 94.1 million and $ 202.2 million, respectively, of short-term borrowings outstanding at a weighted average interest rate of 5.17 percent and 5.04 percent, respectively.

In August 2022, we amended both tranches of our Revolver, which now bear interest using SOFR as the benchmark interest rate, plus a 10-basis point SOFR adjustment, in lieu of LIBOR which is being retired by financial institutions.

In addition, the 364-day tranche was extended for the current year, expiring in August 2023.

At June 30, 2023 and December 31, 2022, we had $ 95.8 million and $ 202.2 million, respectively, of short-term borrowings outstanding at a weighted average interest rate of 5.33 percent and 5.04 percent, respectively.

In August 2022, we amended both tranches of our Revolver, which now bear interest using SOFR as the benchmark interest rate, plus a 10-basis point SOFR adjustment.

In addition, the 364-day tranche was extended through August 2023.

We expect to renew the 364-day tranche of the Revolver upon its current expiration.

As part of these amendments, the parties agreed to eliminate the previous covenant capping the aggregate investments limit at $ 150.0 million where we maintain an ownership interest less than 50 percent.

1 unchanged sentence

All other terms and conditions remain unchanged.

Borrowings outstanding under the sustainable investment sublimit of the 364-day tranche amounted to $ 9.4 million at March 31, 2023.

Borrowings outstanding under the sustainable investment sublimit of the 364-day tranche amounted to $ 9.4 million at June 30, 2023.

The availability of funds under the Revolver is subject to conditions specified in the credit agreement, all of which we currently satisfy.

1 unchanged sentence

We are required by the financial covenants in the Revolver to maintain, at the end of each fiscal year, a funded indebtedness ratio of no greater than 65 percent.

As of March 31, 2023, we are in compliance with this covenant.

As of June 30, 2023, we are in compliance with this covenant.

The 364-day tranche of the Revolver expires in August 2023 and the five-year tranche expires in August 2026, both of which are available to fund our short-term cash needs to meet seasonal working capital requirements and to temporarily fund portions of our capital expenditures.

Borrowings under both tranches of the Revolver are subject to a pricing grid, including the commitment fee and the interest rate charged based upon our total indebtedness to total capitalization ratio for the prior quarter.

As of March 31, 2023, the pricing under the 364-day tranche of the Revolver included an unused commitment fee of 9 basis points and maintains an interest rate of 70 basis points over SOFR plus a 10 basis point SOFR adjustment.

As of March 31, 2023, the pricing under the five-year tranche of the Revolver included an unused commitment fee of 9 basis points and an interest rate of 95 basis points over SOFR plus a 10 basis point SOFR adjustment.

Our total available credit under the Revolver at March 31, 2023 was $ 300.1 million.

As of March 31, 2023, we had issued $ 5.8 million in letters of credit to various counterparties under the Revolver.

As of June 30, 2023, the pricing under the 364-day tranche of the Revolver included an unused commitment fee of 9 basis points and maintains an interest rate of 70 basis points over SOFR plus a 10 basis point SOFR adjustment.

As of June 30, 2023, the pricing under the five-year tranche of the Revolver included an unused commitment fee of 9 basis points and an interest rate of 95 basis points over SOFR plus a 10 basis point SOFR adjustment.

Our total available credit under the Revolver at June 30, 2023 was $ 298.3 million.

As of June 30, 2023, we had issued $ 5.9 million in letters of credit to various counterparties under the Revolver.

These letters of credit are not included in the outstanding short-term borrowings and we do not anticipate that they will be drawn upon by the counterparties.

6 unchanged sentences

We lease natural gas compressors to ensure timely and reliable transportation of natural gas to our customers.

Additionally, we lease a pipeline to deliver natural gas to an industrial customer in Polk County, Florida.

We also lease warehouses to store equipment and materials used in repairs and maintenance for our businesses.

Some of our leases are subject to annual changes in the Consumer Price Index (“CPI”).

While lease liabilities are not re-measured as a result of changes to the CPI, changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred.

While lease liabilities are not re-measured as a result of changes to the CPI, changes to the CPI are treated as variable lease payments and recognized

in the period in which the obligation for those payments was incurred.

A 100-basis-point increase in CPI would not have resulted in material additional annual lease costs.

1 unchanged sentence

The exercise of lease renewal options is at our sole discretion.

The amounts disclosed in our consolidated balance sheet at March 31, 2023, pertaining to the right-of-use assets and lease liabilities, are measured based on our current expectations of exercising our available renewal options.

The amounts disclosed in our consolidated balance sheet at June 30, 2023, pertaining to the right-of-use assets and lease liabilities, are measured based on our current expectations of exercising our available renewal options.

Our existing leases are not subject to any restrictions or covenants that would preclude our ability to pay dividends, obtain financing or enter into additional leases.

As of March 31, 2023, we have not entered into any leases, which have not yet commenced, that would entitle us to significant rights or create additional obligations.

As of June 30, 2023, we have not entered into any leases, which have not yet commenced, that would entitle us to significant rights or create additional obligations.

The following table presents information related to our total lease cost included in our consolidated statements of income:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in thousands) Classification 2023 2022 2023 2022

2 unchanged sentences

(1) Includes short-term leases and variable lease costs, which are immaterial .

The following table presents the balance and classifications of our right of use assets and lease liabilities included in our condensed consolidated balance sheet at March 31, 2023 and December 31, 2022:

(in thousands) Balance sheet classification March 31, 2023 December 31, 2022

The following table presents the balance and classifications of our right of use assets and lease liabilities included in our condensed consolidated balance sheet at June 30, 2023 and December 31, 2022:

(in thousands) Balance sheet classification June 30, 2023 December 31, 2022

Operating lease assets Operating lease right-of-use assets $ 13,432 $ 14,421

2 unchanged sentences

Total lease liabilities $ 13,958 $ 14,944

The following table presents our weighted-average remaining lease terms and weighted-average discount rates for our operating leases at March 31, 2023 and December 31, 2022:

March 31, 2023 December 31, 2022

The following table presents our weighted-average remaining lease terms and weighted-average discount rates for our operating leases at June 30, 2023 and December 31, 2022:

June 30, 2023 December 31, 2022

Weighted-average remaining lease term ( in years )

2 unchanged sentences

Operating leases 3.5 % 3.4 %

The following table presents additional information related to cash paid for amounts included in the measurement of lease liabilities included in our condensed consolidated statements of cash flows as of March 31, 2023 and 2022:

Three Months Ended

Six Months Ended

(in thousands) 2023 2022

Operating cash flows from operating leases $ 1,465 $ 1,428

The following table presents the future undiscounted maturities of our operating and financing leases at March 31, 2023 and for each of the next five years and thereafter:

(in thousands) Operating

The following table presents the future undiscounted maturities of our operating and financing leases at June 30, 2023 and for each of the next five years and thereafter:

(in thousands) Operating Leases (1)

Remainder of 2023 $ 1,419

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements